Business Permit Application Guide for First-Time Entrepreneurs
Published: May 29, 2020 | Posted by: Venus Zoleta | Government Services
Opening a new business soon? A critical task you should make time for is your business permit application. This document is your proof that you can legally operate in the city or town where your business is located—whether it’s a physical store, an online shop, or any enterprise.
So you can set up your business without fuss, know how to apply for a business permit properly. Here’s a simple guide for first-time business owners in the Philippines.
Table of Contents
What is a Business Permit?
A business permit is a certification that your business is legitimate. Having this document means your business has the license to operate in the city or municipality where it’s registered.
This official document is also called the mayor’s permit because it’s processed by the local government unit (LGU) with jurisdiction over the place of business.
Business permits are issued to ensure that businesses pay taxes and comply with local regulations for safety, security, health, and sanitation. This document also entitles an individual or organization to any support provided by LGUs to businesses in their area.
Running an enterprise without this permit can result in penalties such as fines and imprisonment. In worst cases, the LGU may close the operations until a business permit is secured.
3 Things to Know Before Filing Your Business Permit Application
1. Apply for one ASAP
Being a new entrepreneur, you have so much on your plate as you prepare for your business launch. Despite that, it’s important to make your business permit application a priority.
Why? First, it’s required by law. Sole proprietors, partnerships, corporations, cooperatives, foundations, and associations in the Philippines need to get a business license from their respective LGUs before they start operations.
Second, a business permit is one of the requirements for applications for business loans, government financial assistance programs, BIR registration, and other related transactions. It may also be required for when you apply as an authorized reseller/distributor of a brand or as an online seller on e-commerce marketplaces.
Thus, you need to get this permit first, so you can set up your new enterprise smoothly.
Related: Business Loans for Startups in the Philippines
2. You Should Secure Other Documents First
Before filing your business permit application, you need to register your business with the appropriate government agency and secure other clearances and permits.
Business permit requirements take time and effort to process and obtain. You might not have these documents on hand yet, so secure them first.
Requirements for a Business Permit in the Philippines
Every LGU has its own specific set of documents required for permit applications, but here are the typical requirements you have to obtain in the following order:
Business Permit Requirement | Purpose | Where to Get It |
|---|---|---|
Applicable business registration document:
| Proof of business registration |
|
| Barangay Business Clearance | Proof of business location | Barangay hall with jurisdiction over the business location |
| Proof of business location and existence | Owner or building administrator of the leased property (if renting) |
| Sketch and photos of the location | Proof of business location and existence | Owner or building administrator of the leased property (if renting) |
| Locational Clearance / Zoning Clearance | Proof of compliance with the city’s/municipality’s Comprehensive Land Use Plan and Zoning Ordinance | City Planning and Development Office of the city/municipal hall |
| Occupancy Permit | Proof that the structure where the business will operate has passed safety and health standards |
|
| Public Liability Insurance | Protection against legal liabilities as a result of bodily injury/property damage to third parties in connection to the insured’s business operation | Any Insurance Commission-accredited insurance company |
| Authorization letter/Special Power of Attorney and valid ID (if filed through a representative) | Proof that the person is authorized to transact on behalf of the business owner | Business owner |
Your LGU may impose additional requirements, taxes, and fees for business permit applications. To know what else you need to secure and how much the fees are, contact your mayor’s office or visit your LGU’s website.
Related: DTI Business Registration Guide for Entrepreneurs in the Philippines
3. The Application is Typically Done in Person
Photo from PIA website[1]
This means you have to submit the requirements personally or through your authorized representative to the city or municipal hall where your business is located.
However, if you’ll open a business in Valenzuela City, you can use its integrated online permit system called #PaspasPermit[2]. Within seconds after payment confirmation, you’ll receive a provisionary business permit. The actual document will be delivered to you within three to five working days.
How to Apply for a Business Permit in the Philippines
Application form from the Quezon City LGU[3]
- Go to the Business Permit and Licensing Office located within the premises of the city/municipal hall having jurisdiction over your business address.
- Secure and fill out the application form. The form is available on-site, or you can download it in advance from the LGU’s website.
- Submit the accomplished application form and other requirements. The personnel will evaluate your documents. Your application will also undergo an assessment of tax and fees.
- Pay for the assessed tax and fees to the cashier (once approved). Receive your official receipt.
- Claim your business permit. The document may be issued together with a registration plate/sticker or any other certificate. Make sure to display them prominently in your store or office.
Final Thoughts
Business permit application may look tedious because of its long list of requirements, but the actual procedure is simpler than you might expect.
Remember that business permits should be renewed annually. Make sure to renew your permit between January 2 and 20 of every year to avoid penalties and suspension of your business license.
Sources:
- [1] “How to secure a local Business/Mayor’s Permit” (Philippine Information Agency, January 2, 2020)
- [2] Valenzuela City Online Services website
- [3] Quezon City Local Government website
Venus is an experienced personal finance writer with a background in digital marketing, public relations, and journalism. She’s into stock, VUL, and mutual fund investing. Follow Venus on LinkedIn.
