How to Obtain a Business Permit (Mayor’s Permit) in the Philippines — 2025 Comprehensive Legal Guide
1. Why the Business Permit Matters
Under the Local Government Code of 1991 (Republic Act 7160) every person “who establishes, operates or maintains any business, trade or activity” within a city or municipality must first secure a Mayor’s/Business Permit from that local government unit (LGU). Operating without it exposes the owner to closure orders, fines, and even criminal liability. The Ease of Doing Business and Efficient Government Service Delivery Act of 2018 (RA 11032) now caps processing time and mandates one‑stop shops, but the substantive requirements remain rooted in RA 7160 and LGU revenue ordinances.
2. Business Permit vs. Other Registrations
| Purpose | Governing Law | Typical Timing |
|---|---|---|
| Business Name (Sole Prop.) | RA 3883 (DTI) | Day 1 |
| SEC Registration (Corps./Partnerships) | Revised Corporation Code (RA 11232) | Day 1 |
| Barangay Clearance | RA 7160 | After DTI/SEC |
| Mayor’s/Business Permit | RA 7160, RA 11032 | After Barangay Clearance |
| BIR Registration (TIN, POS, Books) | Tax Code (NIRC) | Within 30 days of Permit |
| Secondary Licenses (FDA, DOH, DENR, BSP, etc.) | Sector‑specific laws | Parallel / Post‑permit |
3. Pre‑Permit Prerequisites
Register the legal entity
- Sole Proprietor → DTI Business Name via BNRS (online).
- Corporation/Partnership → SEC eSPARC.
- Cooperative → Cooperative Development Authority.
Secure Barangay Business Clearance Proof of address (lease/land title), valid IDs, and DTI/SEC papers.
Prepare minimum LGU forms & drafts Application form, sketch, photo ID, specimen signatures.
4. Documentary Requirements at the BPLO/BOSS
| Core Documents (everyone) | Common Auxiliary Clearances |
|---|---|
| Completed, notarized application | Occupancy Permit (if new building) |
| DTI/SEC/CDA registration docs | Zoning Clearance / Locational approval |
| Barangay Business Clearance | Sanitary Permit (City/Municipal Health) |
| Lease Contract or Land Title | Fire Safety Inspection Certificate (FSIC) |
| Government‑issued IDs | Environmental Permit (DENR ECC or CENRO clearance) |
| Sketch/Google‑Maps print‑out | Market Clearance (for public market stalls) |
| 2–4 2 × 2 photos (varies) | HOA/Admin Consent (for home‑based) |
Highly regulated industries (food, cosmetics, pharma, banks, schools, BPOs, etc.) attach their respective federal licenses.
5. Step‑by‑Step Process (Standard City/Municipality Flow)
- Assessment Window (Day 0) Submit documents → Get Tax Order of Payment (TOP).
- Cashier (Same Day) Pay Local Business Tax (LBT) + regulatory fees.
- Joint Inspection (Within 3 business days – RA 11032 cap) Fire, health, zoning teams can conduct simultaneous inspection.
- Release of Permit & Plate Mayor signs → BPLO issues soft‑copy permit & official plate/sticker.
- Post‑Issuance Registration BIR 0605 payment, COR printing, books stamping.
Processing‑time limits (RA 11032): Simple transaction — 3 WD Complex — 7 WD Highly technical — 20 WD Failure to act within the period results in automatic approval by law.
6. Fees and Taxes Explained
| Item | Basis | Typical Range* |
|---|---|---|
| Local Business Tax | % of Gross Sales/Receipts (graduated) | ₱2 000 – ₱60 000+ |
| Mayor’s Permit Fee | Flat / capital‑tiered | ₱500 – ₱3 000 |
| Garbage / Sanitation | Floor area or headcount | ₱200 – ₱5 000 |
| Fire Code Fees (BFP) | 10% of all fees paid but ≤₱500 | — |
| Signage / Billboard | Sq. meterage | ₱200 / m² |
| Documentary Stamp Tax | BIR (₱30 per document) | — |
*Each LGU passes its own Revenue Code; confirm exact schedule locally.
7. Validity, Renewal & Penalties
- Validity: Calendar year (1 Jan – 31 Dec).
- Renewal Window: 02 Jan – 20 Jan (mayors can extend to 31 Jan).
- Late Penalties: 25 % surcharge + 2 % monthly interest (capped at 36 months).
