UncategorizedHow to Register an Online Business: Mayor’s Permit, BIR Registration, and Other Requirements

Launching an online business is a thrilling opportunity, but recent legislation has also introduced stricter regulations. In the Philippines, registering your online business is now mandatory to operate legally. We’ll teach you how to register an online business: registering with the DTI/SEC, securing a Mayor’s Permit, BIR registration, and other legal documents you may need.

What is an Online Business

An online business is any commercial venture that operates via the internet, such as selling products or services through websites, social media, or e-commerce platforms. Like traditional businesses, they must comply with legal requirements, but they may also face extra regulations based on their specific activities.

Step 1: Choose Your Business Structure

Before diving into the registration process, decide on your business structure. Common options for online businesses in the Philippines are:

• Sole Proprietorship: Ideal for solo entrepreneurs, this is the simplest structure with fewer regulatory requirements.
• Partnership: Suitable if you’re starting the business with others, sharing responsibilities and profits.
• Corporation: Best for larger operations, offering limited liability but with more complex compliance needs.

Your choice affects the registration process, taxation, and legal obligations, so choose wisely based on your business goals. We will focus on sole proprietorships and partnerships for this guide.

Registering a corporation is more complex and often necessitates the help of a professional business registration service.

Step 2: Register Your Business Name with DTI/SEC

Select a unique name and register it according to your business structure:

• Sole Proprietorship: Go to the Department of Trade and Industry (DTI) website or office to verify name availability and complete registration. Pay a small fee.
• Partnership: Pay a small fee and reserve your business name through the Securities and Exchange Commission (SEC) eSPARC portal. Your reservation is valid for 30 days.

Processing typically takes 4–7 days, depending on the queue length.

Step 3: Obtain a Barangay Clearance

Get a Barangay Clearance from the barangay hall where your business is located. Here’s how:

1. Prepare your DTI or SEC registration certificate: This serves as proof that your business name is officially registered. Make sure to bring a photocopy and the original for verification.
2. Secure proof of your business address: Bring a copy of your lease contract if you’re renting a space, or a tax declaration or utility bill if you own the property. 
3. Fill out the barangay clearance application form: Provide accurate details about your business, including its name, nature of operations, and the names of the business owner/s.
4. Pay the fee: The amount depends on your business type and location.
5. Wait for the processing and approval: Processing usually takes 2 to 3 business days. Some barangays may conduct an inspection or ask for additional information before releasing the clearance.

The barangay clearance is a requirement for your Mayor’s Permit.

Step 4: Secure a Mayor’s Permit

A Mayor’s Permit (also called a Business Permit) is issued by the local government unit (LGU) where your business operates. Even if your business is online, you need this permit from the city or municipality of your business address. Here’s how to get it:

1. Visit Your LGU: Go to the Business Permits and Licensing Office (BPLO) of your city or municipality. Some LGUs offer ways to register for a business permit online, so research if yours has this option.
2. Mayor’s/Business Permit Requirements: This includes your DTI/SEC Certificate, Barangay Clearance, proof of address (e.g., lease contract or utility bill), and a filled-out application form. Requirements vary by LGU, so check with your local office.
3. Pay Fees: Fees depend on your business size and LGU regulations.
4. Get Your Permit: Processing usually takes 1 to 2 weeks. Once approved, you’ll receive your Mayor’s Permit.

Step 5: Register with the Bureau of Internal Revenue (BIR)

BIR registration ensures your business complies with tax laws, letting you issue official receipts and manage tax obligations. Follow these steps:

1. Visit Your Revenue District Office (RDO): Locate the RDO covering your business address. You can find this on the BIR website. You may also register online to the BIR via their online portal.
2. Submit Requirements: Bring your DTI Certificate, Mayor’s Permit, valid ID, and proof of address. You’ll also need to fill out BIR Forms 1901 (for sole proprietors) or 1903 (for partnerships/corporations).
3. Pay the Registration Fee: A small fee plus additional costs for books of accounts and official receipts.
4. Obtain Your Certificate of Registration (COR): The BIR will issue your COR, which includes your Tax Identification Number (TIN). You’ll also register your books of accounts and apply for authority to print receipts.

Step 6: Additional Requirements

Depending on your business type, you may need extra permits or licenses from specific government agencies. These include:

• FDA License to Operate (LTO) – Required for online sellers of food, cosmetics, medicines, and health supplements.
• LTFRB Accreditation – Needed for ride-hailing or delivery platforms; includes registration as a Transport Network Company (TNC) and securing a Certificate of Public Convenience (CPC) or Provisional Authority (PA) for each vehicle.
• BSP or SEC Registration – For businesses offering digital wallets, loans, or other financial services.
• PAGCOR/GAB License – Required for platforms offering online gaming, raffles, or other games of chance.
• NPC Registration – For businesses that collect and process personal data, such as e-commerce sites and apps.

Check with the relevant agencies to learn about their application process. Every business is unique so to ensure full compliance, don’t hesitate to consult with a professional business registration service.

Step 7: Stay Updated on New Online Business Regulations

Online businesses in the Philippines now face tighter regulations, making compliance more critical than ever. Here are key updates to be aware of:

• Mandatory Registration – All online sellers, including those on social media and marketplaces, must register with the DTI or SEC and the BIR.
• Internet Transactions Act of 2023 – Establishes standards for consumer protection, merchant obligations, and dispute resolution in online commerce.
• Digital VAT – Digital services offered by both local and foreign providers are now subject to Value-Added Tax.
• Digital Withholding Tax – Platforms may be required to withhold taxes from seller transactions, especially when acting as intermediaries.
• E-Receipts and E-Invoices – The BIR now mandates digital receipts and invoices for certain businesses.
• Data Privacy Compliance – Businesses collecting customer data must follow the Data Privacy Act and may need to register with the National Privacy Commission (NPC).

Staying informed about these regulations helps ensure your business remains legally compliant and avoids penalties.

Final Thoughts

Registering an online business in the Philippines requires coordinating with multiple government agencies. By securing your DTI registration, Mayor’s Permit, BIR registration, and other necessary permits, you lay a strong legal foundation for your operations. Plan ahead, prepare your documents thoroughly, and don’t hesitate to reach out to us for expert assistance.

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