In one of our previous posts (“Guide for foreigners: Starting a business in the Philippines” ), we discussed the different types of corporate entities in the Philippines, as well as restrictions to owning and starting a business as a foreigner in the country.
Today, we’re going to focus on business requirements you need to fulfill as a foreigner establishing a business in the Philippines.
Business as a sole proprietorship
Registering a business as a sole proprietorship is perhaps the easiest way to establish your business in the Philippines. Foreign nationals are welcome to put up a single proprietorship business as long as there are no restrictions or limitations imposed on the sector (see foreign equity restrictions here).
As a single proprietorship, you are the sole beneficiary of the business, liable to its responsibilities, etc. Under the eyes of the law, your personal interests and that of your business are one and the same.
To register your business as a sole proprietorship, requirements include:
- Interview sheet complete with findings and recommendation (5 copies)
- Accomplished forms:
- Form #16: Business Name Application Form
- Form #17: Foreign Investor’s Application
- Passport-sized ID Pictures (7 copies)
- ACR/ICR, Special Investors Resident Visa (SIRV), or passport
- Notarized appointment of Filipino Resident Agent
- For non-resident alien:
- Proof of inward remittance of Foreign Currency with Peso Conversion for Resident
- Bank certificate of deposit
- Authority to verify bank accounts/bank certificate of deposit
- Certification from Resident Alien not seeking remittance of profits and dividends abroad
- If investment includes assets other than foreign exchange, copy of valuation report from Central Bank
- Clearance/certification from other involved agencies
- Fees/charges
- Single proprietorship: 300.000
- Filing fee: 500.00
- Registration fee: 5,000.00
- Bio data of foreign investor
To check whether your chosen business name is available, visit the Department of Trade and Industry’s official website. Submit at least three preferred names when you’re registering your chosen company name in case your first option is unavailable.
Fulfill the Business Name Application form and submit it with the other required documents to be assessed by DTI. If you’re successful, you’ll receive your Certificate of Registration. This is will be valid for 5 years.
If you are to hire employees in your business, you are also obligated to register your business with the following agencies:
- Social Security System
- Home Development Mutual Fund
- Philippine Health Insurance Corporation
After you register with the DTI, you will also need to register your business with local government units and the Bureau of Internal Revenue.
To register with the barangay, simply visit the hall of the barangay where your business is located and submit an application form, together with your Certificate of Business Registration from DTI, proof of address, and at least two valid IDs. If successful, the barangay will then issue your Barangay Certificate of Business Registration.
The following step is to register in the Mayor’s Office. For this, head to the municipal office and accomplish the application form. Submit this, allowing with your Certificate of Business Registration from DTI, your Barangay Clearance Certificate, proof of address, and two valid IDs. Once everything is deemed in check, you will receive your Mayor’s Business Permit and Licenses.
The final registration is done with the Bureau of Internal Revenue (BIR), which handles taxes in the Philippines. To do so, go to the Regional District Office (RDO), accomplish the BIR Form 1901 – Application for Registration (Sole Proprietor). Submit this along with the Certificate of Registration from DTI, barangay clearance, Mayor’s Business Permit, proof of address, and valid IDs.
Pay for the registration, and then register your business’ book of accounts and receipts. Once done, you will be given your Certificate of Registration (BIR Form 2303).
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