When returning to the Philippines to start your business, most OFWs "just start running it" once they have a solid business plan. However, business registration is a required process that you must do first before formally starting your business operations. It is a process required by law so that your business can legally exist. This blog explains the different major business types in the Philippines, the four major parts of business registration, and two actions you take while abroad.

While taking a HelpBridge entrepreneurship courses does require some time on Sundays, you can actually get started on the business registration process right now! Even if you are unable to attend an OFW business school like HelpBridge, the contents in this article serves to help you get started right at home, and at your own time.

What's Your Business Type?

First, research and identify your desired business type. In the Philippines, there are three major types of business structures:

1. Sole Proprietorship - single-owner business structure for small- and medium-sized businesses. Since the owner is running the business solo, you have full control over the business and enjoy all profits. You also have the least demanding registration and compliance obligations, making it easy to run a business at the start. However, if the business accrues debt or goes bankrupt, the owner is fully responsible for all these debts and his/her personal assets can be at risk.
2. Partnership - multi-owner business structure for expertise-based businesses, usually with 2 to 20 owners. Since there are multiple owners, financing and operating responsibilities are shared, which also means the profits are shared.
3. Corporation - multi-owner business structure for large enterprises, usually with 5 to 15 shareholders. This business structure is usually chosen as your business starts to grow and requires further credibility. You also have the most demanding registration and compliance obligations. However, a key advantage to the corporation is that if the business goes bankrupt, shareholders are only liable according to the capital they invest (meaning personal assets are untouched).

As you get started, we recommend OFWs start out with a sole proprietorship. This is the simplest business structure and is best fitted for a single-owner business.

Four Main Parts of Business Registration

Now that you've identified your business type, the business registration process is a fairly standard process across all industries and provinces. While steps might vary slightly for certain kinds of business (e.g., businesses in F&B, tourism, specific provinces, agriculture, etc.), the registration process mainly comprises of four parts.

Part #1: DTI Registration

The first, most essential step is registering your business name, location, and business structure with the Department of Trade and Industry (DTI). To do this, identify an available business name, register it online, and download your registration certificate. 

For more information, refer to this DTI web guide.

Part #2: BIR Registration

After completing DTI registration, the second step is securing your business' Tax Identification Number (TIN). This is done by registering your business with the Bureau of Internal Revenue (BIR). To do this, submit all required application forms and supporting documentation to the BIR and pay any required processing fees.

For more information, refer to this BIR web guide.

Part #3: Mayor's Permit

The next step is to secure a mayor's permit. This is a legal permission granted for you to operate your business from your local government unit (LGU), which is typically at the city or municipality level. To do this, we recommend enquiring directly with your local LGU about the specific process. You can typically get this by paying a visit to your LGU's office, or calling their hotline when you are back home for holiday. 

Part #4: Barangay Clearance

The final major step is to secure a barangay clearance. This is a legal permission to operate from your local barangay authorities. Similar to securing a mayor's permit, this is a simple process which you can enquire about by directly contacting your local barangay hall.

Two Actions To Take While Abroad

As a domestic helper working overseas, you might think it's impossible to get started on the business registration process while working a full-time job at your employer's home. Here are two actions we suggest you take to prepare for your business registration while you are still working abroad as a domestic worker.

1. Identify your business' name and type

Identifying the name of your business can take a while. So, you can use the free time you have on weekdays to brainstorm potential names for your business. Write down potential names on your favorite notepad, verify if it's available on the DTI Business Name Registration System, and research on your desired business structure. While you may be unable to register your business in process, planning it is a great first step. 

2. Familiarize yourself with all registration processes

While it might be logistically challenging to register your business while working overseas as a domestic worker, you can still learn its processes online! As Philippine government is increasingly turning to digital platforms, you can now learn and do both the DTI and BIR registrations completely online. At the same time, the mayor's permit and barangay clearance processes may still need to be done in person, but you can still use a bit of your holiday back home to enquire about the required documentation at your local LGU and barangay offices. It never too early to get yourself prepared.

Register Now with Expert Guidance

Business registration can be very time-consuming and confusing experience. That's why getting practical training and guidance from a local business expert can boost your confidence and accelerate your progress. Consider joining a HelpBridge course or bootcamp to learn the complete business law essentials and map out the steps you should take. Our business courses are designed for migrant domestic workers and provide detailed examples and case studies easily understood by OFWs. Our 1000+ students have mastered the legal aspects of Philippine business and created complete, ready-to-launch business plans.

Let's get closer to your dream business! Explore our courses here.