Business Permit in the Philippines: Your Comprehensive Guide for 2026
Published Date: November 10, 2025
Published By: Jac Cantos, Upcloud Accounting
Applying for or renewing a business permit in the Philippines is an essential annual task for businesses to maintain full tax and compliance.
Every business must secure this permit during initial registration and renew it each January to maintain compliance.
This article breaks down everything Philippine businesses need to know about securing and renewing their permits, including key requirements and processes.
What is a Business Permit?
A Business Permit is a government-issued license authorizing an entity to operate legally within a specific local government unit (LGU). All registered businesses in the Philippines, unless exempt, are required to secure a business permit, also known as a Mayor’s Permit.
Operating without a valid, up-to-date business permit exposes businesses to risks such as fines, penalties, or even closure. Ensuring compliance is critical for uninterrupted operations.
What is the Purpose of the Business Permit?
Local Government Units (LGUs) in the Philippines use business permits to monitor and regulate businesses within their jurisdiction, ensuring payment of local taxes and dues and compliance with local regulations.
The application or renewal process involves submitting documents and certifications (sanitation, fire safety, environmental safety), confirming that businesses operate safely, responsibly, and in accordance with local standards.
Securing a business permit demonstrates proper registration and legal entitlement to operate within the LGU, boosting legitimacy and credibility and is necessary for establishing partnerships, setting up accounts with banks or payment gateways, and engaging with suppliers or vendors.
Many organizations request a copy of the business permit as part of their due diligence or Know Your Client (KYC) processes.
Business Permit vs BIR Certificate of Registration
It's important to distinguish between the business permit and the Certificate of Registration (BIR Form No. 2303).
Business Permit: A license from the Local Government Unit (LGU) enabling a business to operate within that LGU area.
Certificate of Registration (BIR Form 2303): A BIR Certificate evidencing registration as an official taxpayer in the Philippines, obtained through the Regional District Office (RDO) of the BIR.
Both are essential documents that a business must process and obtain as part of the initial business registration and prior to commencing operations.
Who Needs a Business Permit?
All businesses in the Philippines, unless exempt, require a business permit to operate legally within their local area or LGU, irrespective of the type of entity (Sole Proprietorship, Standard Domestic Corporation, One Person Corporation (OPC), or Partnership) or business model (traditional bricks and mortar or online).
Ensure you have considered your obligations to obtain a business permit during initial registration and maintain/renew it each year. Speak to your law firm, accountant, bookkeeper, or business consultant to confirm the business permit obligations for your business!
Business Permit Applications and Business Permit Renewals
The business permit application process is not a one-off activity!
A business permit must be applied for and secured as part of the initial business registration process.
The business permit must be renewed every year at the start of each year! There are a number of documents required for the Business Permit Renewal.
A business without an up-to-date business permit is technically not entitled to operate within the LGU! If the LGU identifies a business operating without a business permit, the business may be prevented from operating until it has obtained the business permit, complied with requirements, and paid any fines or penalties.
What is the Deadline for Filing the Business Permit?
New Application:
For a first-time application, this needs to happen at the time the business is being registered. Submit your application within 30 days after receiving official registration documents from SEC or DTI to avoid penalties. The Business Permit should be obtained during the business registration process and prior to commencing operations.
Renewal:
Businesses must renew their Business Permit every year by January 20th. Prepare, submit, and file your application between January 1st and January 20th.
There are administrative and financial penalties if the Business Permit is not renewed on time! Start your preparations early and contact your usual provider to support the renewal process!
How to File for the Business Permit?
Whether applying for a new or renewing an existing Business Permit, there are steps that involve various Government agencies and units.
Renewing the Business Permit is traditionally a manual process requiring physical attendance at Government offices. Filing and obtaining the Business Permit must be conducted physically and in person. While some LGUs are moving towards an online system, it is usually a hybrid system that involves both online and physical activities.
One step will be attending the local Barangay Hall and submitting required documents for a Barangay Clearance.
Another step is to attend City Hall with the Barangay Clearance and the rest of the required documents.
Note: In recent years, certain LGUs have created a “one-stop shop” whereby the Barangay Clearance can be obtained while attending at City Hall. Check in advance with your local LGU on the process that applies to your business.
Expert Tip! As the deadline for Business Permit renewal approaches, queues and waiting times at the Barangay Hall and City Hall will get longer! Don't leave the renewal to the last minute!
Information Required for the Business Permit Renewal in the Philippines
Requirements can change from year to year and from Barangay to Municipality. Before proceeding, review and confirm which requirements apply to your business!
The following list includes common documents and information:
Previous Year’s Business Permit Document Suite:
The previous year’s Business Permit (including the OR or Official Receipt evidencing payment for last year’s Permit).
Barangay Clearance Certificate
Community Tax Receipt
Sanitary Permit
Community Tax Certificate/Receipt
CENRO Certificate (if available)
Fire Safety Inspection Certificate
Comprehensive General Liability Insurance (CGL)
Occupation and Zoning Clearance Certificate (if applicable)
Notarized Lease Agreement (depending on the Municipality)
Additional and Updated Information:
Quarterly VAT returns from the previous calendar year
The Audited Financial Statement from the previous year
Declaration of Gross Receipts
Confirmation of number of employees employed at the time of Business Permit Renewal
Full list of employees (including addresses, TIN, SSS, PHIC, PAG-IBIG, etc.) -depending on the Municipality
Affidavit of No Operations (if applicable)
Businesses will be required to pay a business permit fee (based on a % of gross sales/revenue in the previous year), all local business taxes, and any additional charges or fees.
Business Permit processing fees and charges can vary depending on the Barangay or Municipality.
"Plan Ahead" Confirm All Business Permit Requirements in Advance!
Clarify all requirements well in advance with your LGU so there are no surprises when you attend at City Hall or Barangay offices for filing!
Each LGU may have their own variations on the specific requirements, so plan ahead!
Upcloud Accounting: Virtual Outsourced Accounting and Bookkeeping Services in the Philippines
Upcloud Accounting offers accounting, bookkeeping, tax compliance, and business licensing services specializing with startups and SMEs in the Philippines.
Our goal is to increase efficiency, automation, and transparency across the accounting and finance functions of our clients with our cutting-edge technology. If you want to move your company’s finance function online, contact our Team of Expert Accountants and Bookkeepers directly via [email protected] or visit www.upcloudaccounting.comto learn more about how Upcloud Accounting accounting services can support your PH business!
Disclaimer: This article or blog is only for general knowledge and guidance and is not a substitute for an expert opinion. For technical advice, please consult your tax / legal advisor for your specific business concerns. For comments, suggestions, and feedback, feel free to email us at [email protected].
