COMPARING BUSINESS REGULATION IN 25 CITIES AND 183 ECONOMIES 74679 COMPARING BUSINESS REGULATION IN 25 CITIES AND 183 ECONOMIES A copublication of The World Bank and the International Finance Corporation ©2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, D.C. 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved 1 2 3 4 5 09 08 07 06 A copublication of the World Bank and the International Finance Corporation This volume is a product of the staff of the World Bank Group. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. 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Copies of Doing Business 2011: Making a Difference for Entrepreneurs, Doing Business 2010: Reforming through Difficult Times, Doing Business 2009, Doing Business 2008, Doing Business 2007: How to Reform, Doing Business in 2006: Creating Jobs, Doing Business in 2005: Removing Obstacles to Growth and Doing Business in 2004: Understanding Regulations may be purchased at www.doingbusiness.org. About the Investment Climate Advisory Services of the World Bank Group The Investment Climate Advisory Services of the World Bank Group helps governments implement reforms to improve their business environment, and encourage and retain investment, thus fostering competitive markets, growth and job creation. Funding is provided by the World Bank Group (IFC, MIGA, and the World Bank) and over fifteen donor partners working through the multi-donor FIAS platform. Contents Doing Business in the Philippines 2011 Doing Business investigates the reg- is the second subnational report of the ulations that enhance business activity Doing Business series in the Philippines. and those that constrain it. Regulations In the first, Doing Business in the Philip- affecting 3 stages of the life of a local pines 2008, quantitative indicators on business are measured at the subnational business regulations were analyzed for level in the Philippines: starting a busi- 21 cities in 3 regions: Luzon, the Visayas, ness, dealing with construction permits, About Doing Business and and Mindanao. This year, the report ex- and registering property. These indica- Doing Business in the Philippines 1 pands the analysis to 25 cities across the tors were selected because they cover Executive summary  7 nation, including 15 cities from Metro areas of local jurisdiction or practice. The Starting a business  13 Manila (Luzon) that were also covered indicators are used to identify business Dealing with construction permits  19 in 2008: Caloocan, Las Piñas, Makati, reforms and the extent to which these Registering property  25 Malabon, Mandaluyong, Marikina, have been effective in simplifying the Muntinlupa, Navotas, Parañaque, Pasay, procedures, saving time, and lowering   Pasig, Quezon City, San Juan, Taguig, the cost of doing business. The data in Data notes  31 and Valenzuela. In addition, Batangas Doing Business in the Philippines 2011 City tables  36 City (Luzon), replaces Tanauan for this are current as of June 1, 2010. Doing Business indicators 40 edition. In the Visayas, 3 cities—Cebu The methodology for this report has List of procedures City, Lapu-Lapu, and Mandaue—that its limitations. Doing Business does not Starting a business 42 were analyzed in 2008 are measured directly study the security of property for the second time, and a new city— from theft and looting, proximity to Dealing with construction permits 86 Iloilo—is included. In Mindanao, 3 new major markets, quality of infrastructure Registering property 136 cities—Cagayan de Oro, General Santos, services, transparency of government Acknowledgments  163 and Zamboanga City—are studied while procurement, macroeconomic condi- Davao City is studied for a second time. tions, the quality of institutions, and Manila, which represents the Philippines other areas important to businesses. To in the global Doing Business 2011 report, make the data comparable across econo- is also included. The selection of the 25 mies, the indicators refer to a specific type cities was based on the level of urbaniza- of company—generally a limited liability tion, population size, economic activity, company (or its legal equivalent)—in political and geographical diversity, and a standardized case scenario and may other factors. not be representative of the issues facing Comparisons with other econo- other types of businesses or other busi- mies are based on Doing Business 2011: ness transactions. Making a Difference for Entrepreneurs, This study is part of IFC's Advi- the eighth in a series of annual reports sory Service program in the Philippines, published by the World Bank and the which seeks to support private sector International Finance Corporation. The development and sustained economic indicators in Doing Business in the Philip- growth in the Philippines. IFC's Advisory pines 2011 are also comparable with 339 Service programs are consistent with the cities in 43 economies benchmarked in World Bank Group's Country Assistance other subnational Doing Business stud- Strategy for the Philippines. ies. All data and reports are available at http://subnational.doingbusiness.org and www.doingbusiness.org. 1 About Doing The Doing Business project, initiated 9 years ago, goes one step further. It looks regulation, such as stricter disclosure re- quirements in related-party transactions. Business at domestic small and medium-size com- Some give a higher score for a simplified and Doing panies and measures the regulations ap- way of implementing existing regulation, plying to them through their life cycle. such as completing business start-up Business in the Doing Business and the standard cost model initially developed and applied in formalities in a one-stop shop. Doing Business in the Philippines Philippines the Netherlands are, for the present, the only standard tools used across a broad 2011 encompasses 2 types of data. The first come from readings of laws and range of jurisdictions to measure the regulations. The second are time and impact of government rule-making on motion indicators that measure the ef- business activity.1 ficiency and complexity in achieving a The first Doing Business report, pub- regulatory goal (such as granting the lished in 2003, covered 5 indicator sets legal identity of a business). Within the and 133 economies. This year’s report time and motion indicators, cost es- covers 11 indicator sets and 183 econo- timates are recorded from official fee Governments committed to the eco- mies. Nine topics are included in the schedules where applicable. Here, Doing nomic health of their country and op- aggregate ranking on the ease of doing Business builds on Hernando de Soto’s pi- portunities for its citizens focus on more business. The project has benefited from oneering work in applying the time and than macroeconomic conditions. They feedback from governments, academics, motion approach first used by Frederick also pay attention to the laws, regula- practitioners and reviewers.2 The initial Taylor to revolutionize the production of tions and institutional arrangements that goal remains: to provide an objective the Model T Ford. De Soto used the ap- shape daily economic activity. basis for understanding and improving proach in the 1980s to show the obstacles The global financial crisis has re- the regulatory environment for business. to setting up a garment factory on the newed interest in good rules and regu- outskirts of Lima, Peru.3 lation. In times of recession, effective What Doing Business in the business regulation and institutions can Philippines 2011 covers What Doing Business in the support economic adjustment. Easy Philippines 2011 does not entry and exit of firms, and flexibility Doing Business in the Philippines 2011 cover in redeploying resources, make it easier provides a quantitative measure of the to stop doing things for which demand national, and local regulations for start- Just as important as knowing what Doing has weakened and to start doing new ing a business, dealing with construction Business in the Philippines 2011 does is things. Clarification of property rights permits, and registering property—as to know what it does not do—to under- and strengthening of market infrastruc- they apply to domestic small and me- stand what limitations must be kept in ture (such as credit information and dium-size enterprises. mind in interpreting the data. collateral systems) can contribute to con- A fundamental premise of Doing fidence as investors and entrepreneurs Business is that economic activity re- Limited in scope look to rebuild. quires good rules. These include rules Doing Business in the Philippines 2011 Until recently, however, there were that establish and clarify property rights focuses on three topics, with the specific no globally available indicator sets for and reduce the costs of resolving dis- aim of measuring the regulation and red monitoring such microeconomic factors putes, rules that increase the predictabil- tape relevant to the life cycle of a domes- and analyzing their relevance. The first ity of economic interactions and rules tic small to medium-size firm. efforts, in the 1980s, drew on percep- that provide contractual partners with Accordingly: tions data from expert or business sur- core protections against abuse. The ob- • Doing Business in the Philippines 2011 veys. Such surveys are useful gauges jective: regulations designed to be ef- does not measure all 11 indicators of economic and policy conditions. But ficient in their implementation, to be covered in the general Doing Business their reliance on perceptions and their accessible to all who need to use them report. The report covers only those incomplete coverage of poor countries and to be simple in their implementa- 3 areas of business regulation that constrain their usefulness for analysis. tion. Accordingly, some Doing Business are the provenance of the municipal indicators give a higher score for more governments and where local differ- 2 Doing Business in the philippines 2011 ences exist—starting a business, deal- based on prices of consumer goods in a in the Philippines 2011 with data from ing with construction permits, and few urban areas. Such assumptions allow other sources, such as the World Bank registering property. global coverage and enhance compara- Enterprise Surveys.5 • Doing Business in the Philippines 2011 bility, but they inevitably come at the does not measure all aspects of the expense of generality. Why this focus  business environment that matter In areas where regulation is complex to firms or investors—or all factors and highly differentiated, the standard- Doing Business in the Philippines 2011 that affect competitiveness. It does ized case used to construct each Doing functions as a kind of cholesterol test for not, for example, measure security, Business in the Philippines 2011 indicator the regulatory environment for domestic macroeconomic stability, corruption, needs to be carefully defined. Where businesses. A cholesterol test does not the labor skills of the population, the relevant, the standardized case assumes tell us everything about the state of our underlying strength of institutions or a limited liability company. This choice health. But it does measure something the quality of infrastructure. Nor does is in part empirical: private, limited li- important for our health. And it puts us it focus on regulations specific to for- ability companies are the most prevalent on watch to change behaviors in ways eign investment. business form in most economies around that will improve not only our cholesterol • Doing Business in the Philippines 2011 the world. The choice also reflects one rating but also our overall health. does not assess the strength of the fi- focus of Doing Business: expanding op- One way to test whether Doing Busi- nancial system or market regulations, portunities for entrepreneurship. Inves- ness serves as a proxy for the broader both important factors in understand- tors are encouraged to venture into busi- business environment and for competi- ing some of the underlying causes of ness when potential losses are limited to tiveness is to look at correlations be- the global financial crisis. their capital participation. tween the Doing Business rankings and • Doing Business in the Philippines 2011 other major economic benchmarks. The does not cover all regulations, or all Focused on the formal sector indicator set closest to Doing Business regulatory goals, in any city. As econ- In constructing the indicators, Doing in what it measures is the Organization omies and technology advance, more Business in the Philippines 2011 as- for Economic Co-operation and Devel- areas of economic activity are being sumes that entrepreneurs are knowl- opment’s indicators of product market regulated. For example, the European edgeable about all regulations in place regulation; the correlation here is 0.72. Union’s body of laws (acquis) has now and comply with them. In practice, The World Economic Forum’s Global grown to no fewer than 14,500 rule entrepreneurs may spend consider- Competitiveness Index and IMD’s World sets. Doing Business in the Philippines able time finding out where to go and Competitiveness Yearbook are broader in 2011 measures just 3 phases of a com- what documents to submit. Or they scope, but these too are strongly corre- pany’s life cycle, through 3 specific may avoid legally required procedures lated with Doing Business (0.79 and 0.64, indicators. The indicator sets also do altogether—by not registering for social respectively).6 not cover all aspects of regulation in security, for example. A bigger question is whether the the particular area. For example, the Where regulation is particularly issues on which Doing Business focuses indicators on starting a business do onerous, levels of informality are higher. matter for development and poverty re- not cover all aspects of commercial Informality comes at a cost: firms in duction. The World Bank study Voices legislation. the informal sector typically grow more of the Poor asked 60,000 poor people slowly, have poorer access to credit and around the world how they thought they Based on standardized case employ fewer workers—and their work- might escape poverty.7 The answers were scenarios ers remain outside the protections of unequivocal: women and men alike pin The indicators analyzed in Doing Busi- labor law.4 Doing Business in the Philip- their hopes above all on income from ness in the Philippines 2011 are built on pines 2011 measures one set of factors their own business or wages earned in the basis of standardized case scenarios that help explain the occurrence of infor- employment. Enabling growth—and en- with specific assumptions, such as that mality and give policy makers insights suring that poor people can participate the business is located in one of the 25 into potential areas of reform. Gaining a in its benefits—requires an environment cities in the Philippines measured in the fuller understanding of the broader busi- where new entrants with drive and good report. Economic indicators commonly ness environment, and a broader per- ideas, regardless of their gender or ethnic make limiting assumptions of this kind. spective on policy challenges, requires origin, can get started in business and Inflation statistics, for example, are often combining insights from Doing Business where good firms can invest and grow, about doing business and DOING BUSINESS in the philippines 3 generating more jobs. cilitate reallocation of labor and capital. growing economies continually reform Small and medium-size enterprises As businesses rebuild and start to create and update their regulations and their are key drivers of competition, growth new jobs, this helps to lay the ground- way of implementing them, while many and job creation, particularly in develop- work for countries’ economic recovery. poor economies still work with regula- ing countries. But in these economies up And regulatory institutions and pro- tory systems dating to the late 1800s. to 80% of economic activity takes place cesses that are streamlined and acces- in the informal sector. Firms may be pre- sible can help ensure that, as businesses Doing Business— vented from entering the formal sector rebuild, barriers between the informal a user’s guide by excessive bureaucracy and regulation. and formal sectors are lowered, creating Where regulation is burdensome more opportunities for the poor. Quantitative data and benchmarking can and competition limited, success tends be useful in stimulating debate about to depend more on whom you know Doing Business in the policy, both by exposing potential chal- than on what you can do. But where Philippines 2011 as a lenges and by identifying where pol- regulation is transparent, efficient and benchmarking exercise icy makers might look for lessons and implemented in a simple way, it becomes good practices. These data also provide easier for any aspiring entrepreneurs, Doing Business in the Philippines 2011, a basis for analyzing how different policy regardless of their connections, to oper- in capturing some key dimensions of approaches—and different policy re- ate within the rule of law and to benefit regulatory regimes, can be useful for forms—contribute to desired outcomes from the opportunities and protections benchmarking. Any benchmarking—for such as competitiveness, growth and that the law provides. individuals, firms or economies—is nec- greater employment and incomes. In this sense Doing Business values essarily  partial: it is valid and useful if Eight years of Doing Business data good rules as a key to social inclusion. It it helps sharpen judgment, less so if it have enabled a growing body of research also provides a basis for studying effects substitutes for judgment. on how performance on Doing Busi- of regulations and their application. For Doing Business in the Philippines ness indicators—and reforms relevant example, Doing Business 2004 found that 2011 provides 2 takes on the data it col- to those indicators—relate to desired faster contract enforcement was associ- lects: it presents “absolute” indicators for social and economic outcomes. Some ated with perceptions of greater judicial each city for each of the three regulatory 656 articles have been published in fairness—suggesting that justice delayed topics it addresses, and it provides rank- peer-reviewed academic journals, and is justice denied.8 ings of cities by indicator. Judgment is about 2,060 working papers are available In the context of the global crisis required in interpreting these measures through Google Scholar.9 Among the policymakers continue to face particular for any city and in determining a sensible findings: challenges. Both developed and develop- and politically feasible path for reform. • Lower barriers to start-up are associ- ing economies are seeing the impact of Reviewing the Doing Business rank- ated with a smaller informal sector.10 the financial crisis flowing through to ings in isolation may show unexpected • Lower costs of entry encourage entre- the real economy, with rising unemploy- results. Some cities may rank unexpect- preneurship, enhance firm productiv- ment and income loss. The foremost edly high on some indicators. And some ity and reduce corruption.11 challenge for many governments is to cities that have had rapid growth or • Simpler start-up translates into greater create new jobs and economic oppor- attracted a great deal of investment may employment opportunities.12 tunities. But many have limited fiscal rank lower than others that appear to be • The quality of a country’s contract- space for publicly funded activities such less dynamic. ing environment is a source of com- as infrastructure investment or for the But for reform-minded local govern- parative advantage in trade patterns. provision of publicly funded safety nets ments, how much the regulatory environ- Countries with good contract enforce- and social services. Reforms aimed at ment for local entrepreneurs improves ment specialize in industries where creating a better investment climate, in- matters more than their relative ranking. relationship-specific investments are cluding reforms of business regulation, As cities develop, they strengthen and most important.13 can be beneficial for several reasons. add to regulations to protect investor and • Greater information sharing through Flexible regulation and effective institu- property rights. Meanwhile, they find credit bureaus is associated with tions, including efficient processes for more efficient ways to implement existing higher bank profitability and lower starting a business and efficient insol- regulations and cut outdated ones. One bank risk.14 vency or bankruptcy systems, can fa- finding of Doing Business: dynamic and 4 Doing Business in the philippines 2011 How do governments use forming the regulatory environment for Information sources for the data Doing Business? domestic businesses. Most reforms relat- ing to Doing Business topics were nested Most of the indicators are based on laws A common first reaction is to doubt in broader programs of reform aimed and regulations. In addition, most of the the quality and relevance of the Doing at enhancing economic competitiveness. cost indicators are backed by official fee Business data. Yet the debate typically The same can be said at the subnational schedules. Doing Business respondents proceeds to a deeper discussion explor- level. both fill out written surveys and provide ing the relevance of the data to the In structuring their reform pro- references to the relevant laws, regu- economy and areas where reform might grams, governments use multiple data lations and fee schedules, aiding data make sense. sources and indicators. And reformers checking and quality assurance. Most reformers start out by seeking respond to many stakeholders and inter- For some indicators part of the cost examples, and Doing Business helps in est groups, all of whom bring important component (where fee schedules are lack- this (box 1.1). For example, Saudi Arabia issues and concerns into the reform de- ing) and the time component are based used the company law of France as a bate. World Bank Group dialogue with on actual practice rather than the law on model for revising its own. Many coun- governments on the investment climate the books. This introduces a degree of tries in Africa look to Mauritius—the is designed to encourage critical use subjectivity. The Doing Business approach region’s strongest performer on Doing of the data, sharpening judgment and has therefore been to work with legal Business indicators—as a source of good avoiding a narrow focus on improving practitioners or professionals who regu- practices for reform. In the words of Doing Business rankings and encourag- larly undertake the transactions involved. Egypt’s Minister of Investment, Dr. Mah- ing broad-based reforms that enhance Following the standard methodological moud Mohieldin: the investment climate. approach for time and motion studies, What I like about Doing Business... is Doing Business breaks down each process that it creates a forum for exchanging Methodology and data or transaction, such as starting and legally knowledge. It’s no exaggeration to say operating a business, into separate steps that we checked the top ten in every Doing Business in the Philippines 2011 to ensure a better estimate of time. The indicator and we just asked them, covers 25 cities. The data are based on time estimate for each step is given by “How did you do it?” If there is any national and local laws and regulations practitioners with significant and routine advantage to starting late in anything, as well as administrative requirements. experience in the transaction. it’s that you can learn from others. (For a detailed explanation of the Doing The Doing Business approach to data Over the past 8 years there has been Business in the Philippines 2011 method- collection contrasts with that of enter- much activity by governments in re- ology, see Data notes). prise or firm surveys, which capture often one-time perceptions and experiences of businesses. A corporate lawyer registering Box 1.1 100–150 businesses a year will be more How economies have used Doing Business in regulatory reform programs familiar with the process than an entre- To ensure coordination of efforts across agencies, such economies as Colombia, Rwanda and Sierra preneur, who will register a business only Leone have formed regulatory reform committees reporting directly to the president that use the once or maybe twice. A bankruptcy judge Doing Business indicators as one input to inform their programs for improving the business environ- ment. More than 20 other economies have formed such committees at the interministerial level. deciding dozens of cases a year will have These include India, Malaysia, Taiwan (China) and Vietnam in East and South Asia; the Arab Republic more insight into bankruptcy than a com- of Egypt, Morocco, Saudi Arabia, the Syrian Arab Republic, the United Arab Emirates and the Repub- pany that may undergo the process. lic of Yemen in the Middle East and North Africa; Georgia, Kazakhstan, the Kyrgyz Republic, Moldova and Tajikistan in Eastern Europe and Central Asia; Kenya, Liberia, Malawi and Zambia in Sub-Saharan Africa; and Guatemala, Mexico and Peru in Latin America. Beyond the level of the economy, the Asia- Development of the methodology Pacific Economic Cooperation (APEC) organization uses Doing Business to identify potential areas of regulatory reform, to champion economies that can help others improve and to set measurable The methodology for calculating each targets. In 2009 APEC launched the Ease of Doing Business Action Plan with the goal of making it 25% cheaper, faster and easier to do business in the region by 2015. Drawing on a firm survey, plan- indicator is transparent, objective and ners identified 5 priority areas: starting a business, getting credit, enforcing contracts, trading across easily replicable. Leading academics col- borders and dealing with permits. The next 2 steps: the APEC economies setting targets to measure laborate in the development of the indi- results, and the champion economies selected, such as Japan, New Zealand and the United States, developing programs to build capacity to carry out regulatory reform in these areas.1 cators, ensuring academic rigor. Eight of 1. Muhamad Noor (executive director of APEC), speech delivered at ASEAN-NZ Combined Business Council breakfast meeting, Auck- the background papers underlying the land, New Zealand, March 25, 2010, http://www.apec.org. indicators have been published in lead- about doing business and DOING BUSINESS in the philippines 5 ing economic journals. Working Paper 10929, National Bureau of Economic Research, Cambridge, MA; Doing Business uses a simple averag- Antunes, Antonio, and Tiago Cavalcanti. ing approach for weighting sub-indica- 1. The standard cost model is a quantitative 2007. “Start Up Costs, Limited Enforce- methodology for determining the admin- tors and calculating rankings. Other ap- istrative burdens that regulation imposes ment, and the Hidden Economy.” Euro- proaches were explored, including using pean Economic Review 51 (1): 203–24; on businesses. The method can be used Djankov, Simeon, Caroline Freund and principal components and unobserved to measure the effect of a single law or of Cong S. Pham. 2010. “Trading on Time.” selected areas of legislation or to perform components. The principal components a baseline measurement of all legislation Review of Economics and Statistics 92 and unobserved components approaches (1): 166–73. in a country. turn out to yield results nearly identical 12. For example, Freund, Caroline, and Bine- 2. This has included a review by the World swaree Bolaky. 2008. “Trade, Regulations to those of simple averaging. The tests Bank Independent Evaluation Group and Income.” Journal of Development (2008) as well as ongoing input from the show that each set of indicators provide Economics 87: 309–21; Chang, Roberto, International Tax Dialogue. sufficiently broad coverage across topics. Linda Kaltani and Norman Loayza. 2009. 3. De Soto, Hernando. 2000. The Mystery “Openness Can Be Good for Growth: Therefore, the simple averaging approach of Capital: Why Capitalism Triumphs in The Role of Policy Complementarities.” is used. the West and Fails Everywhere Else. New Journal of Development Economics 90: York: Basic Books. 33–49; Helpman, Elhanan, Marc Melitz Improvements to the 4. Schneider, Friedrich. 2005. “The Informal and Yona Rubinstein. 2008. “Estimat- methodology and data revisions Sector in 145 Countries.” Department of ing Trade Flows: Trading Partners and Economics, University Linz. Trading Volumes.” Quarterly Journal of The methodology has undergone contin- 5. http://www.enterprisesurveys.org Economics 123 (2): 441–87. ual improvement over the years. Changes 6. The World Economic Forum’s Global 13. Nunn, Nathan. 2007. “Relationship- have been made mainly in response to Competitiveness Report uses part of Specificity, Incomplete Contracts, and the the Doing Business data sets on starting Pattern of Trade.” Quarterly Journal of country suggestions. In accordance with Economics 122 (2): 569–600. business, employing workers, protecting the Doing Business methodology, these investors and getting credit (legal rights). 14. Houston, Joel, Chen Lin, Ping Lin and changes have been incorporated into 7. Narayan, Deepa, Robert Chambers, Meer Yue Ma. 2010. “Creditor Rights, Informa- Doing Business in the Philippines 2011. Kaul Shah and Patti Petesh. 2000. Voices tion Sharing, and Bank Risk Taking.” of the Poor: Crying Out for Change. Wash- Journal of Financial Economics 96 (3): For starting a business, for example, 485–512. ington, DC: World Bank. the minimum capital requirement can be 8. World Bank. 2003. Doing Business in an obstacle for potential entrepreneurs. 2004: Understanding Regulation. Wash- Initially, Doing Business measured the ington, DC: World Bank Group. required minimum capital regardless of 9. http://scholar.google.com whether it had to be paid up front or 10. For example, Masatlioglu, Yusufcan, not. In many economies only part of the and Jamele Rigolini. 2008. “Informality Traps.” B.E. Journal of Economic Analysis minimum capital has to be paid up front. & Policy 8 (1); Kaplan, David, Eduardo To reflect the actual potential barrier to Piedra and Enrique Seira. 2007. “Entry entry, the paid-in minimum capital has Regulation and Business Start-Ups: Evidence from Mexico.” Policy Research been used since 2004. Working Paper 4322, World Bank, Wash- All changes in methodology are ex- ington, DC.; Ardagna, Silvia, and Anna- plained in the Data notes section of this maria Lusardi. 2008. “Explaining Inter- national Differences in Entrepreneurship: report as well as on the Doing Business The Role of Individual Characteristics website. In addition, data time series and Regulatory Constraints.” NBER for each indicator and city are available Working Paper 14012, National Bureau on the website. The website also makes of Economic Research, Cambridge, MA. available all original data sets used for 11. For example, Alesina, Alberto, Silvia Ardagna, Giuseppe Nicoletti and Fabio background papers. Schiantarelli. 2005. “Regulation and Information on data corrections is Investment.” Journal of the European provided in the Data notes and on the Economic Association 3 (4): 791–825; Perotti, Enrico, and Paolo Volpin. 2004. website. A transparent complaint proce- “Lobbying on Entry.” CEPR Discussion dure allows anyone to challenge the data. Paper 4519, Centre for Economic Policy If errors are confirmed after a data veri- Research, London; Fisman, Raymond, and Virginia Sarria-Allende. 2004. fication process, they are expeditiously “Regulation of Entry and the Distor- corrected. tion of Industrial Organization.” NBER 7 Executive Table 1.1 Where is it easiest to start a business, deal with construction permits summary or register property in the Philippines? Ease of starting Ranking (1–25) Ease of dealing with Ease of registering City a business construction permits property Batangas City 18 11 11 Cagayan De Oro 14 7 24 Caloocan 11 16 6 Cebu City 7 14 4 Davao City 2 1 20 General Santos 1 3 25 Iloilo City 20 20 22 Lapu-Lapu 5 11 13 Las Piñas 24 10 5 Makati 20 9 21 Malabon 16 22 15 Mandaluyong 9 21 17 Mandaue 13 8 8 Good governance is critical to poverty Manila 17 13 9 reduction, economic development, and Marikina 8 5 10 human development. It ensures the ju- Muntinlupa 22 17 19 dicious and transparent use of public Navotas 15 15 2 funds, promotes the growth of a pro- Parañaque 19 18 16 ductive and competitive private sector, Pasay 10 19 13 enhances the effective delivery of public Pasig 23 24 3 services, and upholds the rule of law.1 Quezon City 12 22 17 Good governance is particularly impor- San Juan 25 25 12 tant for businesses: when regulations Taguig 3 2 6 Valenzuela 4 6 1 are simple, transparent, and predictable, Zamboanga City 6 4 23 transaction costs are lower. Entrepre- Source: Doing Business database. Data for Manila are from Doing Business 2011. neurs do not have to waste precious resources on red tape. The playing field levels out, enabling anyone to do busi- Trade and Industry.3 sented in 2008 and tracks progress in the ness without having to resort to connec- Developing information tools to implementation of business reforms. It tions or informal payments. identify opportunities for improvement, also expands the analysis to 25 cities, to In recent years, the Philippines em- point out challenges, and disseminate provide a more comprehensive map of barked on business and political reforms lessons and good practices can assist business regulation in the country. to promote good governance.2 Many these reform endeavors. Doing Business is The summary results of Doing Busi- of these reforms targeted unnecessary one of these tools. Doing Business studies ness in the Philippines 2011 are presented administrative requirements, a major business regulations from the perspec- in the table above (table 1.1). Across the breeder of corruption. While much re- tive of small to medium-size local firms. Philippines, it is easiest to start a business mains to be done, progress has been Manila represents the Philippines in the in General Santos, obtain construction made. Many local governments, for ex- global Doing Business report, the latest of permits in Davao City, and register prop- ample, are taking measures to streamline which compares regulatory practices in erty in Valenzuela. It is most difficult to their business registration and licensing 183 economies worldwide. Doing Busi- start a business or obtain a construction procedures. Supporting these local ef- ness in the Philippines 2008 was the first permit in San Juan and register property forts are national initiatives, such as the report to go beyond Manila, to capture in General Santos. recently launched “Nationwide Stream- these differences in 20 other Philippine When comparing the performance lining of Business Permits and Licensing cities on 3 Doing Business areas: start- in each of the 3 indicators with the re- Systems Reform Project” of the Depart- ing a business, dealing with construc- sults in 2008, some observations stand ment of the Interior and Local Govern- tion permits, and registering property. out: while Taguig and a few other cities ment (DILG) and the Department of This report updates the information pre- emerged as good performers in starting a 8 Doing Business in the philippines 2011 business in both reports, many of 2008’s Doing Business in the Philippines trepreneur is reimbursed for the cost of top-ranked cities are being surpassed 2008 identified good practices in 21 cit- a transformer after 1 year rather than by cities that most improved business ies, pointed out bottlenecks, and pro- having to wait until the end of a contract. regulations, such as Davao City. Makati vided recommendations for business The same policy was also implemented and Mandaluyong are 2 examples of cit- reform. Two and a half years later, this in Cebu and Mandaue by the Visayan ies that dropped relative to their peers report tracks the reforms’ progress over Electric Company. Meanwhile, Para- from 2008 to 2011. Some changes can be time. The results are positive: 65% of the ñaque no longer requires entrepreneurs attributed to the addition of 5 new cities cities benchmarked for the second time to make separate visits to the city mayor’s not measured in Doing Business in the show positive reforms in at least 1 of the office for the mayor’s clearance—this Philippines 2008—a few of which have areas measured. For starting a business, has become an inter-agency procedure easier business regulations. For example, Davao City, Valenzuela, and Pasay posted coordinated by its City Planning and De- General Santos and Zamboanga City remarkable improvements. Davao City velopment Office and mayor’s office. both rank high on the ease of starting a introduced a single assessment of all Improvements also made it easier business and on the ease of dealing with business permit fees at the City Trea- to register property in certain Philippine construction permits. In addition, varia- surer’s Office, instead of requiring visits cities. In Caloocan, Malabon, Navotas, tion exists on an indicator-by-indicator to different agencies. In addition, Davao and Valenzuela notaries reduced their basis: no single city does equally well on City now allows businesses to start oper- fees for preparing sale deeds and related all 3 indicators. Davao City ranks best ations without waiting for an inspection documents—from a range of 1 to 3% of on the ease of dealing with construc- from its City Planning and Development the property value in 2008 to just 1% of tion permits and second on the ease of Office and its Bureau of Fire Protection; the property value in 2010. Lower fees starting a business, but is 20th on the these inspections now take place after a reportedly came as a response to increas- ease of registering property. While Pasig business is up and running. As a result ing competition among notaries in these ranks third on the ease of registering of its business reforms, Davao City cut cities. An entrepreneur saves an average property, it ranks 23rd and 24th on the 7 procedures, speeding up the start- of PHP 41,700 (USD 895) as a result. ease of starting a business and dealing up process by an average of 16 days. At the national level, the Philippines’ with construction permits, respectively. Valenzuela introduced similar reforms Land Registration Authority embarked One reason for this variation is the more and cut 8 procedures and 7 days from on a nationwide land-titling computer- prominent role of the national govern- the business start-up process. Pasay no ization project to consolidate land re- ment in property registration require- longer requires separate applications for cords into a single national database and ments. Meanwhile, local governments its zoning clearance and electrical and facilitate the registration and authentica- are more involved in business start-up mechanical permits; an entrepreneur can tion of titles. Eighteen out of the 25 cities and construction permit requirements. obtain a copy of these clearances and measured have initiated computerization Only Taguig and Valenzuela are consis- permits from the owner of the building efforts as of June 1, 2010. The project tently ranked in the top 7 across all 3 and submit them with their business per- has not yet started in 7 cities: Caloocan, indicators. mit application. As a result, 2 procedures Malabon, Mandaue, Muntinlupa, Navo- were eliminated and an entrepreneur tas, Valenzuela, and Zamboanga City. Local governments are saves PHP 956 (USD 21), on average. While initial phases of computerization improving the ease of doing business Other cities could learn from these suc- may temporarily slow down the process, cessful examples of business reforms on its completion is expected to accelerate Doing Business in the Philippines 2011 the local level (table 1.2). property registration significantly. This is finds that Philippine cities actively re- Local business reforms are also the case of Cebu City, where the comple- formed their business regulations over making it easier to obtain construction tion of all phases of the project has cut 5 the past 2 years. While the economic permits in a few Philippine cities. In days from the time required to register outcomes directly linked to business re- Davao City, officers from its Bureau of property. forms have yet to be measured, this Fire Protection are now stationed at city In certain instances, however, report shows that they have already sim- hall to facilitate applications and pay- changes at the national level do not plified procedures and cut costs for local ments for fire-safety evaluation clear- support the cities’ efforts to improve firms. Many of these improvements came ances. In addition, the Davao Light and efficiency. The recent national amend- from re-engineering business processes Power Company changed its refund ment of the Fire Code is an example. In rather than amending laws. policy on connection costs. Now an en- December 2008, Congress enacted the executive summary 9 Table 1.2 of this requirement varied from city to Nineteen business reforms at the local level since 2008 make it easier to do business city until 2009, when the Department of City or departmental reforms Implementation of national reforms Public Works and Highways issued a cir- Dealing with Dealing with cular, allowing the use of the old build- Starting a construction Registering Starting a construction Registering business permits property business permits property ing permit forms, which do not require Caloocan notarization. A court case questioning 4 4 7 the Implementing Rules and Regulations Cebu City 4 4 4 of the National Building Code is still Davao City 4 4 4 pending.7 Las Piñas 7 On the other hand, national-level Makati 7 reforms can promote better business Malabon 4 7 regulations at the local level. In 2007, Mandaluyong 4 7 Congress passed Republic Act No. 9485, Mandaue 4 otherwise known as the “Anti-Red Tape Manila 4 7 Act,” requiring local and national gov- Marikina ernment agencies to draft their Citi- 7 zen’s Charter, which is an official docu- Muntinlupa 7 ment that describes the procedures for Navotas 4 7 obtaining a particular service and the Parañaque 4 7 guaranteed performance level that the Pasay 4 4 7 public may expect. A Citizen’s Charter is Quezon City 4 7 intended, in part, to avert graft and other San Juan 4 7 corrupt practices. While many cities, Taguig 7 such as Pasay, have drafted their Citi- Valenzuela 4 4 7 zen’s Charters and display them at city hall implementation is inconsistent from 4 Doing Business reform making it easier to do business 7 Doing Business reform making it more difficult to do business city to city and a national mechanism Note: A reform is counted as 1 reform per city per indicator. The reforms occurred between January 2008 and June 2010. for enforcing the charter remains to be Source: Doing Business database. Data for Manila are from Doing Business 2011. established. Fire Code of the Philippines or Republic who wants to start a business legally. Act No. 9514, updating the previous Fire Furthermore, implementation of these Comparing business regulations Code of 1977 (Presidential Decree No. provisions is uneven.6 The new Fire Code across cities 1185). The new Fire Code mandates a also imposes additional requirements to The number of procedures required to fire safety inspection to be issued by the obtain construction permits. Now pay- start a business, and deal with con- Bureau of Fire Protection as a prerequi- ments related to fire clearances must be struction permits shows wide variation site to any permits or licenses issued by made to the Bureau of Fire Protection across the 25 cities included in this study local governments.4 In line with inter- instead of the Office of the Building Of- (figure 1.1). This is not surprising in a national good practice, an inspection of ficial. Marikina and Valenzuela are two country of over 7,000 islands, where the new construction is necessary to ensure cities that had integrated these payments Local Government Code of 1991 granted that an establishment will be safe from at their Office of the Building Official and significant powers to the 80 provincial, fire hazards, and is mandatory to obtain now must add an additional requirement 122 city, and 1,497 municipal govern- the certificate of occupancy. However, for local firms. ments—while retaining other powers the Implementing Rules and Regulations Mandatory notarization of building- within the central national government. of the Philippines’ new Fire Code require permit forms is another example of how While the power of local govern- any new business to secure a Fire Safety national laws, applied unevenly, may cre- ments to regulate commercial activities is Inspection Certificate as a prerequisite ate additional hurdles for local firms. The subject to certain limitations prescribed to a business permit,5 even when the 2004 revision of the National Building under the Local Government Code and new business is leasing space in a build- Code’s Implementing Rules and Regula- other national laws, the national govern- ing that has a certificate. This adds an tions required notarization of building- ment can only supervise local govern- unnecessary burden to an entrepreneur permit forms. However, implementation ments to ensure that they do not exceed 1 8 16 Procedures Note: Doing Business 2010 number of procedures for Manila was adjusted to re ect a data correction for the additional procedure to notarize the articles of incorporation. 10 Doing Business in the philippines 2011 Source: Doing Business database. FIGURE 1.1 cedures. The differences are due to addi- 25-city Large variations in number of procedures across cities average tional requirements imposed by certain CHINA CEBU CITY, PASIG 36 cities on top of National Building Code’s standard requirements. The time needed Range in the 30 Philippines varies from 46 days in Zamboanga City TAGUIG 25 to 169 days in Manila. The longest delays PASIG 22 in Manila are the 63 days needed to get a 18 EAP building permit and the 56 days it takes AVERAGE CEBU CITY, 15 CHINA INDONESIA to connect to electricity. Wide varia- MANILA SINGAPORE tions also exist in terms of cost. Davao INDONESIA 9 EAP 8 City is the least expensive city to obtain NEW ZEALAND INDONESIA AVERAGE EAP AVERAGE CHINA construction permits at 94.2% of income SINGAPORE SINGAPORE NEW ZEALAND NEW ZEALAND per capita. In Iloilo City, the cost is more Starting Dealing with Registering than 10 times higher: 1,035.3% of in- a business construction permits property come per capita. The difference is driven Note: EAP denotes the East Asia and the Paci c region. Source: Doing Business database. mostly by the high cost of an electricity connection in Iloilo City. their powers, according to the constitu- Starting a business tion.8 As a result, national government In Manila and Cebu City, 15 procedures Registering property initiatives to institute uniform standards are necessary to start a business—com- Registering property involves 8 standard and best practices in cities cannot simply pared to 22 in Pasig. It takes entre- procedures. Nine out of the 25 cities add be imposed top-down. National initia- preneurs 22 days to start a business a locally required inspection for a total tives must be implemented with buy-in in General Santos, while it takes more of 9 procedures. In terms of time, Man- from the local governments, which re- than double in Iloilo City (56 days). The daluyong offers the fastest property reg- quires considerable time and effort. cost to entrepreneurs ranges from 15% istration in 22 days. Meanwhile, Cagayan The multi-level regulatory and legal of income per capita in General Santos de Oro and Lapu-Lapu offer the slowest, framework is further complicated by the to 36% in Makati. The variation in the at 81 days and 64 days, respectively. The fact that local governments must strike a number of procedures, time, and costs time differences can be attributed mainly balance between their mandate to pro- among the 25 cities are due to local busi- to the performance of the Register of mote local economic development, on ness registration requirements as well Deeds and the regional district offices of the one hand, and their mandate to pro- as differences in the efficiency of local the Bureau of Internal Revenue. Cities mote public welfare, health, and safety, branches of national agencies. Complet- also vary on property registration costs. on the other. Local governments often ing business registration is faster where Zamboanga City, General Santos, and Ca- resort to raising taxes and fees, which local business start-up requirements are gayan de Oro charge the most—with reg- may act as economic disincentives for consolidated at one-stop shops. It is also istrations costing 5.8%, 5.6%, and 5.3% local firms. In addition, national agen- faster in those cities where certain re- of the property value, respectively. The cies retain responsibility over their local quirements, such as inspections, can be cities with the lowest costs are Mandaue, branches’ procedures and, thus, are cru- fulfilled after the city has issued the Navotas, and Valenzuela—with registra- cial to the process of reducing the burden business permit based on a low-risk or tions costing 3.3%, 3.5%, and 3.5% of the on local entrepreneurs. high-risk assessment. Cost differences property value, respectively. Variations Decentralization is not without are driven mainly by business taxes and in the property transfer tax and notariza- problems in any large and complex econ- garbage fees levied by local governments, tion fees, both of which are assessed as a omy. A recent review in Indonesia found which local firms pay when applying for percentage of the property value, drive that most local regulations were incon- a business permit. the differences in costs across cities. sistent with national laws and incomplete or distorting to economic activity.9 Local Dealing with construction Learning from each other governments and national government permits Benchmarking exercises like Doing Busi- agencies must work together to create Taguig requires only 25 procedures for ness inspire governments to improve an environment where businesses can a permit to build a warehouse. To com- business regulations. They uncover po- flourish. pare, Cebu City and Pasig require 36 pro- tential challenges and identify where pol- executive summary 11 icy makers can look for good practices. Table 1.3 Best practices in the Philippines compared internationally Subnational comparisons between cities Global Rank within the same country can be stron- Indicator (183 economies) ger drivers of reform than international Days to deal with construction permits comparisons, because local governments Zamboanga City (46 days) 5 have a hard time explaining why doing Days to register property business in their city may be harder than Mandaluyong (22 days) 49 in neighboring locations. The good news Cost to register property is that sharing a national legal framework Mandaue (3.35% of property value) 64 facilitates the implementation of existing Cost to deal with construction permits good local practices within a country. Davao City (94.24% of income per capita) 67 National governments can also use Doing Cost to start a business Business data to monitor how efficiently General Santos (15.32% of income per capita) 95 the local branches of their agencies im- Days to start a business plement national regulations. Local gov- General Santos (22 days) 101 ernments can compare their regulations Number of procedures to register property with those of their neighbors. More than half of all the cities (8 procedures) 137 The example of Colombia is telling. Number of procedures to deal with construction permits Doing Business in Colombia 2008 identi- Taguig (25 procedures) 155 fied good practices in 13 cities, pointed Number of procedures to start a business out bottlenecks, and provided recom- 175 Cebu City and Manila (15 procedures) mendations for business reform. Two Source: Doing Business database. Data for Manila are from Doing Business 2011. years later, a new report tracked progress over time. The results were impressive. Another is the one-time assessment of pine city so that it’s faster than in Hong All 13 cities showed improvements in fees that Davao City and Valenzuela have Kong SAR (China) where it takes 67 at least 1 of the areas measured, thanks introduced. Yet another good practice is days. Adopting the property registration to local-level reforms. Similarly, Doing found in Pasay, where separate applica- practices found in Mandaluyong would Business in India 2009 showed that 9 out tions for zoning clearance and fire and allow our hypothetical city to register of 10 Indian states benchmarked for the mechanical permits are no longer neces- property in 22 days—thus ranking 49th second time had introduced business sary in cases where the building in which in registration speediness worldwide, reforms. As a result of these reforms, a new business plans to operate has them ahead of Indonesia and Malaysia. If reg- the average time to start up a company already. istration costs were cut to just 3.35% of dropped from 45 to 35 days and the time Concrete results can be obtained the property value, as seen in Mandaue, to obtain a building permit was reduced by replicating the best local practices. In our hypothetical city could rank 24th by 25 days, on average. The conclusion: business start-up, if a hypothetical Phil- globally for property-registration costs, what gets measured gets reformed. ippine city followed the example of Gen- alongside Peru. In terms of the number Reform-minded local governments eral Santos—where the Certificate Au- of procedures required for the 3 Doing can use Doing Business indicators to thorizing Registration10 is processed by Business indicators measured here, even motivate and sustain business reform the Bureau of Internal Revenue in 1 day, the best-performing cities in the Philip- efforts. There is no need to reinvent the registration with the Social Security Sys- pines lag behind their peers abroad. Cut- wheel: it is sufficient to start by intro- tem takes 1 day, and the print shop prints ting procedures remains the number one ducing the business reforms that have the receipts—in only 3 days—starting a challenge for future business reforms. been successfully implemented in other business could take just 22 days, similar The payoffs of business reforms can cities. In fact, cities in the Philippines to Chile. Start-up costs would come to be large. Higher rankings on the ease of have a lot to gain from adopting the best 15.3% of income per capita, comparable doing business are associated with more regulations and practices that already to Spain or Colombia. Regarding con- growth, more jobs, and a smaller infor- exist in the country (table 1.3). A good struction permits, following the proce- mal sector.11 Business reforms expand example is the one-stop shop in Manila, dures in Zamboanga City, where it takes the reach of regulation by bringing firms established through the Standard Busi- 46 days, would speed up the building of and employees into the formal sector. ness Registration and Permit Processes. a warehouse in this hypothetical Philip- 12 Doing Business in the philippines 2011 There, workers can have health insur- 8. Article X, Sec. 4, of the Philippine Con- stitution states that the President of the ance and pension benefits. Businesses Philippines shall exercise general super- pay taxes. Products are subject to quality 1. Asian Development Bank. 2005. Philip- vision over local governments. standards. In addition, formal firms have pines Country Governance Assessment. Manila: The Asian Development Bank. 9. Regional Autonomy Watch (Komite Pe- greater access to bank credit to fund ex- mantauan Pelaksanaan Otonomi Daerah, 2. Examples are the Comprehensive Agrar- KPPOD) and the Asia Foundation. 2008. pansions and courts to resolve disputes. ian Reform Program, decentralization, Local Economic Governance in Indone- Business reforms that reduce informal- democratization of the political system, sia: A Survey of Businesses in 243 Regen- ity and enforce property rights benefit electoral modernization, and overall cies/Cities in Indonesia, 2007. Prepared modernization of the economy. with support from the United States women especially, because they make up 3. The Nationwide Streamlining of Business Agency for International Development. a large share of the informal sector. Permits and Licensing Systems (BPLS) Jakarta. For the first time in 8 years, Doing Reform Project was launched on August 10. The Certificate Authorizing Registra- Business 2011 finds that economies in East 6, 2010. Marking the event was the sign- tion is issued by the Bureau of Internal ing of a Joint Department Administrative Revenue Commissioner or his authorized Asia and the Pacific were among the most Order on the roles of the Department of representative, attesting that the trans- active in making it easier for local firms to Trade and Industry and the Department fer and conveyance of land, buildings/ do business. Eighteen of 24 economies in of the Interior and Local Government in improvements or shares of stock arising the implementation of the project and of from the sale, barter or exchange has the region reformed business regulations a Memorandum of Agreement to provide been reported and the taxes due inclusive and institutions—more than in any other a mechanism to jointly address con- of the documentary stamp tax, have been year. These business reforms include the straints to local investment generation. paid. The BPLS project is an offshoot of the introduction of a one-stop shop in Manila 11. Djankov, Simeon, Caralee McLiesh and Standard Business Registration and Per- and improvements in its electronic cus- mit Processes project in Mandaluyong, Rita Ramalho. 2006. “Regulation and toms systems. The Philippines can look Manila, Marikina, and Quezon City, Growth.” Economics Letters 92(3): 395- which created traction for a nationwide 401. internally and to neighbors to learn from upscaling. 12. World Bank. 2007. Celebrating Reform positive reform experiences. 2007. Washington, DC: World Bank 4. Section 7 (a), Republic Act No. 9514. Studies from other countries sug- Group and United States Agency for In- 5. Section 9.0.4.1, Implementing Rules and ternational Development. gest that 85% of business reforms occur Regulations, Republic Act No. 9514. in the first 15 months of a new adminis- 6. The starting a business data do not in- tration.12 With the national presidential clude the amendment of the Fire Code elections having just taken place in May given the lack of consensus and final directive on the matter for business reg- 2010, this may be the best time for the istration. Philippines to increase the pace of busi- 7. In September 2009, the Department ness reforms. of Public Works and Highways issued NBCDO Memorandum Order Circular No. 2, in response to an injunction issued by the Court of Appeals in relation to Civil Case No. 05-112479 entitled “PSSE v. the DPWH Secretary.” The Memoran- dum Order Circular instructs the local building officials not to use the new building permit application forms until the case has been resolved by the courts. The case, which was filed by Philippine sanitary and civil engineers, questions the new rule in the Implementing Rules and Regulations giving architects the exclusive right to prepare, sign and seal building plans. 13 Starting a Table 2.1 Where is it easy to start a business—and where not? business Cost Paid-in minimum capital Procedures Time (% of income (% of income Rank City (number) (days) per capita) per capita) 1 General Santos 17 22 15.3 6 2 Davao City 17 27 17.0 6 3 Taguig 16 28 23.2 6 4 Valenzuela 16 32 20.4 6 5 Lapu-Lapu 17 31 20.0 6 6 Zamboanga City 20 28 16.9 6 7 Cebu City 15 31 24.7 6 8 Marikina 16 29 24.3 6 9 Mandaluyong 19 28 21.7 6 10 Pasay 17 32 22.2 6 11 Caloocan 16 28 33.3 6 12 Quezon City 16 36 21.4 6 The creation of new firms is closely 13 Mandaue 18 35 19.9 6 linked to economic development. New 14 Cagayan de Oro 17 32 27.8 6 15 Navotas 21 34 21.0 6 businesses are an indicator of entrepre- 16 Malabon 20 32 26.7 6 neurial activity:1 they offer new jobs,2 17 Manila 15 38 30.3 6 provide added value, and introduce in- 18 Batangas City 19 34 26.7 6 novations3 consequently stimulating 19 Parañaque 20 35 26.0 6 economic growth. It is, therefore, im- 20 Makati 19 33 36.0 6 perative to engender an environment 20 Iloilo City 20 56 22.3 6 favorable to the creation of new firms. 22 Muntinlupa 20 36 26.9 6 In the Philippines, this is particularly 23 Pasig 22 36 26.1 6 critical among small and medium-size 24 Las Piñas 21 35 34.7 6 enterprises which represented 99.6% of 25 San Juan 21 39 26.3 6 Note: The ease of starting a business rankings are the average of the city rankings on the procedures, time, cost and paid-in minimum all businesses registered in the country capital for starting a business. See Data notes for details. and employed 69.9% of the total labor Source: Doing Business database. Manila data is from Doing Business 2011. force in 2006. They contributed 32% of the country’s gross domestic product per capita. In 2008, it took on average 2 Philippine cities studied, starting a busi- that year.4 days longer and cost 2.6% more to do the ness is easier in General Santos, Davao New firms are created and job op- same. The average number of procedures City, and Taguig and more difficult in Las portunities multiply when starting a measured in the 2008 and 2011 reports Piñas and San Juan (table 2.1). business is made easier. Research shows has not changed; it remains more than that when registration becomes faster double the regional average of 8 proce- What is measured? and costs are cut, more firms enter the dures. To compare globally, Equatorial Doing Business in the Philippines 2011 measures market.5 For example, after Malaysia re- Guinea, the country that requires the all the necessary steps to enable a small or medium-size enterprise engaged in general duced its company registration fees as highest number of procedures for start- commercial or industrial activities to operate part of the government’s economic stim- ing a business among all 183 economies legally in 25 Philippine cities—including all per- ulus package, 320,000 new businesses measured by Doing Business 2011—re- mits, inscriptions, notifications, and inspections. The time and cost required to complete each were registered in 2009.6 In Mexico, the quires just 2 procedures more. In terms procedure under normal circumstances are cal- number of new firms increased by 5% of business start-up time, the Philippine culated, as well as the minimum paid-in capital and employment grew by 2.8% following average of 33 days is below East Asia and requirement. It is assumed that all information is readily available to the entrepreneur, that the introduction of a one-stop shop for the Pacific’s regional average of 39 days there has been no prior contact with officials, business registration.7 but more than 10 times that of world- and that all entities involved in the start-up Starting a business in a Philippine leader Singapore (3 days). The average process function without corruption. See the city takes an average of 18 procedures cost is higher than Indonesia’s 22% of detailed description of the standard case in the Data notes. and 33 days, and it costs 24.4% of income income per capita (figure 2.1). Among 14 Doing Business in the philippines 2011 The minimum paid-in capital re- FIGURE 2.1 25-city Starting a business in the Philippines compared internationally average quirement to start a business in the Range in the Philippines is PHP 5,000 (USD 107), Philippines MAKATI 36.0 equivalent to 6% of income per capita. PASIG 22 ILOILO CITY 56 While a minimum paid-in capital re- INDONESIA EAP quirement is intended to discourage shell 18 AVERAGE EAP 24.4 and fraudulent firms, companies can CEBU CITY, 15 AVERAGE INDONESIA MANILA simply withdraw it once the Securities 33 THAILAND MALAYSIA and Exchange Commission has issued MALAYSIA GENERAL 15.3 INDONESIA GENERAL 22 SANTOS the certificate of registration, defeating EAP AVERAGE SANTOS MALAYSIA the purpose of protecting investors in THAILAND the event of insolvency. International SINGAPORE THAILAND SINGAPORE SINGAPORE experience shows that minimum capital NEW ZEALAND NEW ZEALAND NEW ZEALAND requirements can be a barrier to entry Procedures Time Cost (number) (days) (% of income per capita) and can discourage companies from reg- Note: EAP denotes the East Asia and the Paci c region. istering. Economies such as Australia, Source: Doing Business database. Canada, France, Germany, Hong Kong SAR (China), Singapore, Thailand, the Muntinlupa requires a stamp of approval per capita). This city has higher sanitary FIGURE 2.2 United Kingdom, and the United States for the Certificate of Occupancy and inspection fees than other cities outside Number of procedures to start a business do not mandate any minimum capital. Zamboanga requires police clearance. Metro Manila and requires an occupa- Business registration can be grouped Number of These additional procedures add to the procedures tion permit, an oath fee, and a health into 5 major phases: (1) incorporating time itCebu takes City 2 a business. to start 9 certificate. 4 Firms15within Total Metro Manila Manila 3 9 3 15 and registering with the Securities and In addition to local requirements, pay more, because of higher business Caloocan 4 9 3 16 Exchange Commission; (2) obtaining the firms have Marikina to complete4 national level9 permit fees, but 3 are 16 also burdened with local business permit or mayor’s permit Quezon City The 4 requirements. Philippine National9 higher business 3 taxes 16 and garbage fees. to operate and other local government Internal TaguigRevenue Code 3 and Bureau 9of Comparing internationally, 4 16 however, av- offices; (3) obtaining clearances from Internal Valenzuela Revenue 3 policies require en- 9 erage costs of 4 starting 16 a business in 20 Cagayan de Oro 5 9 3 17 the Bureau of Fire Protection; (4) reg- trepreneurs to buy specialized account- out of the 25 Philippine cities are lower Davao City 5 9 3 17 istering to pay taxes with the Bureau ing books, General obtain authorization Santos 4 to print 9 than the East Asia 4 and Pacific 17 average of of Internal Revenue; and (5) register- receipts, and have the Lapu-Lapu 5 printed receipts 9 27.1% of income per 3 capita. 17 ing with the Social Security System and stamped Pasay by the 3Bureau of Internal 11 Since publication 3 17 Doing Business of Philippine Health Insurance Corporation Mandaue Revenue. It has been argued that hav- in the Philippines 2008, individual 6 9 3 18 cit- Batangas City 6 (PhilHealth). ing books and receipts registered and 10 3 ies have taken steps to ease19the busi- Makati 6 9 4 19 Differences in the procedures across stamped Mandaluyong minimizes tax 6 evasion. How- ness 9 start-up burden on 4 local firms 19 (table the 25 cities derive mainly from local ever, this is Iloilo Citynot necessarily 7 the case as 2.2). 10 3 20 requirements and practices (figure 2.2). companies Malabon can find alternative 7 means 9One major initiative 4 is the introduc- 20 Manila and Cebu City require the fewest Muntinlupa to hide revenue of accounting 6 from the tion 11 of the Standard Business 3 Registra- 20 Parañaque 7 9 4 20 number of procedures: 15. Las Piñas, Bureau of Internal Revenue. tion and Permit Process, a joint initiative Zamboanga City 6 11 3 20 Navotas, and San Juan each require 21 Across Las Piñas all 25 cities,7 General Santos of the League 10 of Cities of the4Philippines, 21 procedures to start a business, while is fastest with 22 days, while Navotas 8 Iloilo City the Department 9 of the Interior 4 and Local 21 Pasig requires 22—the most of any Phil- is slowest San Juanwith 56 days. 6 Obtaining a Government,11 and the Department 4 21 of ippine city measured. business permit Pasig and having 8 necessary re- Trade and10Industry. The Standard 4 Busi-22 Local requirements specific to some Local level ceipts and invoices printed are the main ness Registration and Permit Process was 1 National level Private 2 cities only include notarization of the causes delays (figure ofcommunity 1. Includes 2.3). tax certi cate and barangay clearance. launched in February 2009 to simplify 2. Private procedures required by law or regulation include notarizing articles of incorporation and treasurer's a davit, printing business permit application, sanitary Starting receipts business aand and invoices, buying specialis less books costly of account. and standardize business registration Source: Doing Business database. Data for Manila are from Doing Business 2011. and environmental permits, temporary outside Metro Manila. General Santos, and permit processes in Philippine cit- Fire Safety Inspection Certificate, and Zamboanga FIGURE 2.3 City, and Davao City in Min- ies. To achieve this, 5 major reforms were locational clearance. Cagayan de Oro, Time and danao the to are cost cities while Ca- Santos start a business—General cheapest is fastest and implemented: (1) cheapest the unified and single Lapu-Lapu and Mandaue require veri- gayan de Oro is the most expensive city business registration application form, General Santos 15.3 22 fication of real property tax payment. outside Metro Manila (27.8% of income Davao City 17.0 (2) the 27 strengthening of the Business Caloocan 28 33.3 Mandaluyong 21.7 28 Taguig 23.2 28 Zamboanga City 16.9 28 Time (days) (number) (days) (% of income per capita) Note: EAP denotes the East Asia and the Paci c region. Source: Doing Business database. starting a business 15 Permits and Licensing Office to coordi- FIGURE 2.2 Number of procedures to start a business nate the Standard Business Registration and Permit Process, (3) the one-time Number of procedures assessment for all business registration- Cebu City 2 9 4 15 Total related fees and charges, (4) the one-time Manila 3 9 3 15 Caloocan 4 9 3 16 payment at the City Treasurer’s Office, Marikina 4 9 3 16 and (5) the creation of a joint inspection Quezon City 4 9 3 16 coordination team to be composed of the Taguig 3 9 4 16 Business Permits Licensing Office, the Valenzuela 3 9 4 16 Planning and Development Office, the Cagayan de Oro 5 9 3 17 Davao City 5 9 3 17 Health/Sanitary Office, the Office of the General Santos 4 9 4 17 Building Official/City Engineer’s Office, Lapu-Lapu 5 9 3 17 the Waste Management Office/Environ- Pasay 3 11 3 17 ment Protection and Waste Management Mandaue 6 9 3 18 Office, and the Bureau of Fire Protection. Batangas City 6 10 3 19 Makati 6 9 4 19 The fifth and final reform is to be imple- Mandaluyong 6 9 4 19 mented as soon as issues surrounding Iloilo City 7 10 3 20 the new Fire Code are resolved. Malabon 7 9 4 20 The first 4 of these reforms were pi- Muntinlupa 6 11 3 20 loted in Mandaluyong, Manila, Marikina8, Parañaque 7 9 4 20 Zamboanga City 6 11 3 20 and Quezon City. Manila set up a physi- Las Piñas 7 10 4 21 cal one-stop shop, called the Business Navotas 8 9 4 21 One-Stop Shop (BOSS), where one-time San Juan 6 11 4 21 assessments are conducted and one-time Pasig 8 10 4 22 fees are paid. The Business Permits and Local level 1 National level Private 2 Licensing Office and the City Treasurer’s 1. Includes community tax certi cate and barangay clearance. 2. Private procedures required by law or regulation include notarizing articles of incorporation and treasurer's a davit, printing Office deputize staff to the Business One- receipts and invoices, and buying special books of account. Source: Doing Business database. Data for Manila are from Doing Business 2011. Stop Shop so that the entrepreneur does not have to leave the one-stop shop to FIGURE 2.3 complete these transactions. Manila also Time and Registry, cost to which toabecome start aims an online Santos business—General troducedis fastest and cheapest reforms inspired by the Stan- did away with an inspection from the single-access point to start a business. In dard Business Registration and Permit General Santos 15.3 22 Licensing Section of the mayor’s office. December 2006, the President directed Process, Caloocan eliminated the require- Davao City 17.0 27 As a result of this reform Manila cut the Department Caloocan of Trade and Industry to ment for 28 notarization 33.3 of forms. It is gen- business start-up time by 15 days (figure establish and Mandaluyong administer the Philippine erally 21.7 believed 28 that requiring applicants 2.4). Mandaluyong, the other city with Registry.9 This business portal to BusinessTaguig make 23.2 28 statements under oath serves as a one-stop shop, cut the time needed to Zamboanga is intended City to allow for online business 16.9 28 a disincentive to lying on theirTime business- (days) Marikina 24.3 29 obtain a business permit at the Business applications with all national government permit applications lest they be found Cebu City 24.7 31 Permits and Licensing Office from 3 days agencies involved—such as the Securities 20.0liable for perjury. Lapu-Lapu 31 However, Cost only Navotas to 1 day. and Exchange Cagayan de Oro Commission, the Bureau and General 27.8 32 Santos (%have of actually income filed per capita) Quezon City also initiated significant of Internal Revenue, the Social Security any cases Malabon 26.7 against 32 applicants who were reforms by way of the Standard Business System, and PasayPhilHealth. As of November 22.2 found to have 32 lied on their application Registration and Permit Processes which 2009,Valenzuela only 19 of 28 targeted agencies had 20.4 forms.11 32 Makati 33 36.0 were implemented after the cutoff date signed the memorandum of agreement Batangas City Davao 26.7 City 34 cut 7 procedures and for the study. However, within the period with the Department Navotas of Trade and In- 16 21.0 days in the issuance 34 of the business of the study, Quezon City eliminated 2 dustry Lasformalizing Piñas their commitment to permit, allowing 34.7 35 inspections and cer- requirements—notarization of the appli- the project. MandaueMany of the agencies have yet 19.9 tain requirements 35 to take place after the cation form for business registration and Parañaque to complete the interface between their 26.0 35 business is up and running, but before Muntinlupa 26.9 36 the Fire Safety Inspection Certificate. respective registration systems and the renewal of the business permit the fol- Pasig 26.1 36 The efforts in the 4 pilot cities are Philippine Business Registry.10 Quezon City lowing year. 21.4 36 consistent with the Philippine Business Other cities have independently in- Manila 30.3 in Cagayan Similarly, 38 de Oro, Ca- San Juan 26.3 39 Iloilo City 22.3 56 Source: Doing Business database. Data for Manila are from Doing Business 2011. Local level 1 National level Private 2 1. Includes community tax certi cate and barangay clearance. 2. Private procedures required by law or regulation include notarizing articles of incorporation and treasurer's a davit, printing receipts and invoices, and buying special books of account. 16 Doing Source: Doing Business Business thefor inData database. philippines 2011 Manila are from Doing Business 2011. FIGURE 2.3 on the fees that barangays can charge. Time and cost to start a business—General Santos is fastest and cheapest Pasay eliminated 2 procedures and General Santos 15.3 22 saved entrepreneurs PHP 956 (USD 21) Davao City 17.0 27 by no longer requiring firms to obtain a Caloocan 28 33.3 zoning clearance and electrical and me- Mandaluyong 21.7 28 chanical permits, if the new business op- Taguig 23.2 28 erates in a building whose owner already Zamboanga City 16.9 28 Time (days) obtained these clearances and permits. A Marikina 24.3 29 Cebu City 24.7 31 photocopy suffices. Lapu-Lapu 20.0 31 Cost Since 2008, 7 out of the 21 cit- (% of income per capita) Cagayan de Oro 27.8 32 ies measured used application forms Malabon 26.7 32 for the business permit that could be Pasay 22.2 32 Valenzuela 20.4 32 downloaded from the city government Makati 33 36.0 website. This study finds that 3 more Batangas City 26.7 34 cities introduced this service. In Davao Navotas 21.0 34 City, however, applicants must submit Las Piñas 34.7 35 the completed application form to the Mandaue 19.9 35 Parañaque 26.0 35 city’s Business Bureau for encoding and Muntinlupa 26.9 36 wait for the print-out of the encoded ap- Pasig 26.1 36 plication form, before they can proceed Quezon City 21.4 36 with the rest of the business permit ap- Manila 30.3 38 plication process. This thus cancels out San Juan 26.3 39 the potential time saved from having Iloilo City 22.3 56 the business application form available Source: Doing Business database. Data for Manila are from Doing Business 2011. online. Local governments offer good prac- loocan, Lapu-Lapu, Mandaue, Valenzu- The Local Government Code re- tices that their peers could emulate. The FIGURE 2.4 ela, Las Piñas, Malabon, and Taguig, quires Philippine entrepreneurs to ob- following recommended reforms could Manila one-stop shop cut business start-up time by 15 days Time (days) are conducted after the issu- inspections tain a clearance from their Before reform (the barangay facilitate business start-ups across the ance of the business permit, but before smallest political unit) before they can Philippines. the renewal of the permit the following 45 do business in the area.12 from TheTime cut barangay 53 days year. clearance has generally been a prerequi- to 38 What to reform Cebu City further streamlined site to getting a business permit, although After reform Simplify local business permit business 30 start-ups by integrating previ- the regulatory purpose for this require- requirements ously separate steps into a single proce- ment is not entirely clear.13 Because of dure. Cebu City uses the Department of the differences in barangay and commu- Local governments could follow the ex- Trade and Industry’s National Economic nity set-ups coupled with the 1 Procedure autonomy cut amples of Cebu City, Davao City, Ma- 15 Research and Business Action Center granted by the Local Government Code, nila, and Valenzuela, which significantly (NERBAC), which has been operational barangays within the same city may have streamlined their business registration in the city since May 2008. Notarized different procedures and fees for issuing processes by eliminating unnecessary 0 application forms are now submitted barangay clearances, which may encour- certificates, permits, and clearances pre- 1 8 16 to a city hall representative at Procedures NERBAC age firms to apply in those barangays viously required of low-risk businesses Note: Doing Business 2010 number of procedures for Manila was adjusted to re ect a data correction for the additional procedure Region 7 for verification, assessment, where conditions are more favorable. A to notarize the articles of incorporation. especially. Source:payment and Doing Businessof the business permit fees database. number of cities recognize the potential Another way to make registration and taxes. FIGURE 1.1 Cebu City inspections are delays created by the barangay clear- more efficient is to eliminate the inspec- 25-city Large variations conducted by a joint team, of in number procedures consisting of across ancecities and have taken measures to address average tions before a low-risk firm commences representatives from the Zoning Depart- this.14CHINA Cebu City allows entrepreneurs to business operations. Cebu City has a CEBU CITY, PASIG 36 ment, Office of the Building Official, secure the barangay clearance after the joint team of inspectors visiting busi- City Health Range in the Department, Bureau of Fire 30 issuance of the Business Tax Payment nesses after they receive their permit. Philippines and the mayor’s office. Protection, Certificate, while Taguig imposes limits The joint team classifies businesses by TAGUIG 25 PASIG 22 18 EAP AVERAGE CEBU CITY, 15 CHINA INDONESIA starting a business 17 Table 2.2 Nine out of the 20 cities benchmarked in 2008 made it easier to start a business Streamlined procedures to obtain business permit Adopted a unified Introduced a one-time Allowed application form and single application assessment and/or Reduced registration Eliminated notarization to be obtained form payment system requirements of application form from city website Caloocan 4 Cebu City 4 4 Davao City 4 4 4 Mandaluyong 4 4 Manila 4 4 4 Pasay 4 Quezon City 4 4 San Juan 4 Valenzuela 4 4 4 Note: Records business reforms that occurred between January 2008 and June 2010. Source: Doing Business database. Manila data is from Doing Business 2011. risk levels and, instead of inspecting all one of the goals of the Philippine Business Eliminate the registration of books and receipts at the businesses, focuses the inspections on Registry, it will take some time for it to be- Bureau of Internal Revenue those of higher risk to the public. come operational. Many of the agencies— most notably, the Security and Exchange The legalization of books and receipts Create a one-stop shop for Commission—are still in the process of is an outdated practice as firms increas- local- and national-level registration requirements developing or improving their respective ingly use electronic means of account- systems. The Department of Trade and ing. Among 183 economies measured by One-stop shops can reduce the number Industry’s NERBAC offices also have a long Doing Business, only 25 (less than 14%) of procedures, time, and cost to start a way to go to interface with all regional and require newly created limited liability business. In 2005, it took 11 procedures local permit/license issuing agencies. firms to obtain certified books or legalize and 78 days to start a business in Portu- For the Philippine Business Registry books.17 The other 86% no longer require gal. After the one-stop shop was set up, to succeed, it is critical that the con- this procedure. While the Philippines’ Portugal became one of the easiest places cerned agencies commit to this initiative. Bureau of Internal Revenue gives compa- in the world to start a business. It now Existing efforts of the various national nies the option to register their comput- requires only required 6 procedures and agencies to modernize their information erized accounting system, this procedure costs 6.5% of income per capita.15 Egypt and communication technology systems actually takes longer. Thus, even if an introduced a one-stop shop for business should be aligned with the Philippine entrepreneur intends to use a computer- start-up that brings together 30 govern- Business Registry system, starting with ized accounting system from the very ment agencies. In Indonesia, the intro- the full implementation for the single beginning, a new business in the Philip- duction of one-stop shops helped save registration process for the Social Secu- pines has to purchase the special books time: the process that used to require rity System and PhilHealth. of accounts and have these registered 12 procedures and 105 days in 2007/08 In the meantime, local governments with the Bureau of Internal Revenue, just requires just 9 procedures and 47 days can start consolidating procedures to to get up and running. in 2010.16 obtain business permits at their local In the Philippines, corporate registra- level. Cities can follow the Standard Busi- Improve transparency and foster the publication of tion (with the Securities and Exchange ness Registration and Permit Process business procedures Commission) could be integrated with tax standards now being adopted in Manila, registration (with the Bureau of Internal Mandaluyong and Quezon City, and One of the requirements of the Philip- Revenue) and with social services regis- Cebu City (through NERBAC) in taking pines’ Anti-Red Tape Act of 2007 is for tration (with the Social Security System steps toward unifying the procedures Citizen’s Charters to be displayed promi- and PhilHealth). Further reform could also into one-stop shops. nently in all government offices showing integrate local business permits with na- among others, the services provided by tional procedures. While a one-stop shop is that office and standards on quality and Iloilo City 22.3 56 Source: Doing Business database. Data for Manila are from Doing Business 2011. 18 Doing Business in the philippines 2011 FIGURE 2.4 8 Marikina has been delayed in implement- Manila one-stop shop cut business start-up time by 15 days ing the Standard Business Registration Time (days) Before reform and Permit Processes (SBRP) reforms be- cause the city was among the hardest hit Time cut by Typhoon Ketsana in September 2009 45 from 53 days to 38 and had to prioritize disaster relief and rehabilitation efforts. The city expects to After reform experience similar improvements when it 30 begins to implement the SBRP reforms. 9. The national government issued Execu- tive Order 587 on December 8, 2006. 1 Procedure cut 10. Philippine Information Agency Region 7. 15 11. This information was provided by local government officials during the Right of Reply meetings. See the detailed descrip- tion of Right of Reply meetings in the 0 Data notes. 1 8 16 12. Section 158 of the Local Government Procedures Note: Doing Business 2010 number of procedures for Manila was adjusted to re ect a data correction for the additional procedure Code provides that “no city or municipal- to notarize the articles of incorporation. ity may issue any license or permit for Source: Doing Business database. any business or activity unless a clearance is first obtained from the barangay where FIGURE 1.1 25-city such business or activity is located or timeliness Large variationsto be expected in number from ofthe agency across cities procedures average conducted. For such clearance, the baran- rendering these services. Pasay, Malabon, CHINA gay council may impose a reasonable fee.” CEBU CITY, PASIG 36 Quezon City, Lapu-Lapu, Caloocan, and 1. Fritsch, M., Mueller, P. 2004. “The Effects 13. The barangay clearance may be issued of New Firm Formation on Regional De- Zamboanga for a number of reasons: it is a tool for Range in the City are among the cities that 30 velopment over Time.” Paper presented generating revenue for the barangay. It already Philippines prominently display their Char- at the DRUID Summer Conference 2004 TAGUIG 25 on Industrial Dynamics, Innovation and is also a means to enable barangays to ters in city halls. Requiring local govern- verify the existence of the business and PASIG 22 Development, Elsinore, Denmark, June ments to implement a comprehensive and 14-16, the identities of the persons seeking to 18 EAP2004. operate such business. It is also a means strategic public awareness program—in- 2. Baptista, AVERAGE R., V. Escaria, and P. Madruga. CEBU CITY, 15 to determine whether the presence of MANILA the display cluding of their Charters and CHINA 2005.INDONESIA Entrepreneurship, Regional Devel- the business in the community should be work processes prominently INDONESIA at city hall opment and Job Creation:9Case for Portu- SINGAPORE opposed on grounds of health and sanita- EAP Discussion gal. NEW papers on 8 Entrepreneur- tion, public safety, peace and order, and and other government AVERAGEoffices—reduces ZEALAND ship, Growth and Public Policy No INDONESIA 0605, EAP AVERAGE environmental protection, among oth- legal uncertainty, minimizes SINGAPORE the need for Max Planck Institute for ResearchSINGAPORE CHINA into ers. Ateneo School of Government and NEW ZEALAND NEW ZEALAND fixers, and creates greater accountability. Economic Systems, Group Entrepreneur- International Finance Corporation. 2010. Starting Dealing with ship, Growth and Public Registering Policy. The Civil Servicea business Commission—whichconstruction is permits property “Regulatory Simplification Project Policy 3. Fritsch, M., Mueller, P. 2004. “The Effects Notes” pp. 26-27. responsible Note: EAP denotes for monitoring the East c region. and national Asia and the Paci Source: Doing Business database. of New Firm Formation on Regional De- 14. Under Art. X, Section 5 of the Philippine local government compliance with the velopment over Time.” Paper presented Constitution and the Local Government Anti-Red Tape Act—and the Department at the DRUID Summer Conference 2004 Code, cities have the authority to regulate of the Interior and Local Government— on Industrial Dynamics, Innovation and the barangays within their respective Development, Elsinore, Denmark, June areas of jurisdiction. which is responsible for supervising the 14-16, 2004. 15. Marques, Maria Manuel. 2007. “One-Stop conduct of local government units—will 4. Leaño, Rhodora. 2006. “SMEs in the Phil- Shopping in Portugal.” Smart Lessons in have to play a significant role in this ippines.” CACCI Journal 1. Advisory ServicesWashington, DC: The initiative. 5. Motta, Marialisa, Ana Maria Oviedo and World Bank Group. A related recommendation is to im- Massimiliano Santini. 2010. “An Open 16. Mahi, B. Raksaka. 2010. Improving Invest- Door for Firms: The Impact of Business ment Climate in the Era of Decentraliza- prove and update the Web sites of local Entry Reforms.” Washington, DC: World tion and Regional Autonomy. Faculty of governments and national government Bank Group. Economics, University of Indonesia. agencies in the Philippines. It is par- 6 Suruhanjaya Syarikat Malaysia (Com- 17. The list of economies with this require- ticularly important that requirements, panies Commission of Malaysia), press ment includes: Algeria, Angola, Argen- release, March 31, 2009. tina, Cape Verde, Chad, Colombia, Co- forms, and fees for specific services are 7 Bruhn, Miriam. 2008. “License to Sell: moros, Costa Rica, Djibouti, El Salvador, accurate and accessible online, and that The Effect of Business Registration France, Greece, Haiti, Honduras, Iraq, this information is consistent with actual Reform on Entrepreneurial Activity in Italy, Malaysia, Nicaragua, Paraguay, practice. Mexico.” Policy Research Working Paper Peru, Philippines, São Tomé and Princ- 4538. Washington, DC: World Bank. ipe, Spain, Turkey and West Bank and Gaza. 19 Dealing with Table 3.1 Where is it easy to deal with construction permits—and where not? construction Procedures Time Cost permits Rank 1 2 City Davao City Taguig (number) 27 25 (days) 57 85 (% income per capita) 94.2 795.3 3 General Santos 29 71 644.6 4 Zamboanga City 32 46 608.5 5 Marikina 28 91 785.2 6 Valenzuela 28 91 789.8 7 Cagayan de Oro 30 92 279.5 8 Mandaue 35 72 135.5 9 Makati 26 90 806.6 10 Las Piñas 27 102 796.9 11 Batangas City 27 86 944.8 11 Lapu-Lapu 34 88 529.3 13 Manila 26 169 778.5 Finding the right balance between safety 14 Cebu City 36 92 126.4 and efficiency is important in a sector like 15 Navotas 28 107 802.6 construction. Smart regulations ensure 16 Caloocan 31 109 791.8 both public safety and revenues for the 17 Muntinlupa 31 108 802.1 government, while making the process 18 Parañaque 30 107 827.3 easier for entrepreneurs. A complex and 19 Pasay 31 121 798.4 confusing regulatory framework hurts 20 Iloilo City 29 109 1,035.3 21 Mandaluyong 33 121 794.9 businesses and can be a seedbed for 22 Malabon 32 112 815.3 corruption. Instead of promoting public 22 Quezon City 33 120 804.4 safety, overly rigid rules and regulations 24 Pasig 36 148 790.8 may push construction into the informal 25 San Juan 33 144 804.7 economy, undermining the intent. Ac- Note: The ease of dealing with construction permits rankings are the average of the city rankings on the procedures, time, and cost to deal with construction permits. See Data notes for details. cording to a recent survey in countries Source: Doing Business database. Manila data is from Doing Business 2011. that belong to the Asia Pacific Economic Cooperation, the time and procedures for dealing with construction permits is the measured in the Philippines, the builder “biggest regulatory impediment” to doing needs to obtain approvals from the mu- What is measured? business.1 The World Bank Enterprise nicipality as well as from the barangays. Doing Business in the Philippines 2011 looks Surveys also found that firms perceive Adding to the high number of proce- at licensing in the construction industry as higher levels of corruption in countries an example of licensing regulations that busi- FIGURE 3.1 FIGUR nesses face. It measures the procedures, time, where dealing with construction permits Di culty in dealing with construction Some and cost to build a standardized commercial is more difficult (figure 3.1).2 permits is associated with corruption Range warehouse, hook it up to basic utilities, and In the Philippines, dealing with con- Philip Share of rms that expect to give gifts formally register it. These procedures include in exchange for construction permits (%) CEBU submitting project documents (building struction permits requires more pro- PASIG plans and site maps, for example) to the au- cedures and is more expensive than in 30 thorities, obtaining all necessary licenses and neighboring countries. Across the 25 permits, completing all required notifications, 20 TAGU and receiving necessary inspections. The cities included in Doing Business in the time and cost to complete each procedure Philippines 2011, the process requires 10 under normal circumstances are calculated. an average of 30 steps and costs 687.3% All official fees associated with legally completing the procedures are included. of income per capita. To compare, in 0 The survey assumes that the entrepreneur the East Asia and the Pacific region, Least Most di cult di cult is aware of all existing regulations and does an average of 19 procedures and a cost Economies ranked by ease of dealing not use an intermediary to complete the that is just 169% of income per capita with construction permits, quintiles procedures unless required to do so by law. See the detailed description of the standard are required. For example, to obtain a Note: Relationships are signi cant at the 1% level and remain signi cant when controlling for income per capita. case in the Data notes. locational clearance in 24 of the 25 cities Source: Doing Business database; World Bank Enterprise Note: EA Survey database. Source: FIGURE 3.3 20 Doing Business in the philippines 2011 FIGURE 3.2 25-city which is the city government’s legislative on Some cities have more e cient construction permit approval processes average on Range in the body. In Iloilo City, its Zoning Board has CHINA Philippines to approve the project, while in Mandaue ILOILO CITY 1,035.3 CHINA CEBU CITY, 36 and Cebu City the mayor’s office has to PASIG MALAYSIA give the clearance. 30 In two cities, Pasay and Man- TAGUIG 25 MALAYSIA 687.3 daluyong, local firms must secure an EAP EAP MANILA 169 AVERAGE CHINA environmental compliance certificate AVERAGE THAILAND from the Department of Environment SINGAPORE 102 and Natural Resources. Pasay requires THAILAND DENMARK it of all construction projects in view of Most NEW ZEALAND EAP i cult NEW ZEALAND AVERAGE DENMARK 46 ZAMBOANGA DENMARK the city’s environmentally critical status ling SINGAPORE DAVAO CITY 94.2 tiles NEW ZEALAND SINGAPORE close to Laguna Lake. Mandaluyong is Procedures Time Cost THAILAND ain MALAYSIA strictly implementing the Department (number) (days) (% of Note: EAP denotes the East Asia and the Paci c region. income per capita) of Environment and Natural Resources’ Source: Doing Business database. requirement to present an environmen- dures are the inspections conducted by 36 steps (table 3.1). tal compliance certificate or a “certifi- the Office of the Building Official and the During pre-construction, the en- cate of non-coverage” i.e., a document City Assessor’s Office. Also, multiple no- trepreneur has to obtain preparatory to certify that the building does not ing pre- and post-construction tarizations phasesTaguig has the are required. documents—such as the certified true require an environmental approval—for fewest requirements at 25, comparable copy of the land title and of the tax all construction projects within its ju- 11 Total with Malaysia (figure 3.2). declaration of real property, the baran- risdiction, regardless of their scope and 9 Meanwhile, 7 25 average time it takes the gay clearance, the lot plan with the site risk. Simple, low-risk buildings should 15 obtain a construction to 25 permit at 102 map from the geodetic engineer, the have easier compliance rules than com- 9 7 26 days is shorter in the Philippines than locational clearance, the building permit plex, high-risk projects in order to strike 9 7 26 11 the regional average 7 27 167.2 days. This of and ancillary permits, and the fire safety a balance between safety and efficiency. 11 is because many 7 requirements 27 can be evaluation clearance. All cities, except Some issues regarding building per- 9 completed relatively 7 quickly. 27 Zamboanga Taguig, Makati, Batangas City, Davao mit forms have yet to be clearly decided. 9 City, fastest among 7 the 2825 Philippine cit- City, Iloilo City, and Quezon City have Under the 2004 Revised Implementing 9 ies, requires just 46 days28 7 to deal with con- more procedural requirements dur- Rules and Regulations of the National 9 7 28 5 struction 5 permits. 8 The 28 only economies ing pre-construction than in any other Building Code, a building permit appli- 1 measured 9 by Doing 7 Business 29 that require phase (figure 3.3). cation form must be notarized. However, 12 fewer days are Singapore 7 29(25 days); the In most cities, local firms have to because of a pending case in the Court 1 Republic 10 of Korea (34 7 days); 30 the United obtain a certified true copy of the tax of Appeals questioning the legality of 2 7 7 30 States (40 days) and Bahrain (43 days). declaration of real property, as well as the 2004 rules, the Department of Public 2 10 7 31 2 There 9 are 4 major 7 stages: 31 pre-con- a tax clearance from the City Treasur- Works and Highways issued a memo- 2 struction, 11 construction, 7 post-construc- 31 er’s Office. In Batangas City, Davao City, randum circular ordering the Office of 1 tion,12and utilities connections. 7 32 The no- Iloilo City, Makati, Quezon City, and the Building Official not to use the new 1 13 variations across table 7 cities 32 required Taguig the process is simpler: a pho- forms until the matter is resolved by the 2 12 7 33 are due to varying local practices. Some tocopy can be submitted instead. The high court. Nevertheless, 9 of the 25 cit- 15 7 33 2 cities impose 12 additional requirements 7 33 on notarization of the application form for ies use the new forms, and thus require top 2 of the 9standard legal requirements 7 34 the locational clearance, a practice com- notarization. These cities are Caloocan, prescribed 2 by 9 the National 7 Building 35 mon to most cities, is not required in General Santos, Malabon, Marikina, Code. 2 3 In others, 9 for example, 7in Taguig, 36 Marikina, Muntinlupa, Navotas, Para- Muntinlupa, Navotas, Valenzuela, Zam- 2 14 7 36 where there is a concerted effort under- ñaque, Taguig, and Valenzuela. A few cit- boanga City, and Manila. The other cities During way to share and coordinateUtilities Post-Construction information ies require additional approvals, adding continue with the old application forms, internally among a number of differ- m Doing Business 2011. to the burden borne by the entrepreneur. saving firms 1 procedure. ent offices: here, an entrepreneur has to San Juan is the only Philippine city that During construction, random in- complete just 25 procedures. In Pasig, requires project approval by the sang- spections are conducted by the Bureau owest in Davao City the same entrepreneur has to complete guniang panglungsod, or city council, of Fire Protection and by the Office of signi cant when controlling for income per capita. (number) (days) (% of Source: Doing Business database; World Bank Enterprise Note: EAP denotes the East Asia and the Paci c region. income per capita) Survey database. Source: Doing Business database. dealing with construction permits 21 FIGURE 3.3 with the Bureau of Fire Protection in Majority of permit requirements during pre- and post-construction phases order to be certified. The report itself Number of procedures requires numerous documents: pre-con- Singapore 7 2 2 11 Total struction plans/specifications; the design Taguig 7 2 9 7 25 criteria and calculations; a compilation Malaysia 3 7 15 25 of all approved submittals, tests and ac- Makati 8 2 9 7 26 Manila 9 1 9 7 26 ceptance forms of all fire protection and Batangas City 8 1 11 7 27 life safety features during construction; Davao City 7 2 11 7 27 and a compilation of all maintenance Las Piñas 10 1 9 7 27 and testing records kept by the building Marikina 10 2 9 7 28 engineering and maintenance depart- Navotas 10 2 9 7 28 Valenzuela 10 2 9 7 28 ments post-construction. The Fire and Taiwan (China) 10 5 5 8 28 Life Safety Assessment Report could be General Santos 12 1 9 7 29 helpful in improving safety standards Iloilo City 10 12 7 29 of complex and high-risk buildings, but Cagayan de Oro 12 1 10 7 30 it may represent an additional burden Parañaque 14 2 7 7 30 Caloocan 12 2 10 7 31 for simple or low-risk structures—such Muntinlupa 13 2 9 7 31 as a small storage warehouse for non- Pasay 11 2 11 7 31 hazardous goods. Malabon 12 1 12 7 32 Cities also vary in terms of the num- Zamboanga City 11 1 13 7 32 ber of days firms need to deal with con- Mandaluyong 12 2 12 7 33 Quezon City 9 2 15 7 33 struction permits. While it takes just 46 San Juan 12 2 12 7 33 days to deal with construction permits Lapu-lapu 16 2 9 7 34 for a warehouse in Zamboanga City, the Mandaue 17 2 9 7 35 same project in Manila takes 169 days. Cebu City 18 2 9 7 36 Zamboanga City has a relatively fast Pasig 13 2 14 7 36 building permit and electricity connec- Pre-construction During Post-Construction Utilities tion process. Davao City, General Santos, Source: Doing Business database. Data for Manila are from Doing Business 2011. and Mandaue take 57, 71, and 72 days, respectively. Meanwhile, firms in cities in FIGURE 3.4 Cost Building the Official. These to obtain construction offer in Davao maylowest permits requirements City also vary across cities. Metro Manila may have to wait for more opportunities for bribes and waste re- In all cities except Caloocan, Malabon, (% of income per capita) than 100 days. Time needed to secure sources. The authorities 94.2 lose out, because Quezon City, and San Juan, the inspec- water and electricity connections cause Davao City cannot they Cebu City 126.4 monitor the systematically tions for the certificate of occupancy and most of the local variations here. structural Mandaue soundness of buildings, 135.5 and certificate of final electrical inspection While construction permits are businesses lose time and money every take place simultaneously. In these cit- Cagayan de Oro 279.5 generally expensive in the average Phil- timeLapu-Lapu they have to stop construction to ies, 529.3 the application for the certificate of ippine city, there are exceptions (figure Zamboanga City 608.5 deal with an inspector. Risk-based as- occupancy includes a form for the cer- 3.4). Davao City, where dealing with con- General Santos 644.6 sessments Manilaand scheduled inspections at 778.5 inspection. The tificate of final electrical struction permits costs 94.2% of aver- critical phases of the construction pro- entrepreneur receives Marikina 785.2one joint inspec- age income per capita, is less expensive, make the process more efficient and tion. However, in Caloocan, cessValenzuela 789.8 Malabon, relative to income, than Taiwan (China), transparent.Pasig Iloilo City stands out as the Quezon City, and San 790.8Juan, a separate Canada, or Republic of Korea. Within the 791.8 only Caloocan city that does not require inspec- certificate of final electrical inspection Philippines, the cost is driven by the lo- Mandaluyong 794.9 tions during Taguig construction. is a prerequisite for the certificate of 795.3 cational clearances, building permits, fire After construction, Las Piñas the remaining occupancy. 796.9 safety evaluation clearances, certificates steps are to obtain the fire safety inspec- Pasay The new Fire Code 798.4 in the Phil- of occupancy, and utility connections. Muntinlupa tion certificate, the certificate of occu- ippines imposes additional 802.1 compliance Of these, building permit fees and utility Navotas 802.6 pancy, the certificate of final electrical requirements—such as the Fire and Life connections take up the biggest share. Quezon City 804.4 inspection, San Juan and the new tax declaration Safety Assessment Report. 804.7 Architects According to the National Building Code, from the City Makati Assessor’s Office. These must now undergo 40 hours 806.6 of training the cost of a building permit is PHP 30 Malabon 815.3 Parañaque 827.3 Batangas City 944.8 Iloilo City 1,035.3 Pasig 13 2 14 7 36 Pre-construction During Post-Construction Utilities 22 Doing Business in the philippines 2011 Source: Doing Business database. Data for Manila are from Doing Business 2011. FIGURE 3.4 Lapu (PHP 740,000/USD 15,883). It is Cost to obtain construction permits lowest in Davao City cheapest in Cebu City, Davao City and (% of income per capita) Mandaue, as the electric utilities in Davao City 94.2 these 3 locations have a policy of re- Cebu City 126.4 funding the deposit within 1 year (figure Mandaue 135.5 Cagayan de Oro 279.5 3.5).8 Electricity connection in Metro Lapu-Lapu 529.3 Manila cities is more expensive due Zamboanga City 608.5 to the amended Distribution Services General Santos 644.6 Open Access Rules, which took effect Manila 778.5 in April 2010. Pursuant to this amend- Marikina 785.2 789.8 ment, the Manila Electric Company Valenzuela Pasig 790.8 (Meralco) has discontinued waiving Caloocan 791.8 payment. Applicants are now required Mandaluyong 794.9 to pay the project cost of PHP 420,100 Taguig 795.3 (USD 9,017) and a service deposit of Las Piñas 796.9 PHP 144,360 (USD 3,098). Because an Pasay 798.4 Muntinlupa 802.1 electricity connection can account for Navotas 802.6 up to almost 90% of total construction Quezon City 804.4 permit costs in some cities, the total San Juan 804.7 cost of dealing with construction per- Makati 806.6 mits is lowest in locations with cheap Malabon 815.3 Parañaque 827.3 electricity connections, like Davao City Batangas City 944.8 (equivalent to 94.2% of income per Iloilo City 1,035.3 capita). This compares favorably to the Source: Doing Business database. Data for Manila are from Doing Business 2011. 1,035.3% of income per capita firms in Iloilo City have to pay (figure 3.5). The per square meter4—that is, PHP 39,018 ies except Cagayan de Oro, Davao City, high cost of electricity and of obtaining (USD FIGURE 3.5837) for the case study analyzed Marikina, Parañaque, and Zamboanga an electricity connection offers a major In most by Doing cities, electricity . Thisconnections Business explains why represent 21 the biggest City sharethe of total have taken cost to mean provision opportunity for business reforms. Cost of the(PHP25 cities charge the same amount thousands) 10% of building permit fees. Cagayan de Since Doing Business in the Philip- for the Cebu building City 0 permit. Batangas City, Oro, Davao City, and Marikina have in- pines 2008, 4 of the 20 cities reformed in Caloocan, Cebu City, and Davao City Mandaue 0 terpreted it as 10% of total fees paid for at least 1 area concerning construction chargeDavao PHPCity 3,895 0 (USD 84) less because the certificate of occupancy. Parañaque’s permits (table 3.2). Davao City stands Cagayan De Oro 130 they use a different fee structure.5 Fire Safety Inspection Certificate fee out as the most improved. In Davao City, Lapu-Lapu 330 The cost Zamboanga City of the Fire Safety Inspec- 411 of 10% of the combined build- consists the barangay clearance and certified true tion Santos varies among cities. The Certificate General 431 and certificate of occupancy ing permit copy of a land title are no longer required. newBatangas Fire Code City6 and its 2009 Implement- fees. Zamboanga 564 City, which charges The presentation of an original land title Metro Manila cities ing Rules and Regulations prescribe about PHP 10,000564 (USD 215) more than will suffice. City hall in Davao City asked Iloilo City 765 the fee for the Fire Safety Inspection the other cities, uses an entirely differ- the Bureau of Fire Protection to station Certificate equal “10% of all fees to database. Source: Doing Business ent formula based on square footage officers at city hall to facilitate obtain- charged by the Building Official, or of the construction project, which does ing the fire safety evaluation clearances, by the Local Government, or by other not have its basis either in the new or thereby making it more convenient for Government agencies concerned with the old Fire Code. firms to obtain construction permits. the granting of pertinent permits or But the most significant cost is ob- In addition, the Davao Light and Power licenses.” This provision was taken word taining an electricity connection, which Company changed its policy on reim- for word from the Implementing Rules averages almost 90% of total construc- bursing the cost of transformers to local 7 and Regulations of the old Fire Code. tion permit costs and varies across cities. firms. Previously, the cost was only reim- It would appear that this provision has The firm must pay upfront for the costs bursed upon contract termination, but been left vague to give local government of the transformers and installation. now the power company reimburses the units some discretion. Thus, most cit- It is most expensive in Lapu- amount after just 1 year. The Visayan Batangas City 944.8 Iloilo City 1,035.3 Source: Doing Business database. Data for Manila are from Doing Business 2011. dealing with construction permits 23 What to reform FIGURE 3.5 In most cities, electricity connections represent the biggest share of total cost Introduce risk-based approvals Cost (PHP thousands) Not every building project should be Cebu City 0 Mandaue 0 treated equally. Complex and risky struc- Davao City 0 tures—like airports, skyscrapers, chemi- Cagayan De Oro 130 cal plants, or any large building—should Lapu-Lapu 330 have stricter standards for security and Zamboanga City 411 control. Many inspections, clearances, General Santos 431 and consultations should be in place Batangas City 564 Metro Manila cities 564 to guarantee public safety. At the same Iloilo City 765 time, authorities ought to take the time to assess the risk of different projects Source: Doing Business database. and develop risk-based rules to deal with clearances and approvals in a differen- Electric Company (VECO) in Cebu and Electricity connections have become tiated manner. An international good Mandaue also lowered electricity con- more expensive in Metro Manila since practice is to categorize buildings de- nection costs. 2007. An amendment to the Distribution pending on their environmental impact Parañaque also improved in terms Services Open Access Rules issued by the and, according to these characteristics, of dealing with construction permits. Energy Regulatory Commission changed environmental compliance requirements The city no longer requires a separate the cost structure. Before the new regula- should vary. Simple low-risk buildings visit to the mayor’s office for the mayor’s tion was enforced, connection costs were should have easier compliance rules. clearance as a prerequisite for the loca- waived or refunded within a year by Smart regulations help ensure tional clearance. This reform saves the Meralco. With the current rules, every safety while encouraging efficiency. If entrepreneur 1 procedure. connection needs to be fully paid. cities have the same regulations for every type of building, they run the risk of Table 3.2 Four out of 20 cities benchmarked in 2008 made it easier to deal with of not meeting demand due to a lack construction permits of resources—number of inspectors, re- Reduced Added procedure for payment Changed connection cost requirements of fire clearance fee refund process viewers, general staff, and so forth—or Caloocan jeopardizing safety in the long run be- 7 Cebu City 4 cause they cannot pay proper attention Davao City 4 4 to complex buildings. Las Piñas 7 Countries like Colombia have re- Makati 7 cently introduced reforms to classify Malabon 7 buildings according to their risk. Ac- Mandaluyong 7 cording to Colombian law, the building Mandaue 4 analyzed in the Doing Business case study Manila 7 is a “medium-low risk” structure. This Marikina 7 7 classification allows builders of such a Navotas 7 structure to enjoy a faster reviewing ap- Parañaque 4 7 Pasay proval process, compared with riskier 7 Pasig 7 projects, and they can avoid the hiring Quezon City 7 of special consultants for environmental, San Juan 7 fire safety, and traffic studies. Build- Taguig 7 ing authorities also save time reviewing Valenzuela 7 7 studies or sending inspectors to verify 4 Doing Business reform making it easier to do business them and can concentrate resources on 7 Doing Business reform making it more difficult to do business1 more complex projects. 1. The electricity company in Metro Manila (Meralco) discontinued the practice of waiving payment of the project cost as per amended Distribution Services Open Access Rule. Rules like the Fire and Life Safety As- Note: Reforms occurred between January 2008 and June 2010. sessment Report or sanitary inspections Source: Doing Business database. Manila data are from Doing Business 2011. 