4 Steps How to Register Your Business?
In the Philippines, many people are trying their luck in business. In 2018 there were 1.39M recorded business owners under the Department of Trade and Industry, and then in 2019, it ballooned to 1.42M. Although many are thinking of putting up a business, yet some challenges they face stops them from doing so.
One problem that keeps popping up is the worry about registering their business and how to make it legal. Some also have issues on how they go about completing paperwork, getting everything running may be easy, but behind a business set up requires steps that need to be completed before you can have a business under your name. Good thing we have laid down all the steps in registering your business in the Philippines and what other tasks you see as daunting, but really require a lot of patience.
Advantages of Starting a Business in the Philippines
A highly capable workforce is available, with the Philippines having a large number of people who are highly skilled as well as easily trainable. Not to mention that the people speak good English, if not fluently, which was thanks to the influences of the US. Opportunities are welcomed, and people are open to presented ideas. Filipinos are accepting and are willing to adopt new ideas. They are also highly adaptive and can face challenges and problems and knows how to deal with it.
The booming economy in the Philippines is another reason to set up a business, and there are new incentives created to attract investors and set up their ventures here. Some samples involve income tax holidays, tax deductions and exemptions, special economic zones, getting a permanent status for foreign investors that also include, their family.
The Philippines' strategic location is a great way to further business expansions to neighbouring Asian countries. A personalized business where there are nourishing relationships, building friendships, and personal networking.
Types of Corporate Entities in the Philippines
However, if there are miscommunication and disagreement, issues will arise in a partnership type of business, which sometimes leads to the dissolution of the company.
There are many decision-makers, and many individuals will help each other to advance the interest of the company. This type of business ownership has more power or movement and has a high probability of success as well. A Corporation should be duly registered with the SEC or Securities and Exchange Commission.
How to Start a Business in the Philippines?
Choose a Business Structure
Register a Business Name
Pay the Minimum Deposit
Register with the Securities and Exchange Commission (SEC)
• Reserved business name and payment form
• Treasurer's Affidavit
• The Bank Certificate of Deposit or Proof of Inward Remittance should be provided
• Statement of Assets and liabilities
• Accomplished SEC Form
• It will take 10 to 15 days after the submission of completed documentary requirements
Notarize the documents
Obtain the Tax Identification Number (TIN)
When you have this completed, the SEC will provide your TIN. It will take an average of 2 days to complete this process.
Register with BIR
Not completing this step will cause a problem for your company in the long run. The expenses others would-be business owner tried to run away from costs them double once they need to pay legal fees. There is also peace of mind for new business owners knowing they have checked the legal requirements.
Get a Barangay Clearance
Pay the Annual Community Tax
Additional tax may be required and will depend on the assessed value of the real property you have, which includes the earnings and dividends.
Obtain the Business Permit
Register with the Social Security System (SSS)
Registrant must provide the below requirements.
• Employment report or the Form R-1A
• List of employees with their birth dates, salary, employment date, and positions
• Employer registration form or the FORM R-1
• Articles of incorporation, including SEC registrations and by-laws.
Philhealth for employees/employer to cover the medical benefits of your employees, Pag-Ibig fund is mandatory for employees who are covered by the Social Security System, Department of Environment and Natural Resources, or the DENR to avail of the certificate for Environmental Compliance.
Requirements for Doing Business in the Philippines
• Any government-issued ID
• Registration form of the proposed business name in the duplicate copy.
• Registration fee based on location plus the documentary stamp tax
• The accomplished employee data form
• Municipality Permission Letter
• Community tax certificate
• Barangay Clearance
• Location Clearance
• Completed Fire safety
• Electrical inspection certificate
• Certificate occupancy and building permit
• Lease contract
Requirement list for Corporate Registration
• Completed verification slip form
• Articles of incorporation
• Bank certificate (notarized)
• Accomplished Treasurer's affidavit
• Written undertaking for the name change of the corporation by the trustee or Director
• Required clearance certificate from other government agencies
• Required Foreign investment application form if foreign corporation subsidiaries
• Members of the company and their invested capital with the secretary's certification
• Registration fee
• Employee data form
• Permit letter from the Municipality
• Community tax certificate
• Barangay clearance
• Location Clearance
• Fire safety certificate
• Electrical inspection certificate
• Occupancy certificate
• Building permits
• Lease contract as required
Positives include highly skilled manpower, great geographical location, and there are many opportunities with its booming economy. Know what types of Corporate Entities are in the Philippines as there are Sole Proprietorship, Partnership, and Corporation. We also discuss the Branch Office and what is its difference to a Representative Office where the latter cannot generate profit for the company it represents while the Branch Office can.
The question about How to Start a Business in the Philippines was also discussed and the list to follow include:
• Choosing a Business Structure requires deciding whether to take a partner or if you would rather have sole ownership for your business?
• Registering a Business Name is to keep your business name, legal to operate in the Philippines. You need to complete the requirements and follow the steps to make this happen.
• Pay the Minimum Deposit since this is required when doing business in the Philippines, it will not cost you much and will depend on what company or business you are putting up.
• Registering with the Securities and Exchange Commission, is required to have your business recognized legally in the Philippines.
• Everything must be notarized.
• Getting a Tax Identification Number is another step you should complete and will be provided by the SEC or Securities and Exchange Commission.
• Registering with the BIR for taxes, and your business to have the right for sales invoices and receipts.
• Getting a Barangay Clearance is a must and can be completed wherever your business is located, paying the annual community tax will depend on the business that you will pursue, BPLO or Business Permits and Licensing Office will then give you your business permit once you have completed other required documents and clearances.
• Another division of government where you need to register includes the Social Security System, Philhealth, PagIbig, this is important most especially for your employees. You also need to get a permit or a compliance clearance from the Department of Energy and Natural Resources for Environmental Compliance.
If you are planning on setting up a business in the Philippines, you need to complete the requirements first before doing so. We have listed the steps that will help you in putting up the business fast. Although it will take you a few days to finish all the requirements, as long as you pass all the needed paperwork, complete the documents and pay all the fees, you can register your business and get the permits in no time. Other business owners got their business permits in less than a week. The speed of having your business registered will depend on your compliance in completing documents as well.
Also, starting a business in the Philippines is simple as long as you have a rational plan of what business you want to get into and know what types of business ownership you would like it to be. If you are not decided yet, if you like to have a partner in your business, perhaps it is better if you have a sole proprietorship then decide afterwards once your business is proving to be a success. If the business is already growing and investors are interested to be a part of the company, you can decide if you like to have a partner then. Once you have the necessary permits, you will already have peace of mind and can start your business instantly.