Businesses of all entities and sizes in the Philippines need a valid and up-to-date business permit and other clearances to operate legally within the city or municipal jurisdictions (LGUs). While these normally expire at the end of each year (i.e., December 31), it is crucial to process business permit renewals right at the start of the succeeding year, as scheduled.
Business Permit Renewal FAQs
What Is a Business Permit?
A business permit, also called a Mayor’s Permit or BPLO Permit, is a government license issued to companies and business owners. It serves a green light for them to operate legally within the city or municipal jurisdiction. Its issuance comes with certain duties such as local tax payments and compliance with health, sanitary, environmental, safety, and other standards.
Why Do You Need to Renew Your Business Permit?
A business permit is an essential requirement for established businesses in the Philippines in order to operate legally. This permit ensures that the business adheres to safety standards, pays taxes, and is properly documented, which helps protect both the business and its customers. In order to stay compliant with the local laws and regulations, it is a necessary requirement to keep your business permit up to date to avoid incurring penalties.
When Should You Renew Your Business Permit?
A business permit is valid only for the year it was issued and typically expires on December 31st of each year. According to the rule, business permits must be renewed on or before January 20th of each year. A penalty will be imposed for failure to renew your business permit on or before the given due date. It is advisable to start preparing the necessary documents 1-2 months before the deadline.
On the other hand, some LGUs extend their deadlines for the renewal of business permits without surcharges or penalties. A notice is usually sent one week before the January 20 deadline.
What Are the Usual Fees I Need to Pay to the LGU for the Business Permit Renewal?
Business permit renewal fees vary depending on the line of business, city or municipality, and many other factors. Generally, however, these include:
- Business Tax (depends on the total gross sales for the previous year)
- Insurance Policy
- Barangay Business Permit
- Cedula
- Health Certificate for Employees (if applicable)
Fees for Cedula, Sanitary Permit, Signage, and FSIC are usually included in the Business Tax Assessment. Additionally, in some cities that implement a one-stop-shop approach, the Barangay Permit fee is often incorporated into the Business Tax Assessment as well. Additional fees may also apply, such as for:
- Payment for Medical test of all declared employees
- Payment for Health Certificate of each declared employees
- Cedula of all the declared employees
- NBI or Police Clearance
What Are the Consequences of Late Business Permit Renewals?
Failure to process the business permit renewal within the prescribed deadline may result in a penalty amounting to twenty-five percent (25%) of the taxes or fees not paid on time, plus an interest rate of up to two percent (2%) per month on the outstanding amount. Additionally, businesses operating with an expired permit could lead to issuance of a Closure Order, confiscation of assets, and other penalties imposed by your Local Government Units (LGUs).
Can I File the Renewal of Business Permit through Online Application?
You can renew your business permit online if your city offers an online submission portal. If this option is not available, the renewing process business permit must be completed manually at the City or Municipal Business Permit and Licensing Office (BPLO).
After completing the online application, securing all the permits is still done manually. However some LGUs offer delivery of the original business permit and other documents to your business or home address, so you don’t have to visit the city or municipal hall to collect them.
Once received, ensure that your business permit and plate are displayed prominently in your office or store to comply with government regulations.
How Long Will It Take to Renew a Business Permit?
The renewal of a business permit is expected to take just one day. However, due to the high volume of business owners renewing their permits, the entire process, including gathering the necessary requirements, typically takes 1 to 2 weeks.
Can Someone Process the Business Permit Renewal on My Behalf?
Yes, someone can renew your business permit on your behalf, but they will likely need a written authorization from you, along with any necessary documentation required for the renewal process. It’s best to check with the relevant local authorities for specific requirements and procedures that may apply.
Since We Haven’t Conducted Any Operations This Year, Do We Need the Business Permit Renewal?
Yes, you are required to submit an affidavit of non-operation or Certificate of No Gross Sales for the period during which the business was dormant as part of the application process.
What Are the Requirements for the Business Permit Renewal?
The requirements vary from the location of your business. It is best to check where you are currently registered to see the complete list of requirements (Continue reading the business renewal process below for general documentary requirements).
