Industry

My Two Cents: How to Get a Business Permit

Let’s head back to basics.
IMAGE Department of Trade and Industry
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Suck at money? Congrats. You’re part of the 99 percent of people in their 20s floundering when it comes to finance. Adulting is hard, and money is harder—especially when it’s your own and not your parents. My Two Cents is here to break down everything you need to know about finance, business, and entrepreneurship. We’ll tackle all the basics, from how to get a business permit to how to invest in stocks, to educate the fledgling adults on how to not go broke.

Welcome to the idiot’s guide to money. First lesson: How to get a business permit.

Small to medium enterprises are the bedrock of the economy, and they’ve only been growing as the younger generations are attracted to the concept of running their own business—and being their own boss. But before you can run your business, whether that’s a startup or an online shop, you have to follow the rules by the book and get a permit to operate. Contrary to popular belief, it’s not just one piece of paper. It’s multiple, depending on what sort of business you’re running. For this segment, we’ll focus on sole proprietorships or businesses established by only one person (versus partnerships or corporations). It's no secret government offices are often packed, so better get started ASAP. 

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Here are the four main documents you need:

1| Business Name (BN) Registration Certificate

Why you need it: This is the first step you need to complete in order to get the other necessary documents and licenses. Register your business’ official trading name with the Department of Trade and Industry (DTI) so no one else can use the same name.

Requirements: One valid ID, application form, registration fee (which can range from P200 to P2,000 depending on the territorial scheme), and a list of potential business names (just in case someone already has the name you want).

2| Barangay Clearance

Why you need it: The clearance basically attests to the fact that your business is a community-friendly business and complies with the standards of the barangay that your business is located—i.e., it’s not illegal or "unsavory."

Requirements: One valid ID, application form, community tax certificate/cedula, and barangay clearance fee. 

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3| Mayor’s Permit

Why you need it: Also known as the business permit, the mayor’s permit certifies that his office has allowed your business to operate in his city. This one will be harder to get than the BN or Barangay Clearance given the number of requirements.

Requirements: 2 valid IDs, DTI Business Name Certificate, Barangay Clearance, community tax certificate or cedula, application form, lease contract/tax declaration, and SSS clearance.

4| Business TIN Number

Why you need it: Every Filipino individual and business is required to pay their taxes to the Bureau of Internal Revenue (BIR), and your new enterprise is no exception. All Philippine-based businesses must submit a tax statement at the end of the year, which is why having a business TIN is crucial.

Requirements: DTI Business Name Certificate, Barangay Clearance, Mayor’s Permit, proof of residency, 1 valid ID, BIR form 1901, BIR form 1906, and registration fee.

5| Other licenses

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Certain businesses will need additional licenses with a specific agency in order to sell their product or service legally. These agencies include:

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  • Bangko Sentral ng Pilipinas (BSP) – for banks, pawnshops, and foreign exchange shops
  • Bureau of Animal Industry (BAI) – for pig farms, chicken farms, and animal businesses
  • Bureau of Food and Drugs (BFAD) – for businesses that manufacture, trade, or import and export food and drugs
  • Bureau of Fisheries and Aquatic Resources (BFAR) – for fishing and aquatic businesses
  • Bureau of Plant Industry (BPI) – for plant and vegetable companies
  • Commission on Higher Education (CHED) and Department of Education (DepEd) – for businesses that handle tertiary, secondary, and elementary institutions
  • Cooperative Development Authority (CDA) – for cooperatives
  • Department of Labor and Employment (DOLE) – for businesses with five or more employees in order to track the business’ compliance with labor laws.
  • Fiber Industry Development Authority (FIDA) – for fiber product businesses
  • Forest Management Bureau (FMB) – for lumber, logging, and wood companies
  • Insurance Commission (IC) – for insurance companies
  • Intellectual Patent Office (IPO) – for businesses that desire to register their trademarks, formulas, etc.
  • National Tobacco Administration (NTA) – for tobacco businesses
  • Philippine Coconut Authority (PCA) – for rice trading and farming
  • Technical Education and Skills Development Authority (TESDA) – for businesses connection to technical education
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Anri Ichimura
Staff Writer, Esquire Philippines
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