Starting a software, tech, EdTech, or Software-as-a-Service (SaaS) business in the Philippines can be a great opportunity. The country has a growing population of young tech-savvy people as potential customers. However, the government has introduced new regulations for this growing market that businesses need to understand and comply with.
To help you build a legitimate and reputable business, we’ll guide you through the IT company registration process and highlight the key regulations you need to know.
What Is an IT Business?
An Information Technology (IT) business provides digital products or services that involve the use of computers, software, and the Internet. This includes companies that develop software, create mobile or web applications, offer cloud-based solutions (like SaaS), or build tech platforms for specific industries such as education (EdTech).
Even though IT businesses often operate online, they are still required to register with the appropriate government agencies. In addition to standard business permits, they must also comply with special laws on data privacy, cybersecurity, and digital taxation.
Step 1: Choose Your Business Structure
The first decision is to select the appropriate business structure. In the Philippines, IT companies typically operate as one of the following:
- Sole Proprietorship: Ideal for solo entrepreneurs, this structure is simple but offers no liability protection, meaning personal assets are at risk.
- Partnership: Suitable for two or more founders, partnerships share profits and liabilities. A formal partnership agreement is recommended.
- Corporation: Most tech startups opt for this structure due to limited liability, where owners’ personal assets are protected.
For tech, EdTech, or SaaS businesses aiming for scalability or foreign investment, a corporation is often the best choice.
Step 2: Register Your Business Name
Once you’ve chosen a structure, register your business name via:
- For sole proprietorships, register with the Department of Trade and Industry (DTI). You may use their online portal.
- For partnerships, corporations, or OPCs, register with the Securities and Exchange Commission (SEC). Use the SEC’s online platform, eSPARC, to check name availability and reserve your chosen name.
Step 3: Complete Government Agency Registrations
Once your business name is approved, proceed with registering at the following agencies:
- SEC (for Corporations/Partnerships) or DTI (for Sole Proprietors):
- Finalize your company’s legal entity status.
- For corporations, prepare complex documents like Articles of Incorporation and Bylaws. Professional assistance is strongly recommended to ensure accuracy and completeness. Contact us for support with your paperwork.
- Bureau of Internal Revenue (BIR):
- Obtain a Tax Identification Number (TIN) and BIR Form 2303 (Certificate of Registration).
- Register official receipts and invoices, and set up your books of accounts.
- Ensure receipts/invoices are printed and BIR-stamped.
- Local Government Unit (LGU) – Barangay & City/Municipal Hall:
- Secure a Barangay Clearance and Mayor’s Permit.
- Pay the annual business tax.
- Social Agencies (if hiring employees):
- Register with:
- Social Security System (SSS).
- PhilHealth.
- Pag-IBIG Fund.
- Register with:
Even for online or home-based businesses, these registrations are mandatory. Compliance is critical as the government is increasingly strict with digital businesses.
Step 4: Comply with IT-Specific Regulations
Information technology businesses must comply with these regulations:
- Data Privacy Compliance (RA 10173)
If your platform handles personal data (common in SaaS and EdTech), you must:
- Register with the National Privacy Commission (NPC)
- Appoint a Data Protection Officer (DPO)
- Implement privacy and security policies
- Digital VAT Law (RR No. 16-2022)
Digital services earning over ₱3 million annually are subject to 12% VAT. This applies to both local and foreign businesses. You must:
- Register as a VAT taxpayer with the BIR
- Issue VAT-compliant receipts or invoices
- File and remit VAT returns regularly
- Cybercrime and Online Security (RA 10175)
Protect users from cyber threats such as hacking or phishing by:
- Adopting cybersecurity protocols
- Securing your platform against unauthorized access
- Responding to incidents in compliance with the Cybercrime Prevention Act
- E-Commerce Compliance (RA 8792)
If your business involves online sales or transactions:
- Provide clear terms, conditions, and privacy policies
- Ensure secure payment systems and valid electronic contracts
Complying with these laws ensures your IT business operates legally, protects user data, and earns the trust of clients, partners, and regulators.
Step 5: Obtain Permits and Licenses Specific to Your Industry
Depending on your business, you may have to register with or secure a permit from one or more of the government agencies.
Tax Incentives for Exporters
If you export software or digital services, consider registering with:
- Philippine Economic Zone Authority (PEZA) or
- Board of Investments (BOI)
Benefits include:
- Income tax holidays
- Reduced corporate tax rates
- Customs duty exemptions
Additional Industry Licenses
- EdTech Platforms (offering formal education):
- DepEd – for K–12 programs
- CHED – for higher education
- TESDA – for vocational and technical training
- SaaS Platforms with Payment Features:
- Comply with Bangko Sentral ng Pilipinas (BSP) regulations
- Register as an Operator of Payment System (OPS), if applicable
- Use licensed BSP-compliant payment gateways
Step 6: Hire Employees and Register with Government Agencies
As your IT company grows, you’ll likely hire developers, designers, or support staff. Register with the:
- Department of Labor and Employment (DOLE)
- Social Security System (SSS)
- Philippine Health Insurance Corporation (PhilHealth)
- Home Development Mutual Fund (Pag-IBIG)
Ensure compliance with the Labor Code of the Philippines, including minimum wage and working conditions.
Final Thoughts
IT companies have strong growth potential in the Philippines’ expanding tech sector. However, ambitious entrepreneurs must stay informed about evolving digital economy regulations. To avoid penalties or business suspension, make sure your company is properly registered and has all the required permits from the relevant government agencies. To ensure your business is fully compliant with the law, book a consultation with us. We’ll help identify the permits you need and assist you throughout the registration process.
Is This Your First Time Registering an IT Business? You Can Find Expert Assistance Here
Building a software development, EdTech, or SaaS business company in the Philippines can be complicated, especially with the emerging digital regulations and government requirements. From data protection laws to tax registration and industry-specific permits, it’s easy to miss a step that could result in penalties or even disrupt your 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:
- Contact Us Here
- Fill Out the Form Below
- Call us at +63 (02) 8540-9623