March 21, 2014 | Valerie Wong
There are legal hurdles and bureaucratic red tape awaiting applicants who are set on incorporating and registering a new business in the Philippines. This comes as no surprise as in the latest World Bank competitiveness survey (July 2013), the Philippines ranked 170th out of 189 economies in terms of ease in starting a business.
An entrepreneur has to go through numerous agencies such as the Department of Trade and Industry (DTI), Securities and Exchange Commission (SEC), Bureau of Internal Revenue (BIR), Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), Home Development Mutual Fund (Pag-IBIG), Cooperative Development Authority (CDA), Local Government Units (LGUs) and other license or permit-issuing agencies. The process is tedious and could take a month to process, if one is fortunate.
It is definitely not fun to register a business in the Philippines.
The Philippine Business Registry
In an effort to facilitate a quick and easy way to register businesses (and curb rampant corruption and red tape amongst government employees), the Philippine government, spear-headed by DTI, initiated the Philippine Business Registry. Its main objective is to integrate all the agencies involved in business registration as a sort of a one-stop kiosk for sole proprietorship and partnership/corporate businesses. The system interlinks all of the concerned agencies' computerized registration system so that an applicant no longer needs to physically present himself to register his business.
Sole Proprietorship Business Registration
An applicant fills out a downloaded application form from PBR website and presents to the DTI teller for processing. The DTI teller validates or secures the applicant's TIN or Tax Identification Number then processes the Business Name Certificate and Employer's Registration Numbers (ERNs). Upon payment of BN fees, an applicant is issued out his PhilHealth, SSS and Pag-IBIG ERNs. The applicant then gets his Employer ID or Certificate of Registration from the concerned agencies when the ERNs generated by PBR are presented.
Business Registration for Partnerships or Corporations
Business registration for partnerships or corporations is handled by the Securities and Exchange Commission or SEC. An applicant must submit photocopies of the business's SEC registration documents such as the Article of Partnership/Corporation, SEC registration certificate. The applicant must bring the original copies for verification. The SEC teller then sends out the application to SSS, Pag-IBIG and PhilHealth for the applicant to procure the employer registration numbers or ERNs from the said agencies. Upon the acquirement of the PBR-generated ERNs the applicant can now get the Employer ID or Certificate of Registration.
Though the business registration is centralized to a point, the applicant still has to go to the regional offices of the agencies to get the Certificate of Registration. These offices are not housed in one roof. They are located in different areas or cities or towns. Taking into consideration the horrendous traffic in Metro Manila (if the business address is within Metro Manila), the heat or the flood (depending on the weather), this process is thankless! If the business address is in one of the provinces of the Philippines, then the process is more tiring as regional offices of these agencies are scattered all over a particular province.
Business Registration Procedure: No Easy Task
Business registration in the Philippines seems to be straightforward if one is to follow the steps provided by the PBR. However, this is not the case. For example, before a partnership or corporation could start the process of registration, the applicant must first verify and reserve the name of the business with the Securities and Exchange Commission. The applicant must be ready with the notarized articles of incorporation and its by-laws and treasurer's affidavit, statement of assets and liabilities, registration data sheet including the profile of incorporators, officers, directors, stockholders and so on.
After the issuance of the Certificate of Registration, the applicant would have to deal with the LGUs. He needs a barangay clearance, pay the yearly community tax for the issuance of the community tax certificate from the city treasurer's office, get hold of a business permit from the Business Permit and Licensing Office (BPLO), apply for a certificate of registration (COR) and TIN from the Bureau of Internal Revenue (which entails the submission of various requirements again), obtain the permit for the printing of receipts and so on.
The applicant or employer then registers the company's employees under SSS, PhilHealt, and Pag-IBIG but not before submitting the requirements.
Business registration in the Philippines is tasking even with the PBR program. However, this is not a valid reason for abandoning the plan of putting up a business in the Philippines. The economy is thriving and Filipinos are known supporters of imported products and services.
You do not have to be on a tightrope if you are intent on establishing a Philippine-based business. Servcorp has the solutions for a quick and painless registration for your business. After all, the company is one of the most reliable companies when it comes to dealing with Filipino startups.