How to Get a Business Permit in the Philippines
- The barangay business permit clearance is the first step to setting up a business legitimately
- The business permit means you are duly recognized by the government
- The barangay business permit is different from the mayor’s permit
You cannot legitimately start a business in the Philippines unless you have a Business Permit. Without it, you will operate a business that the government does not duly recognize.
What is it and why is it important? Today, we will provide you all the information you need about the Barangay Business Permit. We will also show you the steps on how to get one, and what process you need to undertake, along with the requirements you need to submit.
What is a Business Permit?
The barangay is the smallest unit of governance in the Philippines. It is an arm of the municipal or city government, and its duty is administrative in nature.
The barangay captain is the duly elected leader of a barangay. The barangay clearances you get must have his signature. In essence, his signature is proof that your business has been approved to operate.
To be able to operate a business in a barangay, you must go and visit the office of the barangay captain and ask for a barangay business permit.
Please take note that this permit is different from a personal barangay clearance. The personal barangay clearance is a document proving you are a good citizen.
The barangay business permit is a document allowing you to do business in a barangay. You need this document as part of the mayor’s business permit application. If you do not have a it, you will not be able to secure a Mayor’s Business Permit.
If you want to see a business permit sample, both for barangay or mayor, you can always go to a business institution, like a mall or clothing store, and see them. All businesses are required to post their permits on the wall.
Read all about
Loan for business
Why Do you need a Barangay Business Permit?
So, why is it important to process business permits? It is important because it means that the barangay captain is aware of your business. There are zoning laws in the Philippines. For example, you cannot just put up a piggery anywhere. If you are applying for a business permit, the barangay captain has to know what it is about and then approve it.
Why is this not allowed? Not all businesses are good for the environment or the people. It is why the government has to intervene. If you live in a city, you may not be allowed to operate an animal farm. If you live remotely, you may not be allowed to put up a nightclub. There are also businesses that are illegal and will never be approved, such as things related to adult materials or illicit drugs.
If your planned business is against the law or the zoning rules, the barangay captain will not issue you a document, even if you submitted your barangay business permit requirements.
Without the approval of the barangay captain, you are operating your business illegally. They can call the police or NBI and seize your assets. They can also issue a cease and desist order for you to stop operating your business.
So, once you have the business permit requirements and got approved, the barangay captain will issue a barangay business permit. Then, you can use that document to secure a mayor’s permit from the municipal or city hall.
Barangay Business Permit Requirements
There are some documents you need to prepare. Below is a list of the barangay permit requirements:
- DTI Registration
The cedula is the Community Tax Certificate. You can only get this from the municipal or city hall. To get one, just proceed to the hall and tell the guard that you need it. The guard will tell you which window to go to.
Once you approach the window, you will sign a simple application form. Bring a ballpen; sometimes the ballpens in the government offices do not work or they are out of ink. Prepare the following details:
- Your name
- Annual income
After this, the teller or personnel would tell you the amount you have to pay. There is no fixed cost here. The amount you pay depends on your annual income. Once you have paid the amount, the teller will give you a document called Community Tax Certificate.
The next one you need is a DTI registration. You must go to the Department of Trade and Industry to register your business.
The alternative is to go online and register from there. Here is the link to DTI registration. There is also a cost to pay, and the cost varies. It depends on the type of business you are putting up.
You do not have to physically go to any DTI office. You can use their online registration, and also pay online. The method of payment varies, but there are several you can use, like credit cards, Dragonpay, and other e-wallets.
Once you have both the cedula and DTI registration, go to the office of the barangay hall and ask for a barangay business permit.
How to Get Barangay Buisness Permit
Here are the steps on how to get business permit:
- Speak to the personnel when you visit the barangay hall
- You will get interviewed a little
- Present your cedula and DTI registration
- Fill the Barangay Business Request form – here is the sample
- You must pay the amount; the cost varies but it is not expensive (around 500 to 1,000 pesos)
You will receive a printed and signed barangay business permit clearance. This is not a barangay business permit sample; it is the real deal, so make copies of that and protect the original.
The barangay business clearance will have the following information:
- Official seal of the barangay
- Business owner’s name and details
- The official name of the business
- The address of the business owner
- The actual address or location of the business
- Certification details as per the law
- Date of issuance of the barangay business permit
You must renew your barangay business permit every year. Since you already know how to apply for a business permit and you already have a DTI document, it should be easier by then. The only exception is if your DTI permit has already expired. In that case, you must renew it too.
You will also need a new barangay business permit for your mayor’s business permit renewal. How much is the business permit? It will depend on your income. If you renew your business permits, you will present an income statement.
As such, the business permit cost will also vary. The income statement must come from the BIR.
How Long Does Barangay Permit Last?
The validity of your barangay business permit is only one year. You must renew your business permit every January of the following year.
Unlike other documents in the Philippines, businesses must renew licenses every year as it helps the government collect taxes for business establishments.
Philippines Business Permit Renewal for 2023
The steps on how to process business permit for renewal is the same. However, this time, you no longer need a DTI registration.
Typically, DTI registration is good for three years. So, the requirements for business permit renewal are just your old barangay business permit, cash, and a new community tax certificate.
Take note that for business permit requirements in the Philippines, you need the barangay business permit. Otherwise, the mayor and the BIR will not approve your application or renewal
To renew, make sure you have all the documents with you, and then go to your barangay hall. Tell the personnel that you need a renewal, and they will help you process it.
You need a business permit if you want to legally operate a business in the Philippines, even if you are only operating a small store. The barangay permit is also the document you need to be able to secure other permits from the government.
In essence, the Barangay Captain is issuing you a document proving that you are a legal citizen and that you have been privileged to do business in your community. Without a barangay permit for small business or even a big business, the government can shut you down.
MaydenThis is the best online loan apps for me so far. At first I just tried to fill in all the information and I was really glad that I got the money in just two minutes. The app is reliable and easy to use.5
MarilenLess than 5 minutes for approval & bank transfer, it is amazingly fast. Interest fees are a bit high, however in times of emergency needs, highly commendable & recommendable. Payment options are wider & flexible up to 30 days. The apps itself is good.4
RenzThis app is so good, fast and reliable. Thank you Digido!5
AnnConvenient! Applied yesterday and after the follow up this afternoon they sent the transaction details! Thanks, Digido! I will repay on time.5