A business permit, also known as a ‘mayor’s permit’, allows individuals or companies to conduct business within the jurisdiction of a city or municipality. Business permits are secured from the city or municipal hall where your business is located.
It’s important to secure a business permit before conducting business otherwise you might be fined by your local government, or worse, be forced to shut down your operations.
This guide is for entrepreneurs who are done with their business name registration with DTI or SEC. To save time, it’s recommended to get your business permit processed at the same time as your BIR registration1.
Go back to the main article: How to Register a Business in the Philippines: The Ultimate Guide
Business Permit Requirements
New business permit applicants must submit the following proof of business registration. Take note that you may not be required to submit all of these as the number of documents you will be asked to obtain will depend on the type and nature of your business. Personnel at the city or municipal hall will be the ones to provide you with the final checklist upon inquiry.
- Barangay Business Clearance;
- Occupancy Permit – This is issued by the building official as required by the National Building Code2;
- DTI Certificate with CTC (for sole proprietors and professionals) or SEC Certificate with CTC (for partnerships and corporations);
- CDA Accreditation (Cooperatives);
- Business Capitalization (Sworn Statment) – also known as Sworn Statement of Capitalization, this document is where you’ll declare the exact amount of your initial capital investment. To help you save time, here’s a free Sworn Statement of Capitalization template that you can download, fill out, and bring to the Notary Public to be notarized;
- Community Tax Certificate or Cedula – from the treasurer’s office at your city or municipal hall;
- Contract of Lease – if you rent the building where your business operates;
- Proof of Ownership or Tax Declaration – if you own the building (alternative to the contract of lease);
- Sketch/Vicinity Map of Business Location – can be in the form of a screenshot from Google Maps;
- Printed Photos of the Business Establishment – some LGUs require photos of the location from different angles;
- Safety Seal (for commercial establishments) proving the business has fulfilled minimum health requirements (read the ‘Additional Notes’ section below for more details).
Editor’s Note: As mentioned earlier, you don’t have to submit all of the requirements listed above as the LGU personnel will provide you with a final checklist of requirements after a quick interview about the type and nature of your business. For instance, when I tried to register an online home-based business recently, I was only asked to provide the DTI Certificate, Business Capitalization (Sworn Statement), Barangay Business Clearance, Sketch of Business Location, and Printed Photos of the Business Establishment.
- For sari-sari store owners, DTI and SEC Certificates are not required3.
- The Inter-Agency Task Force (IATF) announced in March 2022 that it would include Safety Seal4 as part of the requirements to have a business permit. This certifies that the commercial establishment has passed the minimum health requirements against COVID-19. The business must ensure the following to get the Safety Seal:
- All on-site employees are fully vaccinated
- Triage areas at points of entry
- Handwashing stations
- Adequate ventilation in enclosed areas
How To Apply for a Business Permit in the Philippines in 5 Steps
1. Secure all the needed requirements (see the previous section)
2. Fill out the business permit application form
Update: With the initiative of the Anti-Red Tape Council, some LGUs have begun to update their business permit application forms to fit with the new one-stop business registration website5, Central Business Portal. Please check with your LGU if you have the latest updated form.
Application forms differ from one LGU to another. For a list of application forms for various LGUs , please refer to the following table:
|Batangas||Manila Front |
|Cagayan de Oro||Muntinlupa|
|Cebu Davao City||Parañaque|
|Iloilo City||Quezon City|
Note: If your city is not on the list, please call your city or municipal hall and ask for a copy of the application form. You can check the contact details of your LGU using DILG’s website.
3. Submit the application form together with all the requirements to the LGU where your business is located
4. Wait for the scheduled inspection of your declared office location or business establishment
Someone from the city or municipal hall will call you a few days after the submission of the requirements to confirm the location of your office or business establishment. One to three employees from the said city or municipal hall will then schedule a visit to inspect the office or business establishment you’ve declared in your application form.
5. Pay the Assessment Fee
The following are the main components of the assessment fee:
- Mayor’s Permit Fee;
- Garbage Fee;
- Sanitary Inspection Fee;
- Building Inspection Fee;
- Electrical, Mechanical, and Plumbing Inspection Fee; and
- Fire Safety Inspection Fee.
- The amount varies depending on your location and the LGU’s policies; and
- That there would be additional inspection charges and regulatory tax for businesses that are engaged in delivery, billboards, and combustibles/explosive substances.
6. Claim Mayor’s Permit on the scheduled date
Take note that some local government units allow delivery of original business permits to your business/home address so you don’t have to return to the city or municipal hall to claim your permit.
Make sure to display your business permit and plate in a visible location in your office or store to comply with government requirements.
Frequently Asked Questions
1. How much is the cost of application for business permits?
The actual amount differs greatly from city to city but the estimated cost of application is around PHP 300 to PHP 5,000 depending on your business.
2. How long does it take to get a business permit in the Philippines?
Based on our research, it may take 1 to 14 days before you can claim your permit. The process is different in each city (e.g., Valenzuela City has this Paspas Permit System that allows the issuance of a provisional business permit within ten seconds after the payment confirmation while other cities may take up to two weeks).
3. Can I apply for the business permit online?
Some LGUs have begun providing business permit processing online. For example, Manila has its own online business permit processing, through GO Manila.
Quezon City and Parañaque, in particular, are part of the pilot of the Central Business Portal or CBP. The CBP is a one-stop website where you can get your whole business registration process done, including DTI, SEC, BIR, and LGU business permit processing. However, it is only currently available for domestic stock corporations6.
4. When should I renew a business permit in the Philippines?
Renewal of business permits must be done on or before January 20 of every year. If you renew your business permit late, you would receive a penalty of:
- 25% surcharge on unpaid taxes, charges, and fees; and
- 2% monthly interest on other fees that remain unpaid, including the surcharge.
5. I’m a freelancer/online seller, do I still need to register my business?
Yes. As long as you are regularly earning from a source that is not under the employer-employee relationship, you should register your business.
6. Aside from the business permit, what else should I secure to start my business correctly?
Before getting your business permit, you should have:
- Finished registering with DTI (Sole Proprietorships) or SEC (Partnerships & Corporations)
- Register with the BIR. This can be done at the same time as getting your business permit.
After getting your business permit, you need to:
- Register your employees with DOLE, SSS, PhilHealth, and Pag-IBIG. If you don’t have any employees, then you can skip this step.
Please refer to this article for a more in-depth guide on the business registration process.
7. I’m a home-based entrepreneur/freelancer who is not renting an office space. What requirements do I need to prepare to apply for a business permit?
The same requirements shall apply. However, if you do not own the building/residence, you may need to secure proof of ownership from the owner and a notarized authorization letter allowing you to use the location as your business address.
- BIR ditches mayor’s permit as a registration requirement. (2020). Retrieved 17 January 2022, from https://mb.com.ph/2020/06/15/bir-ditches-mayors-permit-as-a-registration-requirement/
- National Building Code of the Philippines (1977), Section 301
- Joint Memorandum Circular No. 1, Series 2016, Section 6.1.2 (1)
- Gulla, V. (2022). ‘Safety seal’ to become requirement for business permits: DILG chief. Retrieved 2 April 2022, from https://news.abs-cbn.com/business/03/22/22/safety-seal-to-be-required-for-business-permits-dilg
- Online central business portal set to launch. (2021). Retrieved 17 January 2022, from https://www.bworldonline.com/online-central-business-portal-set-to-launch/
- Cada, S. (2021). BIR’s one-stop shop: Central Business Portal. Retrieved 11 January 2022, from https://www.philstar.com/business/2021/04/13/2090688/birs-one-stop-shop-central-business-portal