How to Register an Online Business in BIR in the Philippines

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The Philippines is known to be one of the most active countries when discussing smartphone and internet technology usage in the Southeast Asian region. This also lays down the foundation for a high rate of e-commerce users in the country, with estimates reaching 73 million active users as of 2021. The total Philippine e-commerce market sales that year were estimated to have reached 17 billion USD and are projected to grow to as high as 17% more by the year 2027 at around 24 billion. 

Filipinos just love ordering from Shopee, Lazada, Zalora, and BeautyMNL. While Philippine e-commerce consumers can now access products from overseas through online shopping, the best Filipino brands have also established their presence in online marketplace channels. With the vast market and innovative products being made locally and catering to new needs and markets, the Filipino e-commerce industry has yet to reach its peak. It is therefore an opportune moment for aspiring business owners to jump into the sailing ship of online selling and establish their own e-business today.

But oftentimes, we hesitate because we do not know where to begin. Worry no more, just make your idea and concept solid, and when you’re fully decided what you want to sell, and what the core of your brand is, we’ll assist you in fulfilling your dream to establish and register your online business. According to the Revenue Memorandum Circular No. 60-2020, anyone doing business or earning income in any manner or form, including those that make money online, or sell products or services, is required to be registered with BIR. Read through this article to know more about the process and steps you’d have to go through to register your business in the Bureau of Internal Revenue (BIR) and the Philippine Department of Trade and Industry (DTI).

Do You Need To Register Your Online Business In The Philippines?

Why is getting a BIR registration important?

Most of us think that applying for a BIR business permit for online business is just a matter of compliance or a mere gateway in order for you to lawfully operate a business. But let us tell you, it’s much more than that. Along with the stability and security, it brings you as a government-allowed business, there are perks that come with a BIR registration.

Here are some of the main reasons why you should get your online business registered at the BIR and some BIR requirements for online business:

1. Avoid paying fines, or worse, going to jail 

Of course, there is reputational damage when your business eventually is revealed to be unregistered, and thus illegally operating. But your goal of securing a stable income can be harmed also when you are ordered to pay fines. Depending on the actual infractions, you can pay a hefty sum of your money for layers of financial penalties that you may accrue. In some cases, especially when public health and safety are a matter of relevance for your business, a prison sentence may also be meted. These are the things we should avoid at all costs, so we strongly advise that you register.

2. You can get opportunities for loans and financial assistance

Most financing and funding institutions require proof of your online seller BIR registration before they even consider your application for financial assistance. Also, a BIR certificate of registration and your tax identification number (TIN) also issued by BIR, are some of the main requirements for opening a corporate bank account. You’ll also need them to apply for a bank loan or other types of financing.

3. More business opportunities may come your way

In business, reputation precedes us. No matter how good your product is, when you sound off badly to investors, partners, and consumers, your capacity to expand and succeed may become limited. Solid proof of your competence and supporting records that you are a law-abiding business person is an arsenal of instruments you can wield when closing new and unprecedented deals.

Steps To get A BIR Registration In The Philippines

1. Prepare the requirements

Our first step is doing an inventory and filling the gaps among the list of documentary requirements that you need to submit. Note that all of these documents must be submitted in scanned PDF copies not exceeding the total 4 MB size for all attachments to your email.

When it comes to how to apply for BIR for online business, there are some minor variations to the required documents depending on the type of business you are seeking to apply for, so ensure that you verify which of the requirements you need to prepare. Check out these registration guides from the BIR website to determine your exact requirements on how to register online business in BIR. For online businesses, you can register as a sole proprietorship, a corporation, or a cooperative depending on your preferred business model and structure.

But for the basics, a mayor’s permit, a BIR registration for online business, a DTI certificate of registration, valid IDs, and a summary of your business description are among the requirements that you have to pay attention to.

2. Determine filing and payment obligations

Depending on your business type and the goals you have described to the DTI and BIR, they will compute your payment obligations and the filing fees. To start off with this process, you have to download and answer the BIR’s survey questionnaire. This will assist the BIR in determining definite tax obligations for your business. 

After you fill in the survey, you’d have to scan the accomplished copy and add it as an attachment to your final email to the BIR. 

3. Pay your fees

To get the ball rolling, you would have to pay the fees. A taxpayer-applicant with an issued TIN may pay the PHP500 registration fee and PHP30 loose documentary stamp tax (DST) via BIR’s e-payment gateways which include LandBank, UnionBank, DBP, PESONet, GCash, and Paymaya among others.

If you’re an applicant and you don’t have a TIN number yet, you should wait for an instruction email from the BIR on when you may pay the fees, but you can only do this at the New Business Registrant Counter at the Revenue District Office (RDO) upon pick-up of your certificate of registration.

4. Submit your requirements via email

When you’ve paid or received an instruction email (in the case of non-TIN holders), the next step would be to attach all your BIR registration requirements for online sellers into one email, which will be sent to the official email address of the office assigned to your area of residence or operations. To determine which email you will send it to, and how you have to formulate your email subject, the BIR NewBizReg online portal will ask you to fill in some information via the Step 4 section on their website. Then, send it to the email address provided, or just click the Email Your Application button to open your mail application on your computer.

You will be promptly sent a confirmation email if your application has been received by your respective RDO. Manual processing of your e-mailed requirements shall commence and be finished in three (3) days unless circumstances require more time for further vetting and verification.

5. Wait for the email for your scheduled pick-up

If everything goes according to plan, you will receive an official email stating the time and date of the scheduled pick-up of your issued Certificate of Registration. If applicable, you will also receive important details on how to purchase your BIR-printed and approved invoices and receipts or an Authority to Print your own. 

Do you need to register your online business in the Philippines?