24 Doing Business in the philippines 2011 should be revised in the Philippines in a separate permanent office for the local 2. http://www.enterprisesurveys.org/ order to adjust to the risk factors and building official.9 3. Presidential Decree No. 1096, as amended, otherwise known as the Na- enforcement constraints of every city. tional Building Code of the Philippines. Increase transparency by publishing helpful information 4. The computation is PHP23 per square Improve the efficiency of meter plus PHP7 per square meter to ac- inspections Dealing with construction permits can count for ancillary costs such as electri- Inspections can be more efficient by be made easier with step-by-step guides cal, mechanical and plumbing fees. changing the current practice of con- to help builders better understand the 5. The 4 cities have taken their fee structure from the Department of Public Works ducting random inspections. One way process. The Citizen’s Charter is a signifi- and Highways (DPWH), albeit from a of doing this is to perform risk-based cant step toward this. Cities have made newer DPWH memorandum circular assessments or schedule inspections at the effort to display flowcharts from the that erroneously dropped one of the zeros in the prescribed fee structure for critical phases of the construction pro- Charter in prominent places at their city computing the building permit fee. The cess. Countries with a system of risk- halls, on their websites, or in brochures. DPWH is addressing this error to rectify based inspections have fewer inspections, They need, however, to make sure that the inconsistencies in the computation of building permit fees used by the cities. on average, than countries with random the information is consistently accurate. 6. Republic Act No. 9514 (2008), otherwise inspections. Another way to improve ef- A major driver of variations in time, known as the Revised Fire Code of the ficiency is for different offices to conduct cost, and number of procedures related Philippines. joint, simultaneous inspections for dif- to construction permits is the uncer- 7. Presidential Decree No. 1185. ferent requirements. Several Philippine tainty surrounding the 2004 Revised Im- 8. The transformer cost changes annually cities are already engaged in this practice, plementing Rules and Regulations of the due to copper price fluctuation. Informa- tion provided by Jaime Jose Y. Aboitiz, when it comes to inspections for the National Building Code. While waiting Executive Vice-President and Chief Op- certificate of occupancy and certificate for the resolution of the case pending in erating Officer-AboitizPower Distribution of electrical inspection. Joint inspections the Court of Appeals that questions the Group. AboitizPower owns and operates Visayan Electric Company and Davao require better coordination among the of- legality of the Implementing Rules and Light and Power Company. fices that conduct inspections—the City Regulations revisions, local governments 9. Section 477 of the Local Government Planning and Development Office, the have gone ahead and made decisions on Code states that the City Engineer shall Office of the Building Official, and the unresolved issues. These decisions in- also act as the Local Building Official. Bureau of Fire Protection. Authorities in clude the use of old versus new building Department of Public Works and High- ways Department Order No. 110 Series Hong Kong SAR (China), China, and Sin- permit application forms, computation of 1993 also devolved the enforcement of gapore already follow this practice. of building permit fees, changes in fee certain aspects of the Building Code to The other face of efficiency is, ca- structures, computation of occupancy the local governments. pacity. There must be an adequate num- fees, and required signatures in building ber of building officials who are prop- plans. erly trained to enforce National Building Clarity on the rules and fees to be Code standards, and whose supervision paid saves time for firms and helps pre- and reporting lines are clear. In most vent irregularities. In the Indonesian city cities, the building official is also the city of Makassar, for example, local laws give engineer. This poses a number of prob- a clear indication of how fees are calcu- lems. The building official is responsible lated and which documents are required. for enforcing the Building Code, report- A list with the formula to calculate the ing to the secretary of public works building permit fee and the documents and highways. The city engineer, on the needed is prominently posted at the City other hand, is also responsible for over- Planning and Development Office. seeing civil works on behalf of the local government and thus reports to the city mayor, posing a potential conflict of in- terest. The combined workload may also 1. Singapore Business Federation. 2009. “Key Findings from ABAC ‘Ease of Doing be a key reason for the delayed approval Business’ Survey.” Presentation at the of building permits. The Local Govern- Singapore Business Federation sessions, ment Code should be amended to create “Removing barriers for business growth in APEC,” Singapore, July 9, 2009. 25 Registering Table 4.1 Where is it easy to register a property—and where not? property Procedures Time Cost (% of property Rank City (number) (days) value) 1 Valenzuela 8 30 3.5 2 Navotas 8 32 3.5 3 Pasig 8 30 4.6 4 Cebu City 9 24 3.6 5 Las Piñas 8 30 4.7 6 Caloocan 8 33 3.8 6 Taguig 8 32 4.6 8 Mandaue 8 63 3.3 9 Manila 8 33 4.3 10 Marikina 8 32 4.8 11 Batangas City 8 48 3.8 12 San Juan 9 26 4.6 13 Lapu-Lapu 8 64 3.8 Land is a fundamental economic asset 13 Pasay 8 31 4.9 in every society. Poorly administered 15 Malabon 9 32 3.6 property systems or not clearly defined 16 Parañaque 9 27 4.6 property rights prevent land from being 17 Mandaluyong 9 22 4.8 turned into productive capital. An ef- 17 Quezon City 8 39 4.8 19 Muntinlupa 9 27 4.8 ficient property registration system has 20 Davao City 8 36 4.9 real benefits. When there is a formal 21 Makati 9 32 4.7 deed, entrepreneurs can use their im- 22 Iloilo City 8 40 4.9 movable assets to obtain credit and grow 23 Zamboanga City 9 26 5.8 their businesses. A study in Peru1 sug- 24 Cagayan De Oro 8 81 5.3 gests that property titles are associated 25 General Santos 9 43 5.6 with a 10% increase in loan approval Note: Rankings are the average of the city rankings on the procedures, time and cost to register property. See Data notes for details. Source: Doing Business database. Manila data is from Doing Business 2011. rates for construction materials. Indeed, banks in countries lacking adequate creditor information prefer land titles Making property registration easy procedures varies only slightly between as collateral, because land is difficult to allows entrepreneurs to focus on their cities, the time and cost vary consider- move or hide. In the Philippines, 70% of businesses. Worldwide, it is easiest to ably. Registering property is easier in commercial bank loans to firms are se- register property in Saudi Arabia, where Valenzuela, where it requires 8 proce- cured by land.2 Property titling can also the entire process can be completed with dures that take 30 days and cost 3.5% of significantly increase land values and 2 procedures, in 2 days, at zero cost. the property value. It is more difficult in investment.3 Moreover, property regis- Some countries within the East Asia and General Santos, where it requires 9 pro- tration benefits governments, because the Pacific region are not far behind. In more properties registered translate into Thailand, it also takes 2 procedures and What is measured? greater tax revenues. 2 days, and in New Zealand, it costs just Doing Business in the Philippines 2011 records the sequence of procedures, time, and costs Across countries, firms of all sizes 0.1% of the property value to transfer necessary for a business to purchase property report that their property rights are better a property from one domestic private from another business and to transfer the protected in countries with more efficient company to another. property title to the buyer’s name, so that the property registration. But the relationship Registering property in the Philip- purchasing business can use it as guaran- tee in taking out loans or sell it to another is stronger for small firms.4 Large busi- pines is not quite as simple, efficient, firm. Every required procedure is included, nesses tend to have ample resources to pro- and affordable as that. It takes 8 to 9 whether it is the responsibility of the seller, tect their property rights. They can afford procedures and an average of 37 days to the buyer, or a third party on their behalf. It is assumed that the property is registered and to invest in security systems and take other transfer an ownership title, while the av- free of dispute. See the detailed description measures to defend their property. But erage cost comes to 4.5% of the property of the standard case in the Data notes. small-scale entrepreneurs may not. value (figure 4.1). While the number of 26 Doing Business in the philippines 2011 FIGURE 4.1 25-city charge a transfer tax of 0.5% of the prop- Registering property in the Philippines compared internationally average erty value and then levy an additional Range in the PHP 4,566 (USD 98) community tax on ZAMBOANGA 5.8 Philippines EAP 9 CITIES 9 CAGAYAN AVERAGE property sales. DE ORO 81 4.5 Under Philippine law, notarization 16 CITIES 8 is the official act to convert a private document that is binding only for the MALAYSIA MANDAUE 3.3 MALAYSIA parties directly involved, into a public EAP AVERAGE DENMARK transaction that is binding for third par- 37 DENMARK ties. Notaries charge between 1% and SINGAPORE NEW ZEALAND 22 3% of the property value to notarize a THAILAND THAILAND MANDALUYONG EAP AVERAGE deed of sale. Notaries in cities outside SINGAPORE SINGAPORE MALAYSIA DENMARK Metro Manila charge, on average, 1% NEW ZEALAND Procedures Time THAILAND Cost NEW ZEALAND while many of those within Metro Ma- (number) (days) (% of property value) nila charge from 2% to 3% of the prop- Note: EAP denotes the East Asia and the Paci c region. Source: Doing Business database. erty value. Although there are guidelines on the rates that may be charged on cedures that take 43 days and cost 5.6% mainly to the efficiency of local offices legal fees, including notarization, issued 4.2 property of the FIGURE value (table 4.1). of national agencies—namely, the local by chapters of the Integrated Bar of the Variation in time and Registering cost to can property register property Register of Deeds and regional district be grouped Philippines, these guidelines are no more into 3 major stages: (1) preparing the offices of the Bureau of Internal Revenue. than recommendations. Mandaluyong 4.8 22 deed of sale Cebu City and related 3.6 documents; 24(2) Securing registration with the Register of Some positive business reforms im- San Juan tax-related prerequisites, completing 4.6 26 Deeds is generally the longest procedure: prove the transfer of property in the which involve Zamboanga City procedures at both 5.8 the 26 it takes as long as 30 days in Lapu-Lapu Philippines. Six of the 20 cities bench- Muntinlupa 4.8 27 Bureau of Internal Revenue and city gov- and Mandaue and up to 60 days in Ca- marked for the second time show an im- Parañaque 4.6 27 ernment offices; and (3) registering with gayan de Oro. Time (days) provement in this area (table 4.2). Over Las Piñas 4.7 30 the Register Pasig of Deeds. Property4.6 registra- 30 Another delay is obtaining the Cer- the past 2 years, the Land Registration tion is managed Valenzuela at the 3.5 national level by 30 tificate Authorizing Registration Cost from the Authority has embarked on a nationwide (% of property value) the Land PasayRegistration Authority, 4.9 which 31Bureau of Internal Revenue. Although land titling computerization project de- Makati offices around 4.7 has regional the Philip- 32 the Bureau has issued a memorandum signed to consolidate land records into pines. Malabon Five procedures 3.6 are governed at 32 saying that the Certificate Authorizing a single national database and facilitate Marikina 4.8 32 the local Navotas level. Among 3.5 Philippine cities 32 Registration is to be released within 5 registration and authentication of titles. 9 procedures (instead with Taguig 4.6of 8), the 32days, this is not observed in practice, This reform is necessary as land records extra requirement is an Caloocan inspection by the 3.8 except 33 in Parañaque. On average, it takes are scattered among the local Register of Manila City Assessor’s Office as 4.3 a prerequisite 33 days, while it takes 25 days in Lapu- 14 Deeds offices of the Land Registration to Davao obtain Citya new property tax 4.9 declara- Lapu 36 and Mandaue and 21 days in Batan- Authority, instead of being consolidated Quezon City 4.8 39 tion in the name of the new owner (the gas City, General Santos, Iloilo City, and in a single national database. This makes Iloilo City 4.9 40 buyer). General SantosCities requiring this additional 5.6 Quezon City. 43 The best local practices are it difficult and expensive for property procedure Batangas City are: Cebu City, 3.8 General San- seen in Parañaque 48 (as mentioned), Las buyers to track the authenticity of tax tos, Makati, Malabon, Mandaluyong, Mandaue 3.3 Piñas, Mandaluyong, and Muntinlupa— 63 clearances on land titles. The manual Lapu-Lapu 3.8 Muntinlupa, Pasay, Parañaque, San Juan, the latter 3 release the certificate 64 in 10 handling of deeds—with its potential for Cagayan De Oro 5.3 81 and Zamboanga City. days. missing files and typographical errors— The Source: Doing timedatabase. Business needed to Data forregister property Manila are from Doing Business 2011. Registration costs differ consider- is a key reason for delays in the registra- varies across the 25 cities included in ably across cities due to variations in tion of deeds. Eighteen out of the 25 cities this report (figure 4.2). In Mandaluyong, the property transfer tax and notariza- covered by this study either initiated or firms spend an average of 22 days to tion fees, both of which are assessed as completed their computerization efforts register property—the same as their a percentage of the property value. The as of June 1, 2010. Among the first to competitors in Indonesia. In Cagayan de cities charge a transfer tax ranging from make the transition is Cebu City, which Oro, registration takes 81 days—about 2 0.33% in Mandaue to 0.83% in Iloilo City now has a fully operational system. As months longer. The differences are due and Caloocan. Las Piñas and Malabon a result, Cebu City cut the time it takes (number) (days) (% of property value) Note: EAP denotes the East Asia and the Paci c region. Source: Doing Business database. registering propert y 27 FIGURE 4.2 provement in the ranking for the three Variation in time and cost to register property out of the four cities reflects this signifi- Mandaluyong 4.8 22 cant reduction in costs. Cebu City 3.6 24 Pasay found another way to make San Juan 4.6 26 registering property less cumbersome. Zamboanga City 5.8 26 While other cities require the tax clear- Muntinlupa 4.8 27 27 ance certificate of real property taxes as Parañaque 4.6 Time (days) Las Piñas 4.7 30 a prerequisite to the payment of transfer Pasig 4.6 30 taxes, Pasay allows both procedures to Valenzuela 3.5 30 Cost be completed simultaneously at the City 31 (% of property value) Pasay 4.9 Treasurer’s Office. Makati 4.7 32 Requirements, time, and cost to Malabon 3.6 32 Marikina 4.8 32 register property are all affected by the Navotas 3.5 32 national land administration system. The Taguig 4.6 32 Philippines’ land administration system Caloocan 3.8 33 faces real challenges, well documented Manila 4.3 33 in a number of studies.5 One of these Davao City 4.9 36 Quezon City 4.8 39 difficulties is an inadequate land infor- Iloilo City 4.9 40 mation system—a shortcoming which General Santos 5.6 43 the land-titling computerization project Batangas City 3.8 48 seeks to address. But because informa- Mandaue 3.3 63 tion about land ownership, location, Lapu-Lapu 3.8 64 Cagayan De Oro 5.3 81 boundaries, and land values are still not systematically available to many local Source: Doing Business database. Data for Manila are from Doing Business 2011. governments, fraud abounds, which has also led to land ownership conflicts.6 All to register with the Register of Deeds in term, but in the short term, the Land title disputes must go to the courts, and half—from 10 to 5 days. Registration Authority is passing on the this has resulted in delays and abuse. A computerized land-titling system costs of modernization to the end users. Land records management has also been offers several benefits; foremost among The Land Registration Authority has im- insufficient. War, theft, fire, and water them is greater efficiency in the registra- posed information technology fees of damage have rendered a large proportion tion and authentication of titles. How- PHP 269 (USD 6) per document and of records missing; while others are miss- ever, in cities that began the transition PHP 158 (USD 3) per title (including ing as a consequence of frequent trans- process later (i.e., in late 2009 or early value-added tax) to cover the costs of fers of records. Still others are in fragile 2010), the transition has caused tem- computerization. The net effect for this condition or illegally altered. At the same porary delays recorded by this study. In study is that the cost of registration with time, duplications and/or overlaps in Davao City, for example, the Register of the Register of Deeds has increased by title records are not easily detected by Deeds now takes 4 more days to regis- almost PHP 2,000 (USD 43). the current system. This is because title ter property than before. In Lapu-Lapu, In four cities registering property records in the Register of Deeds—which firms have to wait 30 days as the city is became less expensive, as compared to is the ultimate repository of land titles in in the first phases of the computerization 2008. Notaries in Caloocan, Malabon, the country—cannot be matched with project, compared to 10 days before com- Navotas, and Valenzuela, which charged, parcel or cadastral map numbers: origi- puterization began. Once the Register of on average, 2% of property value for their nal cadastral surveys and record maps Deeds in each city is fully computerized, services, arrived at an informal agree- are kept at the Land Management Bu- processing title registrations is expected ment to reduce their fees to 1%. This reau of the Department of Environment to be faster than before. reduction reportedly comes in response and Natural Resources, while copies of The cost of registering property in- to increasing competition from new no- subsequent surveys on titled property creased slightly with computerization. taries. As a result, the entrepreneur in and municipal index maps are kept at Computerization is supposed to reduce these cities today pays PHP 41,700 (USD the Land Registration Authority. These administration costs in the medium 895) less to register property. The im- maps do not show or match the cadastral 28 Doing Business in the philippines 2011 Table 4.2 mainly because of an increase in transac- Six out of the 20 cities benchmarked in 2008 made it easier to register property tions. Maharashtra’s stamp-duty revenues Completed computerization of jumped by 20% after the state reduced Reduced Combined the land titling system of the notary fee procedures Register of Deeds the stamp duty from 10% to 5%.10 Egypt’s Caloocan 4 revenue from property registration in- Cebu 4 creased nearly 39% due to the increase in the number of registrations when the Malabon 4 national government lowered the total Navotas 4 cost of property registration.11 Pasay 4 Valenzuela 4 Introduce fast-track Note: Business reforms occurred between January 2008 and June 2010. procedures Source: Doing Business database. Data for Manila are from Doing Business 2011 The Bureau of Internal Revenue and information stored at the Land Manage- is piloting new land titling procedures, Register of Deeds could offer clients a ment Bureau. but with limited use of technology. Not choice of expedited procedures: pay a Moreover, the absence of a national surprisingly, Thailand enjoys high public slightly higher fee for faster completion standard and method for real property confidence in its public administration of the registration process. Cases would valuation has resulted in inefficient allo- system and, in particular, its land admin- be prioritized in a transparent manner, cations and utilizations of the land mar- istration system. The Philippines faces a and those who prefer not to wait would ket and a lack of public confidence in the major challenge for its land administra- be given an official way to speed up the real property sector.7 The property valu- tion system—and its public adminis- process. This type of scheme is offered in ation methodologies vary according to tration system in general: to gain and a number of countries around the world. the purpose for which land is assessed.8 maintain public confidence.9 For example, entrepreneurs in Lithuania Pending Valuation Reform bills seek to Many developed countries and an must obtain a certificate of execution for establish standards to govern the valua- increasing number of developing countries the real estate transaction, which takes 9 tion of real property, and to adopt market have simple, inexpensive, and fast prop- days, on average. Then they apply for a value as the single real property valua- erty registration processes. The Philippines title transfer at the registry, which takes tion base for the assessment of all real could make registering property easier with another 10 days, on average. Now, if they property-related taxes in the country. the following recommendations. don’t want to wait, they can pay a higher The high cost and complexity of fee which cuts the total time from 19 to registering property in the Philippines What to reform 3 days. Fast-track procedures help pri- is especially striking when compared oritize the work of the registry and allow with the country’s regional neighbors. Convert the stamp, transfer taxes entrepreneurs to focus on their business. and notary fees into fixed fees In Thailand, for example, it takes only 2 procedures and 2 days to register prop- Percentage-based fees may lead firms to Standardize requirements at the erty, which can then be used as collateral undervalue their property, or they may Register of Deeds and the Land Registration Authority for a business loan. Both the Philippines simply avoid registration altogether. The and Thailand have title registration sys- Philippines could replace its percentage- The Land Registration Authority’s supervi- tems and a decentralized land adminis- based fees with fixed fees, following a sion over local Register of Deeds offices tration with central control. But in the schedule of payments to be applied to is not uniform—as seen in the varying Philippines, the private survey sector is property transfer transactions. This could descriptions of procedural requirements strong and their survey procedures are discourage tax evasion and reduce in- and computations of costs from city to city, overly specified yet under-regulated. The formal title transfers. The increase in included in the list of procedures of this result is a relatively high cost of survey- revenue from new registrations could report. To minimize the Register of Deeds’ ing, which is passed on to the public. likely make up for any reduction in fees discretion regarding procedural require- To contrast, Thailand’s efficient land ti- collected per property. The Indian state ments and costs, the Land Registration tling (first registration) procedures have of Maharashtra and Egypt are examples Authority must establish an official policy served as a model for systematic land of jurisdictions that reduced fees, yet and ensure that it is strictly implemented. titling in the region. The Philippines saw total tax revenues stay steady or rise, registering propert y 29 Complete the Land Registration Authority computerization project and monitor performance under the new 1. Field, Erica and Maximo Torero. 2006. system “Do Property Titles Increase Credit Ac- cess among the Urban Poor? Evidence The transition from a manual land ti- from a Nationwide Titling Program.” tling system to a computerized one has Working paper. Cambridge, MA: Depart- ment of Economics, Harvard University. caused delays in some cities, as they 2. Enterprise Surveys. Available at www. begin the process. Newly retrained em- enterprise.org ployees still face a learning curve while 3. Deininger, Klaus. 2003. Land Policies for many records are out of their usual filing Growth and Poverty Reduction. World cabinets, being encoded. In this process, Bank Policy Research Report series. New York, NY: Oxford University Press. an entrepreneur wastes time waiting for 4. Batra, Geeta, Daniel Kaufmann and Register of Deeds staff to look for records Andrew Stone. 2003. Investment Climate and navigate an unfamiliar system. The Around the World. Washington, DC: Register of Deeds needs to implement World Bank. temporary steps, tailored to the needs 5. Llanto, Gilberto and Marife Ballesteros. 2003. “Land Issues in Poverty Reduction of specific regional offices, to minimize Strategies and the Development Agenda: near-term delays. Philippines.” Discussion Paper. Makati, Philippines: Philippine Institute for De- Review the Bureau of Internal velopment Studies. Revenue’s protocols with 6. Ibid. authorized agent banks to 7. Explanatory Note, Senator Rodolfo Bi- address delays in notifications of payments for Certificate azon. Introduction to the Real Property Authorizing Registration Valuation Reform Act of 2007. First Regular Session, Fourteenth Congress of The Bureau of Internal Revenue begins the Republic of the Philippines. processing an applicant’s Certificate Au- 8. Ibid. thorizing Registration after it has been 9. Brits, Anne-Marie, Chris Grant and Tony Burns. 2002. “Comparative Study of Land informed by the authorized agent bank Administration Systems.” Regional Work- that the payment was deposited. Ide- shops on Land Policy Issues. Australia: ally, the authorized agent bank would Land Equity International Pty Ltd. inform the Bureau of Internal Revenue 10. World Bank. 2005. Doing Business in 2006: Creating Jobs. Washington, D.C.: of the payment immediately after such World Bank Group. payment is made. However, delays in 11. World Bank. 2007. Doing Business in the posting of payment are known to oc- Egypt 2008. Washington, D.C.: World cur—in fact, certain banks have acquired Bank Group. a reputation for delayed postings. The Bureau of Internal Revenue must look into the delays and may need to impose stricter protocols. 31 Data notes ECONOMY CHARACTERISTICS GROSS NATIONAL INCOME (GNI) PER CAPITA Doing Business in the Philippines 2011 reports 2009 income per capita as published in the World Bank’s World Development Indicators 2009. Income is calculated using the Atlas method (current US$). For cost indicators expressed as a percentage of income per capita, 2009 GNI in local cur- rency units is used as the denominator. The Philippines’ GNI per capita in 2009 = USD 1,790. EXCHANGE RATE The exchange rate used in this report is: 1 USD = 46.59 PHP REGION AND INCOME GROUP Doing Business uses the World Bank regional and income group classifications available at http://www.worldbank.org/data/countryclass. The indicators presented and analyzed in Surveys are administered through more doing business but also identify their source Doing Business in the Philippines 2011 mea- than 510 local experts, including lawyers, and point to what might be reformed. sure business regulation and the protection business consultants, construction firms, en- of property rights—and their effect on busi- gineers, local and national-level government Limits to what is measured nesses, especially small and medium-size do- officials and other professionals routinely ad- The Doing Business methodology has 4 limita- mestic firms. The indicators document the ministering or advising on legal and regula- tions that should be considered when inter- degree of regulation, such as the number of tory requirements. These experts have several, preting the data. First, the data often focus on procedures to start a business or to register typically 4 or more rounds of interaction a specific business form—a limited liability and transfer commercial property. with the Doing Business in the Philippines company of a specified size—and may not be In this project, Doing Business indicators 2011 team, through face-to-face interviews, representative of the regulation on other busi- have been created for 25 Philippine cities, 20 conference calls and written correspondence. nesses, for example, sole proprietorships. Sec- of which were benchmarked in Doing Business The data from surveys are subjected to nu- ond, transactions described in a standardized in the Philippines 2008. The data presented in merous tests for robustness, which lead to case study refer to a specific set of issues and this report for Manila and other countries are revisions or expansions of the information may not represent the full set of issues a busi- based on the global report Doing Business in collected. For example, the preliminary find- ness encounters. Third, the measures of time 2011: Making a Difference for Entrepreneurs. ings are presented to the cities through right involve an element of judgment by the expert The data for all sets of indicators in Doing of reply sessions conducted with local chief respondents. When sources indicate different Business in the Philippines 2011 are for June executives, city administrators and other local estimates, the time indicators reported in 2010. government officials. Following the right of Doing Business represent the median values reply sessions experts are contacted to validate of several responses given under the assump- Methodology findings and clarify issues from the right of tions of the standardized case. reply sessions. Issues that are the purview of Finally, the methodology assumes that The Doing Business in the Philippines 2011 national government agencies are brought to a business has full information on what is data are collected in a standardized way. To the attention of national heads of agencies, required and does not waste time when com- start, the Doing Business team, with academic both through written correspondence and pleting procedures. In practice, completing advisers, designs a survey. The survey uses a face-to-face discussions. a procedure may take longer if the busi- simple business case to ensure comparability The Doing Business methodology offers ness lacks information or is unable to follow across countries and over time—with as- several advantages. It is transparent, using up promptly. Alternatively, the business may sumptions about the legal form of the busi- factual information about what laws and regu- choose to disregard some burdensome pro- ness, its size, its location and the nature of its lations say and allowing multiple interactions cedures. For both reasons the time delays operations. Then the survey is customized to with local respondents to clarify potential reported in Doing Business in the Philippines the particular case of the Philippines. Because misinterpretations of questions. Having rep- 2011 would differ from the recollections of this is the second round of Doing Business resentative samples of respondents is not an entrepreneurs reported in the World Bank En- in the Philippines, two sets of data are used issue, as the texts of the relevant laws and reg- terprise Surveys or other perception surveys. as baseline: among cities that participated in ulations are collected and answers checked for Doing Business in the Philippines 2008, each accuracy. The methodology is inexpensive and Starting a business city’s performance in 2008 serves as baseline easily replicable, so data can be collected in a for 2010. For the cities that are included in large sample of economies. Because standard Doing Business in the Philippines 2011 records Doing Business in the Philippines 2011 for the assumptions are used in the data collection, all procedures that are officially required for first time, the data published for Manila in comparisons and benchmarks are valid across an entrepreneur to start up and formally Doing Business in the Philippines 2008 is used economies. Finally, the data not only highlight operate a commercial business. These include as the baseline. the extent of specific regulatory obstacles to obtaining all necessary licenses and permits 32 Doing Business IN the philippines 2011 and completing any required notifications, Procedures Table 5.1 verifications or inscriptions for the company A procedure is defined as any interaction of What does starting a business measure? and employees with relevant authorities. the company founder with external parties Procedures to legally start and operate a company After a study of laws, regulations and (for example, government agencies, lawyers, • Preregistration (name verification, notarization) publicly available information on business auditors or notaries). Interactions between • Registration in the selected city entry, a detailed list of procedures is de- company founders or company officers and • Postregistration (social security registration, veloped, along with the time and cost of employees are not counted as procedures. company seal) complying with each procedure under nor- Procedures that must be completed in the Time required to complete each procedure mal circumstances and the paid-in minimum same building but in different offices are capital requirements. Subsequently, local in- counted as separate procedures. If founders • Does not include time spent gathering information corporation lawyers and government officials have to visit the same office several times complete and verify the data. for different sequential procedures, each is • Each procedure starts on a separate day Information is also collected on the se- counted separately. The founders are assumed • Procedure completed once final document is received quence in which procedures are to be com- to complete all procedures themselves, with- pleted and whether procedures may be carried out middlemen, facilitators, accountants or • No prior contact with officials out simultaneously. It is assumed that any lawyers, unless the use of such a third party Cost required to complete each procudure required information is readily available and is mandated by law. If the services of profes- • Official costs only, no bribes that all agencies involved in the start-up pro- sionals are required, procedures conducted by • No professional fees unless services required by cess function without corruption. If answers such professionals on behalf of the company law by local experts differ, inquiries continue until are counted separately. Each electronic proce- Paid-in minimum capital the data are reconciled. dure is counted separately. If 2 procedures can To make the data comparable across be completed through the same website but • Deposited in a bank or with a notary before registration begins countries, several assumptions about the busi- require separate filings, they are counted as 2 Source: Doing Business database. ness and the procedures are used. procedures. Both pre- and post- incorporation procedures that are officially required for an Assumptions about the business entrepreneur to formally operate a business procedures may take place simultaneously, The business: are recorded (table 5.1). they cannot start on the same day (that is, • Is a limited liability company. If there is Procedures required for official corre- simultaneous procedures start on consecutive more than one type of limited liability spondence or transactions with public agen- days). A procedure is considered completed company in the country, the limited cies are also included. For example, if a com- once the company has received the final docu- liability form most popular among do- pany seal or stamp is required on official ment, such as the company registration cer- mestic firms is chosen. Information on documents, such as tax declarations, obtain- tificate or tax number. If a procedure can be the most popular form is obtained from ing the seal or stamp is counted. Similarly, if accelerated for an additional cost, the fastest incorporation lawyers or the statistical a company must open a bank account before procedure is chosen. It is assumed that the office. registering for sales tax or value added tax, entrepreneur does not waste time and com- • Operates in the commercial district of this transaction is included as a procedure. mits to completing each remaining procedure the selected cities. Shortcuts are counted only if they fulfill 4 without delay. The time that the entrepreneur • Is 100% domestically owned and has 5 criteria: they are legal, they are available to the spends on gathering information is ignored. It owners, none of whom is a legal entity. general public, they are used by the major- is assumed that the entrepreneur is aware of • Has start-up capital of 10 times income ity of companies, and avoiding them causes all entry regulations and their sequence from per capita at the end of 2009, paid in cash. substantial delays. the beginning but has had no prior contact Only procedures required of all busi- with any of the officials. • Performs general commercial activi- ties, such as the production or sale of nesses are covered. Industry-specific proce- dures are excluded. For example, procedures Cost products or services to the public. The business does not perform foreign trade to comply with environmental regulations Cost is recorded as a percentage of the coun- activities and does not handle products are included only when they apply to all try’s income per capita. It includes all official subject to a special tax regime, for ex- businesses conducting general commercial fees and fees for legal or professional services ample, liquor or tobacco. It is not using or industrial activities. Procedures that the if such services are required by law. Fees for heavily polluting production processes. company undergoes to connect to electricity, purchasing and legalizing company books are • Leases the commercial plant and offices water, gas and waste disposal services are not included if these transactions are required by and is not a proprietor of real estate. included. law. The company law, the commercial code • Does not qualify for investment incen- and specific regulations and fee schedules tives or any special benefits. Time are used as sources for calculating costs. The • Has at least 10 and up to 50 employees Time is recorded in calendar days. The mea- Philippine Corporation Code, the National 1 month after the commencement of sure captures the median duration that incor- Internal Revenue Code and specific regula- operations, all of them nationals. poration lawyers indicate is necessary to com- tions and fee schedules of the Securities and • Has a turnover of at least 100 times plete a procedure with minimum follow-up Exchange Commission and Bureau of Internal income per capita. with government agencies and no extra pay- Revenue, and local revenue codes and tax or- • Has a company deed 10 pages long. ments. It is assumed that the minimum time dinances of the local governments are used as required for each procedure is 1 day. Although sources for calculating costs. In the absence of data notes 33 fee schedules, a government officer’s estimate water, sewerage, and a fixed land line. Proce- Each floor is 9 feet, 10 inches (3 meters) is taken as an official source. In the absence dures necessary to register the property so high. of a government officer’s estimate, estimates that it can be used as collateral or transferred • Has road access and is located in the of incorporation lawyers are used. If several to another entity are also counted. The survey periurban area of the selected city (that incorporation lawyers provide different esti- divides the process of building a warehouse is, on the fringes of the city but still mates, the median reported value is applied. into distinct procedures and calculates the within its official limits). In all cases the cost excludes bribes. time and cost of completing each procedure in • It is not located in a special economic practice under normal circumstances. or industrial zone. The zoning require- Paid-in minimum capital ments for warehouses are met by build- Information is collected from experts in ing in an area where similar warehouses The paid-in minimum capital requirement re- construction permitting, including architects, can be found. flects the amount that the entrepreneur needs construction lawyers, construction firms, • Is located on a land plot of 10,000 to deposit in a bank or with a notary before utility service providers and public officials square feet (929 square meters) that is registration and up to 3 months following in- who deal with building regulations, includ- 100% owned by BuildCo and is regis- corporation and is recorded as a percentage of ing approvals and inspections. To make the tered in the cadastre and land registry. the country’s income per capita. The amount data comparable across economies, several as- • Is a new construction (there was no is typically specified in the commercial code sumptions about the business, the warehouse previous construction on the land). or the company law. Many countries have project and the utility connections are used. • Has complete architectural and a minimum capital requirement but allow technical plans prepared by a licensed businesses to pay only a part of it before reg- Assumptions about the architect. istration, with the rest to be paid after the first construction company • Will include all technical equipment year of operation. The Philippine Corporation The business (BuildCo): required to make the warehouse fully Code states that this amount must be at least • Is a limited liability company. operational. 6.25% of the corporation’s authorized capital • Operates in the selected cities. • Will take 30 weeks to construct (exclud- stock and not less than PHP 5,000. The Secu- • Is 100% domestically and privately ing all delays due to administrative and rities and Exchange Commission, Bureau of owned. regulatory requirements). Internal Revenue, and City Treasurer’s Office • Has 5 owners, none of whom is a legal make distinctions between the authorized Assumptions about the utility entity. connections capital stock, subscribed capital stock, and • Is fully licensed and insured to carry paid-in capital for purposes of computing the out construction projects, such as The electricity connection: registration fees and taxes due. Doing Busi- building warehouses. • Is 10 meters (32 feet, 10 inches) from ness in the Philippines 2011 assumes that the • Has 60 builders and other employees, the main electricity network. paid-in minimum capital, subscribed capital all of them nationals with the technical • Is a medium-tension, 3-phase, 4-wire Y, stock, and authorized capital stock are the expertise and professional experi- 140-kilovolt-ampere (kVA) connection. same amount. ence necessary to obtain construction Three-phase service is available in the permits and approvals. construction area. The data details on starting a business can • Has at least 1 employee who is a li- • Will be delivered by an overhead be found for each economy at http://www. censed architect and registered with the service, unless overhead service is not doingbusiness.org by selecting the economy in local association of architects. available in the periurban area. the drop-down list. This methodology was de- • Has paid all taxes and taken out all • Consists of a simple hookup unless veloped in Djankov, Simeon, Rafael la Porta, necessary insurance applicable to its installation of a private substation Florencio López-de-Silanes and Andrei Schle- general business activity (for example, (transformer) or extension of network accidental insurance for construction is required. ifer. 2002. ¨The Regulation of Entry.¨ Quar- workers and third-person liability • Requires the installation of only one terly Journal of Economics 117(1):1-37, and is insurance). adopted here with minor changes. electricity meter. • Owns the land on which the warehouse is built. BuildCo is assumed to have a licensed electri- Dealing with Construction cian on its team to complete the internal wir- Permits Assumptions about the ing for the warehouse. warehouse Doing Business in the Philippines 2011 records The warehouse: The water and sewerage connection: all procedures required for a business in the • Has a value of PHP 19,500,000. • Is 10 meters (32 feet, 10 inches) from construction industry to build a standardized • Will be used for general storage the existing water source and sewer tap. warehouse. These procedures include submit- activities, such as storage of books or • Does not require water for fire protec- ting all relevant project-specific documents stationery. The warehouse will not be tion reasons; a fire extinguishing system (for example, building plans and site maps) used for any goods requiring special (dry system) will be used instead. If a to the authorities; obtaining all necessary conditions, such as food, chemicals or wet fire protection system is required clearances, licenses, permits and certificates; pharmaceuticals. by law, it is assumed that the water completing all required notifications; and re- • Has 2 stories, both above ground, with demand specified below also covers the a total surface of approximately 14,000 water needed for fire protection. ceiving all necessary inspections. Doing Busi- ness in the Philippines 2011 also records proce- square feet (1,300.6 square meters). • Has an average water use of 662 liters (175 gallons) a day and an average dures for obtaining connections for electricity, 34 Doing Business IN the philippines 2011 wastewater flow of 568 liters (150 gal- minimum time required for each procedure on procedures as well as the time and cost to lons) a day. is 1 day. Although procedures may take place complete each of them. • Has a peak water use of 1,325 liters (350 simultaneously, they cannot start on the same gallons) a day and a peak wastewater day (that is, simultaneous procedures start Assumptions about the parties flow of 1,136 liters (300 gallons) a day. on consecutive days). If a procedure can be The parties (buyer and seller): • Will have a constant level of water de- accelerated legally for an additional cost, the • Are limited liability companies. mand and wastewater flow throughout fastest procedure is chosen. It is assumed that • Are located in the periurban area of the the year. BuildCo does not waste time and commits to selected cities. The telephone connection: completing each remaining procedure without • Are 100% domestically and privately • Is 10 meters (32 feet, 10 inches) from delay. The time that BuildCo spends on gather- owned. the main telephone network. ing information is ignored. It is assumed that • Have 50 employees each, all of whom • Is a fixed land line. BuildCo is aware of all building requirements are nationals. and their sequence from the beginning. • Perform general commercial activities. Procedures A procedure is any interaction of the com- Cost Assumptions about the property pany’s employees or managers with external Cost is recorded as a percentage of the econ- The property: parties, including government agencies, no- omy’s income per capita. Only official costs • Has a value of 50 times income per taries, the land registry, the cadastre, utility are recorded. All the fees associated with capita. The sale price equals the value. companies, public and private inspectors and completing the procedures to legally build • Is fully owned by the seller. technical experts apart from in-house archi- a warehouse are recorded, including those • Has no mortgages attached and has tects and engineers. Interactions between associated with obtaining land use approv- been under the same ownership for the company employees, such as development als and preconstruction design clearances; past 10 years. of the warehouse plans and inspections con- receiving inspection before, during and after • Is registered in the land registry or ducted by employees, are not counted as construction; getting utility connections; and cadastre, or both, and is free of title procedures. Procedures that the company registering the warehouse property. Nonre- disputes. undergoes to connect to electricity, water, curring taxes required for the completion of • Is located in a periurban commercial sewerage and telephone services are included. the warehouse project are also recorded. The zone, and no rezoning is required. All procedures that are legally or in prac- National Building Code, information from • Consists of land and a building. The tice required for building a warehouse are local experts and specific regulations and fee land area is 6,000 square feet (557.4 counted, even if they may be avoided in schedules are used as sources for costs. If sev- square meters). A 2-story warehouse of exceptional cases (table 5.2). eral local partners provide different estimates, 10,000 square feet (929 square meters) the median reported value is used. is located on the land. The warehouse is Time 10 years old, is in good condition and complies with all safety standards, build- Time is recorded in calendar days. The mea- The data details on dealing with construction ing codes and other legal requirements. sure captures the median duration that local permits can be found for each economy at The property of land and building will be experts indicate is necessary to complete the http://www.doingbusiness.org by selecting the transferred in its entirety. procedure in practice. It is assumed that the economy in the drop-down list. • Will not be subject to renovations or additional building following the Table 5.2 Registering property purchase. What does dealing with construction permits measure? • Has no trees, natural water sources, Doing Business in the Philippines 2011 records the natural reserves or historical monu- Procedures to build a warehouse full sequence of procedures necessary for a busi- ments of any kind. • Preconstruction (obtaining clearances and the ness (buyer) to purchase a property from another • Will not be used for special purposes, building permit) business (seller) and to transfer the property title and no special permits, such as for • Inspection during construction to the buyer’s name so that the buyer can use the residential use, industrial plants, waste • Postconstruction (inspections, obtaining the property for expanding its business, as collateral storage or certain types of agricultural certificate of occupancy) in taking new loans or, if necessary, sell to an- activities, are required. • Applying for utilities other business. The process starts with obtaining • Has no occupants (legal or illegal), and Time required to complete each procedure the necessary documents, such as a copy of the no other party holds a legal interest in it. • Does not include time spent gathering information seller’s title if necessary, and conducting due dili- Procedures gence if required. The transaction is considered • Each procedure starts on a separate day complete when it is opposable to third parties A procedure is defined as any interaction • Procedure completed once final document is received and when the buyer can use the property, use it of the buyer or the seller, their agents (if an as collateral for a bank loan or resell it. agent is legally or in practice required) or • No prior contact with officials Every procedure required by law or the property with external parties, includ- Cost required necessary in practice is included, whether it ing government agencies, inspectors, notaries • Official costs only, no bribes is the responsibility of the seller or the buyer and lawyers. Interactions between company • No value added or capital gains tax included or must be completed by a third party on officers and employees are not considered. their behalf. Local property lawyers, notaries All procedures that are legally or in practice Source: Doing Business database. and property registries provide information Table 5.3 transfer taxes, stamp duties and any other What does registering a property measure? payment to the property registry, notaries, Procedures to legally transfer title on real property public agencies or lawyers. Other taxes, such • Preregistration (checking for liens, notarizing sales as capital gains tax or value added tax, are agreement) excluded from the cost measure. Both costs • Registration in the selected city borne by the buyer and those borne by the • Postregistration (paying taxes, filing title with city) seller are included. If cost estimates differ among sources, the median reported value Time required to complete each procedure is used. • Does not include time spent gathering information • Each procedure starts on a separate day The data details on registering property can • Procedure completed once final document is be found for each economy at http://www. received doingbusiness.org by selecting the economy in • No prior contact with officials the drop-down list. Cost required Indicator Ranking • Official costs only, no bribes • No value added or capital gains tax included The ranking on each topic is the simple aver- Source: Doing Business database. age of the percentile rankings on its compo- nent indicators. The ease of starting a business required for registering property are recorded, is a simple average of the city rankings on even if they may be avoided in exceptional the number of procedures, and the associ- cases. It is assumed that the buyer follows the ated time and cost (% of income per capita) fastest legal option available and used by the required to start a business. The ease of deal- majority of property owners. Although the ing with construction permits is a simple buyer may use lawyers or other professionals average of the city rankings on the number of where necessary in the registration process, it procedures, and the associated time and cost is assumed that it does not employ an outside (% of income per capita) required to build a facilitator in the registration process unless warehouse. The ease of registering property legally or in practice required to do so (table is a simple average of the city rankings on the 5.3). number of procedures, associated time and cost (% of property value) required to register Time property. Time is recorded in calendar days. The mea- The rankings are limited in scope. They sure captures the median duration that prop- do not account for an economy's proximity erty lawyers, notaries or registry officials indi- to large markets, the quality of its infrastruc- cate is necessary to complete a procedure. It is ture services (other than services related to assumed that the minimum time required for construction permits), the security of prop- each procedure is 1 day. Although procedures erty from theft and looting, macroeconomic may take place simultaneously, they cannot conditions or the strength of underlying in- start on the same day (that is, simultaneous stitutions. There remains a large unfinished procedures start on consecutive days). It is agenda for research into what regulation con- assumed that the buyer does not waste time stitutes binding constraints, what package of and commits to completing each remaining reforms is most effective and how these issues procedure without delay. If a procedure can are shaped by the context of an economy. The be accelerated for an additional cost, the fast- Doing Business indicators provide a new em- est legal procedure available and used by the pirical data set that may improve understand- majority of property owners is chosen. If pro- ing of these issues. cedures can be undertaken simultaneously, it is assumed that they are. It is assumed that the parties involved are aware of all regula- tions and their sequence from the beginning. Time spent on gathering information is not considered. Cost Cost is recorded as a percentage of the prop- erty value, assumed to be equivalent to 50 times income per capita. Only official costs required by law are recorded, including fees, 36 Doing Business In the philippines 2011 City tables Batangas City Starting a business (rank) 18 Dealing with construction permits (rank) 11 Registering property (rank) 11 Procedures (number) 19 Procedures (number) 27 Procedures (number) 8 Time (days) 34 Time (days) 86 Time (days) 48 Cost (% of income per capita) 26.7 Cost (% of income per capita) 944.8 Cost (% of property value) 3.8 Minimum capital (% of income per capita) 0.06 Cagayan de Oro Starting a business (rank) 14 Dealing with construction permits (rank) 7 Registering property (rank) 24 Procedures (number) 17 Procedures (number) 30 Procedures (number) 8 Time (days) 32 Time (days) 92 Time (days) 81 Cost (% of income per capita) 27.8 Cost (% of income per capita) 279.5 Cost (% of property value) 5.3 Minimum capital (% of income per capita) 0.06 Caloocan Starting a business (rank) 11 Dealing with construction permits (rank) 16 Registering property (rank) 6 Procedures (number) 16 Procedures (number) 31 Procedures (number) 8 Time (days) 28 Time (days) 109 Time (days) 33 Cost (% of income per capita) 33.3 Cost (% of income per capita) 791.8 Cost (% of property value) 3.8 Minimum capital (% of income per capita) 0.06 Cebu City Starting a business (rank) 7 Dealing with construction permits (rank) 14 Registering property (rank) 4 Procedures (number) 15 Procedures (number) 36 Procedures (number) 9 Time (days) 31 Time (days) 92 Time (days) 24 Cost (% of income per capita) 24.7 Cost (% of income per capita) 126.4 Cost (% of property value) 3.6 Minimum capital (% of income per capita) 0.06 Davao City Starting a business (rank) 2 Dealing with construction permits (rank) 1 Registering property (rank) 20 Procedures (number) 17 Procedures (number) 27 Procedures (number) 8 Time (days) 27 Time (days) 57 Time (days) 36 Cost (% of income per capita) 17 Cost (% of income per capita) 94.2 Cost (% of property value) 4.9 Minimum capital (% of income per capita) 0.06 CIT Y TABLEs 37 General Santos Starting a business (rank) 1 Dealing with construction permits (rank) 3 Registering property (rank) 25 Procedures (number) 17 Procedures (number) 29 Procedures (number) 9 Time (days) 22 Time (days) 71 Time (days) 43 Cost (% of income per capita) 15.3 Cost (% of income per capita) 644.6 Cost (% of property value) 5.6 Minimum capital (% of income per capita) 0.06 Iloilo City Starting a business (rank) 20 Dealing with construction permits (rank) 20 Registering property (rank) 22 Procedures (number) 20 Procedures (number) 29 Procedures (number) 8 Time (days) 56 Time (days) 109 Time (days) 40 Cost (% of income per capita) 22.3 Cost (% of income per capita) 1,035.3 Cost (% of property value) 4.9 Minimum capital (% of income per capita) 0.06 Lapu-Lapu Starting a business (rank) 5 Dealing with construction permits (rank) 11 Registering property (rank) 13 Procedures (number) 17 Procedures (number) 34 Procedures (number) 8 Time (days) 31 Time (days) 88 Time (days) 64 Cost (% of income per capita) 20 Cost (% of income per capita) 529.3 Cost (% of property value) 3.8 Minimum capital (% of income per capita) 0.06 Las Piñas Starting a business (rank) 24 Dealing with construction permits (rank) 10 Registering property (rank) 5 Procedures (number) 21 Procedures (number) 27 Procedures (number) 8 Time (days) 35 Time (days) 102 Time (days) 30 Cost (% of income per capita) 34.7 Cost (% of income per capita) 796.9 Cost (% of property value) 4.7 Minimum capital (% of income per capita) 0.06 Makati Starting a business (rank) 20 Dealing with construction permits (rank) 9 Registering property (rank) 21 Procedures (number) 19 Procedures (number) 26 Procedures (number) 9 Time (days) 33 Time (days) 90 Time (days) 32 Cost (% of income per capita) 36 Cost (% of income per capita) 806.6 Cost (% of property value) 4.7 Minimum capital (% of income per capita) 0.06 Malabon Starting a business (rank) 16 Dealing with construction permits (rank) 22 Registering property (rank) 15 Procedures (number) 20 Procedures (number) 32 Procedures (number) 9 Time (days) 32 Time (days) 112 Time (days) 32 Cost (% of income per capita) 26.7 Cost (% of income per capita) 815.3 Cost (% of property value) 3.6 Minimum capital (% of income per capita) 0.06 Mandaluyong Starting a business (rank) 9 Dealing with construction permits (rank) 21 Registering property (rank) 17 Procedures (number) 19 Procedures (number) 33 Procedures (number) 9 Time (days) 28 Time (days) 121 Time (days) 22 Cost (% of income per capita) 21.7 Cost (% of income per capita) 794.9 Cost (% of property value) 4.8 Minimum capital (% of income per capita) 0.06 38 Doing Business In the philippines 2011 Mandaue Starting a business (rank) 13 Dealing with construction permits (rank) 8 Registering property (rank) 8 Procedures (number) 18 Procedures (number) 35 Procedures (number) 8 Time (days) 35 Time (days) 72 Time (days) 63 Cost (% of income per capita) 19.9 Cost (% of income per capita) 135.5 Cost (% of property value) 3.3 Minimum capital (% of income per capita) 0.06 Manila Starting a business (rank) 17 Dealing with construction permits (rank) 13 Registering property (rank) 9 Procedures (number) 15 Procedures (number) 26 Procedures (number) 8 Time (days) 38 Time (days) 169 Time (days) 33 Cost (% of income per capita) 30.3 Cost (% of income per capita) 778.5 Cost (% of property value) 4.3 Minimum capital (% of income per capita) 0.06 Marikina Starting a business (rank) 8 Dealing with construction permits (rank) 5 Registering property (rank) 10 Procedures (number) 16 Procedures (number) 28 Procedures (number) 8 Time (days) 29 Time (days) 91 Time (days) 32 Cost (% of income per capita) 24.3 Cost (% of income per capita) 785.2 Cost (% of property value) 4.8 Minimum capital (% of income per capita) 0.06 Muntinlupa Starting a business (rank) 22 Dealing with construction permits (rank) 17 Registering property (rank) 19 Procedures (number) 20 Procedures (number) 31 Procedures (number) 9 Time (days) 36 Time (days) 108 Time (days) 27 Cost (% of income per capita) 26.9 Cost (% of income per capita) 802.1 Cost (% of property value) 4.8 Minimum capital (% of income per capita) 0.06 Navotas Starting a business (rank) 15 Dealing with construction permits (rank) 15 Registering property (rank) 2 Procedures (number) 21 Procedures (number) 28 Procedures (number) 8 Time (days) 34 Time (days) 107 Time (days) 32 Cost (% of income per capita) 21 Cost (% of income per capita) 802.6 Cost (% of property value) 3.5 Minimum capital (% of income per capita) 0.06 Parañaque Starting a business (rank) 19 Dealing with construction permits (rank) 18 Registering property (rank) 16 Procedures (number) 20 Procedures (number) 30 Procedures (number) 9 Time (days) 35 Time (days) 107 Time (days) 27 Cost (% of income per capita) 26 Cost (% of income per capita) 827.3 Cost (% of property value) 4.6 Minimum capital (% of income per capita) 0.06 Pasay Starting a business (rank) 10 Dealing with construction permits (rank) 19 Registering property (rank) 13 Procedures (number) 17 Procedures (number) 31 Procedures (number) 8 Time (days) 32 Time (days) 121 Time (days) 31 Cost (% of income per capita) 22.2 Cost (% of income per capita) 798.4 Cost (% of property value) 4.9 Minimum capital (% of income per capita) 0.06 CIT Y TABLEs 39 Pasig Starting a business (rank) 23 Dealing with construction permits (rank) 24 Registering property (rank) 3 Procedures (number) 22 Procedures (number) 36 Procedures (number) 8 Time (days) 36 Time (days) 148 Time (days) 30 Cost (% of income per capita) 26.1 Cost (% of income per capita) 790.8 Cost (% of property value) 4.6 Minimum capital (% of income per capita) 0.06 Quezon City Starting a business (rank) 12 Dealing with construction permits (rank) 22 Registering property (rank) 17 Procedures (number) 16 Procedures (number) 33 Procedures (number) 8 Time (days) 36 Time (days) 120 Time (days) 39 Cost (% of income per capita) 21.4 Cost (% of income per capita) 804.4 Cost (% of property value) 4.8 Minimum capital (% of income per capita) 0.06 San Juan Starting a business (rank) 25 Dealing with construction permits (rank) 25 Registering property (rank) 12 Procedures (number) 21 Procedures (number) 33 Procedures (number) 9 Time (days) 39 Time (days) 144 Time (days) 26 Cost (% of income per capita) 26.3 Cost (% of income per capita) 804.7 Cost (% of property value) 4.6 Minimum capital (% of income per capita) 0.06 Taguig Starting a business (rank) 3 Dealing with construction permits (rank) 2 Registering property (rank) 6 Procedures (number) 16 Procedures (number) 25 Procedures (number) 8 Time (days) 28 Time (days) 85 Time (days) 32 Cost (% of income per capita) 23.2 Cost (% of income per capita) 795.3 Cost (% of property value) 4.6 Minimum capital (% of income per capita) 0.06 Valenzuela Starting a business (rank) 4 Dealing with construction permits (rank) 6 Registering property (rank) 1 Procedures (number) 16 Procedures (number) 28 Procedures (number) 8 Time (days) 32 Time (days) 91 Time (days) 30 Cost (% of income per capita) 20.4 Cost (% of income per capita) 789.8 Cost (% of property value) 3.5 Minimum capital (% of income per capita) 0.06 Zamboanga City Starting a business (rank) 6 Dealing with construction permits (rank) 4 Registering property (rank) 23 Procedures (number) 20 Procedures (number) 32 Procedures (number) 9 Time (days) 28 Time (days) 46 Time (days) 26 Cost (% of income per capita) 16.9 Cost (% of income per capita) 608.5 Cost (% of property value) 5.8 Minimum capital (% of income per capita) 0.06 40 Doing Business In the philippines 2011 Doing Starting a business Business Cost Paid-in minimum Ease of capital starting a indicators Procedures (number) Time (days) (% of GNI per capita) (% of GNI business per capita) (rank) Batangas City 19 34 26.7 6% 18 Cagayan de Oro 17 32 27.8 6% 14 Caloocan 16 28 33.3 6% 11 Cebu City 15 31 24.7 6% 7 Davao City 17 27 17.0 6% 2 General Santos 17 22 15.3 6% 1 Iloilo City 20 56 22.3 6% 20 Lapu-Lapu 17 31 20.0 6% 5 Las Piñas 21 35 34.7 6% 24 Makati 19 33 36.0 6% 20 Malabon 20 32 26.7 6% 16 Mandaluyong 19 28 21.7 6% 9 Mandaue 18 35 19.9 6% 13 Manila 15 38 30.3 6% 17 Marikina 16 29 24.3 6% 8 Muntinlupa 20 36 26.9 6% 22 Navotas 21 34 21.0 6% 15 Parañaque 20 35 26.0 6% 19 Pasay 17 32 22.2 6% 10 Pasig 22 36 26.1 6% 23 Quezon City 16 36 21.4 6% 12 San Juan 21 39 26.3 6% 25 Taguig 16 28 23.2 6% 3 Valenzuela 16 32 20.4 6% 4 Zamboanga City 20 28 16.9 6% 6 indicator TABLEs 41 Dealing with construction permits Registering property Ease of dealing with Cost Ease of Cost construction (% of registering Procedures Time (% of GNI permits Procedures Time property property (number) (days) per capita) (rank) (number) (days) value) (rank) Batangas City 27 86 944.8 11 8 48 3.8 11 Cagayan de Oro 30 92 279.5 7 8 81 5.3 24 Caloocan 31 109 791.8 16 8 33 3.8 6 Cebu City 36 92 126.4 14 9 24 3.6 4 Davao City 27 57 94.2 1 8 36 4.9 20 General Santos 29 71 644.6 3 9 43 5.6 25 Iloilo City 29 109 1,035.3 20 8 40 4.9 22 Lapu-Lapu 34 88 529.3 11 8 64 3.8 13 Las Piñas 27 102 796.9 10 8 30 4.7 5 Makati 26 90 806.6 9 9 32 4.7 21 Malabon 32 112 815.3 22 9 32 3.6 15 Mandaluyong 33 121 794.9 21 9 22 4.8 17 Mandaue 35 72 135.5 8 8 63 3.3 8 Manila 26 169 778.5 13 8 33 4.3 9 Marikina 28 91 785.2 5 8 32 4.8 10 Muntinlupa 31 108 802.1 17 9 27 4.8 19 Navotas 28 107 802.6 15 8 32 3.5 2 Parañaque 30 107 827.3 18 9 27 4.6 16 Pasay 31 121 798.4 19 8 31 4.9 13 Pasig 36 148 790.8 24 8 30 4.6 3 Quezon City 33 120 804.4 22 8 39 4.8 17 San Juan 33 144 804.7 25 9 26 4.6 12 Taguig 25 85 795.3 2 8 32 4.6 6 Valenzuela 28 91 789.8 6 8 30 3.5 1 Zamboanga City 32 46 608.5 4 9 26 5.8 23 List of LIST OF Procedures procedures Starting a business BATANGAS CITY Starting a business Standard company legal form: Corporation Paid-in minimum capital requirement: PHP 5,000 = USD 107 Dealing with Data as of: June 2010 construction permits Procedure 1. Verify and reserve the company name with the Securities and Exchange Commission (SEC) Time: 1 day Registering property Cost: PHP 40 Comments: The company can verify the availability of the company name online. Verification is free but reservation of the name, once approved by the SEC, costs PHP 40 for the first 30 days. The company name can be reserved for a maximum of 120 days for a fee of PHP 120, which is renewable upon expiration of the period. Procedure 2. Deposit paid-up capital in the Authorized Agent Bank (AAB) and obtain bank certificate of deposit Time: 1 day Cost: No cost Comments: The company is required by law to deposit paid-up capital amounting to at least 6.25% of the authorized capital stock of the corporation. This paid-up capital must not be less than PHP 5,000. Some banks charge a fee for issuance of the certificate of deposit. Procedure 3. Notarize articles of incorporation and treasurer’s affidavit at the notary Time: 1 day Cost: PHP 500 Comments: According to Sections 14 and 15 of the Corporation Code, articles of incorporation should be notarized before filing with the SEC. Procedure 4. Register the company with the SEC and receive pre- registered Taxpayer Identification Number (TIN) Time: 3 days Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized capital stock or the subscription price of the subscribed capital stock, whichever is higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + PHP 10 registration for SEC bulletin) Comments: The company can register online through SEC i-Register but must pay on site at the SEC. The following documents are required for SEC registration: a. Company name verification slip; b. Articles of incorporation (notarized) and by-laws; c. Treasurer’s affidavit (notarized); d. Statement of assets and liabilities; e. Bank certificate of deposit of the paid-in capital; f. Authority to verify the bank account; g. Registration data sheet with particulars on directors, officers, stockholders, and so forth; h. Written undertaking to comply with SEC reporting requirements (notarized); and i. Written undertaking to change corporate name (notarized). The SEC Head Office issues pre-registered TINs only if the company’s application for registration has been approved. The company must still register with the Bureau of Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- tration fee, obtain and stamp sales invoices, receipts and the books of accounts. Procedure 5. Obtain barangay clearance Time: 1 day Cost: PHP 800 Comments: This clearance is obtained from the barangay where the business is located and is required to obtain the business permit from the city or municipality. Barangay fees vary for each barangay since they have the discretion to impose their own fees and charges for as long as these fees are reasonable and within the limits set by the Local Government Code and city ordinances. Barangay fees may depend on: LIST OF PROCE DURES • STARTING A BUSINESS 43 a. the location and the area (size in square meters) of the place of business; or c. Copy of its SEC registration. b. the company’s paid-up capital and the area it occupies; or For company registrations filed with the SEC Head Office in Metro Manila, the BIR c. whether they issue clearance plates or certificates. confirms the pre-registered TIN issued by the SEC. New taxpayers are required to attend a seminar. Procedure 6. Obtain application form from the Business Permits and Licensing Division (BPLD) Procedure 14. Pay the registration fee and documentary stamp Time: 1 day taxes (DST) at the AAB Cost: No cost Time: 1 day Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance Procedure 7. Obtain endorsement from the City Treasurer’s of shares of stock. DST on the lease contract is not included in the computation of Office (CTO) to the Bureau of Fire Protection (BFP) and the City the cost) Environment Office (City ENRO) Comments: The company must pay DST on the original issuance of shares of stock. Time: 1 day The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of such shares of stock. This payment with the BIR should be made on the 5th of the Cost: No cost month following registration with the SEC. Procedure 8. Obtain temporary Fire Safety Inspection Certificate The COR will be released only after all the DSTs are paid. (FSIC) from the BFP The company must also pay DST on its lease contract at the rate of PHP 3 for the first PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or Time: 1 day fractional part thereof in excess of the first PHP 2,000 for each year of the lease as Cost: No cost (fees included in procedure 11) stated in the contract. Procedure 9*. Obtain clearance from City ENRO Procedure 15. Obtain the authority to print receipts and invoices Time: 1 day from the BIR Cost: No cost (fees included in procedure 11) Time: 1 day Cost: No cost Procedure 10*. Obtain sanitary permit and endorsement from Comments: The authority to print receipts and invoices must be secured before the City Health Office sales receipts and invoices may be printed. The company can ask any authorized Time: 1 day printing company to print its official forms, or it can print its own forms (i.e., it uses Cost: No cost (fees included in procedure 11) its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for this purpose. To obtain the authority to print receipts and invoices from the BIR, the Procedure 11. Obtain business permit to operate from BPLD company must submit the following documents to the Revenue District Office (RDO): Time: 2 days a. Duly completed application for authority to print receipts and invoices (BIR Form No. 1906); Cost: PHP 9,041 (PHP 625.50 business license fee (7.5% of 1% of paid up capital) + PHP 2,000 mayor’s permit fee + PHP 300 sanitation inspection fee + PHP 5,000 envi- b. Job order; ronmental fee + PHP 300 fire inspection fee + PHP 50 City ENRO Clean and Green fee c. Final and clear sample of receipts and invoices (machine-printed); + PHP 765 FSIC (10% of all LGU charges)) d. Application for registration (BIR Form No. 1903); and Comments: Requirements: e. Proof of payment of annual registration fee (BIR Form No. 0605). a. Duly accomplished application form; b. Barangay permit; Procedure 16. Print receipts and invoices at the print shops c. SEC registration and Articles of Incorporation Time: 7 days d. Endorsement from City Health Office; Cost: PHP 4,000 (between PHP 3,000 - PHP 5,000) e. Temporary FSIC; Comments: The cost is based on the following specifications of the official receipt: f. Contract of lease; and 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. g. Tax order of payment receipts. Procedure 17. Have books of accounts and Printer’s Certificate of Delivery (PCD) stamped by the BIR Procedure 12. Buy special books of account at bookstore Time: 1 day Time: 1 day Cost: No cost Cost: PHP 400 Comments: After the printing of receipts and invoices, the printer issues a Printer’s Comments: Special books of accounts are required for registering with the BIR. The Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must books of accounts are sold at bookstores nationwide. One set of journals consisting submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the of four books (cash receipts account, disbursements account, ledger, general journal) company’s principal place of business) for registration and stamping within thirty costs about PHP 400. (30) days from issuance. The company must also submit the following documents: If the company has a computerized accounting system (CAS), it may opt to register a. All required books of accounts; its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to b. VAT registration certificate; inspect and evaluate the company’s CAS within 30 days from receipt of the applica- c. SEC registration; tion form (BIR Form No. 1900) and complete documentary requirements. d. BIR Form W-5; e. Certified photocopy of the ATP; and Procedure 13. Apply for Certificate of Registration (COR) and TIN f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and at the Bureau of Internal Revenue (BIR) commitments of the taxpayer-user. Time: 7 days The company must also submit a copy of the PCD to the BIR RDO having jurisdiction Cost: PHP 115 (PHP 100 certification + PHP 15 documentary stamp tax) over the printer’s principal place of business. Comments: The company must register each type of internal revenue tax for which it is obligated by filing BIR Form No. 0605 and paying the annual registration fee Procedure 18. Register with the Social Security System (SSS) of PHP 500. Upon registration, the BIR will issue to the company the certificate of Time: 1 day registration—BIR Form No. 2303. Cost: No cost To obtain the TIN, the company has to file: Comments: To register with the SSS, the company must submit the following docu- a. Barangay clearance; ments: b. Mayor’s permit; and 44 Doing Business IN the philippines 2011 a. Employer registration form (Form R-1); a. Company name verification slip; b. Employment report (Form R-1A); b. Articles of incorporation (notarized) and by-laws; c. List of employees, specifying their birth dates, positions, monthly salary and date c. Treasurer’s affidavit (notarized); of employment; and d. Statement of assets and liabilities; d. Articles of incorporation, by-laws and SEC registration. e. Bank certificate of deposit of the paid-in capital; Upon submission of the required documents, the SSS employer and employee f. Authority to verify the bank account; numbers will be released. The employees may attend an SSS training seminar after g. Registration data sheet with particulars on directors, officers, stockholders, and so registration. SSS prefers that all members go through such training so that each forth; member is aware of their rights and obligations. h. Written undertaking to comply with SEC reporting requirements (notarized); and Procedure 19. Register with the Philippine Health Insurance i. Written undertaking to change corporate name (notarized). Company (PhilHealth) The SEC Extension Office charges a handling fee of PHP 30 to cover the cost of transmitting the documents to the SEC Head Office in Metro Manila. Time: 1 day Cost: No cost Procedure 5. After issuance of the SEC certificate of Comments: To register with PhilHealth, the company must submit the following incorporation, pay the annual community tax and obtain the documents: community tax certificate (CTC) from the City Treasurer’s Office a. Employer data record (Form ER1); (CTO) b. Report of employee-members (Form ER2); Time: 1 day c. SEC registration; Cost: PHP 500 d. BIR registration; and e. Copy of business permit. Procedure 6. Obtain barangay clearance Upon submission of the required documents, the company shall get the receiving Time: 1 day copy of all the forms as proof of membership until PhilHealth releases the employer Cost: PHP 800 and employee numbers within three months. Comments: This clearance is obtained from the barangay where the business is located and is required to obtain the business permit from the city or municipality. *This procedure can be completed simultaneously with previous procedures. Barangay fees vary for each barangay since they have the discretion to impose their own fees and charges for as long as these fees are reasonable and within the limits set by the Local Government Code and city ordinances. Barangay fees may depend on: starting a business a. the location and the area (size in square meters) of the place of business; or CAGAYAN DE ORO b. the company’s paid-up capital and the area it occupies; or Standard company legal form: Corporation c. whether they issue clearance plates or certificates. Paid-in minimum capital requirement: PHP 5,000 = USD 107 Data as of: June 2010 Procedure 7. Verify real property tax payment at the City Treasurer’s Office (CTO) Realty Tax Division Procedure 1. Verify and reserve the company name with the Time: 1 day Securities and Exchange Commission (SEC) Cost: No cost Time: 1 day Comments: The CTO checks its database to see if tax payments are up to date. It Cost: PHP 40 does not issue tax clearance certificate of real estate taxes for this procedure. Comments: The company can verify the availability of the company name online. Verification is free but reservation of the name, once approved by the SEC, costs PHP Procedure 8. Notarize application form at the City Legal Office 40 for the first 30 days. The company name can be reserved for a maximum of 120 Time: 1 day days for a fee of PHP 120, which is renewable upon expiration of the period. Cost: No cost Procedure 2. Deposit paid-up capital in the Authorized Agent Comments: The application forms are downloadable from the city’s website. Bank (AAB) and obtain bank certificate of deposit Time: 1 day Procedure 9. Obtain Mayor’s Permit to operate from the Business Permits and Licensing Division (BPLD) Cost: No cost Time: 3 days Comments: The company is required by law to deposit paid-up capital amounting to at least 6.25% of the authorized capital stock of the corporation. This paid-up Cost: PHP 11,447 (PHP 6,254.95 business tax (75% of 1% of capitalization) + PHP capital must not be less than PHP 5,000. 100 annual building inspection fee + PHP 75 billboard fee + PHP 2,000 garbage fee + PHP 350 health certificate (PHP 35 per person) + PHP 600.00 mayor’s permit fee + Some banks charge a fee for issuance of the certificate of deposit. PHP 1,000 occupation permit at (PHP 100 per person) + PHP 500 sanitary inspection fee + PHP 75 zoning fee + PHP 20 oath fee + PHP 472 FSIC (10% of all regulatory Procedure 3. Notarize articles of incorporation and treasurer’s fees)) affidavit at the notary The city does not issue a business plate and sticker. Time: 1 day Comments: Inspections by different offices are conducted within 60 days after the Cost: PHP 500 issuance of the business permit. Permit may be revoked if applicant fails to comply Comments: According to Sections 14 and 15 of the Corporation Code, articles of with the post-permit requirements. The additional requirements are the post inspec- incorporation should be notarized before filing with the SEC. tions only. The city collects initial business tax for the quarter covering the period of business Procedure 4. Register the company with the SEC registration. In the succeeding quarter(s), the tax is based on the gross sales for the Time: 5 days preceding quarter. Cost: PHP 2,695 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized capital stock or the subscription price of the subscribed capital stock, whichever is Procedure 10. Buy special books of account at bookstore higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent Time: 1 day to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- Cost: PHP 400 tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + PHP 10 registration for SEC bulletin + PHP 30 handling fee) Comments: The company can register online through SEC i-Register but must pay on site at the SEC. The following documents are required for SEC registration: LIST OF PROCE DURES • STARTING A BUSINESS 45 Comments: Special books of accounts are required for registering with the BIR. The Comments: After the printing of receipts and invoices, the printer issues a Printer’s books of accounts are sold at bookstores nationwide. One set of journals consisting Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must of four books (cash receipts account, disbursements account, ledger, general journal) submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the costs about PHP 400. company’s principal place of business) for registration and stamping within thirty If the company has a computerized accounting system (CAS), it may opt to register (30) days from issuance. The company must also submit the following documents: its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. a. All required books of accounts; 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to b. VAT registration certificate; inspect and evaluate the company’s CAS within 30 days from receipt of the applica- c. SEC registration; tion form (BIR Form No. 1900) and complete documentary requirements. d. BIR Form W-5; Procedure 11. Apply for Certificate of Registration (COR) and e. Certified photocopy of the ATP; and Taxpayer Identification Number (TIN) at the Bureau of Internal f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and Revenue (BIR) commitments of the taxpayer-user. Time: 2 days The company must also submit a copy of the PCD to the BIR RDO having jurisdiction Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) over the printer’s principal place of business. Comments: The company must register each type of internal revenue tax for which Procedure 16. Register with the Social Security System (SSS) it is obligated by filing BIR Form No. 0605 and paying the annual registration fee of PHP 500. Upon registration, the BIR will issue to the company the certificate of Time: 1 day registration—BIR Form No. 2303. Cost: No cost To obtain the TIN, the company has to file: Comments: To register with the SSS, the company must submit the following docu- a. Barangay clearance; ments: b. Mayor’s permit; and a. Employer registration form (Form R-1); c. Copy of its SEC registration. b. Employment report (Form R-1A); For company registrations filed with the SEC Head Office in Metro Manila, the BIR c. List of employees, specifying their birth dates, positions, monthly salary and date confirms the pre-registered TIN issued by the SEC. of employment; and New taxpayers are required to attend a seminar. d. Articles of incorporation, by-laws and SEC registration. Upon submission of the required documents, the SSS employer and employee Procedure 12. Pay the registration fee and documentary stamp numbers will be released. The employees may attend an SSS training seminar after taxes (DST) at the AAB registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations. Time: 1 day Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance Procedure 17. Register with the Philippine Health Insurance of shares of stock. DST on the lease contract is not included in the computation of Company (PhilHealth) the cost) Time: 1 day Comments: The company must pay DST on the original issuance of shares of stock. The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Cost: No cost such shares of stock. This payment with the BIR should be made on the 5th of the Comments: To register with PhilHealth, the company must submit the following month following registration with the SEC. documents: The COR will be released only after all the DSTs are paid. a. Employer data record (Form ER1); The company must also pay DST on its lease contract at the rate of PHP 3 for the first b. Report of employee-members (Form ER2); PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or c. SEC registration; fractional part thereof in excess of the first PHP 2,000 for each year of the lease as d. BIR registration; and stated in the contract. e. Copy of business permit. Procedure 13. Obtain the authority to print receipts and invoices Upon submission of the required documents, the company shall get the receiving from the BIR copy of all the forms as proof of membership until PhilHealth releases the employer and employee numbers within three months. Time: 3 days Cost: No cost starting a business Comments: The authority to print receipts and invoices must be secured before the sales receipts and invoices may be printed. The company can ask any authorized CALOOCAN printing company to print its official forms, or it can print its own forms (i.e., it uses Standard company legal form: Corporation its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Paid-in minimum capital requirement: PHP 5,000 = USD 107 this purpose. To obtain the authority to print receipts and invoices from the BIR, the Data as of: June 2010 company must submit the following documents to the Revenue District Office (RDO): a. Duly completed application for authority to print receipts and invoices (BIR Form Procedure 1. Verify and reserve the company name with the No. 1906); Securities and Exchange Commission (SEC) b. Job order; Time: 1 day c. Final and clear sample of receipts and invoices (machine-printed); Cost: PHP 40 d. Application for registration (BIR Form No. 1903); and Comments: The company can verify the availability of the company name online. e. Proof of payment of annual registration fee (BIR Form No. 0605). Verification is free but reservation of the name, once approved by the SEC, costs PHP 40 for the first 30 days. The company name can be reserved for a maximum of 120 Procedure 14. Print receipts and invoices at the print shops days for a fee of PHP 120, which is renewable upon expiration of the period. Time: 7 days Procedure 2. Deposit paid-up capital in the Authorized Agent Cost: PHP 2,000 Bank (AAB) and obtain bank certificate of deposit Comments: The cost is based on the following specifications of the official receipt: 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Time: 1 day Cost: No cost Procedure 15. Have books of accounts and Printer’s Certificate of Comments: The company is required by law to deposit paid-up capital amounting Delivery (PCD) stamped by the BIR to at least 6.25% of the authorized capital stock of the corporation. This paid-up Time: 1 day capital must not be less than PHP 5,000. Cost: No cost Some banks charge a fee for issuance of the certificate of deposit. 46 Doing Business IN the philippines 2011 Procedure 3. Notarize articles of incorporation and treasurer’s e. Duly accomplished application form; affidavit at the notary f. Photocopy of contract of lease; Time: 1 day g. Public legal liability insurance; Cost: PHP 500 h. Vicinity map; and Comments: According to Sections 14 and 15 of the Corporation Code, articles of i. Picture of establishment (outside and inside views). incorporation should be notarized before filing with the SEC. The application form is submitted at the BPLO for verification, inspection and as- sessment of fees. The business permit fees and taxes are paid at the City Treasurer's Procedure 4. Register the company with the SEC and receive pre- Office. The company is given a temporary sanitation permit from the City Health registered Taxpayer Identification Number (TIN) Office, which is valid for 30 days. Inspections for sanitary permit and fire safety take place after issuance of the business permit. Time: 3 days Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized Procedure 8*. Receive inspection from the BPLO capital stock or the subscription price of the subscribed capital stock, whichever is Time: 1 day higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- Cost: No cost tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + Comments: The BPLO conducts an inspection to verify that the business will PHP 10 registration for SEC bulletin) conduct the activity it has stated in the application. Upon submission of the business Comments: The company can register online through SEC i-Register but must pay permit application, the business establishment is inspected on the same day. on site at the SEC. The following documents are required for SEC registration: a. Company name verification slip; Procedure 9. Buy special books of account at bookstore b. Articles of incorporation (notarized) and by-laws; Time: 1 day c. Treasurer’s affidavit (notarized); Cost: PHP 400 d. Statement of assets and liabilities; Comments: Special books of accounts are required for registering with the BIR. The books of accounts are sold at bookstores nationwide. One set of journals consisting e. Bank certificate of deposit of the paid-in capital; of four books (cash receipts account, disbursements account, ledger, general journal) f. Authority to verify the bank account; costs about PHP 400. g. Registration data sheet with particulars on directors, officers, stockholders, and so If the company has a computerized accounting system (CAS), it may opt to register forth; its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. h. Written undertaking to comply with SEC reporting requirements (notarized); and 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to i. Written undertaking to change corporate name (notarized). inspect and evaluate the company’s CAS within 30 days from receipt of the applica- tion form (BIR Form No. 1900) and complete documentary requirements. The SEC Head Office issues pre-registered TINs only if the company’s application for registration has been approved. The company must still register with the Bureau of Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- Procedure 10. Apply for Certificate of Registration (COR) and TIN tration fee, obtain and stamp sales invoices, receipts and the books of accounts. at the Bureau of Internal Revenue (BIR) Time: 2 days Procedure 5. After issuance of the SEC certificate of Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) incorporation, pay the annual community tax and obtain the Comments: The company must register each type of internal revenue tax for which community tax certificate (CTC) from the City Treasurer’s Office it is obligated by filing BIR Form No. 0605 and paying the annual registration fee (CTO) of PHP 500. Upon registration, the BIR will issue to the company the certificate of Time: 1 day registration—BIR Form No. 2303. Cost: PHP 500 To obtain the TIN, the company has to file: a. Barangay clearance; Procedure 6. Obtain barangay clearance b. Mayor’s permit; and Time: 1 day c. Copy of its SEC registration. Cost: PHP 300 (between PHP 50 – PHP 800) For company registrations filed with the SEC Head Office in Metro Manila, the BIR Comments: This clearance is obtained from the barangay where the business is confirms the pre-registered TIN issued by the SEC. located and is required to obtain the business permit from the city or municipality. New taxpayers are required to attend a seminar. Barangay fees vary for each barangay since they have the discretion to impose their own fees and charges for as long as these fees are reasonable and within the limits Procedure 11. Pay the registration fee and documentary stamp set by the Local Government Code and city ordinances. Barangay fees may depend taxes (DST) at the AAB on: Time: 1 day a. the location and the area (size in square meters) of the place of business; or Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance b. the company’s paid-up capital and the area it occupies; or of shares of stock. DST on the lease contract is not included in the computation of c. whether they issue clearance plates or certificates. the cost) Comments: The company must pay DST on the original issuance of shares of stock. Procedure 7. Obtain the business permit to operate from the The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Business Permits and Licensing Office (BPLO) such shares of stock. This payment with the BIR should be made on the 5th of the Time: 3 days month following registration with the SEC. Cost: PHP 15,110 (PHP 1,667.99 business tax + PHP 2,410 mayor’s permit fee + PHP The COR will be released only after all the DSTs are paid. 350 business plate/sticker + PHP 5,640 refuse fee + PHP 2,410 sanitary permit fee The company must also pay DST on its lease contract at the rate of PHP 3 for the first + PHP 150 building inspection fee + PHP 550 electrical inspection fee + PHP 500 PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or mechanical inspection fee + PHP 90 plumbing inspection fee + PHP 120 billboard/ fractional part thereof in excess of the first PHP 2,000 for each year of the lease as signboard inspection fee + PHP 1,222 FSIC (10% of all regulatory charges)) stated in the contract. Comments: The business permit application form can be downloaded from the Caloocan City website at www.caloocancity.gov.ph. To obtain the business permit, Procedure 12. Obtain the authority to print receipts and invoices the company must file the following documents at the BPLO: from the BIR a. SEC registration; Time: 1 day b. Articles of incorporation and by-laws; Cost: No cost (fees included in procedure 10) c. Barangay clearance; d. Community tax certificate; LIST OF PROCE DURES • STARTING A BUSINESS 47 Comments: The authority to print receipts and invoices must be secured before the starting a business sales receipts and invoices may be printed. The company can ask any authorized CEBU CITY printing company to print its official forms, or it can print its own forms (i.e., it uses its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Standard company legal form: Corporation this purpose. To obtain the authority to print receipts and invoices from the BIR, the Paid-in minimum capital requirement: PHP 5,000 = USD 107 company must submit the following documents to the Revenue District Office (RDO): Data as of: June 2010 a. Duly completed application for authority to print receipts and invoices (BIR Form No. 1906); Procedure 1. Verify and reserve the company name with the Securities and Exchange Commission (SEC) b. Job order; Time: 1 day c. Final and clear sample of receipts and invoices (machine-printed); Cost: PHP 40 d. Application for registration (BIR Form No. 1903); and Comments: The company can verify the availability of the company name online. e. Proof of payment of annual registration fee (BIR Form No. 0605). Verification is free but reservation of the name, once approved by the SEC, costs PHP 40 for the first 30 days. The company name can be reserved for a maximum of 120 Procedure 13. Print receipts and invoices at the print shops days for a fee of PHP 120, which is renewable upon expiration of the period. Time: 7 days Cost: PHP 3,500 (between PHP 3,000 – PHP 3,800) Procedure 2. Deposit paid-up capital in the Authorized Agent Comments: The cost is based on the following specifications of the official receipt: Bank (AAB) and obtain bank certificate of deposit 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Time: 1 day Cost: No cost Procedure 14. Have books of accounts and Printer’s Certificate of Comments: The company is required by law to deposit paid-up capital amounting Delivery (PCD) stamped by the BIR to at least 6.25% of the authorized capital stock of the corporation. This paid-up Time: 1 day capital must not be less than PHP 5,000. Cost: No cost Some banks charge a fee for issuance of the certificate of deposit. Comments: After the printing of receipts and invoices, the printer issues a Printer’s Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must Procedure 3. Notarize articles of incorporation and treasurer’s submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the affidavit at the notary company’s principal place of business) for registration and stamping within thirty Time: 1 day (30) days from issuance. The company must also submit the following documents: Cost: PHP 500 a. All required books of accounts; Comments: According to Sections 14 and 15 of the Corporation Code, articles of b. VAT registration certificate; incorporation should be notarized before filing with the SEC. c. SEC registration; d. BIR Form W-5; Procedure 4. Register the company with the SEC e. Certified photocopy of the ATP; and Time: 5 days f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and Cost: PHP 2,695 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized commitments of the taxpayer-user. capital stock or the subscription price of the subscribed capital stock, whichever is The company must also submit a copy of the PCD to the BIR RDO having jurisdiction higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent over the printer’s principal place of business. to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + Procedure 15. Register with the Social Security System (SSS) PHP 10 registration for SEC bulletin + PHP 30 handling fee) Time: 3 days Comments: The company can register online through SEC i-Register but must pay on site at the SEC. The following documents are required for SEC registration: Cost: No cost a. Company name verification slip; Comments: To register with the SSS, the company must submit the following docu- ments: b. Articles of incorporation (notarized) and by-laws; a. Employer registration form (Form R-1); c. Treasurer’s affidavit (notarized); b. Employment report (Form R-1A); d. Statement of assets and liabilities; c. List of employees, specifying their birth dates, positions, monthly salary and date e. Bank certificate of deposit of the paid-in capital; of employment; and f. Authority to verify the bank account; d. Articles of incorporation, by-laws and SEC registration. g. Registration data sheet with particulars on directors, officers, stockholders, and so Upon submission of the required documents, the SSS employer and employee forth; numbers will be released. The employees may attend an SSS training seminar after h. Written undertaking to comply with SEC reporting requirements (notarized); and registration. SSS prefers that all members go through such training so that each i. Written undertaking to change corporate name (notarized). member is aware of their rights and obligations. The SEC Extension Office charges a handling fee of PHP 30 to cover the cost of transmitting the documents to the SEC Head Office in Metro Manila. Procedure 16. Register with the Philippine Health Insurance Company (PhilHealth) Procedure 5. Obtain the business permit application form Time: 1 day and community tax certificate (CTC) from the Cebu City Hall Cost: No cost representative at DTI National Economic Research and Business Comments: To register with PhilHealth, the company must submit the following Action Center (NERBAC) documents: Time: 1 day a. Employer data record (Form ER1); Cost: PHP 500 (cost of community tax certificate) b. Report of employee-members (Form ER2); Comments: The NERBAC has been operational in Cebu City since May 2008 and c. SEC registration; has greatly facilitated the business permit application process. Personnel from the d. BIR registration; and City Treasurer’s Office assigned at the NERBAC office process requests for business permit application forms and issue CTCs to applicants. After the application form is e. Copy of business permit. notarized, the applicant submits this to the NERBAC for verification, assessment and Upon submission of the required documents, the company shall get the receiving payment of the business permit fees and taxes. copy of all the forms as proof of membership until PhilHealth releases the employer and employee numbers within three months. *This procedure can be completed simultaneously with previous procedures. 48 Doing Business IN the philippines 2011 Procedure 6. Notarize the business permit application form at Procedure 11. Obtain the authority to print receipts and invoices the notary from the BIR Time: 1 day Time: 1 day Cost: PHP 20 Cost: No cost (fees included in procedure 10) Comments: The authority to print receipts and invoices must be secured before the Procedure 7. Obtain the Business Tax Payment Certificate (BTPC) sales receipts and invoices may be printed. The company can ask any authorized from the Cebu City Hall representative at DTI NERBAC printing company to print its official forms, or it can print its own forms (i.e., it uses Time: 3 days its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for this purpose. To obtain the authority to print receipts and invoices from the BIR, the Cost: PHP 9,194.79 (PHP 417 business tax (1/20 of 1% of capitalization) + PHP company must submit the following documents to the Revenue District Office (RDO): 1667.98 mayor’s permit fee (1/5 of 1% of capitalization) + PHP 500 zoning fee + PHP 5,000 garbage fee + PHP 50 health certificate + PHP 480 building fees + PHP 100 a. Duly completed application for authority to print receipts and invoices (BIR Form signboard fee + PHP 779.80 FSIC (10% of all regulatory fees) + PHP 200 barangay No. 1906); clearance) b. Job order; Comments: Once the BTPC is issued, the company can already operate while it c. Final and clear sample of receipts and invoices (machine-printed); is given 60 days to comply with other legal requirements such as barangay clear- d. Application for registration (BIR Form No. 1903); and ance and SSS, PhilHealth, and BIR registration, and to submit itself to the required e. Proof of payment of annual registration fee (BIR Form No. 0605). inspections. For purposes of this study, the cost of the barangay clearance has been included in the total cost for the business permit even though this is paid to the barangay separately after the issuance of the BTPC. Procedure 12. Print receipts and invoices at the print shops The city has a joint inspection team (JIT) consisting of representatives from the Time: 7 days Zoning Department, Office of the Building Official, City Health Department, Bureau Cost: PHP 2,500 (between PHP 2,500 – PHP 3,000) of Fire Protection and the Office of the Mayor. Inspections are conducted within sixty Comments: The cost is based on the following specifications of the official receipt: (60) days from issuance of the BTPC. 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Procedure 8. Buy special books of account at bookstore Procedure 13. Have books of accounts and Printer’s Certificate of Time: 1 day Delivery (PCD) stamped by the BIR Cost: PHP 400 Time: 1 day Comments: Special books of accounts are required for registering with the BIR. The Cost: No cost books of accounts are sold at bookstores nationwide. One set of journals consisting Comments: After the printing of receipts and invoices, the printer issues a Printer’s of four books (cash receipts account, disbursements account, ledger, general journal) Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must costs about PHP 400. submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the If the company has a computerized accounting system (CAS), it may opt to register company’s principal place of business) for registration and stamping within thirty its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. (30) days from issuance. The company must also submit the following documents: 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to a. All required books of accounts; inspect and evaluate the company’s CAS within 30 days from receipt of the applica- b. VAT registration certificate; tion form (BIR Form No. 1900) and complete documentary requirements. c. SEC registration; Procedure 9. Apply for Certificate of Registration (COR) and d. BIR Form W-5; Taxpayer Identification Number (TIN) at the Bureau of Internal e. Certified photocopy of the ATP; and Revenue (BIR) f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and Time: 2 days commitments of the taxpayer-user. Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) The company must also submit a copy of the PCD to the BIR RDO having jurisdiction over the printer’s principal place of business. Comments: The company must register each type of internal revenue tax for which it is obligated by filing BIR Form No. 0605 and paying the annual registration fee of PHP 500. Upon registration, the BIR will issue to the company the certificate of Procedure 14. Register with the Social Security System (SSS) registration—BIR Form No. 2303. Time: 4 days To obtain the TIN, the company has to file: Cost: No cost a. Barangay clearance; Comments: To register with the SSS, the company must submit the following docu- b. Mayor’s permit; and ments: c. Copy of its SEC registration. a. Employer registration form (Form R-1); For company registrations filed with the SEC Head Office in Metro Manila, the BIR b. Employment report (Form R-1A); confirms the pre-registered TIN issued by the SEC. c. List of employees, specifying their birth dates, positions, monthly salary and date New taxpayers are required to attend a seminar. of employment; and d. Articles of incorporation, by-laws and SEC registration. Procedure 10. Pay the registration fee and documentary stamp Upon submission of the required documents, the SSS employer and employee taxes (DST) at the AAB numbers will be released. The employees may attend an SSS training seminar after Time: 1 day registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations. Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance of shares of stock. DST on the lease contract is not included in the computation of Procedure 15. Register with the Philippine Health Insurance the cost) Company (PhilHealth) Comments: The company must pay DST on the original issuance of shares of stock. The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Time: 1 day such shares of stock. This payment with the BIR should be made on the 5th of the Cost: No cost month following registration with the SEC. Comments: To register with PhilHealth, the company must submit the following The COR will be released only after all the DSTs are paid. documents: The company must also pay DST on its lease contract at the rate of PHP 3 for the first a. Employer data record (Form ER1); PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or b. Report of employee-members (Form ER2); fractional part thereof in excess of the first PHP 2,000 for each year of the lease as c. SEC registration; stated in the contract. d. BIR registration; and LIST OF PROCE DURES • STARTING A BUSINESS 49 e. Copy of business permit. Procedure 6. Obtain barangay clearance Upon submission of the required documents, the company shall get the receiving Time: 1 day copy of all the forms as proof of membership until PhilHealth releases the employer and employee numbers within three months. Cost: PHP 50 (between PHP 0 – PHP 100) Comments: This clearance is obtained from the barangay where the business is starting a business located and is required to obtain the business permit from the city or municipality. Barangay fees vary for each barangay since they have the discretion to impose their DAVAO CITY own fees and charges for as long as these fees are reasonable and within the limits Standard company legal form: Corporation set by the Local Government Code and city ordinances. Barangay fees may depend Paid-in minimum capital requirement: PHP 5,000 = USD 107 on: Data as of: June 2010 a. the location and the area (size in square meters) of the place of business; or b. the company’s paid-up capital and the area it occupies; or Procedure 1. Verify and reserve the company name with the c. whether they issue clearance plates or certificates. Securities and Exchange Commission (SEC) Time: 1 day Procedure 7. Obtain print-out of the encoded business permit Cost: PHP 40 application form from the Business Bureau–Permits and License Comments: The company can verify the availability of the company name online. Division (BBPLD) Verification is free but reservation of the name, once approved by the SEC, costs PHP Time: 1 day 40 for the first 30 days. The company name can be reserved for a maximum of 120 Cost: No cost days for a fee of PHP 120, which is renewable upon expiration of the period. Comments: The application form can be downloaded from the city’s website. The applicant submits the filled out application form to the BBPLD for encoding, evalua- Procedure 2. Deposit paid-up capital in the Authorized Agent tion and verification. The BBPLD releases a printout of the encoded application form, Bank (AAB) and obtain bank certificate of deposit which the applicant must have notarized. Time: 1 day Cost: PHP 150 Procedure 8. Notarize the encoded business permit application Comments: The company is required by law to deposit paid-up capital amounting form at the City Legal Office to at least 6.25% of the authorized capital stock of the corporation. This paid-up Time: 1 day capital must not be less than PHP 5,000. Cost: PHP 50 Some banks charge a fee for issuance of the certificate of deposit. Procedure 9. Obtain the Temporary Authority to Operate (TAO) Procedure 3. Notarize articles of incorporation and treasurer’s and Compliance Form from the BBPLD affidavit at the notary Time: 1 day Time: 1 day Cost: PHP 3,332 (PHP 417 business tax (1/20 of 1% of capitalization) + PHP 600 Cost: PHP 500 garbage fee + PHP 50 health certification fee + PHP 100 laboratory fee + PHP 1,000 Comments: According to Sections 14 and 15 of the Corporation Code, articles of mayor’s permit fee + PHP 200 sanitary permit fee + PHP 200 sanitary inspection fee incorporation should be notarized before filing with the SEC. + PHP 300 zoning fee + PHP 150 license plate + PHP 50 tax clearance + PHP 265 FSIC (10% of regulatory fees)) Procedure 4. Register the company with the SEC Comments: The city introduced the TAO in November 2008. To obtain the business Time: 3 days permit, the company must file the following documents at the BBPLD: Cost: PHP 2,695 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized a. SEC registration; capital stock or the subscription price of the subscribed capital stock, whichever is b. Articles of incorporation; higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent c. Community tax certificate of the corporation (but only if corporation is estab- to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- lished before June 30) tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + d. Barangay clearance; PHP 10 registration for SEC bulletin + PHP 30 handling fee) e. Board resolution authorizing person to transact, and clear photocopy of ID of Comments: The company can register online through SEC i-Register but must pay authorized person; on site at the SEC. The following documents are required for SEC registration: f. Duly notarized lease contract (if office is rented); and a. Company name verification slip; g. Sketch of location on the back of the application form. b. Articles of incorporation (notarized) and by-laws; There is one-time assessment of all fees at the City Treasurer’s Office. Upon payment, c. Treasurer’s affidavit (notarized); the applicant will go to BBPLD to present official receipt and supporting documents. d. Statement of assets and liabilities; Once approved, the TAO and Compliance Form are released and the applicant can e. Bank certificate of deposit of the paid-in capital; commence business operations. f. Authority to verify the bank account; The applicant has to submit the original TAO, Compliance Form and other require- g. Registration data sheet with particulars on directors, officers, stockholders, and so ments within 30 working days from issuance of the TAO. Non-compliance within said forth; period will result in automatic revocation and cancellation of the TAO and closure of the business. The requirements include occupational permits for employees, verifica- h. Written undertaking to comply with SEC reporting requirements (notarized); and tion of building permit at the Office of the Building Official, zoning verification at the i. Written undertaking to change corporate name (notarized). City Planning and Development Office and temporary approval from the Bureau of The SEC Extension Office charges a handling fee of PHP 30 to cover the cost of Fire Protection. transmitting the documents to the SEC Head Office in Metro Manila. Procedure 10. Buy special books of account at bookstore Procedure 5. After issuance of the SEC certificate of Time: 1 day incorporation, pay the annual community tax and obtain the Cost: PHP 400 community tax certificate (CTC) from the City Treasurer’s Office Comments: Special books of accounts are required for registering with the BIR. The (CTO) books of accounts are sold at bookstores nationwide. One set of journals consisting Time: 1 day of four books (cash receipts account, disbursements account, ledger, general journal) Cost: PHP 500 costs about PHP 400. 