01 · The permit
What the permit is
The business permit is the city or municipality’s authority to operate at a specific address. It is issued where the business operates and renewed every year. It sits alongside the company’s SEC and BIR registrations, not in place of them.
It also doesn’t replace the licenses national agencies issue for regulated activities. A drugstore needs an FDA license to operate, a lending company an SEC certificate of authority, a contractor a PCAB license, and a school a DepEd permit. The city may ask to see those before it issues its own permit.
02 · The address
Start with the address
The permit is tied to a location, so the city asks for two things about it: proof that the company has the right to use the address, and a fire safety inspection certificate (FSIC) for the building’s occupancy, issued within the last nine months.
If the company owns the property
The transfer certificate of title or the tax declaration.
If it doesn’t
A contract of lease, a memorandum of agreement, or the owner’s written consent.
This is where the choice of address made at
stage 1 pays off. The SEC accepts a virtual office address, but the city looks at the premises, and whether it accepts a virtual office agreement in place of a lease varies from one city to the next. korp.ph handles the business permit for companies registered at its virtual offices in Makati and Daet, and for companies with their own registered office in Metro Manila or Cebu.
03 · Documents
The documents
You provide the first four documents below. City hall handles the rest as part of the same application.
You provide
✓SEC certificate of incorporation: proof the company exists
✓Proof of the right to use the location: title or tax declaration if owned; lease, memorandum of agreement or the owner’s written consent if not
✓Location plan or sketch: where the business sits
✓FSIC for occupancy, issued within nine months, from the building owner through you. A business with a valid one files an affidavit that nothing substantial has changed
City hall handles
✓Barangay clearance: the barangay’s clearance for the business, processed by city hall
✓Community tax certificate: the cedula, folded into the permit’s tax bill
✓Locational clearance: zoning conformity, issued with the permit. Not required on a first application for businesses in malls or central business districts
✓Sanitary permit, issued with the permit: only for businesses covered by the Sanitation Code, such as food, markets, laundries, salons and hotels
From a national agency
✓National agency licenses: only for regulated activities, issued by the agency itself
The application forms don’t need to be notarized.
04 · What you pay
What you pay
Local business tax
Based on the previous year’s gross sales or receipts, so it usually starts in the company’s second year. Each city sets its own rates, within the Local Government Code’s caps. In korp.ph’s experience, companies typically pay between 1% and 2% of gross sales.
Community tax
From ₱500 to ₱10,500 a year, depending on the company’s property and its gross receipts in the previous year. It is paid where the principal office is, and now included in the permit’s tax bill.
Regulatory fees
Each city sets its own in its revenue code.
05 · Renewal
Renewing every year
Most cities renew every permit in January, so a first permit issued mid-year runs only to the end of that year: local business taxes are due within the first 20 days of the year, or of each quarter where the city allows quarterly payment. A city may instead renew each permit on its anniversary date. Renewal needs no new locational clearance, but the SSS law requires the city to ask for a certificate of SSS coverage and compliance before issuing the annual permit.
Late payment carries a surcharge and monthly interest, and the mayor can suspend or revoke a permit for violating its conditions.
06 · FAQ
Frequently asked questions
Do I need to get a barangay clearance first?
No. The barangay clearance is now processed by city hall as part of the business permit application.
Can I get a business permit at a virtual office address?
It depends on the city. The permit needs proof of the right to use the address and a fire safety certificate for the building, and cities differ on whether a virtual office agreement counts. korp.ph handles the permit for companies registered at its virtual offices in Makati and Daet, and for companies with their own registered office in Metro Manila or Cebu.
Is there a business tax in the first year?
The 2021 joint circular tells cities not to charge one on a new business’s capital investment, except printing and publishing businesses and franchise holders. The tax starts the following year, based on the first year’s gross sales or receipts.
