This article is a comprehensive, practitioner-style guide to registering and licensing a business in the Philippines. It synthesizes the legal framework, agency practices, and common compliance workflows used by founders, accountants, and counsel. It covers sole proprietorships (DTI), partnerships and corporations (SEC, for context), national tax registration (BIR), and local permits (LGU: barangay and city/municipality), with practical checklists, timelines, and pitfalls. It is written for informational purposes and is not a substitute for tailored legal advice.

1) Choosing the Right Legal Vehicle

Before any filing, determine the legal form because it drives which registrar you deal with, ownership limits, taxes, and documentary requirements.

Sole Proprietorship
- Registrar: Department of Trade and Industry (DTI).
- Nature: One natural person owns and personally assumes all liabilities.
- Use when: Small/startup ventures where simplicity and cost matter and limited liability is less critical.
Partnership (General or Limited)
- Registrar: Securities and Exchange Commission (SEC).
- Nature: Two or more persons contribute to a common fund, sharing profits; partners (or general partners) bear liability.
Corporation (Stock/Non-stock; One Person Corporation/OPC)
- Registrar: SEC.
- Nature: Separate juridical entity with limited liability; OPC allows a single shareholder who may also be the director.
Cooperative
- Registrar: Cooperative Development Authority (CDA).

This article focuses on DTI registration for sole proprietorships, then BIR (for all businesses), and LGU permits. If you form a corporation/partnership, do the SEC step in place of DTI, then proceed to BIR and LGU similarly.

2) DTI Business Name Registration (Sole Proprietorship)

Purpose. To reserve and register your business name and establish the owner’s identity for trade.

Key principles

The business name must be distinctive, not confusingly similar, and not contrary to law, morals, or public policy.
Certain terms are restricted (e.g., those implying government affiliation, regulated professions, banks, “foundation,” etc.).
Territorial scope determines the fee and where the name has protection (Barangay / City/Municipality / Regional / National).

Common documentary requirements

Accomplished application (online is standard).
Owner’s valid government ID.
Owner’s TIN (Taxpayer Identification Number) if already issued; otherwise you can obtain one during BIR registration.
For foreign nationals: proof of legal stay and authority to do business (e.g., ACR I-Card, visa), and confirmation that the intended activity is allowed under foreign ownership rules (see §10).

Indicative fees (subject to change)

Barangay scope: typically a few hundred pesos.
City/Municipality: higher than barangay.
Regional: higher than city/municipality.
National: highest tier.
Plus documentary stamp tax and minor convenience/service charges, if any.

Validity and renewal

Certificate is valid for five (5) years from issuance; renewal is required to maintain the name.

Output

DTI Certificate of Business Name Registration (digital or printed), showing the registered business name, owner, and scope.

If you are forming a corporation/partnership, you will skip DTI and instead secure SEC registration (Articles of Incorporation/Partnership, By-laws, etc.). Your “name clearance” happens within the SEC process.

3) BIR Registration (All Business Forms)

Every person or entity doing business in the Philippines must register with the Bureau of Internal Revenue (BIR) and obtain a Certificate of Registration (COR / Form 2303), books of accounts, and authority for invoicing/receipting.

A. Where and when to register

Where: Revenue District Office (RDO) with jurisdiction over your principal place of business (or where the head office is located).
When: Before commencing business (practically: within 30 days from DTI/SEC/CDA registration or before issuing any invoice/receipt or opening to the public).

