Corporate ComplianceBusiness Permits for Domestic Corporations in the Philippines

Once you have completed the incorporation process with the Securities and Exchange Commission (SEC), companies need to obtain business permits from the Local Government Unit (LGU) that has jurisdiction over your business’ main office to legally operate. This can involve detailed processes including navigating local laws, land-use planning, structural safety, and sanitation. This ensures you are fully licensed, tax compliant, and ready to trade.

Key Local Permits

Before submitting your documents to the municipal licensing office, you will need to obtain some local permissions. This will ensure your company complies with local land-use planning, structural laws, and health regulations. Required documents include:

• Barangay Business Permit – Your corporation must obtain a permit from the local barangay. You will need to submit your SEC Certificate of Incorporation, Articles of Incorporation, Corporate By-Laws, and lease agreement or proof of ownership to show you are actually trading within the local area.
• Zoning Permit – This document will be issued by the city or municipal planning office. It will ensure that your business complies with the local spatial and land-use planning. Any companies located within industrial areas, complexes, or mixed-use developments will need to ensure they are operating within the correct zoning.
• Fire Safety Inspection Certificate (FSIC) – This will be issued by the local branch of the Bureau of Fire Protection (BFP). It will ensure your business complies with the Fire Code of the Philippines (R.A. 9514). An inspection will be carried out to ensure there are safe emergency exits, fire sprinklers, electrical systems, alarms, and emergency evacuation routes.
• Health Permit – This will be issued by the local municipal health department. You will need to have the premises inspected to ensure they have the correct health and sanitation standards. The company will need to have its premises inspected by the department and receive medical clearance certificates for all trading, administration and maintenance staff.
• Building Permits – If your company is building a specialized building or changing the structure of your leased commercial premises, you will need to ensure you have the correct building, structural, electrical, plumbing, and mechanical permits.
• Environmental Clearance Certificate (ECC) – If your business is involved in manufacturing, mining, chemicals, or large-scale property development, you will need to obtain environmental permits from the Department of Environment and Natural Resources (DENR).
• Licenses from Specific Industries – Some industries will need specific permits from national authorities. Examples of this include the Food and Drug Administration (FDA) for healthcare and food industries, and the National Telecommunications Commission (NTC) for telecom businesses.
• Landlord Permissions – If your business is trading from a commercial building or tower, you will need to obtain permission from your landlord. This will include receiving lessor permits, building permits, and current real property tax receipts.
• Public Liability & Fire Insurance – Many local authorities will want to see proof that you have public liability and property fire insurance.
• Waste Disposal Agreements – If your company is involved in manufacturing or large-scale trading, you will need to have valid waste disposal agreements with an authorized waste disposal company.

Submitting Applications to Your Local Licensing Office

Your company will need to submit its documents to the Business Permit and Licensing Office (BPLO) within your local city or municipality. To obtain your business permits you will need to complete detailed documentation and have them checked by several departments. You will also need to pay local taxes.

• Complete the Application Form – Your company will need to complete the official BPLO form. This will include information about your business, including total office size, total number of employees, business type, and initial capital.
• Calculate Local Taxes & Fees – The BPLO will calculate the correct amount of local business tax (LBT), Mayor’s permit, local garbage collection, health, and administration fees based on your initial capital and business type.
• Pay Local Taxes – You will need to pay the local taxes and administration fees to the local city treasurer. This will give you official receipts.
• Receive Trading Permit & Placards – Once all of your receipts and initial permits have been checked, you will receive your main Mayor’s Permit. You will also receive your placards, yearly registration stickers, and health placards.
• Many forward-thinking local authorities will have a one-stop shop system where they can collect all of their documents in one place each year. However, they will still need to have them checked by individual departments.
• Site Inspections – Once you have received your permits, your local authorities will carry out surprise inspections to ensure that you are complying with health, structural, and permitted trading requirements.
• Local Tax Incentives – If your company is setting up within a local economic area, you will need to submit your Mayor’s Permit to your local investment board to obtain any local tax incentives.
• Signage Permits – Local building inspectors will inspect your signage, billboards, and building signs. They will ensure they are structurally sound and comply with local standards. You will then receive your signage permits.
• Calibrations – If your company uses scales, liquid measures, or large-volume measuring equipment, you will need to have it calibrated and sealed by your local city treasurer.
• Set Up Online BPLO Account – Forward-thinking local authorities will want your company to create an official account on their online business portal.

