Last updated: July 31, 2023
Written by:Digido Financial Writers Team
- A barangay business license is the first step to legitimately establish a business
- A business license means that you are properly recognized by the government
- A barangay business license is different from a mayoral license
You cannot legitimately start a business in the Philippines if you do not have a business license. Without it, you will be running a business that is not properly recognized by the government.
What is it and why is it important? Today we will provide you with all the information you need about the Barangay Business License. We'll also show you the steps to get it and the process you need to take, along with the requirements you need to submit.
What is a business license?
A barangay is the smallest unit of government in the Philippines. It is a branch of the municipal or city government, and its duty is of an administrative nature.
The barangay captain is the duly elected leader of the barangay. The barangay permits you get must have his signature. In essence, his signature is proof that your company has been approved to operate.
To be able to run a business in a barangay, you mustgo and visit the barangay captain's office and apply for a barangay business license.
Please note that this permit is different from the personal barangay permit. A personal barangay permit is a document that proves you are a good citizen.
A barangay business permit is a document that allows you to do business in the barangay. You need this document as part of the mayor's business license application.If you don't have it, you won't be able to get the mayor's business license.
If you want to see a sample business license, both for the barangay or the mayor, you can always go to a business institution, like a mall or a clothing store, and see them. All companies are obliged to post their licenses on the wall.
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Why do you need a Barangay Business Permit?
So why is it important to process business permits? It is important because it means that the barangay captain is aware of your work. There are zoning laws in the Philippines. For example, you can't just set up a piggery anywhere. If you are applying for a business license, the barangay captain must know what it is and then approve it.
Why is this not allowed? Not all companies are good for the environment or people. This is why the government must intervene. If you live in a city, you may not be allowed to run an animal farm. If you live far away, you may not be allowed to open a nightclub. There are also jobs that are illegal and will never be approved, such as things related to adult materials or illegal drugs.
If your planned business is against the law or zoning rules, the barangay captain will not issue you a document, even if you have applied for a business permit in the barangay.
Without the approval of the barangay captain, you are operating your business illegally.They can call the police or the NBI and seize your property. They can also issue a cease and desist order to stop your business from operating.
So, once you acquire the business license requirements and get approval, the barangay captain will issue you a barangay business license. You can then use that document to obtain a mayoral permit from the municipality or city hall.
Barangay Business License Requirements
There are some documents you need to prepare. Below is a list of barangay permit requirements:
- ID card
- DTI registration
The cedula is the tax certificate of the community. You can only get this at the municipal or city hall. To get it, just continue down the hall and tell the guard you need it. The guard will tell you which window to go to.
When you approach the counter, you will sign a simple access form. Bring a ballpoint pen; sometimes ballpoint pens in government offices don't work or run out of ink. Prepare the following details:
- Your name
- Annual income
After that, the cashier or the staff will tell you the amount you have to pay. There is no fixed cost here. The amount you pay depends on your annual income. After you pay the amount, the cashier will give you a document called a Community Tax Certificate.
The next thing you need is aDTI registration. You need to go to the Ministry of Trade and Industry to register your company.
An alternative is to go online and register from there. It's herelink to DTI registration. There is also a cost that must be paid, and the cost varies. It depends on the type of business you are opening.
You do not have to physically go to any DTI office. You can use their online registration and also pay online. Payment methods vary, but there are several you can use, such as credit cards, Dragonpay, and other e-wallets.
After you get both the cedula and DTI registration, go to the barangay hall office and apply for a barangay business permit.
How to get a Barangay Business Permit
Here are the steps to get a business license:
- Talk to the staff when you visit the barangay hall
- You will be interviewed a bit
- Show your cedula and DTI registration
- Fill out the Barangay Business Request form - it's heresample
- You have to pay the amount; the price varies but it is not expensive(oko 500 do 1000 pezosa)
You will receive a written and signed barangay business permit. This is not a sample barangay business license; it's the real thing, so make copies of it and protect the original.
The barangay business approval shall contain the following information:
- Official seal of the barangay
- Name and information of the company owner
- Official company name
- Address of the company owner
- The actual address or location of the business
- Confirmation information according to law
- Barangay Business License Issue Date
You must renew your barangay business license every year.Since you already know how to apply for a business license and already have your DTI document, it should be easier by then. The only exception is if your DTI license has already expired. In that case, you have to restore it as well.
You will also need a new barangay business license to renew your mayor's business license. How much does a business license cost? It will depend on your income. If you renew your business licenses, you will present a profit and loss account.
As such, the cost of a business license will also vary. The income statement must originate from the BIR.
How long does a Barangay Permit last?
Your barangay business permit is only valid for one year.You must renew your business license every January of the following year.
Unlike other documents in the Philippines, businesses must renew their licenses every year as this helps the government collect taxes for business establishments.
Business license renewal in the Philippines for 2023
The steps for processing a business license for renewal are the same. However, you no longer need DTI registration this time.
Typically,DTI registration is valid for three years. So, the business license renewal requirements are just your old barangay business license, cash and a new community tax certificate.
Please note that for the purposes of a business license in the Philippines, you need a barangay business license. Otherwise, the Mayor and the BIR will not approve your application or renewal
For renewal, make sure you have all the documents with you and then go to your barangay hall. Tell the staff you need a renovation and they will help you through the process.
You need a business license if you want to legally run a business in the Philippines, even if you only run a small shop. The barangay permit is also a document that you need to be able to secure other permits from the government.
In essence, the Barangay Captain issues you a document that proves you are a legal citizen and have had the privilege of doing business in your community. Without a barangay permit for small or even large businesses, the government can shut you down.