The Philippines, with its serene islands, vibrant culture, and growing tourism sector, is an ideal place to launch a travel agency, homestay, or tour operation. However, to operate legally and avoid penalties, you must navigate the business registration process. Whether you’re operating island-hopping tours or a guesthouse, these steps will help you get started.
Step 1: Choose Your Business Structure
First, decide on your business structure. Your choice will affect the registration process, compliance requirements, and your taxes. For small to medium enterprises (SMEs), the most common options are:
- Sole Proprietorship: Perfect for solo ventures like freelance tour guiding. It’s simple but ties personal and business liabilities.
- Partnership: Suitable for businesses with two or more owners, requiring a partnership agreement.
- Corporation: Ideal for slightly larger SMEs seeking investors, offering liability protection but with a more complex setup.
Most SMES opt for sole proprietorships or partnerships due to their simplicity. We’ll focus on these two structures for this guide.
Registering a corporation is more complex and typically requires professional assistance from a business registration service.
Step 2: Register Your Business Name
Secure a unique business name that reflects your tourism brand. Register with the Department of Trade and Industry (DTI) for sole proprietorships or the Securities and Exchange Commission (SEC) for partnerships or corporations.
- DTI Registration: Use the DTI’s online portal (https://bnrs.dti.gov.ph/registration) to check name availability, submit an application, and pay fees.
- SEC Registration: Reserve your name via the SEC eSPARC portal (https://esparc.sec.gov.ph/application), submit documents like Articles of Incorporation, and pay fees.
Ensure your name complies with guidelines (e.g., no offensive terms).
Step 3: Obtain a Barangay Clearance
Visit the barangay hall where your business is located to get a Barangay Clearance, confirming compliance with local rules.
- Submit your DTI/SEC registration, a lease contract or proof of ownership, a valid ID, and an application form.
- Pay a fee (varies by barangay).
Processing takes 1–3 days. This clearance is needed for the next step: the Mayor’s Permit.
Step 4: Secure a Mayor’s Permit
The Mayor’s Permit (also called Business Permit), issued by your city or municipality’s Business Permit and Licensing Office (BPLO), is essential to operate legally. Business permit requirements vary by LGU but typically include:
- Barangay Clearance
- DTI/SEC registration
- Lease contract or proof of ownership
- Sanitary Permit (for businesses like homestays, resorts, or restaurants, as discussed previously)
- Fire Safety Inspection Certificate (FSIC) (for physical premises, as noted earlier)
- DTO accreditation (a requirement in some LGUs)
- In tourism-heavy areas like Palawan, additional requirements like environmental clearances may apply.
Submit these, pay fees and expect processing to take 1–2 weeks but may take longer depending on the length of inspection.
Hotels, restaurants, resorts, and similar establishments face stricter regulations. Choose a compliant location and ensure adherence to building, zoning, and safety standards. The LGU will evaluate suitability, and non-compliance may lead to permit denial.
Step 5: Register with the BIR
Register with the Bureau of Internal Revenue (BIR) at the Revenue District Office (RDO) covering your area to get a Taxpayer Identification Number (TIN) and comply with tax obligations.
- Submit your DTI/SEC registration, Mayor’s Permit, and ID.
- Register books of accounts and apply for official receipts.
- Pay a registration fee and documentary stamp taxes.
Fill out BIR Form 1901 (sole proprietorship) or 1903 (partnership).
SMEs with annual gross sales below PHP 3 million can opt for a simplified tax regime (e.g., 8% flat tax). If you fall within this bracket, we highly recommend this to simplify your tax filing.
If your sales are higher, you’ll need to pick Regular Bookkeeping which might require professional assistance when you begin operating.
Within 5–7 days, you’ll receive a Taxpayer Identification Number (TIN) and a Certificate of Registration for display.
Step 6: Consider DOT Accreditation
While DOT accreditation is voluntary under the Tourism Act of 2009 (RA 9593), it’s highly recommended for SMEs like homestays or tour operators. In places like Boracay, it’s mandatory for some businesses (per DOT Memorandum Circular No. 2018-03, as discussed).
Below are the requirements of DOT Accreditation:
- Apply via DOT’s portal (https://accreditation.tourism.gov.ph/login).
- Submit your Mayor’s Permit, DTI/SEC registration, and proof of safety compliance.
- Pay fees and undergo inspection.
Benefits include credibility, access to DOT promotions, and compliance with LGU rules in tourist areas.
Final Tips
- Check LGU Variations: Requirements for Mayor’s Permits differ across cities (e.g., Quezon City may need a zoning clearance, unlike rural LGUs).
- Comply with the Labor Code: If hiring staff, register with SSS, PhilHealth, and Pag-IBIG for employee benefits.
- Stay Compliant: Renew permits annually and keep records for taxes.
Summary
Registering your small to medium tourism business in the Philippines requires
careful attention to local and national regulations. Mistakes can lead to registration delays, penalties, and can even lead to your business becoming temporarily closed. But by following these steps, you’ll ensure legal compliance and position your business to attract tourists.
To ensure a swift and accurate registration process, we highly recommend consulting with a professional business registration service.
First Time Registering a Business? Here’s Where to Find Help
Registering a business in the Philippines can be a complex and challenging process. With numerous permits and licenses required by the government, it’s easy to miss a document or forget to renew it. Unfortunately, this can lead to costly fines or even force your operations to shut down.
Thankfully, the Business Registration Philippines team provides comprehensive support for your business registration, so you don’t have to stress over the paperwork.
We’ll handle the permits and renewals so you can focus on what matters most—running your business and achieving financial success.
Contact us today to schedule an initial consultation with one of our experts:
- Contact Us Here
- Fill Out the Form Below
- Call us at +63 (02) 8540-9623