Though it may sound intimidating, it’s actually a simple process that can take about a week or two. Here is a simple step-by-step on how to register your online business in BIR and DTI.
Why Should I Register My Business in DTI and BIR?
First and foremost, let us start with the question, “Is it really necessary to register my business?” The answer is yes, definitely yes. Why? Here are a few reasons:
- Helps both you and the people of the Philippines through tax collection.
- Makes you legitimate and builds trusts among suppliers, customers and employees.
- Helps you avoid legal problems with the government (we all know how much of a nuisance that is).
- Lets you make transactions with big companies.
- Failure to register results in a fine and imprisonment.
The fine for your failure to register is “not less than ₱5,000 but not more than ₱20,000 and imprisonment of not less than 6 months but not more than 2 years,” according to BIR regulations.
The Entire Process
- DTI business Registration
- Get barangay clearance
- Get mayor’s permit
- BIR Business Registraton
For those who aren’t aware, DTI is the Department of Trade and Industry, they handle businesses that exchange products or goods with foreign countries. They also make sure that consumers have access to safe, quality goods and services. BIR is the Bureau of Internal Revenue, they deal with taxes, penalties, fines, registrations, payments and the like.
For those of you who are online freelancers, you can skip step 1 and 3. All you need is barangay clearance and a registration in BIR.
Step 1: Register Your Business Name in DTI
1. Think of a business name
What makes a business name memorable? It doesn’t have to be complicated, nor does it have to be overly unique. All that really matters is that your business name tells your story and purpose. Another thing to keep in mind is to make sure that your business name is easy to spell and pronounce, so that it’s literally memorable. Just pick a name that you see fit, a name that you pick wholeheartedly.
2. Check if your business name is available
DTI’s site has a function where you can check whether a business name is registered or not. Check yours to see if it’s available.
3. Fill up DTI’s registration form
Once you have an available business name, you should fill up the DTI online registration form. They have a Business Name Registration System (BNRS). An important thing to take note of is the reference code that you’ll be using in all BNRS transactions.
4. Pay for the registration fee
Once you have filled up the registration form, you must pay the registration fee within 7 days from your application. You can pay through GCash, PayMaya or through your credit/debit card. The fee depends on your territorial scope.
A territorial scope is how far your business reaches, like where you establish your offices, branches, manufacturing plants and etc.
- Barangay: P200
- City/Municipality: P500
- Regional: P1,000
- Download your business certificate
Once your payment has been confirmed, it means your business name has been successfully registered. The next step is to download your certificate. On the DTI site, there is a transaction inquiry page where you’ll need to input your reference code.
Here’s a sample of the DTI certificate looks like.
Step 2: Get Barangay Clearance
This is the next thing you’ll need to do once you’ve downloaded your business certificate and it’s actually quite easy to get.
1. Requirements
To get a barangay clearance, you’ll need:
- Two valid government IDs.
- Proof of address; contract of lease or certificate of land title.
- Your certificate of registration from DTI.
2. Go to the barangay hall where your business is located
- Inform the officer that you’re applying for a barangay certificate.
- Request the application form and fill it up.
- Submit the requirements.
- Some barangays may charge a small fee and some may even offer it for free.
- In most cases you’ll be paying for cedula.
Step 3: Get Mayor’s Permit
This is a similar process to getting barangay clearance and has almost the same requirements.
1. Requirements
- Two valid IDs
- Proof of address; contract of lease or certificate of land title
- Your certificate of registration from DTI
- Barangay clearance
2. Go to the municipal office where your business is located
- Fill up the application form, which will be given to you.
- Submit the requirements.
- Claim your mayor’s permit.
Step 4: Register Your Business in BIR
There are two types of BIR registry, one for online businesses (e.g. online shops) and one for online freelancers.
Online Businesse
1. Requirements
- Your certificate of registration from DTI
- Barangay clearance
- Mayor’s permit
- Proof of address; certificate of lease or certificate of land title
- Government-issued ID (e.g. passport, birth certificate, driver’s license)
2. BIR Form 1901
Fill up three copies of BIR Form 1901. You can download the form on the BIR website.
3. Submit your BIR application
Go to the revenue district office (RDO) where your business is located and submit your three filled up copies of BIR Form 1901.
4. Pay registration fee
The registration fee is P500. The documentary stamp tax (DST) or proof of payment of annual registration fee (ARF) is P30.