50 Doing Business IN the philippines 2011 If the company has a computerized accounting system (CAS), it may opt to register Comments: After the printing of receipts and invoices, the printer issues a Printer’s its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the inspect and evaluate the company’s CAS within 30 days from receipt of the applica- company’s principal place of business) for registration and stamping within thirty tion form (BIR Form No. 1900) and complete documentary requirements. (30) days from issuance. The company must also submit the following documents: a. All required books of accounts; Procedure 11. Apply for Certificate of Registration (COR) and b. VAT registration certificate; Taxpayer Identification Number (TIN) at the Bureau of Internal c. SEC registration; Revenue (BIR) d. BIR Form W-5; Time: 2 days e. Certified photocopy of the ATP; and Cost: PHP 15 (documentary stamp tax) f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and Comments: The company must register each type of internal revenue tax for which commitments of the taxpayer-user. it is obligated by filing BIR Form No. 0605 and paying the annual registration fee of PHP 500. Upon registration, the BIR will issue to the company the certificate of The company must also submit a copy of the PCD to the BIR RDO having jurisdiction registration—BIR Form No. 2303. over the printer’s principal place of business. To obtain the TIN, the company has to file: Procedure 16. Register with the Social Security System (SSS) a. Barangay clearance; Time: 2 days b. Mayor’s permit; and Cost: No cost c. Copy of its SEC registration. Comments: To register with the SSS, the company must submit the following docu- For company registrations filed with the SEC Head Office in Metro Manila, the BIR ments: confirms the pre-registered TIN issued by the SEC. a. Employer registration form (Form R-1); New taxpayers are required to attend a seminar. b. Employment report (Form R-1A); Procedure 12. Pay the registration fee and documentary stamp c. List of employees, specifying their birth dates, positions, monthly salary and date of employment; and taxes (DST) at the AAB d. Articles of incorporation, by-laws and SEC registration. Time: 1 day Upon submission of the required documents, the SSS employer and employee Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance numbers will be released. The employees may attend an SSS training seminar after of shares of stock. DST on the lease contract is not included in the computation of registration. SSS prefers that all members go through such training so that each the cost) member is aware of their rights and obligations. Comments: The company must pay DST on the original issuance of shares of stock. The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Procedure 17. Register with the Philippine Health Insurance such shares of stock. This payment with the BIR should be made on the 5th of the Company (PhilHealth) month following registration with the SEC. Time: 1 day The COR will be released only after all the DSTs are paid. Cost: No cost The company must also pay DST on its lease contract at the rate of PHP 3 for the first PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or Comments: To register with PhilHealth, the company must submit the following fractional part thereof in excess of the first PHP 2,000 for each year of the lease as documents: stated in the contract. a. Employer data record (Form ER1); b. Report of employee-members (Form ER2); Procedure 13. Obtain the authority to print receipts and invoices c. SEC registration; from the BIR d. BIR registration; and Time: 1 day e. Copy of business permit. Cost: No cost (fees included in procedure 12) Upon submission of the required documents, the company shall get the receiving Comments: The authority to print receipts and invoices must be secured before the copy of all the forms as proof of membership until PhilHealth releases the employer sales receipts and invoices may be printed. The company can ask any authorized and employee numbers within three months. printing company to print its official forms, or it can print its own forms (i.e., it uses its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for starting a business this purpose. To obtain the authority to print receipts and invoices from the BIR, the company must submit the following documents to the Revenue District Office (RDO): GENERAL SANTOS a. Duly completed application for authority to print receipts and invoices (BIR Form Standard company legal form: Corporation No. 1906); Paid-in minimum capital requirement: PHP 5,000 = USD 107 b. Job order; Data as of: June 2010 c. Final and clear sample of receipts and invoices (machine-printed); d. Application for registration (BIR Form No. 1903); and Procedure 1. Verify and reserve the company name with the Securities and Exchange Commission (SEC) e. Proof of payment of annual registration fee (BIR Form No. 0605). Time: 1 day Procedure 14. Print receipts and invoices at the print shops Cost: PHP 40 Time: 7 days Comments: The company can verify the availability of the company name online. Cost: PHP 1,750 Verification is free but reservation of the name, once approved by the SEC, costs PHP 40 for the first 30 days. The company name can be reserved for a maximum of 120 Comments: The cost is based on the following specifications of the official receipt: days for a fee of PHP 120, which is renewable upon expiration of the period. 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Procedure 2. Deposit paid-up capital in the Authorized Agent Procedure 15. Have books of accounts and Printer’s Certificate of Bank (AAB) and obtain bank certificate of deposit Delivery (PCD) stamped by the BIR Time: 1 day Time: 1 day Cost: No cost Cost: No cost LIST OF PROCE DURES • STARTING A BUSINESS 51 Comments: The company is required by law to deposit paid-up capital amounting Procedure 9. Register with the Social Security System (SSS) to at least 6.25% of the authorized capital stock of the corporation. This paid-up capital must not be less than PHP 5,000. Time: 1 day Some banks charge a fee for issuance of the certificate of deposit. Cost: No cost Comments: To register with the SSS, the company must submit the following docu- Procedure 3. Notarize articles of incorporation and treasurer’s ments: affidavit at the notary a. Employer registration form (Form R-1); Time: 1 day b. Employment report (Form R-1A); Cost: PHP 500 c. List of employees, specifying their birth dates, positions, monthly salary and date Comments: According to Sections 14 and 15 of the Corporation Code, articles of of employment; and incorporation should be notarized before filing with the SEC. d. Articles of incorporation, by-laws and SEC registration. Upon submission of the required documents, the SSS employer and employee Procedure 4. Register the company with the SEC numbers will be released. The employees may attend an SSS training seminar after Time: 1 day registration. SSS prefers that all members go through such training so that each Cost: PHP 2,695 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized member is aware of their rights and obligations. capital stock or the subscription price of the subscribed capital stock, whichever is SSS registration is a prerequisite to the issuance of the business permit by the BPLD. higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- Procedure 10. Register with the Philippine Health Insurance tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + Company (PhilHealth) PHP 10 registration for SEC bulletin + PHP 30 handling fee) Time: 1 day Comments: The company can register online through SEC i-Register but must pay Cost: No cost on site at the SEC. The following documents are required for SEC registration: Comments: To register with PhilHealth, the company must submit the following a. Company name verification slip; documents: b. Articles of incorporation (notarized) and by-laws; a. Employer data record (Form ER1); c. Treasurer’s affidavit (notarized); b. Report of employee-members (Form ER2); d. Statement of assets and liabilities; c. SEC registration; e. Bank certificate of deposit of the paid-in capital; d. BIR registration; and f. Authority to verify the bank account; e. Copy of business permit. g. Registration data sheet with particulars on directors, officers, stockholders, and so Upon submission of the required documents, the company shall get the receiving forth; copy of all the forms as proof of membership until PhilHealth releases the employer h. Written undertaking to comply with SEC reporting requirements (notarized); and and employee numbers within three months. i. Written undertaking to change corporate name (notarized). Philhealth registration is a prerequisite to the issuance of the business permit by the The SEC Extension Office charges a handling fee of PHP 30 to cover the cost of BPLD. transmitting the documents to the SEC Head Office in Metro Manila. SSS registration is a pre-requisite to Philhealth registration. Procedure 5. After issuance of the SEC certificate of Procedure 11. Apply for Certificate of Registration (COR) and incorporation, pay the annual community tax and obtain the Taxpayer Identification Number (TIN) at the Bureau of Internal community tax certificate (CTC) from the City Treasurer’s Office Revenue (BIR) (CTO) Time: 1 day Time: 1 day Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) Cost: PHP 500 Comments: The company must register each type of internal revenue tax for which it is obligated by filing BIR Form No. 0605 and paying the annual registration fee Procedure 6. Obtain barangay clearance of PHP 500. Upon registration, the BIR will issue to the company the certificate of Time: 1 day registration—BIR Form No. 2303. Cost: PHP 800 To obtain the TIN, the company has to file: Comments: This clearance is obtained from the barangay where the business is a. Barangay clearance; located and is required to obtain the business permit from the city or municipality. b. Mayor’s permit; and Barangay fees vary for each barangay since they have the discretion to impose their c. Copy of its SEC registration. own fees and charges for as long as these fees are reasonable and within the limits For company registrations filed with the SEC Head Office in Metro Manila, the BIR set by the Local Government Code and city ordinances. Barangay fees may depend confirms the pre-registered TIN issued by the SEC. on: New taxpayers are required to attend a seminar. a. the location and the area (size in square meters) of the place of business; or b. the company’s paid-up capital and the area it occupies; or Procedure 12. Pay the registration fee and documentary stamp c. whether they issue clearance plates or certificates. taxes (DST) at the AAB Time: 1 day Procedure 7. Obtain application form from Business Permits and Licensing Division (BPLD) Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance of shares of stock. DST on the lease contract is not included in the computation of Time: 1 day the cost) Cost: No cost Comments: The company must pay DST on the original issuance of shares of stock. The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Procedure 8. Notarize business permit application form at the such shares of stock. This payment with the BIR should be made on the 5th of the notary month following registration with the SEC. Time: 1 day The COR will be released only after all the DSTs are paid. Cost: PHP 50 The company must also pay DST on its lease contract at the rate of PHP 3 for the first PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or fractional part thereof in excess of the first PHP 2,000 for each year of the lease as stated in the contract. 52 Doing Business IN the philippines 2011 Procedure 13. Obtain business permit to operate from the BPLD Procedure 17. Have books of accounts and Printer’s Certificate of Time: 2 days Delivery (PCD) stamped by the BIR Cost: PHP 1,805 (PHP 625.5 business tax (3/4 of 1% of paid up capital) + PHP 200 Time: 1 day mayor’s permit fee + PHP 75 garbage fee + PHP 200 sanitary inspection fee + PHP Cost: No cost 45 health certificate + PHP 120 annual building inspection fee + PHP 6 zoning fee + Comments: After the printing of receipts and invoices, the printer issues a Printer’s PHP 10 subscription fee + PHP 310 City ENRO fee + PHP 100 business plate + PHP 6 Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must assessor’s fee + PHP 107.2 fire clearance fee (10% of business tax)) submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the Comments: Upon the applicant’s submission of the notarized application form, the company’s principal place of business) for registration and stamping within thirty BPLD personnel route the application form to the following offices: 1. Bureau of Fire (30) days from issuance. The company must also submit the following documents: Protection (to obtain the temporary FSIC), 2. City Engineering Office (CEO) (to obtain a. All required books of accounts; building clearance), 3. City Planning and Development Office (to obtain property index number and zoning clearance), 4. City Health Office (to obtain the sanitary b. VAT registration certificate; permit), 5. City Environment Office (City ENRO) (to obtain environmental clearance), c. SEC registration; 6. City Treasurer’s Office (to obtain the land tax clearance, fiscal examination, and d. BIR Form W-5; assessment and billing). e. Certified photocopy of the ATP; and Once all the clearances are ready, the BPLD personnel inform the applicant via phone f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and call or SMS message. commitments of the taxpayer-user. The following documents must be complete in order for the permit to be issued: The company must also submit a copy of the PCD to the BIR RDO having jurisdiction a. Duly notarized application form; over the printer’s principal place of business. b. SEC registration; c. Barangay clearance; starting a business d. Community tax certificate; ILOILO CITY e. Locational clearance; Standard company legal form: Corporation f. Temporary FSIC; Paid-in minimum capital requirement: PHP 5,000 = USD 107 g. Sanitary permit; Data as of: June 2010 h. City ENRO Clearance; i. CEO building inspection checklist; Procedure 1. Verify and reserve the company name with the Securities and Exchange Commission (SEC) j. Lease contract; Time: 2 days k. SSS clearance; and Cost: PHP 40 l. Philhealth clearance. Comments: The company can verify the availability of the company name online. The city collects initial business tax for the quarter covering the period of business Verification is free but reservation of the name, once approved by the SEC, costs PHP registration. In the succeeding quarter(s), the tax is based on the gross sales for the 40 for the first 30 days. The company name can be reserved for a maximum of 120 preceding quarter. days for a fee of PHP 120, which is renewable upon expiration of the period. Procedure 14. Buy special books of account at bookstore Procedure 2. Deposit paid-up capital in the Authorized Agent Time: 1 day Bank (AAB) and obtain bank certificate of deposit Cost: PHP 400 Time: 1 day Comments: Special books of accounts are required for registering with the BIR. The Cost: No cost books of accounts are sold at bookstores nationwide. One set of journals consisting of four books (cash receipts account, disbursements account, ledger, general journal) Comments: The company is required by law to deposit paid-up capital amounting costs about PHP 400.00. to at least 6.25% of the authorized capital stock of the corporation. This paid-up capital must not be less than PHP 5,000. If the company has a computerized accounting system (CAS), it may opt to register its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. Some banks charge a fee for issuance of the certificate of deposit. 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to inspect and evaluate the company’s CAS within 30 days from receipt of the applica- Procedure 3. Notarize articles of incorporation and treasurer’s tion form (BIR Form No. 1900) and complete documentary requirements. affidavit at the notary Time: 1 day Procedure 15. Obtain the authority to print receipts and invoices Cost: PHP 500 from the BIR Comments: According to Sections 14 and 15 of the Corporation Code, articles of Time: 3 days incorporation should be notarized before filing with the SEC. Cost: No cost Comments: The authority to print receipts and invoices must be secured before the Procedure 4. Register the company with the SEC sales receipts and invoices may be printed. The company can ask any authorized Time: 3 days printing company to print its official forms, or it can print its own forms (i.e., it uses Cost: PHP 2,695 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for capital stock or the subscription price of the subscribed capital stock, whichever is this purpose. To obtain the authority to print receipts and invoices from the BIR, the higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent company must submit the following documents to the Revenue District Office (RDO): to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- a. Duly completed application for authority to print receipts and invoices (BIR Form tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + No. 1906); PHP 10 registration for SEC bulletin + PHP 30 handling fee) b. Job order; Comments: The company can register online through SEC i-Register but must pay c. Final and clear sample of receipts and invoices (machine-printed); on site at the SEC. The following documents are required for SEC registration: d. Application for registration (BIR Form No. 1903); and a. Company name verification slip; e. Proof of payment of annual registration fee (BIR Form No. 0605). b. Articles of incorporation (notarized) and by-laws; c. Treasurer’s affidavit (notarized); Procedure 16. Print receipts and invoices at the print shops d. Statement of assets and liabilities; Time: 3 days e. Bank certificate of deposit of the paid-in capital; Cost: PHP 1,200 f. Authority to verify the bank account; Comments: The cost is based on the following specifications of the official receipt: 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. LIST OF PROCE DURES • STARTING A BUSINESS 53 g. Registration data sheet with particulars on directors, officers, stockholders, and so Procedure 12. Obtain Mayor’s Permit from the Business Permits forth; and Licensing Division h. Written undertaking to comply with SEC reporting requirements (notarized); and Time: 7 days i. Written undertaking to change corporate name (notarized). Cost: PHP 5,458 (PHP 278 business tax (1/30 of 1% of paid up capital) + PHP 1,000 The SEC Extension Office charges a handling fee of PHP 30 to cover the cost of mayor’s permit fee + PHP 200 sanitary inspection fee + PHP 2,400 garbage fee + transmitting the documents to the SEC Head Office in Metro Manila. PHP 340 fire inspection fee + PHP 500 business plate + PHP 200 PTR fee + PHP 100 zoning fee + PHP 440 FSIC (10% of all regulatory fees)) Procedure 5. After issuance of the SEC certificate of Comments: The applicant must submit the following requirements: incorporation, pay the annual community tax and obtain the a. Locational clearance community tax certificate (CTC) from the City Treasurer’s Office b. Temporary fire safety approval (CTO) Time: 1 day Procedure 13. Buy special books of account at bookstore Cost: PHP 500 Time: 1 day Cost: PHP 400 Procedure 6. Obtain barangay clearance Comments: Special books of accounts are required for registering with the BIR. The Time: 1 day books of accounts are sold at bookstores nationwide. One set of journals consisting Cost: PHP 100 of four books (cash receipts account, disbursements account, ledger, general journal) Comments: This clearance is obtained from the barangay where the business is costs about PHP 400. located and is required to obtain the business permit from the city or municipality. If the company has a computerized accounting system (CAS), it may opt to register Barangay fees vary for each barangay since they have the discretion to impose their its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. own fees and charges for as long as these fees are reasonable and within the limits 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to set by the Local Government Code and city ordinances. Barangay fees may depend inspect and evaluate the company’s CAS within 30 days from receipt of the applica- on: tion form (BIR Form No. 1900) and complete documentary requirements. a. the location and the area (size in square meters) of the place of business; or b. the company’s paid-up capital and the area it occupies; or Procedure 14. Apply for Certificate of Registration (COR) and Taxpayer Identification Number (TIN) at the Bureau of Internal c. whether they issue clearance plates or certificates. Revenue (BIR) Procedure 7. Submit business permit application form and Time: 7 days requirements to, and obtain tax order of payment from City Cost: PHP 115 (PHP 100 certification + PHP 15 documentary stamp tax) Treasurer’s Office (CTO) Comments: The company must register each type of internal revenue tax for which Time: 1 day it is obligated by filing BIR Form No. 0605 and paying the annual registration fee of PHP 500. Upon registration, the BIR will issue to the company the certificate of Cost: No cost registration—BIR Form No. 2303. Comments: The application form is downloadable at the city’s website. Notarization To obtain the TIN, the company has to file: is not required. a. Barangay clearance; The CTO issues a tax order of payment after conducting an inspection and assessing the appropriate fees. b. Mayor’s permit; and Requirements: c. Copy of its SEC registration. 1. Barangay clearance For company registrations filed with the SEC Head Office in Metro Manila, the BIR confirms the pre-registered TIN issued by the SEC. 2. SEC registration New taxpayers are required to attend a seminar. 3. CTC 4. Certificate of no real property Procedure 15. Pay the registration fee and documentary stamp taxes (DST) at the AAB Procedure 8*. Receive inspection from the CTO Time: 1 day Time: 1 day Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance Cost: No cost of shares of stock. DST on the lease contract is not included in the computation of the cost) Procedure 9*. Obtain certificate of no real property from the City Comments: The company must pay DST on the original issuance of shares of stock. Assessor’s Office (CAO) The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Time: 1 day such shares of stock. This payment with the BIR should be made on the 5th of the Cost: PHP 115 (PHP 100 for certification + PHP 15 documentary stamp tax) month following registration with the SEC. Comments: The applicant must apply for a certificate of no real property in view of The COR will be released only after all the DSTs are paid. the fact that it does not own any real estate and is only leasing commercial space. The company must also pay DST on its lease contract at the rate of PHP 3 for the first PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or Procedure 10. Obtain temporary fire safety approval from the fractional part thereof in excess of the first PHP 2,000 for each year of the lease as Bureau of Fire Protection (BFP) stated in the contract. Time: 1 day Cost: No cost (fees included in procedure 12) Procedure 16. Obtain the authority to print receipts and invoices from the BIR Comments: In applying for a business permit, the applicant is allowed to secure a Fire Safety Inspection Certificate (FSIC) within 60 days from issuance of the business Time: 1 day permit. In the meantime, the applicant is required to secure temporary approval Cost: No cost from the BFP. Comments: The authority to print receipts and invoices must be secured before the sales receipts and invoices may be printed. The company can ask any authorized Procedure 11*. Obtain locational clearance from the City printing company to print its official forms, or it can print its own forms (i.e., it uses Planning and Development Office (CPDO) its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Time: 3 days this purpose. To obtain the authority to print receipts and invoices from the BIR, the company must submit the following documents to the Revenue District Office (RDO): Cost: No cost (fees included in procedure 12) a. Duly completed application for authority to print receipts and invoices (BIR Form No. 1906); 54 Doing Business IN the philippines 2011 b. Job order; starting a business c. Final and clear sample of receipts and invoices (machine-printed); LAPU-LAPU d. Application for registration (BIR Form No. 1903); and Standard company legal form: Corporation e. Proof of payment of annual registration fee (BIR Form No. 0605). Paid-in minimum capital requirement: PHP 5,000 = USD 107 Procedure 17. Print receipts and invoices at the print shops Data as of: June 2010 Time: 14 days Procedure 1. Verify and reserve the company name with the Cost: PHP 4,000 (between PHP 3,000 – PHP 5,000) Securities and Exchange Commission (SEC) Comments: The cost is based on the following specifications of the official receipt: Time: 1 day 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Cost: PHP 40 Comments: The company can verify the availability of the company name online. Procedure 18. Have books of accounts and Printer’s Certificate of Verification is free but reservation of the name, once approved by the SEC, costs PHP Delivery (PCD) stamped by the BIR 40 for the first 30 days. The company name can be reserved for a maximum of 120 Time: 1 day days for a fee of PHP 120, which is renewable upon expiration of the period. Cost: No cost Comments: After the printing of receipts and invoices, the printer issues a Printer’s Procedure 2. Deposit paid-up capital in the Authorized Agent Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must Bank (AAB) and obtain bank certificate of deposit submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the Time: 1 day company’s principal place of business) for registration and stamping within thirty Cost: No cost (30) days from issuance. The company must also submit the following documents: Comments: The company is required by law to deposit paid-up capital amounting a. All required books of accounts; to at least 6.25% of the authorized capital stock of the corporation. This paid-up b. VAT registration certificate; capital must not be less than PHP 5,000. c. SEC registration; Some banks charge a fee for issuance of the certificate of deposit. d. BIR Form W-5; e. Certified photocopy of the ATP; and Procedure 3. Notarize articles of incorporation and treasurer’s f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and affidavit at the notary commitments of the taxpayer-user. Time: 1 day The company must also submit a copy of the PCD to the BIR RDO having jurisdiction Cost: PHP 500 over the printer’s principal place of business. Comments: According to Sections 14 and 15 of the Corporation Code, articles of incorporation should be notarized before filing with the SEC. Procedure 19. Register with the Social Security System (SSS) Time: 7 days Procedure 4. Register the company with the SEC Cost: No cost Time: 4 days Comments: To register with the SSS, the company must submit the following docu- Cost: PHP 2,695 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized ments: capital stock or the subscription price of the subscribed capital stock, whichever is a. Employer registration form (Form R-1); higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- b. Employment report (Form R-1A); tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + c. List of employees, specifying their birth dates, positions, monthly salary and date PHP 10 registration for SEC bulletin + PHP 30 handling fee) of employment; and Comments: The company can register online through SEC i-Register but must pay d. Articles of incorporation, by-laws and SEC registration. on site at the SEC. The following documents are required for SEC registration: Upon submission of the required documents, the SSS employer and employee a. Company name verification slip; numbers will be released. The employees may attend an SSS training seminar after b. Articles of incorporation (notarized) and by-laws; registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations. c. Treasurer’s affidavit (notarized); d. Statement of assets and liabilities; Procedure 20. Register with the Philippine Health Insurance e. Bank certificate of deposit of the paid-in capital; Company (PhilHealth) f. Authority to verify the bank account; Time: 1 day g. Registration data sheet with particulars on directors, officers, stockholders, and so Cost: No cost forth; Comments: To register with PhilHealth, the company must submit the following h. Written undertaking to comply with SEC reporting requirements (notarized); and documents: i. Written undertaking to change corporate name (notarized). a. Employer data record (Form ER1); The SEC Extension Office charges a handling fee of PHP 30 to cover the cost of b. Report of employee-members (Form ER2); transmitting the documents to the SEC Head Office in Metro Manila. c. SEC registration; Procedure 5. Obtain barangay clearance d. BIR registration; and Time: 1 day e. Copy of business permit. Cost: PHP 150 (between PHP 100 – PHP 200) Upon submission of the required documents, the company shall get the receiving copy of all the forms as proof of membership until PhilHealth releases the employer Comments: This clearance is obtained from the barangay where the business is and employee numbers within three months. located and is required to obtain the business permit from the city or municipality. Barangay fees vary for each barangay since they have the discretion to impose their own fees and charges for as long as these fees are reasonable and within the limits *This procedure can be completed simultaneously with previous procedures. set by the Local Government Code and city ordinances. Barangay fees may depend on: a. the location and the area (size in square meters) of the place of business; or b. the company’s paid-up capital and the area it occupies; or c. whether they issue clearance plates or certificates. LIST OF PROCE DURES • STARTING A BUSINESS 55 Procedure 6. After issuance of the SEC certificate of Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance of shares of stock. DST on the lease contract is not included in the computation of incorporation, pay the annual community tax and obtain the the cost) community tax certificate (CTC) from the City Treasurer’s Office Comments: The company must pay DST on the original issuance of shares of stock. (CTO) The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Time: 1 day such shares of stock. This payment with the BIR should be made on the 5th of the Cost: PHP 500 month following registration with the SEC. The COR will be released only after all the DSTs are paid. Procedure 7. Obtain the business permit application form from The company must also pay DST on its lease contract at the rate of PHP 3 for the first the City Treasurer’s Office (CTO) PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or Time: 1 day fractional part thereof in excess of the first PHP 2,000 for each year of the lease as Cost: No cost stated in the contract. Procedure 8. Obtain business permit to operate from the CTO Procedure 13. Obtain the authority to print receipts and invoices Time: 3 days from the BIR Cost: PHP 5,143 (PHP 833.99 business tax (1/10 of 1% of paid-up capital) + PHP Time: 1 day 1,667.98 mayor’s permit fee (1/5 of 1% of paid-up capital) + PHP 200 sanitary inspec- Cost: No cost (fees included in procedure 10) tion fee + PHP 500 garbage fee + PHP 100 zoning fee + PHP 1,000 occupational Comments: The authority to print receipts and invoices must be secured before the permit fee (assuming 10 employees at the beginning) + PHP 20 tax clearance + PHP sales receipts and invoices may be printed. The company can ask any authorized 20 police clearance + PHP 500 business plate (new business needs plate, sticker is printing company to print its official forms, or it can print its own forms (i.e., it uses only issued at renewal which is PHP 50) + PHP 300.80 FSIC (10% of all other charges its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for except business tax and occupational permit fee)) this purpose. To obtain the authority to print receipts and invoices from the BIR, the Comments: The city has a one-stop shop managed by the CTO. The applicant company must submit the following documents to the Revenue District Office (RDO): submits the application form and requirements to the one-stop shop and obtains an a. Duly completed application for authority to print receipts and invoices (BIR Form assessment of the business permit fees and taxes. Payment of the business permit No. 1906); fees and taxes is also made at the CTO. The applicant presents the documents for b. Job order; the scheduling of inspection clearances under the Joint Inspection Team (JIT). The c. Final and clear sample of receipts and invoices (machine-printed); company will also obtain the claim stub from the one-stop shop for the release of the business permit. d. Application for registration (BIR Form No. 1903); and e. Proof of payment of annual registration fee (BIR Form No. 0605). Procedure 9*. Obtain the real property tax clearance from the Real Property Tax License and Fees Divisions at the CTO Procedure 14. Print receipts and invoices at the print shops Time: 1 day Time: 7 days Cost: No cost Cost: PHP 2,500 (between PHP 2,500 – PHP 3,000) Comments: Assessment of the real property tax is required even if the entrepreneur Comments: The cost is based on the following specifications of the official receipt: is only renting the property. 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Procedure 10. Buy special books of account at bookstore Procedure 15. Have books of accounts and Printer’s Certificate of Time: 1 day Delivery (PCD) stamped by the BIR Cost: PHP 400 Time: 1 day Comments: Special books of accounts are required for registering with the BIR. The Cost: No cost books of accounts are sold at bookstores nationwide. One set of journals consisting Comments: After the printing of receipts and invoices, the printer issues a Printer’s of four books (cash receipts account, disbursements account, ledger, general journal) Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must costs about PHP 400. submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the If the company has a computerized accounting system (CAS), it may opt to register company’s principal place of business) for registration and stamping within thirty its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. (30) days from issuance. The company must also submit the following documents: 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to a. All required books of accounts; inspect and evaluate the company’s CAS within 30 days from receipt of the applica- b. VAT registration certificate; tion form (BIR Form No. 1900) and complete documentary requirements. c. SEC registration; Procedure 11. Apply for Certificate of Registration (COR) and d. BIR Form W-5; Taxpayer Identification Number (TIN) at the Bureau of Internal e. Certified photocopy of the ATP; and Revenue (BIR) f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and Time: 2 days commitments of the taxpayer-user. Cost: PHP 115 (PHP 100 certification + PHP 15 documentary stamp tax) The company must also submit a copy of the PCD to the BIR RDO having jurisdiction over the printer’s principal place of business. Comments: The company must register each type of internal revenue tax for which it is obligated by filing BIR Form No. 0605 and paying the annual registration fee Procedure 16. Register with the Social Security System (SSS) of PHP 500. Upon registration, the BIR will issue to the company the certificate of registration—BIR Form No. 2303. Time: 4 days To obtain the TIN, the company has to file: Cost: No cost a. Barangay clearance; Comments: To register with the SSS, the company must submit the following docu- ments: b. Mayor’s permit; and a. Employer registration form (Form R-1); c. Copy of its SEC registration. b. Employment report (Form R-1A); For company registrations filed with the SEC Head Office in Metro Manila, the BIR confirms the pre-registered TIN issued by the SEC. c. List of employees, specifying their birth dates, positions, monthly salary and date of employment; and New taxpayers are required to attend a seminar. d. Articles of incorporation, by-laws and SEC registration. Procedure 12. Pay the registration fee and documentary stamp Upon submission of the required documents, the SSS employer and employee taxes (DST) at the AAB numbers will be released. The employees may attend an SSS training seminar after registration. SSS prefers that all members go through such training so that each Time: 1 day member is aware of their rights and obligations. 56 Doing Business IN the philippines 2011 Procedure 17. Register with the Philippine Health Insurance b. Articles of incorporation (notarized) and by-laws; Company (PhilHealth) c. Treasurer’s affidavit (notarized); Time: 1 day d. Statement of assets and liabilities; Cost: No cost e. Bank certificate of deposit of the paid-in capital; Comments: To register with PhilHealth, the company must submit the following f. Authority to verify the bank account; documents: g. Registration data sheet with particulars on directors, officers, stockholders, and so a. Employer data record (Form ER1); forth; b. Report of employee-members (Form ER2); h. Written undertaking to comply with SEC reporting requirements (notarized); and c. SEC registration; i. Written undertaking to change corporate name (notarized). d. BIR registration; and The SEC Head Office issues pre-registered TINs only if the company’s application for registration has been approved. The company must still register with the Bureau of e. Copy of business permit. Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- Upon submission of the required documents, the company shall get the receiving tration fee, obtain and stamp sales invoices, receipts and the books of accounts. copy of all the forms as proof of membership until PhilHealth releases the employer and employee numbers within three months. Procedure 5. After issuance of the SEC certificate of incorporation, pay the annual community tax and obtain the *This procedure can be completed simultaneously with previous procedures. community tax certificate (CTC) from the City Treasurer’s Office (CTO) starting a business Time: 1 day LAS PIÑAS Cost: PHP 500 Standard company legal form: Corporation Procedure 6. Obtain barangay clearance Paid-in minimum capital requirement: PHP 5,000 = USD 107 Time: 1 day Data as of: June 2010 Cost: PHP 700 (between PHP 600 – PHP 1,000) Procedure 1. Verify and reserve the company name with the Comments: This clearance is obtained from the barangay where the business is Securities and Exchange Commission (SEC) located and is required to obtain the business permit from the city or municipality. Time: 1 day Barangay fees vary for each barangay since they have the discretion to impose their own fees and charges for as long as these fees are reasonable and within the limits Cost: PHP 40 set by the Local Government Code and city ordinances. Barangay fees may depend Comments: The company can verify the availability of the company name online. on: Verification is free but reservation of the name, once approved by the SEC, costs PHP a. the location and the area (size in square meters) of the place of business; or 40 for the first 30 days. The company name can be reserved for a maximum of 120 days for a fee of PHP 120, which is renewable upon expiration of the period. b. the company’s paid-up capital and the area it occupies; or c. whether they issue clearance plates or certificates. Procedure 2. Deposit paid-up capital in the Authorized Agent Bank (AAB) and obtain bank certificate of deposit Procedure 7. Obtain the business permit application form from Time: 1 day the Business Permits and Licensing Office (BPLO) Cost: No cost Time: 1 day Comments: The company is required by law to deposit paid-up capital amounting Cost: No cost to at least 6.25% of the authorized capital stock of the corporation. This paid-up capital must not be less than PHP 5,000. Procedure 8. Proceed to the Engineering Department for Some banks charge a fee for issuance of the certificate of deposit. assessment of the annual inspection fees Time: 1 day Procedure 3. Notarize articles of incorporation and treasurer’s Cost: No cost (fees included in procedure 12) affidavit at the notary Time: 1 day Procedure 9. Obtain the locational clearance application form Cost: PHP 500 from the City Planning and Development Office (CPDO) and Comments: According to Sections 14 and 15 of the Corporation Code, articles of notarize locational clearance application form at the notary incorporation should be notarized before filing with the SEC. Time: 1 day Cost: PHP 100 (cost of notarization) Procedure 4. Register the company with the SEC and receive pre- Comments: Requirements include the following: registered Taxpayer Identification Number (TIN) a. Notarized application form; Time: 3 days b. Barangay clearance; and Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized c. Contract of lease capital stock or the subscription price of the subscribed capital stock, whichever is higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent Procedure 10. Obtain the locational clearance from the CPDO to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + Time: 1 day PHP 10 registration for SEC bulletin) Cost: No cost (fees included in procedure 12) Comments: The company can register online through SEC i-Register but must pay on site at the SEC. The following documents are required for SEC registration: Procedure 11. Proceed to the Bureau of Fire Protection (BFP) a. Company name verification slip; for the assessment of fire inspection fee and scheduling of an inspection Time: 1 day Cost: PHP 1,428 (10% of regulatory fees charged by the BPLO) Comments: The inspection from the BFP takes place after the issuance of the busi- ness permit. LIST OF PROCE DURES • STARTING A BUSINESS 57 Procedure 12. Obtain the business permit to operate from the The COR will be released only after all the DSTs are paid. BPLO The company must also pay DST on its lease contract at the rate of PHP 3 for the first PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or Time: 5 days fractional part thereof in excess of the first PHP 2,000 for each year of the lease as Cost: PHP 14,489 (PHP 208.5 business tax (¼ of 1/10 of 1% of paid up capital) + PHP stated in the contract. 3,000 mayor’s permit fee + PHP 8,000 garbage fee + PHP 2,000 sanitary inspection fee + PHP 500 fiscal fee + PHP 300 locational clearance + PHP 250 electrical inspec- Procedure 17. Obtain the authority to print receipts and invoices tion fee + PHP 150 building inspection fee + PHP 60 plumbing inspection fee + PHP from the BIR 20 miscellaneous) Time: 1 day Comments: To obtain the business permit, the company must file the following documents at the BPLO: Cost: No cost (fees included in procedure 15) a. Filled-up application form; Comments: The authority to print receipts and invoices must be secured before the sales receipts and invoices may be printed. The company can ask any authorized b. SEC registration; printing company to print its official forms, or it can print its own forms (i.e., it uses c. Barangay clearance; its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for d. Contract of lease; and this purpose. To obtain the authority to print receipts and invoices from the BIR, the e. Locational clearance. company must submit the following documents to the Revenue District Office (RDO): The company receives an account number at the Encoding Data Processing (EDP) a. Duly completed application for authority to print receipts and invoices (BIR Form Division of the City Treasurer’s Office (CTO). Then the company obtains the assess- No. 1906); ment of business permit fees and taxes at the BPLO, receives the signed interview b. Job order; sheet and receives final approval from the BPLO Chief. The business permit fees and c. Final and clear sample of receipts and invoices (machine-printed); taxes are paid at the CTO. Inspection from the BPLO takes place after issuance of the d. Application for registration (BIR Form No. 1903); and business permit. e. Proof of payment of annual registration fee (BIR Form No. 0605). The city collects initial business tax for the quarter covering the period of business registration. In the succeeding quarter(s), the tax is based on the gross sales for the Procedure 18. Print receipts and invoices at the print shops preceding quarter. Time: 7 days Procedure 13*. Present the official receipt at the Sanitation Cost: PHP 3,500 (between PHP 3,000 – PHP 3,800) Department to obtain the sanitary permit Comments: The cost is based on the following specifications of the official receipt: Time: 1 day 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Cost: No cost (fees included in procedure 12) Procedure 19. Have books of accounts and Printer’s Certificate of Procedure 14. Buy special books of account at bookstore Delivery (PCD) stamped by the BIR Time: 1 day Time: 1 day Cost: PHP 300 Cost: No cost Comments: Special books of accounts are required for registering with the BIR. The Comments: After the printing of receipts and invoices, the printer issues a Printer’s books of accounts are sold at bookstores nationwide. One set of journals consisting Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must of four books (cash receipts account, disbursements account, ledger, general journal) submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the costs about PHP 400. company’s principal place of business) for registration and stamping within thirty (30) days from issuance. The company must also submit the following documents: If the company has a computerized accounting system (CAS), it may opt to register its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. a. All required books of accounts; 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to b. VAT registration certificate; inspect and evaluate the company’s CAS within 30 days from receipt of the applica- c. SEC registration; tion form (BIR Form No. 1900) and complete documentary requirements. d. BIR Form W-5; e. Certified photocopy of the ATP; and Procedure 15. Apply for Certificate of Registration (COR) and TIN at the Bureau of Internal Revenue (BIR) f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and commitments of the taxpayer-user. Time: 2 days The company must also submit a copy of the PCD to the BIR RDO having jurisdiction Cost: PHP 15 (documentary stamp tax) over the printer’s principal place of business. Comments: The company must register each type of internal revenue tax for which it is obligated by filing BIR Form No. 0605 and paying the annual registration fee Procedure 20. Register with the Social Security System (SSS) of PHP 500. Upon registration, the BIR will issue to the company the certificate of Time: 3 days registration—BIR Form No. 2303. Cost: No cost To obtain the TIN, the company has to file: Comments: To register with the SSS, the company must submit the following docu- a. Barangay clearance; ments: b. Mayor’s permit; and a. Employer registration form (Form R-1); c. Copy of its SEC registration. b. Employment report (Form R-1A); For company registrations filed with the SEC Head Office in Metro Manila, the BIR c. List of employees, specifying their birth dates, positions, monthly salary and date confirms the pre-registered TIN issued by the SEC. of employment; and New taxpayers are required to attend a seminar. d. Articles of incorporation, by-laws and SEC registration. Procedure 16. Pay the registration fee and documentary stamp Upon submission of the required documents, the SSS employer and employee numbers will be released. The employees may attend an SSS training seminar after taxes (DST) at the AAB registration. SSS prefers that all members go through such training so that each Time: 1 day member is aware of their rights and obligations. Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance of shares of stock. DST on the lease contract is not included in the computation of Procedure 21. Register with the Philippine Health Insurance the cost) Company (PhilHealth) Comments: The company must pay DST on the original issuance of shares of stock. Time: 1 day The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Cost: No cost such shares of stock. This payment with the BIR should be made on the 5th of the month following registration with the SEC. Comments: To register with PhilHealth, the company must submit the following documents: a. Employer data record (Form ER1); b. Report of employee-members (Form ER2); 58 Doing Business IN the philippines 2011 c. SEC registration; Procedure 5. After issuance of the SEC certificate of d. BIR registration; and incorporation, pay the annual community tax and obtain the e. Copy of business permit. community tax certificate (CTC) from the City Treasurer’s Office Upon submission of the required documents, the company shall get the receiving (CTO) copy of all the forms as proof of membership until PhilHealth releases the employer Time: 1 day and employee numbers within three months. Cost: PHP 500 *This procedure can be completed simultaneously with previous procedures. Procedure 6. Obtain barangay clearance Time: 1 day starting a business Cost: PHP 650 MAKATI Comments: This clearance is obtained from the barangay where the business is located and is required to obtain the business permit from the city or municipality. Standard company legal form: Corporation Barangay fees vary for each barangay since they have the discretion to impose their Paid-in minimum capital requirement: PHP 5,000 = USD 107 own fees and charges for as long as these fees are reasonable and within the limits Data as of: June 2010 set by the Local Government Code and city ordinances. Barangay fees may depend on: Procedure 1. Verify and reserve the company name with the a. the location and the area (size in square meters) of the place of business; or Securities and Exchange Commission (SEC) b. the company’s paid-up capital and the area it occupies; or Time: 1 day c. whether they issue clearance plates or certificates. Cost: PHP 40 Comments: The company can verify the availability of the company name online. Procedure 7. Notarize the business permit and locational Verification is free but reservation of the name, once approved by the SEC, costs PHP clearance application forms at the notary 40 for the first 30 days. The company name can be reserved for a maximum of 120 Time: 1 day days for a fee of PHP 120, which is renewable upon expiration of the period. Cost: PHP 200 (PHP 100 per document) Procedure 2. Deposit paid-up capital in the Authorized Agent Comments: The application forms for both business permit and locational clearance Bank (AAB) and obtain bank certificate of deposit may be downloaded from the Makati City website at www.makati.gov.ph. Time: 1 day Procedure 8. Obtain the locational clearance from the Urban Cost: No cost Development Department–Zoning Administration Division (UDD- Comments: The company is required by law to deposit paid-up capital amounting ZAD) to at least 6.25% of the authorized capital stock of the corporation. This paid-up capital must not be less than PHP 5,000. Time: 4 days Some banks charge a fee for issuance of the certificate of deposit. Cost: PHP 2,700 (PHP 200 filing fee + PHP 2,500 processing fee equivalent to PHP 12.50 per square meter assuming an area of 200 square meters) Procedure 3. Notarize articles of incorporation and treasurer’s Comments: To secure the locational clearance as per Ordinance-2000-78 the affidavit at the notary required documents are: Time: 1 day a. Vicinity/ location map; Cost: PHP 500 b. Barangay clearance; Comments: According to Sections 14 and 15 of the Corporation Code, articles of c. Contract of lease; incorporation should be notarized before filing with the SEC. d. SEC registration; e. Occupancy permit (building/unit); and Procedure 4. Register the company with the SEC and receive pre- f. Business permit application form. registered Taxpayer Identification Number (TIN) Time: 3 days Procedure 9*. Receive inspection for the locational clearance Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized from the UDD-ZAD capital stock or the subscription price of the subscribed capital stock, whichever is Time: 1 day higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent Cost: No cost to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + Procedure 10. Obtain the business permit to operate from the PHP 10 registration for SEC bulletin) Business Permits Office (BPO) Comments: The company can register online through SEC i-Register but must pay on site at the SEC. The following documents are required for SEC registration: Time: 4 days a. Company name verification slip; Cost: PHP 14,304 (PHP 833.99 business tax (10% of 1% of paid up capital) + PHP 6,000 mayor’s permit fee + PHP 5,400 garbage fee + PHP 600 sanitary permit fee + b. Articles of incorporation (notarized) and by-laws; PHP 1,470 FSIC (10% of all regulatory charges) c. Treasurer’s affidavit (notarized); d. Statement of assets and liabilities; Procedure 11*. Present the official receipt at the Makati Health e. Bank certificate of deposit of the paid-in capital; Department (MHD) for the issuance of the sanitary permit f. Authority to verify the bank account; Time: 1 day g. Registration data sheet with particulars on directors, officers, stockholders, and so Cost: No cost (fees included in procedure 10) forth; h. Written undertaking to comply with SEC reporting requirements (notarized); and Procedure 12. Buy special books of account at bookstore i. Written undertaking to change corporate name (notarized). Time: 1 day The SEC Head Office issues pre-registered TINs only if the company’s application for Cost: PHP 250 (between PHP 130 - PHP 400) registration has been approved. The company must still register with the Bureau of Comments: Special books of accounts are required for registering with the BIR. The Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- books of accounts are sold at bookstores nationwide. One set of journals consisting tration fee, obtain and stamp sales invoices, receipts and the books of accounts. of four books (cash receipts account, disbursements account, ledger, general journal) costs about PHP 400. LIST OF PROCE DURES • STARTING A BUSINESS 59 If the company has a computerized accounting system (CAS), it may opt to register Comments: After the printing of receipts and invoices, the printer issues a Printer’s its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the inspect and evaluate the company’s CAS within 30 days from receipt of the applica- company’s principal place of business) for registration and stamping within thirty tion form (BIR Form No. 1900) and complete documentary requirements. (30) days from issuance. The company must also submit the following documents: a. All required books of accounts; Procedure 13. Apply for Certificate of Registration (COR) and TIN at the Bureau of Internal Revenue (BIR) b. VAT registration certificate; Time: 2 days c. SEC registration; Cost: PHP 15 (documentary stamp tax) d. BIR Form W-5; Comments: The company must register each type of internal revenue tax for which e. Certified photocopy of the ATP; and it is obligated by filing BIR Form No. 0605 and paying the annual registration fee f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and of PHP 500. Upon registration, the BIR will issue to the company the certificate of commitments of the taxpayer-user. registration—BIR Form No. 2303. The company must also submit a copy of the PCD to the BIR RDO having jurisdiction To obtain the TIN, the company has to file: over the printer’s principal place of business. a. Barangay clearance; Procedure 18. Register with the Social Security System (SSS) b. Mayor’s permit; and Time: 2 days c. Copy of its SEC registration. Cost: No cost For company registrations filed with the SEC Head Office in Metro Manila, the BIR confirms the pre-registered TIN issued by the SEC. Comments: To register with the SSS, the company must submit the following docu- ments: New taxpayers are required to attend a seminar. a. Employer registration form (Form R-1); Procedure 14. Pay the registration fee and documentary stamp b. Employment report (Form R-1A); taxes (DST) at the AAB c. List of employees, specifying their birth dates, positions, monthly salary and date Time: 1 day of employment; and Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance d. Articles of incorporation, by-laws and SEC registration. of shares of stock. DST on the lease contract is not included in the computation of Upon submission of the required documents, the SSS employer and employee the cost) numbers will be released. The employees may attend an SSS training seminar after Comments: The company must pay DST on the original issuance of shares of stock. registration. SSS prefers that all members go through such training so that each The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of member is aware of their rights and obligations. such shares of stock. This payment with the BIR should be made on the 5th of the month following registration with the SEC. Procedure 19. Register with the Philippine Health Insurance The COR will be released only after all the DSTs are paid. Company (PhilHealth) The company must also pay DST on its lease contract at the rate of PHP 3 for the first Time: 1 day PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or Cost: No cost fractional part thereof in excess of the first PHP 2,000 for each year of the lease as Comments: To register with PhilHealth, the company must submit the following stated in the contract. documents: a. Employer data record (Form ER1); Procedure 15. Obtain the authority to print receipts and invoices b. Report of employee-members (Form ER2); from the BIR c. SEC registration; Time: 1 day d. BIR registration; and Cost: No cost (fees included in procedure 14) e. Copy of business permit. Comments: The authority to print receipts and invoices must be secured before the sales receipts and invoices may be printed. The company can ask any authorized Upon submission of the required documents, the company shall get the receiving printing company to print its official forms, or it can print its own forms (i.e., it uses copy of all the forms as proof of membership until PhilHealth releases the employer its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for and employee numbers within three months. this purpose. To obtain the authority to print receipts and invoices from the BIR, the company must submit the following documents to the Revenue District Office (RDO): *This procedure can be completed simultaneously with previous procedures. a. Duly completed application for authority to print receipts and invoices (BIR Form No. 1906); starting a business b. Job order; MALABON c. Final and clear sample of receipts and invoices (machine-printed); Standard company legal form: Corporation d. Application for registration (BIR Form No. 1903); and Paid-in minimum capital requirement: PHP 5,000 = USD 107 e. Proof of payment of annual registration fee (BIR Form No. 0605). Data as of: June 2010 Procedure 16. Print receipts and invoices at the print shops Procedure 1. Verify and reserve the company name with the Time: 7 days Securities and Exchange Commission (SEC) Cost: PHP 3,500 (between PHP 3,000 - PHP 3,800) Time: 1 day Comments: The cost is based on the following specifications of the official receipt: Cost: PHP 40 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Comments: The company can verify the availability of the company name online. Verification is free but reservation of the name, once approved by the SEC, costs PHP Procedure 17. Have books of accounts and Printer’s Certificate of 40 for the first 30 days. The company name can be reserved for a maximum of 120 Delivery (PCD) stamped by the BIR days for a fee of PHP 120, which is renewable upon expiration of the period. Time: 1 day Cost: No cost Procedure 2. Deposit paid-up capital in the Authorized Agent Bank (AAB) and obtain bank certificate of deposit Time: 1 day Cost: No cost 60 Doing Business IN the philippines 2011 Comments: The company is required by law to deposit paid-up capital amounting Procedure 9. Obtain the locational clearance from the CPDO to at least 6.25% of the authorized capital stock of the corporation. This paid-up capital must not be less than PHP 5,000. Time: 2 days Some banks charge a fee for issuance of the certificate of deposit. Cost: PHP 3,640 (PHP 40 filing fee + PHP 3,600 processing fee equivalent to PHP 18 per square meter assuming an area of 200 square meters) Procedure 3. Notarize articles of incorporation and treasurer’s Comments: Required documents for locational clearance: affidavit at the notary a. Notarized locational clearance application form; Time: 1 day b. Contract of lease; and Cost: PHP 500 c. Barangay clearance. Comments: According to Sections 14 and 15 of the Corporation Code, articles of incorporation should be notarized before filing with the SEC. Procedure 10*. Receive inspection for the locational clearance from the CPDO Procedure 4. Register the company with the SEC and receive pre- Time: 1 day registered Taxpayer Identification Number (TIN) Cost: No cost Time: 3 days Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized Procedure 11. Obtain the business permit to operate from the capital stock or the subscription price of the subscribed capital stock, whichever is Business Permits and Licensing Office (BPLO) higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent Time: 4 days to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- Cost: PHP 5,798 (PHP 208.5 business tax (1/4 of 1/10 of 1% of paid up capital) + tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + PHP 600 mayor’s permit fee + PHP 200 business plate + PHP 1,500 garbage fee + PHP 10 registration for SEC bulletin) PHP 1,000 sanitary inspection fee + PHP 50 mayor’s certification + PHP 400 building Comments: The company can register online through SEC i-Register but must pay inspection fee + PHP 400 electrical inspection fee + PHP 400 plumbing inspection on site at the SEC. The following documents are required for SEC registration: fee + PHP 200 sign/billboard inspection fee + PHP 839 FSIC (10% of all regulatory a. Company name verification slip; charges)) b. Articles of incorporation (notarized) and by-laws; Comments: The applicant submits application form and requirements to the BPLO c. Treasurer’s affidavit (notarized); and gets an assessment of the business permit fees and taxes. The business permit fees and taxes are paid at the City Treasurer’s Office. Sanitary inspection and fire fees d. Statement of assets and liabilities; are paid as part of the fees to be paid before issuance of the business permit but e. Bank certificate of deposit of the paid-in capital; inspections for the sanitary permit and fire safety take place after issuance of the f. Authority to verify the bank account; business permit. g. Registration data sheet with particulars on directors, officers, stockholders, and so The city collects initial business tax for the quarter covering the period of business forth; registration. In the succeeding quarter(s), the tax is based on the gross sales for the h. Written undertaking to comply with SEC reporting requirements (notarized); and preceding quarter. i. Written undertaking to change corporate name (notarized). Procedure 12*. Receive inspection from the BPLO The SEC Head Office issues pre-registered TINs only if the company’s application for registration has been approved. The company must still register with the Bureau of Time: 1 day Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- Cost: No cost tration fee, obtain and stamp sales invoices, receipts and the books of accounts. Comments: The inspection happens the day after the application for new business has been submitted. The business permit will be released only after the inspection Procedure 5. After issuance of the SEC certificate of has taken place. incorporation, pay the annual community tax and obtain the community tax certificate (CTC) from the City Treasurer’s Office Procedure 13. Buy special books of account at bookstore (CTO) Time: 1 day Time: 1 day Cost: PHP 400 Cost: PHP 500 Comments: Special books of accounts are required for registering with the BIR. The books of accounts are sold at bookstores nationwide. One set of journals consisting Procedure 6. Obtain barangay clearance of four books (cash receipts account, disbursements account, ledger, general journal) Time: 1 day costs about PHP 400. Cost: PHP 300 (between PHP 100 – PHP 500) If the company has a computerized accounting system (CAS), it may opt to register its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. Comments: This clearance is obtained from the barangay where the business is 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to located and is required to obtain the business permit from the city or municipality. inspect and evaluate the company’s CAS within 30 days from receipt of the applica- Barangay fees vary for each barangay since they have the discretion to impose their tion form (BIR Form No. 1900) and complete documentary requirements. own fees and charges for as long as these fees are reasonable and within the limits set by the Local Government Code and city ordinances. Barangay fees may depend Procedure 14. Apply for Certificate of Registration (COR) and TIN on: at the Bureau of Internal Revenue (BIR) a. the location and the area (size in square meters) of the place of business; or Time: 2 days b. the company’s paid-up capital and the area it occupies; or Cost: PHP 115 (PHP 100 certification + PHP 15 documentary stamp tax) c. whether they issue clearance plates or certificates. Comments: The company must register each type of internal revenue tax for which Procedure 7. Obtain the business permit application form from it is obligated by filing BIR Form No. 0605 and paying the annual registration fee of PHP 500. Upon registration, the BIR will issue to the company the certificate of the Business Permit and Licensing Office (BPLO) registration—BIR Form No. 2303. Time: 1 day To obtain the TIN, the company has to file: Cost: No cost a. Barangay clearance; Procedure 8. Obtain the locational clearance application form b. Mayor’s permit; and from the City Planning and Development Office (CPDO) and c Copy of its SEC registration. notarize locational clearance and business permit application For company registrations filed with the SEC Head Office in Metro Manila, the BIR forms at the notary confirms the pre-registered TIN issued by the SEC. Time: 1 day New taxpayers are required to attend a seminar. Cost: PHP 100 LIST OF PROCE DURES • STARTING A BUSINESS 61 Procedure 15. Pay the registration fee and documentary stamp Upon submission of the required documents, the SSS employer and employee numbers will be released. The employees may attend an SSS training seminar after taxes (DST) at the AAB registration. SSS prefers that all members go through such training so that each Time: 1 day member is aware of their rights and obligations. Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance of shares of stock. DST on the lease contract is not included in the computation of Procedure 20. Register with the Philippine Health Insurance the cost) Company (PhilHealth) Comments: The company must pay DST on the original issuance of shares of stock. Time: 1 day The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Cost: No cost such shares of stock. This payment with the BIR should be made on the 5th of the month following registration with the SEC. Comments: To register with PhilHealth, the company must submit the following documents: The COR will be released only after all the DSTs are paid. a. Employer data record (Form ER1); The company must also pay DST on its lease contract at the rate of PHP 3 for the first PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or b. Report of employee-members (Form ER2); fractional part thereof in excess of the first PHP 2,000 for each year of the lease as c. SEC registration; stated in the contract. d. BIR registration; and e. Copy of business permit. Procedure 16. Obtain the authority to print receipts and invoices Upon submission of the required documents, the company shall get the receiving from the BIR copy of all the forms as proof of membership until PhilHealth releases the employer Time: 1 day and employee numbers within three months. Cost: No cost (fees included in procedure 15) Comments: The authority to print receipts and invoices must be secured before the *This procedure can be completed simultaneously with previous procedures. sales receipts and invoices may be printed. The company can ask any authorized printing company to print its official forms, or it can print its own forms (i.e., it uses starting a business its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for this purpose. To obtain the authority to print receipts and invoices from the BIR, the MANDALUYONG company must submit the following documents to the Revenue District Office (RDO): Standard company legal form: Corporation a. Duly completed application for authority to print receipts and invoices (BIR Form Paid-in minimum capital requirement: PHP 5,000 = USD 107 No. 1906); Data as of: June 2010 b. Job order; c. Final and clear sample of receipts and invoices (machine-printed); Procedure 1. Verify and reserve the company name with the d. Application for registration (BIR Form No. 1903); and Securities and Exchange Commission (SEC) e. Proof of payment of annual registration fee (BIR Form No. 0605). Time: 1 day Cost: PHP 40 Procedure 17. Print receipts and invoices at the print shops Comments: The company can verify the availability of the company name online. Time: 7 days Verification is free but reservation of the name, once approved by the SEC, costs PHP Cost: PHP 3,500 (between PHP 3,000 – PHP 3,800) 40 for the first 30 days. The company name can be reserved for a maximum of 120 days for a fee of PHP 120, which is renewable upon expiration of the period. Comments: The cost is based on the following specifications of the official receipt: 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Procedure 2. Deposit paid-up capital in the Authorized Agent Bank (AAB) and obtain bank certificate of deposit Procedure 18. Have books of accounts and Printer’s Certificate of Delivery (PCD) stamped by the BIR Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: The company is required by law to deposit paid-up capital amounting to at least 6.25% of the authorized capital stock of the corporation. This paid-up Comments: After the printing of receipts and invoices, the printer issues a Printer’s capital must not be less than PHP 5,000. Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the Some banks charge a fee for issuance of the certificate of deposit. company’s principal place of business) for registration and stamping within thirty (30) days from issuance. The company must also submit the following documents: Procedure 3. Notarize articles of incorporation and treasurer’s a. All required books of accounts; affidavit at the notary b. VAT registration certificate; Time: 1 day c. SEC registration; Cost: PHP 500 d. BIR Form W-5; Comments: According to Sections 14 and 15 of the Corporation Code, articles of incorporation should be notarized before filing with the SEC. e. Certified photocopy of the ATP; and f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and Procedure 4. Register the company with the SEC and receive pre- commitments of the taxpayer-user. registered Taxpayer Identification Number (TIN) The company must also submit a copy of the PCD to the BIR RDO having jurisdiction Time: 3 days over the printer’s principal place of business. Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized capital stock or the subscription price of the subscribed capital stock, whichever is Procedure 19. Register with the Social Security System (SSS) higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent Time: 2 days to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- Cost: No cost tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + Comments: To register with the SSS, the company must submit the following docu- PHP 10 registration for SEC bulletin) ments: Comments: The company can register online through SEC i-Register but must pay a. Employer registration form (Form R-1); on site at the SEC. The following documents are required for SEC registration: b. Employment report (Form R-1A); a. Company name verification slip; c. List of employees, specifying their birth dates, positions, monthly salary and date b. Articles of incorporation (notarized) and by-laws; of employment; and c. Treasurer’s affidavit (notarized); d. Articles of incorporation, by-laws and SEC registration. d. Statement of assets and liabilities; 62 Doing Business IN the philippines 2011 e. Bank certificate of deposit of the paid-in capital; c. Locational clearance; f. Authority to verify the bank account; d. SEC registration; g. Registration data sheet with particulars on directors, officers, stockholders, and so e. Articles of incorporation; forth; f. Contract of lease; h. Written undertaking to comply with SEC reporting requirements (notarized); and g. Pictures of establishment (front – showing left and right neighbors, and inside) on i. Written undertaking to change corporate name (notarized). photo paper; and The SEC Head Office issues pre-registered TINs only if the company’s application for h. Community tax certificate. registration has been approved. The company must still register with the Bureau of The applicant submits application form and requirements to the BPLO and gets an Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- assessment of business permit fees and taxes, as well as the tax order of payment. tration fee, obtain and stamp sales invoices, receipts and the books of accounts. The business permit fees and taxes are paid at the City Treasurer’s Office. Inspection from the BPLO takes place after issuance of the business permit. Procedure 5. After issuance of the SEC certificate of The city collects initial business tax for the quarter covering the period of business incorporation, pay the annual community tax and obtain the registration. In the succeeding quarter(s), the tax is based on the gross sales for the community tax certificate (CTC) from the City Treasurer’s Office preceding quarter. (CTO) Time: 1 day Procedure 12. Buy special books of account at bookstore Cost: PHP 500 Time: 1 day Cost: PHP 400 Procedure 6. Obtain barangay clearance Comments: Special books of accounts are required for registering with the BIR. The Time: 1 day books of accounts are sold at bookstores nationwide. One set of journals consisting Cost: PHP 500 (between PHP 100 - PHP 1,000) of four books (cash receipts account, disbursements account, ledger, general journal) costs about PHP 400. Comments: This clearance is obtained from the Barangay where the business is located and is required to obtain the business permit from the city or municipality. If the company has a computerized accounting system (CAS), it may opt to register Barangay fees vary for each Barangay since they have the discretion to impose their its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. own fees and charges for as long as these fees are reasonable and within the limits 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to set by the Local Government Code and city ordinances. Barangay fees may depend inspect and evaluate the company’s CAS within 30 days from receipt of the applica- on: tion form (BIR Form No. 1900) and complete documentary requirements. a. the location and the area (size in square meters) of the place of business; or Procedure 13. Apply for certificate of registration (COR) and b. the company’s paid-up capital and the area it occupies; or taxpayer’s identification number (TIN) at the Bureau of Internal c. whether they issue clearance plates or certificates. Revenue (BIR) Procedure 7. Obtain the business permit application form from Time: 1 day the Business Permits and Licensing Office (BPLO) Cost: PHP 15 (documentary stamp tax) Time: 1 day Comments: The company must register each type of internal revenue tax for which it is obligated by filing BIR Form No. 0605 and paying the annual registration fee Cost: No cost of PHP 500. Upon registration, the BIR will issue to the company the certificate of registration—BIR Form No. 2303. Procedure 8. Notarize the business permit application form at To obtain the TIN, the company has to file: the notary a. Barangay clearance; Time: 1 day b. Mayor’s permit; and Cost: PHP 50 c. Copy of its SEC registration. Procedure 9. Obtain the locational clearance from the City For company registrations filed with the SEC Head Office in Metro Manila, the BIR Planning and Development Office (CPDO) confirms the pre-registered TIN issued by the SEC. Time: 2 days New taxpayers are required to attend a seminar. Cost: PHP 885 (PHP 89 filing fee + PHP 600 equivalent to PHP 3 per square meter for Procedure 14. Pay the registration fee and documentary stamp commercial establishments assuming an area of 200 square meters, land use fees x 1.25 multiplier for processing fee + PHP 46.30 certificate fee) taxes (DST) at the AAB Time: 1 day Procedure 10*. Receive inspection for the locational clearance Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance from the CPDO of shares of stock. DST on the lease contract is not included in the computation of Time: 1 day the cost) Cost: No cost Comments: The company must pay DST on the original issuance of shares of stock. The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Comments: Scheduling of the inspection would depend on the time of the year such shares of stock. This payment with the BIR should be made on the 5th of the when the application is made. Scheduling tends to take longer during the peak month following registration with the SEC. season, which is the first quarter of the year. The COR will be released only after all the DSTs are paid. Procedure 11. Obtain the business permit to operate from the The company must also pay DST on its lease contract at the rate of PHP 3 for the first BPLO PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or fractional part thereof in excess of the first PHP 2,000 for each year of the lease as Time: 1 day stated in the contract. Cost: PHP 4,363 (PHP 417 business tax (½ of 1/10 of 1% of paid up capital) + PHP 1,000 mayor’s permit fee + PHP 1,250 garbage fee + PHP 400 sanitary inspection fee Procedure 15. Obtain the authority to print receipts and invoices + PHP 240 building inspection fee + PHP 290 electrical inspection + PHP 60 plumb- from the BIR ing + PHP 111 sign/billboard fee + PHP 335.1 FSIC (10% of regulatory fees) + PHP 260 sticker and plate fee) Time: 1 day Comments: To obtain the business permit, the company must file the following Cost: No cost documents at the BPLO: a. Duly notarized application form; b. Barangay clearance; LIST OF PROCE DURES • STARTING A BUSINESS 63 Comments: The authority to print receipts and invoices must be secured before the starting a business sales receipts and invoices may be printed. The company can ask any authorized MANDAUE printing company to print its official forms, or it can print its own forms (i.e., it uses its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Standard company legal form: Corporation this purpose. To obtain the authority to print receipts and invoices from the BIR, the Paid-in minimum capital requirement: PHP 5,000 = USD 107 company must submit the following documents to the Revenue District Office (RDO): Data as of: June 2010 a. Duly completed application for authority to print receipts and invoices (BIR Form No. 1906); Procedure 1. Verify and reserve the company name with the b. Job order; Securities and Exchange Commission (SEC) c. Final and clear sample of receipts and invoices (machine-printed); Time: 1 day d. Application for registration (BIR Form No. 1903); and Cost: PHP 40 e. Proof of payment of annual registration fee (BIR Form No. 0605). Comments: The company can verify the availability of the company name online. Verification is free but reservation of the name, once approved by the SEC, costs PHP 40 for the first 30 days. The company name can be reserved for a maximum of 120 Procedure 16. Print receipts and invoices at the print shops days for a fee of PHP 120, which is renewable upon expiration of the period. Time: 7 days Cost: PHP 3,500 (between PHP 3,000 - PHP 3,800) Procedure 2. Deposit paid-up capital in the Authorized Agent Comments: The cost is based on the following specifications of the official receipt: Bank (AAB) and obtain bank certificate of deposit 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Time: 1 day Cost: No cost Procedure 17. Have books of accounts and Printer’s Certificate of Comments: The company is required by law to deposit paid-up capital amounting Delivery (PCD) stamped by the BIR to at least 6.25% of the authorized capital stock of the corporation. This paid-up Time: 1 day capital must not be less than PHP 5,000. Cost: No cost Some banks charge a fee for issuance of the certificate of deposit. Comments: After the printing of receipts and invoices, the printer issues a Printer’s Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must Procedure 3. Notarize articles of incorporation and treasurer’s submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the affidavit at the notary company’s principal place of business) for registration and stamping within thirty Time: 1 day (30) days from issuance. The company must also submit the following documents: Cost: PHP 500 a. All required books of accounts; Comments: According to Sections 14 and 15 of the Corporation Code, articles of b. VAT registration certificate; incorporation should be notarized before filing with the SEC. c. SEC registration; d. BIR Form W-5; Procedure 4. Register the company with the SEC e. Certified photocopy of the ATP; and Time: 5 days f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and Cost: PHP 2,695 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized commitments of the taxpayer-user. capital stock or the subscription price of the subscribed capital stock, whichever is The company must also submit a copy of the PCD to the BIR RDO having jurisdiction higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent over the printer’s principal place of business. to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + Procedure 18. Register with the Social Security System (SSS) PHP 10 registration for SEC bulletin + PHP 30 handling fee) Time: 2 days Comments: The company can register online through SEC i-Register but must pay on site at the SEC. The following documents are required for SEC registration: Cost: No cost a. Company name verification slip; Comments: To register with the SSS, the company must submit the following docu- ments: b. Articles of incorporation (notarized) and by-laws; a. Employer registration form (Form R-1); c. Treasurer’s affidavit (notarized); b. Employment report (Form R-1A); d. Statement of assets and liabilities; c. List of employees, specifying their birth dates, positions, monthly salary and date e. Bank certificate of deposit of the paid-in capital; of employment; and f. Authority to verify the bank account; d. Articles of incorporation, by-laws and SEC registration. g. Registration data sheet with particulars on directors, officers, stockholders, and so Upon submission of the required documents, the SSS employer and employee forth; numbers will be released. The employees may attend an SSS training seminar after h. Written undertaking to comply with SEC reporting requirements (notarized); and registration. SSS prefers that all members go through such training so that each i. Written undertaking to change corporate name (notarized). member is aware of their rights and obligations. The SEC Extension Office charges a handling fee of PHP 30 to cover the cost of transmitting the documents to the SEC Head Office in Metro Manila. Procedure 19. Register with the Philippine Health Insurance Company (PhilHealth) Procedure 5. After issuance of the SEC certificate of Time: 1 day incorporation, pay the annual community tax and obtain the Cost: No cost community tax certificate (CTC) from the City Treasurer’s Office Comments: To register with PhilHealth, the company must submit the following (CTO) documents: Time: 1 day a. Employer data record (Form ER1); Cost: PHP 500 b. Report of employee-members (Form ER2); c. SEC registration; Procedure 6. Obtain barangay clearance d. BIR registration; and Time: 1 day e. Copy of business permit. Cost: PHP 300 (between PHP 50 – PHP 500) Upon submission of the required documents, the company shall get the receiving copy of all the forms as proof of membership until PhilHealth releases the employer and employee numbers within three months. *This procedure can be completed simultaneously with previous procedures. 64 Doing Business IN the philippines 2011 Comments: This clearance is obtained from the barangay where the business is Procedure 11. Buy special books of account at bookstore located and is required to obtain the business permit from the city or municipality. Time: 1 day Barangay fees vary for each barangay since they have the discretion to impose their own fees and charges for as long as these fees are reasonable and within the limits Cost: PHP 400 set by the Local Government Code and city ordinances. Barangay fees may depend Comments: Special books of accounts are required for registering with the BIR. The on: books of accounts are sold at bookstores nationwide. One set of journals consisting a. the location and the area (size in square meters) of the place of business; or of four books (cash receipts account, disbursements account, ledger, general journal) costs about PHP 400. b. the company’s paid-up capital and the area it occupies; or If the company has a computerized accounting system (CAS), it may opt to register c. whether they issue clearance plates or certificates. its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to Procedure 7. Notarize the business permit and tax clearance inspect and evaluate the company’s CAS within 30 days from receipt of the applica- application forms at the City Legal Office (CLO) tion form (BIR Form No. 1900) and complete documentary requirements. Time: 1 day Cost: No cost Procedure 12. Apply for Certificate of Registration (COR) and Comments: The business permit application form may be downloaded at the Taxpayer Identification Number (TIN) at the Bureau of Internal Mandaue City website at www.mandauecity.gov.ph. Revenue (BIR) The business permit application form is required to be notarized because the ap- Time: 2 days plicant makes a commitment to comply with all applicable laws, ordinances and Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) rules and regulations. Comments: The company must register each type of internal revenue tax for which it is obligated by filing BIR Form No. 0605 and paying the annual registration fee Procedure 8. Acquire the tax clearance certificate of real property of PHP 500. Upon registration, the BIR will issue to the company the certificate of tax from the Realty Tax Division of the City Treasurer’s Office registration—BIR Form No. 2303. (CTO) To obtain the TIN, the company has to file: Time: 1 day a. Barangay clearance; Cost: No cost b. Mayor’s permit; and Comments: The company still needs to get the realty tax clearance so that the c. Copy of its SEC registration. Mandaue City Government can check if the owner of the land, where the company For company registrations filed with the SEC Head Office in Metro Manila, the BIR leases the office, has paid the appropriate taxes for the property. If the owner of confirms the pre-registered TIN issued by the SEC. the land/real property has unpaid realty dues, the owner of the land/real property should pay them first before the business applicant (lessee) can process his/her New taxpayers are required to attend a seminar. business permit. On the other hand, if the owner of the land/real property is cleared with all realty payments, the assigned officer at the Realty Tax Division signs the Procedure 13. Pay the registration fee and documentary stamp application form of the entrepreneur. The company should get the photocopy of the taxes (DST) at the AAB tax declaration of the building from the owner. Time: 1 day Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance Procedure 9. Obtain the locational clearance from the City of shares of stock. DST on the lease contract is not included in the computation of Planning and Development Office (CPDO) the cost) Time: 1 day Comments: The company must pay DST on the original issuance of shares of stock. Cost: PHP 770 The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Comments: The cost is computed based on the declared capital. The company only such shares of stock. This payment with the BIR should be made on the 5th of the needs to pay the relevant fee for the locational clearance and obtain a signature month following registration with the SEC. from the officer at the CPDO. The COR will be released only after all the DSTs are paid. The company must also pay DST on its lease contract at the rate of PHP 3 for the first Procedure 10. Obtain the business permit to operate from the PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or Business Permits Section (BPS) of the City Administrator’s Office fractional part thereof in excess of the first PHP 2,000 for each year of the lease as Time: 4 days stated in the contract. Cost: PHP 4,130 (PHP 417 business tax (1/20 of 1% of paid-up capital) + PHP Procedure 14. Obtain the authority to print receipts and invoices 1,060.50 mayor’s permit fee + PHP 106.05 fire certificate fee (10% of the mayor’s permit fee) + PHP 825 garbage fee + PHP 181.50 public safety fee (10% of sanitary from the BIR inspection fee, zoning fee and garbage fee) + PHP 440 sanitary inspection fee +PHP Time: 1 day 550 zoning fee + PHP 550 business plate + PHP 106.05 FSIC (10% of all regulatory Cost: No cost fees)) Comments: The authority to print receipts and invoices must be secured before the Comments: To obtain the business permit, the company must file the following sales receipts and invoices may be printed. The company can ask any authorized required documents at the BPS: printing company to print its official forms, or it can print its own forms (i.e., it uses a. Duly notarized application form for business permit; its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for b. SEC registration; this purpose. To obtain the authority to print receipts and invoices from the BIR, the company must submit the following documents to the Revenue District Office (RDO): c. Barangay clearance; a. Duly completed application for authority to print receipts and invoices (BIR Form d. Tax clearance certificate of real property tax; No. 1906); e. Locational clearance; and b. Job order; f. Sketch of location for site inspection. c. Final and clear sample of receipts and invoices (machine-printed); The applicant obtains the assessment of the business permit fees and taxes and pays d. Application for registration (BIR Form No. 1903); and at the CTO. The company is given forty-five (45) days upon receipt of the business permit to submit copies of the sanitary permit, FSIC, TIN and SSS registration to the e. Proof of payment of annual registration fee (BIR Form No. 0605). BPS. Procedure 15. Print receipts and invoices at the print shops Time: 7 days Cost: PHP 2,500 (between PHP 2,500 – PHP 3,000) Comments: The cost is based on the following specifications of the official receipt: 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. LIST OF PROCE DURES • STARTING A BUSINESS 65 Procedure 16. Have books of accounts and Printer’s Certificate of Procedure 2. Deposit paid-up capital in the Authorized Agent Delivery (PCD) stamped by the BIR Bank (AAB) and obtain bank certificate of deposit Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: After the printing of receipts and invoices, the printer issues a Printer’s Comments: The company is required by law to deposit paid-up capital amounting Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must to at least 6.25% of the authorized capital stock of the corporation. This paid-up submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the capital must not be less than PHP 5,000. company’s principal place of business) for registration and stamping within thirty Some banks charge a fee for issuance of the certificate of deposit. (30) days from issuance. The company must also submit the following documents: a. All required books of accounts; Procedure 3. Notarize articles of incorporation and treasurer’s b. VAT registration certificate; affidavit at the notary c. SEC registration; Time: 1 day d. BIR Form W-5; Cost: PHP 500 e. Certified photocopy of the ATP; and Comments: According to Sections 14 and 15 of the Corporation Code, articles of f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and incorporation should be notarized before filing with the SEC. commitments of the taxpayer-user. The company must also submit a copy of the PCD to the BIR RDO having jurisdiction Procedure 4. Register the company with the SEC over the printer’s principal place of business. Time: 3 days Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized Procedure 17. Register with the Social Security System (SSS) capital stock or the subscription price of the subscribed capital stock, whichever is Time: 4 days higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- Cost: No cost tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + Comments: To register with the SSS, the company must submit the following docu- PHP 10 registration for SEC bulletin) ments: Comments: The company can register online through SEC i-Register but must pay a. Employer registration form (Form R-1); on site at the SEC. The following documents are required for SEC registration: b. Employment report (Form R-1A); a. Company name verification slip; c. List of employees, specifying their birth dates, positions, monthly salary and date b. Articles of incorporation (notarized) and by-laws; of employment; and c. Treasurer’s affidavit (notarized); d. Articles of incorporation, by-laws and SEC registration. d. Statement of assets and liabilities; Upon submission of the required documents, the SSS employer and employee e. Bank certificate of deposit of the paid-in capital; numbers will be released. The employees may attend an SSS training seminar after registration. SSS prefers that all members go through such training so that each f. Authority to verify the bank account; member is aware of their rights and obligations. g. Registration data sheet with particulars on directors, officers, stockholders, and so forth; Procedure 18. Register with the Philippine Health Insurance h. Written undertaking to comply with SEC reporting requirements (notarized); and Company (PhilHealth) i. Written undertaking to change corporate name (notarized). Time: 1 day The SEC Head Office issues pre-registered TINs only if the company’s application for Cost: No cost registration has been approved. The company must still register with the Bureau of Comments: To register with PhilHealth, the company must submit the following Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- documents: tration fee, obtain and stamp sales invoices, receipts and the books of accounts. a. Employer data record (Form ER1); Procedure 5. Pay the registration fee and documentary stamp b. Report of employee-members (Form ER2); taxes (DST) at the AAB c. SEC registration; Time: 1 day d. BIR registration; and Cost: PHP 4,670 e. Copy of business permit. Comments: The company must pay DST on the original issuance of shares of stock. Upon submission of the required documents, the company shall get the receiving The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of copy of all the forms as proof of membership until PhilHealth releases the employer such shares of stock. This payment with the BIR should be made on the 5th of the and employee numbers within three months. month following registration with the SEC. The COR will be released only after all the DSTs are paid. starting a business The company must also pay DST on its lease contract at the rate of PHP 3 for the first MANILA PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or Standard company legal form: Corporation fractional part thereof in excess of the first PHP 2,000 for each year of the lease as stated in the contract. Paid-in minimum capital requirement: PHP 5,000 = USD 107 Data as of: June 2010 Procedure 6. Pay the annual community tax and obtain the Procedure 1. Verify and reserve the company name with the community tax certificate (CTC) from the City Treasurer’s Office Securities and Exchange Commission (SEC) (CTO) Time: 1 day Time: 1 day Cost: PHP 40 Cost: PHP 500 Comments: The company can verify the availability of the company name online. Procedure 7. Obtain barangay clearance Verification is free but reservation of the name, once approved by the SEC, costs PHP 40 for the first 30 days. The company name can be reserved for a maximum of 120 Time: 2 days days for a fee of PHP 120, which is renewable upon expiration of the period. Cost: PHP 800 Comments: This clearance is obtained from the barangay where the business is located, and is required to obtain the business permit from the city or municipality. Barangay fees vary for each barangay since they have the discretion to impose their own fees and charges for as long as these fees are reasonable and within the limits set by the Local Government Code and city ordinances. 66 Doing Business IN the philippines 2011 The fee charged by the barangay depends on the company’s paid-up capital and the Comments: The authority to print receipts or invoices must be secured before the land area it occupies—a PHP 500 minimum plus PHP 300 for the barangay clearance sales receipts and invoices may be printed. The company can ask any authorized plate. printing company to print its official forms, or it can print its own forms (i.e., it uses its computers to print loose-leaf invoice forms) after obtaining a permit from the Procedure 8. Obtain mayor’s permit at the Licensing Section of BIR for this purpose. To obtain the ATP from the BIR, the company must submit the the Mayor’s Office following documents to the BIR Revenue District Office (RDO): Time: 1 day a. Duly completed application for authority to print receipts and invoices (BIR Form Cost: PHP 11,583 No. 1906); Comments: To obtain a business permit, the applicant submits a business transac- b. Job order; tion form (BTF) which contains vital information to process the application. The BTF c. Final and clear sample of receipts and invoices (machine-printed); is available at the Business Promotions and Development Office located at ground d. Application for registration (BIR Form No. 1903); and floor of the Manila City Hall. The applicant submits the accomplished BTF to the e. Proof of payment of annual registration fee (BIR Form No. 0605). Bureau of Permits (BP) together with the following requirements: a. Barangay clearance; Procedure 12. Print receipts and invoices at the print shops b. SEC registration; Time: 14 days c. Public Liability Insurance (for restaurants, parlors, cinemas, malls etc); Cost: PHP 4,000 d. Authorization letter of owner with ID; Comments: The cost is based on the following specifications of the official receipt: e. Lease contract/tax declaration; 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless. The minimum f. SSS certification/clearance; and print volume is 25 booklets. g. Community tax certificate. Procedure 13. Have books of accounts and Printer’s Certificate of The BP personnel encode the information in the BTF and the requirements for the processing and computation of the business permit fee, and the applicant is issued Delivery of Receipts and Invoices (PCD) stamped by the BIR a computer-generated Business Identification Number (BIN) slip. The applicant then Time: 1 day proceeds to the License Division of the City Treasurer’s Office for computation and Cost: No cost assessment of business tax and regulatory fees. The applicant presents the issued Comments: After the printing of receipts and invoices, the printer issues a Printer’s BIN to the licensing officer on duty, who proceeds to compute and generate the Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must License and Regulatory Fees (LRF) form which is given to the applicant. The applicant submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the then proceeds to the cashier and presents the issued LRF form. The cashier receives company’s principal place of business) for registration and stamping within thirty and records payment of the applicant and validates the LRF form which serves as the (30) days from issuance. The company must also submit the following documents: official receipt. The applicant then goes back to the BP and presents the validated LRF form. After verifying that payment has been made, BP personnel generate the a. All required books of accounts; business permit and secure the approval and signature of the BP Department Head. b. VAT registration certificate; The business permit is released to the applicant upon approval. c. SEC registration; d. BIR Form W-5; Procedure 9. Buy special books of account at bookstore e. Certified photocopy of the ATP; and Time: 1 day f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and Cost: PHP 400 commitments of the taxpayer-user. Comments: Special books of accounts are required for registering with the Bureau The company must also submit a copy of the PCD to the BIR RDO having jurisdiction of Internal Revenue (BIR). The books of accounts are sold at bookstores nationwide. over the printer’s principal place of business. One set of journals consisting of four books (cash receipts account, disbursements account, ledger, general journal) costs about PHP 400. Procedure 14. Initial registration with the Social Security System If the company has a computerized accounting system (CAS), it may opt to register (SSS) its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. Time: 7 days 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to inspect and evaluate the company’s CAS within 30 days from receipt of the applica- Cost: No cost tion form (BIR Form No. 1900) and complete documentary requirements. Comments: Under the new single registration process, the employer is required to register with the SSS using the business registration form (BR-1). Registration Procedure 10. Apply for Certificate of Registration (COR) and with SSS automatically results in registration with the Philippine Health Insurance Taxpayer Identification Number (TIN) at the Bureau of Internal Company (PhilHealth), the employer is no longer required to go to PhilHealth for Revenue (BIR) registration. Based on the employer’s BR-1 submission, the SSS encodes the employer details and Time: 2 days issues the following: SSS employer number together with the employer’s copy of the Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) processed BR-1; SSS information brochure; employer identification card; and list of Comments: The company must register each type of internal revenue tax for which employer obligations and post-registration requirements. it is obligated by filing BIR Form No. 0605 and paying the annual registration fee of PHP 500. Upon registration, the BIR will issue to the company the certificate of Procedure 15. Complete registration with SSS and Philippine registration – BIR Form No. 2303. Health Insurance Company (PhilHealth) To obtain the TIN, the company has to file: Time: 1 day a. Barangay clearance; Cost: No cost b. Business permit; and Comments: Within thirty (30) days from the issuance of the SSS and PhilHealth c. Copy of its SEC registration. employer number, the company submits the following: For company registrations filed with the SEC Head Office in Metro Manila, the BIR To SSS: confirms the pre-registered TIN issued by the SEC. a. Employment report (Form R-1A); New taxpayers are required to attend a seminar. b. Specimen signature card (Form L-501); c. Sketch of business address; and Procedure 11. Obtain the authority to print receipts and invoices from the BIR d. Validated miscellaneous payment return form (Form R-6) or special bank receipt showing payment of the employer registration plate, if not paid upon initial Time: 1 day registration. Cost: No cost To PhilHealth: a. Member registration forms for each employee with the required supporting docu- ments. LIST OF PROCE DURES • STARTING A BUSINESS 67 starting a business Comments: This clearance is obtained from the barangay where the business is MARIKINA located and is required to obtain the business permit from the city or municipality. Barangay fees vary for each barangay since they have the discretion to impose their Standard company legal form: Corporation own fees and charges for as long as these fees are reasonable and within the limits Paid-in minimum capital requirement: PHP 5,000 = USD 107 set by the Local Government Code and city ordinances. Barangay fees may depend Data as of: June 2010 on: a. the location and the area (size in square meters) of the place of business; or Procedure 1. Verify and reserve the company name with the b. the company’s paid-up capital and the area it occupies; or Securities and Exchange Commission (SEC) c. whether they issue clearance plates or certificates. Time: 1 day Cost: PHP 40 Procedure 7. Obtain the business permit to operate from the Comments: The company can verify the availability of the company name online. Business Permits and Licensing Office (BPLO) Verification is free but reservation of the name, once approved by the SEC, costs PHP Time: 2 days 40 for the first 30 days. The company name can be reserved for a maximum of 120 days for a fee of PHP 120, which is renewable upon expiration of the period. Cost: PHP 9,207 (PHP 2,084.98 business tax (25% of 1% paid up capital) + PHP 360 mayor’s permit fee + PHP 15 signboard fee + PHP 5,400 garbage fee + PHP 700 Procedure 2. Deposit paid-up capital in the Authorized Agent sanitary inspection fee + PHP 647.50 FSIC (10% of all regulatory fees)) Bank (AAB) and obtain bank certificate of deposit Comments: The business permit application form can be downloaded from the Marikina City website at www.city.marikina.gov.ph. Time: 1 day To obtain the business permit, the company must submit the following documents Cost: PHP 150 to the BPLO: Comments: The company is required by law to deposit paid-up capital amounting a. Barangay clearance; to at least 6.25% of the authorized capital stock of the corporation. This paid-up capital must not be less than PHP 5,000. b. Photos of establishment (showing signboard and sidewalk); and Some banks charge a fee for issuance of the certificate of deposit. c. SEC registration. The applicant submits the application form and requirements to the BPLO and gets Procedure 3. Notarize articles of incorporation and treasurer’s an assessment of the business permit fees and taxes. The business permit fees and affidavit at the notary taxes are paid at the City Treasurer’s Office. The business permit and business plates will be delivered to the place of business. Marikina City inspections for clearances Time: 1 day (engineering inspection, occupational permit, police clearance, sanitary inspection Cost: PHP 500 and fire inspection) are conducted after the business permit has been issued but Comments: According to Sections 14 and 15 of the Corporation Code, articles of before the renewal of the business permit the following year. incorporation should be notarized before filing with the SEC. Procedure 8*. Receive inspection from the BPLO Procedure 4. Register the company with the SEC and receive pre- Time: 1 day registered Taxpayer Identification Number (TIN) Cost: No cost Time: 3 days Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized Procedure 9. Buy special books of account at bookstore capital stock or the subscription price of the subscribed capital stock, whichever is Time: 1 day higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent Cost: PHP 400 to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + Comments: Special books of accounts are required for registering with the BIR. The PHP 10 registration for SEC bulletin) books of accounts are sold at bookstores nationwide. One set of journals consisting of four books (cash receipts account, disbursements account, ledger, general journal) Comments: The company can register online through SEC i-Register but must pay costs about PHP 400. on site at the SEC. The following documents are required for SEC registration: If the company has a computerized accounting system (CAS), it may opt to register a. Company name verification slip; its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. b. Articles of incorporation (notarized) and by-laws; 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to c. Treasurer’s affidavit (notarized); inspect and evaluate the company’s CAS within 30 days from receipt of the applica- d. Statement of assets and liabilities; tion form (BIR Form No. 1900) and complete documentary requirements. e. Bank certificate of deposit of the paid-in capital; Procedure 10. Apply for Certificate of Registration (COR) and TIN f. Authority to verify the bank account; at the Bureau of Internal Revenue (BIR) g. Registration data sheet with particulars on directors, officers, stockholders, and so Time: 2 days forth; Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) h. Written undertaking to comply with SEC reporting requirements (notarized); and Comments: The company must register each type of internal revenue tax for which i. Written undertaking to change corporate name (notarized). it is obligated by filing BIR Form No. 0605 and paying the annual registration fee The SEC Head Office issues pre-registered TINs only if the company’s application for of PHP 500. Upon registration, the BIR will issue to the company the certificate of registration has been approved. The company must still register with the Bureau of registration—BIR Form No. 2303. Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- To obtain the TIN, the company has to file: tration fee, obtain and stamp sales invoices, receipts and the books of accounts. a. Barangay clearance; Procedure 5. After issuance of the SEC certificate of b. Mayor’s permit; and incorporation, pay the annual community tax and obtain the c. Copy of its SEC registration. community tax certificate (CTC) from the City Treasurer’s Office For company registrations filed with the SEC Head Office in Metro Manila, the BIR (CTO) confirms the pre-registered TIN issued by the SEC. Time: 1 day New taxpayers are required to attend a seminar. Cost: PHP 500 Procedure 11. Pay the registration fee and documentary stamp Procedure 6. Obtain barangay clearance taxes (DST) at the AAB Time: 1 day Time: 1 day Cost: PHP 800 Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance of shares of stock. DST on the lease contract is not included in the computation of the cost) 68 Doing Business IN the philippines 2011 Comments: The company must pay DST on the original issuance of shares of stock. Procedure 16. Register with the Philippine Health Insurance The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of such shares of stock. This payment with the BIR should be made on the 5th of the Company (PhilHealth) month following registration with the SEC. Time: 1 day The COR will be released only after all the DSTs are paid. Cost: No cost The company must also pay DST on its lease contract at the rate of PHP 3 for the first Comments: To register with PhilHealth, the company must submit the following PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or documents: fractional part thereof in excess of the first PHP 2,000 for each year of the lease as a. Employer data record (Form ER1); stated in the contract. b. Report of employee-members (Form ER2); c. SEC registration; Procedure 12. Obtain the authority to print receipts and invoices from the BIR d. BIR registration; and e. Copy of business permit. Time: 1 day Upon submission of the required documents, the company shall get the receiving Cost: No cost copy of all the forms as proof of membership until PhilHealth releases the employer Comments: The authority to print receipts and invoices must be secured before the and employee numbers within three months. sales receipts and invoices may be printed. The company can ask any authorized printing company to print its official forms, or it can print its own forms (i.e., it uses its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for *This procedure can be completed simultaneously with previous procedures. this purpose. To obtain the authority to print receipts and invoices from the BIR, the company must submit the following documents to the Revenue District Office (RDO): starting a business a. Duly completed application for authority to print receipts and invoices (BIR Form MUNTINLUPA No. 1906); Standard company legal form: Corporation b. Job order; Paid-in minimum capital requirement: PHP 5,000 = USD 107 c. Final and clear sample of receipts and invoices (machine-printed); Data as of: June 2010 d. Application for registration (BIR Form No. 1903); and e. Proof of payment of annual registration fee (BIR Form No. 0605). Procedure 1. Verify and reserve the company name with the Securities and Exchange Commission (SEC) Procedure 13. Print receipts and invoices at the print shops Time: 1 day Time: 7 days Cost: PHP 40 Cost: PHP 1,200 (between PHP 3,000 – PHP 3,800) Comments: The company can verify the availability of the company name online. Comments: The cost is based on the following specifications of the official receipt: Verification is free but reservation of the name, once approved by the SEC, costs PHP 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. 