- Retirement/Closure: File application within 30 days of cessation; else penalties continue to accrue.
8. Special Situations
| Scenario | Permit Treatment |
|---|---|
| Home‑based & Online Sellers | Still register at LGU where residence is located; zoning/HOA consent often needed. |
| Branches or Facilities | Each branch obtains its own permit in addition to head office permit. |
| Foreign‑owned Corporations (≥40 % equity) | Same LGU permit; plus Foreign Investment Act registration (BOI) or PEZA if in ecozone. |
| PEZA / Freeport Locators | Obtain PEZA LTO or Freeport AFAB Sub‑licence then present to LGU; many ecozones waive local taxes but still require Mayor’s Permit for record. |
| Professionals (solo practice) | Individual practice usually exempt; but if forming a clinic/company or hiring staff, Mayor’s Permit required. |
9. Electronic & One‑Stop Solutions
- Central Business Portal (business.gov.ph): Integrates DTI, SEC, BIR, and select LGUs.
- eBOSS Platforms: Quezon City, Manila, Cebu City, Davao, and 50+ LGUs offer full online application, electronic signatures, and e‑payment via GCash, PayMaya, or LANDBANK.
- Unified ID (PhilSys) acceptance: Digital KYC allowed for permit applications since 2024 DICT circular.
10. Appeal, Denial & Revocation
- Grounds for Denial: Zoning conflict, public safety, incomplete fire safety compliance, unpaid taxes.
- Administrative Remedy: File written appeal to the Sangguniang Panlungsod/Bayan within 30 days.
- Judicial Review: Rule 65 Petition for grave abuse of discretion at RTC; TRO possible.
- Revocation / Closure: Issued after notice & hearing; aggrieved party may appeal similarly.
11. Compliance Inspections
LGUs, BFP, DENR, DOLE and the National Privacy Commission may conduct periodic or surprise inspections. Keep copies of:
- Mayor’s Permit
- Latest Official Receipts for taxes/fees
- BIR Certificate of Registration (Form 2303)
- Fire Safety Inspection Certificate
- Sanitary Permit & medical certificates of food handlers
- Books of Accounts & latest Audited FS
Non‑display is a ground for citation under RA 7160.
12. Practical Checklist (Print & Tick)
- ☐ Reserve & register business name (DTI/SEC/CDA)
- ☐ Prepare lease/title and sketch
- ☐ Obtain Barangay Business Clearance
- ☐ Assemble documentary requirements (IDs, photos, forms)
- ☐ File at BPLO/BOSS → pay assessed taxes & fees
- ☐ Facilitate joint inspection (Fire, Health, Zoning)
- ☐ Claim Mayor’s Permit & business plate
- ☐ Register with BIR (online COR, books, ORs)
- ☐ Register employees with SSS, PhilHealth, Pag‑IBIG, DOLE
- ☐ Display permit, FSIC, Sanitary Permit, notices
13. Frequently Asked Questions
| Question | Short Answer |
|---|---|
| Can I apply before my SEC Certificate is released? | LGUs require the final SEC Certificate or at least the Interim eCERTIFICATE (downloadable). |
| Is a virtual office address acceptable? | Generally no; LGUs demand physical occupancy proof except in special economic zones and some CBDs. |
| Do online sellers on Shopee/Lazada need a permit? | Yes, if the principal place of business is within an LGU’s jurisdiction—even if inventory is drop‑shipped. |
| Are freelance professionals exempt? | Individual practice is exempt; but forming a juridical entity (e.g., design studio corporation) triggers permit requirements. |
| What if I missed renewal for two years? | File retroactive retirement, settle back taxes, surcharges, and interest; some LGUs offer amnesty ordinances. |
14. Conclusion
A Mayor’s/Business Permit is the LGU’s legal gate‑pass proving your enterprise’s compliance with local taxation, safety, zoning, and health standards. Thanks to RA 11032, most cities now finish simple applications in three working days—often entirely online—but entrepreneurs must still prepare the same core documents and pay the requisite taxes and fees. Keeping track of renewal schedules, sector‑specific licences, and post‑permit obligations (BIR, SSS, DOLE) will spare you costly penalties and interruptions.
Disclaimer: This guide reflects laws and typical LGU practices up to July 20, 2025. Requirements may vary per locality and industry; always confirm with your city or municipal BPLO or consult a Philippine lawyer for situation‑specific advice.