Setting up a business in a country like the Philippines, which has its own unique business processes and regulations, can be difficult for outsiders because such processes and regulations are often neither readily understandable nor transparent. We can help simplify and clarify ambiguous or difficult business concepts and processes. FCB Law helps bridge the business culture and information gap and harmonizes inputs from legal, accounting, operations/management, finance, and other business disciplines to improve common understanding. Our team provides comprehensive assistance for business registration Philippines, ensuring a smooth and efficient process.
In the Philippines, laws derived from the Corporation Code, the Securities and Exchange Commission, and the Bureau of Internal Revenue (BIR) govern business processes. Business forms other than corporations like sole proprietorships and partnerships are also affected by different laws. Not only that, local government units (LGUs) have authority to apply their own local taxes through local revenue codes, enact zoning ordinances, issue business permits and licenses, and enforce municipal ordinances within their own municipalities, cities, and barangays. Being able to navigate these different laws and be self-aware of what law applies where and to what business form is crucial to success. From this landscape evolves Business Registration Day (BRD) that is one-day business registration.
Overview of FCB Law Services
An insightful research and investigation of the commercial realities in the Philippines has provided direct knowledge of the bottlenecks in business set-up procedures, which has helped us develop a custom approach to all our business clients. Customization of services ensures that Filipino business bureaucracy problems are resolved through the simplest and fastest means possible with FCB Law Firm handling all bureaucratic paper-related work in the Philippines. This makes business setup in the Philippines faster and more efficient. We ensure that opening a business in the Philippines is fast and simplified, all the while providing practical business advice while starting a business. Stay informed about business registration requirements with our detailed guides and expert advice.
The information provided to clients on the pre-registration phase through to the license to operate the actual business is focused first on solving entrepreneurs’ requirements and reacting to the business company set-up needs in the fastest and most efficient way possible. FCB Law Services recognized long ago that registering a business in the Philippines should be smooth, straightforward, and with no hidden bureaucracy traps. Direct professional local business knowledge is mixed with customized client treatment for hassle-free business operations in the Philippines. The relationship and trust built by FCB Law Services with their clients provide the best guide through legal Filipino business registration trouble. Small and large companies experience Philippines business services at their best. We offer specialized services for setting up a domestic corporation, from initial registration to ongoing compliance.
Legal Landscape for Starting a Business in the Philippines
It is important for all foreign business owners or investors who plan to put up a business in the Philippines to understand the laws, regulations, and procedures that must be complied with before opening a business legally in the country. Generally, to register a domestic corporation or partnership in the Philippines, the Securities and Exchange Commission (SEC) is the government agency that has jurisdiction over all corporations. On the other hand, if it is a sole proprietorship, a cooperative, an association, or foundation, the appropriate government agency with jurisdiction over the business is the Department of Trade and Industry (DTI), the Cooperative Development Authority (CDA), the Insurance Commission (IC), the Bangko Sentral ng Pilipinas (BSP), the Board of Investments (BOI), or the Philippine Council for NGO Certification (PCNC). Different types of businesses may have different requirements and processes in compliance with laws and regulations that control their operations.
Key Regulations and Requirements
Businesses in the Philippines are subject to several regulatory processes and requirements, all of which must be satisfied before a company can legally commence commercial operations. Registration with several different public agencies is a prerequisite to business formation and operation in the Philippines. Companies must register with the appropriate government agency in order to operate legally. Documentation and establishment requirements, such as a business location, may also need to be met to start operating in the country. Businesses have their own social security requirements within companies employing staff.
Business Name: Before filing with the Philippines Securities and Exchange Commission (SEC), applicants must request a registered name certificate from the SEC. The company reserves its company name for at least 90 days with or without a name verification. A company can hold its name indefinitely through the renewal of a registered company. The Corporate Register of the Company issued by the SEC shows that a company name is approved and registered.
Business Permit Registration in the Philippines
Philippines’ local government codes mandate that all businesses located in a particular municipality should secure a business permit from the local government unit (LGU). For a single proprietorship, the municipal/city hall is responsible for registering the business (the process is usually flocked with vendors for easy guidance upon arriving at the hall).
Before going to the municipal or city hall, you have to prepare the following requirements:
a. Barangay clearance by the barangay
b. Contract of lease
After securing the business permit, you must also have the following who must record their newly issued business permits:
SEC – for any registration of corporation or partnership
BIR – for registration of tax type and books of accounts
DOLE (Department of Labor and Employment) in case the business is a sole proprietorship employing at least ten people, or in case your employees are part of a union.
