Setting up a successful business anywhere in the world can be a pretty daunting task, let alone trying to set up a shop in a developing country like the Philippines. Not to mention the tons of requirements needed to be accomplished such as BIR registration.
Getting all the administrative tasks done can take anywhere between 1-3 months, so make sure you have an action plan in place, and you won’t be wasting any time wondering what to do next.
If you keep this guide handy, it will help to explain the potentially complicated process in detail and guide you through—one step at a time.
Potential Business Ideas
You can start just about any business in the Philippines and make a profit out of it. However, there are certain roles and industries where you’re most likely to have a better chance of success.
Here are a few suggestions:
- Home businesses may include farming plants or animals, establishing a food service, buy & sell, or freelance writing.
- Sari-sari stores are common businesses in the Philippines that require minimal capital to start up.
- Printing business is popular in the Philippines for both enterprises and consumers.
- Laundry/dry cleaning businesses are generally in demand anywhere you go.
- Professional services may include hair styling, photography, landscaping, consulting, and web development, among many others.
- Pet care/training can have high-profit margins if you can build your customer base.
- Appliance repair might be your best venture if you fancy yourself as a handyman.
- Travel &Tours – If you’re passionate about traveling and tourism, you could be a great travel guide!
Risks and Benefits of Sole Proprietorships
A sole proprietorship is a business that is owned and operated by a single person as opposed to partnerships and corporations.
The obvious risk of going solo is that you are wholly liable for any loss that your business suffers. The less obvious risks are that managing a business by oneself can lead to exhaustion and creditors, as well as government agencies can go after your personal assets since you are the business.
However, if you manage to get over these risks, here are some of the benefits you could reap:
- Sole proprietorships are cheaper to set up and register.
- Capital requirements, as well as licensing costs, are minimal.
- There are minimal regulations and monitoring requirements.
- You don’t have to share the business profits with anyone.
Registering Your New Business
In registering your business, remember to prepare all necessary documents beforehand and pay all required fees at the relevant agencies.
- Pick a name for your business (while having a backup name as well) to verify and register with the Department of Trade and Industry (DTI).
*If your business is a partnership or a corporation, you must register your business with the Securities and Exchange Commission (SEC) instead of DTI.
- Deposit the paid-in minimum capital requirement (PHP 5,000) at the bank.
- Obtain clearance from your local Barangay. This requires your DTI/SEC and incorporation documents.
- Obtain the business permit to operate from the Business Permits and Licensing Office (BLPO), which will require your barangay clearance as a prerequisite.
- Apply for a Certificate of Registration (COR) and Taxpayer Identification Number (TIN) at the Bureau of Internal Revenue (BIR). This requires all previously mentioned documents for application purposes, as well as special books of account for stamping, which can be found at bookstores nationwide.
*Print and keep all agency receipts and invoices for reference purposes.
Keep in mind that if you are planning on hiring employees to work for the business, you must register with the Social Security System (SSS), the Philippine Health Insurance Company (PhilHealth), and the Home Development Mutual Fund (Pag-Ibig). These are all prerequisites for employment, and you will need to declare employee salaries and contribute towards these funds whenever you process payrolls.
The entire registration procedure can take a while—thanks to processing times, so don’t simply wait around for the various agencies to fulfill requests. Use the time to work out any other necessary arrangements, which could include sourcing financial investments, office supplies, preparing the business location, rental agreements, and lining up your suppliers.
Follow these simple guidelines and you can set yourself up with the best possible chance of creating a successful, even thriving business in the Philippines. Happy trading!
This is article was submitted by: Danella Yaptinchay. She is the managing director of Full Suite, a service company providing back end support to small businesses. She is a co-founder of Co.lab, a coworking space, and of the media company Homegrown.ph. In constant pursuit of balance and self-development, she tries to apply the practices of yoga to her daily life.