Sole Proprietorship in Philippines

A sole proprietorship is the most basic form of offshore business setup that one can operate. It is a business structure owned by an individual who has all the authority in the company and full control over his/her assets.

This allows the owner of the sole proprietorship business to enjoy all the profits as well as bear the losses and responsibilities for the debts and liabilities. 

The majority of the businessmen are running sole proprietorships for offshore business registration in the Philippines. The proprietor and their proprietorship business are considered as one taxpayer in the Philippines sharing a single TIN (Taxpayer Identification Number) for tax purposes. 

A sole proprietorship in the Philippines must apply for a business trade name and be registered with the Department of Trade and Industry.

Advantages of a Sole Proprietorship in the Philippines

A sole proprietorship is just another form of offshore company formation in the Philippines. Check out the benefits of the same here: 

  • There is a little paperwork needed. The application for a sole proprietorship must be done with the DTI regional or provincial offices
  • No minimum share capital requirement
  • A sole proprietor will completely control the business
  • The sole proprietor acquires all assets and profits of the business and can freely mix business and personal assets

How do you Set Up a Sole Proprietorship in the Philippines?

Establishing a sole proprietorship in the Philippines is less complicated than another offshore company setup. Before anything else, you must be a Filipino Citizen in order to register a sole proprietorship business. If you already possess this prerequisite, then you may go ahead with the company registration in the Philippines.

1. Register Your Business Name at the Department of Trade & Industry (DTI)

First, search whether the name that you have decided is similar to the other existing businesses. If the name you want is available, fill out the business name application form and submit it to the DTI’s office for an offshore company formation. The DTI will then provide you with a Certificate of Registration, after which you can move on to the next step.

2. Register with the Barangay

Once you receive the Certificate of Registration from the DTI, the next step is to go to the Barangay where your business is located and fill out the application. You shall also submit a copy of the Certificate of Registration, two valid IDs, and a Proof of Residence. After a few days, you will receive the Barangay Certificate of Business Registration.

3. Register the Business with the Mayor’s Office

After you get the certificate from the Barangay, do offshore company registration at the municipal office in the city where your business is located. You will need to fill out an application, as well as submit your Certificate of Business Registration from the DTI, your Barangay Clearance Certificate, two valid forms of ID, and Proof of Residency. 

4. Register with the Bureau of Internal Revenue (BIR)

The final step is to register your single proprietorship business in the Philippines with the BIR. To do this, you must visit your Regional Office in the city and fill out the ‘BIR Form 1901’, which is an application to register your business. 

Submit the following documents to get registered: 

  • Certificate of Registration from DTI, 
  • Barangay Clearance Certificate, 
  • Mayor’s Business Permit, 
  • Residency Proof, 
  • Valid ID. 

Once you submit all these documents, you are ready to receive the Certificate of Registration and the invoice of your offshore company formation in the Philippines. Clear the payment to get started. 

BSW | Your Service Provider 

Once all of the steps are completed, it’s time to start for your business in the Philippines. Make sure you have covered all additional clearances, permits, or licenses that you need to obtain before making your business public. Take assistance from Business Setup Worldwide for your offshore business setup in the Philippines to ease the process. Contact us to get started and enjoy the benefits of company formation in the Philippines. 

FAQs

What are the tax obligations of a sole proprietorship?

Sole proprietors are typically subject to income tax and other applicable taxes. It's essential to keep accurate records of income and expenses for tax reporting purposes.

Can a foreigner own a sole proprietorship in the Philippines?

Yes, a foreigner can own a sole proprietorship in the Philippines. However, there are restrictions in certain industries, and it's important to comply with foreign ownership regulations.

Can I change the business name of my sole proprietorship?

Yes, you can change the business name by filing the necessary documents with the DTI and paying the required fees.

Do I need a business permit for a sole proprietorship?

Yes, after registering with the DTI, you need to secure a business permit from the local government unit (LGU) where your business is located.