Health offices and business permits division – for all establishments that serve food or those that are treated as having environmental challenges such as those with chemicals in heavy industries. This permit is issued when certain pre-operating conditions are met by the establishment.
Importance of Business Permits
Business permits indicate local government endorsement of your business. They show that your business earns income legally, which is important when you want to open a bank account, apply for a loan, or register with government agencies. The permits are also needed when you apply for import and export permits in case you’re importing equipment or materials for your business. These licenses, in some local government units (LGUs) like Makati and Quezon City, are prerequisites for transactions such as opening a current account or availing facilities of banks, real estate agents, utilities, and telecommunications. These businesses require the mayor’s permit before recognizing facilitate trade transactions for buyers and sellers. All companies need the business name before they can apply for business permits with BIR and SEC.
Business permits are also records for the services businesses are required to pay the LGU. These cover an annual renewable tax that an enterprise must pay to operate in a city or municipality. Essential services such as fire-fighting and ambulance often depend on these fees. In addition, some agencies are sensitive to the fact that records of payments to the LGU are intact. Said agencies will often demand copies of the preceding year’s permit before completing transactions. Payments of annual municipal permits ensure the business can operate in legal revenue and are important for regulatory oversight. Some businesses are required to apply for additional special permits. Apparel manufacturers applying for a DOLE certificate, for example, must show a copy of their current barangay permit. Such documents are records of payment of dues made to barangay officials and can be vital in the event of a dispute, as all state authorities publicly recognize these services.
Specialized Services for Foreign Investors
In addition to the excellent service at any of the DTI Business Centers, foreign investors also have direct assistance. Here are a few options:
Investment Coordinating Office (ICO)
The flow of investments into the country is lined up to specific development goals and investment projections through the Investment Coordinating Committee (ICC). The ICC identifies various opportunities for business districts across the country to make recommendations to the National Economic Development Authority (NEDA). Investors needing assistance should directly call the ICO of the Investment and Arbitration Division – DTI at (632) 890-5127.
Philippine Trade & Investment Corporation (PTIC)
Recognizing the major foreign trade partners, the Department has established the Philippine Trade and Investment Corporation in the United States of America, United Kingdom, Germany, Japan, Korea, France, Belgium, and Italy. They are directly responsible for attending to the trade and investment needs of foreign investors.
Philippine Business Registry (PBR)
The PBR is a one-stop shop online business registry. It allows domestic and foreign investors to acquire a name for a corporation in just one simple step. The new business owner can complete both the incorporation and application for a business license or permit through the PBR website. Simply log on to its website to find out more.
Legal Considerations for Foreign-Owned Businesses
Legal structures used to do business may vary based on the rights given to the established company, rules laid out by the Securities and Exchange Commission, how it is funded, as well as nationality.
Using a NIPA, local corporation, partnership, or branch, foreign-owned businesses in the Philippines may be established. If allowed to do so, foreign companies may also participate in setting up representative offices, regional or area headquarters, or a regional operating office. The legislation also mandates the use of treatment and other guarantees granted to foreign-owned businesses on a reciprocal basis.
It is recommended that foreign investors wishing to establish their business in the Philippines contact a legal expert before choosing or organizing their company. The expert will provide guidance on the most suitable organization to ensure that the group is consistent with Philippine law, and will also offer advice on the required permits.
Conclusion
Doing business in the Philippines is an exciting opportunity for many because of its strategic location, proficient labor force, rich natural resources, and bustling economy. Now that you have the basic information you need to know when starting a business venture in the Philippines, we hope that you feel more equipped to pursue your entrepreneurial dreams and contribute to the Philippines’ progress. By navigating this process properly, you are bound to avoid any legal constraints and achieve your goals of launching operations in the Philippines. Remember that besides acquiring licenses, you are engaged in the intricacies of the rules and regulations of the Philippines. Make sure to engage in healthy relationships with the lead agency managing foreign investments: the Department of Trade and Industry. Once you are up and running, keep up to date with the latest business policies through its Business and Investments Promotion Division, accessible through the DTI website. With all that said and done, we are excited for your business launch.
If you need a more detailed discussion or assistance on how to register or start your business in the Philippines, here is the contact information of the lead Philippine regulatory agencies who can help answer further questions and can provide more specific assistance. Always remember that once you’re in the process of entering the Philippines, understanding the bureaucracy involved is crucial. Do not be caught unaware and helpless. There are multiple resources available to you including consultants and private technical advisers who will be very valuable especially during the initial phases of your entry. Once more, may your journey be memorable and may your business’ Philippines adventure contribute to the Philippines’ growth and development!
