How to Get a Business Permit in the Philippines in 2024

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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 with all the information you need about the barangay 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 Barangay Permit?

The barangay is the smallest regional authority area 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 the 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 permit.

Please, take note that this permit is different from a personal barangay clearance. The personal barangay clearance is a document issued by the barangay stating that your business complies with the regulations set by the local community. It is often required when applying for other permits and licenses, such as a Business License. The barangay clearance is essentially a certification that you have no outstanding issues or violations within the barangay and that you are cleared to conduct business activities.

The barangay permit is a document that allows people to do business in a barangay. You need this document as part of the Mayor’s application. If you do not have it, you will not be able to secure a Mayor’s Permit.

If you want to see a specimen of the documents, both from a barangay or the 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.

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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 permit, the barangay captain has to know what it is about and then approve it.

Why is this not allowed to start a business without this document? 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 all your 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 requirements approved, the barangay captain will issue a barangay permit. Then, you can use that document to secure the Mayor’s Permit from the municipal or city hall.

Mayor’s Permit vs Business Permit: Difference

In the Philippines, the Mayor’s Permit and the business permit are frequently used interchangeably. However, in some contexts, these terms may have different meanings. Below we give some examples of such meanings.

‘Mayor’s Permit’ denotes the permit issued by the local authorities and required for any kind of business in a certain municipal or urban jurisdiction. This permit denotes that the business meets the requirements of the local laws and regulations. It’s a local level permit and is necessary before you can apply for a business permit at the city or municipal level.

‘Business Permit’ is a more common term that can refer to any official permission or license required to start a business. In the Philippines, it often has the same meaning as the Mayor’s Permit, but can also include other forms of permits, such as tax registrations and special licenses (for example, for restaurants and shipping companies). It’s a crucial document for legal business operations and encompasses various aspects like zoning, sanitation, and fire safety, among others. The document is issued by the city or municipal government where your business is located.

Requirements for New Business Permit 2024

There are some documents you need to prepare. Below is a list of the barangay small business permit requirements:

• Cedula
• DTI Registration
• Money

The cedula is the personal registration tax certificate. You can process it in the municipality or the city hall (1). 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
• Address
• Purpose
• 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 document 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 the DTI registration page (2). There is also a cost to pay, and the cost varies.

You do not have to go to any DTI office. You can use their online registration, and also pay online (3). The method of payment varies, but there are several you can use, like credit cards, Dragonpay, and other e-wallets. It is important to pay the filing charge within one week from the date of application. Otherwise, the application will be canceled.

Once you have both the cedula and DTI registration, go to the office of the barangay hall and ask for a barangay permit.

To obtain the permit, make sure you have the following documentation:

• Barangay permit
• Your previous Mayor’s Permit with the official receipt

Besides, you should have all the company documents:

• Latest Profit Tax Returns
• Cedula
• Current number of employees
• Employees’ certificates of registration

Other documents that the local government unit may require:

• Fire Safety Certificate
• Operation Commencement Act
• Electrical Inspection Certificate
• Environmental Compliance Certificate
• Declaration of Gross Profits
• Affidavit of No Operations, if there was no financial activity over the past year

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Where to Get Business Permit Requirements

Representatives of different business areas obtain their business permit requirements in different government organizations. Let us consider some of them:

The Department of Trade and Industry (DTI) performs business name registrations. All businesses, including sole proprietors, partnerships, and corporations have to register for a business name. Otherwise, they won’t be able to obtain their business permits.

Securities and Exchange Commission (SEC) issues SEC registrations for corporations and partnerships. All businesses of this type should register with the SEC. To be regarded as a legal entity, file for your enterprise’s business registration at the SEC office or use the online SEC registration form.

Barangay Unit is the place where the barangay business permit and the clearance are obtained. Visit this organization after registering your business name. You’ll be required to pay a fee of around ₱ 200.

City or Municipal Office is also referred to as the Business Permit and Licensing Office. Here you can secure all the requirements for the Mayor’s Permit if you own a building or a physical store. If your enterprise is located inside a mall you may not need to visit this office.

How to Get a Buisness Permit

Here are the steps on how to get business permit:

• Speak to the personnel when you visit the barangay hall. Find out all the requirements and fees.
• You will get interviewed a little
• Present your cedula and DTI registration
• Fill the Barangay Business Request form – here is the sample
• Pay the fee. The cost varies but it is not expensive (up to Php 1,000).

You will receive a printed and signed approval. This is not a barangay business permit yet. However, this document is also important, 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

The business clearance from the barangay will have the following data:

• Embossed seal of the barangay
• Business owner’s name and details
• The official business name
• The home 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 permit

This document must be updated on an annual basis. Since 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 permit for your Mayor’s Business Permit renewal. Its price will depend on your income. If you renew your documents, you will present an income statement.

As such, the Mayor’s Permit fees will also vary. The income statement must come from the BIR (3).

To get the Mayor’s Permit you will have to do the following:

1. Go and visit the Business Permit and Licensing Office (abbreviated as BPLO) in the city or the municipality town hall where your enterprise is located.
2. Fill out the application form.
3. Submit the initial requirements.
4. Wait for the assessor to calculate the sum of tax and fees.
5. Pay the necessary taxes and fees. The Mayor’s Permit price can vary from Php 1,000 to Php 5,000.
6. Submit the remaining requirements, if there are any.

How to Compute Business Permit Fees in the Philippines

The total sum includes the cost of cedula, the DTI filing charge, and the business permit fee itself.
Here are the costs of cedula in 2024 (1):

Tax	For individuals	For companies
Annual community tax	Php 5	Php 500
Additional community tax	Php 1 for every Php 1,000 of income from business, profession or real estate property	Php 2 in tax for every Php 5,000 of gross earnings for the previous year
Maximum community tax	Php 5,000	Php 10,500

The DTI filing charge depends on the sort of business you are putting up. In Manila, for example, the registration fee for a single proprietorship is Php 200. If you register a partnership or a corporation, it increases up to Php 500 (4). 

As we have already mentioned, the business permit and Mayor’s Permit are the same, and their price varies up to Php 5,000 depending on a number of factors such as the business area, its type, and size. In Manila, the business permit requirements include the fee of Php 235 plus additional fees and charges (5). 

Business Permit Online Application

If you want to save time, you may try to obtain a business permit online. Visit the official website of your local government unit to see if it has the corresponding service. This option is available for the citizens of Manila, Valenzuela, Quezon City, Pasay, Marikina, and some other cities and towns of the Philippines.

Open the local government unit’s website or mobile app, find the necessary information on the requirements for online business permits in the Philippines, and follow the instructions. Here you can also check the document’s price in your place of residence.

How Long Does a Business Permit Last?

The validity of your barangay permit is 12 months. You must renew the document every January of the following year.

The same refers to the Mayor’s Permits: they expire every year on December 31st. Therefore, you need to renew the documents before the end of January every year. Penalties are imposed on the enterprises that fail to renew their permits on or before the prescribed period.
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 2024

The steps on renewing the document are the same. However, this time, you no longer need a DTI registration.

Typically, DTI registration is good for three years. So, the requirements for the document renewal are just your old barangay permit, cash, and a new community tax certificate.

Take note that you need the barangay 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 the document.

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.

Summary

You need a business permit if you want to legally run 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 have been privileged to do business in your community.

Having obtained the barangay permit, you should go to the BPLO in the place where your enterprise is located, fill out the application form, submit the initial requirements, and make necessary payments. If you fail to process this document, the government can shut you down, no matter how big and successful your business is.

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