According to a 2020 memorandum circular by the BIR, one must register his enterprise if they qualify as “anyone doing business or earning income in any manner or form, including those that make money online, or sell products or services.” However, there are exceptions – if the characteristic of your online business is “intermittent, or irregular”, say for example, you only sell cakes or crafts as a hobby, you are not required to register it via the BIR. But, our fair advice is if you’re planning to make your hobby a regular income source in the future, prepare and plan for registration. 

Steps To Register With The DTI In The Philippines

Before you can proceed to register with the BIR, any business must seek registration and recognition before the Department of Trade and Industry in the Philippines. Sole proprietorships must register their business names in the DTI to lawfully operate in Philippine territory. Operating under a business name without registration may subject you to prosecution under the law. When you register a business name, you get exclusive rights to use the specific name for five years, after which you are required to apply for a renewal.

Here are the steps you have to fulfill to have a duly-registered business under the DTI:

1. Think of a name

It all starts with a name. Your journey in the vast sea of e-commerce sellers begins with how you want to be known and how you’d like to present yourself. Make sure that your name is unique enough for recall and identifiability. After all, it is a legal requirement that your business name is something that cannot be confused with another business. 

Although your company name might differ from the brand name you use in marketing and advertising, it would be nice to see them aligned so your business partners, suppliers, and consumers know that they are dealing with your company at a glance.

2. Confirm name availability

After you’ve solidified your company identity, you’d have to check if you have doppelgangers. The DTI website has a readily available wherein you can check if your name proposals are available for use. If it’s already used, you’d have to wait another five years, but that comes with no certainty as the name owner may renew their registered name. If by chance, you’re caught up in this situation, consider making minor adjustments or replacing your name proposal altogether.

3. Fill up the online registration form

If you are fortunate enough to confirm that your prospective business name is available without hassle, you can now proceed to fill up and accomplish DTI’s business registration form through the Business Name Registration System (BNRS). 

Here you would provide some personal information and answer certain questions about the nature of your business. Make sure to take note of your reference code from the BNRS as this will be your unique code identifier for all your transactions with the system.

4. Pay registration fee

At the end of your registration in the online system, you’ll be receiving instructions on how to pay fees for your online business registration in the Philippines. Upon completion of your form, you are allowed to pay for up to 7 calendar days via a payment option of your choice. Your range of options is between Gcash, Paymaya, or a credit/debit card. The following are the rates:

TERRITORIAL SCOPEFEE
BarangayPhp 200
City/MunicipalityPhp 500
RegionalPhp 1000

Always remember to keep a record of your proof of transaction.

5. Download your certificate

As soon as the system confirms your successful payment, your Business Name will be registered. From hereon, you can log in and check your own business portal with the BNRS. Just go to the Transaction Inquiry tab, and accept the Terms and Conditions. Here, you’ll input the reference code that was issued to you upon registration to access the correct details about your business. 

Safer, And More Stable With A License And Registration 

Processing and accomplishing a formal BIR registration for online sellers can go a long way for you and your online business. Amid a fast-paced, ever-changing world and inside a budding e-commerce industry that is set to get bigger, we want to put a solid foundation for our business to be able to effectively take skyrocketing leaps towards growth and greatness. Registering our businesses with the proper agencies gives us that cushion, that layer of protection for challenges that we might encounter. Things may be unpredictable, but what business people must study is how to survive, how to persist, and how to thrive amid these challenges.

So if by now, you’re simply a hobbyist selling your labors of love to your friends and networks, we encourage you to study how to improve your products, streamline your processes and systems, evaluate your expenses, and your gains and look at the opportunities. And as soon as you’ve decided that you want to make your online business your legit main source of income, or a supplement to your day job, our guide is here to stay and we’d be happy to welcome you back. All support to you, our budding online business owner!

Conclusion

Registering an online business with the Bureau of Internal Revenue (BIR) in the Philippines is a crucial step towards compliance and legitimacy. While the process may seem daunting at first, this article has provided a comprehensive guide on how to navigate through the registration requirements. 

By understanding the necessary documents, steps, and online platforms, entrepreneurs can streamline the registration process and ensure smooth operations. It is important to emphasize the significance of tax compliance, as registering with the BIR not only establishes credibility but also contributes to the growth and development of the online business ecosystem in the Philippines. With the right information and proper adherence to regulations, entrepreneurs can confidently register their online businesses and embark on a successful journey in the digital marketplace.

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Frequently Asked Questions

Does online selling need business permit in philippines?

Yes, online selling needs an online business permit in the Philippines. Even for home-based businesses, legal registration is required.

How to register an online business in the philippines?

To register an online business in the Philippines, obtain a barangay clearance and register your business name with DTI, then register with BIR – all online or at designated offices

Do I need a mayor’s permit for online business?

Yes, a Mayor’s Permit or business permit for online seller, is typically required for online businesses in the Philippines, even if home-based. It complements your BIR registration and signifies local government approval to operate your business.

Does online business need a business license in the Philippines?

Yes, online businesses in the Philippines generally require a business license to operate legally.

How do I register a virtual business in the Philippines?

To register a virtual business in the Philippines, you need to follow the process outlined by the Department of Trade and Industry (DTI) or the Securities and Exchange Commission (SEC), depending on your business structure.

Is online business taxable in the Philippines?

Yes, online businesses in the Philippines are subject to taxation. They need to register with the Bureau of Internal Revenue (BIR) and fulfill their tax obligations.

What are online business laws in the Philippines?

The online business laws in the Philippines encompass various regulations, including consumer protection, data privacy, electronic commerce, intellectual property rights, and cybercrime prevention.

How much does it cost to register a business in the Philippines?

The cost of registering a business in the Philippines varies depending on the business structure and the specific requirements. Generally, the fees range from a few thousand pesos to several tens of thousands of pesos.

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