What You Need To Know About Applying for Business Permit in Davao

 The business sector in Davao has shown exponential growth over the past five years. Indeed, new forms of investments and businesses have opened its doors to the Davaoenos to provide them with more shopping, dining, or entertainment pleasure. Hence, the city government of Davao has enacted a constitution that will encourage entrepreneurs to open their business in the city because it has also helped in the economic growth. One such provision is the “One Stop Shop Program” which ties together the office of the city Mayor and the Business Bureau for faster issuance of business permits and other related transactions.

When a friend of mine recently bought a franchise and wanted to open a business in Davao, I got to witness first-hand the entire process of applying for a business permit. I have to say that the local government has made the process more efficient for entrepreneurs.

The first step that my friend did was to verify the availability of the business name. This process is free but once approved and verified by the Securities and Exchange Commission, the entrepreneur must settle PhP 40 during the first 30 days. The reservation can last up to 120 days, which means you can pay for up to PhP 120.

The law requires all aspiring entrepreneurs to make a deposit that equals over 6 percent of the company's authorized capital stock. Typically, this amount isn't lower than PhP 5,000 although some banks might require additional fees.

At this point, business owners must notarize articles of incorporation before the permit application can be filed on the SEC office. At this point, the registration process will begin with the SEC. This can be done online via the SEC website and you will have to secure a few documents such as verification slip for the name, noticed articles of incorporation, notarized treasurer's affidavit, certificate of deposit, and your statement of assets and liabilities. Also, you must shoulder additional fee of PhP 30 for transferring all documents to the head office in Manila.

The next steps would involve paying your community tax certificate (CTC) and obtain barangay clearance. This clearance shall be obtained within the same barangay wherein your business is going to be located in.

Make sure to print out the business permit application form, which you can also download from the website of Davao City. Fill out the application form before it can be encoded, evaluated and verified. After that, you will once again be asked to have the form notarized at the City Legal Office.

Once the above steps had been completed, my friend was issued the TAO or Temporary Authority to Operate. Also, the BIR requires all computerized accounting systems to have it registered by the BIR Computerized System Evaluation Team. This is normally done within 30 days since the application form was received. Along with that, application for the following is also done at this stage in the process: Certificate of Registration and Business TIN.

The last few steps that my friend took care of was to pay the documentary stamp taxes and registration fee so that their business is permitted to issue receipts. The final two steps involve registering the business for the Social Security System and Phil Health Insurance Company.

It was quite a long process by the time of registering a company name to the issuance of business permit. However, with the steps above, you can hopefully get an idea on what you need to do when you plan on opening your own business in Davao.