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How to Register Your MSME Startup in the Philippines
Published at LinkedIn
Introduction
The experience of the Covid-19 pandemic was both an obstacle and an opportunity for many. An obstacle and an opportunity are two sides of the same coin. We only have to flip the "negative side of the coin" and then see the "brighter side of the coin" where more opportunities are present. Then with a positive mindset, search for those opportunities where you are located and with the resources you can begin with. It is the determination to live and win that can spur anyone to think positively in a negative situation. And that can make a big difference. Build that positive energy and strength to register a startup and build it.
The following information is for those who wish to register a MSME startup in the Philippines. The following steps are location-specific - those whose businesses need to be registered in Pasig City. Though some information are from the years 2022-2024, a lot of updating has been done. One can also update whatever is necessary from AI Overviews in Google Search and obtain real-time data and information from the Pasig Business Permit and Licensing Division.
Initial Things to Consider: Type of Business Entity and Industry
The Department of Trade and Industry (DTI) gives a lot of information at their website. They also give free webinars online or face-to-face seminars that can help you define what business industry you want to enter, and what type of business entity you want to establish. They have all the details for all the information you need. They also give specialized and higher quality webinars at an affordable fee, for any special need in establishing your business in the Philippines.
Establishing a Business Name for a MSME Startup
There is no need to trouble oneself too much for a business name. For starters, you can just go to the business name registration web page of the DTI, and just pick a specific name accepted by the format given by the DTI. You can always change the name upon its expiry and use a more appropriate one suited to the growth of the business' brand and the quality of its business operations. Think of your business like an entity. There is more to the entity than just the name or the identity it represents. Furthermore, there are a lot more important and practical aspects of the business one must keep in mind to work out first.
Certificate of Authority
An easy business entity to begin with is the Barangay Micro Business Enterprise. This type of business has many incentives like exemption from the minimum wage law, credit privileges, and exemptions from annual income tax. To know more about the Barangay Micro Business Enterprise, you can visit its web page, BMBE Registration, Anytime, Anywhere! There are also many videos of the DTI in YouTube to guide you in understanding this new kind of business. Once registered, you will receive a Certificate of Authority granting the privilege to do business with a BMBE entity and the option to renew after a period of two years.
There are also other business entities you can opt for:
- one-person corporation
- partnership
- corporation
Sole proprietorships are registered with the Department of Trade and Industry. One-person corporations, partnerships, and corporate entities are registered with the Security and Exchange Commission.
Barangay Clearance
A clearance is also required from your Barangay office before proceeding to get a Mayor's Permit.
Mayor's Permit @Business One Stop Shop
Since January 2024, to establish a business in Pasig City, this is what is required:
- register at the Business One Stop Shop service in 3/F of Ayala Mall the 30th
- most of the steps to establish a business in Pasig City are speeded up through this service
- bring the requirements listed below for the business permit (Mayor's Permit)
- Barangay Clearance,
- Business Name Certificate,
- DTI Certificate of Authority,
- photo of business establishment
- photo of map showing location of business
- payment for the business permit
Unlike the year 2023, beginning January 2024, business registrations (and business renewals) are all serviced in the Business One Stop Shop. The national government required all LGUs to speed up the process by upgrading the system of registration. Each year becomes easier also because of the Law on the Ease of Doing Business.
Other Certificates required for Mayor's Permit (Business Permit)
City Planning and Development Office (Zoning)
This certifies where your business is located within the city of Pasig.
Environmental Permit to Operate (CENRO)
This certificate is given upon payment of the fees for Mayor's Permit. The fee will contribute to the Pasig Green City Program and other environmental projects.
Sanitary Permit and Health Certificate
This is required if your business involves the handling of food and drinking water.
Fire Safety and Inspection Certificate
This is a basic requirement. Upon registration for Mayor's Permit, an Inspector from the Pasig Branch of the BFP (Bureau of Fire Protection) will schedule a visit to your business location. He may also require you to have fire extinguishers for your business. If you already have one or two at hand, all that is needed is to refill the extinguishers with new contents. Once the Inspector makes camera shots of your business premises and it gets approved, you can obtain your Fire Safety Inspection Certificate at the Pasig Branch of the BFP.
Final Step: Payment
After you have secured all of the above certificate requirements, then you can proceed to payment of the fees. There are three modes of payment: quarterly, semi-annual, and annual. Select whatever is convenient or applicable for your business. Once payment has been made, you will receive your Mayor's Permit Certificate and a Business Plate Number from the Business Permit and License Office Division.
Registering your Business with the Bureau of Internal Revenue
Things to Consider
The important documents to consider when applying for BIR Registration:
- your TIN
- DTI Certificate
- and Mayor's Permit Certificate
Certificate of Registration
A lot of service is given when you need to register at the BIR. The security guards and the employees at the reception desk are ready for any form you need and will give you the initial guidance for the registration process. You just need to properly fill-in the necessary forms and pay the required fees. Once the the right forms are filled-up, and the required fees are paid, a Certificate of Registration will be issued after a waiting period of several days to a week. All the necessary tax information you need to know, and the schedules to pay for your business taxes are printed in that BIR Certificate of Registration.
Authority to Print
With your Certificate of Registration secured, you can apply for the Authority to Print. This is the authority to have your invoices printed by an authorized printer. Previous to the year 2023, there was an expiry of five years for all business receipts and invoices. Now there is none.
Books of Account
This step is a decision the business owner needs to make. You can begin with manual books of accounts. Or you can use a digital system for accounting. This decision is important if you are just beginning. A graduate of any Business Management degree or any degree in Commerce will need to know the actual accounting required by the Bureau of Internal Revenue.
Whatever your form of business, (sole proprietor, one-person corporation, partnership, or corporation), an organized accounting system is important. You can contract an accountant or have one of your hired employees study it through free or paid webinars given by PICPA (Philippine Institute of Certified Public Accountants) in partnership with the Polytechnic University of the Philippines. PICPA has offered an "Accounting for Non-Accountants" (AFNA) program in the past, which is free and covers topics from business transactions to taxation.
For manual book of accounts a journal, ledger and two columnar books for cash receipts journal and cash disbursement journal is required. There are other manual books of accounts needed if your business is VAT-registered. Whether VAT or non-VAT, the manual books of accounts have to be stamped by the B.I.R. officer in charge of the books at the B.I.R. branch of Pasig City in Estancia Mall 5/F.
Business is about people, money, laws, institutions, and ("ahem") good manners and responsibility
If you need to hire workers, you can ask advice from the local branch of the Department of Labor and Employment.
Tips from Rosauro's Legacy Archive
Be hands-on with your business. Make time for it. The more you work, the more you can produce the profit you need. The more you can help the economy in nation-building. And you can make your dreams come true.
All government agencies are in Facebook, X (Twitter), and LinkedIn. If you have an account in any of these three social media networks, you can easily update yourself with any news that is relevant to your business. You can also update on banks and corporations in which the industry of your business is networked with.
Be aware of the schedules of your tax obligations. Failure to pay on time incurs penalty fees. Tax compliance is a must in business.
Summary
Registering an MSME startup in the Philippines, especially in Pasig City, is simplified through updated government systems
- like the Business One Stop Shop.
- Key steps include obtaining a DTI business name,
- Barangay Clearance,
- and Mayor's Permit,
- followed by BIR registration.
Utilize DTI webinars for guidance on business types and stay updated on tax obligations through social media to streamline the process and reduce hassle.
Enjoy and live life to the fullest
Business can be enjoyable and fun too with a right attitude. And as Paljug and Zeigler said in one of their business articles, "Have fun and always remember why you started working for yourself and running your business in the first place."
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