40 for the first 30 days. The company name can be reserved for a maximum of 120 days for a fee of PHP 120, which is renewable upon expiration of the period. Procedure 14. Have books of accounts and Printer’s Certificate of Delivery (PCD) stamped by the BIR Procedure 2. Deposit paid-up capital in the Authorized Agent Time: 1 day Bank (AAB) and obtain bank certificate of deposit Cost: No cost Time: 1 day Comments: After the printing of receipts and invoices, the printer issues a Printer’s Cost: No cost Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must Comments: The company is required by law to deposit paid-up capital amounting submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the to at least 6.25% of the authorized capital stock of the corporation. This paid-up company’s principal place of business) for registration and stamping within thirty capital must not be less than PHP 5,000. (30) days from issuance. The company must also submit the following documents: Some banks charge a fee for issuance of the certificate of deposit. a. All required books of accounts; b. VAT registration certificate; Procedure 3. Notarize articles of incorporation and treasurer’s c. SEC registration; affidavit at the notary d. BIR Form W-5; Time: 1 day e. Certified photocopy of the ATP; and Cost: PHP 500 f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and Comments: According to Sections 14 and 15 of the Corporation Code, articles of commitments of the taxpayer-user. incorporation should be notarized before filing with the SEC. The company must also submit a copy of the PCD to the BIR RDO having jurisdiction over the printer’s principal place of business. Procedure 4. Register the company with the SEC and receive pre- registered Taxpayer Identification Number (TIN) Procedure 15. Register with the Social Security System (SSS) Time: 3 days Time: 5 days Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized Cost: No cost capital stock or the subscription price of the subscribed capital stock, whichever is higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent Comments: To register with the SSS, the company must submit the following docu- to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- ments: tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + a. Employer registration form (Form R-1); PHP 10 registration for SEC bulletin) b. Employment report (Form R-1A); Comments: The company can register online through SEC i-Register but must pay c. List of employees, specifying their birth dates, positions, monthly salary and date on site at the SEC. The following documents are required for SEC registration: of employment; and a. Company name verification slip; d. Articles of incorporation, by-laws and SEC registration. b. Articles of incorporation (notarized) and by-laws; Upon submission of the required documents, the SSS employer and employee c. Treasurer’s affidavit (notarized); numbers will be released. The employees may attend an SSS training seminar after d. Statement of assets and liabilities; registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations. e. Bank certificate of deposit of the paid-in capital; f. Authority to verify the bank account; LIST OF PROCE DURES • STARTING A BUSINESS 69 g. Registration data sheet with particulars on directors, officers, stockholders, and so Procedure 12. Obtain the business permit to operate from the forth; MBC h. Written undertaking to comply with SEC reporting requirements (notarized); and Time: 3 days i. Written undertaking to change corporate name (notarized). Cost: PHP 9,575 (PHP 208.50 business tax (1/4 of 1/10 of 1% of paid up capital) + The SEC Head Office issues pre-registered TINs only if the company’s application for PHP 2,875 mayor’s permit fee + PHP 600 sanitary inspection fee + PHP 650 zoning registration has been approved. The company must still register with the Bureau of fee + PHP 500 building fee + PHP 500 mechanical fee + PHP 240 electrical fee + PHP Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- 140 plumbing fee + PHP 100 signboard fee + PHP 505 miscellaneous + PHP 2,400 tration fee, obtain and stamp sales invoices, receipts and the books of accounts. environmental protection fee + PHP 5 processing fee + PHP 851.5 FSIC (10% of all regulatory fees)) Procedure 5. After issuance of the SEC certificate of Comments: The company must go back to the MBC-BPLO Computer Billing Section incorporation, pay the annual community tax and obtain the to get assessment of the business permit fees and taxes. Then the company pays for community tax certificate (CTC) from the City Treasurer’s Office and obtains the official receipt at the MBC-Treasury Window. (CTO) Time: 1 day Procedure 13. Buy special books of account at bookstore Cost: PHP 500 Time: 1 day Cost: PHP 400 Procedure 6. Obtain barangay clearance Comments: Special books of accounts are required for registering with the BIR. The Time: 1 day books of accounts are sold at bookstores nationwide. One set of journals consisting of four books (cash receipts account, disbursements account, ledger, general journal) Cost: PHP 600 (between PHP 500 – PHP 700) costs about PHP 400. Comments: This clearance is obtained from the barangay where the business is If the company has a computerized accounting system (CAS), it may opt to register located and is required to obtain the business permit from the city or municipality. its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. Barangay fees vary for each barangay since they have the discretion to impose their 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to own fees and charges for as long as these fees are reasonable and within the limits inspect and evaluate the company’s CAS within 30 days from receipt of the applica- set by the Local Government Code and city ordinances. Barangay fees may depend tion form (BIR Form No. 1900) and complete documentary requirements. on: a. the location and the area (size in square meters) of the place of business; or Procedure 14. Apply for Certificate of Registration (COR) and TIN b. the company’s paid-up capital and the area it occupies; or at the Bureau of Internal Revenue (BIR) c. whether they issue clearance plates or certificates. Time: 2 days Cost: PHP 15 (documentary stamp tax) Procedure 7. Proceed to the Muntinlupa Business Center (MBC) to submit application form and requirements; and obtain Comments: The company must register each type of internal revenue tax for which it is obligated by filing BIR Form No. 0605 and paying the annual registration fee endorsement from the Business Permits and Licensing Office of PHP 500. Upon registration, the BIR will issue to the company the certificate of (BPLO) registration—BIR Form No. 2303. Time: 1 day To obtain the TIN, the company has to file: Cost: No cost a. Barangay clearance; Comments: The business permit application form can be downloaded from the b. Mayor’s permit; and Muntinlupa City website at www.muntinlupacity.gov.ph. c. Copy of its SEC registration. To obtain the business permit, the company must file the following documents at For company registrations filed with the SEC Head Office in Metro Manila, the BIR the MBC: confirms the pre-registered TIN issued by the SEC. a. SEC registration; New taxpayers are required to attend a seminar. b. Articles of incorporation and by-laws; c. Contract of lease; and Procedure 15. Pay the registration fee and documentary stamp d. Certificate of Occupancy. taxes (DST) at the AAB Time: 1 day Procedure 8. Present the endorsement from the BPLO at Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance the Bureau of Fire Protection (BFP) to obtain the Fire Safety of shares of stock. DST on the lease contract is not included in the computation of Inspection Certificate (FSIC) the cost) Time: 3 days Comments: The company must pay DST on the original issuance of shares of stock. Cost: No cost (fees included in procedure 12) The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Comments: The company presents the endorsement from the BPLO for the process- such shares of stock. This payment with the BIR should be made on the 5th of the ing of the FSIC to the BFP and the employees there arrange for the date and time of month following registration with the SEC. inspection. The COR will be released only after all the DSTs are paid. The company must also pay DST on its lease contract at the rate of PHP 3 for the first Procedure 9*. Receive inspection for the FSIC from the BFP PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or Time: 1 day fractional part thereof in excess of the first PHP 2,000 for each year of the lease as Cost: No cost stated in the contract. Comments: The BFP conducts an inspection to ensure that the requirements of the Procedure 16. Obtain the authority to print receipts and invoices Fire Code are complied with. from the BIR Procedure 10*. Obtain approval and order of payment from the Time: 1 day City Zoning Administration Office (CZAO) Cost: No cost Time: 1 day Comments: The authority to print receipts and invoices must be secured before the Cost: No cost (fees included in procedure 12) sales receipts and invoices may be printed. The company can ask any authorized printing company to print its official forms, or it can print its own forms (i.e., it uses its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Procedure 11. Obtain stamp of approval for the Certificate of this purpose. To obtain the authority to print receipts and invoices from the BIR, the Occupancy from the Office of the Building Official (OBO) company must submit the following documents to the Revenue District Office (RDO): Time: 2 days Cost: No cost (fees included in procedure 12) 70 Doing Business IN the philippines 2011 starting a business a. Duly completed application for authority to print receipts and invoices (BIR Form No. 1906); NAVOTAS b. Job order; Standard company legal form: Corporation c. Final and clear sample of receipts and invoices (machine-printed); Paid-in minimum capital requirement: PHP 5,000 = USD 107 d. Application for registration (BIR Form No. 1903); and Data as of: June 2010 e. Proof of payment of annual registration fee (BIR Form No. 0605). Procedure 1. Verify and reserve the company name with the Procedure 17. Print receipts and invoices at the print shops Securities and Exchange Commission (SEC) Time: 7 days Time: 1 day Cost: PHP 3,500 (between PHP 3,000 – PHP 3,800) Cost: PHP 40 Comments: The cost is based on the following specifications of the official receipt: Comments: The company can verify the availability of the company name online. 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Verification is free but reservation of the name, once approved by the SEC, costs PHP 40 for the first 30 days. The company name can be reserved for a maximum of 120 Procedure 18. Have books of accounts and Printer’s Certificate of days for a fee of PHP 120, which is renewable upon expiration of the period. Delivery (PCD) stamped by the BIR Procedure 2. Deposit paid-up capital in the Authorized Agent Time: 1 day Bank (AAB) and obtain bank certificate of deposit Cost: No cost Time: 1 day Comments: After the printing of receipts and invoices, the printer issues a Printer’s Cost: No cost Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the Comments: The company is required by law to deposit paid-up capital amounting company’s principal place of business) for registration and stamping within thirty to at least 6.25% of the authorized capital stock of the corporation. This paid-up (30) days from issuance. The company must also submit the following documents: capital must not be less than PHP 5,000. a. All required books of accounts; Some banks charge a fee for issuance of the certificate of deposit. b. VAT registration certificate; Procedure 3. Notarize articles of incorporation and treasurer’s c. SEC registration; affidavit at the notary d. BIR Form W-5; Time: 1 day e. Certified photocopy of the ATP; and Cost: PHP 500 f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and Comments: According to Sections 14 and 15 of the Corporation Code, articles of commitments of the taxpayer-user. incorporation should be notarized before filing with the SEC. The company must also submit a copy of the PCD to the BIR RDO having jurisdiction over the printer’s principal place of business. Procedure 4. Register the company with the SEC and receive pre- registered Taxpayer Identification Number (TIN) Procedure 19. Register with the Social Security System (SSS) Time: 3 days Time: 5 days Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized Cost: No cost capital stock or the subscription price of the subscribed capital stock, whichever is Comments: To register with the SSS, the company must submit the following docu- higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent ments: to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- a. Employer registration form (Form R-1); tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + b. Employment report (Form R-1A); PHP 10 registration for SEC bulletin) c. List of employees, specifying their birth dates, positions, monthly salary and date Comments: The company can register online through SEC i-Register but must pay of employment; and on site at the SEC. The following documents are required for SEC registration: d. Articles of incorporation, by-laws and SEC registration. a. Company name verification slip; Upon submission of the required documents, the SSS employer and employee b. Articles of incorporation (notarized) and by-laws; numbers will be released. The employees may attend an SSS training seminar after c. Treasurer’s affidavit (notarized); registration. SSS prefers that all members go through such training so that each d. Statement of assets and liabilities; member is aware of their rights and obligations. e. Bank certificate of deposit of the paid-in capital; f. Authority to verify the bank account; Procedure 20. Register with the Philippine Health Insurance Company (PhilHealth) g. Registration data sheet with particulars on directors, officers, stockholders, and so forth; Time: 1 day h. Written undertaking to comply with SEC reporting requirements (notarized); and Cost: No cost i. Written undertaking to change corporate name (notarized). Comments: To register with PhilHealth, the company must submit the following The SEC Head Office issues pre-registered TINs only if the company’s application for documents: registration has been approved. The company must still register with the Bureau of a. Employer data record (Form ER1); Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- b. Report of employee-members (Form ER2); tration fee, obtain and stamp sales invoices, receipts and the books of accounts. c. SEC registration; d. BIR registration; and Procedure 5. After issuance of the SEC certificate of e. Copy of business permit. incorporation, pay the annual community tax and obtain the community tax certificate (CTC) from the City Treasurer’s Office Upon submission of the required documents, the company shall get the receiving copy of all the forms as proof of membership until PhilHealth releases the employer (CTO) and employee numbers within three months. Time: 1 day Cost: PHP 500 *This procedure can be completed simultaneously with previous procedures. Procedure 6. Obtain barangay clearance Time: 1 day Cost: PHP 300 (between PHP 100 – PHP 500) LIST OF PROCE DURES • STARTING A BUSINESS 71 Comments: This clearance is obtained from the barangay where the business is Procedure 14. Buy special books of account at bookstore located and is required to obtain the business permit from the city or municipality. Barangay fees vary for each barangay since they have the discretion to impose their Time: 1 day own fees and charges for as long as these fees are reasonable and within the limits Cost: PHP 400 set by the Local Government Code and city ordinances. Barangay fees may depend Comments: Special books of accounts are required for registering with the BIR. The on: books of accounts are sold at bookstores nationwide. One set of journals consisting a. the location and the area (size in square meters) of the place of business; or of four books (cash receipts account, disbursements account, ledger, general journal) b. the company’s paid-up capital and the area it occupies; or costs about PHP 400. c. whether they issue clearance plates or certificates. If the company has a computerized accounting system (CAS), it may opt to register its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. Procedure 7. Obtain the business permit application form from 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to inspect and evaluate the company’s CAS within 30 days from receipt of the applica- the Business Permits and Licensing Office (BPLO) tion form (BIR Form No. 1900) and complete documentary requirements. Time: 1 day Cost: No cost Procedure 15. Apply for Certificate of Registration (COR) and TIN Comments: The city has introduced a 1-page carbonized application form. at the Bureau of Internal Revenue (BIR) Time: 2 days Procedure 8. Notarize the business permit application form at Cost: PHP 15 (documentary stamp tax) the notary Comments: The company must register each type of internal revenue tax for which Time: 1 day it is obligated by filing BIR Form No. 0605 and paying the annual registration fee Cost: PHP 50 of PHP 500. Upon registration, the BIR will issue to the company the certificate of registration—BIR Form No. 2303. Procedure 9. Obtain the locational clearance from the City To obtain the TIN, the company has to file: Planning and Development Office (CPDO) a. Barangay clearance; Time: 1 day b. Mayor’s permit; and Cost: PHP 800 c. Copy of its SEC registration. Comments: Documentation includes: For company registrations filed with the SEC Head Office in Metro Manila, the BIR a. Locational clearance application form (does not have to be notarized); confirms the pre-registered TIN issued by the SEC. b. Barangay clearance; and New taxpayers are required to attend a seminar. c. Contract of lease. Procedure 16. Pay the registration fee and documentary stamp Procedure 10*. Receive inspection from the CPDO and BPLO taxes (DST) at the AAB Time: 1 day Time: 1 day Cost: No cost Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance Comments: The city has a joint inspection team (JIT). of shares of stock. DST on the lease contract is not included in the computation of the cost) Procedure 11. Get assessment of the inspection fees from the Comments: The company must pay DST on the original issuance of shares of stock. Office of the Building Official (OBO) The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of such shares of stock. This payment with the BIR should be made on the 5th of the Time: 1 day month following registration with the SEC. Cost: PHP 1,274 (PHP 640 building inspection fee + PHP 120 plumbing inspection The COR will be released only after all the DSTs are paid. fee + PHP 314 mechanical inspection fee + PHP 200 electrical inspection fee) The company must also pay DST on its lease contract at the rate of PHP 3 for the first Procedure 12. Obtain the business permit to operate from the PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or fractional part thereof in excess of the first PHP 2,000 for each year of the lease as BPLO stated in the contract. Time: 5 days Cost: PHP 2,816 (PHP 208.5 business tax (1/4 of 1/10 of 1% of paid up capital) + PHP Procedure 17. Obtain the authority to print receipts and invoices 500 mayor’s permit fee + PHP 750 garbage fee + PHP 10 mayor’s certificate + PHP from the BIR 110 signboard fee + PHP 350 business plate + PHP 35 sticker + PHP 500 sanitary Time: 1 day permit + PHP 352.9 FSIC (10% of all regulatory fees including the engineering inspection fees)) Cost: No cost (fees included in procedure 15) Comments: To obtain the business permit, the company must file the following Comments: The authority to print receipts and invoices must be secured before the required documents at the BPLO: sales receipts and invoices may be printed. The company can ask any authorized printing company to print its official forms, or it can print its own forms (i.e., it uses a. SEC registration; its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for b. Articles of incorporation and by-laws; this purpose. To obtain the authority to print receipts and invoices from the BIR, the c. Community tax certificate; company must submit the following documents to the Revenue District Office (RDO): d. Barangay clearance; a. Duly completed application for authority to print receipts and invoices (BIR Form e. Locational clearance; No. 1906); f. Duly notarized contract of lease; and b. Job order; g. Picture and sketch of business establishment. c. Final and clear sample of receipts and invoices (machine-printed); The city collects initial business tax for the quarter covering the period of business d. Application for registration (BIR Form No. 1903); and registration. In the succeeding quarter(s), the tax is based on the gross sales for the e. Proof of payment of annual registration fee (BIR Form No. 0605). preceding quarter. Procedure 18. Print receipts and invoices at the print shops Procedure 13*. Proceed to the City Health Office (CHO) for the Time: 7 days sanitary permit Cost: PHP 3,500 (between PHP 3,000 – PHP 3,800) Time: 1 day Comments: The cost is based on the following specifications of the official receipt: Cost: No cost (fees included in procedure 11) 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Comments: The company shall present the official receipt at the CHO to get the sanitary permit. There is no need for inspection. 72 Doing Business IN the philippines 2011 Procedure 19. Have books of accounts and Printer’s Certificate of Procedure 2. Deposit paid-up capital in the Authorized Agent Delivery (PCD) stamped by the BIR Bank (AAB) and obtain bank certificate of deposit Time: 1 day Time: 1 day Cost: No cost Cost: PHP 150 Comments: After the printing of receipts and invoices, the printer issues a Printer’s Comments: The company is required by law to deposit paid-up capital amounting Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must to at least 6.25% of the authorized capital stock of the corporation. This paid-up submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the capital must not be less than PHP 5,000. company’s principal place of business) for registration and stamping within thirty Some banks charge a fee for issuance of the certificate of deposit. (30) days from issuance. The company must also submit the following documents: a. All required books of accounts; Procedure 3. Notarize articles of incorporation and treasurer’s b. VAT registration certificate; affidavit at the notary c. SEC registration; Time: 1 day d. BIR Form W-5; Cost: PHP 500 e. Certified photocopy of the ATP; and Comments: According to Sections 14 and 15 of the Corporation Code, articles of f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and incorporation should be notarized before filing with the SEC. commitments of the taxpayer-user. The company must also submit a copy of the PCD to the BIR RDO having jurisdiction Procedure 4. Register the company with the SEC and receive pre- over the printer’s principal place of business. registered Taxpayer Identification Number (TIN) Time: 3 days Procedure 20. Register with the Social Security System (SSS) Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized Time: 2 days capital stock or the subscription price of the subscribed capital stock, whichever is Cost: No cost higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- Comments: To register with the SSS, the company must submit the following docu- tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + ments: PHP 10 registration for SEC bulletin) a. Employer registration form (Form R-1); Comments: The company can register online through SEC i-Register but must pay b. Employment report (Form R-1A); on site at the SEC. The following documents are required for SEC registration: c. List of employees, specifying their birth dates, positions, monthly salary and date a. Company name verification slip; of employment; and b. Articles of incorporation (notarized) and by-laws; d. Articles of incorporation, by-laws and SEC registration. c. Treasurer’s affidavit (notarized); Upon submission of the required documents, the SSS employer and employee d. Statement of assets and liabilities; numbers will be released. The employees may attend an SSS training seminar after registration. SSS prefers that all members go through such training so that each e. Bank certificate of deposit of the paid-in capital; member is aware of their rights and obligations. f. Authority to verify the bank account; g. Registration data sheet with particulars on directors, officers, stockholders, and so Procedure 21. Register with the Philippine Health Insurance forth; Company (PhilHealth) h. Written undertaking to comply with SEC reporting requirements (notarized); and Time: 1 day i. Written undertaking to change corporate name (notarized). Cost: No cost The SEC Head Office issues pre-registered TINs only if the company’s application for Comments: To register with PhilHealth, the company must submit the following registration has been approved. The company must still register with the Bureau of documents: Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- a. Employer data record (Form ER1); tration fee, obtain and stamp sales invoices, receipts and the books of accounts. b. Report of employee-members (Form ER2); Procedure 5. After issuance of the SEC certificate of c. SEC registration; incorporation, pay the annual community tax and obtain the d. BIR registration; and community tax certificate (CTC) from the City Treasurer’s Office e. Copy of business permit. (CTO) Upon submission of the required documents, the company shall get the receiving Time: 1 day copy of all the forms as proof of membership until PhilHealth releases the employer Cost: PHP 500 and employee numbers within three months. *This procedure can be completed simultaneously with previous procedures. Procedure 6. Obtain barangay clearance Time: 1 day starting a business Cost: PHP 500 (between PHP 400 – PHP 1,000) PARAÑAQUE Comments: This clearance is obtained from the barangay where the business is located and is required to obtain the business permit from the city or municipality. Standard company legal form: Corporation Barangay fees vary for each barangay since they have the discretion to impose their Paid-in minimum capital requirement: PHP 5,000 = USD 107 own fees and charges for as long as these fees are reasonable and within the limits Data as of: June 2010 set by the Local Government Code and city ordinances. Barangay fees may depend on: Procedure 1. Verify and reserve the company name with the a. the location and the area (size in square meters) of the place of business; or Securities and Exchange Commission (SEC) b. the company’s paid-up capital and the area it occupies; or Time: 1 day c. whether they issue clearance plates or certificates. Cost: PHP 40 Comments: The company can verify the availability of the company name online. Procedure 7. Obtain the locational clearance application form Verification is free but reservation of the name, once approved by the SEC, costs PHP from the City Planning and Development Office (CPDO) and 40 for the first 30 days. The company name can be reserved for a maximum of 120 notarize locational clearance application form at the City Legal days for a fee of PHP 120, which is renewable upon expiration of the period. Office (CLO) Time: 1 day Cost: PHP 50 LIST OF PROCE DURES • STARTING A BUSINESS 73 Procedure 8. Notarize the business permit application form at For company registrations filed with the SEC Head Office in Metro Manila, the BIR confirms the pre-registered TIN issued by the SEC. the CLO New taxpayers are required to attend a seminar. Time: 1 day Cost: PHP 50 Procedure 15. Pay the registration fee and documentary stamp Comments: The business permit application form can be downloaded from the taxes (DST) at the AAB Parañaque City website at www.parañaque.gov.ph. Time: 1 day Procedure 9. Obtain the locational clearance from the CPDO Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance of shares of stock. DST on the lease contract is not included in the computation of Time: 1 day the cost) Cost: PHP 4,450 (PHP 500 filing fee + PHP 15 per square meter + 25% of the pay- Comments: The company must pay DST on the original issuance of shares of stock. ment for the area (PHP 15 X 200) + PHP 200 for certificate) The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of such shares of stock. This payment with the BIR should be made on the 5th of the Procedure 10*. Receive inspection from CPDO month following registration with the SEC. Time: 1 day The COR will be released only after all the DSTs are paid. Cost: No cost The company must also pay DST on its lease contract at the rate of PHP 3 for the first PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or Procedure 11. Obtain the business permit to operate from the fractional part thereof in excess of the first PHP 2,000 for each year of the lease as Business Permits and Licensing Office (BPLO) stated in the contract. Time: 4 days Cost: PHP 5,610 (PHP 417 business tax (1/20 of 1% of capitalization) + PHP 600 Procedure 16. Obtain the authority to print receipts and invoices mayor’s permit fee + PHP 3,000 garbage fee + PHP 500 sanitary fee + PHP 50 build- from the BIR ing fee + PHP 26.60 electrical fee + PHP 60 signboard fee + PHP 29.50 plumbing fee Time: 1 day + PHP 50 miscellaneous + PHP 876.61 FSIC (10% of all regulatory charges)) Cost: No cost (fees included in procedure 15) Comments: To obtain the business permit, the company must file the following Comments: The authority to print receipts and invoices must be secured before the documents at the BPLO: sales receipts and invoices may be printed. The company can ask any authorized a. SEC registration; printing company to print its official forms, or it can print its own forms (i.e., it uses b. Barangay clearance; its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for this purpose. To obtain the authority to print receipts and invoices from the BIR, the c. Contract of lease; company must submit the following documents to the Revenue District Office (RDO): d. Photocopy of Certificate of Occupancy; a. Duly completed application for authority to print receipts and invoices (BIR Form e. Picture of establishment; and No. 1906); f. Locational clearance. b. Job order; The city collects initial business tax for the quarter covering the period of business c. Final and clear sample of receipts and invoices (machine-printed); registration. In the succeeding quarter(s), the tax is based on the gross sales for the d. Application for registration (BIR Form No. 1903); and preceding quarter. e. Proof of payment of annual registration fee (BIR Form No. 0605). Procedure 12*. Present the official receipt at the City Health Office (CHO) to obtain the sanitary permit Procedure 17. Print receipts and invoices at the print shops Time: 1 day Time: 7 days Cost: No cost (fees included in procedure 11) Cost: PHP 2,100 Comments: Inspection is not required. The company is only required to get the Comments: The cost is based on the following specifications of the official receipt: sanitary permit after the payment of the fees and before release of business permit. 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Procedure 13. Buy special books of account at bookstore Procedure 18. Have books of accounts and Printer’s Certificate of Delivery (PCD) stamped by the BIR Time: 1 day Time: 1 day Cost: PHP 400 Cost: No cost Comments: Special books of accounts are required for registering with the BIR. The books of accounts are sold at bookstores nationwide. One set of journals consisting Comments: After the printing of receipts and invoices, the printer issues a Printer’s of four books (cash receipts account, disbursements account, ledger, general journal) Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must costs about PHP 400. submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the company’s principal place of business) for registration and stamping within thirty If the company has a computerized accounting system (CAS), it may opt to register (30) days from issuance. The company must also submit the following documents: its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to a. All required books of accounts; inspect and evaluate the company’s CAS within 30 days from receipt of the applica- b. VAT registration certificate; tion form (BIR Form No. 1900) and complete documentary requirements. c. SEC registration; d. BIR Form W-5; Procedure 14. Apply for Certificate of Registration (COR) and TIN e. Certified photocopy of the ATP; and at the Bureau of Internal Revenue (BIR) f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and Time: 2 days commitments of the taxpayer-user. Cost: PHP 15 (documentary stamp tax) The company must also submit a copy of the PCD to the BIR RDO having jurisdiction Comments: The company must register each type of internal revenue tax for which over the printer’s principal place of business. it is obligated by filing BIR Form No. 0605 and paying the annual registration fee of PHP 500. Upon registration, the BIR will issue to the company the certificate of Procedure 19. Register with the Social Security System (SSS) registration—BIR Form No. 2303. Time: 5 days To obtain the TIN, the company has to file: Cost: No cost a. Barangay clearance; Comments: To register with the SSS, the company must submit the following docu- b. Mayor’s permit; and ments: c. Copy of its SEC registration. a. Employer registration form (Form R-1); 74 Doing Business IN the philippines 2011 b. Employment report (Form R-1A); a. Company name verification slip; c. List of employees, specifying their birth dates, positions, monthly salary and date b. Articles of incorporation (notarized) and by-laws; of employment; and c. Treasurer’s affidavit (notarized); d. Articles of incorporation, by-laws and SEC registration. d. Statement of assets and liabilities; Upon submission of the required documents, the SSS employer and employee e. Bank certificate of deposit of the paid-in capital; numbers will be released. The employees may attend an SSS training seminar after f. Authority to verify the bank account; registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations. g. Registration data sheet with particulars on directors, officers, stockholders, and so forth; Procedure 20. Register with the Philippine Health Insurance h. Written undertaking to comply with SEC reporting requirements (notarized); and Company (PhilHealth) i. Written undertaking to change corporate name (notarized). Time: 1 day The SEC Head Office issues pre-registered TINs only if the company’s application for Cost: No cost registration has been approved. The company must still register with the Bureau of Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- Comments: To register with PhilHealth, the company must submit the following tration fee, obtain and stamp sales invoices, receipts and the books of accounts. documents: a. Employer data record (Form ER1); Procedure 5. After issuance of the SEC certificate of b. Report of employee-members (Form ER2); incorporation, pay the annual community tax and obtain the c. SEC registration; community tax certificate (CTC) from the City Treasurer’s Office d. BIR registration; and (CTO) e. Copy of business permit. Time: 1 day Upon submission of the required documents, the company shall get the receiving Cost: PHP 500 copy of all the forms as proof of membership until PhilHealth releases the employer and employee numbers within three months. Procedure 6. Obtain barangay clearance Time: 1 day *This procedure can be completed simultaneously with previous procedures. Cost: PHP 800 (between PHP 500 – PHP 2,000) Comments: This clearance is obtained from the barangay where the business is starting a business located and is required to obtain the business permit from the city or municipality. PASAY Barangay fees vary for each barangay since they have the discretion to impose their own fees and charges for as long as these fees are reasonable and within the limits Standard company legal form: Corporation set by the Local Government Code and city ordinances. Barangay fees may depend Paid-in minimum capital requirement: PHP 5,000 = USD 107 on: Data as of: June 2010 a. the location and the area (size in square meters) of the place of business; or b. the company’s paid-up capital and the area it occupies; or Procedure 1. Verify and reserve the company name with the Securities and Exchange Commission (SEC) c. whether they issue clearance plates or certificates. Time: 1 day Procedure 7. Obtain Fire Safety Inspection Certificate (FSIC) from Cost: PHP 40 the Bureau of Fire Protection (BFP) Comments: The company can verify the availability of the company name online. Time: 2 days Verification is free but reservation of the name, once approved by the SEC, costs PHP Cost: PHP 551 40 for the first 30 days. The company name can be reserved for a maximum of 120 days for a fee of PHP 120, which is renewable upon expiration of the period. Comments: The company gets an assessment of fee for FSIC and receives an order of payment from the BFP before going to the City Treasurer's Office (CTO) for the Procedure 2. Deposit paid-up capital in the Authorized Agent assessment of business permit fees and taxes. After the payment of fees but before Bank (AAB) and obtain bank certificate of deposit the issuance of the business permit, the local Fire Marshall shall counter-sign under the BFP portion of the business permit application form. Time: 1 day Cost: No cost Procedure 8*. Receive inspection for FSIC from the BFP Comments: The company is required by law to deposit paid-up capital amounting Time: 1 day to at least 6.25% of the authorized capital stock of the corporation. This paid-up Cost: No cost capital must not be less than PHP 5,000. Comments: The BFP conducts an inspection to ensure that the requirements of the Some banks charge a fee for issuance of the certificate of deposit. Fire Code are complied with. Procedure 3. Notarize articles of incorporation and treasurer’s Procedure 9. Obtain the business permit to operate from the affidavit at the notary Business Permits and Licensing Office (BPLO) Time: 1 day Time: 3 days Cost: PHP 500 Cost: PHP 6,350 (PHP 417 business tax (1/2 of 1/10 of 1% of paid-up capital) + PHP Comments: According to Sections 14 and 15 of the Corporation Code, articles of 913.16 mayor’s permit fee + PHP 400 office/display + PHP 500 sanitary inspection incorporation should be notarized before filing with the SEC. fee + PHP 2,800 garbage fee + PHP 300 signboard fee + PHP 20 police clearance + PHP 1,000 sticker/plate) Procedure 4. Register the company with the SEC and receive pre- Comments: The business permit application form can be downloaded from the registered Taxpayer Identification Number (TIN) Pasay City website at www.pasay.gov.ph. To obtain the business permit, the com- Time: 3 days pany must file the following documents at the BPLO: Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized a. SEC registration; capital stock or the subscription price of the subscribed capital stock, whichever is b. Barangay clearance; higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent c. Lease contract; to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + d. FSIC; PHP 10 registration for SEC bulletin) e. Certificate of Occupancy (can be borrowed from the owner of the building); and Comments: The company can register online through SEC i-Register but must pay f. Zoning clearance (if the building has already been issued with this clearance, this on site at the SEC. The following documents are required for SEC registration: is no longer needed) LIST OF PROCE DURES • STARTING A BUSINESS 75 The company must proceed to the BPLO to submit the application form and require- ments, get approval of the application and obtain the business account number Procedure 14. Print receipts and invoices at the print shops (BAN). Then the company goes to the CTO for the assessment of the business fees Time: 7 days and taxes, pays at the Teller Division and obtains an official receipt. Cost: PHP 2,000 The city collects initial business tax for the quarter covering the period of business Comments: The cost is based on the following specifications of the official receipt: registration. In the succeeding quarter(s), the tax is based on the gross sales for the 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. preceding quarter. Procedure 15. Have books of accounts and Printer’s Certificate of Procedure 10. Buy special books of account at bookstore Delivery (PCD) stamped by the BIR Time: 1 day Time: 1 day Cost: PHP 400 Cost: No cost Comments: Special books of accounts are required for registering with the BIR. The Comments: After the printing of receipts and invoices, the printer issues a Printer’s books of accounts are sold at bookstores nationwide. One set of journals consisting Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must of four books (cash receipts account, disbursements account, ledger, general journal) submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the costs about PHP 400. company’s principal place of business) for registration and stamping within thirty If the company has a computerized accounting system (CAS), it may opt to register (30) days from issuance. The company must also submit the following documents: its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. a. All required books of accounts; 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to b. VAT registration certificate; inspect and evaluate the company’s CAS within 30 days from receipt of the applica- tion form (BIR Form No. 1900) and complete documentary requirements. c. SEC registration; d. BIR Form W-5; Procedure 11. Apply for Certificate of Registration (COR) and TIN e. Certified photocopy of the ATP; and at the Bureau of Internal Revenue (BIR) f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and Time: 2 days commitments of the taxpayer-user. Cost: PHP 30 (PHP 15 certification fee + PHP 15 documentary stamp tax) The company must also submit a copy of the PCD to the BIR RDO having jurisdiction Comments: The company must register each type of internal revenue tax for which over the printer’s principal place of business. it is obligated by filing BIR Form No. 0605 and paying the annual registration fee of PHP 500. Upon registration, the BIR will issue to the company the certificate of Procedure 16. Register with the Social Security System (SSS) registration—BIR Form No. 2303. Time: 5 days To obtain the TIN, the company has to file: Cost: No cost a. Barangay clearance; Comments: To register with the SSS, the company must submit the following docu- b. Mayor’s permit; and ments: c. Copy of its SEC registration. a. Employer registration form (Form R-1); For company registrations filed with the SEC Head Office in Metro Manila, the BIR b. Employment report (Form R-1A); confirms the pre-registered TIN issued by the SEC. c. List of employees, specifying their birth dates, positions, monthly salary and date New taxpayers are required to attend a seminar. of employment; and d. Articles of incorporation, by-laws and SEC registration. Procedure 12. Pay the registration fee and documentary stamp Upon submission of the required documents, the SSS employer and employee taxes (DST) at the AAB numbers will be released. The employees may attend an SSS training seminar after Time: 1 day registration. SSS prefers that all members go through such training so that each Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance member is aware of their rights and obligations. of shares of stock. DST on the lease contract is not included in the computation of the cost) Procedure 17. Register with the Philippine Health Insurance Comments: The company must pay DST on the original issuance of shares of stock. Company (PhilHealth) The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Time: 1 day such shares of stock. This payment with the BIR should be made on the 5th of the Cost: No cost month following registration with the SEC. Comments: To register with PhilHealth, the company must submit the following The COR will be released only after all the DSTs are paid. documents: The company must also pay DST on its lease contract at the rate of PHP 3 for the first a. Employer data record (Form ER1); PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or b. Report of employee-members (Form ER2); fractional part thereof in excess of the first PHP 2,000 for each year of the lease as stated in the contract. c. SEC registration; d. BIR registration; and Procedure 13. Obtain the authority to print receipts and invoices e. Copy of business permit. from the BIR Upon submission of the required documents, the company shall get the receiving Time: 1 day copy of all the forms as proof of membership until PhilHealth releases the employer Cost: No cost and employee numbers within three months. Comments: The authority to print receipts and invoices must be secured before the sales receipts and invoices may be printed. The company can ask any authorized *This procedure can be completed simultaneously with previous procedures. printing company to print its official forms, or it can print its own forms (i.e., it uses its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for this purpose. To obtain the authority to print receipts and invoices from the BIR, the company must submit the following documents to the Revenue District Office (RDO): a. Duly completed application for authority to print receipts and invoices (BIR Form No. 1906); b. Job order; c. Final and clear sample of receipts and invoices (machine-printed); d. Application for registration (BIR Form No. 1903); and e. Proof of payment of annual registration fee (BIR Form No. 0605). 76 Doing Business IN the philippines 2011 starting a business Comments: This clearance is obtained from the barangay where the business is PASIG located and is required to obtain the business permit from the city or municipality. Barangay fees vary for each barangay since they have the discretion to impose their Standard company legal form: Corporation own fees and charges for as long as these fees are reasonable and within the limits Paid-in minimum capital requirement: PHP 5,000 = USD 107 set by the Local Government Code and city ordinances. Barangay fees may depend Data as of: June 2010 on: a. the location and the area (size in square meters) of the place of business; or Procedure 1. Verify and reserve the company name with the b. the company’s paid-up capital and the area it occupies; or Securities and Exchange Commission (SEC) c. whether they issue clearance plates or certificates. Time: 1 day Cost: PHP 40 Procedure 7. Obtain the business permit application form from Comments: The company can verify the availability of the company name online. the Business Permits and Licensing Office (BPLO) Verification is free but reservation of the name, once approved by the SEC, costs PHP Time: 1 day 40 for the first 30 days. The company name can be reserved for a maximum of 120 days for a fee of PHP 120, which is renewable upon expiration of the period. Cost: No cost Procedure 2. Deposit paid-up capital in the Authorized Agent Procedure 8. Notarize the business permit application form at Bank (AAB) and obtain bank certificate of deposit the notary Time: 1 day Time: 1 day Cost: PHP 100 Cost: PHP 50 Comments: The company is required by law to deposit paid-up capital amounting Procedure 9. Proceed to the Office of the Building Official (OBO) to at least 6.25% of the authorized capital stock of the corporation. This paid-up capital must not be less than PHP 5,000. to get the assessment of the building and plumbing inspection fees Some banks charge a fee for issuance of the certificate of deposit. Time: 1 day Procedure 3. Notarize articles of incorporation and treasurer’s Cost: No cost (fees included in procedure 11) affidavit at the notary Time: 1 day Procedure 10. Proceed to the Electrical and Mechanical Section (EMS) to get the assessment of the electrical and mechanical Cost: PHP 500 inspection fees Comments: According to Sections 14 and 15 of the Corporation Code, articles of incorporation should be notarized before filing with the SEC. Time: 1 day Cost: No cost (fees included in procedure 11) Procedure 4. Register the company with the SEC and receive pre- registered Taxpayer Identification Number (TIN) Procedure 11. Obtain the business permit to operate from the Time: 3 days BPLO Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized Time: 7 days capital stock or the subscription price of the subscribed capital stock, whichever is Cost: PHP 8,860 (PHP 208.5 business tax (1/4 of 1/10 of 1% of capitalization) + PHP higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent 1,000 mayor’s permit fee + PHP 200 business plate registration fee + PHP 300 sani- to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- tary inspection fee + PHP 800 environmental permit + PHP 45 signage fee + PHP tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + 1,000 personnel fee + PHP 680 building and plumbing inspection fees + PHP 3,840 PHP 10 registration for SEC bulletin) electrical and mechanical inspection fees + PHP 786.5 FSIC (10% of all regulatory Comments: The company can register online through SEC i-Register but must pay charges)) on site at the SEC. The following documents are required for SEC registration: Comments: The company gets the assessment of the business permit fees and taxes a. Company name verification slip; and obtains the printed tax order of payment from the Electronic Data Processing unit of the BPLO. Then the company proceeds to the City Treasurer’s Office (CTO) to b. Articles of incorporation (notarized) and by-laws; secure final approval of the tax order of payment and pay business permit fees and c. Treasurer’s affidavit (notarized); taxes at the cashier. d. Statement of assets and liabilities; To obtain the business permit, the company must file the following documents at e. Bank certificate of deposit of the paid-in capital; the BPLO: f. Authority to verify the bank account; a. SEC registration; g. Registration data sheet with particulars on directors, officers, stockholders, and so b. Duly accomplished and notarized application form; forth; c. Barangay clearance; h. Written undertaking to comply with SEC reporting requirements (notarized); and d. Community tax certificate; i. Written undertaking to change corporate name (notarized). e. Contract of lease and Mayor’s permit of lessor or sub-lessor; The SEC Head Office issues pre-registered TINs only if the company’s application for f. Sketch of location of establishment; and registration has been approved. The company must still register with the Bureau of g. Fire safety inspection certificate. Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- tration fee, obtain and stamp sales invoices, receipts and the books of accounts. The city collects initial business tax for the quarter covering the period of business registration. In the succeeding quarter(s), the tax is based on the gross sales for the Procedure 5. After issuance of the SEC certificate of preceding quarter. incorporation, pay the annual community tax and obtain the Procedure 12*. Proceed to the Health Department to present the community tax certificate (CTC) from the City Treasurer’s Office official receipt and obtain the sanitary permit (CTO) Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 11) Cost: PHP 500 Comments: After paying the fees but before obtaining the business permit, the Procedure 6. Obtain barangay clearance company presents the official receipt at the Health Department to get the temporary sanitary permit. The permanent permit is issued after inspection of the business es- Time: 1 day tablishment and within 15 days upon issuance of the business permit. No inspection Cost: PHP 500 is conducted for simple businesses. LIST OF PROCE DURES • STARTING A BUSINESS 77 Procedure 13*. Proceed to the City Environment and Natural Procedure 18. Obtain the authority to print receipts and invoices Resource Office (City ENRO) for the environmental permit from the BIR Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 11) Cost: No cost Comments: After paying fees but before obtaining the business permit, the com- Comments: The authority to print receipts and invoices must be secured before the pany presents the official receipt at City ENRO to get the temporary environmental sales receipts and invoices may be printed. The company can ask any authorized permit. The permanent permit is issued after inspection of the business establish- printing company to print its official forms, or it can print its own forms (i.e., it uses ment and within 15 days upon issuance of the business permit. its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for this purpose. To obtain the authority to print receipts and invoices from the BIR, the Procedure 14*. Proceed to the Bureau of Fire Protection (BFP) for company must submit the following documents to the Revenue District Office (RDO): the temporary Fire Safety Inspection Certificate (FSIC) a. Duly completed application for authority to print receipts and invoices (BIR Form Time: 1 day No. 1906); Cost: No cost (fees included in procedure 11) b. Job order; Comments: After the payment of fees but before the issuance of the business c. Final and clear sample of receipts and invoices (machine-printed); permit, the company presents the official receipt at the BFP to get the temporary d. Application for registration (BIR Form No. 1903); and FSIC. The permanent FSIC is issued after inspection of the business establishment e. Proof of payment of annual registration fee (BIR Form No. 0605). and within 15 days upon issuance of the business permit. Procedure 19. Print receipts and invoices at the print shops Procedure 15. Buy special books of account at bookstore Time: 7 days Time: 1 day Cost: PHP 3,500 Cost: PHP 400 Comments: The cost is based on the following specifications of the official receipt: Comments: Special books of accounts are required for registering with the BIR. The 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. books of accounts are sold at bookstores nationwide. One set of journals consisting of four books (cash receipts account, disbursements account, ledger, general journal) Procedure 20. Have books of accounts and Printer’s Certificate of costs about PHP 400. Delivery (PCD) stamped by the BIR If the company has a computerized accounting system (CAS), it may opt to register Time: 1 day its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to Cost: No cost inspect and evaluate the company’s CAS within 30 days from receipt of the applica- Comments: After the printing of receipts and invoices, the printer issues a Printer’s tion form (BIR Form No. 1900) and complete documentary requirements. Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the Procedure 16. Apply for Certificate of Registration (COR) and TIN company’s principal place of business) for registration and stamping within thirty at the Bureau of Internal Revenue (BIR) (30) days from issuance. The company must also submit the following documents: Time: 2 days a. All required books of accounts; Cost: PHP 15 (documentary stamp tax) b. VAT registration certificate; Comments: The company must register each type of internal revenue tax for which c. SEC registration; it is obligated by filing BIR Form No. 0605 and paying the annual registration fee d. BIR Form W-5; of PHP 500. Upon registration, the BIR will issue to the company the certificate of e. Certified photocopy of the ATP; and registration—BIR Form No. 2303. f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and To obtain the TIN, the company has to file: commitments of the taxpayer-user. a. Barangay clearance; The company must also submit a copy of the PCD to the BIR RDO having jurisdiction b. Mayor’s permit; and over the printer’s principal place of business. c. Copy of its SEC registration. For company registrations filed with the SEC Head Office in Metro Manila, the BIR Procedure 21. Register with the Social Security System (SSS) confirms the pre-registered TIN issued by the SEC. Time: 3 days New taxpayers are required to attend a seminar. Cost: No cost Comments: To register with the SSS, the company must submit the following docu- Procedure 17. Pay the registration fee and documentary stamp ments: taxes (DST) at the AAB a. Employer registration form (Form R-1); Time: 1 day b. Employment report (Form R-1A); Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance c. List of employees, specifying their birth dates, positions, monthly salary and date of shares of stock. DST on the lease contract is not included in the computation of of employment; and the cost) d. Articles of incorporation, by-laws and SEC registration. Comments: The company must pay DST on the original issuance of shares of stock. Upon submission of the required documents, the SSS employer and employee The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of numbers will be released. The employees may attend an SSS training seminar after such shares of stock. This payment with the BIR should be made on the 5th of the registration. SSS prefers that all members go through such training so that each month following registration with the SEC. member is aware of their rights and obligations. The COR will be released only after all the DSTs are paid. The company must also pay DST on its lease contract at the rate of PHP 3 for the first Procedure 22. Register with the Philippine Health Insurance PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or Company (PhilHealth) fractional part thereof in excess of the first PHP 2,000 for each year of the lease as Time: 1 day stated in the contract. Cost: No cost Comments: To register with PhilHealth, the company must submit the following documents: a. Employer data record (Form ER1); b. Report of employee-members (Form ER2); c. SEC registration; d. BIR registration; and 78 Doing Business IN the philippines 2011 e. Copy of business permit. Comments: This clearance is obtained from the barangay where the business is Upon submission of the required documents, the company shall get the receiving located and is required to obtain the business permit from the city or municipality. copy of all the forms as proof of membership until PhilHealth releases the employer Barangay fees vary for each barangay since they have the discretion to impose their and employee numbers within three months. own fees and charges for as long as these fees are reasonable and within the limits set by the Local Government Code and city ordinances. Barangay fees may depend on: *This procedure can be completed simultaneously with previous procedures. a. the location and the area (size in square meters) of the place of business; or starting a business b. the company’s paid-up capital and the area it occupies; or c. whether they issue clearance plates or certificates. QUEZON CITY Standard company legal form: Corporation Procedure 6. After issuance of the SEC certificate of Paid-in minimum capital requirement: PHP 5,000 = USD 107 incorporation, pay the annual community tax and obtain the Data as of: June 2010 community tax certificate (CTC) from the City Treasurer’s Office (CTO) Procedure 1. Verify and reserve the company name with the Time: 1 day Securities and Exchange Commission (SEC) Cost: PHP 500 Time: 1 day Cost: PHP 40 Procedure 7. Obtain the business permit application form from Comments: The company can verify the availability of the company name online. the Business Permits and Licensing Office (BPLO) Verification is free but reservation of the name, once approved by the SEC, costs PHP Time: 1 day 40 for the first 30 days. The company name can be reserved for a maximum of 120 days for a fee of PHP 120, which is renewable upon expiration of the period. Cost: No cost Procedure 2. Deposit paid-up capital in the Authorized Agent Procedure 8. Obtain the business permit to operate from the Bank (AAB) and obtain bank certificate of deposit BPLO Time: 1 day Time: 6 days Cost: No cost Cost: PHP 4,939 (PHP 2,084.98 business tax (25% of 1% of paid-up capital) + PHP 200 mayor’s permit + PHP 150 sanitary inspection fee + PHP 50 signboard fee + Comments: The company is required by law to deposit paid-up capital amounting PHP 250 business plate + PHP 100 QCBRB + PHP 545 zoning clearance + PHP 1,300 to at least 6.25% of the authorized capital stock of the corporation. This paid-up garbage fee+ PHP 259.5 FSIC (10% of all regulatory fees)) capital must not be less than PHP 5,000. Comments: To obtain the business permit, the company must file the following Some banks charge a fee for issuance of the certificate of deposit. documents at the BPLO: Procedure 3. Notarize articles of incorporation and treasurer’s a. SEC registration; affidavit at the notary b. Barangay clearance; Time: 1 day c. Locational clearance; and Cost: PHP 500 d. FSIC. Comments: According to Sections 14 and 15 of the Corporation Code, articles of The company submits application form and requirements at the BPLO, secures incorporation should be notarized before filing with the SEC. evaluation and obtains the claim stub for the processed documents date. Then the company proceeds to the City Treasurer’s Office (CTO) to get the assessment of the Procedure 4. Register the company with the SEC and receive pre- business permit fees and taxes and pay at the CTO’s taxpayer’s lounge. The locational clearance should be accomplished ninety (90) days after the issuance of the business registered Taxpayer Identification Number (TIN) permit; no inspection is needed. Inspection from the BPLO takes place after issuance Time: 3 days of the business permit. Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized The city collects initial business tax for the quarter covering the period of business capital stock or the subscription price of the subscribed capital stock, whichever is registration. In the succeeding quarter(s), the tax is based on the gross sales for the higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent preceding quarter. to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + Procedure 9. Buy special books of account at bookstore PHP 10 registration for SEC bulletin) Time: 1 day Comments: The company can register online through SEC i-Register but must pay Cost: PHP 400 on site at the SEC. The following documents are required for SEC registration: Comments: Special books of accounts are required for registering with the BIR. The a. Company name verification slip; books of accounts are sold at bookstores nationwide. One set of journals consisting b. Articles of incorporation (notarized) and by-laws; of four books (cash receipts account, disbursements account, ledger, general journal) c. Treasurer’s affidavit (notarized); costs about PHP 400. d. Statement of assets and liabilities; If the company has a computerized accounting system (CAS), it may opt to register e. Bank certificate of deposit of the paid-in capital; its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. f. Authority to verify the bank account; 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to inspect and evaluate the company’s CAS within 30 days from receipt of the applica- g. Registration data sheet with particulars on directors, officers, stockholders, and so tion form (BIR Form No. 1900) and complete documentary requirements. forth; h. Written undertaking to comply with SEC reporting requirements (notarized); and Procedure 10. Apply for Certificate of Registration (COR) and TIN i. Written undertaking to change corporate name (notarized). at the Bureau of Internal Revenue (BIR) The SEC Head Office issues pre-registered TINs only if the company’s application for Time: 2 days registration has been approved. The company must still register with the Bureau of Cost: PHP 115 (PHP 1,000 certification fee + PHP 15 documentary stamp tax) Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- tration fee, obtain and stamp sales invoices, receipts and the books of accounts. Comments: The company must register each type of internal revenue tax for which it is obligated by filing BIR Form No. 0605 and paying the annual registration fee of PHP 500. Upon registration, the BIR will issue to the company the certificate of Procedure 5. Obtain barangay clearance registration—BIR Form No. 2303. Time: 1 day To obtain the TIN, the company has to file: Cost: PHP 500 (between PHP 0 – PHP 600) a. Barangay clearance; b. Mayor’s permit; and LIST OF PROCE DURES • STARTING A BUSINESS 79 c. Copy of its SEC registration. Procedure 15. Register with the Social Security System (SSS) For company registrations filed with the SEC Head Office in Metro Manila, the BIR Time: 7 days confirms the pre-registered TIN issued by the SEC. Cost: No cost New taxpayers are required to attend a seminar. Comments: To register with the SSS, the company must submit the following docu- Procedure 11. Pay the registration fee and documentary stamp ments: taxes (DST) at the AAB a. Employer registration form (Form R-1); Time: 1 day b. Employment report (Form R-1A); Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance c. List of employees, specifying their birth dates, positions, monthly salary and date of shares of stock. DST on the lease contract is not included in the computation of of employment; and the cost) d. Articles of incorporation, by-laws and SEC registration. Comments: The company must pay DST on the original issuance of shares of stock. Upon submission of the required documents, the SSS employer and employee The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of numbers will be released. The employees may attend an SSS training seminar after such shares of stock. This payment with the BIR should be made on the 5th of the registration. SSS prefers that all members go through such training so that each month following registration with the SEC. member is aware of their rights and obligations. The COR will be released only after all the DSTs are paid. The company must also pay DST on its lease contract at the rate of PHP 3 for the first Procedure 16. Register with the Philippine Health Insurance PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or Company (PhilHealth) fractional part thereof in excess of the first PHP 2,000 for each year of the lease as Time: 1 day stated in the contract. Cost: No cost Comments: To register with PhilHealth, the company must submit the following Procedure 12. Obtain the authority to print receipts and invoices documents: from the BIR a. Employer data record (Form ER1); Time: 1 day b. Report of employee-members (Form ER2); Cost: No cost (fees included in procedure 11) c. SEC registration; Comments: The authority to print receipts and invoices must be secured before the d. BIR registration; and sales receipts and invoices may be printed. The company can ask any authorized printing company to print its official forms, or it can print its own forms (i.e., it uses e. Copy of business permit. its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Upon submission of the required documents, the company shall get the receiving this purpose. To obtain the authority to print receipts and invoices from the BIR, the copy of all the forms as proof of membership until PhilHealth releases the employer company must submit the following documents to the Revenue District Office (RDO): and employee numbers within three months. a. Duly completed application for authority to print receipts and invoices (BIR Form No. 1906); starting a business b. Job order; SAN JUAN c. Final and clear sample of receipts and invoices (machine-printed); Standard company legal form: Corporation d. Application for registration (BIR Form No. 1903); and Paid-in minimum capital requirement: PHP 5,000 = USD 107 e. Proof of payment of annual registration fee (BIR Form No. 0605). Data as of: June 2010 Procedure 13. Print receipts and invoices at the print shops Procedure 1. Verify and reserve the company name with the Time: 7 days Securities and Exchange Commission (SEC) Cost: PHP 3,500 (between PHP 3,000 – PHP 3,800) Time: 1 day Comments: The cost is based on the following specifications of the official receipt: Cost: PHP 40 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Comments: The company can verify the availability of the company name online. Verification is free but reservation of the name, once approved by the SEC, costs PHP Procedure 14. Have books of accounts and Printer’s Certificate of 40 for the first 30 days. The company name can be reserved for a maximum of 120 Delivery (PCD) stamped by the BIR days for a fee of PHP 120, which is renewable upon expiration of the period. Time: 1 day Procedure 2. Deposit paid-up capital in the Authorized Agent Cost: No cost Bank (AAB) and obtain bank certificate of deposit Comments: After the printing of receipts and invoices, the printer issues a Printer’s Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must Time: 1 day submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the Cost: No cost company’s principal place of business) for registration and stamping within thirty Comments: The company is required by law to deposit paid-up capital amounting (30) days from issuance. The company must also submit the following documents: to at least 6.25% of the authorized capital stock of the corporation. This paid-up a. All required books of accounts; capital must not be less than PHP 5,000. b. VAT registration certificate; Some banks charge a fee for issuance of the certificate of deposit. c. SEC registration; Procedure 3. Notarize articles of incorporation and treasurer’s d. BIR Form W-5; affidavit at the notary e. Certified photocopy of the ATP; and Time: 1 day f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and commitments of the taxpayer-user. Cost: PHP 500 The company must also submit a copy of the PCD to the BIR RDO having jurisdiction Comments: According to Sections 14 and 15 of the Corporation Code, articles of over the printer’s principal place of business. incorporation should be notarized before filing with the SEC. 80 Doing Business IN the philippines 2011 Procedure 4. Register the company with the SEC and receive pre- Procedure 10*. Receive inspection for the locational clearance registered Taxpayer Identification Number (TIN) from the CPDO Time: 3 days Time: 1 day Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized Cost: No cost capital stock or the subscription price of the subscribed capital stock, whichever is higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent Procedure 11. Obtain the Fire Safety Inspection Certificate (FSIC) to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- from the Bureau of Fire Protection (BFP) tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + Time: 3 days PHP 10 registration for SEC bulletin) Cost: No cost (fees included in procedure 13) Comments: The company can register online through SEC i-Register but must pay on site at the SEC. The following documents are required for SEC registration: Comments: The FSIC fee is being assessed at the BPLO and paid at the CTO. a. Company name verification slip; Procedure 12*. Receive inspection for the FSIC from the BFP b. Articles of incorporation (notarized) and by-laws; Time: 1 day c. Treasurer’s affidavit (notarized); Cost: No cost d. Statement of assets and liabilities; Comments: The BFP conducts an inspection to ensure that the requirements of the e. Bank certificate of deposit of the paid-in capital; Fire Code are complied with. f. Authority to verify the bank account; g. Registration data sheet with particulars on directors, officers, stockholders, etc.; Procedure 13. Obtain the business permit to operate from the BPLO h. Written undertaking to comply with SEC reporting requirements (notarized); and Time: 3 days i. Written undertaking to change corporate name (notarized). Cost: PHP 6,106 (PHP 4,169.97 annual business tax (1/2 of 1% of paid-up capital) + The SEC Head Office issues pre-registered TINs only if the company’s application for PHP 750 mayor’s permit fee + PHP 720 garbage fee + PHP 240 sanitary inspection registration has been approved. The company must still register with the Bureau of fee + PHP 50 signboard fee + PHP 176 FSIC (10% of regulatory fees)) Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- Comments: To obtain the mayor’s business permit, the company must file the fol- tration fee, obtain and stamp sales invoices, receipts and the books of accounts. lowing documents at the BPLO: a. SEC registration; Procedure 5. After issuance of the SEC certificate of b. Barangay clearance; incorporation, pay the annual community tax and obtain the c. Locational clearance; community tax certificate (CTC) from the City Treasurer’s Office d. Fire clearance; and (CTO) e. Picture of establishment. Time: 1 day The city collects initial business tax for the quarter covering the period of business Cost: PHP 500 registration. In the succeeding quarter(s), the tax is based on the gross sales for the preceding quarter. Procedure 6. Obtain barangay clearance Time: 1 day Procedure 14. Buy special books of account at bookstore Cost: PHP 500 Time: 1 day Comments: This clearance is obtained from the barangay where the business is Cost: PHP 400 located and is required to obtain the business permit from the city or municipality. Comments: Special books of accounts are required for registering with the BIR. The Barangay fees vary for each barangay since they have the discretion to impose their books of accounts are sold at bookstores nationwide. One set of journals consisting own fees and charges for as long as these fees are reasonable and within the limits set of four books (cash receipts account, disbursements account, ledger, general journal) by the Local Government Code and city ordinances. Barangay fees may depend on: costs about PHP 400. a. the location and the area (size in square meters) of the place of business; or If the company has a computerized accounting system (CAS), it may opt to register b. the company’s paid-up capital and the area it occupies; or its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. c. whether they issue clearance plates or certificates. 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to inspect and evaluate the company’s CAS within 30 days from receipt of the applica- Procedure 7. Request preliminary assessment of business permit tion form (BIR Form No. 1900) and complete documentary requirements. fees and taxes from the City Treasurer’s Office (CTO) Time: 1 day Procedure 15. Apply for Certificate of Registration (COR) and TIN at the Bureau of Internal Revenue (BIR) Cost: No cost Time: 2 days Procedure 8. Obtain the locational clearance application form Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) from the City Planning and Development Office (CPDO) and Comments: The company must register each type of internal revenue tax for which notarize the locational clearance and business permit application it is obligated by filing BIR Form No. 0605 and paying the annual registration fee forms at the notary of PHP 500. Upon registration, the BIR will issue to the company the certificate of registration—BIR Form No. 2303. Time: 1 day To obtain the TIN, the company has to file: Cost: PHP 100 a. Barangay clearance; Comments: The business permit application form is downloadable in the city’s website. b. Mayor’s permit; and c. Copy of its SEC registration. Procedure 9. Obtain the locational clearance from the CPDO For company registrations filed with the SEC Head Office in Metro Manila, the BIR Time: 3 days confirms the pre-registered TIN issued by the SEC. Cost: PHP 2,800 (PHP 2,000 equivalent to PHP 10 per square meter assuming an New taxpayers are required to attend a seminar. area of 200 square meters x 1.25 processing fee + PHP 100 application fee + PHP 200 certificate fee) Procedure 16. Pay the registration fee and documentary stamp Comments: The company must submit the following documents: taxes (DST) at the AAB a. SEC registration; Time: 1 day b. Barangay clearance; Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance c. Contract of lease; and of shares of stock. DST on the lease contract is not included in the computation of the cost) d. Application form from the BPLO. LIST OF PROCE DURES • STARTING A BUSINESS 81 Comments: The company must pay DST on the original issuance of shares of stock. Procedure 21. Register with the Philippine Health Insurance The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of such shares of stock. This payment with the BIR should be made on the 5th of the Company (PhilHealth) month following registration with the SEC. Time: 1 day The COR will be released only after all the DSTs are paid. Cost: No cost The company must also pay DST on its lease contract at the rate of PHP 3 for the first Comments: To register with PhilHealth, the company must submit the following PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or documents: fractional part thereof in excess of the first PHP 2,000 for each year of the lease as a. Employer data record (Form ER1); stated in the contract. b. Report of employee-members (Form ER2); c. SEC registration; Procedure 17. Obtain the authority to print receipts and invoices from the BIR d. BIR registration; and e. Copy of business permit. Time: 1 day Upon submission of the required documents, the company shall get the receiving Cost: No cost copy of all the forms as proof of membership until PhilHealth releases the employer Comments: The authority to print receipts and invoices must be secured before the and employee numbers within three months. sales receipts and invoices may be printed. The company can ask any authorized printing company to print its official forms, or it can print its own forms (i.e., it uses its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for *This procedure can be completed simultaneously with previous procedures. this purpose. To obtain the authority to print receipts and invoices from the BIR, the company must submit the following documents to the Revenue District Office (RDO): starting a business a. Duly completed application for authority to print receipts and invoices (BIR Form TAGUIG No. 1906); Standard company legal form: Corporation b. Job order; Paid-in minimum capital requirement: PHP 5,000 = USD 107 c. Final and clear sample of receipts and invoices (machine-printed); Data as of: June 2010 d. Application for registration (BIR Form No. 1903); and e. Proof of payment of annual registration fee (BIR Form No. 0605). Procedure 1. Verify and reserve the company name with the Securities and Exchange Commission (SEC) Procedure 18. Print receipts and invoices at the print shops Time: 1 day Time: 7 days Cost: PHP 40 Cost: PHP 3,500 (between PHP 3,000 – PHP 3,800) Comments: The company can verify the availability of the company name online. Comments: The cost is based on the following specifications of the official receipt: Verification is free but reservation of the name, once approved by the SEC, costs PHP 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. 40 for the first 30 days. The company name can be reserved for a maximum of 120 days for a fee of PHP 120, which is renewable upon expiration of the period. Procedure 19. Have books of accounts and Printer’s Certificate of Delivery (PCD) stamped by the BIR Procedure 2. Deposit paid-up capital in the Authorized Agent Time: 1 day Bank (AAB) and obtain bank certificate of deposit Cost: No cost Time: 1 day Comments: After the printing of receipts and invoices, the printer issues a Printer’s Cost: No cost Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must Comments: The company is required by law to deposit paid-up capital amounting submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the to at least 6.25% of the authorized capital stock of the corporation. This paid-up company’s principal place of business) for registration and stamping within thirty capital must not be less than PHP 5,000. (30) days from issuance. The company must also submit the following documents: Some banks charge a fee for issuance of the certificate of deposit. a. All required books of accounts; b. VAT registration certificate; Procedure 3. Notarize articles of incorporation and treasurer’s c. SEC registration; affidavit at the notary d. BIR Form W-5; Time: 1 day e. Certified photocopy of the ATP; and Cost: PHP 500 f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and Comments: According to Sections 14 and 15 of the Corporation Code, articles of commitments of the taxpayer-user. incorporation should be notarized before filing with the SEC. The company must also submit a copy of the PCD to the BIR RDO having jurisdiction over the printer’s principal place of business. Procedure 4. Register the company with the SEC and receive pre- registered Taxpayer Identification Number (TIN) Procedure 20. Register with the Social Security System (SSS) Time: 3 days Time: 6 days Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized Cost: No cost capital stock or the subscription price of the subscribed capital stock, whichever is higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent Comments: To register with the SSS, the company must submit the following docu- to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- ments: tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + a. Employer registration form (Form R-1); PHP 10 registration for SEC bulletin) b. Employment report (Form R-1A); Comments: The company can register online through SEC i-Register but must pay c. List of employees, specifying their birth dates, positions, monthly salary and date on site at the SEC. The following documents are required for SEC registration: of employment; and a. Company name verification slip; d. Articles of incorporation, by-laws and SEC registration. b. Articles of incorporation (notarized) and by-laws; Upon submission of the required documents, the SSS employer and employee c. Treasurer’s affidavit (notarized); numbers will be released. The employees may attend an SSS training seminar after d. Statement of assets and liabilities; registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations. e. Bank certificate of deposit of the paid-in capital; f. Authority to verify the bank account; g. Registration data sheet with particulars on directors, officers, stockholders, etc.; h. Written undertaking to comply with SEC reporting requirements (notarized); and 82 Doing Business IN the philippines 2011 i. Written undertaking to change corporate name (notarized). Procedure 9. Buy special books of account at bookstore The SEC Head Office issues pre-registered TINs only if the company’s application for Time: 1 day registration has been approved. The company must still register with the Bureau of Cost: PHP 400 Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- tration fee, obtain and stamp sales invoices, receipts and the books of accounts. Comments: Special books of accounts are required for registering with the BIR. The books of accounts are sold at bookstores nationwide. One set of journals consisting of four books (cash receipts account, disbursements account, ledger, general journal) Procedure 5. Obtain barangay clearance costs about PHP 400. Time: 1 day If the company has a computerized accounting system (CAS), it may opt to register Cost: PHP 500 its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. Comments: This clearance is obtained from the barangay where the business is 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to located and is required to obtain the business permit from the city or municipality. inspect and evaluate the company’s CAS within 30 days from receipt of the applica- Barangay fees vary for each barangay since they have the discretion to impose their tion form (BIR Form No. 1900) and complete documentary requirements. own fees and charges for as long as these fees are reasonable and within the limits set by the Local Government Code and city ordinances. Barangay fees may depend Procedure 10. Apply for Certificate of Registration (COR) and TIN on: at the Bureau of Internal Revenue (BIR) a. the location and the area (size in square meters) of the place of business; or Time: 2 days b. the company’s paid-up capital and the area it occupies; or Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) c. whether they issue clearance plates or certificates. Comments: The company must register each type of internal revenue tax for which it is obligated by filing BIR Form No. 0605 and paying the annual registration fee Procedure 6. After issuance of the SEC certificate of of PHP 500. Upon registration, the BIR will issue to the company the certificate of incorporation, pay the annual community tax and obtain the registration—BIR Form No. 2303. community tax certificate (CTC) from the City Treasurer’s Office To obtain the TIN, the company has to file: (CTO) a. Barangay clearance; Time: 1 day b. Mayor’s permit; and Cost: PHP 500 c. Copy of its SEC registration. Comments: In Taguig, the community tax certificate is not a requirement for obtain- For company registrations filed with the SEC Head Office in Metro Manila, the BIR ing the barangay clearance. The City has passed an ordinance setting a ceiling for confirms the pre-registered TIN issued by the SEC. barangay clearance fees for all barangays under its jurisdiction. New taxpayers are required to attend a seminar. Procedure 7. Notarize the business permit application form at Procedure 11. Pay the registration fee and documentary stamp the notary taxes (DST) at the AAB Time: 1 day Time: 1 day Cost: PHP 50 Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance Comments: Business permit application form is downloadable from the city’s of shares of stock. DST on the lease contract is not included in the computation of website. the cost) Comments: The company must pay DST on the original issuance of shares of stock. Procedure 8. Obtain the business permit to operate from the The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Customer Service Counter of the Business Permits and Licensing such shares of stock. This payment with the BIR should be made on the 5th of the Office (BPLO) month following registration with the SEC. Time: 2 days The COR will be released only after all the DSTs are paid. Cost: PHP 6,426 (PHP 208.5 business tax (1/4 of 1/10 of 1% of paid-up capital) + The company must also pay DST on its lease contract at the rate of PHP 3 for the first PHP 500 environmental impact fee + PHP 2,500 mayor’s permit + PHP 500 sanitary PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or inspection fee + PHP 10 medical/health fees + PHP 400 building inspection fee + fractional part thereof in excess of the first PHP 2,000 for each year of the lease as PHP 400 electrical inspection fee + PHP 250 plumbing inspection fee + PHP 500 stated in the contract. mechanical inspection fee + PHP 200 fire inspection fee + PHP 150 business plate/ sticker + PHP 260 signboard + PHP 547 FSIC (10% of all regulatory charges)) Procedure 12. Obtain the authority to print receipts and invoices Comments: The company must file the following documents at the BPLO: from the BIR a. SEC registration; Time: 1 day b. Duly notarized application form; Cost: No cost c. Barangay clearance; Comments: The authority to print receipts and invoices must be secured before the d. Corporate community tax (Cedula); sales receipts and invoices may be printed. The company can ask any authorized e. Contract of lease; printing company to print its official forms, or it can print its own forms (i.e., it uses its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for f. Insurance (comprehensive general liability); this purpose. To obtain the authority to print receipts and invoices from the BIR, the g. Location sketch; and company must submit the following documents to the Revenue District Office (RDO): h. Photocopy of Certificate of Occupancy (obtained from the owner of the building). a. Duly completed application for authority to print receipts and invoices (BIR Form Once the documents are filled, the officer at the Customer Service Counter forwards No. 1906); the forms to the following offices: (1) the BPLO for the assessment of fees and tax b. Job order; order of payment; and (2) the Health Department for calculation of sanitary inspec- c. Final and clear sample of receipts and invoices (machine-printed); tion fee. d. Application for registration (BIR Form No. 1903); and The city collects initial business tax for the quarter covering the period of business registration. In the succeeding quarter(s), the tax is based on the gross sales for the e. Proof of payment of annual registration fee (BIR Form No. 0605). preceding quarter. Procedure 13. Print receipts and invoices at the print shops Inspection from the BPLO takes place after issuance of the business permit. Time: 7 days Cost: PHP 3,500 (between PHP 2,500 - PHP 3,500) Comments: The cost is based on the following specifications of the official receipt: 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. LIST OF PROCE DURES • STARTING A BUSINESS 83 Procedure 14. Have books of accounts and Printer’s Certificate of Procedure 2. Deposit paid-up capital in the Authorized Agent Delivery (PCD) stamped by the BIR Bank (AAB) and obtain bank certificate of deposit Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: After the printing of receipts and invoices, the printer issues a Printer’s Comments: The company is required by law to deposit paid-up capital amounting Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must to at least 6.25% of the authorized capital stock of the corporation. This paid-up submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the capital must not be less than PHP 5,000. company’s principal place of business) for registration and stamping within thirty Some banks charge a fee for issuance of the certificate of deposit. (30) days from issuance. The company must also submit the following documents: a. All required books of accounts; Procedure 3. Notarize articles of incorporation and treasurer’s b. VAT registration certificate; affidavit at the notary c. SEC registration; Time: 1 day d. BIR Form W-5; Cost: PHP 500 e. Certified photocopy of the ATP; and Comments: According to Sections 14 and 15 of the Corporation Code, articles of f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and incorporation should be notarized before filing with the SEC. commitments of the taxpayer-user. The company must also submit a copy of the PCD to the BIR RDO having jurisdiction Procedure 4. Register the company with the SEC and receive pre- over the printer’s principal place of business. registered Taxpayer Identification Number (TIN) Time: 3 days Procedure 15. Register with the Social Security System (SSS) Cost: PHP 2,665 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized Time: 3 days capital stock or the subscription price of the subscribed capital stock, whichever is Cost: No cost higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- Comments: To register with the SSS, the company must submit the following docu- tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + ments: PHP 10 registration for SEC bulletin) a. Employer registration form (Form R-1); Comments: The company can register online through SEC i-Register but must pay b. Employment report (Form R-1A); on site at the SEC. The following documents are required for SEC registration: c. List of employees, specifying their birth dates, positions, monthly salary and date a. Company name verification slip; of employment; and b. Articles of incorporation (notarized) and by-laws; d. Articles of incorporation, by-laws and SEC registration. c. Treasurer’s affidavit (notarized); Upon submission of the required documents, the SSS employer and employee d. Statement of assets and liabilities; numbers will be released. The employees may attend an SSS training seminar after registration. SSS prefers that all members go through such training so that each e. Bank certificate of deposit of the paid-in capital; member is aware of their rights and obligations. f. Authority to verify the bank account; g. Registration data sheet with particulars on directors, officers, stockholders, and so Procedure 16. Register with the Philippine Health Insurance forth; Company (PhilHealth) h. Written undertaking to comply with SEC reporting requirements (notarized); and Time: 1 day i. Written undertaking to change corporate name (notarized). Cost: No cost The SEC Head Office issues pre-registered TINs only if the company’s application for Comments: To register with PhilHealth, the company must submit the following registration has been approved. The company must still register with the Bureau of documents: Internal Revenue (BIR) in order to identify applicable tax types, pay an annual regis- a. Employer data record (Form ER1); tration fee, obtain and stamp sales invoices, receipts and the books of accounts. b. Report of employee-members (Form ER2); Procedure 5. After issuance of the SEC certificate of c. SEC registration; incorporation, pay the annual community tax and obtain the d. BIR registration; and community tax certificate (CTC) from the City Treasurer’s Office e. Copy of business permit. (CTO) Upon submission of the required documents, the company shall get the receiving Time: 1 day copy of all the forms as proof of membership until PhilHealth releases the employer Cost: PHP 500 and employee numbers within three months. Procedure 6. Obtain barangay clearance starting a business Time: 1 day VALENZUELA Cost: PHP 300 (between PHP 200 – PHP 500) Standard company legal form: Corporation Comments: This clearance is obtained from the barangay where the business is Paid-in minimum capital requirement: PHP 5,000 = USD 107 located and is required to obtain the business permit from the city or municipality. Data as of: June 2010 Barangay fees vary for each barangay since they have the discretion to impose their own fees and charges for as long as these fees are reasonable and within the limits Procedure 1. Verify and reserve the company name with the set by the Local Government Code and city ordinances. Barangay fees may depend Securities and Exchange Commission (SEC) on: Time: 1 day a. the location and the area (size in square meters) of the place of business; or Cost: PHP 40 b. the company’s paid-up capital and the area it occupies; or Comments: The company can verify the availability of the company name online. c. whether they issue clearance plates or certificates. Verification is free but reservation of the name, once approved by the SEC, costs PHP 40 for the first 30 days. The company name can be reserved for a maximum of 120 Procedure 7. Notarize business permit application form at the days for a fee of PHP 120, which is renewable upon expiration of the period. notary Time: 1 day Cost: PHP 100 Comments: Business permit application form is downloadable from the city’s website. 84 Doing Business IN the philippines 2011 Procedure 8. Obtain the business permit to operate from the Procedure 12. Obtain the authority to print receipts and invoices BPLO from the BIR Time: 4 days Time: 1 day Cost: PHP 4,296 (PHP 600 business tax (½ of the mayor’s permit and garbage fees) Cost: No cost (fees included in procedure 10) + PHP 600 mayor’s permit fee + PHP 600 garbage fee + PHP 300 peace and order Comments: The authority to print receipts and invoices must be secured before the fund + PHP 100 plate/sticker + PHP 400 sanitary inspection fee + PHP 450 locational sales receipts and invoices may be printed. The company can ask any authorized clearance + PHP 910 engineering fees + PHP 336 FSIC (10% of all regulatory printing company to print its official forms, or it can print its own forms (i.e., it uses charges)) its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Comments: The applicant submits the following requirements to the BPLO: this purpose. To obtain the authority to print receipts and invoices from the BIR, the a. Duly accomplished business permit application form; company must submit the following documents to the Revenue District Office (RDO): b. Lease contract; a. Duly completed application for authority to print receipts and invoices (BIR Form No. 1906); c. Barangay clearance; b. Job order; d. Community tax certificate; c. Final and clear sample of receipts and invoices (machine-printed); e. SEC registration and articles of incorporation; and d. Application for registration (BIR Form No. 1903); and f. Sketch of business location. e. Proof of payment of annual registration fee (BIR Form No. 0605). Assessment of all fees is done at the BPLO. Upon payment of the fees at City Treasurer’s Office (CTO), the applicant goes back to BPLO to submit all the forms and the receipt of payment. BPLO staff then deliver copies of the application form Procedure 13. Print receipts and invoices at the print shops to concerned departments, who will conduct the appropriate inspections after the Time: 7 days business permit is released. The applicant must comply with all the requirements Cost: PHP 3,500 (between PHP 3,000 – PHP 3,800) within 15 days from the issuance of the business permit. Comments: The cost is based on the following specifications of the official receipt: The city collects initial business tax for the quarter covering the period of business 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. registration. In the succeeding quarter(s), the tax is based on the gross sales for the preceding quarter. Procedure 14. Have books of accounts and Printer’s Certificate of Delivery (PCD) stamped by the BIR Procedure 9. Buy special books of account at bookstore Time: 1 day Time: 1 day Cost: No cost Cost: PHP 400 Comments: After the printing of receipts and invoices, the printer issues a Printer’s Comments: Special books of accounts are required for registering with the BIR. The Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must books of accounts are sold at bookstores nationwide. One set of journals consisting submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the of four books (cash receipts account, disbursements account, ledger, general journal) company’s principal place of business) for registration and stamping within thirty costs about PHP 400. (30) days from issuance. The company must also submit the following documents: If the company has a computerized accounting system (CAS), it may opt to register a. All required books of accounts; its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. b. VAT registration certificate; 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to inspect and evaluate the company’s CAS within 30 days from receipt of the applica- c. SEC registration; tion form (BIR Form No. 1900) and complete documentary requirements. d. BIR Form W-5; e. Certified photocopy of the ATP; and Procedure 10. Apply for Certificate of Registration (COR) and TIN f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and at the Bureau of Internal Revenue (BIR) commitments of the taxpayer-user. Time: 2 days The company must also submit a copy of the PCD to the BIR RDO having jurisdiction Cost: PHP 15 (documentary stamp tax) over the printer’s principal place of business. Comments: The company must register each type of internal revenue tax for which it is obligated by filing BIR Form No. 0605 and paying the annual registration fee Procedure 15. Register with the Social Security System (SSS) of PHP 500. Upon registration, the BIR will issue to the company the certificate of Time: 5 days registration—BIR Form No. 2303. Cost: No cost To obtain the TIN, the company has to file: Comments: To register with the SSS, the company must submit the following docu- a. Barangay clearance; ments: b. Mayor’s permit; and a. Employer registration form (Form R-1); c. Copy of its SEC registration. b. Employment report (Form R-1A); For company registrations filed with the SEC Head Office in Metro Manila, the BIR c. List of employees, specifying their birth dates, positions, monthly salary and date confirms the pre-registered TIN issued by the SEC. of employment; and New taxpayers are required to attend a seminar. d. Articles of incorporation, by-laws and SEC registration. Upon submission of the required documents, the SSS employer and employee Procedure 11. Pay the registration fee and documentary stamp numbers will be released. The employees may attend an SSS training seminar after taxes (DST) at the AAB registration. SSS prefers that all members go through such training so that each Time: 1 day member is aware of their rights and obligations. Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance of shares of stock. DST on the lease contract is not included in the computation of Procedure 16. Register with the Philippine Health Insurance the cost) Company (PhilHealth) Comments: The company must pay DST on the original issuance of shares of stock. Time: 1 day The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Cost: No cost such shares of stock. This payment with the BIR should be made on the 5th of the Comments: To register with PhilHealth, the company must submit the following month following registration with the SEC. documents: The COR will be released only after all the DSTs are paid. a. Employer data record (Form ER1); The company must also pay DST on its lease contract at the rate of PHP 3 for the first b. Report of employee-members (Form ER2); PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or c. SEC registration; fractional part thereof in excess of the first PHP 2,000 for each year of the lease as stated in the contract. d. BIR registration; and LIST OF PROCE DURES • STARTING A BUSINESS 85 e. Copy of business permit. Procedure 6. Obtain barangay clearance Upon submission of the required documents, the company shall get the receiving Time: 1 day copy of all the forms as proof of membership until PhilHealth releases the employer and employee numbers within three months. Cost: PHP 50 (between PHP 20 – PHP 100) Comments: This clearance is obtained from the barangay where the business is starting a business located and is required to obtain the business permit from the city or municipality. Barangay fees vary for each barangay since they have the discretion to impose their ZAMBOANGA CITY own fees and charges for as long as these fees are reasonable and within the limits Standard company legal form: Corporation set by the Local Government Code and city ordinances. Barangay fees may depend Paid-in minimum capital requirement: PHP 5,000 = USD 107 on: a. the location and the area (size in square meters) of the place of business; or Data as of: June 2010 b. the company’s paid-up capital and the area it occupies; or Procedure 1. Verify and reserve the company name with the c. whether they issue clearance plates or certificates. Securities and Exchange Commission (SEC) Time: 1 day Procedure 7. Obtain application form from the Business Permits Cost: PHP 40 and Licensing Division (BPLD) Comments: The company can verify the availability of the company name online. Time: 1 day Verification is free but reservation of the name, once approved by the SEC, costs PHP Cost: No cost 40 for the first 30 days. The company name can be reserved for a maximum of 120 Comments: The applicant must approach a licensing officer at the BPLD to obtain an days for a fee of PHP 120, which is renewable upon expiration of the period. application form. The licensing officer interviews the applicant about the intended business before proceeding to issue the form. Procedure 2. Deposit paid-up capital in the Authorized Agent Bank (AAB) and obtain bank certificate of deposit Procedure 8. Obtain Fire Safety Inspection Certificate (FSIC) at Time: 1 day the Bureau of Fire Protection (BFP) Cost: No cost Time: 2 days Comments: The company is required by law to deposit paid-up capital amounting Cost: No cost (fees included in procedure 12) to at least 6.25% of the authorized capital stock of the corporation. This paid-up capital must not be less than PHP 5,000. Procedure 9*. Obtain police clearance at the Philippine National Some banks charge a fee for issuance of the certificate of deposit. Police of Zamboanga City Time: 1 day Procedure 3. Notarize articles of incorporation and treasurer’s Cost: No cost (fees included in procedure 12) affidavit at the notary Time: 1 day Procedure 10*. Obtain locational clearance from the City Cost: PHP 500 Planning and Development Office Comments: According to Sections 14 and 15 of the Corporation Code, articles of Time: 2 days incorporation should be notarized before filing with the SEC. Cost: No cost (fees included in procedure 12) Procedure 4. Register the company with the SEC Procedure 11*. Obtain sanitary permit from the City Health Office Time: 3 days Time: 1 day Cost: PHP 2,695 (PHP 1,667.99 filing fee equivalent to 1/5 of 1% of the authorized Cost: No cost (fees included in procedure 12) capital stock or the subscription price of the subscribed capital stock, whichever is higher but not less than PHP 1,000 + PHP 16.68 legal research fee (LRF) equivalent Procedure 12. Obtain business permit to operate from the BPLD to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registra- Time: 1 day tion of stock and transfer book (STB) required for new corporations + PHP 320 STB + PHP 10 registration for SEC bulletin + PHP 30 handling fee) Cost: PHP 3,552 (PHP 417 business tax (1/20 of 1% paid up capital) + PHP 50 mayor’s permit fee + PHP 300 garbage fee + PHP 2,000 locational clearance + PHP 50 health Comments: The company can register online through SEC i-Register but must pay certificate fee + PHP 100 sanitary inspection fee + PHP 50 police clearance + PHP on site at the SEC. The following documents are required for SEC registration: 300 business plate and sticker + PHP 285 FSIC (10% of all regulatory fees)) a. Company name verification slip; Comments: Assessment of fees and payment of these are done at the City Trea- b. Articles of incorporation (notarized) and by-laws; surer’s Office. c. Treasurer’s affidavit (notarized); d. Statement of assets and liabilities; Procedure 13. Buy special books of account at bookstore e. Bank certificate of deposit of the paid-in capital; Time: 1 day f. Authority to verify the bank account; Cost: PHP 400 g. Registration data sheet with particulars on directors, officers, stockholders, and so Comments: Special books of accounts are required for registering with the BIR. The forth; books of accounts are sold at bookstores nationwide. One set of journals consisting h. Written undertaking to comply with SEC reporting requirements (notarized); and of four books (cash receipts account, disbursements account, ledger, general journal) costs about PHP 400. i. Written undertaking to change corporate name (notarized). If the company has a computerized accounting system (CAS), it may opt to register The SEC Extension Office charges a handling fee of PHP 30 to cover the cost of its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. transmitting the documents to the SEC Head Office in Metro Manila. 