How to Register as an Independent Contractor in the Philippines

How to Register as an Independent Contractor in the Philippines

What is an independent contractor?

An independent contractor is an individual who offers his or her talent or expertise in the form of services for and in consideration of professional fee, without entering into an employment contract with the one hiring, who is not an employer.
No employer-employee relationship exists between independent contractors and their principals. Their contracts are governed by the law on contracts and other applicable law.

How to secure a DTI sole proprietorship?

Registering your new business can now be accomplished online through the BIR website. This process includes the application, tax type, and registration of your business.
Documentary Requirements:

  • BIR Form 1901 version January 2018
  • For Sole Proprietors/Professionals not regulated by the Professional Regulation Commission (PRC):
      • Any government-issued ID (e.g. Birth Certificate, passport, driver’s license, Community Tax Certificate) that shows the name, address, and birthdate of the applicant, in case the ID has no address, any proof of residence or business address; or

    In case of the practice of profession regulated by PRC:

    • Valid PRC ID and government ID showing address or proof of residence or business address.
  • BIR Printed Receipt/Invoice
  • Final and clear sample of own Principal Receipts Invoices
  • Payment of Fees
    • Registration Fee (RF)
    • Loose Stamp/s (DST) to be affixed on the Certificate of Registration

Note: that if you are transacting through a Representative, you need to execute a Special Power of Attorney (SPA) and present a copy of any government issued ID of the authorized representative.

Step by Step Guide for Registering your Business:

  1. Go to your respective Revenue District Office (RDO)
The RDO should be where your business is located.
  2. Submit your duly accomplished BIR Form 1901, photocopy of ID and DTI certificate
  3. Pay the Registration Fee
  4. Submit photocopy of ARF Receipt
  5. Claim your Certificate of Registration (COR)
This is the Form 2303.
  6. Purchase and register your books of accounts
  7. Accomplish and submit BIR Form 1906 (Authority to Print) at the RDO, together with a sample of principal or supplementary invoices and a copy of your COR.

How to secure a BIR OR?

For Single Proprietors,

1. Prepare the requirements

  • DTI Certificate of Registration
  • Barangay Business Clearance
  • Mayor’s Permit
  • Certificate of Lease (if the place is rented) or Certificate of Land Title (if owned)
  • Government-issued identification (Passport, Driver’s License, Birth Certificate, etc.)

2. Fill up the BIR Form 1901.  Accomplish 3 copies of the BIR Form 1901, which can be downloaded here.
3. Go to your respective Revenue District Office (RDO). The RDO is where your business is located and has jurisdiction over you. This is where you submit your application. You can find your respective RDO here.
4. Pay the Registration Fee. Registration fee is Php 500 and Php 30 for loose DST or Proof of Payment of Annual Registration Fee (ARF). You can pay the registration fee in BIR accredited banks. Accredited banks will provide you a BIR payment form. Submit this to the bank together with your Documentary Stamp Tax on Lease. After payment, submit to your RDO a photocopy of your BIR form payments and other documentary requirements.
Note: DTI Registration Fee is based on the territorial scope of the company.
5. Claim your Certificate of Registration (COR). Some RDOs might require you to attend a seminar about filing your taxes before you can claim your COR. Clarify this with the RDO after paying your registration fee. Upon claiming your COR, ensure that you will also receive the “Ask for Receipt” sign.
6. Purchase and register your books of account. A book of account is where you keep the original record of all your business transactions. There are 3 types of books of account:

  • Manual Books of Account: This includes journals, ledgers, or columnar books where you manually document (handwritten) your business transactions.
  • Loose-leaf Books of Account: This also includes journals and ledgers, but they are printed instead of being handwritten. Bookkeeping through Microsoft Excel (spreadsheets) can be considered as a loose-leaf book of account, as well.
  • Computerized Books of Account: A program or computerized system of bookkeeping that is usually common for businesses with complex operations.

Register your books of account by accomplishing and submitting BIR Form 1905 together with your books of account at the RDO where your business is registered.
7. Secure an Authority to Print (ATP). BIR requires businesses to have Authority to Print receipts (for businesses offering services) or commercial invoices (for businesses selling goods). Accomplish and submit 3 copies of BIR Form 1906 at the RDO, together with a sample of principal or supplementary invoices and a copy of your COR. It would usually take a week before you can get your ATP.
Upon acquiring your ATP, submit it to an accredited BIR printer. You can check BIR accredited printers here. The release of your official invoices usually takes up to 2 weeks.
You know what’s best for you. Let Filepino guide you through this process. Email us at [email protected].