Financial Blog

The nationwide quarantine impacted a lot of lives in terms of career, studies, and lifestyle in general. With the health and economic crisis we’re facing, others took the big leap to start an online business. This includes freelancing, blogging, and the popular option of having an online selling business. Because why not? It does not require large capital and it is quick to set-up. 

One of its great advantages is you get to work at the comforts of your own home. And who doesn’t want to become their own boss?

The most pressing question for those who already set their sights on establishing an online business is “Do I need to register my business?,” and the short answer is yes. Whether you’re offering online services as a freelancer or selling products in your online store, you need to do certain registrations and acquire certain permits.

That being said, here’s a guide on how to get your business registered:

1. Register Business Name in DTI
2. Get Barangay Clearance
3. Acquire Mayor’s Permit
4. Register in BIR

For online freelancers, all you need is to get a Barangay Clearance and register in BIR.

Register your business name in the Department of Trade and Industry (DTI)

1. Prepare your business name. According to DTI, your business name (BN) refers to any name, other than your true name, that you’re going to use in regard to your business.

2. Confirm the availability of your business name. After preparing your business name ideas, search them on DTI’s website and check if it’s available for use.

3. Fill up the online registration form. If your business name is available, you can already proceed and fill up DTI’s online registration form through their Business Name Registration System (BNRS). Take note of the reference code that will be provided to you as you will use it in all transactions with BNRS.

4. Pay the registration fee. After filling up your online registration form, follow the instructions, and pay the necessary registration fee within 7 calendar days from the application date. You can pay the fee via GCash, PayMaya, or Credit/Debit Card.

Registration fee:

5. Download your certificate. Upon confirmation of your payment, your Business Name will be successfully registered. Go to Transaction Inquiry, accept the Terms and Conditions, and input the reference code that was provided when you filled up the registration form.

Register for a Barangay Business Clearance

1. Prepare the requirements.

• Two valid IDs
• Proof of Address. Contract of Lease (if rented) or Certificate of Land Title (if owned)
• Certificate of registration from DTI

2. Go to the barangay where your business is located. Fill up the application form, submit it together with other requirements, and claim your Barangay Business Clearance.

Register for a Mayor’s Permit

1. Prepare the requirements.

• Two valid IDs
• Proof of Address. Contract of Lease (if rented) or Certificate of Land Title (if owned)
• Certificate of registration from DTI
• Barangay Business Clearance

2. Go to the municipal office where your business is located. Fill up the application form, submit together with other requirements, and claim your Mayor’s Permit.

Read more: How to get a Business or Mayor’s Permit for all types of business in the Philippines

Register your business in the Bureau of Internal Revenue (BIR)

For online businesses such as online shops (single proprietor)

1. Prepare the requirements

• DTI Certificate of Registration
• Barangay Business Clearance
• Mayor’s Permit
• Certificate of Lease (if the place is rented) or Certificate of Land Title (if owned)
• Government-issued identification (Passport, Driver’s License, Birth Certificate, etc.

2. Fill up the BIR Form 1901.  Accomplish 3 copies of the BIR Form 1901 which can be downloaded here.

3. Go to your respective Revenue District Office (RDO). The RDO is where your business is located and has jurisdiction over you. This is where you submit your application. You can find your respective RDO here.

4. Pay the Registration Fee. Registration fee is Php 500 and Php 30 for loose DST or Proof of Payment of Annual Registration Fee (ARF). You can pay the registration fee in BIR accredited banks. Accredited banks will provide you a BIR payment form. Submit this to the bank together with your Documentary Stamp Tax on Lease. After payment, submit to your RDO a photocopy of your BIR form payments and other documentary requirements.

5. Claim your Certificate of Registration (COR). Some RDOs might require you to attend a seminar about filing your taxes before you can claim your COR. Clarify this to the RDO after paying your registration fee. Upon claiming your COR, ensure that you will also receive the “Ask for Receipt” sign.

6. Purchase and register your books of account. A book of account is where you keep the original record of all your business transactions.  There are 3 types of books of account:

• Manual Books of Account: This includes journals, ledgers, or columnar books where you manually document (handwrite) your business transactions.
• Loose-leaf Books of Account: This also includes journals and ledgers but they are printed instead of being handwritten. Bookkeeping through Microsoft Excel (spreadsheets) can be considered as a loose-leaf book of account as well.
• Computerized Books of Account: A program or computerized system of bookkeeping that is usually common for businesses with complex operations.