- You can pay the fee in BIR accredited banks, they will give you a BIR payment form.
- Submit your form to the bank with your DST on lease.
- After paying the fee, submit a copy of your BIR form payments (not the original form) and other documents required to your RDO.
5. Claim certificate of registration (COR)
You may have to attend a seminar on filing taxes before the RDO allows you to claim your COR. Once you claim your COR, make sure that you receive your “Ask for Receipt” sign.
Here’s an example of COR.
6. Books of account
This is a record necessary for keeping track of all your business transactions. There are three types of books of account:
- Manual
These are journals, ledgers, columnar books or anywhere you can write down your business transactions.
- Loose-leaf
These are also journals, ledgers or columnar books, but instead of manually writing down every business transaction, they are printed. Excel spreadsheets may also be considered as loose-leaf books of account.
- Computerized
A computerized system or program specialized in keeping track of business transactions. Register the book of account you have chosen and submit your BIR Form 1905 to your RDO.
7. Authority to print (ATP)
Businesses are required to have ATP receipts or commercial invoices. Fill up and submit 3 copies of BIR Form 1906 with a sample of your invoices and a copy (not original form) of your COR.
You can find BIR Form 1906 on the BIR website.
This step is what usually lengthens the process. It takes about 1 week to get your ATP and it takes about 2 weeks to get your official invoices.
8. Printing
Once you have your ATP, you need to have it printed at an accredited list of BIR printer. You can find a list of accredited printers on the BIR site and also providers whose authority to printe were revoked.
Freelancers
1. Requirements
- Tax identification number (TIN)
- Occupational or professional tax receipt
- Government-issued IDs (e.g. passport, birth certificate, driver’s license)
- NSO birth certificate
Your RDO may require a copy of a contract with a client or your barangay clearance.
2. Tax identification number (TIN)
To get a TIN, you need to fill up and submit two copies of BIR Form 1901.
If you already have a TIN, you’ll need to fill up and submit the form again to update your details and declare that you are self-employed. You will also have to fill up and submit BIR Form 1905 to transfer your TIN registration. Change the registered address to your RDO.
3. Pay fee for certificate of registration (COR)
The fee for COR is P500. Fill up and submit BIR Form 0605 to an authorized agent bank of your RDO. Make sure to keep your receipt and have a copy of your form. Make 3 copies of your receipt and form for safekeeping and future use.
4. Occupational tax receipt (OTR)
Freelancers are not required to submit a permit from DTI, but you might need an OTR. To get an OTR, go to your city hall and bring a copy of a contract from an existing project or client. If that doesn’t work, go to your RDO and ask what to do instead. Have a copy (not original form) of your OTR to submit to your RDO.
5. Submit all of your requirements
Go to the revenue district office (RDO) where your business is located and submit your three filled up copies of BIR Form 1901.
If your having trouble looking for the downloadable form in BIR website you can search in Google instead.
6. Claim certificate of registration (COR)
You may have to attend a seminar on filing taxes before the RDO allows you to claim your COR. Once you claim your COR, make sure that you receive your “Ask for Receipt” sign.
7. Books of account
This is a record necessary for keeping track of all your business transactions. There are three types of books of account:
- Manual
These are journals, ledgers, columnar books or anywhere you can write down your business transactions.
- Loose-leaf
These are also journals, ledgers or columnar books, but instead of manually writing down every business transaction, they are printed. Excel spreadsheets may also be considered as loose-leaf books of account.
- Computerized
A computerized system or program specialized in keeping track of business transactions.
Freelancers are usually required to have two books of account. Register the books of account that you have chosen and submit your BIR Form 1905 at your RDO.
8. Authority to print (ATP)
Businesses are required to have ATP receipts or commercial invoices. Fill up and submit 3 copies of BIR Form 1906 with a sample of your invoices and a copy (not original form) of your COR. This step is what usually lengthens the process. It takes about 1 week to get your ATP and it takes about 2 weeks to get your official receipt.
9. Printing
Once you have your ATP, you need to have it printed at an accredited BIR printer. You can find a list of accredited printers on the BIR site.
Conclusion
That’s the end of the process. Now that you’ve registered your business in BIR and DTI, you officially own your business and you can focus on being your own boss. I wish you best of luck on your journey to success!
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