B. Core filings & fees (typical workflow)

Accomplish the proper BIR registration form:
- Sole proprietors & professionals: BIR Form 1901.
- Corporations/Partnerships: BIR Form 1903.
Pay annual registration fee (commonly ₱500 per year, payable upon initial registration and annually thereafter—often on or before 31 January).
Submit documentary requirements, commonly:
- DTI Certificate or SEC/CDA papers.
- Valid IDs; for corporations/partnerships, board/partner documents and TINs of responsible officers.
- Lease contract or proof of business address (e.g., title/tax declaration for owned premises; for home-based, proof of residence and LGU consent where required).
- Site sketch (some RDOs request).
Register books of accounts (manual, loose-leaf, or computerized) and have them stamped/noted.
Secure authorization for invoices/receipts:
- Apply for Authority to Print (ATP) or register your POS/cash register / computerized accounting system per BIR rules.
Receive the BIR Certificate of Registration (Form 2303) listing your tax types and filing frequency.
Post required notices (e.g., “Notice to the Public”) and display COR, ATP acknowledgment, and signage as applicable.

Tip: Align your selected tax types with your business model at the outset (see §4) to avoid amendments later.

C. Ongoing BIR compliance at a glance

Invoicing/Receipting: Issue sales invoices and/or official receipts for every sale of goods/services; keep duplicate copies; follow serial control and content rules.
Books/Records: Keep books and source documents intact for at least 10 years (electronic retention allowed under certain conditions).
Returns & Payments: File and pay on time (monthly/quarterly/annual, depending on tax and your classification).
Withholding: If you have employees or pay suppliers subject to withholding, withhold and remit properly; issue BIR 2307/2316 certificates.
Registration updates: File updates for change of address, trade name, additional branches/lines, change of accounting method, etc.
Annual registration fee (if applicable) is typically paid every January.

4) Taxes You May Be Liable For (Overview)

Your BIR COR will enumerate the tax types you’re registered for. Typical ones:

Income Tax
- Individuals (sole proprietors/professionals): Graduated rates or 8% on gross sales/receipts in lieu of percentage tax if qualified; elective regimes have thresholds/conditions.
- Corporations: 20% or 25% regular corporate income tax depending on size and criteria under recent reforms; Minimum Corporate Income Tax (MCIT) may apply in certain years.
Value-Added Tax (VAT) vs Percentage Tax (Non-VAT)
- VAT: Standard output VAT on taxable sales if you voluntarily register or exceed the VAT threshold (commonly ₱3,000,000 aggregate gross sales/receipts in a 12-month period, subject to change by law).
- Percentage Tax: Applies to non-VAT taxpayers at the statutory rate (commonly 3% of gross sales/receipts for most businesses not VAT-registered; special rates exist for certain sectors).
Withholding Taxes
- Compensation (employee salaries).
- Expanded/final withholding on certain payees (professionals, rentals, etc.).
Excise or Other Special Taxes (if applicable to your goods/services).

Choose VAT vs Non-VAT carefully. VAT can be advantageous if you have significant input VAT (e.g., capital expenditures) or B2B customers who require VAT invoices.

5) LGU Requirements: Barangay & Mayor’s/Business Permits

Even after DTI/SEC and BIR, operating without local permits is prohibited. You must secure both Barangay and City/Municipal permits from the LGU where your principal place of business is located (plus each branch).

A. Barangay Clearance

Where: Barangay Hall having jurisdiction over your business address.
Typical requirements:
- DTI/SEC/CDA certificate.
- Valid IDs.
- Proof of address (lease/consent/ownership).
- Filled-out application form; small fee.
Output: Barangay Business Clearance, prerequisite for Mayor’s Permit.

B. Mayor’s/Business Permit (City/Municipality)

Where: City/Municipal Hall (Business Permits and Licensing Office or “BPLO”).
Typical requirements:
- DTI/SEC/CDA registration.
- Barangay clearance.
- Lease contract/locational clearance and zoning approval.
- Fire Safety inspection (BFP) and payment of fees.
- Sanitary/Health permit (especially for food, wellness, hospitality).
- Environmental permits if applicable (e.g., discharge permits, ECC for certain projects).
- Occupancy permit if newly built/renovated premises.
- Facility layout and equipment list (some LGUs).
- Community tax certificate (CTC/residence tax) payment at the LGU.
Outputs:
- Mayor’s/Business Permit and Official Plate/Sticker, plus assessment for local business taxes (typically paid quarterly or annually).
Renewal: Annually, commonly January 1–20; surcharges apply for late renewal.

