How to Get a Business Permit in the Philippines in 2023
by: The Beat Asia
May 23, 2023
Unless you want to operate underground—which, by the way, you should never do—getting a permit is one of the first steps to starting and legitimizing a business in the Philippines. This official certification, also known as a mayor’s permit or municipal license, is usually processed by the local government unit (LGU) of the city or municipality where the business is registered. Business permits are issued to allow enterprises to operate legally and for the LGUs to monitor the businesses within their jurisdiction.
Who Needs a Business Permit
The ones mandated by law are businesses that regularly earn wages from a source that isn’t an employer-employee relationship. They are big corporations such as malls, hotels, restaurants, and fast-consumer goods companies. Small to medium-sized enterprises like bakeries, milk tea stores, barber shops, and boutique stores are also required to obtain a permit.
Who Are Exempted from Getting a Business Permit
Self-employed professionals and individuals, such as doctors, accountants, and lawyers, are exempt from paying business permit fees as stated in the Local Finance Circular (LFC) 001-2019 issued by the Department of Finance. Only sole proprietors, foundations, corporations, and associations are required to get a certification from their respective LGUs.
When to Get a Business Permit
Before applying for a permit, one must first register their sole proprietorship business at the Department of Trade and Industry (DTI). Take note that this is a pre-requisite to applying for a business license. No DTI registration, no business permit. Once successfully registered, an enterprise may begin filing for a business permit at their respective LGU.
Where to Get a Business Permit
As mentioned, business permits can be requested from the LGU or the mayor’s office where the enterprise is located. If the business is in Makati, then the document must be requested from the Makati City Hall. The same goes for other municipalities.
How to Get a Business Permit
Online registrations are readily available for enterprises who wish to apply for a business permit. Below are the steps:
1. Online account registration
2. Business permit application
3. Licensing and verification of business permit
4. Treasury verification
5. Posting of payment
6. Billing assessment
7. Issuance of the business permit
For in-person application, business owners may head straight to the nearest LGU.
What Are the General Requirements
To apply for a business permit, these documents are required:
1. Application form
2. DTI registration or SEC registration
3. Title of the business property or lease contract
4. Zoning or location clearance
5. Building and occupancy permit
6. Public liability insurance
7. Fire safety certificate
8. Barangay clearance
It must be emphasized that the required documents vary by city or municipality. Since different cities require different procedures, business owners must visit their LGU for the city-specific requirements.
What to Do After Obtaining a Business Permit
After a successful application, businesses are required to renew their mayor’s permit in the first month of the calendar year, from January 1-20. A 25% surcharge on renewal fees to an additional 2% interest per month will be imposed on businesses that fail to renew their permit.
Penalties for Non-Compliance
Starting a business without a business permit can result in penalties and sanctions including fines of between P2,000 and P20,000, and in worst cases, imprisonment of between six months and two years.
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