Whether you are a sole proprietor or a corporate business owner in the Philippines, there are certain rules and regulations that you have to strictly follow.
After registering your business to Department of Trade and Industry (if you are a sole proprietor) or Securities and Exchange Commission Certificate (for Partnership/ Corporation), the next step is to process your business’ registration.
Step 1: Securing business permit from the Local Government Units
Step 2: Bureau of Internal Revenue registration
Step 3: Department of Labor and Employment registration
Step 4: Employer registration to government-mandated employee benefits:
You will be dealing with a number of government units and agencies all throughout your business preparation and operation, as mentioned above. Here are some of the important ones along with the registration process and important notes that you have to be familiar with.
Local Government Unit
Upon securing your registration Securities and Exchange Commission, Department of Trade and Industry, or Cooperative Development Authority – depending on the type of business you will operate – the next part is getting a business permit from the Local Government Unit (LGU) of where your business will be based/located.
The two LGUs that you will get clearances from are:
Just proceed to the barangay center where your business will be located.Present the following documents to the barangay officer (if applicable):
2. Municipal/City Hall
When applying for business clearance, here are some of the requirements that you would need to present:
Take note that Clearance Fees apply. The procedure, requirements, and fees may vary per city or municipality and nature of the business.
The business could choose whether to pay annually, semiannually, or quarterly. The LBT should be renewed and paid not later than the dates of every year:
After successfully securing your business permits from the Local Government Unit, the next step is to register your business with Bureau of Internal Revenue (BIR). BIR is the branch of the government that monitors the company’s’ financial standing, transactions, and compliance with the Philippine Tax Code and other special laws. Failure to register with BIR will lead to paying fines, imprisonment, or even foreclosure of your business.
Each business is under the jurisdiction of a Revenue District Office (RDO) depending on where the business is located. Check the list and details of RDOs here. (https://www.bir.gov.ph/index.php/contact-us/directory/revenue-district-offices.html)
Proceed to your designated Revenue District Office and prepare the following documents for your BIR business registration:
Aside from getting your Certificate of Registration, you are also required to process the following:
Submit duly accomplished BIR Form 1905 (https://www.bir.gov.ph/images/bir_files/old_files/pdf/21351905.pdf) and the books of account. For VAT-registered business, there are normally six books that you have to register:
Application for the Authority to Print Receipts (ATP)
Click here for the downloadable BIR forms. (https://www.bir.gov.ph/index.php/bir-forms.html)
DOLE is the branch of government that upholds and protects Filipino workers including their rights, benefits, and welfare. It is important for the businesses with at least five employees to register with DOLE mainly for the employees’ protection and for the avoidance of labor-related complications as well. In case of noncompliance with the Labor Code, workers could file a complaint with National Labor Relations Commission (NLRC) — a part of DOLE that investigates and deal with any conflict between the employee and employer.
How to register?
Fill out the Registry of Establishment IP Form 3 (http://ncr.dole.gov.ph/fndr/mis/files/rule%201020%20New%20Establishment%20Registration%20(1).pdf)in triplicate copies, attach the detailed layout plan of the office/establishment and submit the documents to the nearest DOLE regional office.
How much is the DOLE registration fee and how often does it have to be renewed?
DOLE Registration is free of charge and is valid for a lifetime, except when there are changes with the location, ownership, business name, and other legalities.
Source and Useful Links:
DOLE Wage FAQs (http://bwc.dole.gov.ph/faqs-on-wage-and-wage-related-benefits)
Labor Code of the Philippines (http://bwc.dole.gov.ph/images/Downloads/LaborCodeofthePhilippines2017.pdf)
DOLE Downloadable Forms (http://ncr.dole.gov.ph/default.php?retsamlakygee=23&resource=617a4046ef07a0d9851942247a994cf9)
SSS is important in making sure that your employees are protected in case of situations that might result in temporary or permanent loss of income. All SSS members are entitled to cash benefits and loan programs which could be of great help in case of unwanted situations.