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to inspect and evaluate the company’s CAS within 30 days from receipt of the applica- Procedure 5. After issuance of the SEC certificate of tion form (BIR Form No. 1900) and complete documentary requirements. incorporation, pay the annual community tax and obtain the community tax certificate (CTC) from the City Treasurer’s Office (CTO) Time: 1 day Cost: PHP 500 86 Doing Business IN the philippines 2011 Procedure 14. Apply for Certificate of Registration (COR) and d. BIR Form W-5; Taxpayer Identification Number (TIN) at the Bureau of Internal e. Certified photocopy of the ATP; and Revenue (BIR) f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and commitments of the taxpayer-user. Time: 2 days The company must also submit a copy of the PCD to the BIR RDO having jurisdiction Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) over the printer’s principal place of business. Comments: The company must register each type of internal revenue tax for which it is obligated by filing BIR Form No. 0605 and paying the annual registration fee Procedure 19. Register with the Social Security System (SSS) of PHP 500. Upon registration, the BIR will issue to the company the certificate of registration—BIR Form No. 2303. Time: 2 days To obtain the TIN, the company has to file: Cost: No cost a. Barangay clearance; Comments: To register with the SSS, the company must submit the following docu- ments: b. Mayor’s permit; and a. Employer registration form (Form R-1); c. Copy of its SEC registration. b. Employment report (Form R-1A); For company registrations filed with the SEC Head Office in Metro Manila, the BIR confirms the pre-registered TIN issued by the SEC. c. List of employees, specifying their birth dates, positions, monthly salary and date of employment; and New taxpayers are required to attend a seminar. d. Articles of incorporation, by-laws and SEC registration. Procedure 15. Pay the registration fee and documentary stamp Upon submission of the required documents, the SSS employer and employee taxes (DST) at the AAB numbers will be released. The employees may attend an SSS training seminar after registration. SSS prefers that all members go through such training so that each Time: 1 day member is aware of their rights and obligations. Cost: PHP 4,670 (PHP 500 registration fee + PHP 4,169.97 DST on original issuance of shares of stock. DST on the lease contract is not included in the computation of Procedure 20. Register with the Philippine Health Insurance the cost) Company (PhilHealth) Comments: The company must pay DST on the original issuance of shares of stock. Time: 1 day The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of such shares of stock. This payment with the BIR should be made on the 5th of the Cost: No cost month following registration with the SEC. Comments: To register with PhilHealth, the company must submit the following The COR will be released only after all the DSTs are paid. documents: The company must also pay DST on its lease contract at the rate of PHP 3 for the first a. Employer data record (Form ER1); PHP 2,000 or fractional part thereof, and an additional PHP 1 for every PHP 1,000 or b. Report of employee-members (Form ER2); fractional part thereof in excess of the first PHP 2,000 for each year of the lease as c. SEC registration; stated in the contract. d. BIR registration; and e. Copy of business permit. Procedure 16. Obtain the authority to print receipts and invoices from the BIR Upon submission of the required documents, the company shall get the receiving copy of all the forms as proof of membership until PhilHealth releases the employer Time: 1 day and employee numbers within three months. Cost: No cost Comments: The authority to print receipts and invoices must be secured before the *This procedure can be completed simultaneously with previous procedures. sales receipts and invoices may be printed. The company can ask any authorized printing company to print its official forms, or it can print its own forms (i.e., it uses its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for this purpose. To obtain the authority to print receipts and invoices from the BIR, the LIST OF Procedures company must submit the following documents to the Revenue District Office (RDO): a. Duly completed application for authority to print receipts and invoices (BIR Form Dealing with construction permits No. 1906); b. Job order; c. Final and clear sample of receipts and invoices (machine-printed); d. Application for registration (BIR Form No. 1903); and BATANGAS CITY e. Proof of payment of annual registration fee (BIR Form No. 0605). Warehouse value: PHP 19,500,000 = USD 418,528 Data as of: June 2010 Procedure 17. Print receipts and invoices at the print shops Time: 5 days Procedure 1. Obtain lot plan with site map from the geodetic Cost: PHP 1,600 engineer Comments: The cost is based on the following specifications of the official receipt: Time: 3 days 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Cost: PHP 1,500 Comments: The company must obtain the lot plan with site map from a geodetic Procedure 18. Have books of accounts and Printer’s Certificate of engineer to confirm the location of the land purported to be in the land title. A lot Delivery (PCD) stamped by the BIR plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Time: 1 day vey, or at least after an analysis has been conducted of the lot technical description appearing on the title. Cost: No cost Comments: After the printing of receipts and invoices, the printer issues a Printer’s Procedure 2*. Obtain barangay clearance Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must Time: 1 day submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the company’s principal place of business) for registration and stamping within thirty Cost: PHP 100 (30) days from issuance. The company must also submit the following documents: Comments: The barangay clearance is generally a requirement for obtaining the a. All required books of accounts; locational clearance. The costs for barangay clearances vary as barangays have the discretion to impose their own fees for as long as such fees are reasonable and b. VAT registration certificate; within the limits imposed by the Local Government Code and city ordinances. c. SEC registration; LIST OF PROCE DURES • DEALING WITH construction permitS 87 Procedure 3. Apply for the locational clearance at the City c. Current real property tax receipt; Planning and Development Office (CPDO) d. Building permit application form; Time: 1 day e. Five (5) sets of survey plans, design plans, specifications and other related documents (i.e., architectural documents, civil/structural documents, electrical Cost: No cost documents, mechanical documents, sanitary documents, plumbing documents, Comments: The locational clearance is required to ensure that the construction electronics documents, geodetic documents, and clearances from other agencies); conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. f. Locational clearance from the UDD; and The applicant must submit the following requirements: g. FSEC. a. Notarized locational clearance application form; After the building permit application is approved, the building official makes an b. Barangay clearance; assessment and issues an order of payment for the company to pay at the CTO. Once c. Transfer Certificate of Title (TCT); the company has paid the building permit fees, it will present the official receipt to d. Latest real property tax receipt; and the Receiving/Releasing Section of the OBO which will then issue the permit. e. Architectural plan. Procedure 9. Receive inspection from the CEO-BPD during The locational clearance is required to ensure that the construction conforms to the construction city’s Comprehensive Land Use Plan and zoning ordinances. Time: 1 day Procedure 4*. Notarize the locational clearance application form Cost: No cost at the notary Comments: During the construction of the warehouse, the CEO-BPD conducts an Time: 1 day inspection to ensure that the construction follows the approved building plans and design. Cost: PHP 200 Procedure 10. Apply for the Certificate of Occupancy and Procedure 5. Receive inspection for the locational clearance from Certificate of Final Electrical Inspection (CFEI) at the CEO-BPD the CPDO Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: In applying for a Certificate of Occupancy, the applicant must submit Procedure 6. Obtain the locational clearance from the CPDO the following to the CEO-BPD: Time: 1 day a. Certificate of completion for mechanical; Cost: PHP 78,800 (PHP 200 land use certification fee + PHP 1,000 for the first PHP b. Original logbook signed and sealed by Engineer-in-Charge of construction; 50,000 of the project cost and PHP 200 for every additional PHP 50,000 or a fraction c. As-built plan signed and sealed by Engineer-in-Charge in case; thereof) d. Electrical plan/sketch duly signed and sealed by Professional Electrical Engineer; Comments: The applicant pays the locational clearance fee at the City Treasurer’s and Office (CTO) and obtains the locational clearance at the CPDO. e. Insulation/Merger test result for electrical works. Requirements for CFEI: Procedure 7*. Apply and obtain Fire Safety Evaluation Clearance a. Duly accomplished electrical permit application form; (FSEC) from the local Fire Marshall at the Bureau of Fire b. Tax declaration/TCT; and Protection (BFP) c. Current tax receipt. Time: 3 days The CFEl certifies that a final inspection of the electrical installation has been Cost: PHP 19,500 (0.1% of estimated project cost) conducted and that such installation has been completed in accordance with the Comments: The FSEC is a clearance with a fire safety checklist that enumerates the approved plans and specifications on file with the CEO-BPD and the provisions of the life and fire safety requirements of the Fire Code. Philippine Electrical Code. The City Fire Marshall evaluates one set of plans and specifications submitted by the applicant to ensure that they conform to the fire safety and control requirements Procedure 11. Obtain zoning and land use compliance from the of the Fire Code. The applicant must also submit 3 sets of the Fire and Life Safety CPDO Assessment Report (FALAR) 1 (which documents the fire and life safety features of Time: 2 days the building) prepared by an architect who is duly certified by the BFP to prepare this report. Cost: PHP 4,390 Comments: This clearance confirms that the warehouse has complied with the Procedure 8. Apply and obtain the building permit and ancillary issued locational clearance. permits at the City Engineering Office-Building Permit Division (CEO-BPD) Procedure 12*. Receive inspection for the zoning and land use compliance from CPDO Time: 23 days Time: 1 day Cost: PHP 35,123 (first 500 square meters x PHP 23 + Cost: No cost next 100 square meters x PHP 22 + next 100 square meters x PHP 20.50 + Procedure 13*. Apply for the Fire Safety Inspection Certificate next 100 square meters x PHP 19.50 + (FSIC) at the BFP next 100 square meters x PHP 18 + Time: 1 day next 100 square meters x PHP 17 + Cost: PHP 3,912 (10% of building permit fees + PHP 400 inspection fee) next 301 square meters x PHP 16 Comments: Once construction has been completed, the company requests the BFP for a total of PHP 26,016. to inspect the site to certify that the required fire safety construction, fire protective Ancillary fees are estimated at PHP 7 per square meter) and/or warning systems are properly installed and in good working condition. The Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) that the construction of the building was in accordance with FALAR 1), prepared by plumbing permit, and (7) electronics permit. an architect who is duly certified by the BFP to prepare this report. The applicant must submit the following requirements: Procedure 14*. Receive final inspection for the FSIC from the BFP a. Photocopy of Original Certificate of Title (OCT)/TCT on file with the Registry of Time: 1 day Deeds; Cost: No cost b. Photocopy of tax declaration; 88 Doing Business IN the philippines 2011 Procedure 15*. Obtain the FSIC from the BFP Comments: There are three telephone companies providing landline services in Batangas City. The cost is PHP 1,500 for Philippine Long Distance Co. (PLDT), and Time: 3 days PHP 999 for Bayantel. Globelines requires proof of financial capability but does not Cost: No cost charge any fee. There is a lock-in period of 12 months for the three providers. The case study assumes that the company will request services from Globelines as this is Procedure 16*. Receive final inspection for the Certificate of the option most favorable to the company. Occupancy and CFEI from the CEO-BPD Time: 1 day Procedure 25*. Apply for the tax declaration of improvement at Cost: No cost the City Assessor’s Office (CAO) Comments: The CEO-BPD conducts a final inspection to check the building based Time: 1 day on the certificate of completion, construction logbook, building inspection sheets, Cost: No cost original and as-built plans and specifications. Comments: The company must update its official records to include the newly built warehouse for tax purposes. The CEO-BPD furnishes the CAO with a copy of Procedure 17. Obtain the Certificate of Occupancy and CFEI from the building plan and Certificate of Occupancy to notify them of the new building the CEO-BPD construction. The company must submit the floor plan and as-built plan to the CAO. Time: 7 days Procedure 26*. Receive inspection from the Appraiser of CAO Cost: PHP 19,400 (PHP 1,000 for first PHP 1,200,000 of the project value; PHP 1,000 for every million in excess thereof; PHP 400 for the last PHP 150,000 - PHP 300,000) Time: 1 day Comments: After the CEO-BPD has processed the application and conducted the Cost: No cost inspection, it then issues an assessment and order of payment. The CEO-BPD issues the Certificate of Occupancy after the applicant has paid the corresponding fees. Procedure 27*. Obtain the tax declaration of improvement from the CAO Procedure 18. Apply for electricity connection at Manila Electric Time: 5 days Company (Meralco) Cost: No cost Time: 1 day Comments: The tax declaration of improvement is released after an appraiser Cost: No cost inspects the property, which can be done on the following day or sometimes even Comments: The electric company is Meralco. The company visits Meralco Batangas on the same day. City Branch to request the connection and submit the CFEl and electrical plans. Meralco conducts an inspection of the warehouse and in the following days the *This procedure can be completed simultaneously with previous procedures. technical staff visits the site for the electricity connection. Dealing with Construction Permits Procedure 19. Receive inspection for electricity connection from Meralco CAGAYAN DE ORO Time: 1 day Warehouse value: PHP 19,500,000 = USD 418,528 Cost: No cost Data as of: June 2010 Procedure 20. Obtain electricity connection from Meralco Procedure 1. Obtain certified true copy of the land title from the Register of Deeds (RD) Time: 35 days Time: 5 days Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security Cost: PHP 160 (PHP 30 for the certification + PHP 6 for each additional page (4 pages deposit) needed) + PHP 112 IT fee) Comments: The certified true copy of the land title serves as proof of ownership of Procedure 21*. Apply for water connection at Batangas City the land on which the warehouse is to be built. Water District (BCWD) Time: 1 day Procedure 2*. Obtain certified true copy of the tax declaration of real property from the City Assessor’s Office (CAO) Cost: No cost Time: 1 day Comments: The applicant must submit the following documents: location of establishment and nature of business, barangay clearance, Special Power of Attorney Cost: PHP 40 for authorized company representative to sign the contract, and photocopy of valid Comments: The certified true copy of the tax declaration of real property enables ID of authorized person. the company to identify the property by its index number. The tax clearance serves as proof that there are no arrears in the payment of realty taxes. Procedure 22*. Receive inspection for water connection from BCWD Procedure 3*. Obtain lot plan with site map from the geodetic Time: 1 day engineer Cost: No cost Time: 3 days Cost: PHP 1,000 Procedure 23*. Obtain water connection from BCWD Comments: The company must obtain the lot plan with site map from a geodetic Time: 7 days engineer to confirm the location of the land purported to be in the land title. A lot Cost: PHP 60,508 (PHP 9,508 cost of materials + PHP 3,000 service connection plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- charge + PHP 3,000 excavation fee + PHP 45,000 water meter maintenance fee) vey, or at least after an analysis has been conducted of the lot technical description appearing on the title. Comments: To ensure quality, BCWD provides the materials for installation. BCWD charges a water meter maintenance fee of PHP 45,000 to keep the pipes and facilities Procedure 4*. Obtain barangay construction clearance safe and properly working. Time: 1 day Procedure 24*. Obtain telephone connection from the telephone Cost: PHP 628 company Comments: The barangay clearance is generally a requirement for obtaining the Time: 8 days locational clearance. The costs for barangay clearances vary as barangays have the discretion to impose their own fees for as long as such fees are reasonable and Cost: No cost within the limits imposed by the Local Government Code and city ordinances. LIST OF PROCE DURES • DEALING WITH construction permitS 89 Procedure 5. Apply for the building permit and ancillary permits Procedure 11. Submit one set of building plans to CAO for filing at the Office of the Building Official (OBO) Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ Procedure 12. Obtain the building permit from the OBO structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) Time: 21 days plumbing permit, and (7) electronics permit. Cost: PHP 59,418 (according to the National Building Code of the Philippines, the The applicant must submit the following requirements: cost of the building permit is PHP 23 per square meter. The computation here is a. Certified true copy of Original Certificate of Title (OCT)/Transfer Certificate of Title based on PHP 30 per square meter to account for ancillary costs such as electrical, (TCT) on file with the Registry of Deeds; mechanical and plumbing fees, plus cost of locational clearance computed at PHP 1,000 + 0.1% in excess of PHP 100,000 (project cost)) b. Tax declaration; Comments: After the building permit application is approved, the building official c. Current real property tax receipt; makes an assessment and issues an order of payment for the company to pay at the d. Building permit application form; CTO. Once the company has paid the building permit fees, it will present the official e. Five (5) sets of survey plans, design plans, specifications and other related receipt to the Receiving/Releasing Section of the OBO which will then issue the documents (i.e., architectural documents, civil/structural documents, electrical permit. documents, mechanical documents, sanitary documents, plumbing documents, electronics documents, geodetic documents, and clearances from other agen- Procedure 13. Receive inspection from the OBO during cies); and construction f. Locational clearance from the City Planning and Development Office (CPDO). Time: 1 day Cost: No cost (fees included in procedure 12) Procedure 6. Apply for the locational clearance from the City Planning and Development Office (CPDO) Comments: During the construction of the warehouse, the OBO conducts an inspec- tion to ensure that the construction follows the approved building plans and design. Time: 1 day Cost: No cost Procedure 14. Apply for the Certificate of Occupancy and Comments: The locational clearance is required to ensure that the construction Certificate of Final Electrical Inspection (CFEI) from the OBO conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. Time: 1 day The applicant must submit the following requirements: Cost: No cost a. Notarized locational clearance application form; Comments: In applying for a Certificate of Occupancy, the applicant must submit b. Barangay clearance; the following to the OBO: c. TCT; a. Application for the Certificate of Occupancy; d. Latest real property tax receipt; and b. Duly notarized certificate of completion; e. Architectural plan. c. Construction logbook; d. As-built plans and specifications; and Procedure 7. Notarize the locational clearance application form e. Building inspection sheet, at the notary all signed and sealed by the architect or engineer who undertook the full-time Time: 1 day inspection and supervision of the construction. Cost: PHP 100 The CFEI certifies that a final inspection of the electrical installation has been conducted and that such installation has been completed in accordance with the Procedure 8. Receive inspection for the locational clearance from approved plans and specifications on file with the OBO and the provisions of the the CPDO Philippine Electrical Code. Time: 1 day Cost: No cost Procedure 15. Apply for the tax declaration of improvement at the CAO Procedure 9. Obtain the locational clearance from the CPDO Time: 1 day Time: 4 days Cost: No cost Cost: No cost (fees included in Procedure 12) Comments: The company must update its official records to include the newly built Comments: The applicant pays the locational clearance fee at the City Treasurer’s warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building Office (CTO) and obtains the locational clearance at the CPDO. plan and Certificate of Occupancy to notify them of the new building construction. The company must submit the floor plan and as-built plan to the CAO. Procedure 10*. Apply and obtain Fire Safety Evaluation Clearance (FSEC) from the local Fire Marshall at the Bureau of Fire Procedure 16. Receive inspection from the Appraiser of CAO Protection (BFP) Time: 1 day Time: 7 days Cost: No cost Cost: PHP 19,500 (0.1% of estimated project cost) Procedure 17. Obtain the tax declaration of improvement from Comments: The FSEC is a clearance with a fire safety checklist that enumerates the the CAO life and fire safety requirements of the Fire Code. Time: 1 day One set of plans and specifications submitted by the applicant to the OBO is referred to the City Fire Marshall, who evaluates the plans to ensure that they conform to the Cost: No cost fire safety and control requirements of the Fire Code. The applicant must also submit Comments: The tax declaration of improvement is released after an appraiser 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents inspects the property, which can be done on the following day or sometimes even the fire and life safety features of the building) prepared by an architect who is duly on the same day. certified by the BFP to prepare this report. The City Fire Marshall must submit his recommendations to the OBO within 5 working days from the date of referral. Procedure 18*. Obtain zoning compliance from the CPDO While the company is getting approval from the City Fire Marshall, the OBO simulta- Time: 1 day neously processes the building permit application and checks the building plans and Cost: No cost specifications. Comments: This clearance is to confirm that the warehouse has complied with the issued locational clearance and approved setbacks. 90 Doing Business IN the philippines 2011 Procedure 19*. Apply for the Fire Safety Inspection Certificate Procedure 28*. Receive inspection for water connection from (FSIC) at the BFP CDOWD Time: 1 day Time: 1 day Cost: PHP 1,900 (10% of total fees of the certificate of occupancy) Cost: No cost Comments: Once construction has been completed, the company requests the BFP to inspect the site to certify that the required fire safety construction, fire protective Procedure 29*. Obtain water connection from CDOWD and/or warning systems are properly installed and in good working condition. The Time: 22 days applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies Cost: PHP 1,360 (PHP 1,000 installation fee + PHP 360 stand pipe) that the construction of the building was in accordance with FALAR 1), prepared by an architect who is duly certified by the BFP to prepare this report. Procedure 30*. Obtain telephone connection from the telephone company Procedure 20*. Receive final inspection for the FSIC from the BFP Time: 8 days Time: 1 day Cost: No cost Cost: No cost Comments: There are three telephone companies providing landline services in Procedure 21*. Obtain the FSIC from the BFP Cagayan de Oro City. These are Philippine Long Distance Co. (PLDT), Bayantel, and Globelines. For PLDT, the cost is PHP 1,500 with a lock-in period of 12 months. For Time: 1 day Bayantel, the cost is PHP 749 with no lock-in period. For Globelines, there is no con- Cost: No cost nection fee but there is a lock-in period of 12 months. The case study assumes that the company will request services from Globelines as this is the option favorable to Procedure 22*. Receive final inspection for the Certificate of the company. Occupancy and CFEI from the OBO Time: 1 day *This procedure can be completed simultaneously with previous procedures. Cost: No cost Comments: The OBO conducts a final inspection to check the building based on the Dealing with Construction Permits certificate of completion, construction logbook, building inspection sheets, original CALOOCAN and as-built plans and specifications. Warehouse value: PHP 19,500,000 = USD 418,528 Procedure 23. Obtain the Certificate of Occupancy and CFEI from Data as of: June 2010 the OBO Procedure 1. Obtain certified true copy of the land title from the Time: 8 days Register of Deeds (RD) Cost: PHP 19,000 (PHP 1,000 per PHP 1,000,000; the excess has no cost) Time: 2 days Comments: After the OBO has processed the application and conducted the Cost: PHP 57 (PHP 30 for the certification + PHP 6 for each additional page (2 pages inspection, it then issues an assessment and order of payment. The OBO issues the needed) + PHP 15 documentary stamp tax) Certificate of Occupancy after the applicant has paid the corresponding fees. Comments: The certified true copy of the land title serves as proof of ownership of Procedure 24. Apply for electricity connection at Cagayan de Oro the land on which the warehouse is to be built. Electric Power and Light Company (CEPALCO) Procedure 2*. Obtain certified true copy of the tax declaration of Time: 1 day real property from the City Assessor’s Office (CAO) Cost: No cost Time: 2 days Comments: The applicant submits a letter of application, the CFEI and electrical Cost: PHP 65 (PHP 50 + PHP 15 documentary stamp) plans. Two options are available: 1. Customer supplies the transformer/lines/pole (assuming a 34.5kV primary distribution line) or 2. The applicant makes a cash Comments: The certified true copy of the tax declaration of real property enables advance of approximately PHP 600,000 and CEPALCO supplies the transformer. In the the company to identify the property by its index number. The tax clearance serves second option, a certain portion of the total amount, based on the gross distribution as proof that there are no arrears in the payment of realty taxes. revenue, is refunded every 6 months until the entire amount is fully refunded (but w/o interest). The second option is more favorable to the applicant. Procedure 3*. Obtain lot plan with site map from the geodetic Either option requires a basic fee (estimated 1-month bill deposit and service fee) engineer equivalent to PHP 130,000, which is refundable upon termination of contract with Time: 7 days interest. Cost: PHP 1,000 Comments: The company must obtain the lot plan with site map from a geodetic Procedure 25. Receive inspection for electricity connection from engineer to confirm the location of the land purported to be in the land title. A lot CEPALCO plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Time: 1 day vey, or at least after an analysis has been conducted of the lot technical description Cost: No cost appearing on the title. Procedure 26. Obtain electricity connection from CEPALCO Procedure 4*. Obtain barangay clearance Time: 33 days Time: 1 day Cost: PHP 130,000 (estimated connection cost is PHP 600,000, which is refunded Cost: PHP 100 every 6 months, plus PHP 130,000 basic fees or the estimated 1-month bill deposit Comments: The barangay clearance is generally a requirement for obtaining the and service fee, which is refunded upon termination of contract) locational clearance. The costs for barangay clearances vary as barangays have the discretion to impose their own fees for as long as such fees are reasonable and Procedure 27*. Apply for water connection at Cagayan de Oro within the limits imposed by the Local Government Code and city ordinances. Water District (CDOWD) Time: 1 day Procedure 5. Apply for the locational clearance at the City Planning and Development Office (CPDO) Cost: No cost Time: 1 day Comments: The company visits CDOWD to apply for connection. Inspection takes place 3 days from the date of application. Cost: No cost Comments: The locational clearance is required to ensure that the construction conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. LIST OF PROCE DURES • DEALING WITH construction permitS 91 The applicant must submit the following requirements: Procedure 12. Obtain the building permit from the OBO a. Notarized locational clearance application form; Time: 4 days b. Barangay clearance; Cost: PHP 39,518 (according to the National Building Code of the Philippines, the c. Transfer Certificate of Title (TCT); cost of the building permit is PHP 23 per square meter. The computation here is d. Latest real property tax receipt; and based on PHP 30 per square meter to account for ancillary costs such as electrical, e. Architectural plan. mechanical and plumbing fees + PHP 500 filing fee) Comments: After the building permit application is approved, the building official Procedure 6. Notarize the locational clearance application form makes an assessment and issues an order of payment for the company to pay at the at the notary CTO. Once the company has paid the building permit fees, it will present the official receipt to the Receiving/Releasing Section of the OBO which will then issue the Time: 1 day permit. Cost: PHP 50 Procedure 13. Receive inspection from the BFP during Procedure 7. Receive inspection for the locational clearance from construction the CPDO Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 11) Cost: No cost Comments: The BFP conducts an inspection during construction to ensure that the plans and fire safety precautions are observed. Procedure 8. Obtain the locational clearance from the CPDO Time: 13 days Procedure 14. Receive inspection from the OBO during Cost: PHP 4,402 (PHP 3 per square meter + PHP 100 filing fee + PHP 400 zoning and construction land use verification fee) Time: 1 day Comments: The applicant pays the locational clearance fee at the City Treasurer’s Cost: No cost (fees included in procedure 12) Office (CTO) and obtains the locational clearance at the CPDO. Comments: During the construction of the warehouse, the OBO conducts an inspec- Procedure 9. Apply for the building permit and ancillary permits tion to ensure that the construction follows the approved building plans and design. at the Office of the Building Official (OBO) Procedure 15. Apply for the Certificate of Occupancy at the OBO Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ Comments: In applying for a Certificate of Occupancy, the applicant must submit structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) the following to the OBO: plumbing permit, and (7) electronics permit. a. Application for Certificate of Occupancy; The applicant must submit the following requirements: b. Duly notarized certificate of completion; a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- try of Deeds; c. Construction logbook; b. Tax declaration; d. As-built plans and specifications; and c. Current real property tax receipt; e. Building Inspection Sheet, d. Building permit application form; all signed and sealed by the architect or engineer who undertook the full-time inspection and supervision of the construction. e. Five (5) sets of survey plans, design plans, specifications and other related documents (i.e., architectural documents, civil/structural documents, electrical documents, mechanical documents, sanitary documents, plumbing documents, Procedure 16. Apply for the Fire Safety Inspection Certificate electronics documents, geodetic documents, and clearances from other agen- (FSIC) at the BFP cies); and Time: 1 day f. Locational clearance from the CPDO. Cost: PHP 3,901 (10% of building permit fees) Comments: Once construction has been completed, the company requests the BFP Procedure 10. Notarize the building permit application form at to inspect the site to certify that the required fire safety construction, fire protective the notary and/or warning systems are properly installed and in good working condition. The Time: 1 day applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies that the construction of the building was in accordance with FALAR 1), prepared by Cost: PHP 50 an architect who is duly certified by the BFP to prepare this report. Procedure 11. Apply and obtain Fire Safety Evaluation Clearance Procedure 17. Receive final inspection for the FSIC from the BFP (FSEC) from the local Fire Marshall at the Bureau of Fire Protection (BFP) Time: 1 day Cost: No cost (fees included in procedure 16) Time: 7 days Cost: PHP 19,500 (0.1% of the estimated project cost) Procedure 18. Obtain the FSIC from the BFP Comments: The FSEC is a clearance with a fire safety checklist that enumerates the Time: 1 day life and fire safety requirements of the Fire Code. Cost: No cost One set of plans and specifications submitted by the applicant to the OBO is referred to the City Fire Marshall, who evaluates the plans to ensure that they conform to the Procedure 19. Receive final inspection for the Certificate of fire safety and control requirements of the Fire Code. The applicant must also submit 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents Occupancy from the OBO the fire and life safety features of the building) prepared by an architect who is duly Time: 1 day certified by the BFP to prepare this report. The City Fire Marshall must submit his Cost: No cost (fees included in procedure 20) recommendations to the OBO within 5 working days from the date of referral. Comments: The OBO conducts a final inspection to check the building based on the While the company is getting approval from the City Fire Marshall, the OBO simulta- certificate of completion, construction logbook, building inspection sheets, original neously processes the building permit application and checks the building plans and and as-built plans and specifications. specifications. 92 Doing Business IN the philippines 2011 Procedure 20. Obtain the Certificate of Occupancy from the OBO Procedure 30*. Obtain telephone connection from the telephone Time: 3 days company Cost: PHP 19,800 (PHP 1,000 per PHP 1,000,000 of the project value; the cost for the Time: 5 days excess PHP 500,000 is PHP 800) Cost: No cost Comments: After the OBO has processed the application and conducted the Comments: There are three telephone companies providing landline services in inspection, it then issues an assessment and order of payment. The OBO issues the Caloocan City. These are Philippine Long Distance Co. (PLDT), Globelines and Digitel. Certificate of Occupancy after the applicant has paid the corresponding fees. For PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months for the regular phone line. Globelines requires proof of financial capability but does not Procedure 21. Apply for the Certificate of Final Electrical charge any fee. There is a lock-in period of 12 months for the regular phone line. Inspection (CFEI) from the Electrical Division of the OBO For Digitel, the cost is PHP 2,500 and there is a lock-in period of 30 months for the Time: 1 day regular phone line. The case study assumes that the company will request services from Globelines as this is the option favorable to the company. Cost: No cost Comments: The CFEI certifies that a final inspection of the electrical installation has Procedure 31*. Obtain the tax declaration of improvement from been conducted and that such installation has been completed in accordance with the CAO the approved plans and specifications on file with the OBO and the provisions of the Philippine Electrical Code. Time: 1 day Cost: No cost Procedure 22. Receive final inspection for the CFEI from the OBO Comments: The company must update its official records to include the newly built Time: 1 day warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building plan and Certificate of Occupancy to notify them of the new building construction. Cost: No cost The company must submit the floor plan and as-built plan to the CAO. Procedure 23. Obtain the CFEI from the OBO Time: 1 day *This procedure can be completed simultaneously with previous procedures. Cost: No cost Dealing with Construction Permits Procedure 24. Apply for electricity connection at Manila Electric CEBU CITY Company (Meralco) Warehouse value: PHP 19,500,000 = USD 418,528 Time: 1 day Data as of: June 2010 Cost: No cost Comments: The electric company is Meralco. The company visits Meralco to request Procedure 1. Obtain certified true copy of the land title from the the connection and submit the CFEI and electrical plans. Meralco conducts an Register of Deeds (RD) inspection of the warehouse and in the following days the technical staff visits the Time: 3 days site for the electricity connection. Cost: PHP 160 (PHP 30 for the certification + PHP 6 for each additional page (4 pages needed) + PHP 112 IT fee) Procedure 25. Receive inspection for electricity connection from Comments: The certified true copy of the land title serves as proof of ownership of Meralco the land on which the warehouse is to be built. Time: 1 day Cost: No cost Procedure 2*. Obtain certified true copy of the tax declaration of real property from the City Assessor’s Office (CAO) Procedure 26. Obtain electricity connection from Meralco Time: 1 day Time: 56 days Cost: PHP 55 (PHP 40 certification + PHP 15 documentary stamp tax) Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Comments: The certified true copy of the tax declaration of real property enables ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security the company to identify the property by its index number. The tax clearance serves deposit) as proof that there are no arrears in the payment of realty taxes. Procedure 27*. Apply for water and sewage connection at Procedure 3*. Obtain lot plan with site map from the geodetic Maynilad Water Services, Inc. (Maynilad) engineer Time: 1 day Time: 2 days Cost: No cost Cost: PHP 1,250 Comments: The water company is Maynilad. The company visits Maynilad to request Comments: The company must obtain the lot plan with site map from a geodetic the connection and inspection takes place in a week. Maynilad subcontracts the engineer to confirm the location of the land purported to be in the land title. A lot installation with a contractor and the time of actual installation depends on the plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- contractor. vey, or at least after an analysis has been conducted of the lot technical description appearing on the title. Procedure 28*. Receive inspection for water and sewage connection from Maynilad Procedure 4*. Obtain barangay clearance Time: 1 day Time: 2 days Cost: No cost Cost: PHP 200 Comments: The barangay clearance is generally a requirement for obtaining the Procedure 29*. Obtain water and sewage connection from locational clearance. The costs for barangay clearances vary as barangays have the Maynilad discretion to impose their own fees for as long as such fees are reasonable and Time: 30 days within the limits imposed by the Local Government Code and city ordinances. Cost: PHP 7,455 Procedure 5. Apply for the locational clearance at the City Planning and Development Office (CPDO) Time: 1 day Cost: No cost Comments: The locational clearance is required to ensure that the construction conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. LIST OF PROCE DURES • DEALING WITH construction permitS 93 The applicant must submit the following requirements: Procedure 13. Get evaluation of and comments on the line and a. Notarized locational clearance application form; grade plans from the OBO b. Barangay clearance; Time: 1 day c. Transfer Certificate of Title (TCT); Cost: No cost (fees included in procedure 18) d. Latest real property tax receipt; and e. Architectural plan. Procedure 14. Get evaluation of and comments on the sanitary and plumbing plans from the OBO Procedure 6. Notarize the locational clearance application form Time: 1 day at the notary Cost: No cost (fees included in procedure 18) Time: 1 day Cost: PHP 50 Procedure 15. Get evaluation of and comments on the electrical plans Procedure 7. Receive inspection for the locational clearance from Time: 1 day the CPDO Cost: No cost (fees included in procedure 18) Time: 1 day Cost: No cost (fees included in procedure 8) Procedure 16. Apply and obtain Fire Safety Evaluation Clearance (FSEC) from the local Fire Marshall at the Bureau of Fire Procedure 8. Obtain the locational clearance from the CPDO Protection (BFP) Time: 6 days Time: 7 days Cost: PHP 20,604 (PHP 1,000 + 1/10 of 1% of the total estimated cost of the project Cost: PHP 19,500 (0.1% of estimated project cost) in excess of PHP 100,000 for the zoning fee + 1% of the zoning fee for legal and Comments: The FSEC is a clearance with a fire safety checklist that enumerates the research fee) life and fire safety requirements of the Fire Code. Comments: The applicant pays the locational clearance fee at the City Treasurer’s One set of plans and specifications submitted by the applicant to the OBO is referred Office (CTO) and obtains the locational clearance at the CPDO. to the City Fire Marshall, who evaluates the plans to ensure that they conform to the fire safety and control requirements of the Fire Code. The applicant must also submit Procedure 9. Apply for the building permit and ancillary permits 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents at the Office of the Building Official (OBO) the fire and life safety features of the building) prepared by an architect who is duly Time: 1 day certified by the BFP to prepare this report. The City Fire Marshall must submit his Cost: No cost recommendations to the OBO within 5 working days from the date of referral. Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ While the company is getting approval from the City Fire Marshall, the OBO simulta- structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) neously processes the building permit application and checks the building plans and plumbing permit, and (7) electronics permit. specifications. The applicant must submit the following requirements: Procedure 17. Obtain the parking compliance from the City a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- Mayor’s Office (CMO) try of Deeds; Time: 1 day b. Tax declaration; Cost: No cost c. Current real property tax receipt; d. Building permit application form; Procedure 18. Obtain the building permit from the OBO e. Five (5) sets of survey plans, design plans, specifications and other related Time: 30 days documents (i.e., architectural documents, civil/structural documents, electrical Cost: PHP 35,123 (first 500 square meters x PHP 23 + documents, mechanical documents, sanitary documents, plumbing documents, electronics documents, geodetic documents, and clearances from other agen- next 100 square meters x PHP 22 + cies); and next 100 square meters x PHP 20.50 + f. Locational clearance from the CPDO. next 100 square meters x PHP 19.50 + next 100 square meters x PHP 18 + Procedure 10. Receive preliminary inspection from OBO next 100 square meters x PHP 17 + Time: 1 day next 301 square meters x PHP 16 Cost: No cost for a total of PHP 26,016. Comments: OBO conducts a preliminary inspection onsite to check whether the Ancillary fees are estimated at PHP 7 per square meter) construction has started or not. There is a penalty if construction has started without the building permit. Comments: After the building permit application is approved, the building official makes an assessment and issues an order of payment for the company to pay at the CTO. Once the company has paid the building permit fees, it will present the official Procedure 11. Get evaluation of and comments on the receipt to the Receiving/Releasing Section of the OBO which will then issue the architectural plans from the OBO permit. Time: 1 day Cost: No cost (fees included in procedure 18) Procedure 19. Receive inspection from the BFP during Comments: Upon submitting the required documents for the building permit, the construction company has to visit different sections to have the plans evaluated and approved. Time: 1 day Cost: No cost (fees included in procedure 16) Procedure 12. Get evaluation of and comments on the civil/ Comments: The BFP conducts an inspection during construction to ensure that the structural plans from the OBO plans and fire safety precautions are observed. Time: 1 day Cost: No cost (fees included in procedure 18) Procedure 20. Receive inspection from the OBO during construction Time: 1 day Cost: No cost (fees included in procedure 18) Comments: During the construction of the warehouse, the OBO conducts an inspec- tion to ensure that the construction follows the approved building plans and design. 94 Doing Business IN the philippines 2011 Procedure 21. Apply for the Certificate of Occupancy and Procedure 28. Receive inspection for electricity connection from Certificate of Final Electrical Inspection (CFEI) at the OBO VECO Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: In applying for a Certificate of Occupancy, the applicant must submit the following to the OBO: Procedure 29. Obtain electricity connection from VECO a. Application for Certificate of Occupancy; Time: 19 days b. Duly notarized certificate of completion; Cost: No cost c. Construction logbook; Procedure 30*. Apply for water connection at Metro Cebu Water d. As-built plans and specifications; and District (MCWD) e. Building inspection sheet, Time: 1 day all signed and sealed by the architect or engineer who undertook the full-time inspection and supervision of the construction. Cost: No cost The CFEI certifies that a final inspection of the electrical installation has been Procedure 31*. Receive inspection for water connection from conducted and that such installation has been completed in accordance with the approved plans and specifications on file with the OBO and the provisions of the MCWD Philippine Electrical Code. Time: 1 day Cost: No cost Procedure 22. Apply for the Fire Safety Inspection Certificate (FSIC) at the BFP Procedure 32*. Obtain water connection from MCWD Time: 1 day Time: 15 days Cost: PHP 3,512 (10% of building permit fees) Cost: No cost Comments: Once construction has been completed, the company requests the BFP to inspect the site to certify that the required fire safety construction, fire protective Procedure 33*. Obtain telephone connection from the telephone and/or warning systems are properly installed and in good working condition. The company applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies Time: 5 days that the construction of the building was in accordance with FALAR 1), prepared by Cost: PHP 4,950 (installation fee paid during application) an architect who is duly certified by the BFP to prepare this report. Comments: There are three telephone companies providing landline services in Procedure 23. Receive final inspection for the FSIC from the BFP Cebu City. The cost is PHP 1,500 for Philippine Long Distance Co. (PLDT), and PHP 999 for Bayantel. Globelines requires proof of financial capability but does not charge any Time: 1 day fee. There is a lock-in period of 12 months for the three providers. The case study Cost: No cost (fees included in procedure 22) assumes that the company will request services from Globelines as this is the option favorable to the company. Procedure 24. Obtain the FSIC from the BFP Time: 3 days Procedure 34*. Apply for the tax declaration of improvement at Cost: No cost the CAO Time: 1 day Procedure 25. Receive final inspection for the Certificate of Cost: No cost Occupancy and CFEI from the OBO Comments: The company must update its official records to include the newly built Time: 1 day warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building Cost: No cost (fees included in procedure 26) plan and Certificate of Occupancy to notify them of the new building construction. The company must submit the floor plan and as-built plan to the CAO. Comments: The OBO conducts a final inspection to check the building based on the certificate of completion, construction logbook, building inspection sheets, original and as-built plans and specifications. Procedure 35*. Receive inspection from the Appraiser of CAO Time: 1 day Procedure 26. Obtain the Certificate of Occupancy and CFEI from Cost: No cost the OBO Time: 3 days Procedure 36*. Obtain the tax declaration of improvement from Cost: PHP 20,000 (PHP 1,000 per PHP 1,000,000 of the project value) CAO Comments: After the OBO has processed the application and conducted the Time: 1 day inspection, it then issues an assessment and order of payment. The OBO issues the Cost: No cost Certificate of Occupancy after the applicant has paid the corresponding fees. Comments: The tax declaration of improvement is released after an appraiser inspects the property, which can be done on the following day or sometimes even Procedure 27. Apply for electricity connection at Visayan Electric on the same day. Company (VECO) Time: 1 day *This procedure can be completed simultaneously with previous procedures. Cost: No cost Comments: The company visits VECO to apply for the connection and submit the CFEI and electrical plans. VECO technical staff inspects the warehouse. The cost of the transformers is PHP 118,644 per transformer (three needed). The total project cost is PHP 433,123 and is refunded after one year. LIST OF PROCE DURES • DEALING WITH construction permitS 95 Dealing with Construction Permits One set of plans and specifications submitted by the applicant to the OBO is referred DAVAO CITY to the City Fire Marshall, who evaluates the plans to ensure that they conform to the fire safety and control requirements of the Fire Code. The applicant must also submit Warehouse value: PHP 19,500,000 = USD 418,528 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents Data as of: June 2010 the fire and life safety features of the building) prepared by an architect who is duly certified by the BFP to prepare this report. The City Fire Marshall must submit his Procedure 1. Obtain lot plan with site map from the geodetic recommendations to the OBO within 5 working days from the date of referral. engineer While the company is getting approval from the City Fire Marshall, the OBO simulta- Time: 2 days neously processes the building permit application and checks the building plans and Cost: PHP 500 specifications. Comments: The company must obtain the lot plan with site map from a geodetic engineer to confirm the location of the land purported to be in the land title. A lot Procedure 7. Obtain the building permit from the OBO plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Time: 18 days vey, or at least after an analysis has been conducted of the lot technical description Cost: PHP 35,123 (first 500 square meters x PHP 23 + appearing on the title. next 100 square meters x PHP 22 + Procedure 2. Apply for locational clearance at the City Planning next 100 square meters x PHP 20.50 + and Development Office (CPDO) next 100 square meters x PHP 19.50 + Time: 1 day next 100 square meters x PHP 18 + Cost: No cost next 100 square meters x PHP 17 + Comments: The locational clearance is required to ensure that the construction next 301 square meters x PHP 16 conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. for a total of PHP 26,016. The applicant must submit the following requirements: Ancillary fees are estimated at PHP 7 per square meter) a. Notarized locational clearance application form; Comments: After the building permit application is approved, the building official b. Barangay clearance; makes an assessment and issues an order of payment for the company to pay at the CTO. Once the company has paid the building permit fees, it will present the official c .Transfer Certificate of Title (TCT); receipt to the Receiving/Releasing Section of the OBO which will then issue the d. Latest real property tax receipt; and permit. e. Architectural plan. Procedure 8. Receive inspection from the BFP during Procedure 3. Notarize the locational clearance application form construction at the notary Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 6) Cost: PHP 100 Comments: The BFP conducts an inspection during construction to ensure that the plans and fire safety precautions are observed. Procedure 4. Obtain the locational clearance from the CPDO Time: 2 days Procedure 9. Receive inspection from the OBO during Cost: PHP 2,250 (PHP 1.5 per square meter + PHP 300 filing fee) construction Comments: The applicant pays the locational clearance fee at the City Treasurer’s Time: 1 day Office (CTO) and obtains the locational clearance at the CPDO. Cost: No cost (fees included in procedure 7) Comments: During the construction of the warehouse, the OBO conducts an inspec- Procedure 5. Apply for the building permit and ancillary permits tion to ensure that the construction follows the approved building plans and design. at the Office of the Building Official (OBO) Time: 1 day Procedure 10. Apply for the Certificate of Occupancy and Cost: No cost Certificate of Final Electrical Inspection (CFEI) at the OBO Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ Time: 1 day structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) Cost: No cost plumbing permit, and (7) electronics permit. Comments: In applying for a Certificate of Occupancy, the applicant must submit The applicant must submit the following requirements: the following to the OBO: a. Photocopy of Original Certificate of Title (OCT)/TCT on file with the Registry of a. Application for Certificate of Occupancy; Deeds; b. Duly notarized certificate of completion; b. Photocopy of tax declaration; c. Construction logbook; c. Current real property tax receipt; d. As-built plans and specifications; and d. Building permit application form; e. Building inspection sheet, e. Five (5) sets of survey plans, design plans, specifications and other related all signed and sealed by the architect or engineer who undertook the full-time documents (i.e., architectural documents, civil/structural documents, electrical inspection and supervision of the construction. documents, mechanical documents, sanitary documents, plumbing documents, electronics documents, geodetic documents, and clearances from other agen- The CFEI certifies that a final inspection of the electrical installation has been cies); and conducted and that such installation has been completed in accordance with the approved plans and specifications on file with the OBO and the provisions of the f. Locational clearance from the CPDO. Philippine Electrical Code. Procedure 6. Apply and obtain Fire Safety Evaluation Clearance Procedure 11. Obtain validation from Zoning Administrator at (FSEC) from the local Fire Marshall at the Bureau of Fire the CPDO Protection (BFP) Time: 2 days Time: 7 days Cost: PHP 75 (filing fee) Cost: PHP 19,500 (0.1% of estimated project cost) Comments: This validation is a prerequisite for obtaining the Certificate of Oc- Comments: The FSEC is a clearance with a fire safety checklist that enumerates the cupancy and confirms that the warehouse has complied with the issued locational life and fire safety requirements of the Fire Code. clearance. The company submits the completed application form for the Certificate of Occupancy, certificate of completion, approved building plans, and locational clearance to the Zoning Administrator. 96 Doing Business IN the philippines 2011 Procedure 12*. Receive inspection for Zoning Administrator’s Procedure 22*. Receive inspection for water connection from validation from the CPDO DCWD Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: Upon application for zoning validation, inspection may take place that afternoon or the following day. Procedure 23*. Obtain water connection from DCWD Time: 5 days Procedure 13*. Apply for the Fire Safety Inspection Certificate Cost: No cost (FSIC) at the BFP Time: 1 day Procedure 24*. Obtain telephone connection from the telephone Cost: PHP 1,641 (10% of total fees for the certificate of occupancy) company Comments: Once construction has been completed, the company requests the BFP Time: 4 days to inspect the site to certify that the required fire safety construction, fire protective Cost: No cost and/or warning systems are properly installed and in good working condition. The Comments: There are three telephone companies providing landline services in applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies Davao City. These are Philippine Long Distance Co. (PLDT), Bayantel, and Globelines. that the construction of the building was in accordance with FALAR 1), prepared by For PLDT, the cost is PHP 1,500 with a lock-in period of 12 months. For Bayantel, the an architect who is duly certified by the BFP to prepare this report. cost is PHP 749 with no lock-in period. For Globelines, there is no connection fee but there is a lock-in period of 12 months. The case study assumes that the company will Procedure 14*. Receive final inspection for the FSIC from the BFP request services from Globelines as this is the option favorable to the company. Time: 1 day Cost: No cost (fees included in procedure 13) Procedure 25*. Apply for the tax declaration of improvement at the City Assessor’s Office (CAO) Procedure 15*. Obtain the FSIC from the BFP Time: 1 day Time: 3 days Cost: No cost Cost: No cost Comments: The company must update its official records to include the newly built warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building Procedure 16*. Receive final inspection for the Certificate of plan and Certificate of Occupancy to notify them of the new building construction. Occupancy and CFEI from the OBO The company must submit the floor plan and as-built plan to the CAO. Time: 1 day Procedure 26*. Receive inspection from the Appraiser of CAO Cost: No cost (fees included in procedure 17) Time: 1 day Procedure 17. Obtain the Certificate of Occupancy and CFEI from Cost: No cost the OBO Time: 5 days Procedure 27*. Obtain tax declaration of improvement from CAO Cost: PHP 16,410 (project value/1,200,000 x PHP 1,000 + PHP 60 plumbing fee + Time: 1 day PHP 96 electrical fee + PHP 100 filing fee) Cost: No cost Comments: After the OBO has processed the application and conducted the Comments: The tax declaration of improvement is released after an appraiser inspection, it then issues an assessment and order of payment. The OBO issues the inspects the property, which can be done on the following day or sometimes even Certificate of Occupancy after the applicant has paid the corresponding fees. on the same day. Procedure 18. Apply for electricity connection at Davao Light and *This procedure can be completed simultaneously with previous procedures. Power Company (Davao Light) Time: 1 day Dealing with Construction Permits Cost: No cost GENERAL SANTOS Comments: The electric company is Davao Light. The company visits Davao Light to request the connection. Davao Light conducts an inspection of the warehouse and Warehouse value: PHP 19,500,000 = USD 418,528 in the following days the technical staff visits the site for the electric connection. Data as of: June 2010 The cost of the transformers is PHP 106,000 (three needed) and is refunded after a year through deductions to monthly bills computed at 75% of the applicant’s annual Procedure 1. Obtain certified true copy of the land title from the gross distribution revenue. Register of Deeds (RD) Time: 7 days Procedure 19. Receive inspection for electricity connection from Cost: PHP 160 (PHP 30 for the certification + PHP 6 for each additional page (4 pages Davao Light needed) + PHP 112 IT fee) Time: 1 day Comments: The certified true copy of the land title serves as proof of ownership of Cost: No cost the land on which the warehouse is to be built. Procedure 20. Obtain electricity connection from Davao Light Procedure 2*. Obtain certified true copy of the tax declaration of Time: 2 days real property from the City Assessor’s Office (CAO) Cost: No cost Time: 1 day Cost: PHP 55 (PHP 40 certificate + PHP 15 documentary stamp tax) Procedure 21*. Apply for water connection at the Davao City Comments: The certified true copy of the tax declaration of real property enables Water District (DCWD) the company to identify the property by its index number. The tax clearance serves Time: 1 day as proof that there are no arrears in the payment of realty taxes. Cost: PHP 3,000 (installation fee paid during application) Comments: The local service provider is DCWD. The company visits DCWD to apply Procedure 3*. Obtain lot plan with site map from the geodetic for the connection; connection is effected some days after the inspection. engineer Time: 2 days Cost: PHP 500 LIST OF PROCE DURES • DEALING WITH construction permitS 97 Comments: The company must obtain the lot plan with site map from a geodetic Procedure 10. Receive preliminary inspection for line and grade engineer to confirm the location of the land purported to be in the land title. A lot plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- from CEO-BD vey, or at least after an analysis has been conducted of the lot technical description Time: 1 day appearing on the title. Cost: No cost Procedure 4. Apply for the locational clearance at the City Procedure 11. Apply and obtain Fire Safety Evaluation Clearance Planning and Development Office (CPDO) (FSEC) from the local Fire Marshall at the Bureau of Fire Time: 1 day Protection (BFP) Cost: No cost Time: 7 days Comments: The locational clearance is required to ensure that the construction Cost: PHP 19,500 (0.1% of the estimated project cost) conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. Comments: The FSEC is a clearance with a fire safety checklist that enumerates the The applicant must submit the following requirements: life and fire safety requirements of the Fire Code. a. Notarized locational clearance application form; One set of plans and specifications submitted by the applicant to the OBO is referred b. Barangay clearance; to the City Fire Marshall, who evaluates the plans to ensure that they conform to the fire safety and control requirements of the Fire Code. The applicant must also submit c. Transfer Certificate of Title (TCT); 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents d. Latest real property tax receipt; and the fire and life safety features of the building) prepared by an architect who is duly e. Architectural plan. certified by the BFP to prepare this report. The City Fire Marshall must submit his The applicant obtains an endorsement from the CPDO before applying for a baran- recommendations to the OBO within 5 working days from the date of referral. gay clearance. While the company is getting approval from the City Fire Marshall, the OBO simulta- neously processes the building permit application and checks the building plans and Procedure 5. Obtain barangay clearance specifications. Time: 1 day Procedure 12. Obtain the building permit from the CEO-BD Cost: PHP 100 Time: 20 days Comments: The barangay clearance is generally a requirement for obtaining the locational clearance. The costs for barangay clearances vary as barangays have the Cost: PHP 39,018 (according to the National Building Code of the Philippines, the discretion to impose their own fees for as long as such fees are reasonable and cost of the building permit is PHP 23 per square meter. The computation here is within the limits imposed by the Local Government Code and city ordinances. based on PHP 30 per square meter to account for ancillary costs such as electrical, mechanical and plumbing fees) Procedure 6*. Notarize the locational clearance application form Comments: After the building permit application is approved, the building official at the notary makes an assessment and issues an order of payment for the company to pay at the CTO. Once the company has paid the building permit fees, it will present the official Time: 1 day receipt to the Receiving/Releasing Section of the CEO-BD which will then issue the Cost: PHP 100 permit. Procedure 7. Obtain the locational clearance from the CPDO Procedure 13. Receive inspection from CEO-BD during Time: 2 days construction Cost: PHP 21,500 (1/10 of 1% of the project value + PHP 2,000 for commercial use) Time: 1 day Comments: The applicant pays the locational clearance fee at the City Treasurer’s Cost: No cost Office (CTO) and obtains the locational clearance at the CPDO. Comments: During the construction of the warehouse, the CEO-BD conducts an inspection to ensure that the construction follows the approved building plans and Procedure 8. Apply for the building permit and ancillary permits design. at the City Engineering Office-Building Division (CEO-BD) Time: 1 day Procedure 14. Apply for the Fire Safety Inspection Certificate Cost: No cost (FSIC) at the BFP Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ Time: 1 day structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) Cost: PHP 3,901 (10% of building permit fees) plumbing permit, and (7) electronics permit. Comments: Once construction has been completed, the company requests the BFP The applicant must submit the following requirements: to inspect the site to certify that the required fire safety construction, fire protective a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- and/or warning systems are properly installed and in good working condition. The try of Deeds; applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies b. Tax declaration; that the construction of the building was in accordance with FALAR 1), prepared by an architect who is duly certified by the BFP to prepare this report. c. Current real property tax receipt; d. Building permit application form; Procedure 15. Receive final inspection for the FSIC from the BFP e. Five (5) sets of survey plans, design plans, specifications and other related Time: 1 day documents (i.e., architectural documents, civil/structural documents, electrical documents, mechanical documents, sanitary documents, plumbing documents, Cost: No cost electronics documents, geodetic documents, and clearances from other agen- cies); and Procedure 16. Obtain the FSIC from the BFP f. Locational clearance from the CPDO. Time: 1 day Cost: No cost Procedure 9. Notarize the building permit application form at the notary Procedure 17. Apply for the Certificate of Occupancy and Time: 1 day Certificate of Final Electrical Inspection (CFEI) at the CEO-BD Cost: PHP 100 Time: 1 day Cost: No cost Comments: In applying for a Certificate of Occupancy, the applicant must submit the following to the CEO-BD: a. Application for Certificate of Occupancy; b. Duly notarized certificate of completion; 98 Doing Business IN the philippines 2011 c. Construction logbook; Comments: For commercial use, the estimated cost is PHP 5,000 (materials and d. As-built plans and specifications; labor). The applicant can make a downpayment of PHP 1,500 and pay the remaining balance within 6 months. e. Building inspection sheet; f. FSIC (2 copies); Procedure 26*. Obtain telephone connection from the telephone g. Sanitary certificate signed and sealed by the Sanitary Engineer/Master Plumber (2 company copies); Time: 8 days h. Photocopy of the building and ancillary permits; Cost: No cost i. Approved building plans; and Comments: There are three telephone companies providing landline services in j. Photograph of the structure, General Santos City. The cost is PHP 1,500 for Philippine Long Distance Co. (PLDT) all signed and sealed by the architect or engineer who undertook the full-time and PHP 749 for Bayantel. Globelines requires proof of financial capability but does inspection and supervision of the construction. not charge any fee. There is a lock-in period of 12 months for PLDT and Globelines The CFEI certifies that a final inspection of the electrical installation has been while Bayantel has no lock-in period. The case study assumes that the company will conducted and that such installation has been completed in accordance with the request services from Globelines as this is the option favorable to the company. approved plans and specifications on file with the CEO-BD and the provisions of the Philippine Electrical Code. Procedure 27*. Apply for the tax declaration of improvement at the CAO Procedure 18. Receive final inspection for the Certificate of Time: 1 day Occupancy and CFEI from the CEO-BD Cost: No cost Time: 1 day Comments: The company must update its official records to include the newly built Cost: No cost warehouse for tax purposes. The CEO-BD furnishes the CAO with a copy of the build- Comments: The CEO-BD conducts a final inspection to check the building based ing plan and Certificate of Occupancy to notify them of the new building construc- on the certificate of completion, construction logbook, building inspection sheets, tion. The company must submit the floor plan and as-built plan to the CAO. original and as-built plans and specifications. Procedure 28*. Receive inspection from the Appraiser of CAO Procedure 19. Obtain the Certificate of Occupancy and CFEI from Time: 1 day the CEO-BD Cost: No cost Time: 9 days Cost: PHP 20,000 (PHP 1,000 per PHP 1,000,000 of the project value) Procedure 29*. Obtain the tax declaration of improvement from Comments: After the CEO-BD has processed the application and conducted the the CAO inspection, it then issues an assessment and order of payment. The CEO-BD issues Time: 5 days the Certificate of Occupancy after the applicant has paid the corresponding fees. Cost: No cost Comments: The tax declaration of improvement is released after an appraiser Procedure 20. Apply for electricity connection at South Cotabato inspects the property, which can be done on the following day or sometimes even Electric Cooperative, Inc. (SOCOTECO II) on the same day. Time: 1 day Cost: No cost *This procedure can be completed simultaneously with previous procedures. Comments: The electric company is SOCOTECO II. The company visits SOCOTECO II to request the connection. SOCOTECO technical staff visits the site to inspect the Dealing with Construction Permits warehouse and checks the service entrance. For a 140 kW load, the company has to install its own transformers. ILOILO CITY Warehouse value: PHP 19,500,000 = USD 418,528 Procedure 21. Receive inspection for electricity connection from Data as of: June 2010 SOCOTECO II Time: 1 day Procedure 1. Obtain lot plan with site map from the geodetic Cost: No cost engineer Time: 3 days Procedure 22. Obtain electricity connection from SOCOTECO II Cost: PHP 1,000 Time: 5 days Comments: The company must obtain the lot plan with site map from a geodetic Cost: PHP 431,084 (PHP 104,839.29 per 50 kVA transformer (three needed) + PHP engineer to confirm the location of the land purported to be in the land title. A lot 14,178.39 accessories + PHP 57,887.47 estimated meter deposit (3 phase CT rated) plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- + PHP 35,000 estimated meter deposit (3 phase self-contained) + PHP 7,000 labor vey, or at least after an analysis has been conducted of the lot technical description cost-metering + PHP 1,000 service fee + PHP 1,500 service deposit) appearing on the title. Procedure 23*. Apply for water connection at General Santos City Procedure 2*. Obtain barangay clearance Water District (GSCWD) Time: 1 day Time: 1 day Cost: PHP 50 Cost: No cost Comments: The barangay clearance is generally a requirement for obtaining the Comments: The applicant is required to attend a one-hour seminar on GSCWD locational clearance. The costs for barangay clearances vary as barangays have the company rules and policies. discretion to impose their own fees for as long as such fees are reasonable and within the limits imposed by the Local Government Code and city ordinances. Procedure 24*. Receive inspection for water connection from Procedure 3*. Obtain special permit from the Zoning Board GSCWD Time: 30 days Time: 1 day Cost: PHP 1,000 (filing fee) Cost: No cost Comments: Warehouse construction is considered a special project that requires the Procedure 25*. Obtain water connection from GSCWD approval of the Zoning Board. The applicant must apply for a Special Permit, which is a requirement for the locational clearance. Time: 1 day Cost: PHP 1,600 (PHP 1,500 downpayment + PHP 100 inspection fee) LIST OF PROCE DURES • DEALING WITH construction permitS 99 Procedure 4. Apply for the locational clearance at the Office of Procedure 10. Obtain the building permit from the OBO Zoning Administration (OZA) Time: 13 days Time: 1 day Cost: PHP 39,018 (according to the National Building Code of the Philippines, the Cost: No cost cost of the building permit is PHP 23 per square meter. The computation here is Comments: The locational clearance is required to ensure that the construction based on PHP 30 per square meter to account for ancillary costs such as electrical, conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. mechanical and plumbing fees) The applicant must submit the following requirements: Comments: After the building permit application is approved, the building official makes an assessment and issues an order of payment for the company to pay at the a. Notarized locational clearance application form; CTO. Once the company has paid the building permit fees, it will present the official b. Barangay clearance; receipt to the Receiving/Releasing Section of the OBO which will then issue the c. Transfer Certificate of Title (TCT); permit. d. Latest real property tax receipt; and e. Architectural plan. Procedure 11. Apply for the Certificate of Occupancy and Certificate of Final Electrical Inspection (CFEI) at the OBO Procedure 5. Notarize the locational clearance application form Time: 1 day at the notary Cost: No cost Time: 1 day Comments: In applying for a Certificate of Occupancy, the applicant must submit Cost: PHP 100 the following to the OBO: a. Application for Certificate of Occupancy; Procedure 6. Receive inspection for the locational clearance from b. Duly notarized certificate of completion; the OZA c. Construction logbook; Time: 1 day d. As-built plans and specifications; and Cost: No cost e. Building inspection sheet, all signed and sealed by the architect or engineer who undertook the full-time Procedure 7. Obtain the locational clearance from the OZA inspection and supervision of the construction. Time: 1 day The CFEI certifies that a final inspection of the electrical installation has been Cost: PHP 19,400 (PHP 1,000 for the first PHP 100,000 of the project cost; excess is conducted and that such installation has been completed in accordance with the multiplied by 1/10 of 1%) approved plans and specifications on file with the OBO and the provisions of the Comments: The applicant pays the locational clearance fee at the City Treasurer’s Philippine Electrical Code. Office (CTO) and obtains the locational clearance at the OZA. Procedure 12. Apply for zoning compliance certificate at OZA Procedure 8. Apply for the building permit and ancillary permits Time: 1 day at the Office of the Building Official (OBO) Cost: PHP 2,000 Time: 1 day Comments: This clearance confirms that the warehouse has complied with the Cost: No cost issued locational clearance. This is a requirement in obtaining the Certificate of Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ Occupancy. structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) plumbing permit, and (7) electronics permit. Procedure 13. Receive inspection from OZA The applicant must submit the following requirements: Time: 1 day a. Photocopy of Original Certificate of Title (OCT)/TCT on file with the Registry of Cost: No cost Deeds; b. Photocopy of tax declaration; Procedure 14. Obtain zoning compliance certificate from OZA c. Current real property tax receipt; Time: 5 days d. Building permit application form; Cost: No cost e. Five (5) sets of survey plans, design plans, specifications and other related documents (i.e., architectural documents, civil/structural documents, electrical Procedure 15*. Apply for the Fire Safety Inspection Certificate documents, mechanical documents, sanitary documents, plumbing documents, (FSIC) at the BFP electronics documents, geodetic documents, and clearances from other agen- Time: 1 day cies); and Cost: PHP 3,901 (10% of building fees) f. Locational clearance from the OZA. Comments: Once construction has been completed, the company requests the BFP to inspect the site to certify that the required fire safety construction, fire protective Procedure 9. Apply and obtain Fire Safety Evaluation Clearance and/or warning systems are properly installed and in good working condition. The (FSEC) from the local Fire Marshall at the Bureau of Fire applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies Protection (BFP) that the construction of the building was in accordance with FALAR 1), prepared by Time: 3 days an architect who is duly certified by the BFP to prepare this report. Cost: PHP 19,500 (0.1% of estimated project cost) Procedure 16*. Receive final inspection for the FSIC from the BFP Comments: The FSEC is a clearance with a fire safety checklist that enumerates the Time: 1 day life and fire safety requirements of the Fire Code. Cost: No cost One set of plans and specifications submitted by the applicant to the OBO is referred to the City Fire Marshall, who evaluates the plans to ensure that they conform to the fire safety and control requirements of the Fire Code. The applicant must also submit 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents the fire and life safety features of the building) prepared by an architect who is duly certified by the BFP to prepare this report. The City Fire Marshall must submit his recommendations to the OBO within 5 working days from the date of referral. While the company is getting approval from the City Fire Marshall, the OBO simulta- neously processes the building permit application and checks the building plans and specifications. 100 Doing Business IN the philippines 2011 Procedure 17*. Obtain the FSIC from the BFP Procedure 24*. Receive inspection for water and sewage Time: 5 days connection from MIWD Cost: No cost Time: 1 day Cost: No cost Procedure 18*. Receive final inspection for the Certificate of Occupancy and CFEI from the OBO Procedure 25*. Obtain water and sewage connection from MIWD Time: 1 day Time: 35 days Cost: No cost Cost: PHP 600 (PHP 1,150 material cost + PHP 750 installation cost + PHP 600 meter Comments: The OBO conducts a final inspection to check the building based on the maintenance fee) the applicant can initially pay PHP 600 certificate of completion, construction logbook, building inspection sheets, original and as-built plans and specifications. Procedure 26*. Obtain telephone connection from the telephone company Procedure 19. Obtain the Certificate of Occupancy and CFEI from Time: 8 days the OBO Cost: No cost Time: 5 days Comments: There are three telephone companies providing landline services in Cost: PHP 12,000 (the floor area is multiplied by 10,000: the first PHP 1,200,000 is Iloilo City. The cost is PHP 1,500 for Philippine Long Distance Co. (PLDT), and PHP 999 assessed PHP 1,000, while an additional PHP 1,000 is assessed for every million in for Bayantel. Globelines requires proof of financial capability but does not charge any excess thereof) fee. There is a lock-in period of 12 months for the three providers. The case study Comments: After the OBO has processed the application and conducted the assumes that the company will request services from Globelines as this is the option inspection, it then issues an assessment and order of payment. The OBO issues the most favorable to the company. Certificate of Occupancy after the applicant has paid the corresponding fees. Procedure 27*. Apply for the tax declaration of improvement at Procedure 20. Apply for electricity connection at Panay Electric the City Assessor’s Office (CAO) Company (PECO) Time: 1 day Time: 1 day Cost: PHP 200 (inspection fee) Cost: No cost Comments: The company must update its official records to include the newly built Comments: The company visits PECO to request the connection. Requirements for warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building permanent connection are: Certificate of Occupancy, CFEI, FSIC, tax declaration, copy plan and Certificate of Occupancy to notify them of the new building construction. of the land title, and board resolution for the designation of an authorized represen- The company must submit the floor plan and as-built plan to the CAO. tative if a corporation. Upon submission of the application form and requirements, the customer service representative informs the Electrical Engineering Division of Procedure 28*. Receive inspection from the Appraiser of CAO PECO to schedule an inspection. This normally happens the following day. After Time: 1 day inspection, PECO prepares the Electrical Calculation and Loads Estimate (ECALES) Cost: No cost Report. This report analyzes the materials needed, poles, size of wires, load of the transformers, and other details related to installation. Procedure 29*. Obtain the tax declaration of improvement from There are two options in installing the 3 50-kVA transformers: 1. mounted in the post the CAO or 2. installed in a platform. Using option 1, the total cost is PHP 546,250.50 (PHP 515,260 cost of materials plus PHP 30,980.50 labor and equipment usage). Using Time: 1 day option 2, the total cost is PHP 678,308.15 (PHP 604,629.65 cost of materials plus PHP Cost: No cost 73,678.50 labor and equipment usage). PECO recommends that the applicant have a Comments: The tax declaration of improvement is released after an appraiser platform for the 3 transformers for safety reasons. The first option is more favorable inspects the property, which can be done on the following day or sometimes even to the applicant. on the same day. Aside from the material cost, the applicant is also required to pay the bill deposit computed at 140 kW x 8 hours x 30 days x PHP 10/kWh X 0.65 demand factor for a *This procedure can be completed simultaneously with previous procedures. total of PHP 218,400. This deposit is a guarantee of prompt payment of bills of the applicant and is refunded upon termination of contract. Dealing with Construction Permits Procedure 21. Receive inspection for electricity connection from LAPU-LAPU PECO Warehouse value: PHP 19,500,000 = USD 418,528 Time: 1 day Data as of: June 2010 Cost: No cost Procedure 1. Obtain certified true copy of the land title from the Procedure 22. Obtain electricity connection from PECO Register of Deeds (RD) Time: 19 days Time: 7 days Cost: PHP 764,641 (PHP 515,260 material cost + PHP 30,980.5 labor cost + PHP Cost: PHP 160 (PHP 30 for the certification + PHP 6 for each additional page (4 pages 218,400 bill deposit) needed) + PHP 112 IT fee) Comments: The certified true copy of the land title serves as proof of ownership of Procedure 23*. Apply for water and sewage connection at Metro the land on which the warehouse is to be built. Iloilo Water District (MIWD) Time: 1 day Procedure 2*. Obtain certified true copy of the tax declaration of Cost: No cost real property from the City Assessor’s Office (CAO) Comments: The applicant is required to attend a one-hour orientation/seminar on Time: 2 days company policies and the application process. Inspection happens after a few days. Cost: PHP 40 (PHP 25 tax declaration + PHP 15 documentary stamp tax) Comments: The certified true copy of the tax declaration of real property enables the company to identify the property by its index number. The tax clearance serves as proof that there are no arrears in the payment of realty taxes. LIST OF PROCE DURES • DEALING WITH construction permitS 101 Procedure 3*. Obtain lot plan with site map from the geodetic Procedure 10. Apply and obtain Fire Safety Evaluation Clearance engineer (FSEC) from the local Fire Marshall at the Bureau of Fire Time: 3 days Protection (BFP) Cost: PHP 1,250 Time: 7 days Comments: The company must obtain the lot plan with site map from a geodetic Cost: PHP 19,500 (0.1% of estimated project cost) engineer to confirm the location of the land purported to be in the land title. A lot Comments: The FSEC is a clearance with a fire safety checklist that enumerates the plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- life and fire safety requirements of the Fire Code. vey, or at least after an analysis has been conducted of the lot technical description One set of plans and specifications submitted by the applicant to the OBO is referred appearing on the title. to the City Fire Marshall, who evaluates the plans to ensure that they conform to the fire safety and control requirements of the Fire Code. The applicant must also submit Procedure 4*. Obtain barangay clearance 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents Time: 2 days the fire and life safety features of the building) prepared by an architect who is duly Cost: PHP 100 certified by the BFP to prepare this report. The City Fire Marshall must submit his recommendations to the OBO within 5 working days from the date of referral. Comments: The barangay clearance is generally a requirement for obtaining the locational clearance. The costs for barangay clearances vary as barangays have the While the company is getting approval from the City Fire Marshall, the OBO simulta- discretion to impose their own fees for as long as such fees are reasonable and neously processes the building permit application and checks the building plans and within the limits imposed by the Local Government Code and city ordinances. specifications. Procedure 5. Apply for locational clearance at the City Planning Procedure 11. Get evaluation of and comments on the and Development Office (CPDO) architectural plans from the OBO Time: 1 day Time: 1 day Cost: No cost Cost: No cost (fees included in procedure 16) Comments: The locational clearance is required to ensure that the construction Comments: Upon submitting the required documents for the building permit, the conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. company has to visit different sections to have the plans evaluated and approved. The applicant must submit the following requirements: Procedure 12. Get evaluation of and comments on the civil/ a. Notarized locational clearance application form; structural plans from the OBO b. Barangay clearance; Time: 1 day c. Transfer Certificate of Title (TCT); Cost: No cost (fees included in procedure 16) d. Latest real property tax receipt; and e. Architectural plan. Procedure 13. Get evaluation of and comments on the line and grade plans from the OBO Procedure 6. Notarize locational clearance application form at Time: 1 day the notary Cost: No cost (fees included in procedure 16) Time: 1 day Cost: PHP 50 Procedure 14. Get evaluation of and comments on the sanitary and plumbing plans from the OBO Procedure 7. Receive inspection for the locational clearance from Time: 1 day the CPDO Cost: No cost (fees included in procedure 16) Time: 1 day Cost: No cost (fees included in procedure 8) Procedure 15. Get evaluation of and comments on the electrical plans from the OBO Procedure 8. Obtain the locational clearance from the CPDO Time: 1 day Time: 4 days Cost: No cost (fees included in procedure 16) Cost: PHP 22,500 (PHP 5,000 for over PHP 2,000,000 of the project value + 1/10 of 1% in excess of PHP 2,000,000) Procedure 16. Obtain the building permit from the OBO Comments: The applicant pays the locational clearance fee at the City Treasurer’s Time: 16 days Office (CTO) and obtains the locational clearance at the CPDO. Cost: PHP 39,018 (according to the National Building Code of the Philippines, the cost of the building permit is PHP 23 per square meter. The computation here is Procedure 9. Apply for the building permit and ancillary permits based on PHP 30 per square meter to account for ancillary costs such as electrical, at the Office of the Building Official (OBO) mechanical and plumbing fees) Time: 1 day Comments: After the building permit application is approved, the building official Cost: No cost makes an assessment and issues an order of payment for the company to pay at the Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ CTO. Once the company has paid the building permit fees, it will present the official structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) receipt to the Receiving/Releasing Section of the OBO which will then issue the plumbing permit, and (7) electronics permit. permit. The applicant must submit the following requirements: Procedure 17. Receive inspection from the BFP during construction a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- try of Deeds; Time: 1 day b. Tax declaration; Cost: No cost (fees included in procedure 10) c. Current real property tax receipt; Comments: The BFP conducts an inspection during construction to ensure that the plans and fire safety precautions are observed. d. Building permit application form; e. Five (5) sets of survey plans, design plans, specifications and other related Procedure 18. Receive inspection from the OBO during documents (i.e., architectural documents, civil/structural documents, electrical construction documents, mechanical documents, sanitary documents, plumbing documents, electronics documents, geodetic documents, and clearances from other agen- Time: 1 day cies); and Cost: No cost (fees included in procedure 16) f. Locational clearance from the CPDO. Comments: During the construction of the warehouse, the OBO conducts an inspec- tion to ensure that the construction follows the approved building plans and design. 102 Doing Business IN the philippines 2011 Procedure 19. Apply for the Fire Safety Inspection Certificate Procedure 27. Obtain electricity connection from MECO (FSIC) at the BFP Time: 13 days Time: 1 day Cost: PHP 330,000 (cost of three 50-kVA transformers) Cost: PHP 3,901 (10% of building permit fees) Comments: Once construction has been completed, the company requests the BFP Procedure 28*. Apply for water connection at Metro Cebu Water to inspect the site to certify that the required fire safety construction, fire protective District (MCWD) and/or warning systems are properly installed and in good working condition. The Time: 1 day applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies Cost: No cost that the construction of the building was in accordance with FALAR 1), prepared by an architect who is duly certified by the BFP to prepare this report. Procedure 29*. Receive inspection for water connection from MCWD Procedure 20. Receive final inspection for the FSIC from the BFP Time: 1 day Time: 1 day Cost: No cost Cost: No cost (fees included in procedure 19) Procedure 30*. Obtain water connection from MCWD Procedure 21. Obtain the FSIC from the BFP Time: 13 days Time: 7 days Cost: PHP 4,950 (PHP 1,000 guarantee deposit + PHP 3,950 service connection cost) Cost: No cost Procedure 31*. Obtain telephone connection from the telephone Procedure 22. Apply for the Certificate of Occupancy and company Certificate of Final Electrical Inspection (CFEI) at the OBO Time: 5 days Time: 1 day Cost: No cost Cost: No cost Comments: There are three telephone companies providing landline services in Comments: In applying for a Certificate of Occupancy, the applicant must submit Lapu-Lapu City. The cost is PHP 1,500 for Philippine Long Distance Co. (PLDT), and the following to the OBO: PHP 999 for Bayantel. Globelines requires proof of financial capability but does not a. Application for Certificate of Occupancy; charge any fee. There is a lock-in period of 12 months for the three providers. The b. Duly notarized certificate of completion; case study assumes that the company will request services from Globelines as this is c. Construction logbook; the option favorable to the company. d. As-built plans and specifications; and Procedure 32*. Apply for the tax declaration of improvement at e. Building inspection sheet, the CAO all signed and sealed by the architect or engineer who undertook the full-time Time: 1 day inspection and supervision of the construction. Cost: No cost The CFEI certifies that a final inspection of the electrical installation has been conducted and that such installation has been completed in accordance with the Comments: The company must update its official records to include the newly built approved plans and specifications on file with the OBO and the provisions of the warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building Philippine Electrical Code. plan and Certificate of Occupancy to notify them of the new building construction. The company must submit the floor plan and as-built plan to the CAO. Procedure 23. Receive final inspection for the Certificate of Occupancy and CFEI from the OBO Procedure 33*. Receive inspection from the Appraiser of CAO Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 24) Cost: No cost Comments: The OBO conducts a final inspection to check the building based on the Procedure 34*. Obtain the tax declaration of improvement from certificate of completion, construction logbook, building inspection sheets, original and as-built plans and specifications. CAO Time: 1 day Procedure 24. Obtain the Certificate of Occupancy and CFEI from Cost: No cost the OBO Comments: The tax declaration of improvement is released after an appraiser Time: 14 days inspects the property, which can be done on the following day or sometimes even Cost: PHP 20,000 (PHP 1,000 for every PHP 1,000,000 of the project value) on the same day. Comments: After the OBO has processed the application and conducted the inspection, it then issues an assessment and order of payment. The OBO issues the *This procedure can be completed simultaneously with previous procedures. Certificate of Occupancy after the applicant has paid the corresponding fees. Dealing with Construction Permits Procedure 25. Apply for electricity connection at Mactan Electric LAS PIÑAS Company (MECO) Time: 1 day Warehouse value: PHP 19,500,000 = USD 418,528 Data as of: June 2010 Cost: No cost Comments: The electric company is MECO. The company visits MECO to request the Procedure 1. Obtain certified true copy of the land title from the connection and submit the CFEI and electrical plans. MECO conducts an inspection Register of Deeds (RD) of the warehouse and in the following days the technical staff visits the site for the Time: 3 days electricity connection. The cost of the transformers is PHP 110,000 per transformer (three needed). Cost: PHP 160 (PHP 30 for the certification + PHP 6 for each additional page (4 pages needed) + PHP 112 IT fee) Procedure 26. Receive inspection for electricity connection from Comments: The certified true copy of the land title serves as proof of ownership of MECO the land on which the warehouse is to be built. Time: 1 day Cost: No cost LIST OF PROCE DURES • DEALING WITH construction permitS 103 Procedure 2*. Obtain certified true copy of the tax declaration of Procedure 9. Apply and obtain Fire Safety Evaluation Clearance real property from the City Assessor’s Office (CAO) (FSEC) from the local Fire Marshall at the Bureau of Fire Time: 1 day Protection (BFP) Cost: PHP 100 Time: 7 days Comments: The certified true copy of the tax declaration of real property enables Cost: PHP 19,500 (0.1% of estimated project cost) the company to identify the property by its index number. The tax clearance serves Comments: The FSEC is a clearance with a fire safety checklist that enumerates the as proof that there are no arrears in the payment of realty taxes. life and fire safety requirements of the Fire Code. One set of plans and specifications submitted by the applicant to the OBO is referred Procedure 3*. Obtain lot plan with site map from the geodetic to the City Fire Marshall, who evaluates the plans to ensure that they conform to the engineer fire safety and control requirements of the Fire Code. The applicant must also submit Time: 3 days 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents Cost: PHP 1,000 the fire and life safety features of the building) prepared by an architect who is duly certified by the BFP to prepare this report. The City Fire Marshall must submit his Comments: The company must obtain the lot plan with site map from a geodetic recommendations to the OBO within 5 working days from the date of referral. engineer to confirm the location of the land purported to be in the land title. A lot plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- While the company is getting approval from the City Fire Marshall, the OBO simulta- vey, or at least after an analysis has been conducted of the lot technical description neously processes the building permit application and checks the building plans and appearing on the title. specifications. Procedure 4*. Obtain barangay clearance Procedure 10. Obtain the building permit from the OBO Time: 1 day Time: 11 days Cost: PHP 300 Cost: PHP 39,018 (according to the National Building Code of the Philippines, the cost of the building permit is PHP 23 per square meter. The computation here is Comments: The barangay clearance is generally a requirement for obtaining the based on PHP 30 per square meter to account for ancillary costs such as electrical, locational clearance. The costs for barangay clearances vary as barangays have the mechanical and plumbing fees) discretion to impose their own fees for as long as such fees are reasonable and within the limits imposed by the Local Government Code and city ordinances. Comments: After the building permit application is approved, the building official makes an assessment and issues an order of payment for the company to pay at the Procedure 5. Apply for the locational clearance at the City CTO. Once the company has paid the building permit fees, it will present the official receipt to the Receiving/Releasing Section of the OBO which will then issue the Planning and Development Office (CPDO) permit. Time: 1 day Cost: No cost Procedure 11. Receive inspection from the BFP during Comments: The locational clearance is required to ensure that the construction construction conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. Time: 1 day The applicant must submit the following requirements: Cost: No cost (fees included in procedure 9) a. Notarized locational clearance application form; Comments: The BFP conducts an inspection during construction to ensure that the b. Barangay clearance; plans and fire safety precautions are observed. c. Transfer Certificate of Title (TCT); d. Latest real property tax receipt; and Procedure 12. Apply for the Certificate of Occupancy and Certificate of Final Electrical Inspection (CFEI) at the OBO e. Architectural plan. Time: 1 day Procedure 6. Notarize the locational clearance application form Cost: No cost at the notary Comments: In applying for a Certificate of Occupancy, the applicant must submit Time: 1 day the following to the OBO: Cost: PHP 100 a. Application for Certificate of Occupancy; b. Duly notarized certificate of completion; Procedure 7. Obtain the locational clearance from the CPDO c. Construction logbook; Time: 3 days d. As-built plans and specifications; and Cost: PHP 8,503 (PHP 5 per square meter + PHP 2,000 filing fee) e. Building inspection sheet, Comments: The applicant pays the locational clearance fee at the City Treasurer’s all signed and sealed by the architect or engineer who undertook the full-time Office (CTO) and obtains the locational clearance at the CPDO. inspection and supervision of the construction. The Certificate of Final Electrical Inspection certifies that a final inspection of the Procedure 8. Apply for the building permit and ancillary permits electrical installation has been conducted and that such installation has been at the Office of the Building Official (OBO) completed in accordance with the approved plans and specifications on file with the Time: 1 day OBO and the provisions of the Philippine Electrical Code. Cost: PHP 700 (PHP 200 filing fee + PHP 500 processing fee) Procedure 13. Apply for the Fire Safety Inspection Certificate Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) (FSIC) at the BFP plumbing permit, and (7) electronics permit. Time: 1 day The applicant must submit the following requirements: Cost: PHP 3,901 (10% of building permit fees) a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- Comments: Once construction has been completed, the company requests the BFP try of Deeds; to inspect the site to certify that the required fire safety construction, fire protective b. Tax declaration; and/or warning systems are properly installed and in good working condition. The applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies c. Current real property tax receipt; that the construction of the building was in accordance with FALAR 1), prepared by d. Building permit application form; an architect who is duly certified by the BFP to prepare this report. e. Five sets of survey plans, design plans, specifications and other related documents (i.e., architectural documents, civil/structural documents, electrical documents, mechanical documents, sanitary documents, plumbing documents, electronics documents, geodetic documents, and clearances from other agencies); and f. Locational clearance from the CPDO. 104 Doing Business IN the philippines 2011 Procedure 14. Receive final inspection for the FSIC from the BFP Comments: There are three telephone companies providing landline services in Las Piñas City. These are Philippine Long Distance Co. (PLDT), Globelines, and Digitel. For Time: 1 day PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months for the regular Cost: No cost (fees included in procedure 13) phone line. Globelines requires proof of financial capability but does not charge any fee. There is a lock-in period of 12 months for the regular phone line. For Digitel, the Procedure 15. Obtain the FSIC from the BFP cost is PHP 2,500 and there is a lock-in period of 30 months for the regular phone Time: 2 days line. The case study assumes that the company will request services from Globelines as this is the option favorable to the company. Cost: No cost Procedure 25*. Apply for the tax declaration of improvement at Procedure 16. Receive final inspection for the Certificate of the CAO Occupancy and CFEI from the OBO Time: 1 day Time: 1 day Cost: No cost Cost: No cost (fees included in procedure 17) Comments: The company must update its official records to include the newly built Comments: The OBO conducts a final inspection to check the building based on the warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building certificate of completion, construction logbook, building inspection sheets, original plan and Certificate of Occupancy to notify them of the new building construction. and as-built plans and specifications. The company must submit the floor plan and as-built plan to the CAO. Procedure 17. Obtain the Certificate of Occupancy and CFEI from Procedure 26*. Receive inspection from the Appraiser of CAO the OBO Time: 1 day Time: 8 days Cost: No cost Cost: PHP 19,400 (PHP 1,000 for the first PHP 1,200,000 of the project value; PHP 1,000 for every PHP 1,000,000 in excess thereof; PHP 400 for PHP 150,000 - PHP Procedure 27*. Obtain the tax declaration of improvement from 300,000) CAO Comments: After the OBO has processed the application and conducted the inspection, it then issues an assessment and order of payment. The OBO issues the Time: 1 day Certificate of Occupancy after the applicant has paid the corresponding fees. Cost: No cost Comments: The tax declaration of improvement is released after an appraiser Procedure 18. Apply for electricity connection at Manila Electric inspects the property, which can be done on the following day or sometimes even Company (Meralco) on the same day. Time: 1 day Cost: No cost *This procedure can be completed simultaneously with previous procedures. Comments: The electric company is Meralco. The company visits Meralco to request the connection and submit the CFEI and electrical plans. Meralco conducts an Dealing with Construction Permits inspection of the warehouse and in the following days the technical staff visits the MAKATI site for the electricity connection. Warehouse value: PHP 19,500,000 = USD 418,528 Procedure 19. Receive inspection for electricity connection from Data as of: June 2010 Meralco Time: 1 day Procedure 1. Obtain lot plan with site map from the geodetic Cost: No cost engineer Time: 3 days Procedure 20. Obtain electricity connection from Meralco Cost: PHP 1,750 Time: 56 days Comments: The company must obtain the lot plan with site map from a geodetic Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- engineer to confirm the location of the land purported to be in the land title. A lot ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- deposit) vey, or at least after an analysis has been conducted of the lot technical description appearing on the title. Procedure 21*. Apply for water and sewage connection at Maynilad Water Services, Inc. (Maynilad) Procedure 2*. Obtain barangay clearance Time: 1 day Time: 2 days Cost: No cost Cost: PHP 300 (PHP 150 per floor) Comments: The water company is Maynilad. The company visits Maynilad to request Comments: The barangay clearance is generally a requirement for obtaining the the connection and inspection takes place within a week. Connection is effected locational clearance. The costs for barangay clearances vary as barangays have the some days after the inspection. discretion to impose their own fees for as long as such fees are reasonable and within the limits imposed by the Local Government Code and city ordinances. Procedure 22*. Receive inspection for water and sewage connection from Maynilad Procedure 3. Notarize locational clearance application form at the notary Time: 1 day Time: 1 day Cost: No cost Cost: PHP 50 Procedure 23*. Obtain water and sewage connection from Maynilad Procedure 4. Apply for locational clearance at the Urban Development Department (UDD) Time: 30 days Time: 1 day Cost: PHP 7,455 Cost: No cost Procedure 24*. Obtain telephone connection from the telephone Comments: This clearance confirms that the intended land use conforms to the local company government’s zoning ordinances, wherein a Barangay clearance is required. Time: 5 days Cost: No cost LIST OF PROCE DURES • DEALING WITH construction permitS 105 Procedure 5. Receive inspection for locational clearance from the Procedure 11. Apply for the Fire Safety Inspection Certificate UDD (FSIC) at the BFP Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 6) Cost: PHP 3,901 (10% of building permit fees) Comments: Once construction has been completed, the company requests the BFP Procedure 6. Obtain locational clearance from the UDD to inspect the site to certify that the required fire safety construction, fire protective Time: 2 days and/or warning systems are properly installed and in good working condition. The Cost: PHP 16,458 (PHP 12.5 per square meter + PHP 200 filing fee) applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies that the construction of the building was in accordance with FALAR 1), prepared by Comments: The applicant pays the locational clearance fee at the City Treasurer’s an architect who is duly certified by the BFP to prepare this report. Office (CTO) and obtains the locational clearance at UDD. Procedure 12. Receive final inspection for the FSIC from the BFP Procedure 7*. Apply and obtain Fire Safety Evaluation Clearance (FSEC) from the local Fire Marshall at the Bureau of Fire Time: 1 day Protection (BFP) Cost: No cost (fees included in procedure 11) Time: 7 days Procedure 13. Obtain the FSIC from the BFP Cost: PHP 19,500 (0.1% of estimated project cost) Time: 1 day Comments: The FSEC is a clearance with a fire safety checklist that enumerates the Cost: No cost life and fire safety requirements of the Fire Code. The City Fire Marshall evaluates one set of plans and specifications submitted by the Procedure 14. Apply for the Certificate of Occupancy and applicant to ensure that they conform to the fire safety and control requirements Certificate of Final Electrical Inspection (CFEI) at the OBO of the Fire Code. The applicant must also submit 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents the fire and life safety features of Time: 1 day the building) prepared by an architect who is duly certified by the BFP to prepare Cost: No cost this report. Comments: In applying for a Certificate of Occupancy, the applicant must submit the following to the OBO: Procedure 8. Apply and obtain the building permit and ancillary a. Application for Certificate of Occupancy; permits at the Office of the Building Official (OBO) b. Duly notarized certificate of completion; Time: 6 days c. Construction logbook; Cost: PHP 39,018 (according to the National Building Code of the Philippines, the d. As-built plans and specifications; and cost of the building permit is PHP 23 per square meter. The computation here is based on PHP 30 per square meter to account for ancillary costs such as electrical, e. Building inspection sheet, mechanical and plumbing fees) all signed and sealed by the architect or engineer who undertook the full-time Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ inspection and supervision of the construction. structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) The CFEI certifies that a final inspection of the electrical installation has been plumbing permit, and (7) electronics permit. conducted and that such installation has been completed in accordance with the The applicant must submit the following requirements: approved plans and specifications on file with the OBO and the provisions of the Philippine Electrical Code. a. Photocopy of Original Certificate of Title (OCT)/TCT on file with the Registry of Deeds; Procedure 15. Receive final inspection for the Certificate of b. Photocopy of tax declaration; Occupancy and CFEI from the OBO c. Current real property tax receipt; Time: 1 day d. Building permit application form; Cost: No cost e. Five (5) sets of survey plans, design plans, specifications and other related Comments: The OBO conducts a final inspection to check the building based on the documents (i.e., architectural documents, civil/structural documents, electrical certificate of completion, construction logbook, building inspection sheets, original documents, mechanical documents, sanitary documents, plumbing documents, and as-built plans and specifications. electronics documents, geodetic documents, and clearances from other agen- cies); Procedure 16. Obtain the Certificate of Occupancy and CFEI from f. Locational clearance from the UDD; and the OBO g. FSEC. Time: 5 days After the building permit application is approved, the building official makes an Cost: PHP 20,400 (PHP 1,000 for first PHP 1,200,000 of the project value; PHP 1,000 assessment and issues an order of payment for the company to pay at the CTO. Once for every PHP 1,000,000 in excess thereof; PHP 400 for PHP 150,000 - PHP 400,000 + the company has paid the building permit fees, it will present the official receipt to PHP 1,000 for CFEI) the Receiving/Releasing Section of the OBO which will then issue the permit. Comments: After the OBO has processed the application and conducted the Procedure 9. Receive inspection from the BFP during inspection, it then issues an assessment and order of payment. The OBO issues the Certificate of Occupancy after the applicant has paid the corresponding fees. construction Time: 1 day Procedure 17. Apply for electricity connection at Manila Electric Cost: No cost (fees included in procedure 7) Company (Meralco) Comments: The BFP conducts an inspection during construction to ensure that the Time: 1 day plans and fire safety precautions are observed. Cost: No cost Procedure 10. Receive inspection from the OBO during Comments: The electric company is Meralco. The company visits Meralco to request the connection and submit the CFEI and electrical plans. Meralco conducts an construction inspection of the warehouse and in the following days the technical staff visits the Time: 1 day site for the electricity connection. Cost: No cost (fees included in procedure 8) Comments: During the construction of the warehouse, the OBO conducts an inspec- Procedure 18. Receive inspection for electricity connection from tion to ensure that the construction follows the approved building plans and design. Meralco Time: 1 day Cost: No cost 106 Doing Business IN the philippines 2011 Dealing with Construction Permits Procedure 19. Obtain electricity connection from Meralco Time: 56 days MALABON Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Warehouse value: PHP 19,500,000 = USD 418,528 ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security Data as of: June 2010 deposit) Comments: The electric company is Meralco. The company visits Meralco to request Procedure 1. Obtain certified true copy of the land title from the the connection and submit the CFEI and electrical plans. Meralco conducts an Register of Deeds (RD) inspection of the warehouse and in the following days the technical staff visits the Time: 2 days site for the electricity connection. Cost: PHP 57 (PHP 30 for the certification + PHP 6 for each additional page (2 pages needed) + PHP 15 documentary stamp tax) Procedure 20*. Apply for water and sewage connection at Comments: The certified true copy of the land title serves as proof of ownership of Maynilad Water Services, Inc. (Maynilad) or Manila Water the land on which the warehouse is to be built. Company, Inc. (Manila Water) Time: 1 day Procedure 2*. Obtain certified true copy of the tax declaration of Cost: No cost real property from the City Assessor’s Office (CAO) Comments: There are two private water providers for Makati City. Maynilad services Time: 1 day the west zone and Manila Water services the east zone. The company visits the water Cost: PHP 115 (PHP 100 certification + PHP 15 documentary stamp tax) company to request the connection and pays PHP 7,455 for Maynilad or PHP 6,855 Comments: The certified true copy of the tax declaration of real property enables for Manila Water. Inspection takes place in a week. The case study assumes that the the company to identify the property by its index number. The tax clearance serves company will apply for a water connection from Manila Water as this is the option as proof that there are no arrears in the payment of realty taxes. favorable to the company. Procedure 3*. Obtain lot plan with site map from the geodetic Procedure 21*. Receive inspection for water and sewage engineer connection from Maynilad or Manila Water Time: 3 days Time: 1 day Cost: PHP 1,250 Cost: No cost Comments: The company must obtain the lot plan with site map from a geodetic engineer to confirm the location of the land purported to be in the land title. A lot Procedure 22*. Obtain water and sewage connection from plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Maynilad or Manila Water vey, or at least after an analysis has been conducted of the lot technical description Time: 21 days appearing on the title. Cost: PHP 6,855 Procedure 4*. Obtain barangay clearance Procedure 23*. Obtain telephone connection from the telephone Time: 1 day company Cost: PHP 500 Time: 5 days Comments: The barangay clearance is generally a requirement for obtaining the Cost: No cost locational clearance. The costs for barangay clearances vary as barangays have the Comments: There are three telephone companies providing landline services in discretion to impose their own fees for as long as such fees are reasonable and Makati City. These are Philippine Long Distance Co. (PLDT), Globelines, and Digitel. within the limits imposed by the Local Government Code and city ordinances. For PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months for the regular phone line. Globelines requires proof of financial capability but does not Procedure 5. Apply for the locational clearance at the City charge any fee. There is a lock-in period of 12 months for the regular phone line. Planning and Development Office (CPDO) For Digitel, the cost is PHP 2,500 and there is a lock-in period of 30 months for the Time: 1 day regular phone line. The case study assumes that the company will request services Cost: No cost from Globelines as this is the option favorable to the company. Comments: The locational clearance is required to ensure that the construction Procedure 24*. Apply for the tax declaration of improvement at conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. the City Assessor’s Office (CAO) The applicant must submit the following requirements: Time: 1 day a. Notarized locational clearance application form; Cost: No cost b. Barangay clearance; Comments: The company must update its official records to include the newly built c. Transfer Certificate of Title (TCT); warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building d. Latest real property tax receipt; and plan and Certificate of Occupancy to notify them of the new building construction. e. Architectural plan. The company must submit the floor plan and as-built plan to the CAO. Procedure 6. Notarize the locational clearance application form Procedure 25*. Receive inspection from the Appraiser of CAO at the notary Time: 1 day Time: 1 day Cost: No cost Cost: PHP 100 Procedure 26*. Obtain the tax declaration of improvement from Procedure 7. Receive inspection for the locational clearance from the CAO the CPDO Time: 1 day Time: 1 day Cost: No cost Cost: No cost (fees included in procedure 8) Comments: The tax declaration of improvement is released after an appraiser inspects the property, which can be done on the following day or sometimes even Procedure 8. Obtain the locational clearance from the CPDO on the same day. Time: 3 days Cost: PHP 23,450 (PHP 18 per square meter + PHP 40 processing fee) *This procedure can be completed simultaneously with previous procedures. Comments: The applicant pays the locational clearance fee at the City Treasurer’s Office (CTO) and obtains the locational clearance at the CPDO. LIST OF PROCE DURES • DEALING WITH construction permitS 107 Procedure 9. Apply for the building permit and ancillary permits Comments: The CFEI certifies that a final inspection of the electrical installation has been conducted and that such installation has been completed in accordance with at the Office of the Building Official (OBO) the approved plans and specifications on file with the OBO and the provisions of the Time: 1 day Philippine Electrical Code. Cost: No cost Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ Procedure 15. Receive final inspection for the CFEI from the OBO structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) Time: 1 day plumbing permit, and (7) electronics permit. Cost: No cost The applicant must submit the following requirements: a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- Procedure 16. Obtain the CFEI from the OBO try of Deeds; Time: 1 day b. Tax declaration; Cost: No cost c. Current real property tax receipt; d. Building permit application form; Procedure 17. Apply for the Certificate of Occupancy at the OBO e. Five (5) sets of survey plans, design plans, specifications and other related Time: 1 day documents (i.e., architectural documents, civil/structural documents, electrical Cost: No cost documents, mechanical documents, sanitary documents, plumbing documents, Comments: In applying for a Certificate of Occupancy, the applicant must submit electronics documents, geodetic documents, and clearances from other agen- the following to the OBO: cies); and a. Application for Certificate of Occupancy; f. Locational clearance from the CPDO. b. Duly notarized certificate of completion; Procedure 10. Notarize the building permit application form at c. Construction logbook; the notary d. As-built plans and specifications; and Time: 1 day e. Building inspection sheet, Cost: PHP 100 all signed and sealed by the architect or engineer who undertook the full-time inspection and supervision of the construction. Procedure 11. Apply and obtain Fire Safety Evaluation Clearance (FSEC) from the local Fire Marshall at the Bureau of Fire Procedure 18. Apply for the Fire Safety Inspection Certificate Protection (BFP) (FSIC) at the BFP Time: 7 days Time: 1 day Cost: PHP 19,500 (0.1% of estimated project cost) Cost: PHP 3,901 (10% of building permit fees) Comments: The FSEC is a clearance with a fire safety checklist that enumerates the Comments: Once construction has been completed, the company requests the BFP life and fire safety requirements of the Fire Code. to inspect the site to certify that the required fire safety construction, fire protective and/or warning systems are properly installed and in good working condition. The One set of plans and specifications submitted by the applicant to the OBO is referred applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies to the City Fire Marshall, who evaluates the plans to ensure that they conform to the that the construction of the building was in accordance with FALAR 1), prepared by fire safety and control requirements of the Fire Code. The applicant must also submit an architect who is duly certified by the BFP to prepare this report. 