Dreaming of starting a business in the Philippines? Whether you’re a local entrepreneur or a foreign investor, this step-by-step guide is here to walk you through everything you need to know—from registration and permits to funding options.
Why Start a Business in the Philippines?
The Philippines is a fantastic place to kick off your entrepreneurial journey. With its growing economy and a young, tech-savvy, English-speaking population, it’s perfect for small to medium-sized businesses.
You don’t need huge capital to get started. Many successful Filipino entrepreneurs have found creative, cost-effective ways to launch businesses, like selling via social media, running home-based food delivery services, freelancing in writing or design, starting an online store, or offering virtual assistance.
Plus, with a strong demand for local products and services, you’re already on a solid foundation.
Who Can Start a Business in the Philippines?
• Filipino Citizens: Full ownership is allowed.
• Foreigners: Can fully own businesses in specific industries. For others, a local partner is required (check the Foreign Investment Negative List).
Business Startup Costs in the Philippines for 2025
| Expense | Estimated Cost Range |
| Business Registration | ₱4,000 – ₱20,000 |
| Barangay & Mayor’s Permits | ₱1,000 – ₱10,000 |
| BIR Registration | ₱4,000 – ₱10,000 |
| Rent, Supplies, Utilities | Varies (depends on business) |
Budget at least ₱40,000–₱100,000 for permits and basic setup. However, you can still start certain online businesses for under ₱20,000.
Step-by-Step Guide to Starting a Business in the Philippines
- Choose Your Business Structure
• Sole Proprietorship: Ideal if you’re starting small and want full control. Register with the Department of Trade and Industry (DTI) for a straightforward setup. You’ll be the sole owner, and the business is not a separate entity, meaning you assume all liabilities.
• Partnership or Corporation: If you plan to grow or want more structure, consider these options. They’re registered with the Securities and Exchange Commission (SEC). A partnership allows shared ownership, while a corporation gives more protection to shareholders.
Your choice depends on your long-term goals and risk tolerance. Sole proprietorships are simpler, while partnerships and corporations offer more security and growth potential.
- Register Your Business Name
• DTI: Sole proprietors must register their business name with DTI. It’s a simple process where you pick a unique name.
• SEC: For partnerships or corporations, you’ll need to register with the SEC to formalize your business.
Choose a name that’s unique, memorable, and reflects your brand identity.
- Secure Local Permits
• Barangay Clearance: This confirms your business complies with local regulations.
• Mayor’s Business Permit: A must-have for most businesses to prove compliance with zoning, health, and safety regulations.
Fees and requirements vary by location, so check with your local government unit (LGU) for specific guidelines.
- Register with the BIR (Bureau of Internal Revenue)
Registering with the BIR is crucial to issue receipts and pay taxes like income tax and VAT. You’ll also get a Taxpayer Identification Number (TIN). Get registered early to avoid delays.
- Open a Business Bank Account
Separating personal and business finances is essential. Most banks require DTI/SEC certificates, BIR registration, and other documents to open an account.
Choose a bank that fits your needs and makes financial management easier.
- Set Up Your Office or Store
• Physical Store: If needed, ensure your location fits your target market and complies with zoning laws.
• Co-working Space: A great budget-friendly option that offers flexibility and office amenities.
• Home Office: Ideal for online businesses or freelancers, saving on overhead costs.
Choose an office setup that suits your business type and budget. For online businesses, working from home might be your best bet.
Top Small Business Ideas for 2025
If you need ideas for a small business in the Philippines, start with these high-demand options:
- Food & Beverage: Coffee kiosks, milk tea shops, baked goods
- Online Selling: Lazada, Shopee, or Facebook marketplace
- Freelancing: Writing, virtual assistance, graphic design
- Tech Services: App development, SEO, digital marketing
Many businesses can be launched with ₱10,000–₱20,000, especially online ventures.
How to Protect Your Business
To keep your business safe and running smoothly:
- Register Your Trademark: Protect your brand by registering it with IPOPHL.
- Keep Permits Valid: Make sure your business permits are up to date to avoid any issues down the road.
- Stay Informed: Stay on top of local regulations and tax deadlines to keep everything in check and avoid surprises.
Common Business Challenges & How to Overcome Them
Starting a business comes with its own set of challenges, but with the right strategies, you can easily overcome them:
- Slow Permit Processing: To avoid delays, make sure to prepare your documents early, submit them completely, and follow up regularly.
- Tough Competition: Stand out by offering unique products, excellent customer service, and innovative solutions.
- Poor Financial Tracking: Stay on top of your finances by using accounting software or hiring a part-time bookkeeper to keep everything in order.
- Poor Internet & Infrastructure: Ensure reliable connectivity by investing in a solid internet connection or utilizing mobile hotspots in areas with weak infrastructure
Need Capital? SB Finance Can Help You Get Started
Sometimes, a financial boost is all you need to get your business up and running. SB Finance offers flexible loan options with easy applications and competitive terms, helping you get the funds you need without the hassle.
- Personal Loans for Business Needs
• Loan Amount: Up to ₱3,000,000
• No Collateral or Post-Dated Checks Required
• How to Apply: Apply through the Zuki app, website, or any Security Bank branch
- OR/CR-Based Loans
For business owners who already own a vehicle, you can leverage your car’s OR/CR for a loan without surrendering your car.
• Loan Amount: ₱100,000 to ₱2,000,000
• No Need to Surrender Your Car
• Fast Approval & High Loan-to-Value Ratio
Get a Cash Credit Group Life Insurance provides added peace of mind by ensuring your loan is covered if something happens to you.
Learn more here: Personal Loan
Frequently Asked Questions
Q: Do I need a physical office?
A: Not necessarily. Many businesses, especially online stores or freelance services, can be operated from home. You can always scale up to a physical location later as your business grows.
Q: Can a foreigner fully own a business?
A: Yes, foreigners can fully own a business in the Philippines, but only in industries where 100% foreign ownership is allowed. Some sectors still require a local partner.
Q: How much capital do I need to start?
A: You can start with as little as ₱10,000–₱20,000, especially for online businesses or small-scale ventures. However, capital needs vary based on your business type.
Q: Where can I get help?
A: You can visit government agencies like DTI, BIR, SEC, or your local LGU for registration and requirements. Alternatively, business consultants can offer guidance to ensure you’re on the right track.
Start Building Your Business Today
Starting a business in the Philippines is challenging but rewarding. With the right information and mindset, you can take that first step toward financial independence and success.
Bookmark this guide, follow the steps, and don’t be afraid to start small. Every big business began with a single idea!