Generally, as an employer, you will be required to handle the monthly SSS contributions of your employees until the last day of his/her employment with you. It will be your responsibility to make sure that their monthly contributions are paid accordingly.
How much is the monthly SSS contribution per employee?
Each employee’s contribution is equivalent to 11% of the employee’s salary per month for based on the basic salary not exceeding PHP16,000.00, part of which will be deducted from the employee’s monthly pay (3.63%) while the rest will be paid by the employer.
Monthly contributions should be payed lot later that the 10th of every month.
Read more about the employers’ duties and responsibilities in SSS contributions here. (https://www.sss.gov.ph/sss/appmanager/pages.jsp?page=employerduties)
How to Register with SSS as an Employer?
You have to accomplish Employer Registration (SS Form R-1) (https://www.sss.gov.ph/sss/DownloadContent?fileName=SSSForms_ER_Registration.pdf) and Employment Report (SS Form R-1A) (https://www.sss.gov.ph/sss/DownloadContent?fileName=SSSForms_Employment_Report.pdf) forms along with other documents required depending on the type of business that you will register:
– Photocopy of an Authority to Operate such as (but not limited to):
– Photocopy of the approved Articles of Partnership
– Photocopy of Approved Articles of Incorporation
Other regular compliance required:
For employers’ SSS registration, click here.
Sources and Useful Links:
SSS Compulsory Coverage of Employers (https://www.sss.gov.ph/sss/appmanager/pages.jsp?page=employerscoverage)
SSS Downloadable Forms (https://www.sss.gov.ph/sss/appmanager/sss_downloads.jsp?type=forms)
Employees Compensation FAQs (https://www.sss.gov.ph/sss/appmanager/pages.jsp?page=employeescompensation)
SSS FAQs (https://www.sss.gov.ph/sss/appmanager/pages.jsp?page=faqsmembership)
PhilHealth is part of the mandatory employee membership and contribution to make them eligible for the health insurance benefits that PhilHealth members enjoy.
The purpose of PhilHealth is to make medical care more affordable by providing comprehensive health insurance policies to Filipinos.
How much is the monthly PhilHealth contribution per employee?
Starting in January 2018, an employee’s monthly contribution should be 2.75% of his/her monthly basic salary. The amount will be equally shared by the employer and employee.
How to register with PhilHealth as an Employer
Additional documents have to be submitted depending on the nature of the business:
How Do Employers Pay for the Monthly PhilHealth Contribution?
Make sure to remit your payment on or before your due dates. The payment schedule is as follows:
PENs ending in 0-4 : Every 11th-15th day of the month
PENs ending in 5-9 : Every 16th-20th day of the month
Other regular compliance required:
Sources and Useful Links:
Duties and Responsibilities of an Employer (https://www.philhealth.gov.ph/partners/employers/duties_responsibilities.pdf)
Downloadable Forms and Documents (https://www.philhealth.gov.ph/downloads/)
Another mandatory government contribution that employers have to adhere to is the Pag-IBIG or Home Development Mutual Fund. HDMF Members are eligible for a number of benefits that give opportunities for Filipino workers to own houses and properties by providing affordable loaning systems and housing programs. They offer educational and emergency loans as well.
The HDMF also serves as a savings scheme wherein the members can withdraw their total savings (TAV) plus the dividends accumulated after completing at least 240 monthly contributions.
How much is the monthly HDMF contribution per employee?
Like the other mandatory contributions, this also depends on the employee’s monthly basic salary.
How to Register with HDMF as an Employer?
For old employers, however, you can go directly to the Pag-IBIG branch where your records are at.
You may check the list of branches here (http://www.pagibigfund.gov.ph/directory/ncr.html).
Source and Useful Links:
Downloadable Forms: http://www.pagibigfund.gov.ph/dlformsprovident.html