The business registration process may be a tricky one to navigate. Registering to the Bureau of Internal Revenue (BIR) alone will require your time, effort, and a load of requirements and certifications. For many, this procedure is made more difficult by improper preparation, sparse research, and unawareness of updated rules and regulations.
If you are planning to open up a business in the Philippines, be mindful of all requirements that you need to prepare beforehand. For a seamless registration process with the BIR, it is best to come ready and well-equipped. With that in mind, here is everything that you need to do before registering your business in the Philippines.
1. Know the nature of your business
Before registering your business to the BIR, you must first understand the nature of your business. It is important to know what kind of industry you are operating in, as well as the kind of business you will be operating.
An industry is any group of organizations that produce or supply services, goods, and sources of income. One example of a major Philippine Industry is Tourism. Meanwhile, the kind of business pertains to the type of goods and services that you offer. Different kinds of business that fall under the tourism industry include: Hotel and Resort chains, Airline companies, Travel agencies, and the like.
Knowing this information is vital as it will be requested when filing for registration for your new business. In addition, different laws and tax rules are applicable for different industries as well as the type of business and the products or services produced.
2. Identify your business classification
Another important thing to note is the business classification or structure, whether your company is a sole proprietorship, cooperative, corporation, or partnership. Each type of business structure has its set of advantages, such as complete ownership in a sole proprietorship, and disadvantages, such as unlimited liability in a sole proprietorship.
In addition, each business classification is subject to different tax rules, which is something to keep in mind when registering your company. Moreover, there are different requirements for each business classification, which you must comply with before you can successfully register your business.
3. Have your business name registered to the Department of Trade and Industry (DTI) or Securities and Exchange Commission (SEC)
Before you register your business, it is important to first have your name registered with DTI or SEC. You cannot process BIR registration without first securing this certification. A DTI or SEC certificate ensures that your name is unique to only you and does not infringe upon the copyright and trademark laws of other brands with similar names to yours.
4. Research govt requirements and additional requirements of LGU
The Philippine government system is decentralized. This means that on top of the National Government’s laws on trade, commerce, and taxation, local government ordinances and laws may apply to your area. It is important to research these ahead of time, so you are not caught off-guard. Moreover, different LGU (local government units) may require some additional requirements.
5. Have your business plan set (budget, capital, etc. must be fixed)
The most important thing you need to do before registering your business is to have a plan set in stone. While this may sound obvious, you would be surprised by the number of business registrants who register without a proper business plan in place. It is vital that you set up a plan so you will know and have concrete steps on how your operations will be managed. This will also offer other details like having a location set and securing the needed capital after preparing the budget plan. As the saying goes, “if you fail to plan, you plan to fail.”
The Final Wrap Up
If you need help finalizing your business plans, setting financial projections, or assistance with BIR registration, our team will be more than happy to help you. We have helped countless businesses in various industries with registration. Most of all, our staff is well-versed in processing different businesses classifications to ensure you have all the requirements to avoid delays. We also provide payroll, tax, bookkeeping, accounting services to get your books in order. Call us for a free 30-minute consultation so we can get your business up and running in no time.