Small, medium and big businesses contribute to the economic growth of a country. Good businesses give more jobs, build more infrastructures, and increase national revenue in the form of taxes collected from them. In our country where the rate of unemployment is rising and the economy is not showing significant progress, business entrepreneurs, who take the courage to build their new enterprises, become modern heroes. If you want to be one of them or you are already one of them who are now building wealth for our country, the following are some quick things you should know and learn about doing business in the Philippines.
Types of businesses
Business in the Philippines can be formed as a proprietorship, partnership or corporation. A single proprietorship is a business that is owned by a single individual who has full control and authority in running this kind of business. A business formed as partnership is a business that is owned by two or more individuals or partners. A corporation is a business that is owned by its shareholders. For more information, please read our article about the “different types of business in the Philippines”.
Registering business name
If you are starting a single proprietorship business, you should register your business or trade name with the Department of Trade and Industry (DTI). If you are starting a partnership or corporation you can directly register your business with the Securities and Exchange Commission (SEC). You may also wish to register your corporate name with the DTI. Some special types of companies may need to obtain secondary licenses or endorsements, such as from Bangko Sentral ng Pilipinas (BSP) for pawnshops, banks and other financial institutions. For more details you can read the following articles:
- How to register trade name with the DTI
- How to register a stock corporation with the SEC
- How to register a non-stock corporation with the SEC
Local government permit
After securing certificate of registration from DTI or SEC, you need to obtain a Permit from the City Mayor’s Office. The different Philippine Cities or Local Government Units LGUs may have different processes and procedures for getting a Mayor’s Business Permit. You can read our article “How to get a Mayor’s Business Permit in the Philippines” for more information. You can also check where among the Philippine cities are considered “the most business friendly cities in the country”.
The next thing to do is to register your business with the Bureau of Internal Revenue (BIR), the agency that is responsible for the collection of your income tax, business tax and other taxes which may be applicable to you. You should register with the BIR before you start operation to avoid any future tax problems. Please read our article “How to register with the BIR” for more details. You may also extend your reading for more important information and guidelines in our “Tax Guide Philippines” post.
Every employers and business owners in the country must also remember that the Philippine Government has set out laws to protect Filipino workers. These mandates require businesses and their employees to be registered with the Social Security System (SSS), Philippine Health Insurance Corporation (PHIC) / PhilHealth, Home Development Mutual Fund (HDMF) or Pag-IBIG Fund and the Department of Labor and Employment (DOLE). You may also check our quick article on “How to register business in the Philippines” for more information with regard to registering a business with other government agencies.
Achieving business success
To be successful in doing business in the Philippines, everyone should have great business, entrepreneurial, managerial and marketing skills. We need to deal wisely with our customers, our employees and even with our selves. As an advice I always give to my readers, the toughest and the worst business rival you can encounter is YOURSELF. It’s hard to defy our own greed, laziness and other personal weaknesses.
Filipino consumers are loyal customers, especially if we will also become loyal to them by showing that we really care and by providing them with quality products and those products that save lives in this time of economic crisis and financial woes. The Philippines also encourages businesses to maintain their social responsibilities. Corporations are even mandated to observe good corporate governance.
Filipino workers are hardworking and dedicated, especially if we become good employers, managers and leaders to them. We must always remember that the universal rule or the ethic of reciprocity is always applicable in any parts of the world. Always bear in mind “to do the things that you want other people to do to you”. That other people can be your customers, employees, suppliers, investors, creditors and the public.