Register your books of account by accomplishing and submitting BIR Form 1905 together with your books of account at the RDO where your business is registered.

7. Secure an Authority to Print (ATP). BIR requires businesses to have Authority to Print receipts (for businesses offering services) or commercial invoices (for businesses selling goods). Accomplish and submit 3 copies of BIR Form 1906 at the RDO, together with a sample of principal or supplementary invoices and a copy of your COR. It would usually take a week before you can get your ATP.

Upon acquiring your ATP, submit it to an accredited BIR printer. You can check BIR accredited printers here. The release of your official invoices usually takes up to 2 weeks.

For online freelancers

1. Prepare the requirements.

• Tax Identification Number (TIN)
• Occupational Tax Receipt (for non-licensed professionals)
• Professional Tax Receipt (for licensed professionals)
• Government-issued IDs
• NSO Birth Certificate

The Revenue District Office (RDO) might ask for additional requirements such as a copy of a contract with a client or Barangay Clearance.

2a. Get a Tax Identification Number (TIN). For those who don’t have a TIN yet, you need to accomplish and submit 2 copies of BIR Form 1901. This is the first thing you need to secure before proceeding to the next step.

2b. Update Your Personal Information. If you were previously employed and already have a TIN, you still have to accomplish the BIR Form 1901 and update your details. You now have to declare that you are “self-employed”. In addition, you also have to accomplish BIR Form 1905 to transfer your TIN registration. Change your registered address and transfer to the appropriate RDO where you do your business and have jurisdiction over you. You can find your respective RDO here.

3. Pay the Certificate of Registration (COR) Fee. The registration fee for COR is Php 500. Accomplish BIR Form 0605 and pay the fee to any Authorized Agent Bank of your RDO. Always keep your receipt and copy of the form. After payment, prepare 3 photocopies of the accomplished form and the receipt provided.

4. Secure an Occupational Tax Receipt (OTR). BIR does not require freelancers to submit a DTI permit, but you might need to secure an OTR. Municipalities have different requirements when it comes to OTR issuance. You can get an OTR from your city hall, and the most basic requirement is a copy of a contract from an existing project or client. If your city does not issue an OTR, you can go directly to your RDO and ask for additional info on what to do instead. Prepare a photocopy of your OTR for submission to RDO if your city provides one.

5. Submit all the requirements to your respective RDO. The RDO is where your business is located and has jurisdiction over you. This is where you submit your application. You can find your respective RDO here.

6. Claim your Certificate of Registration (COR). Some RDOs might require you to attend a seminar about filing your taxes before you can claim your COR. Clarify this to the RDO after paying your registration fee. Upon claiming your COR, ensure that you will also receive the “Ask for Receipt” sign.

7. Purchase and register your books of account. A book of account is where you keep the original record of all your business transactions.  There are 3 types of books of account:

• Manual Books of Account: This includes journals, ledgers, or columnar books where you manually document (handwrite) your business transactions.
• Loose-leaf Books of Account: This also includes journals and ledgers but they are printed instead of being handwritten. Bookkeeping through Microsoft Excel (spreadsheets) can be considered as a loose-leaf book of account as well.
• Computerized Books of Account: A program or computerized system of bookkeeping that is usually common for businesses with complex operations.

For freelancers, it is usually required to have 2 books of accounts. Register your books by accomplishing and submitting BIR Form 1905 together with your books of account at the RDO where your business is registered.

8. Secure an Authority to Print (ATP). BIR requires businesses to have Authority to Print receipts (for businesses offering services) or commercial invoices (for businesses selling goods). Accomplish and submit 3 copies of BIR Form 1906 at the RDO, together with a sample of principal or supplementary invoices and a copy of your COR. It would usually take a week before you can get your ATP.

Upon acquiring your ATP, submit it to an accredited BIR printer. You can check BIR accredited printers here. The release of your official receipt usually takes up to 2 weeks.

After going through all the paperwork of making your online business legal and registered, you can now breathe a sigh of relief since you’re already ensured that you fully own your online business and no one else could use your business name. Getting the BIR Registration appropriate for you also means that you’re responsible enough to pay your taxes. Now all you have to do is to become your own boss and focus on growing your first online business.