Starting an online business in the Philippines opens up a world of opportunities, giving you access to a broader customer base than a traditional brick-and-mortar store. However, whether you’re selling retail products through e-commerce platforms or offering software on your website, securing the proper documents is a requirement to legally run a business. This is especially important as e-commerce regulations have become stricter with the introduction of new laws in 2025.
We’ll guide you through how to obtain a Mayor’s Permit (also known as a Business Permit), the other essential legal documents you’ll need, and the latest legislative updates that online entrepreneurs should know about.
What is an Online Business
An online business typically refers to any commercial activity conducted over the internet, including selling goods or services through websites, social media, or e-commerce platforms. They are subject to the same legal requirements as traditional businesses but may have additional regulatory requirements depending on their operations.
1. Choose a Legal Business Structure
Begin by selecting the appropriate legal structure for your business:
- Sole Proprietorship: Suitable for single-owner businesses; simpler registration but does not protect you from business liabilities.
- Partnership: For businesses with two or more owners. Owners share business responsibilities and liabilities.
- Corporation: Ideal for larger ventures. Offers limited liability but involves more complex regulations.
Register your chosen structure with the Department of Trade and Industry (DTI) for sole proprietorships or the Securities and Exchange Commission (SEC) for partnerships and corporations.
For our guide, we’ll focus more on sole proprietorships and partnerships. Registering a corporation is usually more complex and typically requires assistance from a business registration service.
2. Register Your Business Name
Choose a distinctive name and register it based on your business structure:
- Sole Proprietorship: Visit the Department of Trade and Industry (DTI) website or office to check name availability and register. You’ll need to pay a small fee.
- Partnership: Use the Securities and Exchange Commission (SEC) eSPARC portal to reserve your name for 30 days. You’ll need to pay a small fee.
Processing time typically takes 4–7 days, depending on queue length.
3. Obtain a Barangay Clearance
Obtain a Barangay Clearance from the barangay hall where your office is located. Bring the following:
- DTI or SEC registration certificate
- Proof of address (e.g., lease contract)
- Completed application form
- A small fee (varies based on your barangay)
Processing usually takes 2–3 days. Ensure you secure this clearance, as it’s required for subsequent registration steps.
4. Apply for a Mayor’s Permit
To legally operate your online business, secure a Mayor’s Permit (also called Business Permit) from your Local Government Unit (LGU) or Business Permits and Licensing Office (BPLO). Based on your location, some LGUs will allow you to at least partially apply for a mayor’s permit online.
Business permit requirements may differ slightly by LGU but typically include:
- DTI or SEC registration
- Barangay Clearance
- Lease contract or proof of office ownership
- Community Tax Certificate (Cedula), available from the barangay or municipal hall
- Additional permits (e.g., Sanitary Permit, Fire Safety Inspection Certificate) for commercial offices
- Fees (amount varies depending on location).
The Mayor’s Permit ensures compliance and boosts credibility with clients. Depending on your business, some clients will refuse to work with you unless you have this permit and a BIR certificate (see below).
The process usually takes 1-2 weeks but may take longer depending on the length of inspection.
5 Register with the Bureau of Internal Revenue (BIR)
To ensure tax compliance, register with the Bureau of Internal Revenue (BIR) at your local Revenue District Office (RDO). You may also register online to the BIR via their online portal. Provide the following:
- DTI or SEC registration certificate
- Mayor’s Permit (Business Permit)
- Lease contract or proof of office address
- Valid ID
- A small fee plus costs for official receipts and books of accounts
Complete BIR Form 1901 (sole proprietorships) or Form 1903 (partnerships). For annual sales below PHP 3 million, opt for simplified bookkeeping to ease tax filing. Higher sales require regular bookkeeping, which may need professional assistance as your firm grows.
Expect your Tax Identification Number (TIN) and Certificate of Registration in 5–7 days, which must be displayed at your business.
6. Be Aware of New Regulations for Online Businesses
Online businesses in the Philippines are now subject to stricter regulations. Staying updated with these changes is important to remain compliant and avoid penalties. Here are new regulations you should know:
- Mandatory Business Registration – Online sellers, including those on social media and marketplaces, must register with the DTI or SEC, and the BIR. This is what we have explained in this guide.
- Internet Transactions Act of 2023 – Sets standards for online consumer protection, merchant responsibilities, and dispute resolution.
- Digital VAT (Value-Added Tax) – Digital services provided by non-resident and resident digital platforms are now subject to VAT, under amendments to the Tax Code.
- Digital Withholding Tax – Online platforms may be required to withhold taxes on behalf of sellers, especially for large transactions or when acting as intermediaries.
- E-Receipt and E-Invoice Requirements – Certain businesses must now issue digital receipts and invoices, as required by the BIR.
- Data Privacy Compliance – Businesses handling customer data must comply with the Data Privacy Act and, in some cases, register with the National Privacy Commission (NPC).
7. Special Permits and Licenses
Certain online businesses require additional legal documents depending on their operations. For example:
- Online food sellers may need a permit from the Food and Drug Administration (FDA),
- Financial service providers must register with and obtain licenses from the Bangko Sentral ng Pilipinas (BSP),
- Transport-related platforms like ride-hailing or delivery services (e.g., Grab) must secure accreditation as a Transport Network Company (TNC) from the Land Transportation Franchising and Regulatory Board (LTFRB).
These are just some of the permits your business may require. Since every business is unique, the best way to ensure you meet all regulatory requirements is to consult a professional business registration service.
Final Thoughts
Acquiring the necessary permits and registering with the DTI or SEC is a requirement for online businesses to operate legally. New laws have also introduced stricter regulations in the sector. Failure to comply may result in hefty penalties or even the suspension of your business operations. If you need assistance registering your business and ensuring you’re in complete compliance, feel free to contact us.
Are You Registering a Business for the First Time? Here’s Where to Find Assistance.
Registering a business in the Philippines can be a complex and challenging process. With numerous permits and licenses required by the government, it’s easy to miss a document or forget to renew it. Unfortunately, this can lead to costly fines or even force your operations to shut down.
That’s where Triple i Consulting comes in. Our team of experienced lawyers and accountants provides comprehensive support for your business registration, so you don’t have to stress over the paperwork. Our expertise and network enable us to streamline your registration process, ensuring it’s completed swiftly and correctly.
We’ll handle the permits and renewals so you can focus on what matters most—running your business and achieving financial success.
Contact us today to schedule an initial consultation with one of our experts:
- Fill out the form below
- Call us at: +63 (02) 8540-9623
- Send an email to: info@tripleiconsulting.com
