BusinessHow to Obtain a PCAB License in the Philippines

June 21, 2024
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What is a PCAB License?

The Philippine Contractors Accreditation Board (PCAB) License is a mandatory certification for contractors operating within the construction industry in the Philippines. Mandated by Republic Act No. 4566, also known as the Contractor’s License Law, the license is a legal prerequisite to engage in contracting activities in the country. This legislation aims to safeguard public safety by ensuring that only qualified and competent contractors are authorized to undertake construction projects.

Legal Requirements and Compliance

According to RA 4566, architects and engineers intending to contract work in the Philippines must clearly state in their bid invitations and project specifications that bidders, including contractors, subcontractors, or specialty contractors, must possess a valid PCAB license for their bids to be considered. This requirement applies to both resident and non-resident contractors. The law encompasses four primary classifications for contractors: general engineering, general building, specialty, and trade.

Types of PCAB Licenses

Regular License

A Regular License is issued to domestic construction entities, including sole proprietorships, partnerships, and corporations, provided they have at least 60% Filipino equity. However, a landmark ruling by the Supreme Court in the case of PCAB vs. Manila Water Company Inc. (G.R. No. 217590, March 10, 2020) overturned this nationality requirement. The court ruled that the PCAB had overstepped its authority by imposing nationality-based restrictions in its Rules and Regulations. Consequently, the ruling allows for issuing Regular Licenses to domestic corporations irrespective of foreign equity ownership, thereby enabling 100% foreign-owned construction companies to obtain a Regular License. Despite this ruling, the current status quo remains, and the 40% foreign equity limitation is still enforced until PCAB fully implements the Supreme Court’s decision.

Special License

A Special License is granted to consortia, foreign contractors, joint ventures, or project owners for single, specific projects. This type of license is project-specific and is invalidated upon the project’s completion, even if it occurs before the fiscal year ends.

License Validity and Processing Times

Validity

A Regular License is valid for one fiscal year, from July 1 to June 30 of the following year, unless it is canceled, suspended, or revoked by the board. A Special License, however, is invalidated once the specific project for which it was issued is completed.

Processing Times

The Construction Industry Authority of the Philippines outlines the following estimated processing times for PCAB licenses, with a strong emphasis on “estimated”:

  • New Regular License: 30 business days
  • Renewal of Regular License: 10 business days
  • Revision of Classification: 15 business days
  • Upgrading of License Category: 30 business days
  • Change of Authorized Managing Officer: 30 business days
  • Change of Business Name & Status: 15 business days
  • Change of Business Name: 15 business days
  • Joint Venture-Local (New/Renewal/Re-Issuance); Consortium-Local (New/Renewal/Re-Issuance): 5 business days
  • Joint Venture-Foreign (New); Consortium-Foreign (New); Foreign (New): 30 business days
  • Joint Venture-Foreign (Renewal); Consortium-Foreign (Renewal); Foreign (Renewal): 10 business days
  • Registration for Government Infrastructure Projects: 10 business days
  • Additional Project Kind: 15 business days
  • Public-Private Projects (PPP): 5 business days

Application Requirements for PCAB License

To apply for a new Regular Contractor’s License, the following documents and certifications are required:

  • Affidavit of Attestation
  • Authorized Managing Officer (AMO) Affidavit
  • Authority to Verify Documents with Depository Bank, BIR, and other Government Agencies
  • Authorized Representatives Affidavit
  • Certificate of Attendance of a 2-day AMO Seminar
  • Certificate of Completion of a 40-hour Construction Safety and Health Seminar (COSH)
  • A certified true copy of the Business Name Registration Certificate
  • Contractor’s General Information
  • Complete Audited Financial Statement (AFS) with accompanying Auditor’s Opinion Report and Notes dated within the last six months
  • Construction in Progress: Schedule with complete details (if the amount exceeds 10% of the Net Worth)
  • Documents supporting other assets
  • For existing firms: AFS for the immediately preceding taxable year and a copy of Annual Income Tax Return (ITR) and Quarterly ITR certified by the BIR
  • Integrity Pledge
  • Original NBI Clearance
  • Original signature (preferably in blue ink) of the AMO on every page of the application forms, including supporting documents
  • Proofs of Employer’s membership with SSS, PhilHealth, and PAG-IBIG
  • Schedule of Receivables
  • Sustaining Technical Employee(s) Affidavit of Construction Experience
  • Sustaining Technical Employee(s) Personal Appearance
  • Sustaining Technical Employee(s) Affidavit of Undertaking with a copy of valid PRC ID(s)

Assistance in Acquiring PCAB License

Acquiring a PCAB license can be a complex and challenging process, especially for foreign nationals or non-resident aliens. To facilitate this, companies, contact us. We provide comprehensive support to ensure timely and efficient acquisition of PCAB licenses, making the process smooth and hassle-free.