Legal requirements for setting up Wholesale and Retail trade companies in the Philippines

The Philippines is a developing country with a population of 111 million people and the third largest economy in Southeast Asia. Following are the steps you need to follow to set up your wholesale or retail trade company in the Philippines with Emerhub.

Steps for registering Wholesale and Retail Companies in the Philippines

Emerhub will guide you through the following steps to establish your wholesale or retail trade company in the Philippines to obtain:

1. SEC license to operate
2. Business permit in the locality where the business is situated
3. Certificate of Registration with the Bureau of Internal Revenue
4. Certificate of Registration with the Social Institutions
5. Setting up a bank account (Certificate of Deposit)

Provisional requirements:

• BOC License for import and export activities
• DTI (Department of Trade and Industry) Registration – If there is a secondary license incidental to the type of product the client sells.
• Acquire FDA (Food and Drug Administration) License to Operate (LTO) and Certificate of Product Registration (CPR) if products fall into the following FDA-regulated categories:
  • Food and beverages
  • Cosmetics
  • Drugs/pharmaceuticals and biological products
  • Medical devices
  • Pesticides
  • Household hazardous products
  • Electronic products that emit radiation
  • Tobacco products
  • Vape and e-cigarettes (According to FDA Circular No. 2021-016)
  • Drugs, medical devices, and food for animals (According to FDA Circular No. 2022-0591)

Wholesale and retail trade companies are registered under a domestic or branch office. Emerhub helps you obtain the following certificates from government bodies:

Registration certificate with the Securities and Exchange Commission (SEC)

An SEC registration allows a business to validate its legal entity, issue receipts, trade financial assets, and get certain rights under the country’s corporate law. Foreign corporations (branch office, regional headquarters, and regional operating headquarters) are issued a license to transact business in the Philippines while domestic corporations like subsidiaries are issued a certificate of incorporation.

Emerhub first registers your company with the Securities and Exchange Commission (SEC).

Process:

1. Submission of initial application
2. Approval from SEC
3. Routing of documents to signatories
4. Final payment and Submission of hard copies
5. Issuance of certificate

Estimated time: 30 working days

Registration in Local Government Unit (LGU)

As soon as the company acquires a license to carry out business activities, it is mandated to secure a permit from the local government unit that has jurisdiction over the place of business. Local Government Unit (LGU) permits, which are also called Mayor’s Permits or Business Permits, are licenses required for your trade company to comply with city ordinances. To file for registration in the Local Government Unit (LGU), Emerhub guides you through the following process:

Process:

1. Emerhub submits application form and documents
2. Inspection
3. Assessment of fees
4. Payment
5. Issuance of Business Permit

Estimated time: 30 working days

Registration certificate with the Bureau of Internal Revenue (BIR)

The Bureau of Internal Revenue (BIR) regulates finance, taxation, and monetary policies in the Philippines. It collects and enforces all tax revenues, fees, and charges for the Philippine government.  Emerhub registers your business with the BIR manually, while all future transactions are reported online. 

Process:

1. Application for Taxpayer Identification Numbers
2. Secure authorized computation from the officer-in-charge
3. Payment of documentary stamp tax
4. Submission of requirements
5. The request for a template from the Authorized Printer
6. Acceptance of the documentary requirements
7. Release of Certificate of Registration
8. Release of Authority to print
9. Stamping of Books of Account

Estimated time: 14 working days

Certificate of registration with Social Institutions

Before your wholesale or retail trade company hires its first employee, Emerhub has to register you with Social Institutions in the Philippines. These institutes provide benefits to the workers in the Philippines which are working in various sectors. These benefits include:

• Philhealth is the medical insurance program by the Philippine Health Insurance Corporation (PHIC)  that provides universal health coverage.
• SSS – Social Security System provides protection against various contingencies such as old age, disability, calamities, sickness, pregnancies, unemployment, and death.
• Pag-IBIG is the Home Development Mutual Fund (HDMF) which provides home loans and affordable housing financial assistance to employees. Both employers, as well as employees, contribute to this fund on the basis of the employee’s salary.

Process:

The process for registering in all three aforementioned institutions is similar and mentioned as follows:

1. Emerhub prepares the required documents
2. Signing of documents by the authorized signatory
3. Submission to the government agency
4. Assessment of submitted documents
5. Release of Certificate
6. Creation of online access

Estimated time: 30 working days

Setting up a bank account 

A bank account for a wholesale or retail trade company in the Philippines can be set up using the below-mentioned process:

Process:

1. Preparation of bank forms by Emerhub 
2. Secure the signature of the authorized signatories and directors
3. Submission to the relationship manager
4. Evaluation of documents
5. Issuance of an account number

Estimated time: 30 working days

Minimum capital requirement for establishing a wholesale and retail company in the Philippines

The minimum capital requirement for setting up a wholesale or retail trade company in the Philippines is as follows:

• No minimum capital is required if the wholesale or retail trade is 60% Filipino-owned and 40% Foreign-owned.
• The minimum capital requirement for a 41%-100% foreign-owned (FIA) company engaged in wholesale business is PHP 12,000,000.00
• A 41%-100% foreign-owned company (FIA) engaged in retail must have a minimum capital of PHP 25,000,000.00

Process timeline for setting up a wholesale or retail company in the Philippines

1. Security Exchange Commission (SEC) license: 30 working days
2. Certificate of Registration with the Bureau of Internal Revenue (BIR): 14 working days
3. Certificate of Registration with the Social Institutions: 30 working days
4. Certificate of Registration with the Local Government Unit: 30 working days
5. Bank account set up: 30 working days

Register your company with Emerhub

Setting up a trading business can be a frustrating task, especially in a new international market but we are here to help you at every stage.

Emerhub assists in executing all the registration steps for wholesale and retail trade companies. It takes us almost 60 days to incorporate your company with the SEC, BIR, LGU, and Social Institutions.

Get started today by filling out the form below.