LGU processes vary. Some cities operate one-stop shops and accept consolidated inspections; others require sequential clearances. Plan your timeline accordingly, especially for food-related businesses with more pre-operational requirements.

6) Special/Regulatory Licenses (Activity-Based)

Depending on your line of business, you may need sector-specific clearances before the LGU issues a permit or before operating:

Food, drug, cosmetics, medical devices: FDA licenses/notifications.
Education/training centers: DepEd/CHED/TESDA authorizations, as applicable.
Health facilities/clinics: DOH and professional board licenses.
Financial services, lending, payments, crypto, securities: BSP, SEC approvals/registrations.
Telecom/ISP/radio: NTC permits.
Tourism accommodations: DOT accreditation (often beneficial or required for incentives/marketing).
Logistics/transport: LTFRB, MARINA, CAB, etc.
Construction/engineering/architecture: PCAB license; PRC professional licenses.
Gaming, raffles, promos: PAGCOR, DTI Fair Trade permits.
Import/Export: Bureau of Customs registration, BOI/PEZA if seeking incentives; product-specific permits (e.g., DA-BAI, BAFS).

7) Registration for Employment & Labor Compliance

If you hire employees, parallel registrations and compliance kick in:

SSS, PhilHealth, Pag-IBIG: Employer registration and monthly remittances; report newly hired employees.
DOLE: Establishment reporting and compliance with labor standards (minimum wage, benefits, OSH).
Data Privacy: If processing personal information at scale or sensitive data, consider obligations under the Data Privacy Act (e.g., appoint a DPO; possible registration/notifications for certain processing systems).

8) Typical End-to-End Timeline (Sole Proprietor Example)

Day 1 – DTI business name registration (often immediate issuance).
Days 1–5 – Barangay clearance (site visit/verification possible).
Days 3–10 – Mayor’s/Business Permit (depends on inspections).
Days 3–10 – BIR registration (obtain COR, books, ATP/receipting authority).
Before opening – Post notices, prepare official receipts/invoices, and implement bookkeeping/payroll compliance.

Corporations/partnerships add SEC processing upfront (name clearance, articles/by-laws, director/officer requirements).

9) Home-Based, Online, and Freelance Businesses

Still must register with BIR and LGU (even if home-based).
LGU zoning may limit certain activities in purely residential areas; secure home-occupation permit if available.
Online sellers/freelancers: Register as sole proprietor or professional, obtain COR, and issue receipts for services/digital goods.
Consider the 8% income tax option (if eligible) versus graduated rates + percentage tax.

10) Foreign Ownership & Doing Business

Foreign participation in Philippine businesses is governed by the Constitution, the Foreign Investments Act, the Foreign Investment Negative List (FINL), and special sectoral laws.

Key concepts:

Some activities are partly or fully reserved to Filipino citizens or corporations with a minimum Filipino equity.
For domestic market enterprises with majority foreign ownership, a minimum capital requirement may apply, subject to exceptions (e.g., advanced technology, employment count).
Retail trade and other regulated sectors have special capitalization/tests.
Sole proprietorships may be owned by foreign nationals subject to visa/ACR requirements and activity restrictions; many foreign investors opt for corporate forms for clarity and limited liability.
Separate alien employment permits, visas, and tax treaties may be relevant.

Always confirm whether your planned activity is open to foreign equity, and structure accordingly (e.g., wholly foreign-owned corporation, joint venture, or export-oriented enterprise).

