What is a business permit (mayor’s permit)?
In the Philippines, a business permit (also known as the mayor’s permit) is an essential certification that validates the legitimacy and authorization of a business to operate in a specific city or municipality. This official document is processed by the local government unit (LGU) supervising the business’s location. A business permit in the Philippines is essential to ensure the business complies with local tax regulations and ensures safety, security, health, and sanitation. This permit also grants access to any support or assistance the LGU provides to businesses in the area. The law on business permits in the Philippines is that all businesses, whatever the legal form, must secure a mayor’s permit or municipal license from the city or municipality where they are located.
Requirements to obtain a business permit in the Philippines
Before applying for a business permit, completing the necessary registration with government agencies and securing other permits and licenses for business in the Philippines is essential. These are the requirements for obtaining a business permit:
- Business permit application form: Filled with business information, including business name, address, and nature of business.
- Registration certificate: Proof of business registration from the SEC for corporations, DTI for sole proprietorships, and CDA for cooperatives.
- Barangay clearance: Local government approval certifying the business meets community requirements.
- Community Tax Certificate (CTC): A document, also known as Cedula, proving the payment of community tax.
- Lease contract or land title: Document of the business premises ownership or rental agreement.
- Sketch or photos of the business location: Visual representation of the business location for zoning verification.
- Occupancy permit: Certification that the building is safe for occupancy.
- Fire Safety Inspection Certificate (FSIC): A document from the fire department certifying the business meets fire safety regulations.
- Sanitary permit: The local health office certification that the business complies with sanitation and hygiene standards.
- Building and Electrical Inspection Certificate: Documents proving that the building complies with local construction and electrical safety standards.
- Public liability insurance: Insurance policy covering damages or injuries to third parties, required for certain businesses like restaurants and cinemas.
6-step guide to getting a business permit in the Philippines
Understanding the process of getting a business permit in the Philippines is essential for any individual or organization planning to operate a business there. The business permit registration may vary depending on the Local Government Unit (LGU) you are dealing with. Below are six steps in applying for a business permit in the Philippines.
Step 1: Visit the Business Permit and Licensing Office (BPLO)
Locate the BPLO within the premises of the city/municipal hall that has jurisdiction over your business address. In some cases, to get a business permit in the Philippines, you may have the option to apply for a new business permit or renewal at malls that have partnerships with your LGU.
Step 2: Secure and complete the application form
Obtain it on-site or download it from the city’s website. Ensure that you provide accurate and complete information on the form.
Step 3: Submit the application form and other requirements
Submit the completed application form and all the mayor’s permit requirements. The personnel at the BPLO will evaluate your documents to ensure everything is in order.
Step 4: Undergo assessment of tax and fees
When your application is completed, it will be assessed for taxes and fees. The BPLO officials will compute the amount you must pay according to the nature and size of your company.
Step 5: Pay the assessed tax and fees
Proceed to the cashier and pay the assessed tax and fees to get a business permit in the Philippines. Once you have paid, you will receive an official receipt as proof of payment.
Step 6: Claim your business permit
After paying taxes and fees, you can claim your business permit, which may come with a registration plate/sticker or other certificates. Make sure to display these legal documents needed to start a business in the Philippines as the LGU requires.
How much does it cost to get a business permit in the Philippines?
Starting a business comes with various fees to get a business permit in the Philippines, depending on your location. Here is an overview of the cost of a business permit in the Philippines:
- Business permit processing fee: ₱ 500 ($8.93)
- Mayor’s permit fee: ₱ 100 ($1.79)
- Sanitary fee: ₱ 150 ($2.68)
- Building inspection fee: ₱ 200 ($3.57)
- Electrical inspection fee: ₱ 20 ($0.36)
- Plumbing fee: ₱ 15 ($0.27)
- Signboard fee: ₱ 50 ($0.89)
- Fire fee: ₱ 300 ($5.36)
- Sticker fee: ₱ 50 ($0.89)
Renewing your business permit in the Philippines
For small business owners, renewing your business license in the Philippines is an essential task that must be completed every year to ensure the legal operation of your business. It is advisable to get a business permit in the Philippines and start filing for renewal before the deadline, January 20th of each year.
The documents you’ll need to renew your business permit can differ based on location. However, here are the standard business permit requirements for renewal:
- Previous year’s business permit.
- Barangay Clearance Certificate.
- Tax Residency Certificate (TRC).
- Sanitary permit.
- Fire Safety Inspection Certificate.
In addition to these standard requirements to get a business permit in the Philippines, you may also need to provide the following additional and updated documents:
- Audited financial statements from the previous year.
- Confirmation of the number of employees at the time of business permit renewal, including their individual addresses and registration numbers for TIN, SSS, PHIC, Pag-IBIG, etc.
- Quarterly VAT returns from the previous year.
- Letter of Explanation (if gross sales are lower than the previous year).
How much is the renewal of a business permit in the Philippines?
When renewing a business license in the Philippines, the fees vary depending on the city or town of your business. In determining the specific fees applicable to get a business permit in the Philippines for renewal, it is recommended to check with your local government unit. Additionally, it is essential to remember that there is a 25% surcharge on the renewal fees and an additional 2% charge for every month of delay in renewing your business license in the Philippines. Therefore, it is crucial to ensure timely renewal to avoid incurring unnecessary penalties.
Assistance for obtaining a business permit in the Philippines
Navigating the process of obtaining a business permit in the Philippines can be complex, but our expert team is here to help. We offer comprehensive support from understanding the requirements and gathering the necessary documents to submitting your application and ensuring compliance with local regulations. Our personalized assistance is designed to make the entire process smooth and efficient for you. You can also email us at [email protected] for detailed inquiries and tailored guidance. Contact us today and take the first step towards confidently securing your business permit!
Frequently Asked Questions (FAQs)
How do I compute the business permit fee in the Philippines?
The business permit fee in the Philippines can be computed based on various factors such as the type of business, location, and annual gross sales.
Do you need a business permit for Airbnb in the Philippines?
Yes, you must get a business permit for Airbnb in the Philippines.
Are the mayor’s permit and business permit the same?
Yes, mayor’s permits and business permits are the same in the Philippines. It is a government license that allows you to operate your business legally within your local government unit.
How long is a business permit valid?
A business permit is typically valid until December 31st of each year and needs to be renewed before the end of January the following year.
Where can I get a business permit in the Philippines?
A business permit in the Philippines is usually obtained at the City or Municipal Hall’s Business Permit and Licensing Office.
