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A one-stop checklist for starting a business in the Philippines

Starting a business in the Philippines can be a lucrative endeavor for foreign entrepreneurs such as yourself. Once you have a solid grasp of your niche and target market, the next step is to form your business and register with the relevant government agency.
 
To help you stay on track with the paperwork and requirements, we’ve prepared a comprehensive business start-up checklist.
 

What’s your business’s structure?

 
You have three options:
 

  • Sole proprietorship – Best for small businesses with a sole owner. There’s minimal regulation and no need to establish a separate business entity. Since this is an unincorporated structure, the business’s personal assets and liabilities are considered your own.
     
    Sole proprietorships must register with the Department of Trade and Industry (DTI). Learn more about setting up a sole proprietorship in the Philippines here.

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  • Partnership (general or limited) – Ideal for two or a handful of individuals who intend to be co-owners of the business. The partnership becomes a separate legal entity from the individual business owners. Partners share the profits of the business and may have varying liabilities for the obligations and debts of the company.

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  • Corporation – A minimum of five people (maximum is 15) can form a corporation. Obtaining approval from the Securities and Exchange Commission (SEC) is necessary. Expect more regulatory restrictions to apply in this business structure.

 
Partnerships and corporations must register with the SEC. Learn more about registering partnerships in the Philippines here. Meanwhile, everything you need to learn about registering corporations can be found here.
 

Find and establish a business address

 
Having a physical address for your business is a crucial step. You’ll frequently provide this information to various government agencies.
 

Secure barangay clearance

 
A barangay is the smallest administrative unit in the Philippines. All businesses are required to obtain clearance from the barangay they belong to. They typically ask for the following requirements:
 

  • A valid government-issued ID (at least 2)

  • DTI or SEC certification

  • Contract of lease (if office space is rented) or title and tax declaration (if office space is owned)

 

Local government unit (LGU) registration

 
Known locally as a mayor’s business permit. To secure a license to operate in a city (e.g. Makati, Pasig, Quezon City) you’ll need the following basic requirements:
 

  • Locational clearance (obtained from the Zoning Administration Division within city hall)

  • DTI or SEC certification

  • Contract of lease (if office space is rented) or title and tax declaration (if office space is owned)

  • Barangay clearance

  • Comprehensive general liability insurance

 
Additional requirements may be needed depending on the nature of your business.
 

Bureau of Internal Revenue (BIR) registration

 
The next step is to smooth out tax compliance requirements. Identify which BIR Revenue District Office (RDO) your business will be subject to. A city or a portion of a city may be under the jurisdiction of an RD. This is indicated by a set of numbers (e.g. 47 for East Makati, 43 for Pasig).
 
Next, provide the following:
 

  • BIR Form 1901 (for single proprietorship)

  • BIR Form 1903 (for partnership and corporation)

  • BIR Form 0605 (Tax payment form)

  • BIR Form 2000 (Documentary stamp tax)

  • BIR Form 1905 (books of account registration)

  • BIR Form 1906 (Authority to print receipts)

  • BIR Form 2303 (Certificate of registration)

  • DTI or SEC certification and other relevant documents

  • Barangay clearance

  • Mayor’s business permit

 
When registering employees to the BIR, these are the basic requirements:
 

  • Employee TIN

  • Birth certificate or any government-issued ID

  • Certificate of employment or company ID

  • Marriage certificate (if employee is married)

  • Birth certificate of dependents (if applicable)

 

Social Security System (SSS), PhilHealth, and Pag-IBIG (housing fund)

 
The government requires all types of businesses to register as employers with SSS, PhilHealth and Pag-IBIG. Additionally, you’ll also need to register your employees with these agencies.
 
For SSS employee registration (prerequisite for Pag-IBIG):
 

  • SSS number of employee

  • Valid primary ID or two secondary IDs

  • SSS Application form or R1A Form

 
For PhilHealth employee registration:
 

  • PhilHealth identification number

  • PhilHealth member registration form or PMRF (for both PhilHealth members and non-members)

  • PhilHealth report of employer members or ER2 Form

 
For Pag-IBIG employee monthly contributions:
 

  • Pag-IBIG membership ID

  • Membership savings remittance form or MSRF (filed monthly, with names and membership details of employee)

 

Starting up a business in the Philippines is easier with FilePino

 
Accomplishing all of these business registration tasks can take a lot of your time. The best approach is to work smart and tap the expertise of our team at FilePino.
 
We’ll help you form a company here in the Philippines and take care of your bookkeeping, recruitment, and payroll concerns. Get in touch with us today at +63.917.892.2337 or contact us here to get started.