Launching a manufacturing business in the Philippines can be highly rewarding thanks to the country’s expanding economy, CREATE law tax incentives, and strategic Southeast Asian location. However, aside from the standard DTI or SEC registration and business permit, factories typically need to obtain several additional permits from various government agencies.
To help you start your enterprise, we’ll explain the requirements and process of registering a manufacturing business in the Philippines.
What is a Manufacturing Business?
A manufacturing business, also referred to as a factory, production plant, or industrial enterprise, is a company that transforms raw materials into finished products using labor, machinery, and tools. These products may include everyday consumer goods like food, apparel, and gadgets, or industrial outputs such as components, equipment, or chemicals.
What Are the Government Incentives for Manufacturing Businesses?
The Philippine government offers various incentives to encourage manufacturing investments, particularly in export-oriented or priority sectors. Through agencies like the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA), qualified businesses may enjoy benefits such as income tax holidays, reduced corporate income tax rates, duty-free importation of capital equipment, and tax exemptions on raw materials. These incentives aim to support growth, innovation, and job creation within the manufacturing industry.
Step 1: Choose a Business Structure
The first step is to decide on the legal business structure of your manufacturing business. Common options include:
- Sole Proprietorship: Owned by one individual, simplest to set up, but the owner has unlimited liability.
- Partnership: Two or more individuals share ownership, with shared responsibilities and liabilities.
- Corporation: A separate legal entity, offering limited liability but requiring more complex registration processes.
For a manufacturing business, a corporation is often preferred due to its ability to attract investors and limit personal liability. If you choose this structure, you’ll register with the Securities and Exchange Commission (SEC). For sole proprietorships or partnerships, registration is handled by the Department of Trade and Industry (DTI).
Step 2: Register the Business Name
- For Sole Proprietorships: Register your business name with the DTI through their online portal. Ensure the name is unique and reflects your manufacturing business.
- For Corporations or Partnerships: File with the SEC via their eSPARC (Electronic Simplified Processing of Application for Registration of Company) system.
Registering a corporation normally requires professional help due to its stricter requirements including the Articles of Incorporation and bylaws. Contact us for expert guidance.
Step 3: Secure a Barangay Clearance
Visit the barangay (local community) office where your factory will be located to obtain a Barangay Business Clearance. This document confirms that your business complies with local community regulations. Requirements typically include a location sketch, proof of address, and a small fee (the amount depends on the barangay).
Step 4: Obtain a Mayor’s Permit
Apply for a Business Permit (Mayor’s Permit) at the municipal or city hall where your factory is situated. This permit allows you to operate within the locality legally. Business permit requirements include:
- DTI or SEC registration certificate
- Barangay Clearance
- Lease contract or proof of property ownership
- Other documents like a Community Tax Certificate (CTC)
- A small fee (amount depends on the LGU)
The Mayor’s Permit must be renewed annually. Since manufacturing businesses often involve health and safety risks, you may be required to submit additional documents or information specific to your operations.
Contact us and we can provide you personalized assistance to help you receive your Business Permit and other necessary legal documents.
Step 5: Register with the Bureau of Internal Revenue (BIR)
Register your manufacturing business with the BIR to obtain a Tax Identification Number (TIN) and comply with tax obligations. Visit the Revenue District Office (RDO) covering your business location and submit:
- DTI/SEC registration
- Mayor’s Permit
- Barangay Clearance
- Proof of address
You’ll also need to register for applicable taxes (e.g., Value Added Tax or Percentage Tax) and secure an Authority to Print (ATP) for official receipts. Be ready to pay several small fees (amounts vary but are minimal).
Step 6: Secure Additional Permits for Manufacturing
Manufacturing businesses often require specialized permits due to their industrial nature. These may include:
- Environmental Compliance Certificate (ECC): Issued by the Department of Environment and Natural Resources (DENR), this is mandatory for factories with potential environmental impact (e.g., those handling chemicals or generating waste).
- Sanitary Permit: Required for businesses handling food, beverages, or pharmaceuticals, obtained from the local health office.
- Fire Safety Inspection Certificate: Issued by the Bureau of Fire Protection (BFP) after inspecting your factory for compliance with fire safety standards.
- Mechanical and Electrical Permits: If your factory uses heavy machinery or specialized electrical systems, secure these from the local government’s engineering office.
- FDA License: For manufacturing food, drugs, or cosmetics, register with the Food and Drug Administration (FDA).
Securing each permit may take a few days to a week. The process may take longer depending on the complexity of your business.
Step 7: Register with Government-Mandated Agencies
For businesses with employees, register with:
- Department of Labor and Employment (DOLE): Any business with employees must register to ensure they follow the labor laws.
- Social Security System (SSS): For employee social security benefits.
- Philippine Health Insurance Corporation (PhilHealth): For health insurance.
- Home Development Mutual Fund (Pag-IBIG): For housing and savings benefits.
Submit employer registration forms and comply with contribution requirements. These registrations ensure your employees receive government-mandated benefits.
Step 8: Comply with Industry-Specific Regulations
Depending on your manufacturing niche, additional licenses may be required. For example:
- Chemical manufacturing: Permits from the Philippine National Police (PNP) for handling controlled substances.
- Textile or garment production: Compliance with labor and safety standards enforced by the Department of Labor and Employment (DOLE).
- Food, cosmetics, or pharmaceuticals: Registration and product approval from the Food and Drug Administration (FDA) to ensure safety and quality standards.
- Export-oriented businesses: Registration with the Philippine Economic Zone Authority (PEZA) for tax incentives if located in an economic zone.
Obtaining each permit typically takes a few days to a week, though the timeline may be longer depending on the complexity of your business.
To ensure you have all the permits and licenses you need, give us a call. We can promptly and accurately handle your registration requirements and ensure you’re fully compliant with Philippine laws.
Final Thoughts
Registering a manufacturing business in the Philippines involves several steps, from choosing a business structure to securing industry-specific permits. By following the process and complying with local regulations, you can legally operate your factory. Given the strict requirements, we highly recommend working with a professional business registration service. Our team of experienced lawyers can handle the necessary registrations with the appropriate government agencies and ensure your business is fully compliant.
Is This Your First Time Registering a Manufacturing Business? You Can Find Expert Assistance Here
Setting up a manufacturing business in the Philippines can be especially complex due to the number of permits, inspections, and regulatory requirements involved. From environmental clearances to safety certifications, it’s easy to overlook a crucial document or miss a deadline. Unfortunately, these oversights can result in costly fines or even suspend your business operations.
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:
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- Call us at +63 (02) 8540-9623