A quick guide to starting a business in the Philippines
Over the past few years we have helped many expats set up their business in Cebu: this is intended as a basic guide for those who wish to do it for themselves.
If, after reading this you wish us to do it for you, we would charge the following:-
To set you up as a Sole Trader – 5,000p plus the DTI fees
To set up your Corporation with SEC – 25,000p to 35,000p plus SEC fees and all incidental costs, normally between 6,000p and 7,000p.
To obtain your Mayor’s Business Permit – 25,000p plus all fees, normally between 15,000p and 20,000p.
It is not hard to do yourself but there are some negative aspects that you will encounter:-
- It will involve many hours of waiting in queues often to be told you are in the wrong one!
- It will involve revisiting offices several times because of some piece of lacking information which you were never told to bring!
- You will never be told the whole process, or even the next few steps unless you ask detailed questions.
- Things need to be done in a specific order.
- Some government offices will accept photocopies while others need to view the original.
- Although the laws regarding setting up a business are uniform throughout the Philippines, each Municipality will have a slightly different interpretation of those laws.
- Things will not happen at the same pace as they do in your own country – if you are not patient, don’t even bother.
- You can apply to register your business name with the Department of Trade and Industry, (DTI).
- You can choose to register and protect your business name at 4 different levels – Barangay, Municipality, Regional or National.
- The cost varies according to the level you choose but ranges from 200p for Barangay to 2000p for National registration.
- You now need to obtain a Mayor’s Permit.
- I have never done a Partnership set up so don’t know any of the costs.
- You will need to apply to the Securities and Exchange Commission, SEC, for forms and requirements.
- Once finished with registration at SEC, you now need to obtain a Mayor’s Permit.
- Buy the Incorporation papers from SEC – 600p
- Fill out the forms which needs to be done by typewriter or computer – hand-written applications are not accepted.
- You will need a minimum of 5 Incorporators. The number of Filipinos required depends on the type of business you will be running.
- Open a Bank Account and obtain a Bank Certification of your deposit.
- Prepare 4 copies of all the forms and have them notarised.
- Obtain Documentary Stamps for the notarised forms.
- Submit the completed forms to SEC
- SEC costs vary again according to the type of Corporation being set up, but typically a Domestic Stock Corporation will cost 2750p and a Foreign BPO Export Corporation will cost 5100p
- Buy a Stock and transfer Book from SEC 350p
- Go back, and if no corrections are needed – highly unlikely even if you know what you’re doing – pick up your Registration Certificate.
- You now need to obtain a Mayor’s Permit.
- Go to the City Hall in the Municipality in which your business will operate and apply for a Mayor’s Permit. Take along your DTI or SEC certificates
- The fees charged will depend on the type of business you are setting up and the amount of your paid up capital – it should range between 4000p and 6000p for small operations.
- You will be granted a temporary permit and you have 60 days to comply with all of their requirements which are detailed below.
- Contact their Special Inspection Team to arrange a time for them to visit your business premises. 3-4 people will come to check out the building for fire safety, sanitary and environmental compliance and they will leave a list of things you need to do and the permits you need to get.
- Obtain a Sanitary Permit.
- Obtain a Fire Safety Permit – you will probably be required to buy a fire extinguisher.
- Obtain a Health Permit – you will probably need to have chest X-ray.
- Visit the Environmental Officer to check his concerns and get his stamp of approval
- Visit the Treasury Officer at City hall to check if your capital is sufficient.
- Register yourself or your Corporation with the Bureau of Internal revenue (BIR) – you will need to attend a 3 hour seminar and will need to have a set of Official Receipts printed. Registration with the BIR costs 500p and the printing of the Official Receipts will cost you around 2,500p.
- Register your business and any employees with Philhealth.
- Register your business and any employees with Pag-Ibig.
- Register your business and any employees with SSS.
- Take all your permits, registrations and compliances to City Hall to obtain your Mayor’s Permit.