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents the fire and life safety features of the building) prepared by an architect who is duly Procedure 19. Receive final inspection for the FSIC from the BFP certified by the BFP to prepare this report. The City Fire Marshall must submit his recommendations to the OBO within 5 working days from the date of referral. Time: 1 day While the company is getting approval from the City Fire Marshall, the OBO simulta- Cost: No cost (fees included in procedure 18) neously processes the building permit application and checks the building plans and specifications. Procedure 20. Obtain the FSIC from the BFP Time: 2 days Procedure 12. Obtain the building permit from the OBO Cost: No cost Time: 23 days Cost: PHP 39,018 (according to the National Building Code of the Philippines, the Procedure 21. Receive final inspection for the Certificate of cost of the building permit is PHP 23 per square meter. The computation here is Occupancy from the OBO based on PHP 30 per square meter to account for ancillary costs such as electrical, Time: 1 day mechanical and plumbing fees) Cost: No cost (fees included in procedure 22) Comments: After the building permit application is approved, the building official Comments: The OBO conducts a final inspection to check the building based on the makes an assessment and issues an order of payment for the company to pay at the certificate of completion, construction logbook, building inspection sheets, original CTO. Once the company has paid the building permit fees, it will present the official and as-built plans and specifications. receipt to the Receiving/Releasing Section of the OBO which will then issue the permit. Procedure 22. Obtain the Certificate of Occupancy from the OBO Procedure 13. Receive inspection from the BFP during Time: 1 day construction Cost: PHP 20,000 (PHP 1,000 per PHP 1,000,000 of the project cost) Time: 1 day Comments: After the OBO has processed the application and conducted the Cost: No cost (fees included in procedure 11) inspection, it then issues an assessment and order of payment. The OBO issues the Certificate of Occupancy after the applicant has paid the corresponding fees. Comments: The BFP conducts an inspection during construction to ensure that the plans and fire safety precautions are observed. Procedure 23. Apply for electricity connection at Manila Electric Company (Meralco) Procedure 14. Apply for the Certificate of Final Electrical Inspection (CFEI) at the OBO Time: 1 day Time: 1 day Cost: No cost Cost: PHP 50 (inspection fee) Comments: The electric company is Meralco. The company visits Meralco to request the connection and submit the CFEI and electrical plans. Meralco conducts an inspection of the warehouse and in the following days the technical staff visits the site for the electricity connection. 108 Doing Business IN the philippines 2011 Dealing with Construction Permits Procedure 24. Receive inspection for electricity connection from Meralco MANDALUYONG Time: 1 day Warehouse value: PHP 19,500,000 = USD 418,528 Cost: No cost Data as of: June 2010 Procedure 25. Obtain electricity connection from Meralco Procedure 1. Obtain certified true copy of the land title from the Register of Deeds (RD) Time: 56 days Time: 3 days Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security Cost: PHP 160 (PHP 30 for the certification + PHP 6 for each additional page (4 pages deposit) needed) + PHP 112 IT fee) Comments: The certified true copy of the land title serves as proof of ownership of Procedure 26*. Apply for water and sewage connection at the land on which the warehouse is to be built. Maynilad Water Services, Inc. (Maynilad) Time: 1 day Procedure 2*. Obtain certified true copy of the tax declaration of real property from the City Assessor’s Office (CAO) Cost: No cost Time: 1 day Comments: The water company is Maynilad. The company visits Maynilad to request the connection and inspection takes place within a week. Connection is effected Cost: PHP 65 (PHP 50 + PHP 15 documentary stamp tax) some days after the inspection. Comments: The certified true copy of the tax declaration of real property enables the company to identify the property by its index number. The tax clearance serves Procedure 27*. Receive inspection for water and sewage as proof that there are no arrears in the payment of realty taxes. connection from Maynilad Time: 1 day Procedure 3*. Obtain lot plan with site map from the geodetic engineer Cost: No cost Time: 3 days Procedure 28*. Obtain water and sewage connection from Cost: PHP 2,000 Maynilad Comments: The company must obtain the lot plan with site map from a geodetic Time: 30 days engineer to confirm the location of the land purported to be in the land title. A lot plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Cost: PHP 7,455 vey, or at least after an analysis has been conducted of the lot technical description appearing on the title. Procedure 29*. Obtain telephone connection from the telephone company Procedure 4*. Obtain barangay clearance Time: 5 days Time: 2 days Cost: No cost Cost: PHP 1,000 Comments: There are four telephone companies providing landline services in Comments: The barangay clearance is generally a requirement for obtaining the Malabon City. These are Philippine Long Distance Co. (PLDT), Globelines, Digitel, and locational clearance. The costs for barangay clearances vary as barangays have the Bayantel. For PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months discretion to impose their own fees for as long as such fees are reasonable and for the regular phone line. Globelines requires proof of financial capability but does within the limits imposed by the Local Government Code and city ordinances. not charge any fee. There is a lock-in period of 12 months for the regular phone line. For Digitel, the cost is PHP 2,500 and there is a lock-in period of 30 months for the Procedure 5. Apply for the locational clearance at the City regular phone line. For Bayantel, the cost PHP 749 with no lock-in period. The case study assumes that the company will request services from Globelines as this is the Planning and Development Office (CPDO) option favorable to the company. Time: 1 day Cost: No cost Procedure 30*. Apply for the tax declaration of improvement at Comments: The locational clearance is required to ensure that the construction the CAO conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. Time: 1 day The applicant must submit the following requirements: Cost: No cost a. Notarized locational clearance application form; Comments: The company must update its official records to include the newly built b. Barangay clearance; warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building c. Transfer Certificate of Title (TCT); plan and Certificate of Occupancy to notify them of the new building construction. d. Latest real property tax receipt; and The company must submit the floor plan and as-built plan to the CAO. e. Architectural plan. Procedure 31*. Receive inspection from the Appraiser of CAO Procedure 6. Notarize the locational clearance application form Time: 1 day at the notary Cost: No cost Time: 1 day Procedure 32*. Obtain the tax declaration of improvement from Cost: PHP 100 the CAO Procedure 7. Obtain the Certificate of Non-Coverage (CNC) from Time: 1 day the Department of Environment and Natural Resources Cost: No cost Time: 2 days Comments: The tax declaration of improvement is released after an appraiser inspects the property, which can be done on the following day or sometimes even Cost: PHP 600 on the same day. Comments: For projects that do not pose environmental hazard and with a floor area of more than 1,000 square meters, CNC from the DENR is required. *This procedure can be completed simultaneously with previous procedures. Procedure 8. Receive inspection for the locational clearance from the CPDO Time: 1 day Cost: No cost (fees included in procedure 9) LIST OF PROCE DURES • DEALING WITH construction permitS 109 Procedure 9. Obtain the locational clearance from the CPDO Procedure 15. Apply for the Certificate of Occupancy and Time: 13 days Certificate of Final Electrical Inspection (CFEI) at the OBO Cost: PHP 5,013 (PHP 3 per square meter for land use fee + 25% of land use fee + Time: 1 day PHP 89 filing fee + PHP 46 certificate fee) Cost: No cost Comments: The applicant pays the locational clearance fee at the City Treasurer’s Comments: In applying for a Certificate of Occupancy, the applicant must submit Office (CTO) and obtains the locational clearance at the CPDO. the following to the OBO: a. Application for Certificate of Occupancy; Procedure 10. Apply for the building permit and ancillary permits b. Duly notarized certificate of completion; at the Office of the Building Official (OBO) c. Construction logbook; Time: 1 day d. As-built plans and specifications; and Cost: No cost e. Building inspection sheet, Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) all signed and sealed by the architect or engineer who undertook the full-time plumbing permit, and (7) electronics permit. inspection and supervision of the construction. The applicant must submit the following requirements: The CFEI certifies that a final inspection of the electrical installation has been conducted and that such installation has been completed in accordance with the a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- approved plans and specifications on file with the OBO and the provisions of the try of Deeds; Philippine Electrical Code. b. Tax declaration; c. Current real property tax receipt; Procedure 16. Apply for the Fire Safety Inspection Certificate d. Building permit application form; (FSIC) and obtain the order of payment at the BFP e. Five (5) sets of survey plans, design plans, specifications and other related Time: 1 day documents (i.e., architectural documents, civil/structural documents, electrical Cost: PHP 3,901 (10% of building permit fees) documents, mechanical documents, sanitary documents, plumbing documents, Comments: Once construction has been completed, the company requests the BFP electronics documents, geodetic documents, and clearances from other agen- to inspect the site to certify that the required fire safety construction, fire protective cies); and and/or warning systems are properly installed and in good working condition. The f. Locational clearance from the CPDO. applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies that the construction of the building was in accordance with FALAR 1), prepared by Procedure 11. Apply and obtain Fire Safety Evaluation Clearance an architect who is duly certified by the BFP to prepare this report. (FSEC) from the local Fire Marshall at the Bureau of Fire Protection (BFP) Procedure 17. Receive final inspection for the FSIC from the BFP Time: 7 days Time: 1 day Cost: PHP 19,500 (0.1% of estimated project cost) Cost: No cost (fees included in procedure 16) Comments: The FSEC is a clearance with a fire safety checklist that enumerates the life and fire safety requirements of the Fire Code. Procedure 18. Obtain the FSIC from the BFP One set of plans and specifications submitted by the applicant to the OBO is referred Time: 7 days to the City Fire Marshall, who evaluates the plans to ensure that they conform to the Cost: No cost fire safety and control requirements of the Fire Code. The applicant must also submit 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents Procedure 19*. Apply for sanitary inspection certificate at the the fire and life safety features of the building) prepared by an architect who is duly City Health Office (CHO) certified by the BFP to prepare this report. The City Fire Marshall must submit his Time: 1 day recommendations to the OBO within 5 working days from the date of referral. Cost: PHP 800 (basic fee for commercial) While the company is getting approval from the City Fire Marshall, the OBO simulta- neously processes the building permit application and checks the building plans and specifications. Procedure 20*. Receive inspection for the sanitary inspection certificate from the CHO Procedure 12. Obtain the building permit from the OBO Time: 1 day Time: 12 days Cost: No cost Cost: PHP 39,018 (according to the National Building Code of the Philippines, the cost of the building permit is PHP 23 per square meter. The computation here is Procedure 21*. Obtain the sanitary inspection certificate from based on PHP 30 per square meter to account for ancillary costs such as electrical, the CHO mechanical and plumbing fees) Time: 1 day Comments: After the building permit application is approved, the building official Cost: No cost makes an assessment and issues an order of payment for the company to pay at the CTO. Once the company has paid the building permit fees, it will present the official Procedure 22*. Receive final inspection for the Certificate of receipt to the Receiving/Releasing Section of the OBO which will then issue the Occupancy and CFEI from the OBO permit. Time: 1 day Procedure 13. Receive inspection from the BFP during construction Cost: No cost (fees included in procedure 23) Time: 1 day Comments: The OBO conducts a final inspection to check the building based on the certificate of completion, construction logbook, building inspection sheets, original Cost: No cost (fees included in procedure 11) and as-built plans and specifications. Comments: The BFP conducts an inspection during construction to ensure that the plans and fire safety precautions are observed. Procedure 23. Obtain the Certificate of Occupancy and CFEI from the OBO Procedure 14. Receive inspection from the OBO during Time: 8 days construction Cost: PHP 19,400 (PHP 850,000 - PHP 1,200,000 of the project value is PHP 1,000; Time: 1 day every PHP 1,000,000 in excess thereof is PHP 1,000; PHP 150,000 - PHP 400,000 is Cost: No cost PHP 400) Comments: During the construction of the warehouse, the OBO conducts an inspec- tion to ensure that the construction follows the approved building plans and design. 110 Doing Business IN the philippines 2011 Comments: After the OBO has processed the application and conducted the Procedure 33*. Obtain the tax declaration of improvement from inspection, it then issues an assessment and order of payment. The OBO issues the Certificate of Occupancy after the applicant has paid the corresponding fees. the CAO Time: 1 day Procedure 24. Apply for electricity connection at Manila Electric Cost: No cost Company (Meralco) Comments: The tax declaration of improvement is released after an appraiser Time: 1 day inspects the property, which can be done on the following day or sometimes even Cost: No cost on the same day. Comments: The electric company is Meralco. The company visits Meralco to request the connection and submit the CFEI and electrical plans. Meralco conducts an *This procedure can be completed simultaneously with previous procedures. inspection of the warehouse and in the following days the technical staff visits the site for the electricity connection. Dealing with Construction Permits Procedure 25. Receive inspection for electricity connection from MANDAUE Meralco Warehouse value: PHP 19,500,000 = USD 418,528 Time: 1 day Data as of: June 2010 Cost: No cost Procedure 1. Obtain certified true copy of the land title from the Procedure 26. Obtain electricity connection from Meralco Register of Deeds (RD) Time: 56 days Time: 2 days Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Cost: PHP 57 (PHP 30 for the certification + PHP 6 for each additional page (2 pages ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security needed) + PHP 15 documentary stamp tax) deposit) Comments: The certified true copy of the land title serves as proof of ownership of the land on which the warehouse is to be built. Procedure 27*. Apply for water and sewage connection at Manila Water Company, Inc. (Manila Water) Procedure 2*. Obtain certified true copy of the tax declaration of Time: 1 day real property from the City Assessor’s Office (CAO) Cost: No cost Time: 1 day Comments: The water company is Manila Water. The company visits Manila Water Cost: PHP 37 (PHP 22 certification + PHP 15 documentary stamp tax) to request the connection and inspection takes place within a week. Connection is Comments: The certified true copy of the tax declaration of real property enables effected some days after the inspection. the company to identify the property by its index number. The tax clearance serves as proof that there are no arrears in the payment of realty taxes. Procedure 28*. Receive inspection for water and sewage connection from Manila Water Procedure 3*. Obtain lot plan with site map from the geodetic Time: 1 day engineer Cost: No cost Time: 2 days Cost: PHP 1,500 Procedure 29*. Obtain water and sewage connection from Manila Comments: The company must obtain the lot plan with site map from a geodetic Water engineer to confirm the location of the land purported to be in the land title. A lot Time: 21 days plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- vey, or at least after an analysis has been conducted of the lot technical description Cost: PHP 6,855 appearing on the title. Procedure 30*. Obtain telephone connection from the telephone Procedure 4*. Obtain barangay clearance company Time: 2 days Time: 5 days Cost: PHP 200 Cost: No cost Comments: The barangay clearance is generally a requirement for obtaining the Comments: There are three telephone companies providing landline services in locational clearance. The costs for barangay clearances vary as barangays have the Mandaluyong City. These are Philippine Long Distance Co. (PLDT), Globelines and discretion to impose their own fees for as long as such fees are reasonable and Digitel. For PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months within the limits imposed by the Local Government Code and city ordinances. for the regular phone line. Globelines requires proof of financial capability but does not charge any fee. There is a lock-in period of 12 months for the regular phone line. Procedure 5. Apply for the locational clearance at the City For Digitel, the cost is PHP 2,500 and there is a lock-in period of 30 months for the Planning and Development Office (CPDO) regular phone line. The case study assumes that the company will request services from Globelines as this is the option favorable to the company. Time: 1 day Cost: No cost Procedure 31*. Apply for the tax declaration of improvement at Comments: The locational clearance is required to ensure that the construction the CAO conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. Time: 1 day The applicant must submit the following requirements: Cost: No cost a. Notarized locational clearance application form; Comments: The company must update its official records to include the newly built b. Barangay clearance; warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building c. Transfer Certificate of Title (TCT); plan and Certificate of Occupancy to notify them of the new building construction. d. Latest real property tax receipt; and The company must submit the floor plan and as-built plan to the CAO. e. Architectural plan. Procedure 32*. Receive inspection for the tax declaration of improvement at the CAO Procedure 6. Notarize the locational clearance application form at the notary Time: 1 day Time: 1 day Cost: No cost Cost: PHP 100 LIST OF PROCE DURES • DEALING WITH construction permitS 111 Procedure 7. Receive inspection for the locational clearance from One set of plans and specifications submitted by the applicant to the OBO is referred to the City Fire Marshall, who evaluates the plans to ensure that they conform to the the CPDO fire safety and control requirements of the Fire Code. The applicant must also submit Time: 1 day 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents Cost: No cost (fees included in procedure 8) the fire and life safety features of the building) prepared by an architect who is duly certified by the BFP to prepare this report. The City Fire Marshall must submit his Procedure 8. Obtain the locational clearance from the CPDO recommendations to the OBO within 5 working days from the date of referral. Time: 2 days While the company is getting approval from the City Fire Marshall, the OBO simulta- Cost: PHP 24,750 (PHP 5,000 + 1/10 of 1% of the total estimated cost of the project neously processes the building permit application and checks the building plans and in excess of PHP 2,000,000 + 10% increase) specifications. Comments: The applicant pays the locational clearance fee at the City Treasurer’s Procedure 16. Obtain the Mayor’s clearance from the City Mayor’s Office (CTO) and obtains the locational clearance at the CPDO. Office (CMO) Procedure 9. Apply for the building permit and ancillary permits Time: 1 day at the Office of the Building Official (OBO) Cost: No cost (fees included in procedure 17) Time: 1 day Comments: The Mayor’s clearance is a local procedure (Executive Order No. 10 Cost: No cost S-2006) that requires applicants of building permit with an estimated project cost of PHP 500,000 and above to go to the Mayor’s office for notation. Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) Procedure 17. Obtain the building permit from the OBO plumbing permit, and (7) electronics permit. Time: 8 days The applicant must submit the following requirements: Cost: PHP 39,018 (according to the National Building Code of the Philippines, the a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- cost of the building permit is PHP 23 per square meter. The computation here is try of Deeds; based on PHP 30 per square meter to account for ancillary costs such as electrical, b. Tax declaration; mechanical and plumbing fees) c. Current real property tax receipt; Comments: After the building permit application is approved, the building official d. Building permit application form; makes an assessment and issues an order of payment for the company to pay at the e. Five (5) sets of survey plans, design plans, specifications and other related CTO. Once the company has paid the building permit fees, it will present the official documents (i.e., architectural documents, civil/structural documents, electrical receipt to the Receiving/Releasing Section of the OBO which will then issue the documents, mechanical documents, sanitary documents, plumbing documents, permit. electronics documents, geodetic documents, and clearances from other agen- cies); and Procedure 18. Receive inspection from the BFP during f. Locational clearance from the CPDO. construction Time: 1 day Procedure 10. Get evaluation of and comments on the Cost: No cost (fees included in procedure 15) architectural plans from the OBO Comments: The BFP conducts an inspection during construction to ensure that the Time: 1 day plans and fire safety precautions are observed. Cost: No cost (fees included in procedure 17) Comments: Upon submitting the required documents for the building permit, the Procedure 19. Receive inspection from the OBO during company has to visit different sections to have the plans evaluated and approved. construction Time: 1 day Procedure 11. Get evaluation of and comments on the civil/ Cost: No cost (fees included in procedure 17) structural plans from the OBO Comments: During the construction of the warehouse, the OBO conducts an inspec- Time: 1 day tion to ensure that the construction follows the approved building plans and design. Cost: No cost (fees included in procedure 17) Procedure 20. Apply for the Certificate of Occupancy and Procedure 12. Get evaluation of and comments on the line and Certificate of Final Electrical Inspection (CFEI) at the OBO grade plans from the OBO Time: 1 day Time: 1 day Cost: No cost Cost: No cost (fees included in procedure 17) Comments: In applying for a Certificate of Occupancy, the applicant must submit the following to the OBO: Procedure 13. Get evaluation of and comments on the sanitary a. Application for Certificate of Occupancy; and plumbing plans from the OBO b. Duly notarized certificate of completion; Time: 1 day c. Construction logbook; Cost: No cost (fees included in procedure 17) d. As-built plans and specifications; and e. Building inspection sheet, Procedure 14. Get evaluation of and comments on the electrical all signed and sealed by the architect or engineer who undertook the full-time plans from the OBO inspection and supervision of the construction. Time: 1 day The CFEI certifies that a final inspection of the electrical installation has been Cost: No cost (fees included in procedure 17) conducted and that such installation has been completed in accordance with the approved plans and specifications on file with the OBO and the provisions of the Procedure 15. Apply and obtain Fire Safety Evaluation Clearance Philippine Electrical Code. (FSEC) from the local Fire Marshall at the Bureau of Fire Protection (BFP) Procedure 21. Apply for the Fire Safety Inspection Certificate Time: 7 days (FSIC) at the BFP Cost: PHP 19,500 (0.1% of estimated project cost) Time: 1 day Comments: The FSEC is a clearance with a fire safety checklist that enumerates the Cost: PHP 3,901 (10% of building permit fees) life and fire safety requirements of the Fire Code. 112 Doing Business IN the philippines 2011 Comments: Once construction has been completed, the company requests the BFP Comments: There are three telephone companies providing landline services in to inspect the site to certify that the required fire safety construction, fire protective Mandaue City. The cost is PHP 1,500 for Philippine Long Distance Co. (PLDT), and and/or warning systems are properly installed and in good working condition. The PHP 999 for Bayantel. Globelines requires proof of financial capability but does not applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies charge any fee. There is a lock-in period of 12 months for the three providers. The that the construction of the building was in accordance with FALAR 1), prepared by case study assumes that the company will request services from Globelines as this is an architect who is duly certified by the BFP to prepare this report. the option favorable to the company. Procedure 22. Receive final inspection for the FSIC from the BFP Procedure 33*. Apply for the tax declaration of improvement at Time: 1 day the CAO Cost: No cost (fees included in procedure 21) Time: 1 day Cost: No cost Procedure 23. Obtain the FSIC from the BFP Comments: The company must update its official records to include the newly built Time: 3 days warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building Cost: No cost plan and Certificate of Occupancy to notify them of the new building construction. The company must submit the floor plan and as-built plan to the CAO. Procedure 24. Receive final inspection for the Certificate of Occupancy and CFEI from the OBO Procedure 34*. Receive inspection from the Appraiser of CAO Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 25) Cost: No cost Comments: The OBO conducts a final inspection to check the building based on the Procedure 35*. Obtain the tax declaration of improvement from certificate of completion, construction logbook, building inspection sheets, original and as-built plans and specifications. the CAO Time: 1 day Procedure 25. Obtain the Certificate of Occupancy and CFEI from Cost: No cost the OBO Comments: The tax declaration of improvement is released after an appraiser Time: 10 days inspects the property, which can be done on the following day or sometimes even Cost: PHP 19,000 (PHP 1,000 for the first PHP 1,200,000 of the project value; PHP on the same day. 1,000 for every PHP 1,000,000 in excess thereof. If excess is less than PHP 500,000, there is no charge; but if more than PHP 500,000, the cost is PHP 1,000) *This procedure can be completed simultaneously with previous procedures. Comments: After the OBO has processed the application and conducted the inspection, it then issues an assessment and order of payment. The OBO issues the Dealing with Construction Permits Certificate of Occupancy after the applicant has paid the corresponding fees. MANILA Procedure 26. Apply for electricity connection at Visayan Electric Warehouse value: PHP 19,500,000 = USD 418,528 Company (VECO) Data as of: June 2010 Time: 1 day Cost: No cost Procedure 1. Obtain certified true copy of the land title from the Comments: The company visits VECO to apply for the connection and submit the Register of Deeds (RD) CFEI and electrical plans. VECO technical staff inspects the warehouse. The cost of the Time: 5 days transformers is PHP 118,644 per transformer (three needed). The total project cost is Cost: PHP 57 (PHP 30 for the certification + PHP 6 for each additional page (2 pages PHP 433,123 and is refunded after one year. needed) + PHP 15 documentary stamp tax) Comments: The certified true copy of the land title serves as proof of ownership of Procedure 27. Receive inspection for electricity connection from the land on which the warehouse is to be built. VECO Time: 1 day Procedure 2*. Obtain certified true copy of the tax declaration Cost: No cost of real property and tax clearance from the City Assessor’s Office (CAO) Procedure 28. Obtain electricity connection from VECO Time: 1 day Time: 19 days Cost: PHP 60 Cost: No cost Comments: The certified true copy of the tax declaration of real property enables the company to identify the property by its index number. The tax clearance serves Procedure 29*. Apply for water connection at Metro Cebu Water as proof that there are no arrears in the payment of realty taxes. District (MCWD) Time: 1 day Procedure 3*. Obtain lot plan with site map from the geodetic Cost: PHP 4,950 (installation fee paid during application) engineer Time: 3 days Procedure 30*. Receive inspection for water connection from Cost: PHP 1,000 MCWD Comments: The company must obtain the lot plan with site map from a geodetic Time: 1 day engineer to confirm the location of the land purported to be in the land title. A lot Cost: No cost plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- vey, or at least after an analysis has been conducted of the lot technical description Procedure 31*. Obtain water connection from MCWD appearing on the title. Time: 15 days Procedure 4. Obtain barangay clearance Cost: No cost Time: 2 days Procedure 32*. Obtain telephone connection from the telephone Cost: PHP 100 company Comments: The barangay clearance is generally a requirement for obtaining the locational clearance. The costs for barangay clearances vary as barangays have the Time: 5 days discretion to impose their own fees for as long as such fees are reasonable and Cost: No cost within the limits imposed by the Local Government Code and city ordinances. LIST OF PROCE DURES • DEALING WITH construction permitS 113 Procedure 5. Obtain locational clearance from the City Planning Procedure 11. Apply for the Certificate of Occupancy and and Development Office (CPDO) Certificate of Final Electrical Inspection (CFEI) at the OBO Time: 20 days Time: 1 day Cost: PHP 8,279 (PHP 5 per square meter for land use fee + 25% service processing Cost: No cost fee + PHP 150 application fee) Comments: In applying for a Certificate of Occupancy, the applicant must submit Comments: The locational clearance is required to ensure that the construction the following to the OBO: conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. a. Certificate of completion for mechanical; The applicant must submit the following requirements: b. Original logbook signed and sealed by Engineer-in-Charge of construction; a. Notarized locational clearance application form; c. As-built plan signed and sealed by Engineer-in-Charge in case; b. Barangay clearance; d. Electrical plan/sketch duly signed and sealed by Professional Electrical Engineer; c. Transfer Certificate of Title (TCT); and d. Latest real property tax receipt; e. Insulation/Merger test result for electrical works. e. Architectural plan; and Requirements for CFEI: f. Other documents required by the city. a. Duly accomplished electrical permit application form; b. Tax declaration/TCT; and Procedure 6. Apply for the building permit and ancillary permits c. Current tax receipt. at the Office of the Building Official (OBO) The CFEI certifies that a final inspection of the electrical installation has been Time: 1 day conducted and that such installation has been completed in accordance with the Cost: No cost approved plans and specifications on file with the OBO. Procedure 7. Apply and obtain Fire Safety Evaluation Clearance Procedure 12. Apply for the Fire Safety Inspection Certificate (FSEC) from the local Fire Marshall at the Bureau of Fire (FSIC) at the BFP Protection (BFP) Time: 1 day Time: 1 day Cost: PHP 4,801 (10% of all fees charged by the Building Official) Cost: PHP 19,500 (0.1% of estimated project cost) Comments: Once construction has been completed, the company requests the BFP Comments: The FSEC is a clearance with a fire safety checklist that enumerates the to inspect the site to certify that the required fire safety construction, fire protective life and fire safety requirements of the Fire Code. and/or warning systems are properly installed and in good working condition. The The City Fire Marshall evaluates one set of plans and specifications submitted by the applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies applicant to ensure that they conform to the fire safety and control requirements that the construction of the building was in accordance with FALAR 1), prepared by of the Fire Code. The applicant must also submit 3 sets of the Fire and Life Safety an architect who is duly certified by the BFP to prepare this report. Assessment Report (FALAR) 1 (which documents the fire and life safety features of the building) prepared by an architect who is duly certified by the BFP to prepare Procedure 13. Receive final inspection for the FSIC from the BFP this report. Time: 1 day Cost: No cost Procedure 8. Obtain the building permit and ancillary permits at the OBO Procedure 14. Obtain the FSIC from the BFP Time: 63 days Time: 14 days Cost: PHP 39,733 (PHP 600 PHP filing fee + PHP 115 for location with respect to Cost: No cost abutment to street specific charge + PHP 30 per square meter) Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ Procedure 15*. Receive final inspection for the certificate of structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) occupancy and CFEI from the OBO plumbing permit, and (7) electronics permit. Time: 1 day The applicant must submit the following requirements: Cost: No cost a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- Comments: The OBO conducts a final inspection to check the building based on the try of Deeds; Certificate of Completion, construction logbook, building inspection sheets, original b. Tax declaration; and as-built plans and specifications. c. Current real property tax receipt; d. Building permit application form; Procedure 16*. Obtain the Certificate of Occupancy and CFEI from e. Five sets of survey plans, design plans, specifications and other related documents the OBO (i.e., architectural documents, civil/structural documents, electrical documents, Time: 10 days mechanical documents, sanitary documents, plumbing documents, electronics Cost: PHP 3,122 documents, geodetic documents, and clearances from other agencies); and Comments: After the OBO has processed the application and conducted the f. Locational clearance from the CPDO. inspection, it then issues an assessment and order of payment. The OBO issues the certificate of occupancy after the applicant has paid the corresponding fees. Procedure 9. Notarize the building permit application form at the notary Procedure 17. Apply for electricity connection from Manila Time: 1 day Electric Company (Meralco) Cost: PHP 200 Time: 1 day Comments: The applications mentioned in the previous procedure should be duly Cost: No cost notarized. While submitting the application itself may be free of charge, the notariza- Comments: The electric company is Meralco. The company visits Meralco to request tion could cost about PHP 200, fixed and based on a Supreme Court circular strictly the connection and submit the CFEI and electrical plans. Meralco conducts an regulating the practice of notaries. inspection of the warehouse and in the following days the technical staff visits the site for the electricity connection. Procedure 10. Receive inspection from the OBO during construction Time: 1 day Procedure 18. Receive electricity inspection Cost: No cost Time: 1 day Comments: During the construction of the warehouse, the OBO conducts an inspec- Cost: No cost tion to ensure that the construction follows the approved building plans and design. 114 Doing Business IN the philippines 2011 Dealing with Construction Permits Procedure 19. Obtain electricity connection from MERALCO Time: 56 days MARIKINA Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Warehouse value: PHP 19,500,000 = USD 418,528 ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security Data as of: June 2010 deposit) Comments: The electric company is Manila Electric Company (Meralco). The com- Procedure 1. Obtain certified true copy of the land title from the pany visits Meralco to request the connection and submit the certificate of electrical Register of Deeds (RD) inspection and electrical plans. Meralco conducts an inspection of the warehouse Time: 1 day and in the following weeks the technical staff visit the site for the electricity connec- Cost: PHP 160 (PHP 30 for the certification + PHP 6 for each additional page (4 pages tion. needed) + PHP 112 IT fee) Comments: The certified true copy of the land title serves as proof of ownership of Procedure 20*. Apply for water and sewage connection from the land on which the warehouse is to be built. Maynilad Water Services, Inc. (Maynilad) Time: 1 day Procedure 2*. Obtain certified true copy of the tax declaration of Cost: PHP 6,411 real property from the City Assessor’s Office (CAO) Comments: The water company is Maynilad. The company visits Maynilad to Time: 1 day request the connection and inspection takes place in a week. Maynilad subcontracts Cost: PHP 50 the installation to a contractor and the time of actual installation depends on the Comments: The certified true copy of the tax declaration of real property enables contractor. the company to identify the property by its index number. The tax clearance serves as proof that there are no arrears in the payment of realty taxes. Procedure 21*. Receive inspection for water connection from Maynilad Procedure 3*. Obtain lot plan with site map from the geodetic Time: 1 day engineer Cost: No cost Time: 3 days Cost: PHP 1,000 Procedure 22*. Obtain water and sewage connection from Comments: The company must obtain the lot plan with site map from a geodetic Maynilad engineer to confirm the location of the land purported to be in the land title. A lot Time: 30 days plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Cost: No cost vey, or at least after an analysis has been conducted of the lot technical description appearing on the title. Procedure 23*. Obtain telephone connection from the telephone company Procedure 4*. Obtain barangay clearance Time: 5 days Time: 2 days Cost: PHP 1,500 Cost: PHP 500 Comments: There are three telephone companies providing landline services in Ma- Comments: The barangay clearance is generally a requirement for obtaining the nila City. The cost is PHP 1,500 for Philippine Long Distance Co. (PLDT), and PHP 999 locational clearance. The costs for barangay clearances vary as barangays have the for Bayantel. Globelines requires proof of financial capability but does not charge any discretion to impose their own fees for as long as such fees are reasonable and fee. There is a lock-in period of 12 months for the three providers. The case study within the limits imposed by the Local Government Code and city ordinances. assumes that the company will request services from Globelines as this is the option most favorable to the company. Procedure 5. Apply for the locational clearance, building permit and ancillary permits at the Office of the Building Official (OBO) Procedure 24*. Apply for the tax declaration of improvement at Time: 1 day the CAO Cost: No cost Time: 1 day Comments: The Receiving Section of the OBO receives the applications and assigns Cost: No cost a bar code number. The applicant is asked to return after five to seven days to pick up Comments: The company must update its official records to include the newly built the locational clearance and building permit. warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building The locational clearance confirms that the intended land use conforms to the local plan and certificate of occupancy to notify them of the new building construction. government’s zoning ordinances. If the OBO finds that the project does not conform The company must submit the floor plan and as-built plan to the CAO. to land use, it automatically terminates the processing of the building permit. The applicant must submit the following requirements: Procedure 25*. Receive inspection from the Appraiser of CAO a. Notarized locational clearance application form; Time: 1 day b. Barangay clearance; Cost: No cost c. Transfer Certificate of Title (TCT); Procedure 26*. Obtain tax declaration of improvement at CAO d. Latest real property tax receipt; and e. Architectural plan. Time: 1 day Cost: No cost Procedure 6. Receive inspection for the locational clearance from Comments: The tax declaration of improvement is released after an appraiser the OBO inspects the property, which can be done on the following day or sometimes even Time: 1 day on the same day. Cost: No cost (fees included in procedure 7) *This procedure can be completed simultaneously with previous procedures. Procedure 7. Obtain the locational clearance from the OBO Time: 1 day Cost: PHP 1,940 (PHP 1,000 + 1/10 of 1% in excess of PHP 100,000) Comments: The applicant pays the locational clearance fee at the City Treasurer’s Office (CTO) and obtains the locational clearance at the OBO. LIST OF PROCE DURES • DEALING WITH construction permitS 115 Procedure 8. Notarize the building permit application form at the d. As-built plans and specifications; and notary e. Building inspection sheet, Time: 1 day all signed and sealed by the architect or engineer who undertook the full-time inspection and supervision of the construction. Cost: PHP 100 The CFEI certifies that a final inspection of the electrical installation has been Procedure 9. Apply and obtain Fire Safety Evaluation Clearance conducted and that such installation has been completed in accordance with the approved plans and specifications on file with the OBO and the provisions of the (FSEC) from the local Fire Marshall at the Bureau of Fire Philippine Electrical Code. Protection (BFP) Time: 2 days Procedure 14. Apply for the Fire Safety Inspection Certificate Cost: PHP 19,500 (0.1% of the estimated project cost) (FSIC) at the BFP Comments: The FSEC is a clearance with a fire safety checklist that enumerates the Time: 1 day life and fire safety requirements of the Fire Code. Cost: PHP 1,930 (10% of certificate of occupancy fees) One set of plans and specifications submitted by the applicant to the OBO is referred Comments: Once construction has been completed, the company requests the BFP to the City Fire Marshall, who evaluates the plans to ensure that they conform to the to inspect the site to certify that the required fire safety construction, fire protective fire safety and control requirements of the Fire Code. The applicant must also submit and/or warning systems are properly installed and in good working condition. The 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies the fire and life safety features of the building) prepared by an architect who is duly that the construction of the building was in accordance with FALAR 1), prepared by certified by the BFP to prepare this report. The City Fire Marshall must submit his an architect who is duly certified by the BFP to prepare this report. recommendations to the OBO within 5 working days from the date of referral. While the company is getting approval from the City Fire Marshall, the OBO simulta- Procedure 15. Receive final inspection for the FSIC from the BFP neously processes the building permit application and checks the building plans and Time: 1 day specifications. Cost: No cost (fees included in procedure 14) Procedure 10. Obtain the building permit from the OBO Comments: The OBO conducts a final inspection to check the building based on the certificate of completion, construction logbook, building inspection sheets, original Time: 11 days and as-built plans and specifications. Cost: PHP 39,018 (according to the National Building Code of the Philippines, the cost of the building permit is PHP 23 per square meter. The computation here is Procedure 16. Obtain the FSIC from the BFP based on PHP 30 per square meter to account for ancillary costs such as electrical, mechanical and plumbing fees) Time: 2 days Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ Cost: No cost structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) Comments: After the OBO has processed the application and conducted the plumbing permit, and (7) electronics permit. inspection, it then issues an assessment and order of payment. The OBO issues the The applicant must submit the following requirements: Certificate of Occupancy after the applicant has paid the corresponding fees. a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- Procedure 17. Receive final inspection for the Certificate of try of Deeds; Occupancy and CFEI from the OBO b. Tax declaration; Time: 1 day c. Current real property tax receipt; Cost: No cost (fees included in procedure 18) d. Building permit application form; e. Five (5) sets of survey plans, design plans, specifications and other related Procedure 18. Obtain the Certificate of Occupancy and CFEI from documents (i.e., architectural documents, civil/structural documents, electrical the OBO documents, mechanical documents, sanitary documents, plumbing documents, electronics documents, geodetic documents, and clearances from other agen- Time: 3 days cies); and Cost: PHP 19,300 (PHP 1,000 for every PHP 1,200,000 of the project value; PHP 1,000 f. Locational clearance from the CPDO. for every million in excess thereof) Procedure 11. Receive inspection from the BFP during Procedure 19. Apply for electricity connection at Manila Electric construction Company (Meralco) Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 9) Cost: No cost Comments: The BFP conducts an inspection during construction to ensure that the Comments: The electric company is Meralco. The company visits Meralco to request plans and fire safety precautions are observed. the connection and submit the CFEI and electrical plans. Meralco conducts an inspection of the warehouse and in the following days the technical staff visits the Procedure 12. Receive inspection from the OBO during site for the electricity connection. construction Procedure 20. Receive inspection for electricity connection from Time: 1 day Meralco Cost: No cost (fees included in procedure 10) Time: 1 day Comments: During the construction of the warehouse, the OBO conducts an inspec- Cost: No cost tion to ensure that the construction follows the approved building plans and design. Procedure 21. Obtain electricity connection from Meralco Procedure 13. Apply for the Certificate of Occupancy and Certificate of Final Electrical Inspection (CFEI) at the OBO Time: 56 days Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Time: 1 day ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security Cost: No cost deposit) Comments: In applying for a Certificate of Occupancy, the applicant must submit the following to the OBO: Procedure 22*. Apply for water and sewage connection at Manila a. Application for Certificate of Occupancy; Water Company, Inc. (Manila Water) b. Duly notarized certificate of completion; Time: 1 day c. Construction logbook; Cost: No cost 116 Doing Business IN the philippines 2011 Comments: The water company is Manila Water. The company visits Manila Water Comments: The certified true copy of the tax declaration of real property enables to request the connection and inspection takes place within a week. Connection is the company to identify the property by its index number. The tax clearance serves effected some days after the inspection. as proof that there are no arrears in the payment of realty taxes. Procedure 23*. Receive inspection for water and sewage Procedure 3*. Obtain lot plan with site map from the geodetic connection from Manila Water engineer Time: 1 day Time: 3 days Cost: No cost Cost: PHP 2,000 Comments: The company must obtain the lot plan with site map from a geodetic Procedure 24*. Obtain water and sewage connection from Manila engineer to confirm the location of the land purported to be in the land title. A lot Water plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Time: 21 days vey, or at least after an analysis has been conducted of the lot technical description appearing on the title. Cost: PHP 6,855 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transformers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security deposit) Procedure 4*. Obtain barangay clearance Procedure 25*. Obtain telephone connection from the telephone Time: 2 days company Cost: PHP 500 Time: 5 days Comments: The barangay clearance is generally a requirement for obtaining the Cost: No cost locational clearance. The costs for barangay clearances vary as barangays have the discretion to impose their own fees for as long as such fees are reasonable and Comments: There are three telephone companies providing landline services in within the limits imposed by the Local Government Code and city ordinances. Marikina City. These are Philippine Long Distance Co. (PLDT), Globelines and Digitel. For PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months for the Procedure 5. Apply for the locational clearance at the City Zoning regular phone line. Globelines requires proof of financial capability but does not charge any fee. There is a lock-in period of 12 months for the regular phone line. Administration Office (CZAO) For Digitel, the cost is PHP 2,500 and there is a lock-in period of 30 months for the Time: 1 day regular phone line. The case study assumes that the company will request services Cost: No cost from Globelines as this is the option favorable to the company. Comments: The locational clearance is required to ensure that the construction conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. Procedure 26*. Apply for the tax declaration of improvement at The applicant must submit the following requirements: the CAO a. Barangay clearance; Time: 1 day b. Transfer Certificate of Title (TCT); Cost: No cost c. Latest real property tax receipt; Comments: The company must update its official records to include the newly built warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building d. Fault line survey report; and plan and Certificate of Occupancy to notify them of the new building construction. e. Architectural plan. The company must submit the floor plan and as-built plan to the CAO. Procedure 6. Apply for fault line survey report at Muntinlupa City Procedure 27*. Receive inspection from the Appraiser of CAO Disaster Coordinating Council (MCDCC) Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: The company requests a fault line survey report from MCDCC. MCDCC Procedure 28*. Obtain tax declaration of improvement from the inspects the site to check whether the construction is within the fault line zone. If CAO the building is within the fault line zone, MCDCC will advise the company to move in Time: 1 day a buffer zone, which is 5 meters away from the fault line zone. Cost: No cost Procedure 7. Receive inspection for the fault line survey report Comments: The tax declaration of improvement is released after an appraiser from MCDCC inspects the property, which can be done on the following day or sometimes even on the same day. Time: 1 day Cost: No cost *This procedure can be completed simultaneously with previous procedures. Procedure 8. Receive inspection for the locational clearance from the CZAO Dealing with Construction Permits Time: 1 day MUNTINLUPA Cost: No cost Warehouse value: PHP 19,500,000 = USD 418,528 Data as of: June 2010 Procedure 9. Obtain the locational clearance from the CZAO Time: 3 days Procedure 1. Obtain certified true copy of the land title from the Cost: PHP 12,368 (based on amended Zoning Ordinance of June 2008. PHP 175 filing Register of Deeds (RD) fee + PHP 7.5 per square meter for land use fee + 25% of land use fee for processing Time: 2 days fee) Cost: PHP 57 (PHP 30 for the certification + PHP 6 for each additional page (2 pages Comments: The applicant pays the locational clearance fee at the City Treasurer’s needed) + PHP 15 documentary stamp tax) Office (CTO) and obtains the locational clearance at the CZAO. Comments: The certified true copy of the land title serves as proof of ownership of the land on which the warehouse is to be built. Procedure 10. Apply for the building permit and ancillary permits at the Office of the Building Official (OBO) Procedure 2*. Obtain certified true copy of the tax declaration of Time: 1 day real property from the City Assessor’s Office (CAO) Cost: No cost Time: 1 day Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ Cost: PHP 50 structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) plumbing permit, and (7) electronics permit. LIST OF PROCE DURES • DEALING WITH construction permitS 117 The applicant must submit the following requirements: b. Duly notarized certificate of completion; a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- c. Construction logbook; try of Deeds; d. As-built plans and specifications; and b. Tax declaration; e. Building inspection sheet, c. Current real property tax receipt; all signed and sealed by the architect or engineer who undertook the full-time d. Building permit application form; inspection and supervision of the construction. e. Five (5) sets of survey plans, design plans, specifications and other related The CFEI certifies that a final inspection of the electrical installation has been documents (i.e., architectural documents, civil/structural documents, electrical conducted and that such installation has been completed in accordance with the documents, mechanical documents, sanitary documents, plumbing documents, approved plans and specifications on file with the OBO and the provisions of the electronics documents, geodetic documents, and clearances from other agen- Philippine Electrical Code. cies); and f. Locational clearance from the CZAO. Procedure 17. Apply for the Fire Safety Inspection Certificate (FSIC) at the BFP Procedure 11. Notarize the building permit application form at Time: 1 day the notary Cost: PHP 3,901 (10% of building permit fees) Time: 1 day Comments: Once construction has been completed, the company requests the BFP Cost: PHP 100 to inspect the site to certify that the required fire safety construction, fire protective and/or warning systems are properly installed and in good working condition. The Procedure 12. Apply and obtain Fire Safety Evaluation Clearance applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies (FSEC) from the local Fire Marshall at the Bureau of Fire that the construction of the building was in accordance with FALAR 1), prepared by Protection (BFP) an architect who is duly certified by the BFP to prepare this report. Time: 7 days Procedure 18. Receive final inspection for the FSIC from the BFP Cost: PHP 19,500 (0.1% of estimated project cost) Time: 1 day Comments: The FSEC is a clearance with a fire safety checklist that enumerates the Cost: No cost (fees included in procedure 17) life and fire safety requirements of the Fire Code. One set of plans and specifications submitted by the applicant to the OBO is referred Procedure 19. Obtain the FSIC from the BFP to the City Fire Marshall, who evaluates the plans to ensure that they conform to the fire safety and control requirements of the Fire Code. The applicant must also submit Time: 2 days 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents Cost: No cost the fire and life safety features of the building) prepared by an architect who is duly certified by the BFP to prepare this report. The City Fire Marshall must submit his Procedure 20. Receive final inspection for the Certificate of recommendations to the OBO within 5 working days from the date of referral. Occupancy and CFEI from the OBO While the company is getting approval from the City Fire Marshall, the OBO simulta- Time: 1 day neously processes the building permit application and checks the building plans and Cost: No cost (fees included in procedure 21) specifications. Comments: The OBO conducts a final inspection to check the building based on the certificate of completion, construction logbook, building inspection sheets, original Procedure 13. Obtain the building permit from the OBO and as-built plans and specifications. Time: 13 days Cost: PHP 39,018 (according to the National Building Code of the Philippines, the Procedure 21. Obtain the Certificate of Occupancy and CFEI from cost of the building permit is PHP 23 per square meter. The computation here is the OBO based on PHP 30 per square meter to account for ancillary costs such as electrical, Time: 8 days mechanical and plumbing fees) Cost: PHP 19,500 (PHP 1,000 per PHP 1,000,000 of the project value) Comments: After the building permit application is approved, the building official makes an assessment and issues an order of payment for the company to pay at the Comments: After the OBO has processed the application and conducted the CTO. Once the company has paid the building permit fees, it will present the official inspection, it then issues an assessment and order of payment. The OBO issues the receipt to the Receiving/Releasing Section of the OBO which will then issue the Certificate of Occupancy after the applicant has paid the corresponding fees. permit. Procedure 22. Apply for electricity connection at Manila Electric Procedure 14. Receive inspection from the BFP during Company (Meralco) construction Time: 1 day Time: 1 day Cost: No cost Cost: No cost (fees included in procedure 12) Comments: The electric company is Meralco. The company visits Meralco to request Comments: The BFP conducts an inspection during construction to ensure that the the connection and submit the CFEI and electrical plans. Meralco conducts an plans and fire safety precautions are observed. inspection of the warehouse and in the following days the technical staff visits the site for the electricity connection. Procedure 15. Receive inspection from the OBO during construction Procedure 23. Receive inspection for electricity connection from Meralco Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 13) Cost: No cost Comments: During the construction of the warehouse, the OBO conducts an inspec- tion to ensure that the construction follows the approved building plans and design. Procedure 24. Obtain electricity connection from Meralco Procedure 16. Apply for the Certificate of Occupancy and Time: 56 days Certificate of Final Electrical Inspection (CFEI) at the OBO Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Time: 1 day ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security deposit) Cost: No cost Comments: In applying for a Certificate of Occupancy, the applicant must submit the following to the OBO: a. Application for Certificate of Occupancy; 118 Doing Business IN the philippines 2011 Procedure 25*. Apply for water and sewage connection at Procedure 2*. Obtain certified true copy of the tax declaration of Maynilad Water Services, Inc. (Maynilad) real property from the City Assessor’s Office (CAO) Time: 1 day Time: 1 day Cost: No cost Cost: PHP 75 (PHP 30 verification fee + PHP 30 certification + PHP 15 documentary Comments: The water company is Maynilad. The company visits Maynilad to request stamp tax) the connection and inspection takes place within a week. Maynilad subcontracts Comments: The certified true copy of the tax declaration of real property enables the installation with a contractor and the time of actual installation depends on the the company to identify the property by its index number. The tax clearance serves contractor. as proof that there are no arrears in the payment of realty taxes. Procedure 26*. Receive inspection for water and sewage Procedure 3*. Obtain lot plan with site map from the geodetic connection from Maynilad engineer Time: 1 day Time: 2 days Cost: No cost Cost: PHP 1,500 Comments: The company must obtain the lot plan with site map from a geodetic Procedure 27*. Obtain water and sewage connection from engineer to confirm the location of the land purported to be in the land title. A lot Maynilad plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Time: 30 days vey, or at least after an analysis has been conducted of the lot technical description appearing on the title. Cost: PHP 7,455 Procedure 28*. Obtain telephone connection from the telephone Procedure 4*. Obtain barangay clearance company Time: 2 days Time: 5 days Cost: PHP 200 Cost: No cost Comments: The barangay clearance is generally a requirement for obtaining the locational clearance. The costs for barangay clearances vary as barangays have the Comments: There are three telephone companies providing landline services in discretion to impose their own fees for as long as such fees are reasonable and Muntinlupa City. These are Philippine Long Distance Co. (PLDT), Globelines and within the limits imposed by the Local Government Code and city ordinances. Digitel. For PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months for the regular phone line. Globelines requires proof of financial capability but does Procedure 5. Apply for the building permit and ancillary permits not charge any fee. There is a lock-in period of 12 months for the regular phone line. For Digitel, the cost is PHP 2,500 and there is a lock-in period of 30 months for the at the Office of the Building Official (OBO) regular phone line. The case study assumes that the company will request services Time: 1 day from Globelines as this is the option favorable to the company. Cost: No cost Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ Procedure 29*. Apply for the tax declaration of improvement at structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) the CAO plumbing permit, and (7) electronics permit. Time: 1 day The applicant must submit the following requirements: Cost: No cost a. Certified true copy of Original Certificate of Title (OCT)/Transfer Certificate of Title Comments: The company must update its official records to include the newly built (TCT) on file with the Registry of Deeds; warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building b. Tax declaration; plan and Certificate of Occupancy to notify them of the new building construction. c. Current real property tax receipt; The company must submit the floor plan and as-built plan to the CAO. d. Building permit application form; and Procedure 30*. Receive inspection from the Appraiser of CAO e. Five (5) sets of survey plans, design plans, specifications and other related documents (i.e., architectural documents, civil/structural documents, electrical Time: 1 day documents, mechanical documents, sanitary documents, plumbing documents, Cost: No cost electronics documents, geodetic documents, and clearances from other agen- cies). Procedure 31*. Obtain the tax declaration of improvement from the CAO Procedure 6. Notarize the building permit application form at the Time: 1 day notary Cost: No cost Time: 1 day Comments: The tax declaration of improvement is released after an appraiser Cost: PHP 100 inspects the property, which can be done on the following day or sometimes even on the same day. Procedure 7. Apply for the locational clearance at the City Planning and Development Office (CPDO) *This procedure can be completed simultaneously with previous procedures. Time: 1 day Cost: No cost Dealing with Construction Permits Comments: The locational clearance is required to ensure that the construction conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. NAVOTAS The applicant must submit the following requirements: Warehouse value: PHP 19,500,000 = USD 418,528 a. Barangay clearance; Data as of: June 2010 b. TCT; Procedure 1. Obtain certified true copy of the land title from the c. Latest real property tax receipt; and Register of Deeds (RD) d. Architectural plan. Time: 2 days Cost: PHP 57 (PHP 30 for the certification + PHP 6 for each additional page (2 pages Procedure 8. Obtain the locational clearance from the CPDO needed) + PHP 15 documentary stamp tax) Time: 7 days Comments: The certified true copy of the land title serves as proof of ownership of Cost: PHP 13,056 (PHP 10 per square meter + PHP 50 processing fee) the land on which the warehouse is to be built. Comments: The applicant pays the locational clearance fee at the City Treasurer’s Office (CTO) and obtains the locational clearance at the CPDO. LIST OF PROCE DURES • DEALING WITH construction permitS 119 Procedure 9*. Apply and obtain Fire Safety Evaluation Clearance Comments: Once construction has been completed, the company requests the BFP to inspect the site to certify that the required fire safety construction, fire protective (FSEC) from the local Fire Marshall at the Bureau of Fire and/or warning systems are properly installed and in good working condition. The Protection (BFP) applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies Time: 9 days that the construction of the building was in accordance with FALAR 1), prepared by Cost: PHP 19,500 (0.1% of estimated project cost) an architect who is duly certified by the BFP to prepare this report. Comments: The FSEC is a clearance with a fire safety checklist that enumerates the life and fire safety requirements of the Fire Code. Procedure 15. Receive final inspection for the FSIC from the BFP One set of plans and specifications submitted by the applicant to the OBO is referred Time: 1 day to the City Fire Marshall, who evaluates the plans to ensure that they conform to the Cost: No cost (fees included in procedure 14) fire safety and control requirements of the Fire Code. The applicant must also submit 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents Procedure 16. Obtain the FSIC from the BFP the fire and life safety features of the building) prepared by an architect who is duly Time: 3 days certified by the BFP to prepare this report. The City Fire Marshall must submit his Cost: No cost recommendations to the OBO within 5 working days from the date of referral. While the company is getting approval from the City Fire Marshall, the OBO simulta- Procedure 17. Receive final inspection for the Certificate of neously processes the building permit application and checks the building plans and Occupancy and CFEI from the OBO specifications. Time: 1 day Procedure 10. Obtain the building permit from the OBO Cost: No cost (fees included in procedure 18) Time: 9 days Comments: The OBO conducts a final inspection to check the building based on the Cost: PHP 39,018 (according to the National Building Code of the Philippines, the certificate of completion, construction logbook, building inspection sheets, original cost of the building permit is PHP 23 per square meter. The computation here is and as-built plans and specifications. based on PHP 30 per square meter to account for ancillary costs such as electrical, mechanical and plumbing fees) Procedure 18. Obtain the Certificate of Occupancy and CFEI from Comments: After the building permit application is approved, the building official the OBO makes an assessment and issues an order of payment for the company to pay at the Time: 13 days CTO. Once the company has paid the building permit fees, it will present the official Cost: PHP 20,000 (PHP 1,000 per PHP 1,000,000 of the project value) receipt to the Receiving/Releasing Section of the OBO which will then issue the Comments: After the OBO has processed the application and conducted the permit. inspection, it then issues an assessment and order of payment. The OBO issues the Certificate of Occupancy after the applicant has paid the corresponding fees. Procedure 11. Receive inspection from the BFP during construction Procedure 19. Apply for electricity connection at Manila Electric Time: 1 day Company (Meralco) Cost: No cost (fees included in procedure 9) Time: 1 day Comments: The BFP conducts an inspection during construction to ensure that the Cost: No cost plans and fire safety precautions are observed. Comments: The electric company is Meralco. The company visits Meralco to request the connection and submit the CFEI and electrical plans. Meralco conducts an Procedure 12. Receive inspection from the OBO during inspection of the warehouse and in the following days the technical staff visits the construction site for the electricity connection. Time: 1 day Cost: No cost (fees included in procedure 10) Procedure 20. Receive inspection for electricity connection from Comments: During the construction of the warehouse, the OBO conducts an inspec- Meralco tion to ensure that the construction follows the approved building plans and design. Time: 1 day Cost: No cost Procedure 13. Apply for the Certificate of Occupancy and Certificate of Final Electrical Inspection (CFEI) at the OBO Procedure 21. Obtain electricity connection from Meralco Time: 1 day Time: 56 days Cost: No cost Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Comments: In applying for a Certificate of Occupancy, the applicant must submit ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security the following to the OBO: deposit) a. Application for Certificate of Occupancy; Procedure 22*. Apply for water and sewage connection at b. Duly notarized certificate of completion; Maynilad Water Services, Inc. (Maynilad) c. Construction logbook; Time: 1 day d. As-built plans and specifications; and Cost: No cost e. Building inspection sheet, Comments: The water company is Maynilad. The company visits Maynilad to request all signed and sealed by the architect or engineer who undertook the full-time the connection and inspection takes place within a week. Connection is effected inspection and supervision of the construction. some days after the inspection. The CFEI certifies that a final inspection of the electrical installation has been conducted and that such installation has been completed in accordance with the Procedure 23*. Receive inspection for water and sewage approved plans and specifications on file with the OBO and the provisions of the connection from Maynilad Philippine Electrical Code. Time: 1 day Procedure 14. Apply for the Fire Safety Inspection Certificate Cost: No cost (FSIC) and obtain the order of payment from the BFP Procedure 24*. Obtain water and sewage connection from Time: 1 day Maynilad Cost: PHP 3,901 (10% of building permit fees) Time: 30 days Cost: PHP 7,455 120 Doing Business IN the philippines 2011 Procedure 25*. Obtain telephone connection from the telephone Procedure 4*. Obtain barangay clearance company Time: 2 days Time: 5 days Cost: PHP 350 Cost: No cost Comments: The barangay clearance is generally a requirement for obtaining the Comments: There are three telephone companies providing landline services in locational clearance. The costs for barangay clearances vary as barangays have the Navotas City. These are Philippine Long Distance Co. (PLDT), Globelines, and Digitel. discretion to impose their own fees for as long as such fees are reasonable and For PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months for the within the limits imposed by the Local Government Code and city ordinances. regular phone line. Globelines requires proof of financial capability but does not charge any fee. There is a lock-in period of 12 months for the regular phone line. Procedure 5. Apply for the locational clearance at the City For Digitel, the cost is PHP 2,500 and there is a lock-in period of 30 months for the Planning and Development Office (CPDO) regular phone line. The case study assumes that the company will request services Time: 1 day from Globelines as this is the option favorable to the company. Cost: No cost Procedure 26*. Apply for the tax declaration of improvement at Comments: The locational clearance is required to ensure that the construction the CAO conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. Time: 1 day The applicant must submit the following requirements: Cost: No cost a. Barangay clearance; Comments: The company must update its official records to include the newly built b. Transfer Certificate of Title (TCT); warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building c. Latest real property tax receipt; and plan and Certificate of Occupancy to notify them of the new building construction. d. Architectural plan. The company must submit the floor plan and as-built plan to the CAO. Procedure 6. Obtain the locational clearance from the CPDO Procedure 27*. Receive inspection from the Appraiser of CAO Time: 4 days Time: 1 day Cost: PHP 30,288 (PHP 15 per square meter for land use fee + PHP 500 filing fee + Cost: No cost 25% of land use fee + PHP 4 per square meter for open space + PHP 200 processing fee) Procedure 28*. Obtain the tax declaration of improvement from Comments: The applicant pays the locational clearance fee at the City Treasurer’s the CAO Office (CTO) and obtains the locational clearance at the CPDO. Time: 12 days Cost: No cost Procedure 7. Apply for the building permit and ancillary permits Comments: The tax declaration of improvement is released after an appraiser at the Office of the Building Official (OBO) inspects the property, which can be done on the following day or sometimes even Time: 1 day on the same day. Cost: PHP 500 (filing fee) Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) *This procedure can be completed simultaneously with previous procedures. plumbing permit, and (7) electronics permit. The applicant must submit the following requirements: Dealing with Construction Permits a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- PARAÑAQUE try of Deeds; Warehouse value: PHP 19,500,000 = USD 418,528 b. Tax declaration; Data as of: June 2010 c. Current real property tax receipt; d. Building permit application form; Procedure 1. Obtain certified true copy of the land title from the e. Five (5) sets of survey plans, design plans, specifications and other related Register of Deeds (RD) documents (i.e., architectural documents, civil/structural documents, electrical Time: 1 day documents, mechanical documents, sanitary documents, plumbing documents, Cost: PHP 160 (PHP 30 for the certification + PHP 6 for each additional page (4 pages electronics documents, geodetic documents, and clearances from other agen- needed) + PHP 112 IT fee) cies); and Comments: The certified true copy of the land title serves as proof of ownership of f. Locational clearance from the CPDO. the land on which the warehouse is to be built. The city is using the old building permit application forms not requiring notarization. Procedure 2*. Obtain certified true copy of the tax declaration of Procedure 8. Get evaluation of and comments on the real property from the City Assessor’s Office (CAO) architectural plans from the OBO Time: 1 day Time: 1 day Cost: PHP 50 Cost: No cost (fees included in procedure 14) Comments: The certified true copy of the tax declaration of real property enables Comments: Upon submitting the required documents for the building permit, the the company to identify the property by its index number. The tax clearance serves company has to visit different sections to have the plans evaluated and approved. as proof that there are no arrears in the payment of realty taxes. Procedure 9. Get evaluation of and comments on the civil/ Procedure 3*. Obtain lot plan with site map from the geodetic structural plans from the OBO engineer Time: 1 day Time: 3 days Cost: No cost (fees included in procedure 14) Cost: PHP 1,500 Comments: The company must obtain the lot plan with site map from a geodetic Procedure 10. Get evaluation of and comments on the line and engineer to confirm the location of the land purported to be in the land title. A lot grade plans from the OBO plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Time: 1 day vey, or at least after an analysis has been conducted of the lot technical description Cost: No cost (fees included in procedure 14) appearing on the title. LIST OF PROCE DURES • DEALING WITH construction permitS 121 Procedure 11. Get evaluation of and comments on the sanitary The CFEI certifies that a final inspection of the electrical installation has been conducted and that such installation has been completed in accordance with the and plumbing plans from the OBO approved plans and specifications on file with the OBO and the provisions of the Time: 1 day Philippine Electrical Code. Cost: No cost (fees included in procedure 14) Procedure 18. Apply for the Fire Safety Inspection Certificate Procedure 12. Get evaluation of and comments on the electrical (FSIC) at the BFP plans from the OBO Time: 1 day Time: 1 day Cost: PHP 5,972 (10% of building permit and certificate of occupancy fees) Cost: No cost (fees included in procedure 14) Comments: Once construction has been completed, the company requests the BFP to inspect the site to certify that the required fire safety construction, fire protective Procedure 13. Apply and obtain Fire Safety Evaluation Clearance and/or warning systems are properly installed and in good working condition. The (FSEC) from the local Fire Marshall at the Bureau of Fire applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies Protection (BFP) that the construction of the building was in accordance with FALAR 1), prepared by Time: 4 days an architect who is duly certified by the BFP to prepare this report. Cost: PHP 19,500 (0.1% of estimated project cost) Procedure 19. Receive final inspection for the FSIC from the BFP Comments: The FSEC is a clearance with a fire safety checklist that enumerates the Time: 1 day life and fire safety requirements of the Fire Code. Cost: No cost (fees included in procedure 18) One set of plans and specifications submitted by the applicant to the OBO is referred to the City Fire Marshall, who evaluates the plans to ensure that they conform to the fire safety and control requirements of the Fire Code. The applicant must also submit Procedure 20. Obtain the FSIC from the BFP 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents Time: 2 days the fire and life safety features of the building) prepared by an architect who is duly Cost: No cost certified by the BFP to prepare this report. The City Fire Marshall must submit his recommendations to the OBO within 5 working days from the date of referral. Procedure 21. Receive final inspection for the Certificate of While the company is getting approval from the City Fire Marshall, the OBO simulta- Occupancy and CFEI from the OBO neously processes the building permit application and checks the building plans and Time: 1 day specifications. Cost: No cost (fees included in procedure 22) Procedure 14. Obtain the building permit from the OBO Comments: The OBO conducts a final inspection to check the building based on the certificate of completion, construction logbook, building inspection sheets, original Time: 16 days and as-built plans and specifications. Cost: PHP 39,018 (according to the National Building Code of the Philippines, the cost of the building permit is PHP 23 per square meter. The computation here is Procedure 22. Obtain the Certificate of Occupancy and CFEI from based on PHP 30 per square meter to account for ancillary costs such as electrical, the OBO mechanical and plumbing fees) Time: 5 days Comments: After the building permit application is approved, the building official makes an assessment and issues an order of payment for the company to pay at the Cost: PHP 20,700 (PHP 200 inspection fee + PHP 1,000 per PHP 1,000,000 of the CTO. Once the company has paid the building permit fees, it will present the official project + PHP 500 filing fee) receipt to the Receiving/Releasing Section of the OBO which will then issue the Comments: After the OBO has processed the application and conducted the permit. inspection, it then issues an assessment and order of payment. The OBO issues the Certificate of Occupancy after the applicant has paid the corresponding fees. Procedure 15. Receive inspection from the BFP during construction Procedure 23. Apply for electricity connection at Manila Electric Time: 1 day Company (Meralco) Cost: No cost (fees included in procedure 13) Time: 1 day Comments: The BFP conducts an inspection during construction to ensure that the Cost: No cost plans and fire safety precautions are observed. Comments: The electric company is Meralco. The company visits Meralco to request the connection and submit the CFEI and electrical plans. Meralco conducts an Procedure 16. Receive inspection from the OBO during inspection of the warehouse and in the following days the technical staff visits the construction site for the electricity connection. Time: 1 day Procedure 24. Receive inspection for electricity connection from Cost: No cost (fees included in procedure 14) Meralco Comments: During the construction of the warehouse, the OBO conducts an inspec- Time: 1 day tion to ensure that the construction follows the approved building plans and design. Cost: No cost Procedure 17. Apply for the Certificate of Occupancy and Certificate of Final Electrical Inspection (CFEI) at the OBO Procedure 25. Obtain electricity connection from Meralco Time: 56 days Time: 1 day Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Cost: No cost ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security Comments: In applying for a Certificate of Occupancy, the applicant must submit deposit) the following to the OBO: a. Application for Certificate of Occupancy; Procedure 26*. Apply for water and sewage connection at b. Duly notarized certificate of completion; Maynilad Water Services, Inc. (Maynilad) c. Construction logbook; Time: 1 day d. As-built plans and specifications; and Cost: No cost e. Building inspection sheet, Comments: The water company is Maynilad. The company visits Maynilad to request all signed and sealed by the architect or engineer who undertook the full-time the connection and inspection takes place within a week. Connection is effected inspection and supervision of the construction. some days after the inspection. 122 Doing Business IN the philippines 2011 Procedure 27*. Receive inspection for water and sewage Procedure 4*. Obtain barangay clearance connection from Maynilad Time: 2 days Time: 1 day Cost: PHP 100 Cost: No cost Comments: The barangay clearance is generally a requirement for obtaining the locational clearance. The costs for barangay clearances vary as barangays have the Procedure 28*. Obtain water and sewage connection from discretion to impose their own fees for as long as such fees are reasonable and Maynilad within the limits imposed by the Local Government Code and city ordinances. Time: 30 days Procedure 5. Apply for the locational clearance at the City Cost: PHP 7,455 Planning and Development Office (CPDO) Procedure 29*. Obtain telephone connection from the telephone Time: 1 day company Cost: No cost Time: 5 days Comments: The locational clearance is required to ensure that the construction Cost: No cost conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. Comments: There are three telephone companies providing landline services in The applicant must submit the following requirements: Parañaque City. These are Philippine Long Distance Co. (PLDT), Globelines, and a. Notarized locational clearance application form; Digitel. For PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months b. Barangay clearance; for the regular phone line. Globelines requires proof of financial capability but does c. Transfer Certificate of Title (TCT); not charge any fee. There is a lock-in period of 12 months for the regular phone line. For Digitel, the cost is PHP 2,500 and there is a lock-in period of 30 months for the d. Latest real property tax receipt; regular phone line. The case study assumes that the company will request services e. Architectural plan; from Globelines as this is the option favorable to the company. f. Photographs of the site; g. Vicinity/location map/lot plan duly signed and sealed by geodetic engineer; and Procedure 30*. Obtain the tax declaration of improvement from h. Environmental Compliance Certificate (ECC) or Certificate of Non-Coverage (CNC). the CAO Time: 9 days Procedure 6. Notarize the locational clearance application form Cost: No cost at the notary Comments: The company must update its official records to include the newly built Time: 1 day warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building Cost: PHP 100 plan and Certificate of Occupancy to notify them of the new building construction. The company must submit the floor plan and as-built plan to the CAO. Procedure 7. Obtain the Certificate of Non-Coverage (CNC) from the Laguna Lake Development Authority (LLDA) *This procedure can be completed simultaneously with previous procedures. Time: 1 day Cost: PHP 600 Dealing with Construction Permits Comments: An Environmental Compliance Certificate (ECC) is required of a pro- PASAY posed project if it will pose environmental hazards. If it will not, the company should Warehouse value: PHP 19,500,000 = USD 418,528 get a Certificate of Non-Coverage (CNC) from LLDA that certifies that the project is exempted from obtaining an ECC. Data as of: June 2010 Because Pasay City is an environmentally critical area, the CPDO requires commercial projects such as warehouses with a floor area of more than 1,000 square meters to Procedure 1. Obtain certified true copy of the land title from the apply for an ECC or CNC prior to issuance of locational clearance. Register of Deeds (RD) Time: 1 day Procedure 8. Receive inspection for the locational clearance from Cost: PHP 160 (PHP 30 for the certification + PHP 6 for each additional page (4 pages the CPDO needed) + PHP 112 IT fee) Time: 1 day Comments: The certified true copy of the land title serves as proof of ownership of Cost: No cost (fees included in procedure 9) the land on which the warehouse is to be built. Procedure 9. Obtain the locational clearance from the CPDO Procedure 2*. Obtain certified true copy of the tax declaration Time: 3 days of real property and tax clearance from the City Assessor’s Office (CAO) Cost: PHP 8,629 (PHP 5 per square meter for land use fee + 25% of land use fee + PHP 300 inspection fee + PHP 200 application fee) Time: 1 day Comments: The applicant pays the locational clearance fee at the City Treasurer’s Cost: PHP 135 (PHP 120 tax clearance + PHP 15 documentary stamp tax) Office (CTO) and obtains the locational clearance at the CPDO. Comments: The certified true copy of the tax declaration of real property enables the company to identify the property by its index number. The tax clearance serves Procedure 10*. Apply and obtain Fire Safety Evaluation Clearance as proof that there are no arrears in the payment of realty taxes. (FSEC) from the local Fire Marshall at the Bureau of Fire Protection (BFP) Procedure 3*. Obtain lot plan with site map from the geodetic Time: 7 days engineer Cost: PHP 19,500 (0.1% of estimated project cost) Time: 3 days Comments: The FSEC is a clearance with a fire safety checklist that enumerates the Cost: PHP 1,000 life and fire safety requirements of the Fire Code. Comments: The company must obtain the lot plan with site map from a geodetic The City Fire Marshall evaluates one set of plans and specifications submitted by the engineer to confirm the location of the land purported to be in the land title. A lot applicant to ensure that they conform to the fire safety and control requirements plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- of the Fire Code. The applicant must also submit 3 sets of the Fire and Life Safety vey, or at least after an analysis has been conducted of the lot technical description Assessment Report (FALAR) 1 (which documents the fire and life safety features of appearing on the title. the building) prepared by an architect who is duly certified by the BFP to prepare this report. LIST OF PROCE DURES • DEALING WITH construction permitS 123 Procedure 11. Apply and obtain the building permit and ancillary The applicant must submit the following requirements: permits at the Office of the Building Official (OBO) a. Certificate of completion; Time: 12 days b. Photocopy of the locational clearance; Cost: PHP 39,018 (according to the National Building Code of the Philippines, the c. Photo of the built structure; and cost of the building permit is PHP 23 per square meter. The computation here is d. Approved plan (if necessary). based on PHP 30 per square meter to account for ancillary costs such as electrical, mechanical and plumbing fees) Procedure 16*. Receive inspection for the certificate of Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ conformance from the CPDO structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) Time: 1 day plumbing permit, and (7) electronics permit. Cost: No cost The applicant must submit the following requirements: Comments: CPDO inspects the site to see whether the architectural plan was fol- a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- lowed or not. try of Deeds; b. Tax declaration; Procedure 17*. Apply for the Fire Safety Inspection Certificate c. Current real property tax receipt; (FSIC) at the BFP d. Building permit application form; Time: 1 day e. Five (5) sets of survey plans, design plans, specifications and other related Cost: PHP 3,901 (10% of building permit fees) documents (i.e., architectural documents, civil/structural documents, electrical Comments: Once construction has been completed, the company requests the BFP documents, mechanical documents, sanitary documents, plumbing documents, to inspect the site to certify that the required fire safety construction, fire protective electronics documents, geodetic documents; and/or warning systems are properly installed and in good working condition. The f. Locational clearance from the CPDO; applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies g. FSEC; and that the construction of the building was in accordance with FALAR 1), prepared by an architect who is duly certified by the BFP to prepare this report. h. CNC. After the building permit application is approved, the building official makes an Procedure 18*. Receive final inspection for the FSIC from the BFP assessment and issues an order of payment for the company to pay at the CTO. Once Time: 1 day the company has paid the building permit fees, it will present the official receipt to the Receiving/Releasing Section of the OBO which will then issue the permit. Cost: No cost (fees included in procedure 17) Procedure 12. Receive inspection from the BFP during Procedure 19*. Obtain the FSIC from the BFP construction Time: 13 days Time: 1 day Cost: No cost Cost: No cost (fees included in procedure 10) Procedure 20. Receive final inspection for the Certificate of Comments: The BFP conducts an inspection during construction to ensure that the plans and fire safety precautions are observed. Occupancy and CFEI from the OBO Time: 1 day Procedure 13. Receive inspection from the OBO during construction Cost: No cost (fees included in procedure 21) Time: 1 day Comments: The OBO conducts a final inspection to check the building based on the Cost: No cost (fees included in procedure 11) certificate of completion, construction logbook, building inspection sheets, original and as-built plans and specifications. Comments: During the construction of the warehouse, the OBO conducts an inspec- tion to ensure that the construction follows the approved building plans and design. Procedure 21. Obtain the Certificate of Occupancy and CFEI from Procedure 14. Apply for the Certificate of Occupancy and the OBO Certificate of Final Electrical Inspection (CFEI) at the OBO Time: 13 days Time: 1 day Cost: PHP 20,000 (PHP 1,000 per PHP 1,000,000 of the project value) Cost: No cost Comments: After the OBO has processed the application and conducted the inspection, it then issues an assessment and order of payment. The OBO issues the Comments: In applying for a Certificate of Occupancy, the applicant must submit Certificate of Occupancy after the applicant has paid the corresponding fees. the following to the OBO: a. Application for Certificate of Occupancy; Procedure 22. Apply for electricity connection at Manila Electric b. Duly notarized certificate of completion; Company (Meralco) c. Construction logbook; Time: 1 day d. As-built plans and specifications; Cost: No cost e. Certificate of conformance; and Comments: The electric company is Meralco. The company visits Meralco to request f. Building inspection sheet, the connection and submit the CFEI and electrical plans. Meralco conducts an all signed and sealed by the architect or engineer who undertook the full-time inspection of the warehouse and in the following days the technical staff visits the inspection and supervision of the construction. site for the electricity connection. The CFEI certifies that a final inspection of the electrical installation has been conducted and that such installation has been completed in accordance with the Procedure 23. Receive inspection for electricity connection from approved plans and specifications on file with the OBO and the provisions of the Meralco Philippine Electrical Code. Time: 1 day Cost: No cost Procedure 15. Obtain certificate of conformance (prior to occupancy) from the CPDO Procedure 24. Obtain electricity connection from Meralco Time: 1 day Time: 56 days Cost: PHP 800 (PHP 600 + PHP 200 inspection fee) Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Comments: The certificate of conformance (prior to occupancy) is issued by the ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security CPDO/Zoning Administrator prior to the issuance of the certificate of occupancy by deposit) the OBO to make sure that the construction of the building with particular descrip- tion is allowed within a certain area/locality. 124 Doing Business IN the philippines 2011 Procedure 25*. Apply for water and sewage connection at Procedure 2*. Obtain certified true copy of the tax declaration of Maynilad Water Services, Inc. (Maynilad) real property from the City Assessor’s Office (CAO) Time: 1 day Time: 1 day Cost: No cost Cost: PHP 45 (PHP 30 for the certificate + PHP 15 documentary stamp tax) Comments: The water company is Maynilad. The company visits Maynilad to request Comments: The certified true copy of the tax declaration of real property enables the connection and inspection takes place within a week. Maynilad subcontracts the company to identify the property by its index number. The tax clearance serves the installation with a contractor and the time of actual installation depends on the as proof that there are no arrears in the payment of realty taxes. contractor. Procedure 3*. Obtain lot plan with site map from the geodetic Procedure 26*. Receive inspection for water and sewage engineer connection from Maynilad Time: 4 days Time: 1 day Cost: PHP 1,250 Cost: No cost Comments: The company must obtain the lot plan with site map from a geodetic engineer to confirm the location of the land purported to be in the land title. A lot Procedure 27*. Obtain water and sewage connection from plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Maynilad vey, or at least after an analysis has been conducted of the lot technical description Time: 30 days appearing on the title. Cost: PHP 7,455 Procedure 4*. Obtain barangay clearance Procedure 28*. Obtain telephone connection from the telephone Time: 2 days company Cost: PHP 225 Time: 5 days Comments: The barangay clearance is generally a requirement for obtaining the Cost: No cost locational clearance. The costs for barangay clearances vary as barangays have the discretion to impose their own fees for as long as such fees are reasonable and Comments: There are three telephone companies providing landline services in within the limits imposed by the Local Government Code and city ordinances. Pasay City. These are Philippine Long Distance Co. (PLDT), Globelines and Digitel. For PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months for the regular Procedure 5. Apply for the locational clearance at the City phone line. Globelines requires proof of financial capability but does not charge any fee. There is a lock-in period of 12 months for the regular phone line. For Digitel, the Planning and Development Office (CPDO) cost is PHP 2,500 and there is a lock-in period of 30 months for the regular phone Time: 1 day line. The case study assumes that the company will request services from Globelines Cost: No cost as this is the option favorable to the company. Comments: The locational clearance is required to ensure that the construction conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. Procedure 29*. Apply for the tax declaration of improvement at The applicant must submit the following requirements: the CAO a. Notarized locational clearance application form; Time: 1 day b. Barangay clearance; Cost: No cost c. Transfer Certificate of Title (TCT); Comments: The company must update its official records to include the newly built warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building d. Latest real property tax receipt; and plan and Certificate of Occupancy to notify them of the new building construction. e. Architectural plan. The company must submit the floor plan and as-built plan to the CAO. Procedure 6. Notarize the locational clearance application form Procedure 30*. Receive inspection from the Appraiser of CAO at the notary Time: 1 day Time: 1 day Cost: No cost Cost: PHP 100 Procedure 31*. Obtain the tax declaration of improvement from Procedure 7. Receive inspection for the locational clearance from the CAO the CPDO Time: 1 day Time: 1 day Cost: No cost Cost: No cost (fees included in procedure 8) Comments: The tax declaration of improvement is released after an appraiser inspects the property, which can be done on the following day or sometimes even Procedure 8. Obtain the locational clearance from the CPDO on the same day. Time: 13 days Cost: PHP 2,646 (PHP 2 per square meter + PHP 45 processing fee) *This procedure can be completed simultaneously with previous procedures. Comments: The applicant pays the locational clearance fee at the City Treasurer’s Office (CTO) and obtains the locational clearance at the CPDO. Dealing with Construction Permits Procedure 9. Obtain the environmental clearance from the City PASIG Environment and Natural Resources Office (City ENRO) Warehouse value: PHP 19,500,000 = USD 418,528 Time: 3 days Data as of: June 2010 Cost: No cost Procedure 1. Obtain certified true copy of the land title from the Comments: As per memorandum of the City Administrator, applications for building Register of Deeds (RD) permit require an Environmental Clearance from the City Environment and Natural Resources Office (City ENRO). Cost is based on the number, species, and size of trees Time: 3 days that have to be cut in the project site. The application form should be duly notarized. Cost: PHP 160 (PHP 30 for the certification + PHP 6 for each additional page (4 pages needed) + PHP 112 IT fee) Procedure 10. Notarize the environmental clearance application Comments: The certified true copy of the land title serves as proof of ownership of form at the notary the land on which the warehouse is to be built. Time: 1 day Cost: PHP 100 LIST OF PROCE DURES • DEALING WITH construction permitS 125 Procedure 11. Apply for the building permit and ancillary permits Procedure 16. Apply for the electrical permit and receive order of at the Office of the Building Official (OBO) payment at the Electrical and Mechanical Section Time: 1 day Time: 1 day Cost: No cost Cost: PHP 3,000 Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ Comments: Application, processing, and release of the electrical permit, temporary structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) utility permit, and Certificate of Final Electrical Inspection (CFEI) are done in the plumbing permit, and (7) electronics permit. Electrical and Mechanical Section. The company, after obtaining the building permit, The applicant must submit the following requirements: can apply for the electrical permit at the Electrical and Mechanical Section. The Head of the Electrical and Mechanical Section will then release the order of payment for a. Application form; the company to pay at the CTO. b. Certified true copy of Original Certificate of Title/TCT on file with the Registry of Deeds; Procedure 17. Obtain the electrical permit at the Electrical and c. Tax declaration; Mechanical Section d. Current real property tax receipt; Time: 2 days e. Six (6) sets of survey plans, design plans, specifications and other related Cost: No cost (fees included in procedure 16) documents (i.e., architectural documents, civil/structural documents, electrical documents, mechanical documents, sanitary documents, plumbing documents, Procedure 18. Apply for the Certificate of Occupancy at the OBO electronics documents, geodetic documents; Time: 1 day f. Location plan; Cost: No cost g. Community tax certificate; Comments: In applying for a Certificate of Occupancy, the applicant must submit h. Barangay clearance; the following to the OBO: i. Locational clearance from the CPDO; and a. Application for Certificate of Occupancy; j. Clearance from City ENRO. b. Duly notarized certificate of completion; The city is using the old building permit application forms not requiring notarization. c. Construction logbook; Procedure 12. Apply and obtain Fire Safety Evaluation Clearance d. As-built plans and specifications; and (FSEC) from the local Fire Marshall at the Bureau of Fire e. Building inspection sheet, Protection (BFP) all signed and sealed by the architect or engineer who undertook the full-time inspection and supervision of the construction. Time: 7 days Cost: PHP 19,500 (0.1% of estimated project cost) Procedure 19. Apply for the Fire Safety Inspection Certificate Comments: The FSEC is a clearance with a fire safety checklist that enumerates the (FSIC) and obtain the order of payment from the BFP life and fire safety requirements of the Fire Code. Time: 1 day One set of plans and specifications submitted by the applicant to the OBO is referred Cost: PHP 3,901 (10% of building permit fees) to the City Fire Marshall, who evaluates the plans to ensure that they conform to the fire safety and control requirements of the Fire Code. The applicant must also submit Comments: Once construction has been completed, the company requests the BFP 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents to inspect the site to certify that the required fire safety construction, fire protective the fire and life safety features of the building) prepared by an architect who is duly and/or warning systems are properly installed and in good working condition. The certified by the BFP to prepare this report. The City Fire Marshall must submit his applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies recommendations to the OBO within 5 working days from the date of referral. that the construction of the building was in accordance with FALAR 1), prepared by an architect who is duly certified by the BFP to prepare this report. While the company is getting approval from the City Fire Marshall, the OBO simulta- neously processes the building permit application and checks the building plans and specifications. Procedure 20. Receive final inspection for the FSIC from the BFP Time: 1 day Procedure 13. Obtain the building permit from the OBO Cost: No cost (fees included in procedure 19) Time: 26 days Cost: PHP 35,767 (according to the National Building Code of the Philippines, the Procedure 21. Obtain the FSIC from the BFP cost of the building permit is PHP 23 per square meter. The computation here is Time: 2 days based on PHP 27.5 per square meter to account for ancillary costs such as electrical, Cost: No cost mechanical and plumbing fees. The electrical fees are paid separately at the Electrical and Mechanical Section) Procedure 22*. Apply for the Certificate of Final Electrical Comments: After the building permit application is approved, the building official Inspection (CFEI) at the Electrical and Mechanical Section makes an assessment and issues an order of payment for the company to pay at the Time: 1 day CTO. Once the company has paid the building permit fees, it will present the official receipt to the Receiving/Releasing Section of the OBO which will then issue the Cost: PHP 1,000 (fixed fee for industrial buildings) permit. Comments: The company visits the Electrical and Mechanical Section to request the CFEI and schedule an inspection to certify that the as-built plans correspond to the Procedure 14. Receive an inspection from the BFP during actual completed construction works. construction Procedure 23*. Receive final inspection for the CFEI from the Time: 1 day Electrical and Mechanical Section Cost: No cost (fees included in procedure 12) Time: 1 day Comments: The BFP conducts an inspection during construction to ensure that the plans and fire safety precautions are observed. Cost: No cost (fees included in procedure 22) Procedure 15. Receive inspection from the OBO during Procedure 24*. Obtain the CFEI from the Electrical and construction Mechanical Section Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 13) Cost: No cost Comments: During the construction of the warehouse, the OBO conducts an inspec- tion to ensure that the construction follows the approved building plans and design. 126 Doing Business IN the philippines 2011 Procedure 25*. Receive final inspection for the Certificate of Procedure 34*. Apply for the tax declaration of improvement at Occupancy from the OBO the CAO Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 26) Cost: No cost Comments: The OBO conducts a final inspection to check the building based on the Comments: The company must update its official records to include the newly built certificate of completion, construction logbook, building inspection sheets, original warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building and as-built plans and specifications. plan and Certificate of Occupancy to notify them of the new building construction. The company must submit the floor plan and as-built plan to the CAO. Procedure 26. Obtain the Certificate of Occupancy from the OBO Time: 17 days Procedure 35*. Receive inspection from the Appraiser of CAO Cost: PHP 20,500 (PHP 1,000 per PHP 1,000,000 of the project value + PHP 500 Time: 1 day inspection fee) Cost: No cost Comments: After the OBO has processed the application and conducted the inspection, it then issues an assessment and order of payment. The OBO issues the Procedure 36*. Obtain the tax declaration of improvement from Certificate of Occupancy after the applicant has paid the corresponding fees. the CAO Time: 7 days Procedure 27. Apply for electricity connection at Manila Electric Cost: No cost Company (Meralco) Comments: The tax declaration of improvement is released after an appraiser Time: 1 day inspects the property, which can be done on the following day or sometimes even Cost: No cost on the same day. Comments: The electric company is Meralco. The company visits Meralco to request the connection and submit the CFEI and electrical plans. Meralco conducts an *This procedure can be completed simultaneously with previous procedures. inspection of the warehouse and in the following days the technical staff visits the site for the electricity connection. Dealing with Construction Permits Procedure 28. Receive inspection for electricity connection from QUEZON CITY Meralco Warehouse value: PHP 19,500,000 = USD 418,528 Time: 1 day Data as of: June 2010 Cost: No cost Procedure 1. Obtain certified true copy of the land title from the Procedure 29. Obtain electricity connection from Meralco Register of Deeds (RD) Time: 56 days Time: 7 days Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Cost: PHP 160 (PHP 30 for the certification + PHP 6 for each additional page (4 pages ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security needed) + PHP 112 IT fee) deposit) Comments: The certified true copy of the land title serves as proof of ownership of the land on which the warehouse is to be built. Procedure 30*. Apply for water and sewage connection at Manila Water Company, Inc. (Manila Water) Procedure 2*. Obtain lot plan with site map from the geodetic Time: 1 day engineer Cost: No cost Time: 3 days Comments: The water company is Manila Water. The company visits Manila Water Cost: PHP 1,250 to request the connection and inspection takes place within a week. Connection is Comments: The company must obtain the lot plan with site map from a geodetic effected some days after the inspection. engineer to confirm the location of the land purported to be in the land title. A lot plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Procedure 31*. Receive inspection for water and sewage vey, or at least after an analysis has been conducted of the lot technical description connection from Manila Water appearing on the title. Time: 1 day Cost: No cost Procedure 3*. Obtain barangay clearance Time: 2 days Procedure 32*. Obtain water and sewage connection from Manila Cost: PHP 300 Water Comments: The barangay clearance is generally a requirement for obtaining the Time: 21 days locational clearance. The costs for barangay clearances vary as barangays have the Cost: PHP 6,855 discretion to impose their own fees for as long as such fees are reasonable and within the limits imposed by the Local Government Code and city ordinances. Procedure 33*. Obtain telephone connection from the telephone company Procedure 4. Apply for the locational clearance at the City Planning and Development Office (CPDO) Time: 5 days Time: 1 day Cost: No cost Cost: PHP 45 (filing fee) Comments: There are three telephone companies providing landline services in Pasig City. These are Philippine Long Distance Co. (PLDT), Globelines and Digitel. For Comments: The locational clearance is required to ensure that the construction PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months for the regular conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. phone line. Globelines requires proof of financial capability but does not charge any The applicant must submit the following requirements: fee. There is a lock-in period of 12 months for the regular phone line. For Digitel, the a. Notarized locational clearance application form; cost is PHP 2,500 and there is a lock-in period of 30 months for the regular phone b. Barangay clearance; line. The case study assumes that the company will request services from Globelines as this is the option favorable to the company. c. Transfer Certificate of Title (TCT); d. Latest real property tax receipt; and e. Architectural plan. LIST OF PROCE DURES • DEALING WITH construction permitS 127 Procedure 5. Notarize the locational clearance application form Procedure 12. Apply for the Fire Safety Inspection Certificate at the notary (FSIC) at the BFP Time: 1 day Time: 1 day Cost: PHP 50 Cost: PHP 3,901 (10% of building permit fees) Comments: Once construction has been completed, the company requests the BFP Procedure 6. Receive inspection for the locational clearance from to inspect the site to certify that the required fire safety construction, fire protective the CPDO and/or warning systems are properly installed and in good working condition. The Time: 1 day applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies that the construction of the building was in accordance with FALAR 1), prepared by Cost: No cost (fees included in procedure 7) an architect who is duly certified by the BFP to prepare this report. Procedure 7. Obtain the locational clearance from the CPDO Procedure 13. Receive final inspection for the FSIC from the BFP Time: 5 days Time: 1 day Cost: PHP 2,926 (PHP 2.25 per square meter) Cost: No cost (fees included in procedure 12) Comments: The applicant pays the locational clearance fee at the City Treasurer’s Office (CTO) and obtains the locational clearance at the CPDO. Procedure 14. Obtain the FSIC from the BFP Procedure 8*. Apply and obtain Fire Safety Evaluation Clearance Time: 5 days (FSEC) from the local Fire Marshall at the Bureau of Fire Cost: No cost Protection (BFP) Procedure 15*. Apply for health certificate at the City Health Time: 7 days Office (CHO) Cost: PHP 19,500 (0.1% of the estimated project cost) Time: 1 day Comments: The FSEC is a clearance with a fire safety checklist that enumerates the Cost: No cost life and fire safety requirements of the Fire Code. The City Fire Marshall evaluates one set of plans and specifications submitted by the Procedure 16*. Receive inspection for the health certificate from applicant to ensure that they conform to the fire safety and control requirements the CHO of the Fire Code. The applicant must also submit 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents the fire and life safety features of Time: 1 day the building) prepared by an architect who is duly certified by the BFP to prepare Cost: No cost this report. Procedure 17*. Obtain the health certificate from the CHO Procedure 9. Apply and obtain the building permit and ancillary Time: 5 days permits at the Office of the Building Official (OBO) Cost: PHP 400 (fixed fee for commercial applications) Time: 12 days Cost: PHP 39,018 (according to the National Building Code of the Philippines, the Procedure 18*. Apply for the Certificate of Final Electrical cost of the building permit is PHP 23 per square meter. The computation here is Inspection (CFEI) at the OBO based on PHP 30 per square meter to account for ancillary costs such as electrical, Time: 1 day mechanical and plumbing fees) Cost: No cost Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) Comments: The CFEI certifies that a final inspection of the electrical installation has plumbing permit, and (7) electronics permit. been conducted and that such installation has been completed in accordance with the approved plans and specifications on file with the OBO and the provisions of the The applicant must submit the following requirements: Philippine Electrical Code. a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- try of Deeds; Procedure 19*. Receive final inspection for the CFEI from the OBO b. Photocopy of tax declaration; Time: 1 day c. Building permit application form; Cost: No cost d. Five (5) sets of survey plans, design plans, specifications and other related documents (i.e., architectural documents, civil/structural documents, electrical Procedure 20*. Obtain the CFEI from the OBO documents, mechanical documents, sanitary documents, plumbing documents, Time: 1 day electronics documents, geodetic documents, and clearances from other agen- cies); and Cost: No cost e. Locational clearance from the CPDO. Procedure 21. Apply for the Certificate of Occupancy at the OBO After the building permit application is approved, the building official makes an Time: 1 day assessment and issues an order of payment for the company to pay at the CTO. Once the company has paid the building permit fees, it will present the official receipt to Cost: No cost the Receiving/Releasing Section of the OBO which will then issue the permit. Comments: In applying for a Certificate of Occupancy, the applicant must submit the following to the OBO: Procedure 10. Receive inspection from the BFP during a. Application for Certificate of Occupancy; construction b. FSIC; Time: 1 day c. Health certificate; Cost: No cost (fees included in procedure 8) d. Duly notarized certificate of completion; Comments: The BFP conducts an inspection during construction to ensure that the e. Construction logbook; plans and fire safety precautions are observed. f. As-built plans and specifications; and Procedure 11. Receive inspection from the OBO during g. Building inspection sheet, construction all signed and sealed by the architect or engineer who undertook the full-time inspection and supervision of the construction. Time: 1 day Cost: No cost (fees included in procedure 9) Comments: During the construction of the warehouse, the OBO conducts an inspec- tion to ensure that the construction follows the approved building plans and design. 