How to Process Your Business Permit Renewal in the Philippines
Renewing the business permit and other clearances can be a daunting task, especially for first-timers, because of its complexity and bureaucratic hurdles. Professional service providers can guarantee that the necessary paperwork is accurately completed and filed on time, hence reducing the risks of costly delays and compliance issues.
1. Prepare the Necessary Documents.
The following documents are typically required for business permit renewal. Additional requirements may be requested depending on the nature of your business:
- Duly accomplished Business Permit Renewal Application form (please note that some LGUs updates their forms annually)
- Valid Local Insurance Policy or official receipt of Comprehensive General Liability (CGL)
- SEC Registration/Articles of Incorporation/Amended Articles of Incorporation/ Latest General Information Sheet
- Copy of Official Receipt for the previous Business Permit
- New Barangay Permit (Current Year)
- Copy of the previous Mayor’s Permit, Business Tax Assessment and Official Receipts
- Copy of previous Cedula, Sanitary Permit, FSIC etc.
- Occupancy Permit
- Filed Audited Financial Statement and Income Tax Return duly submitted and received by the Bureau of Internal Revenue
- Filed Monthly and Quarterly VAT (2550) -or Filed Monthly and Quarterly Percentage Tax Returns (2551), whichever is applicable
- Proof of Ownership or Tax Declaration -required if you own the building (as an alternative to the contract of lease)
- Lessor Real Property Tax (RPT)
- Sketch/Vicinity Map of Business Location
- Updated Notarized Contract of Lease or Affidavit of Consent to use space if not renting.
- Certificate of Gross Receipts for the previous year (signed by the President and Treasurer)
- Authorization Letter (if representative)
- Valid ID of the person granting Authority and the assigned Authorized Representative
Please note that some cities implement a one-stop-shop approach during business permit renewal season to streamline the process. This allows taxpayers to secure permits such as but not limited to barangay permits and insurance policies, directly at the City Hall.
If PEZA-registered, you will need to submit the following along with the above requirements:
- Paid 3%
- Copy of PEZA Certificate
- Copy of a valid Notice of Income Tax Holidays (ITH)
2. Secure the Barangay Clearance.
In some cities, a one-stop-shop approach is used, allowing Barangay Clearances to be integrated into the processing conducted by the Business Permits and Licensing Office (BPLO). This means you do not need to obtain the clearance separately from the barangay, as the barangay fees will be included in our tax and bill assessment. However, In cities that do not employ this system, you will need to process the renewal of barangay permits directly at the barangay jurisdiction.
3. Proceed to Your City or Municipal Hall.
Complete the application form and submit it along with all required documents for evaluation. Application forms are available at the Business Permit Licensing Division, you need to secure one in advance to familiarize yourself with the requirements.
Once your documents are approved, the BPLO will assess the applicable fees for the year. You may choose to pay annually or quarterly. Payments for the Business Permit fees should be made at the City Treasurer’s Office.
After making your payment, the City Treasurer’s Office will issue an official receipt and you must present this receipt as proof of payment when claiming your Barangay Clearance, Business Permit and other related permits.
4. Renew Your Business Establishment’s Sanitary Permit.
To comply with the Sanitary Permit to Operate, secure a health certificate for your employees along with the other requirements:
- Latest Sanitary Permit (For all LGU)
- Latest Pest Control (For Makati)
- Latest Water Potability (For Makati)
- Latest Medical Test (X-Ray, Urinalysis, and Stool) of employees (For QC, Makati, Muntinlupa, Pasig, & Mandaluyong)
- Latest Employee Health Certificate (For QC, Makati, Muntinlupa, Pasig city, Mandaluyong)
5. Renew Your Fire Safety Inspection Certificate (FSIC).
To renew your Fire Safety Inspections Certificate (FSIC), visit your local Bureau of Fire Protection (BFP) office and submit the completed application form along with required documents, including a previous FSIC, a photo and sales invoice of a valid fire extinguisher, and a copy of the latest business permit.
BFP personnel will review your application, and you can find your assigned inspector by contacting the office. The inspector will conduct a site inspection to assess your fire safety measures, and if any deficiencies are found, you will have a specified timeframe to correct them. After addressing the issues, a final inspection will be performed, and upon successful compliance, the BFP will issue your FSIC.
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