11) Common Pitfalls (and How to Avoid Them)

Misaligned address documents. Ensure your DTI/SEC address, lease/ownership, and LGU filings match; the BIR RDO is address-based.
Starting sales without BIR documents. Do not issue invoices/receipts or accept revenue before obtaining COR and ATP/receipting authority.
Wrong tax type selection. Analyze VAT vs Non-VAT and 8% option at the outset.
Unregistered branches or POS. Each branch and each POS/cash register may need registration and serial control.
Neglected renewals. LGU permits renew annually (often by Jan 20); BIR annual fee (if applicable) is typically due January; professional/sectoral licenses have separate calendars.
Ignoring withholding. Even micro-enterprises often have withholding obligations when paying rent/professionals or employing staff.
Improper books. Keep books updated, stamped/authorized, and reconciled with returns.
Regulatory overlap. Heavily regulated sectors (e.g., food/health/finance) require agency clearances before LGU issues a permit.

12) Practical Checklists

A. Sole Proprietorship (DTI → BIR → LGU)

Decide business name & scope; check distinctiveness.
DTI application + ID + owner details.
Get DTI Certificate.
Prepare lease/ownership proof; utility bill/site sketch.
Barangay clearance.
Mayor’s/Business permit: zoning, fire, sanitary, environmental (if any), occupancy/signage permits, community tax.
BIR registration (Form 1901), pay annual reg fee, COR (2303).
Books of accounts registration.
ATP or POS/PDTU/CAS registration; print/buy invoices/receipts.
Post notices; start operations.
Calendar your BIR/LGU filing and renewal dates.

B. Corporation/Partnership (SEC → BIR → LGU)

Name clearance; draft Articles/By-laws; capitalization & share structure; directors/officers.
SEC registration and issuance of corporate papers.
Same LGU and BIR steps as above, using corporate documents.
Employer registrations (SSS/PhilHealth/Pag-IBIG), DOLE reporting when hiring.

13) Recordkeeping & Audit Readiness

Maintain chart of accounts, voucher system, and document trails (PO–DR–SI/OR–Collections).
Preserve contracts, leases, proof of deliveries, and tax certificates (2307/2316).
Reconcile books vs. tax returns and inventory periodically.
Keep regulatory licenses and inspection logs on file (BFP, sanitary, environmental, etc.).

14) Frequently Asked Questions

Q: Can I operate from my home? A: Often yes for low-impact businesses, but confirm zoning and subdivision/condo rules; obtain home-based business permits if required.

Q: Do I need to register if I only sell online occasionally? A: If you are regularly engaged in trade or business, you must register with BIR (and typically LGU). Occasional garage-sale-type disposals may be different.

Q: When do I become VAT-liable? A: Upon voluntary registration or when you exceed the VAT threshold within a 12-month period. Monitor your running totals.

Q: What if I change address or add a branch? A: File BIR updates (RDO transfer as needed), DTI/SEC amendments, and LGU permits for the new location/branch.

Q: Do freelancers need DTI? A: Professionals (e.g., consultants, designers) may register with BIR as professionals without DTI, using their personal name; those using a trade name typically register that name with DTI.

15) Final Notes

Treat DTI/SEC, BIR, and LGU as three distinct tracks that must all be completed before fully operating.
Build a compliance calendar for returns, renewals, and inspections.
For regulated sectors or foreign participation, obtain pre-clearance advice to avoid costly restructuring.

Quick Reference (At a Glance)

DTI (Sole Proprietorship): Business name registration → 5-year validity.
SEC (Corporation/Partnership): Juridical entity formation (if not sole prop).
BIR: COR (2303) + books + ATP/POS → invoices/receipts, tax types, filing cadence.
LGU: Barangay Clearance → Mayor’s/Business Permit + fire/sanitary/zoning/environmental.
Employment: SSS/PhilHealth/Pag-IBIG registration; DOLE; payroll taxes/withholding.
Sectoral: FDA/BSP/NTC/DOH/etc. as applicable.
Renewals: LGU annually (often by Jan 20); BIR annual fee (typically January).

If you want, I can tailor a step-by-step pack (forms, templates, and a deadline calendar) to your city and business type.