Learn how to apply for a business permit or mayor’s permit for the first time here.
January is always a crucial time for Philippine MSMEs, as this is the time for business owners to complete their business permit renewal.
To operate legally in the Philippines, businesses are expected to have a business permit, and keep it up-to-date every year. While it’s best to prepare your documents for business permit renewal at least a month before January, you’ll be able to meet the deadline as long as you don’t leave things until the last minute.
Know the documents you need to prepare and the deadline for the business permit renewals in your LGU below!
What is a business permit?
A business permit, also known as a mayor’s permit, is a government license secured from your local government unit (LGU). It allows you to operate your business legally within the area of your LGU. It is also your local LGU’s way of ensuring you are paying business taxes and following health and safety standards.
Business permits can be obtained from your business LGU’s City Hall or Municipal Hall.
Who needs a business permit?
Any type of business – sole proprietorship, partnership, corporation, or cooperative – should have a business permit and renew it every year.
LGUs track the number of businesses under their jurisdiction by the number of business permits they issued for the year. In addition, potential customers and partners may also request for your business permit before conducting business to prove your business legitimacy.
When is the deadline for the annual renewal of business permits?
Traditionally, business permit or mayor’s permit renewal is from January 1 to January 20 of every year. This deadline applies regardless of the date of your business registration with the Department of Trade and Industry (DTI), Securities and Exchange Commission (SEC), or Cooperative Development Authority (CDA).
Some LGUs extend their deadlines for special circumstances, such as wider jurisdiction. For example, the following LGUs have announced extended business permit renewal deadlines for 2023 without penalties:
- Makati City: Jan 31, 2023
- Cebu City: Jan 31, 2023
What are the required documents for business permit renewal?
The documentary requirements for business permit renewal may vary depending on your LGU, so check your LGU website to see the exact list of business permit renewal requirements for your area. However, these are the documents that are commonly requested by all LGUs:
I. Barangay Business Permit, also called Barangay Clearance or Barangay Clearance Certificate. This license also requires annual renewal every January 20.
The barangay business permit can be obtained at your local Barangay Hall by providing the following documents:
• Previous year’s Barangay Business Permit
• Official Receipt for payment for last year’s Barangay Business Permit
• Application Form (2 copies)
II. Other business permit renewal documents:
• Previous year’s Business Permit
• Community Tax Certificate or Receipt
• Lease Contract
• CENRO (Community Environment and Natural Resources Office) Certificate
• Sanitary Permit
• Fire Safety Inspection Certificate
• Comprehensive General Liability Insurance
• Occupation and Zoning Clearance Certificate
• Audited Financial Statement from the previous year
III. Depending on the LGU or municipality with authority over your business area, you may also need to submit the following:
• Notarized lease agreement
• DTI, SEC, or CDA Registration
• Quarterly VAT returns from the previous year
• Declaration of Gross Receipts
• Number of employees at the time of renewal
• SSS, Pag-IBIG, and PhilHealth registrations of employees at the time of renewal
• Affidavit of No Operations, if your business did not operate or engage in financial transactions in the previous year
Take note that you also need to pay the following fees to obtain selected documents in the list:
- Local business tax (LBT)
- Mayor’s permit fee
- Sanitary inspection fee
- Garbage fee
- Building inspection fee
- Zoning fee
Where do you renew your business permit?
You should first get a new Barangay Clearance or Barangay Business Permit at your local Barangay Hall before renewing your business permit at the City Hall or Municipal Hall. In addition, you may have to go to other government offices such as CENRO or BIR to complete your document list.
Going to different offices to submit requirements takes a lot of time and energy. Thanks to the Ease of Doing Business Act, however, many LGUs have set up a business one-stop shop (BOSS) where you can get both your Barangay Business Permit and Mayor’s Permit.
BOSS can be found at the city hall, municipal hall, or mall branches in your local area. Cities in Metro Manila with such shops include Manila, Pasig, Parañaque, Quezon, Navotas, Marikina, Valenzuela, Taguig, Makati, Muntinlupa, Las Piñas, San Juan, and Caloocan. Although the traditional process of business permit renewal without BOSS can take one or two weeks, some LGUs like Manila City swear it can release permits in just one day. Remember to check your LGU website for the availability of BOSS service, as some LGUs operate BOSS only during hectic hours.
To avoid standing in long lines, LGUs also have hybrid registration systems that allow business owners to set an appointment schedule online before submitting the requirements in person. Check your LGU website to set an appointment, then follow these general steps:
- Get a renewal application form for barangay business permit at your barangay hall.
- Submit the requirements for assessment.
- Pay the processing fee and keep the receipts.
- Return to your barangay hall on the specified date by your LGU to get your barangay clearance.
- For the business permit or mayor’s permit, get the renewal application form at the city hall or municipal hall.
- Submit the requirements including your new Barangay Clearance for assessment
- Pay the processing fee and keep the receipt.
- Return to your city hall or municipal hall on the specified date by your LGU to get your business permit.
Accomplishing the process of getting a business permit can be a daunting task. However, it’s essential to all businesses because it can save you from legal, tax, and other financial problems in the future. Having an up-to-date business permit also helps you build trust and a good reputation from clients, partners, and the government.
Skipping or delaying business permit renewal or mayor’s permit renewal entails the following penalties under the Local Government Code of the Philippines: a 25% surcharge on the business tax assessed; an additional 2% penalty for every month in which the business permit was not renewed; and the possible closure and/or seizure of properties and assets for cases of extreme delinquency.
We hope that this guide helps you meet your business obligations in time! If you need anything else for your business, especially with extending your working capital or finding the best options for business loans, just visit the First Circle blog to learn more.