How to ‘Legalize’ your Business in the Philippines

Congratulations on finally planning to start your own business! Starting your business can be a little overwhelming, especially at first, when different government offices require that you register and apply for different licenses before you start your business operations.

In this article I’ll list down all the basic government requirements for those who plan to start their own small to mid-sized business to help and enlighten you in this complicated process.

Why register your business with the different government offices? And are there benefits to it? Aside from it being a requirement of the law, complying with government requirements also gives you the following benefits as a business owner:

  1. Protect your brand – When you register your business name with the Department of Trade and Industry (DTI), you can avoid others from copying your business name.
  2. Open bank accounts – Banks will require that you provide a proof that you have registered your business with the government before you are able to open a bank account. Yes, you may use your own personal bank accounts during business transactions, but, having a separate bank account for your business will give you a more professional ‘look and feel’ especially when dealing with clients. It’s also easier to manage your finances when your business and personal bank accounts are kept separate.
  3. Getting loans / credit cards for your business – Same as number 2 above, you need to provide a proof that you are a legitimate business before banks and other lending institutions can trust you enough to grant you a loan.
  4. Hire employees – One must have a legitimate business in order to be able to hire the best and suitable employees. No employee would want to be hired by an employer who’s not even registered as a business right? You need to register your business in order to be able to file tax returns and contribute to SSS/Pag-Ibig/Philhealth, etc. on behalf of your employees.
  5. Supplier relations – No supplier would want to deal with you if you are not a legitimate, ‘risky’ business partner.
  6. Business reputation – customers and clients will only want to buy from and/or transact with a legitimate business, especially for their big ticket purchases, where they will mostly require a receipt and a guarantee from the government that your business is safe to transact with.

Now that we know the benefits of registering one’s business, see below on the list of government registrations and/or licenses in order for one to start a fully operational, legitimate business:

  1. Register your ‘business name’ with below government offices depending on the structure of your business
    • Department of Trade and Industry (DTI) – for sole proprietorship businesses, an entity owned and run solely by one person
    • Securities and Exchange Commission (SEC) – for corporations and/or partnerships
    • Cooperative Development Authority (CDA) – for cooperatives
  2. Get a Barangay Clearance for your business from the Barangay Hall that has the jurisdiction over the location of your business.
  3. Get a Business / Mayor’s Permit from the municipality or city hall covering your business.
  4. Apply for a Tax Identification Number (TIN) for your business, together with the technicalities (registration of books of accounts, authority to print receipts, and authority to use cash register machine, etc.) with the Bureau of Internal Revenue (BIR).
  5. If and when hiring employees, business owners must register their employees with the following agencies for legality and to establish their benefits as well.
    • Department of Labor and Employment (DOLE) – Register with DOLE if you have 5 or more employees
    • Social Security System (SSS) – All employees must be registered to ensure social welfare of all workers.
    • Home Development Mutual Fund (HDMF) / Pag-Ibig Fund – Employees earning P4,000 or more in a month must be registered.
    • PhilHealth Insurance – All employees must be registered to provide health insurance to all workers.

These are all the basic requirements of the government from all business owners. Depending on the nature of your business and if you provide specialized products and services, one must also secure other gov’t licenses and requirements (e.g. LTFRB license for taxi operators, BFAD certificate for those who are in the food / health business, etc.). Contact DTI at (02) 751 0384 or visit their website to find out if your business type needs additional permits / licenses before starting business operations.

Stay rich,


Have something to say? Feel free to Share Your Story, comment, or ask a question. Also like me on Facebook and Twitter! Thanks!