Register with Tax Authorities

Obtaining your local permits will involve registering with the tax authorities. Your company will need to ensure they have obtained the correct registration.

• Submit Form BIR 1903 – Domestic corporations will need to submit an application for registration to the Revenue District Office (RDO) with jurisdiction over their main office within 30 days of receiving their incorporation documents from the SEC.
• Pay Tax – Your company will need to pay the yearly tax and process your documentary stamp tax (DST) for your shares, property leases, and contracts.
• Register Books – Your company will need to submit its books to your local RDO. This includes manual books, computerized accounting software (CAS), or loose-leaf books. They will need to be stamped, registered and taxed.
• Receive Authority to Print (ATP) – To invoice your customers and receive earnings, you will need to have an ATP. This will allow you to issue official invoices, receipts, and statements from authorized printers.
• Register Computer Invoicing – If your company uses ERP software or invoicing software, you will need to have it authorized by the BIR.
• Receive BIR Certificate of Registration (Form 2303) – Form 2303 will give you official confirmation that you have registered with the tax authorities. It will include details of the type of tax you will need to pay, how often, and what you need to report.
• Special Tax Exemptions – If your company is entitled to tax exemptions, you will need to submit documents to the BIR. This will include any special economic zones or legislation.
• Submit Tax Identification Numbers – The BIR will require you to submit Tax Identification Numbers (TIN) for your directors, incorporators, and officers.
• Register POS Machines – If your company is in retail, hospitality, or services and uses automated cash registers, you will need to obtain a permit for each machine from the BIR.
• Pay DST for Leases – You will need to pay the correct amount of Documentary Stamp Tax for your lease agreements within the correct time frames.

Potential Delays

Obtaining your local permits can cause many issues. This can delay your start date, increase costs, and cause issues when trading. Knowing how to get a business permit in the Philippines will help you understand the different processes, tax bands, and local rules.

• Different Rules – Different cities and municipalities throughout the Philippines will have different rules. This will include different taxes, structural guidelines, and additional permits.
• Structural & Safety Issues – If you do not have the correct permits for building, you will experience delays in receiving your Mayor’s Permit.
• Incorrect Company Name – If your company name does not match on your SEC, property title, lease agreement, and application form, you will experience delays.
• Disagreement on Taxes – If there are disagreements on the local business tax, you will experience delays when paying your taxes at the City Treasury.
• Multiple Permits – As different local and national authorities will have different processing times, if you experience delays with one permit, you will experience delays with all.
• Incorrect Business Type – If your business type does not match the correct tax band, you can experience tax reassessments, penalties, and backdating.
• Missed Deadlines – If you miss any deadlines for your post-SEC tax registration or local permits, you will incur late fees from the local treasuries and tax authorities.
• Incomplete Lease Agreement – If you do not have the required tax receipts from your landlord, property title, and tax declarations, you will experience delays.
• Changes to Zoning – If there are changes to the zoning of your local area, you may experience delays. You will need to apply for a variance.
• Underestimate Processing Times – Corporations often underestimate how long it will take to process their documents through multiple departments.

Summary

By obtaining all of your local government permits, you will link your incorporation with the SEC to fully trade. By obtaining your permits from the Barangay, local zoning, fire safety, Mayor’s Permit, and BIR, you will have a strong foundation to legally trade, grow your business, and fully comply with your business permits in the Philippines.

Is Assistance Available?

Navigating the local authorities, fire department, zoning, and tax authorities can be extremely difficult. This often causes delays to your business. By using BusinessRegistrationPhilippines.com, you can ensure your domestic company does not incur any costly mistakes and will be fully licensed with all local and national authorities. Contact us today to book an initial consultation.

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