Are you planning to register your business but don’t know which category is best for your unique needs? There are several categories available according to accounting services in the Philippines. Take time to assess what structure is best for your operations as this will lay the foundation of your business.
One such special category for small businesses is the BMBE category or the Barangay Micro-Business Enterprise. This option is good for you if you want to benefit from the incentives, enjoy tax breaks, and lessen capital expenses. Learn more about the BMBE registration process in this article so you can get your certification.
Why You Should Register as BMBE
The legislation about BMBE was enacted under the administration of former President Gloria Macapagal Arroyo on November 13, 2002. According to tax services in Manila, this BMBE act aims to recognize small businesses and micro-enterprises as a crucial part of the country’s economy so they’re given perks and privileges to sustain their small operations. These types of businesses give Filipinos livelihoods and improve the quality of their life. BMBE has incentives and these are the following:
- Exempted from income tax (tax from the operations)
- Exempted from the minimum wage law (they will still receive benefits from SSS and PhilHealth)
- Will have access to a window for special credit (created for BMBE’s financing)
- Will have access to programs such as the tech transfer, marketing, production, and management training programs
- The LGU might also offer to reduce or be exempted from paying the local taxes, charges, and fees
Requirements to Be Eligible to Register
Not all startups are immediately qualified to register as BMBE based on consultations with expert tax and accounting services in the Philippines. If you want to know your eligibility to register, you must take note of the following criteria:
- Your business needs to be centered on services and producing products.
- Your total assets should not exceed 3 million pesos.
- Your business should not be connected or related to your exercise of a profession.
- Your operations should not be a branch of a bigger corporation.
Documents You Need to Collate for Registration
- Filled up and signed BMBE Form 1 (three copies)
- Passport Size Photos (three copies)
When you want to register as BMBE, your registration will take place in the city or municipality’s treasurer’s office. It has to be where your business is established.
If your assets are equal to or less than 300,000 pesos, you need to comply with the following additional requirements:
- You need to register your business entity in an appropriate agency of the government.
- Corporations – Securities and Exchange Commission (SEC)
- Cooperatives – Cooperative Development Authority (CDA)
- Sole Proprietors – Department of Trade and Industry (DTI)
If your assets are more than 300,000 pesos or up to 3,000,000 pesos, you need to do the following additional requirements:
- Register as a Business
- TIN or Taxpayer Identification Number
- Certificate of Registration from BIR
- Mayor’s Permit or Municipal Business Permit
- Affidavit stating that the business is Barangay based and a micro-business
- Sworn statement of assets and liabilities
- Photo of the place of your business
- Loan contract(s) copy
- ITR or Income Tax Return
To renew your BMBE registration, submit all the mentioned documents above, prepare your annual information return for the year filed with the BIR, and submit all the necessary attachments together with the tax return.
How to Register as a BMBE
- Prepare three copies and fill up the BMBE Form 1 and your signature affixed.
- Collect and submit all the necessary documents to the office of the City or Municipal Treasurer.
- The application will be evaluated and processed within 15 working days
- Pay all administrative costs. There should not be any charge when registering and issuing a certificate of authority but there are times when they can levy a minimal fee that cost not more than 1,000 pesos.
- Wait for your Certificate of authority to be released to serve as your proof of registration. It will be only valid for 2 years and should be renewed after that time span.
It’s important that you know how to save money as a business owner. It will help you create a foundation that is stable and solid. Moreover, this will give you enough funds to eventually grow your operations. Though it takes a lot of time, effort, and commitment to make your business grow, it will be worth it. It will not be an easy path but if you persevere and know what you are doing, you got this and will be on your path to success.
Just remember that if things become too overwhelming for you, there are professionals and service providers out there that will be willing to help you out with your concerns. You can call our team of CPAs for expert tax and accounting services in Pasig. We can help you with business registration and assess if you’re small business qualifies under the BMBE.