128 Doing Business IN the philippines 2011 Procedure 22. Receive final inspection for the Certificate of Procedure 31*. Apply for the tax declaration of improvement at Occupancy from the OBO the City Assessor’s Office (CAO) Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 23) Cost: No cost Comments: The OBO conducts a final inspection to check the building based on the Comments: The company must update its official records to include the newly built certificate of completion, construction logbook, building inspection sheets, original warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building and as-built plans and specifications. plan and Certificate of Occupancy to notify them of the new building construction. The company must submit the floor plan and as-built plan to the CAO. Procedure 23. Obtain the Certificate of Occupancy from the OBO Time: 18 days Procedure 32*. Receive inspection from the Appraiser of CAO Cost: PHP 32,000 (PHP 1,600 per PHP 1,000,000 of the project value based on Time: 1 day Quezon City Revenue Code) Cost: No cost Comments: After the OBO has processed the application and conducted the inspection, it then issues an assessment and order of payment. The OBO issues the Procedure 33*. Obtain the tax declaration of improvement from Certificate of Occupancy after the applicant has paid the corresponding fees. the CAO Time: 3 days Procedure 24. Apply for electricity connection at Manila Electric Cost: No cost Company (Meralco) Comments: The tax declaration of improvement is released after an appraiser Time: 1 day inspects the property, which can be done on the following day or sometimes even Cost: No cost on the same day. Comments: The electric company is Meralco. The company visits Meralco to request the connection and submit the CFEI and electrical plans. Meralco conducts an *This procedure can be completed simultaneously with previous procedures. inspection of the warehouse and in the following days the technical staff visits the site for the electricity connection. Dealing with Construction Permits Procedure 25. Receive inspection for electricity connection from SAN JUAN Meralco Warehouse value: PHP 19,500,000 = USD 418,528 Time: 1 day Data as of: June 2010 Cost: No cost Procedure 1. Obtain development permit from the City Council Procedure 26. Obtain electricity connection from Meralco Time: 30 days Time: 56 days Cost: No cost Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Comments: San Juan City requires a development permit for warehouse projects ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security with floor area more than 1,000 square meters. This is required since they only have deposit) limited land area and large projects like this have to be approved by the City Council. Procedure 27*. Apply for water and sewage connection at Procedure 2. Obtain certified true copy of the land title from the Maynilad Water Services, Inc. (Maynilad) or Manila Water Register of Deeds (RD) Company, Inc. (Manila Water) Time: 3 days Time: 1 day Cost: PHP 160 (PHP 30 for the certification + PHP 6 for each additional page (4 pages Cost: No cost needed) + PHP 112 IT fee) Comments: There are two private water providers for Quezon City. Maynilad services Comments: The certified true copy of the land title serves as proof of ownership of the west zone and Manila Water services the east zone. The company visits the water the land on which the warehouse is to be built. company to request the connection and pays PHP 7,455 for Maynilad or PHP 6,855 for Manila Water. Inspection takes place within a week and the connection is effected Procedure 3*. Obtain certified true copy of the tax declaration of some days after the inspection. The case study assumes that the company will real property from the City Assessor’s Office (CAO) request water from Manila Water as this is the option favorable to the company. Time: 1 day Procedure 28*. Receive inspection for water and sewage Cost: PHP 30 connection from Maynilad or Manila Water Comments: The certified true copy of the tax declaration of real property enables the company to identify the property by its index number. The tax clearance serves Time: 1 day as proof that there are no arrears in the payment of realty taxes. Cost: No cost Procedure 4*. Obtain lot plan with site map from the geodetic Procedure 29*. Obtain water and sewage connection from engineer Maynilad or Manila Water Time: 3 days Time: 21 days Cost: PHP 1,000 Cost: PHP 6,855 Comments: The company must obtain the lot plan with site map from a geodetic engineer to confirm the location of the land purported to be in the land title. A lot Procedure 30*. Obtain telephone connection from the telephone plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- company vey, or at least after an analysis has been conducted of the lot technical description Time: 5 days appearing on the title. Cost: No cost Comments: There are four telephone companies providing landline services in Procedure 5*. Obtain barangay clearance Quezon City. The cost is PHP 1,500 for Philippine Long Distance Co. (PLDT), PHP 749 Time: 2 days for Bayantel and PHP 2,500 for Digitel. Globelines requires proof of financial capabil- Cost: PHP 100 ity but does not charge any fee. There is a lock-in period of 12 months for PLDT and Comments: The barangay clearance is generally a requirement for obtaining the Globelines, and 30 months for Digitel. Bayantel offers no lock-in period for regular locational clearance. The costs for barangay clearances vary as barangays have the phone line. The case study assumes that the company will request services from discretion to impose their own fees for as long as such fees are reasonable and Globelines as this is the option favorable to the company. within the limits imposed by the Local Government Code and city ordinances. LIST OF PROCE DURES • DEALING WITH construction permitS 129 Procedure 6. Apply for locational clearance at the City Planning Procedure 12. Obtain the building permit from the OBO and Development Office (CPDO) Time: 7 days Time: 1 day Cost: PHP 39,018 (according to the National Building Code of the Philippines, the Cost: No cost cost of the building permit is PHP 23 per square meter. The computation here is Comments: The locational clearance is required to ensure that the construction based on PHP 30 per square meter to account for ancillary costs such as electrical, conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. mechanical and plumbing fees) The applicant must submit the following requirements: Comments: After the building permit application is approved, the building official makes an assessment and issues an order of payment for the company to pay at the a. Notarized locational clearance application form; CTO. Once the company has paid the building permit fees, it will present the official b. Barangay clearance; receipt to the Receiving/Releasing Section of the OBO which will then issue the c. Transfer Certificate of Title (TCT); permit. d. Latest real property tax receipt; and e. Architectural plan. Procedure 13. Receive inspection from the BFP during construction Time: 1 day Procedure 7. Notarize the locational clearance application form Cost: No cost (fees included in procedure 11) at the notary Comments: The BFP conducts an inspection during construction to ensure that the Time: 1 day plans and fire safety precautions are observed. Cost: PHP 50 Procedure 14. Receive inspection from the OBO during construction Procedure 8. Receive inspection for locational clearance from the Time: 1 day CPDO Cost: No cost (fees included in procedure 12) Time: 1 day Comments: During the construction of the warehouse, the OBO conducts an inspec- Cost: No cost (fees included in procedure 9) tion to ensure that the construction follows the approved building plans and design. Procedure 9. Obtain locational clearance from the CPDO Procedure 15. Apply for the Certificate of Occupancy at the OBO Time: 1 day Time: 1 day Cost: PHP 16,550 (PHP 10 per square meter for land use fee + 25% of land use fee + Cost: No cost PHP 100 inspection fee + PHP 200 certificate fee) Comments: In applying for a Certificate of Occupancy, the applicant must submit Comments: The applicant pays the locational clearance fee at the City Treasurer’s the following to the OBO: Office (CTO) and obtains the locational clearance at the CPDO. a. Application for Certificate of Occupancy; b. Duly notarized certificate of completion; Procedure 10. Apply for the building permit and ancillary permits c. Construction logbook; at the Office of the Building Official (OBO) d. As-built plans and specifications; and Time: 1 day e. Building inspection sheet, Cost: No cost all signed and sealed by the architect or engineer who undertook the full-time Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ inspection and supervision of the construction. structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) plumbing permit, and (7) electronics permit. Procedure 16. Apply for the Fire Safety Inspection Certificate The applicant must submit the following requirements: (FSIC) at the BFP a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- Time: 1 day try of Deeds; Cost: PHP 3,901 (10% of building permit fees) b. Tax declaration; Comments: Once construction has been completed, the company requests the BFP c. Current real property tax receipt; to inspect the site to certify that the required fire safety construction, fire protective d. Building permit application form; and/or warning systems are properly installed and in good working condition. The e. Five (5) sets of survey plans, design plans, specifications and other related applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies documents (i.e., architectural documents, civil/structural documents, electrical that the construction of the building was in accordance with FALAR 1), prepared by documents, mechanical documents, sanitary documents, plumbing documents, an architect who is duly certified by the BFP to prepare this report. electronics documents, geodetic documents, and clearances from other agen- cies); and Procedure 17. Receive final inspection for the FSIC from the BFP f. Locational clearance from the CPDO. Time: 1 day Cost: No cost (fees included in procedure 16) Procedure 11. Apply and obtain Fire Safety Evaluation Clearance (FSEC) from the local Fire Marshall at the Bureau of Fire Procedure 18. Obtain the FSIC from the BFP Protection (BFP) Time: 19 days Time: 7 days Cost: No cost Cost: PHP 19,500 (0.1% of estimated project cost) Comments: The FSEC is a clearance with a fire safety checklist that enumerates the Procedure 19. Receive final inspection for the Certificate of life and fire safety requirements of the Fire Code. Occupancy from the OBO One set of plans and specifications submitted by the applicant to the OBO is referred Time: 1 day to the City Fire Marshall, who evaluates the plans to ensure that they conform to the Cost: No cost (fees included in procedure 20) fire safety and control requirements of the Fire Code. The applicant must also submit 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents Procedure 20. Obtain the Certificate of Occupancy from the OBO the fire and life safety features of the building) prepared by an architect who is duly Time: 4 days certified by the BFP to prepare this report. The City Fire Marshall must submit his recommendations to the OBO within 5 working days from the date of referral. Cost: PHP 19,400 (PHP 1,000 for first PHP 1,200,000 of the project value; PHP 1,000 for every PHP 1,000,000 in excess thereof; PHP 400 for PHP 150,000 – PHP 400,000) While the company is getting approval from the City Fire Marshall, the OBO simulta- neously processes the building permit application and checks the building plans and Comments: After the OBO has processed the application and conducted the specifications. inspection, it then issues an assessment and order of payment. The OBO issues the Certificate of Occupancy after the applicant has paid the corresponding fees. 130 Doing Business IN the philippines 2011 Procedure 21. Apply for the Certificate of Final Electrical Procedure 31*. Apply for the tax declaration of improvement at Inspection (CFEI) at the OBO the CAO Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 12) Cost: PHP 100 (processing fee) Comments: The CFEI certifies that a final inspection of the electrical installation has Comments: The company must update its official records to include the newly built been conducted and that such installation has been completed in accordance with warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building the approved plans and specifications on file with the OBO and the provisions of the plan and Certificate of Occupancy to notify them of the new building construction. Philippine Electrical Code. The company must submit the floor plan and as-built plan to the CAO. Procedure 22. Receive final inspection for the CFEI from the OBO Procedure 32*. Receive inspection from the Appraiser of CAO Time: 1 day Time: 1 day Cost: No cost Cost: No cost Procedure 23. Obtain the CFEI from the OBO Procedure 33*. Obtain the tax declaration of improvement from Time: 1 day the CAO Cost: No cost Time: 1 day Cost: No cost Procedure 24. Apply for electricity connection at Manila Electric Comments: The tax declaration of improvement is released after an appraiser Company (Meralco) inspects the property, which can be done on the following day or sometimes even Time: 1 day on the same day. Cost: No cost Comments: The electric company is Meralco. The company visits Meralco to request *This procedure can be completed simultaneously with previous procedures. the connection and submit the CFEI and electrical plans. Meralco conducts an inspection of the warehouse and in the following days the technical staff visits the Dealing with Construction Permits site for the electricity connection. TAGUIG Procedure 25. Receive inspection for electricity connection from Warehouse value: PHP 19,500,000 = USD 418,528 Meralco Data as of: June 2010 Time: 1 day Cost: No cost Procedure 1. Obtain lot plan with site map from the geodetic engineer Procedure 26. Obtain electricity connection from Meralco Time: 3 days Time: 56 days Cost: PHP 1,250 Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Comments: The company must obtain the lot plan with site map from a geodetic ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security engineer to confirm the location of the land purported to be in the land title. A lot deposit) plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- vey, or at least after an analysis has been conducted of the lot technical description Procedure 27*. Apply for water and sewage connection at Manila appearing on the title. Water Company, Inc. (Manila Water) Time: 1 day Procedure 2*. Obtain barangay clearance Cost: No cost Time: 2 days Comments: The water company is Manila Water. The company visits Manila Water Cost: PHP 500 to request the connection and inspection takes place within a week. Connection is Comments: The barangay clearance is generally a requirement for obtaining the effected some days after the inspection. locational clearance. The costs for barangay clearances vary as barangays have the discretion to impose their own fees for as long as such fees are reasonable and Procedure 28*. Receive inspection for water and sewage within the limits imposed by the Local Government Code and city ordinances. connection from Manila Water Procedure 3. File applications for locational clearance and Time: 1 day building permit at the Customer Service Counter of the City Cost: No cost Planning and Development Office (CPDO) Procedure 29*. Obtain water and sewage connection from Manila Time: 1 day Water Cost: PHP 50 (filing fee for locational clearance) Time: 21 days Comments: Application for building permit can be done simultaneously with the application for locational clearance. Application forms and checklists are available at Cost: PHP 6,855 the Customer Service Counter of the CPDO. Only applications with complete require- ments will be processed. Procedure 30*. Obtain telephone connection from the telephone company Procedure 4. Receive inspection for the locational clearance from Time: 5 days the City Planning and Development Office (CPDO) Cost: No cost Time: 1 day Comments: There are three telephone companies providing landline services in San Cost: No cost Juan City. These are Philippine Long Distance Co. (PLDT), Globelines and Digitel. For Comments: After review, the CPDO endorses the application to the City Mayor for PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months for the regular final approval. The applicant is advised by phone once the locational clearance is phone line. Globelines requires proof of financial capability but does not charge any ready for pick up. fee. There is a lock-in period of 12 months for the regular phone line. For Digitel, the cost is PHP 2,500 and there is a lock-in period of 30 months for the regular phone line. The case study assumes that the company will request services from Globelines Procedure 5. Obtain the locational clearance from the OBO as this is the option favorable to the company. Time: 1 day Cost: PHP 6,503 (PHP 5 per square meter) Comments: The company goes to the CPDO to obtain the locational clearance. LIST OF PROCE DURES • DEALING WITH construction permitS 131 Procedure 6*. Apply and obtain Fire Safety Evaluation Clearance a. Application for Certificate of Occupancy; (FSEC) from the local Fire Marshall at the Bureau of Fire b. Duly notarized certificate of completion; Protection (BFP) c. Construction logbook; Time: 3 days d. As-built plans and specifications; and Cost: PHP 19,500 (0.1% of estimated project cost) e. Building inspection sheet, Comments: The FSEC is a clearance with a fire safety checklist that enumerates the all signed and sealed by the architect or engineer who undertook the full-time life and fire safety requirements of the Fire Code. inspection and supervision of the construction. One set of plans and specifications submitted by the applicant to the OBO is referred The CFEI certifies that a final inspection of the electrical installation has been to the City Fire Marshall, who evaluates the plans to ensure that they conform to the conducted and that such installation has been completed in accordance with the fire safety and control requirements of the Fire Code. The applicant must also submit approved plans and specifications on file with the OBO and the provisions of the 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents Philippine Electrical Code. the fire and life safety features of the building) prepared by an architect who is duly To facilitate application for electricity connection, the OBO allows applicants to file certified by the BFP to prepare this report. The City Fire Marshall must submit his their application for CFEI even before the construction is completed. recommendations to the OBO within 5 working days from the date of referral. While the company is getting approval from the City Fire Marshall, the OBO simulta- Procedure 14. Receive final inspection for the Certificate of neously processes the building permit application and checks the building plans and Occupancy and CFEI from the OBO specifications. Time: 1 day Cost: No cost Procedure 7. Obtain the building permit from the OBO Comments: The OBO conducts a final inspection to check the building based on the Time: 5 days certificate of completion, construction logbook, building inspection sheets, original Cost: PHP 39,018 (according to the National Building Code of the Philippines, the and as-built plans and specifications. cost of the building permit is PHP 23 per square meter. The computation here is based on PHP 30 per square meter to account for ancillary costs such as electrical Procedure 15. Obtain the Certificate of Occupancy and CFEI from and plumbing fees) the OBO Comments: After the building permit application is approved, the building official Time: 4 days makes an assessment and issues an order of payment for the company to pay at the City Treasurer’s Office (CTO). Once the company has paid the building permit fees, it Cost: PHP 21,000 (PHP 1,000 per PHP 1,000,000 of the project value + 10% of electri- will present the official receipt to the Receiving/Releasing Section of the OBO which cal permit fee for the CFEI) will then issue the permit. Comments: After the OBO has processed the application and conducted the inspection, it then issues an assessment and order of payment. The OBO issues the Procedure 8. Receive inspection from the BFP during Certificate of Occupancy after the applicant has paid the corresponding fees. construction Procedure 16. Apply for electricity connection at Manila Electric Time: 1 day Company (Meralco) Cost: No cost (fees included in procedure 6) Time: 1 day Comments: The BFP conducts an inspection during construction to ensure that the plans and fire safety precautions are observed. Cost: No cost Comments: The electric company is Meralco. The company visits Meralco to request Procedure 9. Receive inspection from the OBO during the connection and submit the CFEI and electrical plans. Meralco conducts an construction inspection of the warehouse and in the following days the technical staff visits the site for the electricity connection. Time: 1 day Cost: No cost (fees included in procedure 7) Procedure 17. Receive inspection for electricity connection from Comments: During the construction of the warehouse, the OBO conducts an inspec- Meralco tion to ensure that the construction follows the approved building plans and design. Time: 1 day Cost: No cost Procedure 10. Apply for the Fire Safety Inspection Certificate (FSIC) at the BFP Procedure 18. Obtain electricity connection from Meralco Time: 1 day Time: 56 days Cost: PHP 3,901 (10% of building permit fees) Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Comments: Once construction has been completed, the company requests the BFP ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security to inspect the site to certify that the required fire safety construction, fire protective deposit) and/or warning systems are properly installed and in good working condition. The applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies Procedure 19*. Apply for water and sewage connection at Manila that the construction of the building was in accordance with FALAR 1), prepared by Water Company, Inc. (Manila Water) an architect who is duly certified by the BFP to prepare this report. Time: 1 day Procedure 11. Receive final inspection for the FSIC from the BFP Cost: No cost Time: 1 day Comments: The water company is Manila Water. The company visits Manila Water Cost: No cost (fees included in procedure 10) to request the connection and inspection takes place within a week. Connection is effected some days after the inspection. Procedure 12. Obtain the FSIC from the BFP Procedure 20*. Receive inspection for water and sewage Time: 3 days connection from Manila Water Cost: No cost Time: 1 day Procedure 13. Apply for the Certificate of Occupancy and Cost: No cost Certificate of Final Electrical Inspection (CFEI) at the OBO Procedure 21*. Obtain water and sewage connection from Manila Time: 1 day Water Cost: No cost Time: 21 days Comments: In applying for a Certificate of Occupancy, the applicant must submit Cost: PHP 6,855 the following to the OBO: 132 Doing Business IN the philippines 2011 Procedure 22*. Obtain telephone connection from the telephone Procedure 4*. Obtain barangay clearance company Time: 1 day Time: 5 days Cost: PHP 150 Cost: No cost Comments: The barangay clearance is generally a requirement for obtaining the Comments: There are three telephone companies providing landline services in locational clearance. The costs for barangay clearances vary as barangays have the Taguig City. These are Philippine Long Distance Co. (PLDT), Globelines and Digitel. discretion to impose their own fees for as long as such fees are reasonable and For PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months for the within the limits imposed by the Local Government Code and city ordinances. regular phone line. Globelines requires proof of financial capability but does not charge any fee. There is a lock-in period of 12 months for the regular phone line. Procedure 5. Apply for the locational clearance, building permit For Digitel, the cost is PHP 2,500 and there is a lock-in period of 30 months for the and ancillary permits at the City Engineer’s Office-Building Unit regular phone line. The case study assumes that the company will request services (CEO-BU) from Globelines as this is the option favorable to the company. Time: 1 day Procedure 23*. Apply for the tax declaration of improvement at Cost: No cost the City Assessor’s Office (CAO) Comments: The locational clearance is required to ensure that the construction conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. Time: 1 day The applicant must submit the following requirements for the locational clearance: Cost: PHP 200 (processing fee) a. Barangay clearance; Comments: The company must update its official records to include the newly built warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building b. Transfer Certificate of Title (TCT); plan and Certificate of Occupancy to notify them of the new building construction. c. Latest real property tax receipt; and The company must submit the floor plan and as-built plan to the CAO. d. Architectural plan. The ancillary permits consist of: (1) the architectural permit, (2) civil/structural Procedure 24*. Receive inspection from the Appraiser of CAO permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) plumbing Time: 1 day permit, and (7) electronics permit. Cost: No cost The applicant must submit the following requirements for the building permit: a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- Procedure 25*. Obtain the tax declaration of improvement from try of Deeds; the CAO b. Tax declaration; Time: 1 day c. Current real property tax receipt; Cost: No cost d. Building permit application form; Comments: The tax declaration of improvement is released after an appraiser e. Five (5) sets of survey plans, design plans, specifications and other related inspects the property, which can be done on the following day or sometimes even documents (i.e., architectural documents, civil/structural documents, electrical on the same day. documents, mechanical documents, sanitary documents, plumbing documents, electronics documents, geodetic documents, and clearances from other agen- cies); and *This procedure can be completed simultaneously with previous procedures. f. Locational clearance from the CEO-BU. Dealing with Construction Permits Procedure 6. Receive inspection for the locational clearance from VALENZUELA the CEO-BU Warehouse value: PHP 19,500,000 = USD 418,528 Time: 1 day Data as of: June 2010 Cost: No cost (fees included in procedure 7) Comments: The CEO-BU conducts an inspection of the property before issuance of Procedure 1. Obtain certified true copy of the land title from the the locational clearance. Register of Deeds (RD) Time: 1 day Procedure 7. Obtain the locational clearance from the CEO-BU Cost: PHP 57 (PHP 30 for the certification + PHP 6 for each additional page (2 pages Time: 1 day needed) + PHP 15 documentary stamp tax) Cost: PHP 3,302 (PHP 2.5 per square meter + PHP 50 filing fee) Comments: The certified true copy of the land title serves as proof of ownership of Comments: The applicant pays the locational clearance fee at the City Treasurer’s the land on which the warehouse is to be built. Office (CTO) and obtains the locational clearance at the CEO-BU. Procedure 2*. Obtain certified true copy of the tax declaration of Procedure 8. Notarize the building permit application form at the real property from the City Assessor’s Office (CAO) notary Time: 1 day Time: 1 day Cost: PHP 25 (PHP 10 + PHP 15 documentary stamp tax) Cost: PHP 100 Comments: The certified true copy of the tax declaration of real property enables the company to identify the property by its index number. The tax clearance serves Procedure 9. Apply and obtain Fire Safety Evaluation Clearance as proof that there are no arrears in the payment of realty taxes. (FSEC) from the local Fire Marshall at the Bureau of Fire Protection (BFP) Procedure 3*. Obtain lot plan with site map from the geodetic engineer Time: 1 day Time: 2 days Cost: PHP 19,500 (0.1% of the estimated project cost) Cost: PHP 700 Comments: The FSEC is a clearance with a fire safety checklist that enumerates the life and fire safety requirements of the Fire Code. Comments: The company must obtain the lot plan with site map from a geodetic engineer to confirm the location of the land purported to be in the land title. A lot One set of plans and specifications submitted by the applicant to the OBO is referred plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- to the City Fire Marshall, who evaluates the plans to ensure that they conform to the vey, or at least after an analysis has been conducted of the lot technical description fire safety and control requirements of the Fire Code. The applicant must also submit appearing on the title. 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents the fire and life safety features of the building) prepared by an architect who is duly certified by the BFP to prepare this report. The City Fire Marshall must submit his recommendations to the OBO within 5 working days from the date of referral. LIST OF PROCE DURES • DEALING WITH construction permitS 133 While the company is getting approval from the City Fire Marshall, the OBO simulta- Procedure 17. Receive final inspection for the Certificate of neously processes the building permit application and checks the building plans and specifications. Occupancy and CFEI from the CEO-BU Time: 1 day Procedure 10. Obtain the building permit from the CEO-BU Cost: No cost Time: 14 days Comments: The CEO-BU conducts a final inspection to check the building based Cost: PHP 39,018 (according to the National Building Code of the Philippines, the on the certificate of completion, construction logbook, building inspection sheets, cost of the building permit is PHP 23 per square meter. The computation here is original and as-built plans and specifications. based on PHP 30 per square meter to account for ancillary costs such as electrical, mechanical and plumbing fees) Procedure 18. Obtain the Certificate of Occupancy and CFEI from Comments: After the building permit application is approved, the building official the CEO-BU makes an assessment and issues an order of payment for the company to pay at the Time: 3 days CTO. Once the company has paid the building permit fees, it will present the official Cost: PHP 20,000 (PHP 1,000 per PHP 1,000,000 of the project, the excess is still PHP receipt to the Receiving/Releasing Section of the CEO-BU which will then issue the 1,000) permit. Comments: After the CEO-BU has processed the application and conducted the inspection, it then issues an assessment and order of payment. The CEO-BU issues Procedure 11. Receive inspection from the Bureau of Fire the Certificate of Occupancy after the applicant has paid the corresponding fees. Protection (BFP) during construction Time: 1 day Procedure 19. Apply for electricity connection at Manila Electric Cost: No cost (fees included in procedure 9) Company (Meralco) Comments: The BFP conducts an inspection during construction to ensure that the Time: 1 day plans and fire safety precautions are observed. Cost: No cost Comments: The electric company is Meralco. The company visits Meralco to request Procedure 12. Receive inspection from the CEO-BU during the connection and submit the CFEI and electrical plans. Meralco conducts an construction inspection of the warehouse and in the following days the technical staff visits the Time: 1 day site for the electricity connection. Cost: No cost (fees included in procedure 10) Comments: During the construction of the warehouse, the CEO-BU conducts an Procedure 20. Receive inspection for electricity connection from inspection to ensure that the construction follows the approved building plans and Meralco design. Time: 1 day Cost: No cost Procedure 13. Apply for the Certificate of Occupancy and Certificate of Final Electrical Inspection (CFEI) at the CEO-BU Procedure 21. Obtain electricity connection from Meralco Time: 1 day Time: 56 days Cost: No cost Cost: PHP 564,490 (PHP 35,000 for poles + PHP 334,400 for two 75 kVA transform- Comments: In applying for a Certificate of Occupancy, the applicant must submit ers + PHP 44,000 for dressings + PHP 6,700 for guying + PHP 144,390 for security the following to the CEO-BU: deposit) a. Application for Certificate of Occupancy; Procedure 22*. Apply for water and sewage connection at b. Duly notarized certificate of completion; Maynilad Water Services, Inc. (Maynilad) c. Construction logbook; Time: 1 day d. As-built plans and specifications; and Cost: No cost e. Building inspection sheet, Comments: The water company is Maynilad. The company visits Maynilad to request all signed and sealed by the architect or engineer who undertook the full-time the connection and inspection takes place within a week. Connection is effected inspection and supervision of the construction. some days after the inspection. The CFEI certifies that a final inspection of the electrical installation has been conducted and that such installation has been completed in accordance with the Procedure 23*. Receive inspection for water and sewage approved plans and specifications on file with the CEO-BU and the provisions of the connection from Maynilad Philippine Electrical Code. Time: 1 day Procedure 14. Apply for the Fire Safety Inspection Certificate Cost: No cost (FSIC) at the BFP Procedure 24*. Obtain water and sewage connection from Time: 1 day Maynilad Cost: PHP 3,901 (10% of building permit fees) Time: 30 days Comments: Once construction has been completed, the company requests the BFP to inspect the site to certify that the required fire safety construction, fire protective Cost: PHP 7,455 and/or warning systems are properly installed and in good working condition. The applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies Procedure 25*. Obtain telephone connection from the telephone that the construction of the building was in accordance with FALAR 1), prepared by company an architect who is duly certified by the BFP to prepare this report. Time: 5 days Cost: No cost Procedure 15. Receive final inspection for the FSIC from the BFP Comments: There are four telephone companies providing landline services in Va- Time: 1 day lenzuela City. These are Philippine Long Distance Co. (PLDT), Globelines, Digitel, and Cost: No cost (fees included in procedure 14) Bayantel. For PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months for the regular phone line. Globelines requires proof of financial capability but does Procedure 16. Obtain the FSIC from the BFP not charge any fee. There is a lock-in period of 12 months for the regular phone line. Time: 1 day For Digitel, the cost is PHP 2,500 and there is a lock-in period of 30 months for the regular phone line. For Bayantel, the cost is PHP 749 with no lock-in period. The case Cost: No cost study assumes that the company will request services from Globelines as this is the option favorable to the company. 134 Doing Business IN the philippines 2011 Procedure 26*. Apply for the tax declaration of improvement at The applicant must submit the following requirements: the CAO a. Notarized locational clearance application form; Time: 1 day b. Barangay clearance; Cost: No cost c. Transfer Certificate of Title (TCT); Comments: The company must update its official records to include the newly built d. Latest real property tax receipt; and warehouse for tax purposes. The CEO-BU furnishes the CAO with a copy of the build- e. Architectural plan. ing plan and Certificate of Occupancy to notify them of the new building construc- tion. The company must submit the floor plan and as-built plan to the CAO. Procedure 6*. Notarize the locational clearance application form at the notary Procedure 27*. Receive inspection from the Appraiser of CAO Time: 1 day Time: 1 day Cost: PHP 100 Cost: No cost Procedure 7. Obtain the locational clearance from the CPDO Procedure 28*. Obtain the tax declaration of improvement from Time: 1 day the CAO Cost: PHP 22,500 (PHP 3,000 + 1/10 of 1% of the project value) Time: 1 day Comments: The applicant pays the locational clearance fee at the City Treasurer’s Cost: No cost Office (CTO) and obtains the locational clearance at the CPDO. Comments: The tax declaration of improvement is released after an appraiser inspects the property, which can be done on the following day or sometimes even Procedure 8. Apply for the building permit and ancillary permits on the same day. at the Office of the Building Official (OBO) Time: 1 day *This procedure can be completed simultaneously with previous procedures. Cost: No cost Comments: The ancillary permits consist of: (1) the architectural permit, (2) civil/ Dealing with Construction Permits structural permit, (3) electrical permit, (4) mechanical permit, (5) sanitary permit, (6) ZAMBOANGA CITY plumbing permit, and (7) electronics permit. The applicant must submit the following requirements: Warehouse value: PHP 19,500,000 = USD 418,528 a. Certified true copy of Original Certificate of Title (OCT)/TCT on file with the Regis- Data as of: June 2010 try of Deeds; Procedure 1. Obtain certified true copy of the land title from the b. Tax declaration; Register of Deeds (RD) c. Current real property tax receipt; Time: 1 day d. Building permit application form; Cost: PHP 57 (PHP 30 for the certification + PHP 6 for each additional page (2 pages e. Five (5) sets of survey plans, design plans, specifications and other related needed) + PHP 15 documentary stamp tax) documents (i.e., architectural documents, civil/structural documents, electrical Comments: The certified true copy of the land title serves as proof of ownership of documents, mechanical documents, sanitary documents, plumbing documents, the land on which the warehouse is to be built. electronics documents, geodetic documents, and clearances from other agen- cies); and Procedure 2*. Obtain certified true copy of the tax declaration of f. Locational clearance from the CPDO. real property from the City Assessor’s Office (CAO) Time: 1 day Procedure 9. Notarize the building permit application form at the notary Cost: PHP 25 (PHP 10 certification + PHP 15 documentary stamp tax) Time: 1 day Comments: The certified true copy of the tax declaration of real property enables the company to identify the property by its index number. The tax clearance serves Cost: PHP 100 as proof that there are no arrears in the payment of realty taxes. Procedure 10. Apply and obtain Fire Safety Evaluation Clearance Procedure 3*. Obtain lot plan with site map from the geodetic (FSEC) from the local Fire Marshall at the Bureau of Fire engineer Protection (BFP) Time: 3 days Time: 2 days Cost: PHP 1,500 Cost: PHP 6,503 (half of 10,000 x floor area x 0.1%) Comments: The company must obtain the lot plan with site map from a geodetic Comments: The FSEC is a clearance with a fire safety checklist that enumerates the engineer to confirm the location of the land purported to be in the land title. A lot life and fire safety requirements of the Fire Code. plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- One set of plans and specifications submitted by the applicant to the OBO is referred vey, or at least after an analysis has been conducted of the lot technical description to the City Fire Marshall, who evaluates the plans to ensure that they conform to the appearing on the title. fire safety and control requirements of the Fire Code. The applicant must also submit 3 sets of the Fire and Life Safety Assessment Report (FALAR) 1 (which documents Procedure 4*. Obtain barangay clearance the fire and life safety features of the building) prepared by an architect who is duly Time: 1 day certified by the BFP to prepare this report. The City Fire Marshall must submit his recommendations to the OBO within 5 working days from the date of referral. Cost: PHP 100 While the company is getting approval from the City Fire Marshall, the OBO simulta- Comments: The barangay clearance is generally a requirement for obtaining the neously processes the building permit application and checks the building plans and locational clearance. The costs for barangay clearances vary as barangays have the specifications. discretion to impose their own fees for as long as such fees are reasonable and within the limits imposed by the Local Government Code and city ordinances. Procedure 11. Obtain the building permit from the OBO Procedure 5. Apply for the locational clearance at the City Time: 8 days Planning and Development Office (CPDO) Cost: PHP 39,018 (according to the National Building Code of the Philippines, the Time: 1 day cost of the building permit is PHP 23 per square meter. The computation here is based on PHP 30 per square meter to account for ancillary costs such as electrical, Cost: No cost mechanical and plumbing fees) Comments: The locational clearance is required to ensure that the construction conforms to the city’s Comprehensive Land Use Plan and zoning ordinances. LIST OF PROCE DURES • DEALING WITH construction permitS 135 Comments: After the building permit application is approved, the building official Procedure 21*. Receive final inspection for the Certificate of makes an assessment and issues an order of payment for the company to pay at the CTO. Once the company has paid the building permit fees, it will present the official Occupancy and CFEI from the OBO receipt to the Receiving/Releasing Section of the OBO which will then issue the Time: 1 day permit. Cost: No cost Comments: The OBO conducts a final inspection to check the building based on the Procedure 12. Receive inspection from the BFP during construction certificate of completion, construction logbook, building inspection sheets, original Time: 1 day and as-built plans and specifications. Cost: No cost Comments: The BFP conducts an inspection during construction to ensure that the Procedure 22. Obtain the Certificate of Occupancy and CFEI from plans and fire safety precautions are observed. the OBO Time: 2 days Procedure 13. Apply for the Certificate of Occupancy and Cost: PHP 19,400 (PHP 1,000 for first PHP 1,200,000 of the project value; PHP 1,000 Certificate of Final Electrical Inspection (CFEI) at the OBO for every PHP 1,000,000 in excess thereof; PHP 400 for the last PHP 150,000 - PHP Time: 1 day 300,000) Cost: No cost Comments: After the OBO has processed the application and conducted the inspection, it then issues an assessment and order of payment. The OBO issues the Comments: In applying for a Certificate of Occupancy, the applicant must submit Certificate of Occupancy after the applicant has paid the corresponding fees. the following to the OBO: a. Application for Certificate of Occupancy; Procedure 23. Apply for electricity connection at Zamboanga City b. Duly notarized certificate of completion; Electric Cooperative (ZAMCELCO) c. Construction logbook; Time: 1 day d. As-built plans and specifications; and Cost: No cost e. Building inspection sheet, Comments: The company visits ZAMCELCO to apply for the electricity connection all signed and sealed by the architect or engineer who undertook the full-time and submit the electrical plans and CFEI. ZAMCELCO technical staff inspects the inspection and supervision of the construction. warehouse. The company has to buy its own transformers and other installation The CFEI certifies that a final inspection of the electrical installation has been materials since ZAMCELCO does not provide these. conducted and that such installation has been completed in accordance with the approved plans and specifications on file with the OBO and the provisions of the Procedure 24. Receive inspection for electricity connection from Philippine Electrical Code. ZAMCELCO Time: 1 day Procedure 14. Apply for the Fire Safety Inspection Certificate Cost: No cost (FSIC) at the BFP Time: 1 day Procedure 25. Obtain electricity connection from ZAMCELCO Cost: PHP 6,503 (remaining half of 10,000 x floor area x 0.1%) Time: 12 days Comments: Once construction has been completed, the company requests the BFP Cost: PHP 410,807 (PHP 294,000 for the three 50-kVA transformers bought from pri- to inspect the site to certify that the required fire safety construction, fire protective vate firms + PHP 40,000 three-phase metering outfit with accessories + PHP 67,907 and/or warning systems are properly installed and in good working condition. The bill deposit + PHP 8,000 labor cost + PHP 900 testing fee) applicant must submit a Fire and Life Safety Assessment Report 2 (which certifies that the construction of the building was in accordance with FALAR 1), prepared by Procedure 26*. Apply for water connection at Zamboanga City an architect who is duly certified by the BFP to prepare this report. Water District (ZCWD) Time: 1 day Procedure 15. Receive final inspection for the FSIC from the BFP Cost: No cost Time: 1 day Comments: The applicant has to attend a two-hour seminar on ZCWD policies, Cost: No cost which is scheduled every Thursday. A certificate is issued to the applicant, which is one of the requirements for the water connection application. ZCWD does not Procedure 16. Obtain the FSIC from the BFP provide the materials for installation; hence, this is shouldered by the applicant. Time: 1 day Cost: No cost Procedure 27*. Receive inspection for water connection from ZCWD Procedure 17*. Obtain sanitary certificate from the City Health Time: 1 day Office (CHO) Cost: No cost Time: 1 day Cost: PHP 350 Procedure 28*. Obtain water connection from ZCWD Time: 2 days Procedure 18*. Receive inspection for the sanitary certificate Cost: PHP 501 (PHP 150 inspection fee + PHP 351 customer deposit of estimated bill from CHO of 1.5 months) + cost of materials for installation Time: 1 day Cost: No cost Procedure 29*. Obtain telephone connection from the telephone company Procedure 19*. Obtain zoning compliance from the CPDO Time: 8 days Time: 1 day Cost: No cost Cost: No cost Comments: There are three telephone companies providing landline services in Comments: This clearance confirms that the warehouse has complied with the Zamboanga City. These are Philippine Long Distance Co. (PLDT), Globelines, and issued locational clearance. Bayantel. For PLDT, the cost is PHP 1,500 and there is a lock-in period of 12 months for the regular phone line. Globelines requires proof of financial capability but does Procedure 20*. Receive inspection for the zoning compliance not charge any fee. There is a lock-in period of 12 months for the regular phone line. from CPDO For Bayantel, the cost is PHP 749 with no lock-in period. The case study assumes that the company will request services from Globelines as this is the option favorable to Time: 1 day the company. Cost: No cost 136 Doing Business IN the philippines 2011 Procedure 30*. Apply for the tax declaration of improvement at Procedure 4. Obtain Certificate Authorizing Registration (CAR) the CAO from the Bureau of Internal Revenue (BIR) Time: 1 day Time: 21 days Cost: No cost Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) Comments: The company must update its official records to include the newly built Comments: The Certificate Authorizing Registration (CAR) is a certification issued by warehouse for tax purposes. The OBO furnishes the CAO with a copy of the building the BIR that the transfer and conveyance of the property was reported and the taxes plan and Certificate of Occupancy to notify them of the new building construction. due have been fully paid. The company must submit the floor plan and as-built plan to the CAO. The taxpayer/applicant must submit the following documents to the BIR: a. Tax identification number (TIN) of seller and buyer; Procedure 31*. Receive inspection from the Appraiser of CAO b. Notarized deed of absolute sale/document of transfer, but only photocopied Time: 1 day document shall be retained by the BIR; Cost: No cost c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office for the land and improvement applicable to the taxable transaction; Procedure 32*. Obtain the tax declaration of improvement from d. Owners copy (for presentation purposes only) and photocopy (for authentication) the CAO of the Original Certificate of Title (OCT), or the certified true copy of the Transfer Time: 5 days Certificate of Title (TCT); and Cost: No cost e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or Comments: The tax declaration of improvement is released after an appraiser certificate of “with improvement” issued by the Assessor’s Office. inspects the property, which can be done on the following day or sometimes even on the same day. Procedure 5. Pay documentary stamp tax and creditable *This procedure can be completed simultaneously with previous procedures. withholding tax (CWT) at an authorized agent bank (AAB) Time: 1 day Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction LIST OF Procedures thereof of the property value) + creditable withholding tax of 6% of the selling price, Registering property fair market value, or zonal value, whichever is highest. Note: Computation for CWT is not included in the cost reflected.] Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 for DST and CWT respectively, based on the ONETT computation sheets prepared by the BIR ONETT team. The applicant files the DST return and CWT return and pays BATANGAS CITY the taxes at the AAB of the Revenue District Office. Payment must be made through Property value: PHP 4,169,969 = USD 89,500 either a manager’s check or cashier’s check within 5 days after the close of the month Data as of: June 2010 when the taxable document was signed or within 30 days from the sale, whichever is earlier. Procedure 1. Prepare the notarized deed of sale and related Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- documents ately issues a claim slip. Time: 1 day Procedure 6. Pay the transfer tax at the CTO Cost: PHP 41,700 (1% of the property value) Time: 1 day Comments: While the deed of sale can be prepared by anyone, it must be executed before and notarized by a notary public. In many instances, the notary public drafts Cost: PHP 31,275 (0.75% of the property price) the deed of sale and conducts the whole process on behalf of the parties. Comments: The transfer tax must be paid at the CTO. The documentation shall In addition to the deed of sale, the Register of Deeds also requires both the buyer include: and the seller to submit notarized secretary’s certificates containing the resolution of a. Tax clearance certificate for real property taxes from the CTO (obtained in Proce- their board of directors approving the sale. The buyer must also produce a certificate dure 3); from the Securities and Exchange Commission (SEC) stating that its articles of incor- b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and poration have been registered with the SEC. c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). Procedure 2*. Obtain certified true copy of latest tax declaration Procedure 7. Secure registration with the Register of Deeds (RD) and certificate of with improvement from the City Assessor’s Time: 21 days Office (CAO) Cost: PHP 23,863 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Time: 1 day PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Cost: PHP 195 {PHP 50 per RPU [(Land (1RPU), Building (1RPU)] + PHP 50 certificate of 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + with improvement + PHP 45 (PHP 15 documentary stamp tax per RPU/document)} PHP 2,419.2 IT fee (PHP 268.8 per document) + PHP 300 primary entry fee (PHP Comments: The seller must obtain a certified true copy of the latest tax declaration 30 per document) + PHP 480 registration fee for specific documents (PHP 120 per for the land and the building as well as a certificate of “with improvement” from the document) + PHP 120 fixed entry fee for specific documents (PHP 30 per document) CAO as these documents are required by the BIR. Loose documentary stamps must + PHP 40 legal research fee for specific documents (PHP 10 per document) + PHP 60 be affixed to these documents as proof of payment of the documentary stamp tax annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. certificate of title} However these can be more readily purchased at city government offices at a cost Comments: The buyer applies for registration with the Register of Deeds. The ranging from PHP 18-25 per stamp. documentation shall include: a. Copy of deed of absolute sale; Procedure 3*. Obtain tax clearance certificate of real property b. Official receipt evidencing payment of transfer tax; taxes from the Land Tax Division of the City Treasurer’s Office (CTO) c. Certificate Authorizing Registration from the BIR (CAR) including official receipts for payment of DST and CWT; Time: 1 day d. Real property tax clearance from the City Treasurer’s Office; Cost: PHP 215 (PHP 100 per RPU [(Land (1RPU), Building (1RPU)] + PHP 15 documen- e. Original copy of owner’s duplicate of TCT (in the name of the seller); tary stamp tax) f. Original or certified true copy of the latest tax declaration; Comments: The seller, after paying any arrears, obtains a tax clearance certificate from the CTO. g. Notarized secretary’s certificate containing resolution of the board of directors of the seller approving the sale; The documentation shall include an original of the official receipt evidencing pay- ment by seller of real property taxes. LIST LIST OFOF PROCE DURES PROCEDURES • RegistERING • STARTING APROPERT Y BUSINESS 137 h. Notarized secretary’s certificate containing resolution of the board of directors of Procedure 4. Obtain Certificate Authorizing Registration (CAR) the buyer approving the sale; from the Bureau of Internal Revenue (BIR) i. Articles of incorporation of the buyer and by-laws; and Time: 14 days j. Certificate from the SEC that the articles of incorporation of the buyer have been registered. Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) The Register of Deeds has been fully computerized since December 2, 2009 as a Comments: The Certificate Authorizing Registration (CAR) is a certification issued by result of the Land Registration Authority's land titling computerization project. the BIR that the transfer and conveyance of the property was reported and the taxes due have been fully paid. Procedure 8. Obtain new tax declaration over the building and The taxpayer/applicant must submit the following documents to the BIR: the land in the name of buyer from CAO a. Tax identification number (TIN) of seller and buyer; Time: 1 day b. Notarized deed of absolute sale/document of transfer, but only photocopied Cost: No cost document shall be retained by the BIR; Comments: The buyer applies with the CAO for the issuance of a new tax declara- c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office tion over the building in his name. for the land and improvement applicable to the taxable transaction; The documentation shall include: d. Owners copy (for presentation purposes only) and photocopy (for authentication) of the Original Certificate of Title (OCT), or the certified true copy of the Transfer a. Photocopy of notarized deed of sale (obtained in Procedure 1); Certificate of Title (TCT); and b. Copy of latest tax declaration (in the name of seller) (obtained in Procedure 2); e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or c. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- certificate of “with improvement” issued by the Assessor’s Office. dure 3); d. Certificate authorizing registration from the BIR (obtained in Procedure 5); Procedure 5. Pay documentary stamp tax and creditable e. Photocopy of official receipt of transfer tax payment (original copy to be pre- withholding tax (CWT) at an authorized agent bank (AAB) sented) (obtained in Procedure 6); and Time: 1 day f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction (obtained in Procedure 7). thereof of the property value) + creditable withholding tax of 6% of the selling price, fair market value, or zonal value, whichever is highest.] *This procedure can be completed simultaneously with previous procedures. Note: Computation for CWT is not included in the cost reflected. Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 registering property for DST and CWT respectively, based on the ONETT computation sheets prepared by the BIR ONETT team. The applicant files the DST return and CWT return and pays CAGAYAN DE ORO the taxes at the AAB of the Revenue District Office. Payment must be made through Property value: PHP 4,169,969 = USD 89,500 either a manager’s check or cashier’s check within 5 days after the close of the month Data as of: June 2010 when the taxable document was signed or within 30 days from the sale, whichever is earlier. Procedure 1. Prepare the notarized deed of sale and related Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- documents ately issues a claim slip. Time: 1 day Cost: PHP 104,249 (2.5% of the property value) Procedure 6. Pay the transfer tax at the CTO Comments: While the deed of sale can be prepared by anyone, it must be executed Time: 1 day before and notarized by a notary public. In many instances, the notary public drafts Cost: PHP 31,275 (0.75% of property price) the deed of sale and conducts the whole process on behalf of the parties. Comments: The transfer tax must be paid at the CTO. The documentation shall In addition to the deed of sale, the Register of Deeds also requires both the buyer include: and the seller to submit notarized secretary’s certificates containing the resolution of a. Tax clearance certificate for real property taxes from the CTO (obtained in Proce- their board of directors approving the sale. The buyer must also produce a certificate dure 3); from the Securities and Exchange Commission (SEC) stating that its articles of incor- b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and poration have been registered with the SEC. c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). Procedure 2*. Obtain certified true copy of latest tax declaration Procedure 7. Secure registration with the Register of Deeds (RD) and certificate of with improvement from the City Assessor’s Office (CAO) Time: 60 days Time: 1 day Cost: PHP 23,863 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Cost: PHP 165 {(PHP 40 per RPU [(Land (1RPU), Building (1RPU)] + PHP 40 for 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + certificate of with improvement + PHP 45 (PHP 15 documentary stamp tax per RPU/ PHP 2,419.2 IT fee (PHP 268.8 per document) + PHP 300 primary entry fee (PHP document)} 30 per document) + PHP 480 registration fee for specific documents (PHP 120 per Comments: The seller must obtain a certified true copy of the latest tax declaration document) + PHP 120 fixed entry fee for specific documents (PHP 30 per document) for the land and the building as well as a certificate of “with improvement” from the + PHP 40 legal research fee for specific documents (PHP 10 per document) + PHP 60 CAO as these documents are required by the BIR. Loose documentary stamps must annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer be affixed to these documents as proof of payment of the documentary stamp tax certificate of title} (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. Comments: The buyer applies for registration with the Register of Deeds. The However these can be more readily purchased at city government offices at a cost documentation shall include: ranging from PHP 18-25 per stamp. a. Copy of deed of absolute sale; Procedure 3*. Obtain tax clearance certificate of real property b. Official receipt evidencing payment of transfer tax; taxes from the Land Tax Division of the City Treasurer’s Office (CTO) c. Certificate Authorizing Registration from the BIR (CAR) including official receipts Time: 1 day for payment of DST and CWT; Cost: PHP 215 (PHP 100 per RPU [(Land (1RPU), Building (1RPU)] + PHP 15 documen- d. Real property tax clearance from the City Treasurer’s Office; tary stamp tax) e. Original copy of owner’s duplicate of TCT (in the name of the seller); Comments: The seller, after paying any arrears, obtains a tax clearance certificate f. Original or certified true copy of the latest tax declaration; from the CTO. g. Notarized secretary's certificate containing resolution of the board of directors of The documentation shall include an original of the official receipt evidencing pay- the seller approving the sale; ment by seller of real property taxes. 138 Doing Business IN the philippines 2011 h. Notarized secretary's certificate containing resolution of the board of directors of Procedure 4. Obtain Certificate Authorizing Registration (CAR) the buyer approving the sale; from the Bureau of Internal Revenue (BIR) i. Articles of incorporation of the buyer and by-laws; and Time: 14 days j. Certificate from the SEC that the articles of incorporation of the buyer have been registered. Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) The Register of Deeds has been fully computerized since June 15, 2010 as a result of Comments: The Certificate Authorizing Registration (CAR) is a certification issued by the Land Registration Authority's land titling computerization project. the BIR that the transfer and conveyance of the property was reported and the taxes due have been fully paid. Procedure 8. Obtain new tax declaration over the building and The taxpayer/applicant must submit the following documents to the BIR: the land in the name of buyer from CAO a. Tax identification number (TIN) of seller and buyer; Time: 2 days b. Notarized deed of absolute sale/document of transfer, but only photocopied Cost: No cost document shall be retained by the BIR; Comments: The buyer applies with the CAO for the issuance of a new tax declara- c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office tion over the building in his name. for the land and improvement applicable to the taxable transaction; The documentation shall include: d. Owners copy (for presentation purposes only) and photocopy (for authentication) of the Original Certificate of Title (OCT), or the certified true copy of the Transfer a. Photocopy of notarized deed of sale (obtained in Procedure 1); Certificate of Title (TCT); and b. Certified true copy of latest tax declaration (in the name of seller) (obtained in e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or Procedure 2); certificate of “with improvement” issued by the Assessor’s Office. c. Tax clearance certificate of real property tax from the CTO (obtained in Procedure 5); Procedure 5. Pay documentary stamp tax and creditable d. Certificate authorizing registration from the BIR (obtained in Procedure 3); withholding tax (CWT) at an authorized agent bank (AAB) e. Photocopy of official receipt of transfer tax payment (original copy to be pre- Time: 1 day sented) (obtained in Procedure 6); and Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer thereof of the property value) + creditable withholding tax of 6% of the selling price, (obtained in Procedure 7). fair market value, or zonal value, whichever is highest.] Note: Computation for CWT is not included in the cost reflected. *This procedure can be completed simultaneously with previous procedures. Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 for DST and CWT respectively, based on the ONETT computation sheets prepared registering property by the BIR ONETT team. The applicant files the DST return and CWT return and pays the taxes at the AAB of the Revenue District Office. Payment must be made through CALOOCAN either a manager’s check or cashier’s check within 5 days after the close of the month Property value: PHP 4,169,969 = USD 89,500 when the taxable document was signed or within 30 days from the sale, whichever Data as of: June 2010 is earlier. Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- Procedure 1. Prepare the notarized deed of sale and related ately issues a claim slip. documents Time: 1 day Procedure 6*. Pay the transfer tax at the CTO Cost: PHP 41,700 (1% of the property value) Time: 1 day Comments: While the deed of sale can be prepared by anyone, it must be executed Cost: PHP 34,402 (0.825% of the property price) before and notarized by a notary public. In many instances, the notary public drafts Comments: The transfer tax must be paid at the CTO. The documentation shall the deed of sale and conducts the whole process on behalf of the parties. include: In addition to the deed of sale, the Register of Deeds also requires both the buyer a. Tax clearance certificate for real property taxes from the CTO (obtained in Proce- and the seller to submit notarized secretary’s certificates containing the resolution of dure 3); their board of directors approving the sale. The buyer must also produce a certificate b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and from the Securities and Exchange Commission (SEC) stating that its articles of incor- poration have been registered with the SEC. c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). Procedure 2*. Obtain certified true copy of latest tax declaration Procedure 7. Secure registration with the Register of Deeds (RD) and certificate of with improvement from the City Assessor’s Time: 10 days Office (CAO) Cost: PHP 21,261 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Time: 1 day PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Cost: PHP 195 {PHP 50 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] PHP 300 primary entry fee (PHP 30 per document) + PHP 480 registration fee for + PHP 50 for certificate of with improvement + PHP 45 (PHP 15 documentary stamp specific documents (PHP 120 per document) + PHP 120 fixed entry fee for specific tax per RPU/document)} documents (PHP 30 per document) + PHP 40 legal research fee for specific docu- Comments: The seller must obtain a certified true copy of the latest tax declaration ments (PHP 10 per document) + PHP 60 annotation fee (PHP 30 per document) + for the land and the building as well as a certificate of “with improvement” from the PHP 75 fee for issuance of new transfer certificate of title} CAO as these documents are required by the BIR. Loose documentary stamps must Comments: The buyer applies for registration with the Register of Deeds. The be affixed to these documents as proof of payment of the documentary stamp tax documentation shall include: (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. However these can be more readily purchased at city government offices at a cost a. Copy of deed of absolute sale; ranging from PHP 18-25 per stamp. b. Official receipt evidencing payment of transfer tax; c. Certificate Authorizing Registration from the BIR (CAR) including official receipts Procedure 3*. Obtain tax clearance certificate of Real Property for payment of DST and CWT; Tax from the Land Tax Division of the City Treasurer’s Office (CTO) d. Real property tax clearance from the City Treasurer’s Office; Time: 2 days e. Original copy of owner’s duplicate of TCT (in the name of the seller); Cost: PHP 65 (PHP 50 for tax clearance + PHP 15 per documentary stamp tax) f. Original or certified true copy of the latest tax declaration; Comments: The seller, after paying any arrears, obtains a tax clearance certificate g. Notarized secretary’s certificate containing resolution of the board of directors of from the CTO. The documentation shall include an original of the official receipt the seller approving the sale; evidencing payment by seller of realty taxes. h. Notarized secretary’s certificate containing resolution of the board of directors of the buyer approving the sale; LIST LIST OFOF PROCE DURES PROCEDURES • RegistERING • STARTING APROPERT Y BUSINESS 139 i. Articles of incorporation of the buyer and by-laws; and Procedure 4. Obtain Certificate Authorizing Registration (CAR) j. Certificate from the SEC that the articles of incorporation of the buyer have been from the Bureau of Internal Revenue (BIR) registered. Time: 14 days Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) Procedure 8. Obtain new tax declaration over the building and Comments: The Certificate Authorizing Registration (CAR) is a certification issued by the land in the name of buyer from CAO the BIR that the transfer and conveyance of the property was reported and the taxes due have been fully paid. Time: 3 days The taxpayer/applicant must submit the following documents to the BIR: Cost: No cost a. Tax identification number (TIN) of seller and buyer; Comments: The buyer applies with the CAO for the issuance of a new tax declara- tion over the building in his name. b. Notarized deed of absolute sale/document of transfer, but only photocopied document shall be retained by the BIR; The documentation shall include: c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office a. Photocopy of notarized deed of sale (obtained in Procedure 1); for the land and improvement applicable to the taxable transaction; b. Certified true copy of latest tax declaration (in the name of seller) (obtained in d. Owners copy (for presentation purposes only) and photocopy (for authentication) Procedure 2); of the Original Certificate of Title (OCT), or the certified true copy of the Transfer c. Tax clearance certificate for real property tax from the CTO (obtained in Procedure Certificate of Title (TCT); and 3); e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or d. Certificate authorizing registration from the BIR (obtained in Procedure 4); certificate of “with improvement” issued by the Assessor’s Office. e. Photocopy of official receipt of transfer tax payment (original copy to be pre- sented) (obtained in Procedure 6); and Procedure 5. Pay documentary stamp tax and creditable f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) withholding tax (CWT) at an authorized agent bank (AAB) (obtained in Procedure 7). Time: 1 day Cost: PHP 62,550 [PHP 15 for every PHP 1,000 or a fraction thereof of the property *This procedure can be completed simultaneously with previous procedures. value) + creditable withholding tax of 6% of the selling price, fair market value, or zonal value, whichever is highest.] registering property Note: Computation for CWT is not included in the cost reflected. CEBU CITY Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 for DST and CWT respectively, based on the ONETT computation sheets prepared Property value: PHP 4,169,969 = USD 89,500 by the BIR ONETT team. The applicant files the DST return and CWT return and pays Data as of: June 2010 the taxes at the AAB of the Revenue District Office. Payment must be made through either a manager’s check or cashier’s check within 5 days after the close of the month Procedure 1. Prepare the notarized deed of sale and related when the taxable document was signed or within 30 days from the sale, whichever documents is earlier. Time: 1 day Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- Cost: PHP 41,700 (1% of the property value) ately issues a claim slip. Comments: While the deed of sale can be prepared by anyone, it must be executed before and notarized by a notary public. In many instances, the notary public drafts Procedure 6. Pay the transfer tax at the CTO the deed of sale and conducts the whole process on behalf of the parties. Time: 1 day In addition to the deed of sale, the Register of Deeds also requires both the buyer Cost: PHP 20,850 (0.5% of the property price) and the seller to submit notarized secretary’s certificates containing the resolution of Comments: The transfer tax must be paid at the CTO. The documentation shall their board of directors approving the sale. The buyer must also produce a certificate include: from the Securities and Exchange Commission (SEC) stating that its articles of incor- a. Tax clearance certificate of real property tax from the CTO (obtained in Procedure poration have been registered with the SEC. 3); b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and Procedure 2*. Obtain certified true copy of latest tax declaration and certificate of with improvement from the City Assessor’s c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). Office (CAO) Procedure 7. Secure registration with the Register of Deeds (RD) Time: 1 day Time: 5 days Cost: PHP 165 {PHP 40 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] + PHP 40 for certificate of with improvement + PHP 45 (PHP 15 documentary stamp Cost: PHP 23,434 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + tax per RPU/document)} PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 199.56 legal research fee (1% of the registration fee) + PHP 60 judicial form fee + Comments: The seller must obtain a certified true copy of the latest tax declaration PHP 2,150.4 IT fee (PHP 268.8 per document) + PHP 240 primary entry fee (PHP for the land and the building as well as a certificate of “with improvement” from the 30 per document) + PHP 360 registration fee for specific documents (PHP 120 per CAO as these documents are required by the BIR. Loose documentary stamps must document) + PHP 90 fixed entry fee for specific documents (PHP 30 per document) be affixed to these documents as proof of payment of the documentary stamp tax + PHP 30 legal research fee for specific documents (PHP 10 per document) + PHP 60 (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. annotation fee (PHP 30 per document) + PHP 288 fee for issuance of new transfer However these can be more readily purchased at city government offices at a cost certificate of title} ranging from PHP 18-25 per stamp. Comments: The buyer applies for registration with the Register of Deeds. The documentation shall include: Procedure 3*. Obtain tax clearance certificate of Real Property Tax from the Land Tax Division of the City Treasurer’s Office (CTO) a. Copy of deed of absolute sale; Time: 1 day b. Official receipt evidencing payment of transfer tax; Cost: PHP 65 [PHP 30 for tax clearance + PHP 10 per page of tax declaration (assum- c. Certificate Authorizing Registration from the BIR (CAR) including official receipts ing 2 pages for land and building) + PHP 15 for documentary stamp tax] for payment of DST and CWT; Comments: The seller, after paying any arrears, obtains a tax clearance certificate d. Real property tax clearance from the City Treasurer’s Office; from the CTO. The documentation shall include an original of the official receipt e. Original copy of owner’s duplicate of TCT (in the name of the seller); evidencing payment by seller of realty taxes. f. Original or certified true copy of the latest tax declaration; g. Notarized secretary’s certificate containing resolution of the board of directors of the seller approving the sale; 140 Doing Business IN the philippines 2011 h. Notarized secretary’s certificate containing resolution of the board of directors of Comments: The seller must obtain a certified true copy of the latest tax declaration the buyer approving the sale; and for the land and the building as well as a certificate of “with improvement” from the i. Articles of incorporation of the buyer and by-laws. CAO as these documents are required by the BIR. Loose documentary stamps must be affixed to these documents as proof of payment of the documentary stamp tax The Register of Deeds has been fully computerized since July 7, 2009 as a result of (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. the Land Registration Authority's land titling computerization project. However these can be more readily purchased at city government offices at a cost ranging from PHP 18-25 per stamp. Procedure 8*. Obtain new tax declaration over the building and the land in the name of buyer from CAO Procedure 3*. Obtain tax clearance certificate of Real Property Time: 3 days Tax from the Land Tax Division of the City Treasurer’s Office (CTO) Cost: No cost Time: 1 day Comments: The buyer applies with the CAO for the issuance of a new tax declara- Cost: PHP 50 (PHP 25 for tax clearance of land + PHP 10 if there is a building + PHP tion over the building in his name. 15 documentary stamp tax on certificate) The documentation shall include: Comments: The seller, after paying any arrears, obtains a tax clearance certificate a. Photocopy of notarized deed of sale (obtained in Procedure 1); from the CTO. The documentation shall include an original of the official receipt b. Certified true copy of latest tax declaration (in the name of seller) (obtained in evidencing payment by seller of realty taxes. Procedure 2); c. Tax clearance certificate of real property tax from the CTO (obtained in Procedure Procedure 4. Obtain Certificate Authorizing Registration (CAR) 3); from the Bureau of Internal Revenue (BIR) d. Certificate authorizing registration from the BIR (obtained in Procedure 4); and Time: 14 days e. Photocopy of official receipt of transfer tax payment (original copy to be pre- Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) sented) (obtained in Procedure 6). Comments: The Certificate Authorizing Registration (CAR) is a certification issued by The city does not require the new TCT in issuing the new tax declaration. the BIR that the transfer and conveyance of the property was reported and the taxes The documentation shall include: due have been fully paid. a. Photocopy of notarized deed of sale (obtained in Procedure 1); The taxpayer/applicant must submit the following documents to the BIR: b. certified true copy of latest tax declaration (in the name of seller) (obtained in a. Tax identification number (TIN) of seller and buyer; Procedure 2); b. Notarized deed of absolute sale/document of transfer, but only photocopied c. Certificate authorizing registration from the BIR (obtained in Procedure 3); document shall be retained by the BIR; d. Realty tax clearance from the CTO (obtained in Procedure 5); c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office for the land and improvement applicable to the taxable transaction; e. Photocopy of official receipt of transfer tax payment (original copy to be pre- sented) (obtained in Procedure 6); and d. Owners copy (for presentation purposes only) and photocopy (for authentication) of the Original Certificate of Title (OCT), or the certified true copy of the Transfer f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) Certificate of Title (TCT); and (obtained in Procedure 7). e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or certificate of “with improvement” issued by the Assessor’s Office. Procedure 9*. Obtain inspection from CAO Time: 1 day Procedure 5. Pay documentary stamp tax and creditable Cost: No cost withholding tax (CWT) at an authorized agent bank (AAB) Time: 1 day *This procedure can be completed simultaneously with previous procedures. Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction thereof of the property value) + creditable withholding tax of 6% of the selling price, fair market value, or zonal value, whichever is highest.] registering property Note: Computation for CWT is not included in the cost reflected. DAVAO CITY Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 Property value: PHP 4,169,969 = USD 89,500 for DST and CWT respectively, based on the ONETT computation sheets prepared by Data as of: June 2010 the BIR ONETT team. The applicant files the DST return and CWT return and pays the taxes at the AAB of the Revenue District Office. Payment must be made through either Procedure 1. Prepare the notarized deed of sale and related a manager’s check or cashier’s check within 5 days after the close of the month when documents the taxable document was signed or within 30 days from the sale, whichever is earlier. Time: 1 day Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- Cost: PHP 83,399 (1-3% of the property value) ately issues a claim slip. Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 for DST and CWT respectively, based on the ONETT computation sheets Comments: While the deed of sale can be prepared by anyone, it must be executed prepared by the BIR ONETT team. The applicant files the DST return and CWT return before and notarized by a notary public. In many instances, the notary public drafts and pays the taxes at the AAB of the Revenue District Office. Payment must be made the deed of sale and conducts the whole process on behalf of the parties. through either a manager’s check or cashier’s check within 5 days after the close of In addition to the deed of sale, the Register of Deeds also requires both the buyer the month when the taxable document was signed or within 30 days from the sale, and the seller to submit notarized secretary’s certificates containing the resolution of whichever is earlier. their board of directors approving the sale. The buyer must also produce a certificate Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- from the Securities and Exchange Commission (SEC) stating that its articles of incor- ately issues a claim slip. poration have been registered with the SEC. Procedure 6. Pay the transfer tax at the CTO Procedure 2*. Obtain certified true copy of latest tax declaration Time: 1 day and certificate of with improvement from the City Assessor’s Office (CAO) Cost: PHP 33,360 (0.8% of the property price) Time: 1 day Comments: The transfer tax must be paid at the CTO. The documentation shall include: Cost: PHP 120 {PHP 25 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] + PHP 25 for certificate of with improvement + PHP 45 (PHP 15 documentary stamp a. Deed of absolute sale (obtained in Procedure 1); tax per RPU/document)} b. Tax declaration (Obtained in Procedure 2); c. Tax clearance certificate of real property tax from the CTO (obtained in Procedure 3); d. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and e. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). LIST LIST OFOF PROCE DURES PROCEDURES • RegistERING • STARTING APROPERT Y BUSINESS 141 Procedure 7. Secure registration with the Register of Deeds (RD) Procedure 2*. Obtain certified true copy of latest tax declaration Time: 14 days and certificate of with improvement from the City Assessor’s Cost: PHP 24,322 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Office (CAO) PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Time: 2 days 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Cost: PHP 165 {PHP 40 per RPU [(Land (1RPU), Building (1RPU)] + PHP 40 for PHP 2,688 IT fee (PHP 268.8 per document) + PHP 330 primary entry fee (PHP 30 certificate of no improvement + PHP 45 (PHP 15 documentary stamp tax per RPU/ per document) + PHP 600 registration fee for specific documents (PHP 120 per document)} document) + PHP 150 fixed entry fee for specific documents (PHP 30 per document) Comments: The seller must obtain a certified true copy of the latest tax declaration + PHP 50 legal research fee for specific documents (PHP 10 per document) + PHP 60 for the land and the building as well as a certificate of “with improvement” from the annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer CAO as these documents are required by the BIR. Loose documentary stamps must certificate of title} be affixed to these documents as proof of payment of the documentary stamp tax Comments: The buyer applies for registration with the Register of Deeds. The (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. documentation shall include: However these can be more readily purchased at city government offices at a cost a. Copy of deed of absolute sale; ranging from PHP 18-25 per stamp. b. Official receipt evidencing payment of transfer tax; c. Certificate Authorizing Registration from the BIR (CAR) including official receipts Procedure 3*. Obtain tax clearance certificate of real property for payment of DST and CWT; taxes from the Land Tax Division of the City Treasurer’s Office (CTO) d. Real property tax clearance from the City Treasurer’s Office; Time: 1 day e. Original copy of owner’s duplicate of TCT (in the name of the seller); Cost: PHP 65 (PHP 25 per RPU[(Land (1RPU), Building (1RPU)] + PHP 15 documen- tary stamp tax) f. Original or certified true copy of the latest tax declaration; Comments: The seller, after paying any arrears, obtains a tax clearance certificate g. Notarized secretary’s certificate containing resolution of the board of directors of from the CTO. the seller approving the sale; The documentation shall include an original of the official receipt evidencing pay- h. Notarized secretary’s certificate containing resolution of the board of directors of ment by seller of realty taxes. the buyer approving the sale; i. Articles of incorporation of the buyer and by-laws; Procedure 4. Obtain Certificate Authorizing Registration (CAR) j. Articles of incorporation of the seller and by-laws; and from the Bureau of Internal Revenue (BIR) k. Certificate from the SEC that the articles of incorporation of the buyer have been Time: 21 days registered. Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) The Register of Deeds has been fully computerized since February, 2010 as a result of Comments: The Certificate Authorizing Registration (CAR) is a certification issued by the Land Registration Authority's land titling computerization project. the BIR that the transfer and conveyance of the property was reported and the taxes due have been fully paid. Procedure 8. Obtain new tax declaration over the building and the land in the name of buyer from CAO The taxpayer/applicant must submit the following documents to the BIR: a. Tax identification number (TIN) of seller and buyer; Time: 3 days b. Notarized deed of absolute sale/document of transfer, but only photocopied Cost: No cost document shall be retained by the BIR; Comments: The buyer applies with the CAO for the issuance of a new tax declara- c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office tion over the building in his name. for the land and improvement applicable to the taxable transaction; The documentation shall include: d. Owners copy (for presentation purposes only) and photocopy (for authentication) a. Photocopy of notarized deed of sale (obtained in Procedure 1); of the Original Certificate of Title (OCT), or the certified true copy of the Transfer b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Certificate of Title (TCT); and Procedure 2); e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or c. Tax clearance certificate of real property tax from the CTO (obtained in Procedure certificate of “with improvement” issued by the Assessor’s Office. 3); d. Certificate authorizing registration from the BIR (obtained in Procedure 4); Procedure 5. Pay documentary stamp tax and creditable e. Photocopy of official receipt of transfer tax payment (original copy to be pre- withholding tax (CWT) at an authorized agent bank (AAB) sented) (obtained in Procedure 6); and Time: 1 day f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction (obtained in Procedure 7). thereof of the property value) + creditable withholding tax of 6% of the selling price, fair market value, or zonal value, whichever is highest.] *This procedure can be completed simultaneously with previous procedures. Note: Computation for CWT is not included in the cost reflected. Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 registering property for DST and CWT respectively, based on the ONETT computation sheets prepared by the BIR ONETT team. The applicant files the DST return and CWT return and pays the GENERAL SANTOS taxes at the AAB of the Revenue District Office. Payment must be made through either Property value: PHP 4,169,969 = USD 89,500 a manager’s check or cashier’s check within 5 days after the close of the month when Data as of: June 2010 the taxable document was signed or within 30 days from the sale, whichever is earlier. Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- Procedure 1. Prepare the notarized deed of sale and related ately issues a claim slip. documents Time: 1 day Procedure 6*. Pay the transfer tax at the CTO Cost: PHP 125,099 (3% of the property value) Time: 1 day Comments: While the deed of sale can be prepared by anyone, it must be executed Cost: PHP 20,850 (0.5% of the property price) before and notarized by a notary public. In many instances, the notary public drafts Comments: The transfer tax must be paid at the CTO. The documentation shall the deed of sale and conducts the whole process on behalf of the parties. include: In addition to the deed of sale, the Register of Deeds also requires both the buyer a. Notarized deed of absolute sale; and the seller to submit notarized secretary’s certificates containing the resolution of b. Certificate of improvement from the Assessor’s Office (obtained in Procedure 2); their board of directors approving the sale. The buyer must also produce a certificate c. Copy of the latest tax declaration (obtained in Procedure 2); and from the Securities and Exchange Commission (SEC) stating that its articles of incor- poration have been registered with the SEC. d. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- dure 3). 142 Doing Business IN the philippines 2011 Procedure 7. Obtain new tax declaration over the building and Procedure 2*. Obtain tax clearance certificate of Real Property the land in the name of buyer from CAO Tax from the City Treasurer’s Office (CTO) Time: 3 days Time: 1 day Cost: No cost Cost: PHP 115 (PHP 100 for tax clearance + PHP 15 per documentary stamp tax) Comments: The buyer applies with the CAO for the issuance of a new tax declara- Comments: The seller, after paying any arrears, obtains a tax clearance certificate tion over the building in his name. from the CTO. The documentation shall include: The documentation shall include an original of the official receipt evidencing pay- a. Photocopy of notarized deed of sale (obtained in Procedure 1); ment by seller of realty taxes. b. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- dure 3); Procedure 3. Obtain certified true copy of latest tax declaration and certificate of with improvement from the City Assessor’s c. Certificate authorizing registration from the BIR (obtained in Procedure 4); Office (CAO) d. Photocopy of official receipt of transfer tax payment (original copy to be pre- sented) (obtained in Procedure 5); Time: 1 day e. Transfer certificate of title in the name of the seller; and Cost: PHP 405 {PHP 100 per RPU [(Land (1RPU), Building (1RPU)] for certified true copy of the latest tax declaration + PHP 100 for certificate of with improvement + PHP f. Sworn statement declaring the true and current market value of the property. 60 verification fee + PHP 45 (PHP 15 documentary stamp tax per RPU/document)} Procedure 8*. Receive inspection from CAO Comments: The seller must obtain a certified true copy of the latest tax declaration for the land and the building as well as a certificate of “with improvement” from the Time: 1 day CAO as these documents are required by the BIR. Loose documentary stamps must Cost: No cost be affixed to these documents as proof of payment of the documentary stamp tax (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. Procedure 9. Secure registration with the Register of Deeds (RD) However these can be more readily purchased at city government offices at a cost Time: 14 days ranging from PHP 18-25 per stamp. Cost: PHP 22,945 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Documentation shall include the tax clearance certificate of real property tax PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP (obtained in Procedure 2) 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + PHP 1,881.16 IT fee (PHP 268.8 per document) + PHP 240 primary entry fee (PHP Procedure 4. Obtain Certificate Authorizing Registration (CAR) 30 per document) + PHP 240 registration fee for specific documents (PHP 120 per from the Bureau of Internal Revenue (BIR) document) + PHP 60 fixed entry fee for specific documents (PHP 30 per document) Time: 21 days + PHP 20 legal research fee for specific documents (PHP 10 per document) + PHP 60 Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer certificate of title} Comments: The Certificate Authorizing Registration (CAR) is a certification issued by the BIR that the transfer and conveyance of the property was reported and the taxes Comments: The buyer applies for registration with the Register of Deeds. The due have been fully paid. documentation shall include: The taxpayer/applicant must submit the following documents to the BIR: a. Copy of deed of absolute sale; a. Tax identification number (TIN) of seller and buyer; b. Official receipt evidencing payment of transfer tax; b. Notarized deed of absolute sale/document of transfer, but only photocopied c. Certificate Authorizing Registration from the BIR (CAR) including official receipts document shall be retained by the BIR; for payment of DST and CWT; c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office d. Real property tax clearance from the City Treasurer’s Office; for the land and improvement applicable to the taxable transaction; e. Original copy of owner’s duplicate of TCT (in the name of the seller); d. Owners copy (for presentation purposes only) and photocopy (for authentication) f. Original or certified true copy of the latest tax declaration; of the Original Certificate of Title (OCT), or the certified true copy of the Transfer g. Notarized secretary’s certificate containing resolution of the board of directors of Certificate of Title (TCT); and the seller approving the sale; e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or h. Notarized secretary’s certificate containing resolution of the board of directors of certificate of “with improvement” issued by the Assessor’s Office. the buyer approving the sale; i. Articles of incorporation of the buyer and by-laws; Procedure 5. Pay documentary stamp tax and creditable j. Articles of incorporation of the seller and by-laws; and withholding tax (CWT) at an authorized agent bank (AAB) k. Certificate from the SEC that the articles of incorporation of the buyer have been Time: 1 day registered. Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction The Register of Deeds has been fully computerized since January 11, 2010 as a result thereof of the property value) + creditable withholding tax of 6% of the selling price, of the Land Registration Authority's land titling computerization project. fair market value, or zonal value, whichever is highest.] *This procedure can be completed simultaneously with previous procedures. Note: Computation for CWT is not included in the cost reflected. Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 registering property for DST and CWT respectively, based on the ONETT computation sheets prepared by the BIR ONETT team. The applicant files the DST return and CWT return and pays the ILOILO CITY taxes at the AAB of the Revenue District Office. Payment must be made through either Property value: PHP 4,169,969 = USD 89,500 a manager’s check or cashier’s check within 5 days after the close of the month when Data as of: June 2010 the taxable document was signed or within 30 days from the sale, whichever is earlier. Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- Procedure 1. Prepare the notarized deed of sale and related ately issues a claim slip. documents Time: 1 day Procedure 6. Pay the transfer tax at the CTO Cost: PHP 83,399 (1-3% of the property value) Time: 1 day Comments: While the deed of sale can be prepared by anyone, it must be executed Cost: PHP 34,402 (0.825% of the property price) before and notarized by a notary public. In many instances, the notary public drafts Comments: The transfer tax must be paid at the CTO. The documentation shall the deed of sale and conducts the whole process on behalf of the parties. include: In addition to the deed of sale, the Register of Deeds also requires both the buyer a. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- and the seller to submit notarized secretary’s certificates containing the resolution of dure 2); their board of directors approving the sale. The buyer must also produce a certificate b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and from the Securities and Exchange Commission (SEC) stating that its articles of incor- c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). poration have been registered with the SEC. LIST LIST OFOF PROCE DURES PROCEDURES • RegistERING • STARTING APROPERT Y BUSINESS 143 Procedure 7. Secure registration with the Register of Deeds (RD) Procedure 2. Obtain tax clearance certificate of real property Time: 7 days taxes from the Land Tax Division of City Treasurer’s Office (CTO) Cost: PHP 23,426 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Time: 1 day PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Cost: PHP 35 (PHP 20 for tax clearance + PHP 15 for documentary stamp tax on 199.56 legal research fee (1% of the registration fee) + PHP 60 judicial form fee + certificate) PHP 2,580 IT fee + PHP 30 primary entry fee for Copy of Deed of Sale + PHP 540 Comments: The seller, after paying any due amounts, obtains a tax clearance registration fee for specific documents + PHP 60 fee for issuance of new transfer certificate from the CTO. certificate of title} The documentation shall include: an original of the official receipt evidencing pay- Comments: The buyer applies for registration with the Register of Deeds. The ment by seller of realty taxes. documentation shall include: a. Copy of deed of absolute sale; Procedure 3. Obtain certified true copy of latest tax declaration b. Official receipt evidencing payment of transfer tax; and certificate of with improvement from the City Assessor’s c. Certificate Authorizing Registration from the BIR (CAR) including official receipts Office (CAO) for payment of DST and CWT; Time: 2 days d. Real property tax clearance from the City Treasurer’s Office; Cost: PHP 115 {PHP 25 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] e. Original copy of owner’s duplicate of TCT (in the name of the seller); + PHP 20 for certificate of with improvement + PHP 45 (PHP 15 documentary stamp f. Original or certified true copy of the latest tax declaration; tax per RPU/document)} g. Notarized secretary’s certificate containing resolution of the board of directors of Comments: The seller must obtain a certified true copy of the latest tax declaration the seller approving the sale; for the land and the building as well as a certificate of “with improvement” from the CAO as these documents are required by the BIR. Loose documentary stamps must h. Notarized secretary’s certificate containing resolution of the board of directors of be affixed to these documents as proof of payment of the documentary stamp tax the buyer approving the sale; (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. i. Articles of incorporation of the buyer and by-laws; and However these can be more readily purchased at city government offices at a cost j. Certificate from the SEC that the articles of incorporation of the buyer have been ranging from PHP 18-25 per stamp. registered. The Register of Deeds has been fully computerized since December 9, 2009 as a Procedure 4. Obtain Certificate Authorizing Registration (CAR) result of the Land Registration Authority's land titling computerization project. from the Bureau of Internal Revenue (BIR) Time: 25 days Procedure 8. Obtain new tax declaration over the building and Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) the land in the name of buyer from CAO Comments: The Certificate Authorizing Registration (CAR) is a certification issued by Time: 7 days the BIR that the transfer and conveyance of the property was reported and the taxes Cost: PHP 230 (PHP 100 per RPU + PHP 15 documentary stamp tax per document) due have been fully paid. Comments: The buyer applies with the CAO for the issuance of a new tax declara- The taxpayer/applicant must submit the following documents to the BIR: tion over the building in his name. a. Tax identification number (TIN) of seller and buyer; The documentation shall include: b. Notarized deed of absolute sale/document of transfer, but only photocopied a. Photocopy of notarized deed of sale (obtained in Procedure 1); document shall be retained by the BIR; b. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office dure 2); for the land and improvement applicable to the taxable transaction; c. Copy of the latest tax declaration (in the name of seller) (obtained in Procedure 3); d. Owners copy (for presentation purposes only) and photocopy (for authentication) d. Certificate authorizing registration from the BIR (obtained in Procedure 4); of the Original Certificate of Title (OCT), or the certified true copy of the Transfer e. Photocopy of official receipt of transfer tax payment (original copy to be pre- Certificate of Title (TCT); and sented) (obtained in Procedure 6); and e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) certificate of “with improvement” issued by the Assessor’s Office. (obtained in Procedure 7). Procedure 5. Pay documentary stamp tax and creditable *This procedure can be completed simultaneously with previous procedures. withholding tax (CWT) at an authorized agent bank (AAB) Time: 1 day registering property Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction LAPU-LAPU thereof of the property value) + creditable withholding tax of 6% of the selling price, Property value: PHP 4,169,969 = USD 89,500 fair market value, or zonal value, whichever is highest.] Data as of: June 2010 Note: Computation for CWT is not included in the cost reflected. Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 Procedure 1. Prepare the notarized deed of sale and related for DST and CWT respectively, based on the ONETT computation sheets prepared by documents the BIR ONETT team. The applicant files the DST return and CWT return and pays the Time: 1 day taxes at the AAB of the Revenue District Office. Payment must be made through either Cost: PHP 41,700 (1% of the property value) a manager’s check or cashier’s check within 5 days after the close of the month when the taxable document was signed or within 30 days from the sale, whichever is earlier. Comments: While the deed of sale can be prepared by anyone, it must be executed before and notarized by a notary public. In many instances, the notary public drafts Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- the deed of sale and conducts the whole process on behalf of the parties. ately issues a claim slip. In addition to the deed of sale, the Register of Deeds also requires both the buyer and the seller to submit notarized secretary’s certificates containing the resolution of Procedure 6. Pay the transfer tax at the CTO their board of directors approving the sale. The buyer must also produce a certificate Time: 1 day from the Securities and Exchange Commission (SEC) stating that its articles of incor- Cost: PHP 31,275 (0.75% of the property price) poration have been registered with the SEC. Comments: The transfer tax must be paid at the CTO. The documentation shall include: a. Tax clearance certificate of real estate taxes from the CTO (obtained in Procedure 4); b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). 144 Doing Business IN the philippines 2011 Procedure 7. Secure registration with the Register of Deeds (RD) Procedure 2*. Obtain certified true copy of latest tax declaration Time: 30 days and certificate of with improvement from the City Assessor’s Cost: PHP 23,404 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Office (CAO) PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Time: 1 day 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Cost: PHP 345 {PHP 100 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] PHP 2,150.4 IT fee (PHP 268.8 per document) + PHP 270 primary entry fee (PHP + PHP 100 for certificate of with improvement + PHP 45 (PHP 15 documentary 30 per document) + PHP 360 registration fee for specific documents (PHP 120 per stamp tax per RPU/document)} document) + PHP 90 fixed entry fee for specific documents (PHP 30 per document) Comments: The seller must obtain a certified true copy of the latest tax declaration + PHP 30 legal research fee for specific documents (PHP 10 per document) + PHP 60 for the land and the building as well as a certificate of “with improvement” from the annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer CAO as these documents are required by the BIR. Loose documentary stamps must certificate of title} be affixed to these documents as proof of payment of the documentary stamp tax Comments: The buyer applies for registration with the Register of Deeds. The (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. documentation shall include: However these can be more readily purchased at city government offices at a cost a. Copy of deed of absolute sale; ranging from PHP 18-25 per stamp. b. Official receipt evidencing payment of transfer tax; c. Certificate Authorizing Registration from the BIR (CAR) including official receipts Procedure 3*. Obtain tax clearance certificate of Real Property for payment of DST and CWT; Tax from the Land Tax Division of the City Treasurer’s Office (CTO) d. Real property tax clearance from the City Treasurer’s Office; Time: 1 day e. Original copy of owner’s duplicate of TCT (in the name of the seller); Cost: PHP 130 (PHP 50 per RPU [(Land (1RPU), Building (1RPU)] + PHP 15 documen- tary stamp tax per RPU/document) f. Original or certified true copy of the latest tax declaration; Comments: The seller, after paying any arrears, obtains a tax clearance certificate g. Notarized secretary’s certificate containing resolution of the board of directors of from the CTO. the seller approving the sale; The documentation shall include an original of the official receipt evidencing pay- h. Notarized secretary’s certificate containing resolution of the board of directors of ment by seller of realty taxes. the buyer approving the sale; and i. Articles of incorporation of the buyer and by-laws. Procedure 4. Obtain Certificate Authorizing Registration (CAR) The Register of Deeds has been fully computerized since November 19, 2009 as a from the Bureau of Internal Revenue (BIR) result of the Land Registration Authority's land titling computerization project. Time: 10 days Procedure 8. Obtain new tax declaration over the building and Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) the land in the name of buyer from CAO Comments: The Certificate Authorizing Registration (CAR) is a certification issued by the BIR that the transfer and conveyance of the property was reported and the taxes Time: 3 days due have been fully paid. Cost: No cost The taxpayer/applicant must submit the following documents to the BIR: Comments: The buyer applies with the CAO for the issuance of a new tax declara- a. Tax identification number (TIN) of seller and buyer; tion over the building in his name. b. Notarized deed of absolute sale/document of transfer, but only photocopied The documentation shall include: document shall be retained by the BIR; a. Photocopy of notarized deed of sale (obtained in Procedure 1); c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office b. Tax clearance certificate real estate taxes from the CTO (obtained in Procedure 2); for the land and improvement applicable to the taxable transaction; c. Latest tax declaration (in the name of seller) (obtained in Procedure 3); d. Owners copy (for presentation purposes only) and photocopy (for authentication) d. Certificate authorizing registration from the BIR (obtained in Procedure 4); of the Original Certificate of Title (OCT), or the certified true copy of the Transfer e. Photocopy of official receipt of transfer tax payment (original copy to be pre- Certificate of Title (TCT); and sented) (obtained in Procedure 6); and e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) certificate of “with improvement” issued by the Assessor’s Office. (obtained in Procedure 7). Procedure 5. Pay documentary stamp tax and creditable registering property withholding tax (CWT) at an authorized agent bank (AAB) Time: 1 day LAS PIÑAS Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction Property value: PHP 4,169,969 = USD 89,500 thereof of the property value) + creditable withholding tax of 6% of the selling price, Data as of: June 2010 fair market value, or zonal value, whichever is highest.] Procedure 1. Prepare the notarized deed of sale and related Note: Computation for CWT is not included in the cost reflected. documents Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 for DST and CWT respectively, based on the ONETT computation sheets prepared by Time: 1 day the BIR ONETT team. The applicant files the DST return and CWT return and pays the Cost: PHP 83,399 (1-3% of the property value) taxes at the AAB of the Revenue District Office. Payment must be made through either Comments: While the deed of sale can be prepared by anyone, it must be executed a manager’s check or cashier’s check within 5 days after the close of the month when before and notarized by a notary public. In many instances, the notary public drafts the taxable document was signed or within 30 days from the sale, whichever is earlier. the deed of sale and conducts the whole process on behalf of the parties. Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- In addition to the deed of sale, the Register of Deeds also requires both the buyer ately issues a claim slip. and the seller to submit notarized secretary’s certificates containing the resolution of their board of directors approving the sale. The buyer must also produce a certificate Procedure 6. Pay the transfer tax at the CTO from the Securities and Exchange Commission (SEC) stating that its articles of incor- Time: 1 day poration have been registered with the SEC. Cost: PHP 25,416 (0.5% of property price + PHP 4,566 community tax on the sale of property) Comments: The transfer tax must be paid at the CTO. The documentation shall include: a. Notarized deed of sale (obtained in Procedure 1); b. Tax clearance certificate of real property tax from the CTO (obtained in Procedure 3); and c. Certificate Authorizing Registration from the BIR (obtained in Procedure 4). LIST LIST OFOF PROCE DURES PROCEDURES • RegistERING • STARTING APROPERT Y BUSINESS 145 Procedure 7. Secure registration with the Register of Deeds (RD) Procedure 2*. Obtain certified true copy of latest tax declaration Time: 14 days and certificate of with improvement from the City Assessor’s Cost: PHP 23,863 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Office (CAO) PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Time: 1 day 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Cost: PHP 195 {PHP 50 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] PHP 2,419.2 IT fee (PHP 268.8 per document) + PHP 300 primary entry fee (PHP + PHP 50 for certificate of with improvement + PHP 45 (PHP 15 documentary stamp 30 per document) + PHP 480 registration fee for specific documents (PHP 120 per tax per RPU/document)} document) + PHP 120 fixed entry fee for specific documents (PHP 30 per document) Comments: The seller must obtain a certified true copy of the latest tax declaration + PHP 40 legal research fee for specific documents (PHP 10 per document) + PHP 60 for the land and the building as well as a certificate of “with improvement” from the annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer CAO as these documents are required by the BIR. Loose documentary stamps must certificate of title} be affixed to these documents as proof of payment of the documentary stamp tax Comments: The buyer applies for registration with the Register of Deeds. The (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. documentation shall include: However these can be more readily purchased at city government offices at a cost a. Copy of deed of absolute sale; ranging from PHP 18-25 per stamp. b. Official receipt evidencing payment of transfer tax; c. Certificate Authorizing Registration from the BIR (CAR) including official receipts Procedure 3*. Obtain tax clearance certificate of real property for payment of DST and CWT; taxes from the Land Tax Division of the City Treasurer’s Office (CTO) d. Real property tax clearance from the City Treasurer’s Office; Time: 1 day e. Original copy of owner’s duplicate of TCT (in the name of the seller); Cost: PHP 65 (PHP 50 for tax clearance certificate + PHP 15 for documentary stamp tax) f. Original or certified true copy of the latest tax declaration; Comments: The seller, after paying any arrears, obtains a tax clearance certificate g. Notarized secretary’s certificate containing resolution of the board of directors of from the CTO. the seller approving the sale; The documentation shall include an original of the official receipt evidencing pay- h. Notarized secretary’s certificate containing resolution of the board of directors of ment by seller of realty taxes. the buyer approving the sale; and i. Articles of incorporation of the buyer and by-laws. Procedure 4. Obtain Certificate Authorizing Registration (CAR) The Register of Deeds has been fully computerized since December 3, 2009 as a from the Bureau of Internal Revenue (BIR) result of the Land Registration Authority's land titling computerization project. Time: 14 days Procedure 8. Obtain new tax declaration over the building and Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) the land in the name of buyer from CAO Comments: The Certificate Authorizing Registration (CAR) is a certification issued by the BIR that the transfer and conveyance of the property was reported and the taxes Time: 1 day due have been fully paid. Cost: PHP 300 [PHP 150 per real property unit (RPU)] The taxpayer/applicant must submit the following documents to the BIR: Comments: The buyer applies with the CAO for the issuance of a new tax declara- a. Tax identification number (TIN) of seller and buyer; tion over the land and building in his name. b. Notarized deed of absolute sale/document of transfer, but only photocopied The documentation shall include: document shall be retained by the BIR; a. Photocopy of notarized deed of sale (obtained in Procedure 1); c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office b. Certified true copy of latest tax declaration (in the name of seller) (obtained in for the land and improvement applicable to the taxable transaction; Procedure 2); d. Owners copy (for presentation purposes only) and photocopy (for authentication) c. Tax clearance certificate of real property tax from Land Tax Division of the CTO of the Original Certificate of Title (OCT), or the certified true copy of the Transfer (obtained in Procedure 3); Certificate of Title (TCT); and d Photocopy of official receipt of transfer tax payment (original copy to be pre- e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or sented) (obtained in Procedure 6); certificate of “with improvement” issued by the Assessor’s Office. e. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) (obtained in Procedure 7); and Procedure 5. Pay documentary stamp tax and creditable f. Pictures of land and building. withholding tax (CWT) at an authorized agent bank (AAB) *This procedure can be completed simultaneously with previous procedures. Time: 1 day Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction registering property thereof of the property value) + creditable withholding tax of 6% of the selling price, fair market value, or zonal value, whichever is highest.] MAKATI Note: Computation for CWT is not included in the cost reflected. Property value: PHP 4,169,969 = USD 89,500 Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 Data as of: June 2010 for DST and CWT respectively, based on the ONETT computation sheets prepared by Procedure 1. Prepare the notarized deed of sale and related the BIR ONETT team. The applicant files the DST return and CWT return and pays the taxes at the AAB of the Revenue District Office. Payment must be made through either documents a manager’s check or cashier’s check within 5 days after the close of the month when Time: 1 day the taxable document was signed or within 30 days from the sale, whichever is earlier. Cost: PHP 83,399 (1-3% of the property value) Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- Comments: While the deed of sale can be prepared by anyone, it must be executed ately issues a claim slip. before and notarized by a notary public. In many instances, the notary public drafts the deed of sale and conducts the whole process on behalf of the parties. Procedure 6. Pay the transfer tax at the CTO In addition to the deed of sale, the Register of Deeds also requires both the buyer Time: 1 day and the seller to submit notarized secretary’s certificates containing the resolution of Cost: PHP 25,020 (0.6% of the property price) their board of directors approving the sale. The buyer must also produce a certificate Comments: The transfer tax must be paid at the CTO. The documentation shall from the Securities and Exchange Commission (SEC) stating that its articles of incor- include: poration have been registered with the SEC. a. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- dure 3); b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). 146 Doing Business IN the philippines 2011 Procedure 7. Secure registration with the Register of Deeds (RD) Procedure 2*. Obtain certified true copy of latest tax declaration Time: 10 days and certificate of with improvement from the City Assessor’s Cost: PHP 23,863 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Office (CAO) PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Time: 1 day 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Cost: PHP 575 {PHP 100 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] PHP 2,419.2 IT fee (PHP 268.8 per document) + PHP 300 primary entry fee (PHP + PHP 100 for certificate of with improvement + PHP 45 (PHP 15 documentary 30 per document) + PHP 480 registration fee for specific documents (PHP 120 per stamp tax per RPU/document)} document) + PHP 120 fixed entry fee for specific documents (PHP 30 per document) Note: Cost is for 2 certified true copies of latest tax declaration for BIR and CTO. + PHP 40 legal research fee for specific documents (PHP 10 per document) + PHP 60 annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer Comments: The seller must obtain a certified true copy of the latest tax declaration certificate of title} for the land and the building as well as a certificate of “with improvement” from the CAO as these documents are required by the BIR. Loose documentary stamps must Comments: The buyer applies for registration with the Register of Deeds. The be affixed to these documents as proof of payment of the documentary stamp tax documentation shall include: (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. a. Copy of deed of absolute sale; However these can be more readily purchased at city government offices at a cost b. Official receipt evidencing payment of transfer tax; ranging from PHP 18-25 per stamp. c. Certificate Authorizing Registration from the BIR (CAR) including official receipts for payment of DST and CWT; Procedure 3*. Obtain tax clearance certificate of real property d. Real property tax clearance from the City Treasurer’s Office; taxes from the Land Tax Division of the City Treasurer’s Office e. Original copy of owner’s duplicate of TCT (in the name of the seller); (CTO) f. Original or certified true copy of the latest tax declaration; Time: 1 day g. Notarized secretary’s certificate containing resolution of the board of directors of Cost: PHP 130 (PHP 50 per RPU [(Land (1RPU), Building (1RPU)] + PHP 15 for docu- the seller approving the sale; mentary stamp tax per RPU/document) h. Notarized secretary’s certificate containing resolution of the board of directors of Comments: The seller, after paying any arrears, obtains a tax clearance certificate the buyer approving the sale; from the CTO. i. Articles of incorporation of the buyer and by-laws; and The documentation shall include an original of the official receipt evidencing pay- ment by seller of realty taxes. j. Certificate from the SEC that the articles of incorporation of the buyer have been registered. Procedure 4. Obtain Certificate Authorizing Registration (CAR) The Register of Deeds has been fully computerized since January, 2010 as a result of from the Bureau of Internal Revenue (BIR) the Land Registration Authority's land titling computerization project. Time: 14 days Procedure 8. Obtain new tax declaration over the building and Cost: PHP 230 (PHP 100 certification fee + PHP 100 certified true copy of CAR + PHP the land in the name of buyer from CAO 15 documentary stamp tax per RPU/document) Time: 3 days Comments: The Certificate Authorizing Registration (CAR) is a certification issued by the BIR that the transfer and conveyance of the property was reported and the taxes Cost: PHP 400 [PHP 200 per real property unit (RPU)] due have been fully paid. Comments: The buyer applies with the CAO for the issuance of a new tax declara- The taxpayer/applicant must submit the following documents to the BIR: tion over the building in his name. a. Tax identification number (TIN) of seller and buyer; The documentation shall include: b. Notarized deed of absolute sale/document of transfer, but only photocopied a. Photocopy of notarized deed of sale (obtained in Procedure 1); document shall be retained by the BIR; b. Certified true copy of latest tax declaration (in the name of seller) (obtained in c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office Procedure 2); for the land and improvement applicable to the taxable transaction; c. Tax clearance certificate of real property taxes from the CTO (obtained in Proc. 3); d. Owners copy (for presentation purposes only) and photocopy (for authentication) d. Certificate authorizing registration from the BIR (obtained in Procedure 4); of the Original Certificate of Title (OCT), or the certified true copy of the Transfer e. Photocopy of official receipt of transfer tax payment (original copy to be pre- Certificate of Title (TCT); and sented) (obtained in Procedure 6); and e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) certificate of “with improvement” issued by the Assessor’s Office. (obtained in Procedure 7). Procedure 5. Pay documentary stamp tax and creditable Procedure 9*. Receive inspection from CAO withholding tax (CWT) at an authorized agent bank (AAB) Time: 1 day Time: 1 day Cost: No cost Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction *This procedure can be completed simultaneously with previous procedures. thereof of the property value) + creditable withholding tax of 6% of the selling price, fair market value, or zonal value, whichever is highest.] registering property Note: Computation for CWT is not included in the cost reflected. Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 MALABON for DST and CWT respectively, based on the ONETT computation sheets prepared Property value: PHP 4,169,969 = USD 89,500 by the BIR ONETT team. The applicant files the DST return and CWT return and pays Data as of: June 2010 the taxes at the AAB of the Revenue District Office. Payment must be made through either a manager’s check or cashier’s check within 5 days after the close of the month Procedure 1. Prepare the notarized deed of sale and related when the taxable document was signed or within 30 days from the sale, whichever documents is earlier. Time: 1 day Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- Cost: PHP 41,700 (1% of the property value) ately issues a claim slip. Comments: While the deed of sale can be prepared by anyone, it must be executed before and notarized by a notary public. In many instances, the notary public drafts Procedure 6*. Pay the transfer tax at the CTO the deed of sale and conducts the whole process on behalf of the parties. Time: 1 day In addition to the deed of sale, the Register of Deeds also requires both the buyer Cost: PHP 25,416 (0.5% of the property price + PHP 4,566 community tax on the sale and the seller to submit notarized secretary’s certificates containing the resolution of of property) their board of directors approving the sale. The buyer must also produce a certificate from the Securities and Exchange Commission (SEC) stating that its articles of incor- poration have been registered with the SEC. LIST LIST OFOF PROCE DURES PROCEDURES • RegistERING • STARTING APROPERT Y BUSINESS 147 Comments: The transfer tax must be paid at the CTO. The documentation shall registering property include: MANDALUYONG a. Deed of sale; Property value: PHP 4,169,969 = USD 89,500 b. Certified true copy of tax declaration; and Data as of: June 2010 c. Tax clearance certificate of real property taxes from the CTO (obtained in Procedure 3). Procedure 1. Prepare the notarized deed of sale and related documents Procedure 7. Secure registration with the Register of Deeds (RD) Time: 1 day Time: 10 days Cost: PHP 83,399 (1-3% of the property value) Cost: PHP 21,261 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Comments: While the deed of sale can be prepared by anyone, it must be executed PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP before and notarized by a notary public. In many instances, the notary public drafts 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + the deed of sale and conducts the whole process on behalf of the parties. PHP 300 primary entry fee (PHP 30 per document) + PHP 480 registration fee for In addition to the deed of sale, the Register of Deeds also requires both the buyer specific documents (PHP 120 per document) + PHP 120 fixed entry fee for specific and the seller to submit notarized secretary’s certificates containing the resolution of documents (PHP 30 per document) + PHP 40 legal research fee for specific docu- their board of directors approving the sale. The buyer must also produce a certificate ments (PHP 10 per document) + PHP 60 annotation fee (PHP 30 per document) + from the Securities and Exchange Commission (SEC) stating that its articles of incor- PHP 75 fee for issuance of new transfer certificate of title} poration have been registered with the SEC. Comments: The buyer applies for registration with the Register of Deeds. The documentation shall include: Procedure 2*. Obtain certified true copy of latest tax declaration a. Copy of deed of absolute sale; and certificate of with improvement from the City Assessor’s b. Official receipt evidencing payment of transfer tax; Office (CAO) c. Certificate Authorizing Registration from the BIR (CAR) including official receipts Time: 1 day for payment of DST and CWT; Cost: PHP 195 {PHP 50 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] d. Real property tax clearance from the City Treasurer’s Office; + PHP 50 for certificate of with improvement + PHP 45 (PHP 15 documentary stamp e. Original copy of owner’s duplicate of TCT (in the name of the seller); tax per RPU/document)} f. Original or certified true copy of the latest tax declaration; Comments: The seller must obtain a certified true copy of the latest tax declaration g. Notarized secretary’s certificate containing resolution of the board of directors of for the land and the building as well as a certificate of “with improvement” from the the seller approving the sale; CAO as these documents are required by the BIR. Loose documentary stamps must be affixed to these documents as proof of payment of the documentary stamp tax h. Notarized secretary’s certificate containing resolution of the board of directors of (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. the buyer approving the sale; However these can be more readily purchased at city government offices at a cost i. Articles of incorporation of the buyer and by-laws; and ranging from PHP 18-25 per stamp. j. Certificate from the SEC that the articles of incorporation of the buyer have been registered. Procedure 3*. Obtain tax clearance certificate of Real Property Tax from the Land Tax Division of the City Treasurer’s Office (CTO) Procedure 8. Obtain new tax declaration over the building and Time: 1 day the land in the name of buyer from CAO Cost: PHP 25 (PHP 10 for tax clearance + PHP 15 for stamp tax on certificate) Time: 3 days Comments: The seller, after paying any arrears, obtains a tax clearance certificate Cost: PHP 200 [PHP 100 per real property unit (RPU)] from the CTO. Comments: The buyer applies with the CAO for the issuance of a new tax declara- The documentation shall include an original of the official receipt evidencing pay- tion over the building in his name. ment by seller of realty taxes. The documentation shall include: a. Notarized deed of sale (obtained in Procedure 1); Procedure 4. Obtain Certificate Authorizing Registration (CAR) b. Photocopy of latest tax declaration (in the name of seller) (obtained in Procedure from the Bureau of Internal Revenue (BIR) 2); Time: 10 days c. Photocopy of tax clearance certificate of real property taxes from the CTO (ob- Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) tained in Procedure 3); Comments: The Certificate Authorizing Registration (CAR) is a certification issued by d. Certified true copy of Certificate Authorizing Registration from the BIR (obtained the BIR that the transfer and conveyance of the property was reported and the taxes in Procedure 4); due have been fully paid. e. Photocopy or certified true copy of official receipt of transfer tax payment (origi- The taxpayer/applicant must submit the following documents to the BIR: nal copy to be presented) (obtained in Procedure 6); a. Tax identification number (TIN) of seller and buyer; f. Certified true copy of the transfer certificate of title (TCT) issued by the RD (in the b. Notarized deed of absolute sale/document of transfer, but only photocopied name of the buyer) (obtained in Procedure 7); document shall be retained by the BIR; g. Community tax certificate of the corporation; and c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office h. Photographs of the property. for the land and improvement applicable to the taxable transaction; d. Owners copy (for presentation purposes only) and photocopy (for authentication) Procedure 9*. Receive inspection from CAO of the Original Certificate of Title (OCT), or the certified true copy of the Transfer Time: 1 day Certificate of Title (TCT); and Cost: No cost e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or certificate of “with improvement” issued by the Assessor’s Office. *This procedure can be completed simultaneously with previous procedures. Procedure 5. Pay documentary stamp tax and creditable withholding tax (CWT) at an authorized agent bank (AAB) Time: 1 day Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction thereof of the property value) + creditable withholding tax of 6% of the selling price, fair market value, or zonal value, whichever is highest.] Note: Computation for CWT is not included in the cost reflected. 148 Doing Business IN the philippines 2011 Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 registering property for DST and CWT respectively, based on the ONETT computation sheets prepared by MANDAUE the BIR ONETT team. The applicant files the DST return and CWT return and pays the taxes at the AAB of the Revenue District Office. Payment must be made through either Property value: PHP 4,169,969 = USD 89,500 a manager’s check or cashier’s check within 5 days after the close of the month when Data as of: June 2010 the taxable document was signed or within 30 days from the sale, whichever is earlier. Procedure 1. Prepare the notarized deed of sale and related Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- ately issues a claim slip. documents Time: 1 day Procedure 6. Pay the transfer tax at the CTO Cost: PHP 41,700 (1% of the property value) Time: 1 day Comments: While the deed of sale can be prepared by anyone, it must be executed Cost: PHP 31,275 (0.75% of the property price) before and notarized by a notary public. In many instances, the notary public drafts the deed of sale and conducts the whole process on behalf of the parties. Comments: The transfer tax must be paid at the CTO. The documentation shall include: In addition to the deed of sale, the Register of Deeds also requires both the buyer and the seller to submit notarized secretary’s certificates containing the resolution of a. Tax clearance certificate of real property tax from the CTO (obtained in Proc. 3); their board of directors approving the sale. The buyer must also produce a certificate b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and from the Securities and Exchange Commission (SEC) stating that its articles of incor- c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). poration have been registered with the SEC. Procedure 7. Secure registration with the Register of Deeds (RD) Procedure 2*. Obtain certified true copy of latest tax declaration Time: 5 days and certificate of with improvement from the City Assessor’s Cost: PHP 23,863 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Office (CAO) PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Time: 1 day 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Cost: PHP 191 {PHP 22 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] + PHP 2,419.2 IT fee (PHP 268.8 per document) + PHP 300 primary entry fee (PHP PHP 27.50 for certificate of with improvement + PHP 45 (PHP 15 documentary stamp 30 per document) + PHP 480 registration fee for specific documents (PHP 120 per tax per RPU/document)} document) + PHP 120 fixed entry fee for specific documents (PHP 30 per document) Note: Cost is for 2 certified true copies of latest tax declaration for BIR and RD. + PHP 40 legal research fee for specific documents (PHP 10 per document) + PHP 60 annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer Comments: The seller must obtain a certified true copy of the latest tax declaration certificate of title} for the land and the building as well as a certificate of “with improvement” from the CAO as these documents are required by the BIR. Loose documentary stamps must Comments: The buyer applies for registration with the Register of Deeds. The be affixed to these documents as proof of payment of the documentary stamp tax documentation shall include: (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. a. Copy of deed of absolute sale; However these can be more readily purchased at city government offices at a cost b. Official receipt evidencing payment of transfer tax; ranging from PHP 18-25 per stamp. c. Certificate Authorizing Registration from the BIR (CAR) including official receipts for payment of DST and CWT; Procedure 3*. Obtain tax clearance certificate of real property d. Real property tax clearance from the City Treasurer’s Office; taxes from the Land Tax Division of the City Treasurer’s Office e. Original copy of owner’s duplicate of TCT (in the name of the seller); (CTO) f. Original or certified true copy of the latest tax declaration; Time: 1 day g. Notarized secretary’s certificate containing resolution of the board of directors of Cost: PHP 51 (PHP 36 for tax clearance + PHP 15 for documentary stamp tax) the seller approving the sale; Comments: The seller, after paying any arrears, obtains a tax clearance certificate h. Notarized secretary’s certificate containing resolution of the board of directors of from the CTO. the buyer approving the sale; The documentation shall include an original of the official receipt evidencing pay- i. Articles of incorporation of the buyer and by-laws; and ment by seller of realty taxes. j. Certificate from the SEC that the articles of incorporation of the buyer have been registered. Procedure 4. Obtain Certificate Authorizing Registration (CAR) from the Bureau of Internal Revenue (BIR) The Register of Deeds has been fully computerized since January 26, 2010 as a result of the Land Registration Authority's land titling computerization project. Time: 25 days Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) Procedure 8. Obtain new tax declaration over the building and Comments: The Certificate Authorizing Registration (CAR) is a certification issued by the land in the name of buyer from CAO the BIR that the transfer and conveyance of the property was reported and the taxes Time: 1 day due have been fully paid. Cost: PHP 600 [PHP 300 per real property unit (RPU)] The taxpayer/applicant must submit the following documents to the BIR: Comments: The buyer applies with the CAO for the issuance of a new tax declara- a. Tax identification number (TIN) of seller and buyer; tion over the building in his name. b. Notarized deed of absolute sale/document of transfer, but only photocopied The documentation shall include: document shall be retained by the BIR; a. Photocopy of notarized deed of sale (obtained in Procedure 1); c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office for the land and improvement applicable to the taxable transaction; b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Procedure 2); d. Owners copy (for presentation purposes only) and photocopy (for authentication) of the Original Certificate of Title (OCT), or the certified true copy of the Transfer c. Tax clearance certificate of real property tax from the CTO (obtained in Proc. 3); Certificate of Title (TCT); and d. Certificate authorizing registration from the BIR (obtained in Procedure 4); e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or e. Photocopy of official receipt of transfer tax payment (original copy to be pre- certificate of “with improvement” issued by the Assessor’s Office. sented) (obtained in Procedure 6); and f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) Procedure 5. Pay documentary stamp tax and creditable (obtained in Procedure 7). withholding tax (CWT) at an authorized agent bank (AAB) Time: 1 day Procedure 9*. Receive inspection from CAO Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction Time: 1 day thereof of the property value) + creditable withholding tax of 6% of the selling price, Cost: No cost fair market value, or zonal value, whichever is highest.] *This procedure can be completed simultaneously with previous procedures. LIST LIST OFOF PROCE DURES PROCEDURES • RegistERING • STARTING APROPERT Y BUSINESS 149 Note: Computation for CWT is not included in the cost reflected. registering property Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 MANILA for DST and CWT respectively, based on the ONETT computation sheets prepared Property value: PHP 4,169,969 = USD 89,500 by the BIR ONETT team. The applicant files the DST return and CWT return and pays the taxes at the AAB of the Revenue District Office. Payment must be made through Data as of: June 2010 either a manager’s check or cashier’s check within 5 days after the close of the month Procedure 1. Prepare the notarized deed of sale and related when the taxable document was signed or within 30 days from the sale, whichever is earlier. documents Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- Time: 1 day ately issues a claim slip. Cost: PHP 62,650 (1.5% of the property value + PHP 100 for notarization) Comments: Anyone can prepare the document, however, the deed of sale must be Procedure 6. Pay the transfer tax at the CTO ratified before the notary public and it is common for him to draft it and conduct the Time: 1 day whole process on behalf of the parties Cost: PHP 13,761 (0.33% of the property price) Procedure 2. Obtain certified true copy of latest tax declaration Comments: The transfer tax must be paid at the CTO. The documentation shall and certificate of with improvement from the City Assessor’s include: Office (CAO) a. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- dure 3); Time: 1 day b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and Cost: PHP 100 c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). Comments: The seller obtains a certified true copy of the latest tax declaration from the Assessor’s Office of Manila. Procedure 7. Secure registration with the Register of Deeds (RD) Procedure 3. Pay documentary stamp tax and creditable Time: 30 days withholding tax (CWT) at an authorized agent bank (AAB) Cost: PHP 21,261 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Time: 1 day PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Cost: PHP 62,550 (1.5% of the property price) PHP 300 primary entry fee (PHP 30 per document) + PHP 480 registration fee for Comments: The seller files the Documentary Stamp Tax return and Capital Gains Tax specific documents (PHP 120 per document) + PHP 120 fixed entry fee for specific return with the authorized agent bank in the Revenue District of Manila. This is done documents (PHP 30 per document) + PHP 40 legal research fee for specific docu- within 5 days after the close of the month when the taxable document was signed or ments (PHP 10 per document) + PHP 60 annotation fee (PHP 30 per document) + within 30 days after the sale, whichever is earlier. The taxes are paid at the authorized PHP 75 fee for issuance of new transfer certificate of title} bank to the account of the Bureau of Internal Revenue. The Capital Gains Tax is 6% Comments: The buyer applies for registration with the Register of Deeds. The of capital gains based on selling price, fair market value or zonal value, whichever is documentation shall include: higher. a. Copy of deed of absolute sale; The Documentary Stamp Tax is 1.5% based on selling price or fair market value, whichever is higher. b. Official receipt evidencing payment of transfer tax; The documentation shall include: c. Certificate Authorizing Registration from the BIR (CAR) including official receipts for payment of DST and CWT; a. Original copy and photocopy of notarized deed of sale of building (obtained in Procedure 1); d. Real property tax clearance from the City Treasurer’s Office; b. Certified true copy of transfer certificate of title (in the name of seller); e. Original copy of owner’s duplicate of TCT (in the name of the seller); c. Certified true copy of latest tax declaration (in the name of seller) (obtained in f. Original or certified true copy of the latest tax declaration; Procedure 2); g. Notarized secretary’s certificate containing resolution of the board of directors of d. Photocopy of the latest realty tax receipt; the seller approving the sale; e. Letter-request; and h. Notarized secretary’s certificate containing resolution of the board of directors of the buyer approving the sale; f. Identification card of the person requesting. i. Articles of incorporation of the buyer and by-laws; and Procedure 4. Obtain Certificate Authorizing Registration (CAR) j. Certificate from the SEC that the articles of incorporation of the buyer have been from the Bureau of Internal Revenue (BIR) registered. Time: 14 days Procedure 8. Obtain new tax declaration over the building and Cost: PHP 115 the land in the name of buyer from CAO Comments: After paying the taxes in Procedure 3, the seller must obtain a tax clear- Time: 3 days ance (or Certificate Authorizing Registration) from the Bureau of Internal Revenue. This certificate will authorize the registration of the property. Cost: No cost The documentation shall include: Comments: The buyer applies with the CAO for the issuance of a new tax declara- tion over the building in his name. a. Certified true copy of transfer certificate of title (in the name of seller); The documentation shall include: b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Procedure 2); and a. Photocopy of notarized deed of sale (obtained in Procedure 1); c. Tax identification numbers. b. Copy of latest tax declaration (in the name of seller) (obtained in Procedure 2); c. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- Procedure 5. Obtain tax clearance certificate of real property taxes dure 3); from the Land Tax Division of the City Treasurer’s Office (CTO) d. Certificate authorizing registration from the BIR (obtained in Procedure 4); Time: 2 days e. Photocopy of official receipt of transfer tax payment (original copy to be pre- Cost: PHP 75 sented) (obtained in Procedure 6); and Comments: The seller, after paying any due amounts, obtains a tax clearance certifi- f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) cate from the Treasurer’s Office of the Local Government Unit (Manila). (obtained in Procedure 7). The documentation shall include: an original of the official receipt evidencing pay- ment by seller of realty taxes. *This procedure can be completed simultaneously with previous procedures. The seller, after paying any due amounts, obtains a tax clearance certificate from the Treasurer’s Office of the Local Government Unit (Manila). The documentation shall include: an original of the official receipt evidencing pay- ment by seller of realty taxes. 150 Doing Business IN the philippines 2011 Procedure 6. Pay the transfer tax at the CTO b. Secretary’s certificate containing the resolution of the board of directors of buyer approving the sale; Time: 1 day c. Original copy of owner’s duplicate of the transfer certificate of title (in the name of Cost: PHP 31,400 [0.75 of the property price (transfer tax)+ PHP 125 (certificate of seller); payment)] d. Certificate authorizing registration from the Bureau of Internal Revenue (obtained Comments: The transfer tax must be paid at the Treasurer’s Office of Manila. in Procedure 4); The documentation shall include: e. Realty tax clearance from the Treasurer’s Office of Manila (obtained in Procedure a. Certificate Authorizing Registration from the Bureau of Internal Revenue (ob- 5); tained in Procedure 4); f. Official receipt of transfer tax payment (obtained in Procedure 6); and b. Realty tax clearance from the Treasurer’s Office of Manila (obtained in Procedure g. Official receipts of the Bureau of Internal Revenue (for capital gains tax and 5); and documentary stamp tax) (obtained in Procedure 3). c. Official receipt of the Bureau of Internal Revenue (for documentary stamp tax) (obtained in Procedure 4). registering property Procedure 7. Obtain new tax declaration over the building and MARIKINA the land in the name of buyer from CAO Property value: PHP 4,169,969 = USD 89,500 Time: 3 days Data as of: June 2010 Cost: No cost Procedure 1. Prepare the notarized deed of sale and related Comments: The buyer applies with the Assessor’s Office of Manila for the issuance documents of a new tax declaration over the building in his name. Time: 1 day The documentation shall include: Cost: PHP 83,399 (1-3% of the property value) a. Photocopy of notarized deed of sale of building (obtained in Procedure 1); Comments: While the deed of sale can be prepared by anyone, it must be executed b. Certified true copy of latest tax declaration (in the name of seller) (obtained in before and notarized by a notary public. In many instances, the notary public drafts Procedure 2); the deed of sale and conducts the whole process on behalf of the parties. c. Certificate authorizing registration from the Bureau of Internal Revenue (obtained In addition to the deed of sale, the Register of Deeds also requires both the buyer in Procedure 4); and the seller to submit notarized secretary’s certificates containing the resolution of d. Realty tax clearance from the Treasurer’s Office of Manila (obtained in Procedure their board of directors approving the sale. The buyer must also produce a certificate 5); and from the Securities and Exchange Commission (SEC) stating that its articles of incor- e. Photocopy of official receipt of transfer tax payment (original copy to be pre- poration have been registered with the SEC. sented) (obtained in Procedure 6). Procedure 2*. Obtain certified true copy of latest tax declaration Procedure 8. Secure registration with the Register of Deeds (RD) and certificate of with improvement from the City Assessor’s Time: 10 days Office (CAO) Cost: PHP 20,726 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Time: 1 day PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Cost: PHP 325 {PHP 50 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] 199.56 legal research fee (1% of the registration fee) + PHP 240 registration fee for + PHP 50 for certificate of with improvement + PHP 75 (PHP 15 documentary stamp specific documents (PHP 120 per document) + PHP 90 copy of deed of absolute sale tax per RPU/document)} + PHP 240 notarized Secretary’s Certificate containing resolution of the board of Note: Cost is for 2 certified true copies of latest tax declaration for BIR and CAO. director’s of the buyer approving the sale + PHP 240 articles of incorporation of the buyer and by-laws} Comments: The seller must obtain a certified true copy of the latest tax declaration for the land and the building as well as a certificate of “with improvement” from the Comments: The buyer applies for registration with the Register of Deeds of Manila. CAO as these documents are required by the BIR. Loose documentary stamps must The following internal steps take place after the application is submitted: be affixed to these documents as proof of payment of the documentary stamp tax 1. The Entry clerk receives and enters all documents in the primary Entry Book (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. (Judicial form No. 39) and notes therein the day, hour and minute of reception of all However these can be more readily purchased at city government offices at a cost instrument in the order in which they are received. ranging from PHP 18-25 per stamp. 2. Documents are then brought to the Registrar of Deeds (RD) or Deputy Register of Deeds for assignment. Procedure 3*. Obtain tax clearance certificate of real property 3. Documents/Titles are assigned by the RD to the Land Registration Examiner (LRE) taxes from the Land Tax Division of the City Treasurer’s Office who prepares computation and order of payment of registration fees. (CTO) 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees are Time: 1 day computed based on a schedule of Fees approved by the Department of Justice. Cost: PHP 65 (PHP 50 for tax clearance + PHP 15 per documentary stamp tax) 5. Upon the payment of the fees, the document is forwarded to the LRE who reviews Comments: The seller, after paying any arrears, obtains a tax clearance certificate the same and determines whether or not it is ready to register. The owner’s copy of from the CTO. the title is compared to the title on file, produced by Records Officer/Vault keeper. The documentation shall include an original of the official receipt evidencing pay- 6. If the instrument is not ready to be registered, the LRE recommends its denial ment by seller of realty taxes. to the RD. If the instrument is ready, the LRE likewise recommends to the RD the registration of the document through a routing slip. Procedure 4. Obtain Certificate Authorizing Registration (CAR) 7. RD reviews examination, and once same is approved, assigns documents to clerk from the Bureau of Internal Revenue (BIR) for action, with instruction on the route slip. Time: 14 days 8. If the transaction involves issuance of title, Records Officer/Judicial Form Custo- Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) dian records the transaction in the logbook releases sets of title forms (judicial form) and assigns the corresponding title control number to the set of titles issued to the Comments: The Certificate Authorizing Registration (CAR) is a certification issued by action clerk. the BIR that the transfer and conveyance of the property was reported and the taxes due have been fully paid. 9. Assigned employee acts on the documents, as instructed. The taxpayer/applicant must submit the following documents to the BIR: 10. Final registration – RD signs titles and documents. a. Tax identification number (TIN) of seller and buyer; 11. Release of documents – by the releasing clerk to the buyer who should be ready with ID and copies of official receipts of the registration fees. b. Notarized deed of absolute sale/document of transfer, but only photocopied document shall be retained by the BIR; The documentation shall include: c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office a. Articles of incorporation and by-laws of the buyer; for the land and improvement applicable to the taxable transaction; LIST LIST OFOF PROCE DURES PROCEDURES • RegistERING • STARTING APROPERT Y BUSINESS 151 d. Owners copy (for presentation purposes only) and photocopy (for authentication) Procedure 8. Obtain new tax declaration over the building and of the Original Certificate of Title (OCT), or the certified true copy of the Transfer Certificate of Title (TCT); and the land in the name of buyer from CAO e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or Time: 3 days certificate of “with improvement” issued by the Assessor’s Office. Cost: PHP 100 (PHP 50 per real property unit (RPU)) Comments: The buyer applies with the CAO for the issuance of a new tax declara- Procedure 5. Pay documentary stamp tax and creditable tion over the building in his name. withholding tax (CWT) at an authorized agent bank (AAB) The documentation shall include: Time: 1 day a. Original copy of deed of sale (obtained in Procedure 1); Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction b. Certified true copy of latest tax declaration (in the name of seller) (obtained in thereof of the property value) + creditable withholding tax of 6% of the selling price, Procedure 2); fair market value, or zonal value, whichever is highest.] c. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- Note: Computation for CWT is not included in the cost reflected. dure 3); Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 d. Certificate authorizing registration from the BIR (obtained in Procedure 4); for DST and CWT respectively, based on the ONETT computation sheets prepared e. Certified true copy of the official receipt of transfer tax payment (obtained in by the BIR ONETT team. The applicant files the DST return and CWT return and pays Procedure 6); and the taxes at the AAB of the Revenue District Office. Payment must be made through f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) either a manager’s check or cashier’s check within 5 days after the close of the month (obtained in Procedure 7). when the taxable document was signed or within 30 days from the sale, whichever is earlier. Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- *This procedure can be completed simultaneously with previous procedures. ately issues a claim slip. registering property Procedure 6. Pay the transfer tax and obtain certified true copy of transfer tax payment receipt at the Land Tax Division of the MUNTINLUPA CTO Property value: PHP 4,169,969 = USD 89,500 Time: 1 day Data as of: June 2010 Cost: PHP 31,325 (0.75% of the property price + PHP 50 for certified true copy of Procedure 1. Prepare the notarized deed of sale and related transfer tax payment) documents Comments: The transfer tax must be paid at the CTO. The documentation shall include: Time: 1 day a. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- Cost: PHP 83,399 (1-3% of the property value) dure 3); Comments: While the deed of sale can be prepared by anyone, it must be executed b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and before and notarized by a notary public. In many instances, the notary public drafts the deed of sale and conducts the whole process on behalf of the parties. c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). In addition to the deed of sale, the Register of Deeds also requires both the buyer and the seller to submit notarized secretary’s certificates containing the resolution of Procedure 7. Secure registration with the Register of Deeds (RD) their board of directors approving the sale. The buyer must also produce a certificate Time: 10 days from the Securities and Exchange Commission (SEC) stating that its articles of incor- Cost: PHP 23,863 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + poration have been registered with the SEC. PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Procedure 2*. Obtain certified true copy of latest tax declaration PHP 2,419.2 IT fee (PHP 268.8 per document) + PHP 300 primary entry fee (PHP and certificate of with improvement from the City Assessor’s 30 per document) + PHP 480 registration fee for specific documents (PHP 120 per Office (CAO) document) + PHP 120 fixed entry fee for specific documents (PHP 30 per document) + PHP 40 legal research fee for specific documents (PHP 10 per document) + PHP 60 Time: 1 day annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer Cost: PHP 195 {PHP 50 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] certificate of title} + PHP 50 certificate of with improvement + PHP 45 (PHP 15 documentary stamp tax Comments: The buyer applies for registration with the Register of Deeds. The per RPU/document)} documentation shall include: Comments: The seller must obtain a certified true copy of the latest tax declaration a. Copy of deed of absolute sale; for the land and the building as well as a certificate of “with improvement” from the CAO as these documents are required by the BIR. Loose documentary stamps must b. Official receipt evidencing payment of transfer tax; be affixed to these documents as proof of payment of the documentary stamp tax c. Certificate Authorizing Registration from the BIR (CAR) including official receipts (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. for payment of DST and CWT; However these can be more readily purchased at city government offices at a cost d. Real property tax clearance from the City Treasurer’s Office; ranging from PHP 18-25 per stamp. e. Original copy of owner’s duplicate of TCT (in the name of the seller); Procedure 3*. Obtain tax clearance certificate of real property f. Original or certified true copy of the latest tax declaration; taxes from the Land Tax Division of the City Treasurer’s Office g. Notarized secretary’s certificate containing resolution of the board of directors of (CTO) the seller approving the sale; Time: 1 day h. Notarized secretary’s certificate containing resolution of the board of directors of the buyer approving the sale; Cost: PHP 65 (PHP 50 for tax clearance + PHP 15 for documentary stamp tax) i. Articles of incorporation of the buyer and by-laws; and Comments: The seller, after paying any arrears, obtains a tax clearance certificate from the CTO. j. Certificate from the SEC that the articles of incorporation of the buyer have been registered. The documentation shall include an original of the official receipt evidencing pay- ment by seller of realty taxes. The Register of Deeds has been fully computerized since June 7, 2010 as a result of Procedure 4. Obtain Certificate Authorizing Registration (CAR) the Land Registration Authority's land titling computerization project. from the Bureau of Internal Revenue (BIR) Time: 10 days Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) 152 Doing Business IN the philippines 2011 Comments: The Certificate Authorizing Registration (CAR) is a certification issued by Procedure 8. Obtain new tax declaration over the building and the BIR that the transfer and conveyance of the property was reported and the taxes due have been fully paid. the land in the name of buyer from CAO The taxpayer/applicant must submit the following documents to the BIR: Time: 1 day a. Tax identification number (TIN) of seller and buyer; Cost: PHP 100 [PHP 50 per real property unit (RPU)] b. Notarized deed of absolute sale/document of transfer, but only photocopied Comments: The buyer applies with the CAO for the issuance of a new tax declara- document shall be retained by the BIR; tion over the building in his name. c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office The documentation shall include: for the land and improvement applicable to the taxable transaction; a. Photocopy of notarized deed of sale (obtained in Procedure 1); d. Owners copy (for presentation purposes only) and photocopy (for authentication) b. Copy of latest tax declaration (in the name of seller) (obtained in Procedure 2); of the Original Certificate of Title (OCT), or the certified true copy of the Transfer c. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- Certificate of Title (TCT); and dure 5); e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or d. Certificate authorizing registration from the BIR (obtained in Procedure 4); certificate of “with improvement” issued by the Assessor’s Office. e. Photocopy of official receipt of transfer tax payment (original copy to be pre- sented) (obtained in Procedure 6); and Procedure 5. Pay documentary stamp tax and creditable f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) withholding tax (CWT) at an authorized agent bank (AAB) (obtained in Procedure 7). Time: 1 day Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction Procedure 9*. Receive inspection from CAO thereof of the property value) + creditable withholding tax of 6% of the selling price, Time: 1 day fair market value, or zonal value, whichever is highest.] Cost: No cost Note: Computation for CWT is not included in the cost reflected. Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 for DST and CWT respectively, based on the ONETT computation sheets prepared *This procedure can be completed simultaneously with previous procedures. by the BIR ONETT team. The applicant files the DST return and CWT return and pays the taxes at the AAB of the Revenue District Office. Payment must be made through registering property either a manager’s check or cashier’s check within 5 days after the close of the month when the taxable document was signed or within 30 days from the sale, whichever NAVOTAS is earlier. Property value: PHP 4,169,969 = USD 89,500 Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- Data as of: June 2010 ately issues a claim slip. Procedure 1. Prepare the notarized deed of sale and related Procedure 6. Pay the transfer tax at the CTO documents Time: 1 day Time: 1 day Cost: PHP 31,275 (0.75% of the property price) Cost: PHP 41,700 (1% of the property value) Comments: The transfer tax must be paid at the CTO. The documentation shall Comments: While the deed of sale can be prepared by anyone, it must be executed include: before and notarized by a notary public. In many instances, the notary public drafts the deed of sale and conducts the whole process on behalf of the parties. a. Deed of sale (obtained in Procedure 1); In addition to the deed of sale, the Register of Deeds also requires both the buyer b. Copy of latest tax declaration (in the name of seller) (obtained in Procedure 2); and the seller to submit notarized secretary’s certificates containing the resolution of c. Tax clearance certificate of real property taxes from the CTO (obtained in Proc. 3); their board of directors approving the sale. The buyer must also produce a certificate d. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and from the Securities and Exchange Commission (SEC) stating that its articles of incor- e. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). poration have been registered with the SEC. Procedure 7. Secure registration with the Register of Deeds (RD) Procedure 2*. Obtain certified true copy of latest tax declaration Time: 10 days and certificate of with improvement from the City Assessor’s Office (CAO) Cost: PHP 21,261 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Time: 1 day 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Cost: PHP 225 {PHP 60 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] PHP 300 primary entry fee (PHP 30 per document) + PHP 480 registration fee for + PHP 60 for certificate of with improvement + PHP 45 (PHP 15 documentary stamp specific documents (PHP 120 per document) + PHP 120 fixed entry fee for specific tax per RPU/document)} documents (PHP 30 per document) + PHP 40 legal research fee for specific docu- Comments: The seller must obtain a certified true copy of the latest tax declaration ments (PHP 10 per document) + PHP 60 annotation fee (PHP 30 per document) + for the land and the building as well as a certificate of “with improvement” from the PHP 75 fee for issuance of new transfer certificate of title} CAO as these documents are required by the BIR. Loose documentary stamps must Comments: The buyer applies for registration with the Register of Deeds. The be affixed to these documents as proof of payment of the documentary stamp tax documentation shall include: (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. a. Copy of deed of absolute sale; However these can be more readily purchased at city government offices at a cost ranging from PHP 18-25 per stamp. b. Official receipt evidencing payment of transfer tax; c. Certificate Authorizing Registration from the BIR (CAR) including official receipts Procedure 3*. Obtain tax clearance certificate of real property for payment of DST and CWT; taxes from the City Treasurer’s Office (CTO) d. Real property tax clearance from the City Treasurer’s Office; Time: 1 day e. Original copy of owner’s duplicate of TCT (in the name of the seller); Cost: PHP 25 (PHP 10 for tax clearance certificate + PHP 15 documentary stamp tax) f. Original or certified true copy of the latest tax declaration; Comments: The seller, after paying any arrears, obtains a tax clearance certificate g. Notarized secretary’s certificate containing resolution of the board of directors of from the CTO. the seller approving the sale; The documentation shall include an original of the official receipt evidencing pay- h. Notarized secretary’s certificate containing resolution of the board of directors of ment by seller of realty taxes. the buyer approving the sale; i. Articles of incorporation of the buyer and by-laws; and j. Certificate from the SEC that the articles of incorporation of the buyer have been registered. LIST LIST OFOF PROCE DURES PROCEDURES • RegistERING • STARTING APROPERT Y BUSINESS 153 Procedure 4. Obtain Certificate Authorizing Registration (CAR) Procedure 8. Obtain new tax declaration over the building and from the Bureau of Internal Revenue (BIR) the land in the name of buyer from CAO Time: 14 days Time: 3 days Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) Cost: PHP 200 [PHP 100 per real property unit (RPU)] Comments: The Certificate Authorizing Registration (CAR) is a certification issued by Comments: The buyer applies with the CAO for the issuance of a new tax declara- the BIR that the transfer and conveyance of the property was reported and the taxes tion over the building in his name. due have been fully paid. The documentation shall include: The taxpayer/applicant must submit the following documents to the BIR: a. Photocopy of notarized deed of sale (obtained in Procedure 1); a. Tax identification number (TIN) of seller and buyer; b. Copy of latest tax declaration (in the name of seller) (obtained in Procedure 2); b. Notarized deed of absolute sale/document of transfer, but only photocopied c. Tax clearance certificate of real property tax from the CTO (obtained in Procedure document shall be retained by the BIR; 3); c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office d. Certificate authorizing registration from the BIR (obtained in Procedure 4); for the land and improvement applicable to the taxable transaction; e. Photocopy of official receipt of transfer tax payment (original copy to be pre- d. Owners copy (for presentation purposes only) and photocopy (for authentication) sented) (obtained in Procedure 6); and of the Original Certificate of Title (OCT), or the certified true copy of the Transfer f. Certified true copy of transfer certificate of title (TCT) issued by the RD (in the name Certificate of Title (TCT); and of the buyer) (obtained in Procedure 7). e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or certificate of “with improvement” issued by the Assessor’s Office. *This procedure can be completed simultaneously with previous procedures. Procedure 5. Pay documentary stamp tax and creditable withholding tax (CWT) at an authorized agent bank (AAB) registering property Time: 1 day PARAÑAQUE Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction Property value: PHP 4,169,969 = USD 89,500 thereof of the property value) + creditable withholding tax of 6% of the selling price, Data as of: June 2010 fair market value, or zonal value, whichever is highest.] Note: Computation for CWT is not included in the cost reflected. Procedure 1. Prepare the notarized deed of sale and related Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 documents for DST and CWT respectively, based on the ONETT computation sheets prepared Time: 1 day by the BIR ONETT team. The applicant files the DST return and CWT return and pays Cost: PHP 83,399 (1-3% of the property value) the taxes at the AAB of the Revenue District Office. Payment must be made through either a manager’s check or cashier’s check within 5 days after the close of the month Comments: While the deed of sale can be prepared by anyone, it must be executed when the taxable document was signed or within 30 days from the sale, whichever before and notarized by a notary public. In many instances, the notary public drafts is earlier. the deed of sale and conducts the whole process on behalf of the parties. Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- In addition to the deed of sale, the Register of Deeds also requires both the buyer ately issues a claim slip. and the seller to submit notarized secretary’s certificates containing the resolution of their board of directors approving the sale. The buyer must also produce a certificate from the Securities and Exchange Commission (SEC) stating that its articles of incor- Procedure 6*. Pay the transfer tax at the CTO poration have been registered with the SEC. Time: 1 day Cost: PHP 20,850 (0.5% of the property price) Procedure 2*. Obtain certified true copy of latest tax declaration Comments: The transfer tax must be paid at the CTO. The applicant only needs to and certificate of with improvement from the City Assessor’s present the deed of sale. Office (CAO) Time: 1 day Procedure 7. Secure registration with the Register of Deeds (RD) Cost: PHP 195 {PHP 50 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] + Time: 10 days PHP 50 certificate of no improvement + PHP 45 (PHP 15 documentary stamp tax per Cost: PHP 21,261 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + RPU/document)} PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Comments: The seller must obtain a certified true copy of the latest tax declaration 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + for the land and the building as well as a certificate of “with improvement” from the PHP 300 primary entry fee (PHP 30 per document) + PHP 480 registration fee for CAO as these documents are required by the BIR. Loose documentary stamps must specific documents (PHP 120 per document) + PHP 120 fixed entry fee for specific be affixed to these documents as proof of payment of the documentary stamp tax documents (PHP 30 per document) + PHP 40 legal research fee for specific docu- (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. ments (PHP 10 per document) + PHP 60 annotation fee (PHP 30 per document) + However these can be more readily purchased at city government offices at a cost PHP 75 fee for issuance of new transfer certificate of title} ranging from PHP 18-25 per stamp. Comments: The buyer applies for registration with the Register of Deeds. The documentation shall include: Procedure 3*. Obtain tax clearance certificate of real property a. Copy of deed of absolute sale; taxes from the City Treasurer’s Office (CTO) b. Official receipt evidencing payment of transfer tax; Time: 1 day c. Certificate Authorizing Registration from the BIR (CAR) including official receipts Cost: PHP 115 [PHP 50 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] + for payment of DST and CWT; PHP 15 documentary stamp tax] d. Real property tax clearance from the City Treasurer’s Office; Comments: The seller, after paying any arrears, obtains a tax clearance certificate e. Original copy of owner’s duplicate of TCT (in the name of the seller); from the CTO. f. Original or certified true copy of the latest tax declaration; The documentation shall include an original of the official receipt evidencing pay- ment by seller of realty taxes. g. Notarized secretary’s certificate containing resolution of the board of directors of the seller approving the sale; Procedure 4. Obtain Certificate Authorizing Registration (CAR) h. Notarized secretary’s certificate containing resolution of the board of directors of from the Bureau of Internal Revenue (BIR) the buyer approving the sale; Time: 5 days i. Articles of incorporation of the buyer and by-laws; and Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) j. Certificate from the SEC that the articles of incorporation of the buyer have been registered. 154 Doing Business IN the philippines 2011 Comments: The Certificate Authorizing Registration (CAR) is a certification issued by Procedure 8. Obtain new tax declaration over the building and the BIR that the transfer and conveyance of the property was reported and the taxes due have been fully paid. the land in the name of buyer from CAO The taxpayer/applicant must submit the following documents to the BIR: Time: 3 days a. Tax identification number (TIN) of seller and buyer; Cost: PHP 100 (PHP 100 per transfer) b. Notarized deed of absolute sale/document of transfer, but only photocopied Comments: The buyer applies with the CAO for the issuance of a new tax declara- document shall be retained by the BIR; tion over the building in his name. c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office The documentation shall include: for the land and improvement applicable to the taxable transaction; a. Photocopy of notarized deed of sale (obtained in Procedure 1); d. Owners copy (for presentation purposes only) and photocopy (for authentication) b. Copy of latest tax declaration (in the name of seller) (obtained in Procedure 2); of the Original Certificate of Title (OCT), or the certified true copy of the Transfer c. Tax clearance certificate of real property taxes from the CTO (obtained in Proc. 3); Certificate of Title (TCT); and d. Certificate authorizing registration from the BIR (obtained in Procedure 4); e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or e. Photocopy of official receipt of transfer tax payment (original copy to be pre- certificate of “with improvement” issued by the Assessor’s Office. sented) (obtained in Procedure 6); and f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) Procedure 5. Pay documentary stamp tax and creditable (obtained in Procedure 7). withholding tax (CWT) at an authorized agent bank (AAB) Time: 1 day Procedure 9*. Receive inspection from CAO Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction Time: 1 day thereof of the property value) + creditable withholding tax of 6% of the selling price, Cost: No cost fair market value, or zonal value, whichever is highest.] Note: Computation for CWT is not included in the cost reflected. *This procedure can be completed simultaneously with previous procedures. Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 for DST and CWT respectively, based on the ONETT computation sheets prepared by the BIR ONETT team. The applicant files the DST return and CWT return and pays the registering property taxes at the AAB of the Revenue District Office. Payment must be made through either PASAY a manager’s check or cashier’s check within 5 days after the close of the month when the taxable document was signed or within 30 days from the sale, whichever is earlier. Property value: PHP 4,169,969 = USD 89,500 Data as of: June 2010 Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- ately issues a claim slip. Procedure 1. Prepare the notarized deed of sale and related documents Procedure 6. Pay the transfer tax at the CTO Time: 1 day Time: 1 day Cost: PHP 83,399 (1-3% of the property value) Cost: PHP 20,850 (0.5% of the property price) Comments: While the deed of sale can be prepared by anyone, it must be executed Comments: The transfer tax must be paid at the CTO. The documentation shall before and notarized by a notary public. In many instances, the notary public drafts include: the deed of sale and conducts the whole process on behalf of the parties. a. Tax clearance certificate of real property taxes from the CTO (obtained in Proc. 3); In addition to the deed of sale, the Register of Deeds also requires both the buyer b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and and the seller to submit notarized secretary’s certificates containing the resolution of c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). their board of directors approving the sale. The buyer must also produce a certificate from the Securities and Exchange Commission (SEC) stating that its articles of incor- Procedure 7. Secure registration with the Register of Deeds (RD) poration have been registered with the SEC. Time: 14 days Procedure 2*. Obtain certified true copy of latest tax declaration Cost: PHP 23,863 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP and certificate of with improvement from the City Assessor’s 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Office (CAO) PHP 2,419.2 IT fee (PHP 268.8 per document) + PHP 300 primary entry fee (PHP Time: 1 day 30 per document) + PHP 480 registration fee for specific documents (PHP 120 per Cost: PHP 165 {PHP 40 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] + document) + PHP 120 fixed entry fee for specific documents (PHP 30 per document) PHP 40 for certificate of no improvement + PHP 45 (PHP 15 documentary stamp tax + PHP 40 legal research fee for specific documents (PHP 10 per document) + PHP 60 per RPU/document)} annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer Comments: The seller must obtain a certified true copy of the latest tax declaration certificate of title} for the land and the building as well as a certificate of “with improvement” from the Comments: The buyer applies for registration with the Register of Deeds. The CAO as these documents are required by the BIR. Loose documentary stamps must documentation shall include: be affixed to these documents as proof of payment of the documentary stamp tax a. Copy of deed of absolute sale; (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. b. Official receipt evidencing payment of transfer tax; However these can be more readily purchased at city government offices at a cost ranging from PHP 18-25 per stamp. c. Certificate Authorizing Registration from the BIR (CAR) including official receipts for payment of DST and CWT; Procedure 3. Obtain Certificate Authorizing Registration (CAR) d. Real property tax clearance from the City Treasurer’s Office; from the Bureau of Internal Revenue (BIR) e. Original copy of owner’s duplicate of TCT (in the name of the seller); Time: 14 days f. Original or certified true copy of the latest tax declaration; Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) g. Notarized secretary’s certificate containing resolution of the board of directors of Comments: The Certificate Authorizing Registration (CAR) is a certification issued by the seller approving the sale; the BIR that the transfer and conveyance of the property was reported and the taxes h. Notarized secretary’s certificate containing resolution of the board of directors of due have been fully paid. the buyer approving the sale; The taxpayer/applicant must submit the following documents to the BIR: i. Articles of incorporation of the buyer and by-laws; and a. Tax identification number (TIN) of seller and buyer; j. Certificate from the SEC that the articles of incorporation of the buyer have been b. Notarized deed of absolute sale/document of transfer, but only photocopied registered. document shall be retained by the BIR; The Register of Deeds has been fully computerized since January 10, 2010 as a result c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office of the Land Registration Authority's land titling computerization project. for the land and improvement applicable to the taxable transaction; LIST LIST OFOF PROCE DURES PROCEDURES • RegistERING • STARTING APROPERT Y BUSINESS 155 d. Owners copy (for presentation purposes only) and photocopy (for authentication) Procedure 7. Obtain new tax declaration over the building and of the Original Certificate of Title (OCT), or the certified true copy of the Transfer Certificate of Title (TCT); and the land in the name of buyer from CAO e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or Time: 3 days certificate of “with improvement” issued by the Assessor’s Office. Cost: No cost (fees included in procedure 5) Comments: The buyer applies with the CAO for the issuance of a new tax declara- Procedure 4. Pay documentary stamp tax and creditable tion over the building in his name. withholding tax (CWT) at an authorized agent bank (AAB) The documentation shall include: Time: 1 day a. Photocopy of notarized deed of sale (obtained in Procedure 1); Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction b. Copy of latest tax declaration (in the name of seller) (obtained in Procedure 2); thereof of the property value) + creditable withholding tax of 6% of the selling price, c. Certificate authorizing registration from the BIR (obtained in Procedure 3); fair market value, or zonal value, whichever is highest.] d. Photocopy of official receipt of transfer tax payment (original copy to be pre- Note: Computation for CWT is not included in the cost reflected. sented) (obtained in Procedure 5); Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 for e. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- DST and CWT respectively, based on the ONETT computation sheets prepared by the dure 5); and BIR ONETT team. The applicant files the DST return and CWT return and pays the taxes f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) at the AAB of the Revenue District Office. Payment must be made through either a (obtained in Procedure 6). manager’s check or cashier’s check within 5 days after the close of the month when the taxable document was signed or within 30 days from the sale, whichever is earlier. Procedure 8*. Receive inspection from CAO Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- ately issues a claim slip. Time: 1 day Cost: No cost Procedure 5. Pay transfer tax and obtain tax clearance certificate of real property taxes City Treasurer’s Office (CTO) *This procedure can be completed simultaneously with previous procedures. Time: 1 day Cost: PHP 32,450 {[PHP 34,243 (0.75% of property price + PHP 1,000 transfer fee registering property [PHP 500 per RPU (Land (1RPU), Building (1RPU)] + PHP 120 for tax clearance certifi- PASIG cate + PHP 40 application fee + PHP 15 documentary stamp tax)} Comments: The documentation shall include: Property value: PHP 4,169,969 = USD 89,500 Data as of: June 2010 a. Deed of absolute sale (obtained in procedure 1); b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); Procedure 1. Prepare the notarized deed of sale and related c. Real property tax receipts from 2005 to 2009; documents d. Payment receipts of the transfer tax, tax clearance certificate of real property tax, Time: 1 day application fee; Cost: PHP 83,399 (1-3% of the property value) e. Authorization letter if the one processing is a representative; and Comments: While the deed of sale can be prepared by anyone, it must be executed f. Community tax certificate of the corporation or the authorized representative. before and notarized by a notary public. In many instances, the notary public drafts Assessment for the transfer fee, transfer tax, verification fee, application fee, and tax the deed of sale and conducts the whole process on behalf of the parties. clearance certificate of real property taxes is done under this procedure. Applicant In addition to the deed of sale, the Register of Deeds also requires both the buyer pays at the CTO cashier and receives an official receipt. The official receipt is required and the seller to submit notarized secretary’s certificates containing the resolution of for the release of the tax clearance certificate of real property taxes. their board of directors approving the sale. The buyer must also produce a certificate from the Securities and Exchange Commission (SEC) stating that its articles of incor- Procedure 6. Secure registration with the Register of Deeds (RD) poration have been registered with the SEC. Time: 10 days Cost: PHP 23,863 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Procedure 2*. Obtain certified true copy of latest tax declaration PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP and certificate of with improvement from the City Assessor’s 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Office (CAO) PHP 2,419.2 IT fee (PHP 268.8 per document) + PHP 300 primary entry fee (PHP Time: 1 day 30 per document) + PHP 480 registration fee for specific documents (PHP 120 per Cost: PHP 135 {PHP 30 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] + document) + PHP 120 fixed entry fee for specific documents (PHP 30 per document) PHP 30 for certificate of no improvement + PHP 45 (PHP 15 documentary stamp tax + PHP 40 legal research fee for specific documents (PHP 10 per document) + PHP 60 per RPU/document)} annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer Comments: The seller must obtain a certified true copy of the latest tax declaration certificate of title} for the land and the building as well as a certificate of “with improvement” from the Comments: The buyer applies for registration with the Register of Deeds. The CAO as these documents are required by the BIR. Loose documentary stamps must documentation shall include: be affixed to these documents as proof of payment of the documentary stamp tax a. Copy of deed of absolute sale; (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. b. Official receipt evidencing payment of transfer tax; However these can be more readily purchased at city government offices at a cost c. Certificate Authorizing Registration from the BIR (CAR) including official receipts ranging from PHP 18-25 per stamp. for payment of DST and CWT; Procedure 3*. Obtain tax clearance certificate of real property d. Real property tax clearance from the City Treasurer’s Office; taxes from the Land Tax Division of the City Treasurer’s Office e. Original copy of owner’s duplicate of TCT (in the name of the seller); (CTO) f. Original or certified true copy of the latest tax declaration; Time: 1 day g. Notarized secretary’s certificate containing resolution of the board of directors of Cost: PHP 45 (PHP 30 for tax clearance + PHP 15 for stamp tax on certificate) the seller approving the sale; Comments: The seller, after paying any arrears, obtains a tax clearance certificate h. Notarized secretary’s certificate containing resolution of the board of directors of from the CTO. the buyer approving the sale; The documentation shall include an original of the official receipt evidencing pay- i. Articles of incorporation of the buyer and by-laws; and ment by seller of realty taxes. j. Certificate from the SEC that the articles of incorporation of the buyer have been registered. The Register of Deeds has been fully computerized since January , 2010 as a result of the Land Registration Authority's land titling computerization project. 156 Doing Business IN the philippines 2011 Procedure 4. Obtain Certificate Authorizing Registration (CAR) h. Notarized secretary’s certificate containing resolution of the board of directors of the buyer approving the sale; from the Bureau of Internal Revenue (BIR) i. Articles of incorporation of the buyer and by-laws; and Time: 14 days j. Certificate from the SEC that the articles of incorporation of the buyer have been Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) registered. Comments: The Certificate Authorizing Registration (CAR) is a certification issued by The Register of Deeds has been fully computerized since December 15, 2010 as a the BIR that the transfer and conveyance of the property was reported and the taxes result of the Land Registration Authority's land titling computerization project. due have been fully paid. The taxpayer/applicant must submit the following documents to the BIR: Procedure 8. Obtain new tax declaration over the building and a. Tax identification number (TIN) of seller and buyer; the land in the name of buyer from CAO b. Notarized deed of absolute sale/document of transfer, but only photocopied Time: 1 day document shall be retained by the BIR; Cost: PHP 200 [PHP 100 per real property unit (RPU)] c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office Comments: The buyer applies with the CAO for the issuance of a new tax declara- for the land and improvement applicable to the taxable transaction; tion over the building in his name. d. Owners copy (for presentation purposes only) and photocopy (for authentication) The documentation shall include: of the Original Certificate of Title (OCT), or the certified true copy of the Transfer Certificate of Title (TCT); and a. Photocopy of notarized deed of sale (obtained in Procedure 1); e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or b. Copy of latest tax declaration (in the name of seller) (obtained in Procedure 2); certificate of “with improvement” issued by the Assessor’s Office. c. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- dure 3); Procedure 5. Pay documentary stamp tax and creditable d. Certificate authorizing registration from the BIR (obtained in Procedure 4); withholding tax (CWT) at an authorized agent bank (AAB) e. Photocopy of official receipt of transfer tax payment (original copy to be pre- Time: 1 day sented) (obtained in Procedure 6); and Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) thereof of the property value) + creditable withholding tax of 6% of the selling price, (obtained in Procedure 7). fair market value, or zonal value, whichever is highest.] Note: Computation for CWT is not included in the cost reflected. *This procedure can be completed simultaneously with previous procedures. Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 for DST and CWT respectively, based on the ONETT computation sheets prepared registering property by the BIR ONETT team. The applicant files the DST return and CWT return and pays the taxes at the AAB of the Revenue District Office. Payment must be made through QUEZON CITY either a manager’s check or cashier’s check within 5 days after the close of the month Property value: PHP 4,169,969 = USD 89,500 when the taxable document was signed or within 30 days from the sale, whichever Data as of: June 2010 is earlier. Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- Procedure 1. Prepare the notarized deed of sale and related ately issues a claim slip. documents Time: 1 day Procedure 6. Pay the transfer tax at the CTO Cost: PHP 83,399 (1-3% of the property value) Time: 1 day Comments: While the deed of sale can be prepared by anyone, it must be executed Cost: PHP 20,850 (0.5% of the property price) before and notarized by a notary public. In many instances, the notary public drafts Comments: The transfer tax must be paid at the CTO. The documentation shall the deed of sale and conducts the whole process on behalf of the parties. include: In addition to the deed of sale, the Register of Deeds also requires both the buyer a. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- and the seller to submit notarized secretary’s certificates containing the resolution of dure 3); their board of directors approving the sale. The buyer must also produce a certificate b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and from the Securities and Exchange Commission (SEC) stating that its articles of incor- poration have been registered with the SEC. c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). Procedure 2*. Obtain certified true copy of latest tax declaration Procedure 7. Secure registration with the Register of Deeds (RD) and certificate of with improvement from the City Assessor’s Time: 10 days Office (CAO) Cost: PHP 23,863 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Time: 1 day PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Cost: PHP 275 {PHP 70 per RPU [(Land (1RPU), Building (1RPU)] + PHP 90 for PHP 2,419.2 IT fee (PHP 268.8 per document) + PHP 300 primary entry fee (PHP certificate of with improvement + PHP 45 (PHP 15 documentary stamp tax per RPU/ 30 per document) + PHP 480 registration fee for specific documents (PHP 120 per document)} document) + PHP 120 fixed entry fee for specific documents (PHP 30 per document) Comments: The seller must obtain a certified true copy of the latest tax declaration + PHP 40 legal research fee for specific documents (PHP 10 per document) + PHP 60 for the land and the building as well as a certificate of “with improvement” from the annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer CAO as these documents are required by the BIR. Loose documentary stamps must certificate of title} be affixed to these documents as proof of payment of the documentary stamp tax Comments: The buyer applies for registration with the Register of Deeds. The (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. documentation shall include: However these can be more readily purchased at city government offices at a cost ranging from PHP 18-25 per stamp. a. Copy of deed of absolute sale; b. Official receipt evidencing payment of transfer tax; Procedure 3*. Obtain tax clearance certificate of real property c. Certificate Authorizing Registration from the BIR (CAR) including official receipts taxes from the Land Tax Division of the City Treasurer’s Office for payment of DST and CWT; (CTO) d. Real property tax clearance from the City Treasurer’s Office; Time: 2 days e. Original copy of owner’s duplicate of TCT (in the name of the seller); Cost: PHP 65 (PHP 50 for tax clearance + PHP 15 for documentary stamp tax) f. Original or certified true copy of the latest tax declaration; Comments: The seller, after paying any arrears, obtains a tax clearance certificate g. Notarized secretary’s certificate containing resolution of the board of directors of from the CTO. the seller approving the sale; The documentation shall include an original of the official receipt evidencing pay- ment by seller of realty taxes. LIST LIST OFOF PROCE DURES PROCEDURES • RegistERING • STARTING APROPERT Y BUSINESS 157 Procedure 4. Obtain Certificate Authorizing Registration (CAR) h. Notarized secretary’s certificate containing resolution of the board of directors of the buyer approving the sale; from the Bureau of Internal Revenue (BIR) i. Articles of incorporation of the buyer and by-laws; and Time: 21 days j. Certificate from the SEC that the articles of incorporation of the buyer have been Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) registered. Comments: The Certificate Authorizing Registration (CAR) is a certification issued by The Register of Deeds has been fully computerized since December 14, 2010 as a the BIR that the transfer and conveyance of the property was reported and the taxes result of the Land Registration Authority's land titling computerization project. due have been fully paid. The taxpayer/applicant must submit the following documents to the BIR: Procedure 8. Obtain new tax declaration over the building and a. Tax identification number (TIN) of seller and buyer; the land in the name of buyer from CAO b. Notarized deed of absolute sale/document of transfer, but only photocopied Time: 2 days document shall be retained by the BIR; Cost: No cost c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office Comments: The buyer applies with the CAO for the issuance of a new tax declara- for the land and improvement applicable to the taxable transaction; tion over the building in his name. d. Owners copy (for presentation purposes only) and photocopy (for authentication) The documentation shall include: of the Original Certificate of Title (OCT), or the certified true copy of the Transfer Certificate of Title (TCT); and a. Photocopy of notarized deed of sale (obtained in Procedure 1); e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or b. Copy of latest tax declaration (in the name of seller) (obtained in Procedure 2); certificate of “with improvement” issued by the Assessor’s Office. c. Tax clearance certificate of real property taxes from the CTO (obtained in Proc. 3); d. Certificate authorizing registration from the BIR (obtained in Procedure 4); Procedure 5. Pay documentary stamp tax and creditable e. Photocopy of official receipt of transfer tax payment (original copy to be pre- withholding tax (CWT) at an authorized agent bank (AAB) sented) (obtained in Procedure 6); and Time: 1 day f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction (obtained in Procedure 7). thereof of the property value) + creditable withholding tax of 6% of the selling price, fair market value, or zonal value, whichever is highest.] *This procedure can be completed simultaneously with previous procedures. Note: Computation for CWT is not included in the cost reflected. Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 registering property for DST and CWT respectively, based on the ONETT computation sheets prepared by the BIR ONETT team. The applicant files the DST return and CWT return and pays SAN JUAN the taxes at the AAB of the Revenue District Office. Payment must be made through Property value: PHP 4,169,969 = USD 89,500 either a manager’s check or cashier’s check within 5 days after the close of the month Data as of: June 2010 when the taxable document was signed or within 30 days from the sale, whichever is earlier. Procedure 1. Prepare the notarized deed of sale and related Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- documents ately issues a claim slip. Time: 1 day Cost: PHP 83,399 (1-3%of the property value) Procedure 6. Pay the transfer tax at the CTO Comments: While the deed of sale can be prepared by anyone, it must be executed Time: 1 day before and notarized by a notary public. In many instances, the notary public drafts Cost: PHP 31,275 (0.75% of the property price) the deed of sale and conducts the whole process on behalf of the parties. Comments: The transfer tax must be paid at the CTO. The documentation shall In addition to the deed of sale, the Register of Deeds also requires both the buyer include: and the seller to submit notarized secretary’s certificates containing the resolution of a. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- their board of directors approving the sale. The buyer must also produce a certificate dure 3); from the Securities and Exchange Commission (SEC) stating that its articles of incor- b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and poration have been registered with the SEC. c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). Procedure 2*. Obtain certified true copy of latest tax declaration Procedure 7. Secure registration with the Register of Deeds (RD) and certificate of with improvement from the City Assessor’s Office (CAO) Time: 10 days Time: 1 day Cost: PHP 23,863 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Cost: PHP 135 {PHP 30 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + + PHP 30 for certificate of with improvement + PHP 45 (PHP 15 documentary stamp PHP 2,419.2 IT fee (PHP 268.8 per document) + PHP 300 primary entry fee (PHP tax per RPU/document)} 30 per document) + PHP 480 registration fee for specific documents (PHP 120 per Comments: The seller must obtain a certified true copy of the latest tax declaration document) + PHP 120 fixed entry fee for specific documents (PHP 30 per document) for the land and the building as well as a certificate of “with improvement” from the + PHP 40 legal research fee for specific documents (PHP 10 per document) + PHP 60 CAO as these documents are required by the BIR. Loose documentary stamps must annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer be affixed to these documents as proof of payment of the documentary stamp tax certificate of title} (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. Comments: The buyer applies for registration with the Register of Deeds. The However these can be more readily purchased at city government offices at a cost documentation shall include: ranging from PHP 18-25 per stamp. a. Copy of deed of absolute sale; Procedure 3*. Obtain tax clearance certificate of real property b. Official receipt evidencing payment of transfer tax; taxes from the Land Tax Division of the City Treasurer’s Office c. Certificate Authorizing Registration from the BIR (CAR) including official receipts (CTO) for payment of DST and CWT; Time: 2 days d. Real property tax clearance from the City Treasurer’s Office; Cost: PHP 65 (PHP 50 for tax clearance + PHP 15 per documentary stamp tax) e. Original copy of owner’s duplicate of TCT (in the name of the seller); Comments: The seller, after paying any arrears, obtains a tax clearance certificate f. Original or certified true copy of the latest tax declaration; from the CTO. g. Notarized secretary’s certificate containing resolution of the board of directors of The documentation shall include an original of the official receipt evidencing pay- the seller approving the sale; ment by seller of realty taxes. 158 Doing Business IN the philippines 2011 Procedure 4. Obtain Certificate Authorizing Registration (CAR) i. Articles of incorporation of the buyer and by-laws; and from the Bureau of Internal Revenue (BIR) j. Certificate from the SEC that the articles of incorporation of the buyer have been registered. Time: 14 days The Register of Deeds has been fully computerized since March 16, 2010 as a result Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) of the Land Registration Authority's land titling computerization project. Comments: The Certificate Authorizing Registration (CAR) is a certification issued by the BIR that the transfer and conveyance of the property was reported and the taxes Procedure 8. Obtain new tax declaration over the building and due have been fully paid. the land in the name of buyer from CAO The taxpayer/applicant must submit the following documents to the BIR: Time: 3 days a. Tax identification number (TIN) of seller and buyer; Cost: PHP 200 [PHP 100 per real property unit (RPU)] b. Notarized deed of absolute sale/document of transfer, but only photocopied Comments: The buyer applies with the CAO for the issuance of a new tax declara- document shall be retained by the BIR; tion over the building in his name. c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office The documentation shall include: for the land and improvement applicable to the taxable transaction; a. Photocopy of notarized deed of sale (obtained in Procedure 1); d. Owners copy (for presentation purposes only) and photocopy (for authentication) of the Original Certificate of Title (OCT), or the certified true copy of the Transfer b. Copy of latest tax declaration (in the name of seller) (obtained in Procedure 2); Certificate of Title (TCT); and c. Tax clearance certificate of real property taxes from the CTO (obtained in Proc. 3); e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or d. Certificate authorizing registration from the BIR (obtained in Procedure 4); certificate of “with improvement” issued by the Assessor’s Office. e. Photocopy of official receipt of transfer tax payment (original copy to be pre- sented) (obtained in Procedure 6); and Procedure 5. Pay documentary stamp tax and creditable f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) withholding tax (CWT) at an authorized agent bank (AAB) (obtained in Procedure 7). Time: 1 day Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction Procedure 9*. Receive inspection from CAO thereof of the property value) + creditable withholding tax of 6% of the selling price, Time: 1 day fair market value, or zonal value, whichever is highest.] Cost: No cost Note: Computation for CWT is not included in the cost reflected. *This procedure can be completed simultaneously with previous procedures. Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 for DST and CWT respectively, based on the ONETT computation sheets prepared by the BIR ONETT team. The applicant files the DST return and CWT return and pays registering property the taxes at the AAB of the Revenue District Office. Payment must be made through TAGUIG either a manager’s check or cashier’s check within 5 days after the close of the month when the taxable document was signed or within 30 days from the sale, whichever Property value: PHP 4,169,969 = USD 89,500 is earlier. Data as of: June 2010 Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- Procedure 1. Prepare the notarized deed of sale and related ately issues a claim slip. documents Procedure 6. Pay the transfer tax at the CTO Time: 1 day Time: 1 day Cost: PHP 83,399 (1-3% of the property value) Cost: PHP 20,850 (0.5% of the property price) Comments: While the deed of sale can be prepared by anyone, it must be executed before and notarized by a notary public. In many instances, the notary public drafts Comments: The transfer tax must be paid at the CTO. The documentation shall the deed of sale and conducts the whole process on behalf of the parties. include: In addition to the deed of sale, the Register of Deeds also requires both the buyer a. Tax clearance certificate of real property taxes from the CTO (obtained in Proc. 3); and the seller to submit notarized secretary’s certificates containing the resolution of b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and their board of directors approving the sale. The buyer must also produce a certificate c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5). from the Securities and Exchange Commission (SEC) stating that its articles of incor- poration have been registered with the SEC. Procedure 7. Secure registration with the Register of Deeds (RD) Time: 3 days Procedure 2*. Obtain tax clearance certificate of Real Property Cost: PHP 23,863 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Tax from the Land Tax Division of the City Treasurer’s Office (CTO) PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Time: 1 day 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Cost: PHP 115 {(PHP 50 per RPU [(Land (1RPU), Building (1RPU)] + PHP 15 documen- PHP 2,419.2 IT fee (PHP 268.8 per document) + PHP 300 primary entry fee (PHP tary stamp tax} 30 per document) + PHP 480 registration fee for specific documents (PHP 120 per Comments: The seller, after paying any arrears, obtains a tax clearance certificate document) + PHP 120 fixed entry fee for specific documents (PHP 30 per document) from the CTO. + PHP 40 legal research fee for specific documents (PHP 10 per document) + PHP 60 The documentation shall include an original of the official receipt evidencing pay- annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer ment by seller of realty taxes. certificate of title} Comments: The buyer applies for registration with the Register of Deeds. The Procedure 3. Obtain certified true copy of latest tax declaration documentation shall include: and certificate of with improvement from the City Assessor’s a. Copy of deed of absolute sale; Office (CAO) b. Official receipt evidencing payment of transfer tax; Time: 1 day c. Certificate Authorizing Registration from the BIR (CAR) including official receipts Cost: PHP 201 {PHP 53 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] for payment of DST and CWT; + PHP 50 for certificate of with improvement + PHP 45 (PHP 15 documentary stamp d. Real property tax clearance from the City Treasurer’s Office; tax per document)} e. Original copy of owner’s duplicate of TCT (in the name of the seller); Comments: The seller must obtain a certified true copy of the latest tax declaration f. Original or certified true copy of the latest tax declaration; for the land and the building as well as a certificate of “with improvement” from the g. Notarized secretary’s certificate containing resolution of the board of directors of CAO as these documents are required by the BIR. Loose documentary stamps must the seller approving the sale; be affixed to these documents as proof of payment of the documentary stamp tax (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. h. Notarized secretary’s certificate containing resolution of the board of directors of However these can be more readily purchased at city government offices at a cost the buyer approving the sale; ranging from PHP 18-25 per stamp. LIST LIST OFOF PROCE DURES PROCEDURES • RegistERING • STARTING APROPERT Y BUSINESS 159 Procedure 4. Obtain Certificate Authorizing Registration (CAR) h. Notarized secretary’s certificate containing resolution of the board of directors of the buyer approving the sale; from the Bureau of Internal Revenue (BIR) i. Articles of incorporation of the buyer and by-laws; and Time: 14 days j. Certificate from the SEC that the articles of incorporation of the buyer have been Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) registered. Comments: The Certificate Authorizing Registration (CAR) is a certification issued by The Register of Deeds has been fully computerized since January, 2010 as a result of the BIR that the transfer and conveyance of the property was reported and the taxes the Land Registration Authority's land titling computerization project. due have been fully paid. The taxpayer/applicant must submit the following documents to the BIR: Procedure 8. Obtain new tax declaration over the building and a. Tax identification number (TIN) of seller and buyer; the land in the name of buyer from CAO b. Notarized deed of absolute sale/document of transfer, but only photocopied Time: 3 days document shall be retained by the BIR; Cost: PHP 250 (PHP 125 per RPU) c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office Comments: The buyer applies with the CAO for the issuance of a new tax declara- for the land and improvement applicable to the taxable transaction; tion over the building in his name. d. Owners copy (for presentation purposes only) and photocopy (for authentication) The documentation shall include: of the Original Certificate of Title (OCT), or the certified true copy of the Transfer Certificate of Title (TCT); and a. Photocopy of notarized deed of sale (obtained in Procedure 1); e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or b. Tax clearance certificate of real property tax from the CTO (obtained in Procedure certificate of “with improvement” issued by the Assessor’s Office. 2); c. Certified true copy of latest tax declaration (in the name of seller) (obtained in Procedure 5. Pay documentary stamp tax and creditable Procedure 3); withholding tax (CWT) at an authorized agent bank (AAB) d. Certificate authorizing registration from the BIR (obtained in Procedure 4); Time: 1 day e. Photocopy of official receipt of transfer tax payment (original copy to be pre- Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction sented) (obtained in Procedure 6); and thereof of the property value) + creditable withholding tax of 6% of the selling price, f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) fair market value, or zonal value, whichever is highest.] (obtained in Procedure 7). Note: Computation for CWT is not included in the cost reflected. Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 *This procedure can be completed simultaneously with previous procedures. for DST and CWT respectively, based on the ONETT computation sheets prepared by the BIR ONETT team. The applicant files the DST return and CWT return and pays registering property the taxes at the AAB of the Revenue District Office. Payment must be made through either a manager’s check or cashier’s check within 5 days after the close of the month VALENZUELA when the taxable document was signed or within 30 days from the sale, whichever Property value: PHP 4,169,969 = USD 89,500 is earlier. Data as of: June 2010 Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- ately issues a claim slip. Procedure 1. Prepare the notarized deed of sale and related documents Procedure 6*. Pay the transfer tax at the CTO Time: 1 day Time: 1 day Cost: PHP 41,700 (1% of the property value) Cost: PHP 20,850 (0.5% of the property price) Comments: While the deed of sale can be prepared by anyone, it must be executed Comments: The transfer tax must be paid at the CTO. The documentation shall before and notarized by a notary public. In many instances, the notary public drafts include: the deed of sale and conducts the whole process on behalf of the parties. a. Deed of absolute sale; In addition to the deed of sale, the Register of Deeds also requires both the buyer b. Tax clearance certificate of real property tax from the CTO (obtained in Procedure and the seller to submit notarized secretary’s certificates containing the resolution of 2); and their board of directors approving the sale. The buyer must also produce a certificate from the Securities and Exchange Commission (SEC) stating that its articles of incor- c. Latest tax declaration (obtained in Procedure 3). poration have been registered with the SEC. Procedure 7. Secure registration with the Register of Deeds (RD) Procedure 2*. Obtain certified true copy of latest tax declaration Time: 10 days and certificate of with improvement from the City Assessor’s Cost: PHP 23,863 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + Office (CAO) PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP Time: 1 day 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + PHP 2,419.2 IT fee (PHP 268.8 per document) + PHP 300 primary entry fee (PHP Cost: PHP 75 {PHP 10 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] + 30 per document) + PHP 480 registration fee for specific documents (PHP 120 per PHP 10 certificate of with improvement + PHP 45 (PHP 15 documentary stamp tax document) + PHP 120 fixed entry fee for specific documents (PHP 30 per document) per RPU/document)} + PHP 40 legal research fee for specific documents (PHP 10 per document) + PHP 60 Comments: The seller must obtain a certified true copy of the latest tax declaration annotation fee (PHP 30 per document) + PHP 258 fee for issuance of new transfer for the land and the building as well as a certificate of “with improvement” from the certificate of title} CAO as these documents are required by the BIR. Loose documentary stamps must Comments: The buyer applies for registration with the Register of Deeds. The be affixed to these documents as proof of payment of the documentary stamp tax documentation shall include: (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. However these can be more readily purchased at city government offices at a cost a. Copy of deed of absolute sale; ranging from PHP 18-25 per stamp. b. Official receipt evidencing payment of transfer tax; c. Certificate Authorizing Registration from the BIR (CAR) including official receipts Procedure 3*. Obtain tax clearance certificate of Real Property for payment of DST and CWT; Tax from the Land Tax Division of the City Treasurer’s Office (CTO) d. Real property tax clearance from the City Treasurer’s Office; Time: 2 days e. Original copy of owner’s duplicate of TCT (in the name of the seller); Cost: PHP 35 (PHP 20 for tax clearance + PHP 15 documentary stamp tax) f. Original or certified true copy of the latest tax declaration; Comments: The seller, after paying any arrears, obtains a tax clearance certificate g. Notarized secretary’s certificate containing resolution of the board of directors of from the CTO. the seller approving the sale; The documentation shall include an original of the official receipt evidencing pay- ment by seller of realty taxes. 160 Doing Business IN the philippines 2011 Procedure 4. Obtain Certificate Authorizing Registration (CAR) h. Notarized secretary’s certificate containing resolution of the board of directors of the buyer approving the sale; from the Bureau of Internal Revenue (BIR) i. Articles of incorporation of the buyer and by-laws; and Time: 14 days j. Certificate from the SEC that the articles of incorporation of the buyer have been Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) registered. Comments: The Certificate Authorizing Registration (CAR) is a certification issued by the BIR that the transfer and conveyance of the property was reported and the taxes Procedure 8. Obtain new tax declaration over the building and due have been fully paid. the land in the name of buyer from CAO The taxpayer/applicant must submit the following documents to the BIR: Time: 3 days a. Tax identification number (TIN) of seller and buyer; Cost: No cost b. Notarized deed of absolute sale/document of transfer, but only photocopied Comments: The buyer applies with the CAO for the issuance of a new tax declara- document shall be retained by the BIR; tion over the building in his name. c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office The documentation shall include: for the land and improvement applicable to the taxable transaction; a. Photocopy of notarized deed of sale (obtained in Procedure 1); d. Owners copy (for presentation purposes only) and photocopy (for authentication) of the Original Certificate of Title (OCT), or the certified true copy of the Transfer b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Certificate of Title (TCT); and Procedure 2); e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or c. Tax clearance certificate for real property tax from the CTO (obtained in Procedure certificate of “with improvement” issued by the Assessor’s Office. 3); d. Certificate authorizing registration from the BIR (obtained in Procedure 4); Procedure 5. Pay documentary stamp tax and creditable e. Photocopy of official receipt of transfer tax payment (original copy to be pre- withholding tax (CWT) at an authorized agent bank (AAB) sented) (obtained in Procedure 6); and Time: 1 day f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction (obtained in Procedure 7). thereof of the property value) + creditable withholding tax of 6% of the selling price, fair market value, or zonal value, whichever is highest.] *This procedure can be completed simultaneously with previous procedures. Note: Computation for CWT is not included in the cost reflected. Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 registering property for DST and CWT respectively, based on the ONETT computation sheets prepared ZAMBOANGA CITY by the BIR ONETT team. The applicant files the DST return and CWT return and pays the taxes at the AAB of the Revenue District Office. Payment must be made through Property value: PHP 4,169,969 = USD 89,500 either a manager’s check or cashier’s check within 5 days after the close of the month Data as of: June 2010 when the taxable document was signed or within 30 days from the sale, whichever is earlier. Procedure 1. Prepare the notarized deed of sale and related Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- documents ately issues a claim slip. Time: 1 day Cost: PHP 125,099 (3% of the property value) Procedure 6. Pay the transfer tax at the CTO Comments: While the deed of sale can be prepared by anyone, it must be executed Time: 1 day before and notarized by a notary public. In many instances, the notary public drafts Cost: PHP 20,850 (0.5% of the property price) the deed of sale and conducts the whole process on behalf of the parties. Comments: The transfer tax must be paid at the CTO. The documentation shall In addition to the deed of sale, the Register of Deeds also requires both the buyer include: and the seller to submit notarized secretary’s certificates containing the resolution of a. Tax clearance certificate of real property tax from the CTO (obtained in Procedure their board of directors approving the sale. The buyer must also produce a certificate 3); from the Securities and Exchange Commission (SEC) stating that its articles of incor- poration have been registered with the SEC. b. Certificate Authorizing Registration from the BIR (obtained in Procedure 4); and c. Official receipt of the BIR (for documentary stamp tax) (obtained in Procedure 5. Procedure 2. Obtain certified true copy of latest tax declaration and certificate of with improvement from the City Assessor’s Procedure 7. Secure registration with the Register of Deeds of Office (CAO) Valenzuela Time: 1 day Time: 7 days Cost: PHP 75 {PHP 10 per real property unit (RPU) [(Land (1RPU), Building (1RPU)] + Cost: PHP 21,261 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + PHP 10 for certificate of with improvement + PHP 45 (PHP 15 documentary stamp PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP tax per RPU/document)} 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + Comments: The seller must obtain a certified true copy of the latest tax declaration PHP 300 primary entry fee (PHP 30 per document) + PHP 480 registration fee for for the land and the building as well as a certificate of “with improvement” from the specific documents (PHP 120 per document) + PHP 120 fixed entry fee for specific CAO as these documents are required by the BIR. Loose documentary stamps must documents (PHP 30 per document) + PHP 40 legal research fee for specific docu- be affixed to these documents as proof of payment of the documentary stamp tax ments (PHP 10 per document) + PHP 60 annotation fee (PHP 30 per document) + (DST) on certificates. Loose documentary stamps sold at the BIR Office cost PHP 15. PHP 75 fee for issuance of new transfer certificate of title} However these can be more readily purchased at city government offices at a cost Comments: The buyer applies for registration with the Register of Deeds. The ranging from PHP 18-25 per stamp. documentation shall include: a. Copy of deed of absolute sale; Procedure 3. Obtain Certificate Authorizing Registration (CAR) b. Official receipt evidencing payment of transfer tax; from the Bureau of Internal Revenue (BIR) c. Certificate Authorizing Registration from the BIR (CAR) including official receipts Time: 7 days for payment of DST and CWT; Cost: PHP 115 (PHP 100 certification fee + PHP 15 documentary stamp tax) d. Real property tax clearance from the City Treasurer’s Office; Comments: The Certificate Authorizing Registration (CAR) is a certification issued by e. Original copy of owner’s duplicate of TCT (in the name of the seller); the BIR that the transfer and conveyance of the property was reported and the taxes f. Original or certified true copy of the latest tax declaration; due have been fully paid. g. Notarized secretary’s certificate containing resolution of the board of directors of The taxpayer/applicant must submit the following documents to the BIR: the seller approving the sale; a. Tax identification number (TIN) of seller and buyer; LIST LIST OFOF PROCE DURES PROCEDURES • RegistERING • STARTING APROPERT Y BUSINESS 161 b. Notarized deed of absolute sale/document of transfer, but only photocopied Procedure 8. Obtain new tax declaration over the building and document shall be retained by the BIR; the land in the name of buyer from CAO c. Certified true copy of the latest tax declaration issued by the City Assessor’s Office for the land and improvement applicable to the taxable transaction; Time: 7 days d. Owners copy (for presentation purposes only) and photocopy (for authentication) Cost: No cost of the Original Certificate of Title (OCT), or the certified true copy of the Transfer Comments: The buyer applies with the CAO for the issuance of a new tax declara- Certificate of Title (TCT); and tion over the building in his name. e. Sworn declaration of “with improvement” by at least one (1) of the transferees, or The documentation shall include: certificate of “with improvement” issued by the Assessor’s Office. a. Photocopy of notarized deed of sale (obtained in Procedure 1); b. Copy of latest tax declaration (in the name of seller) (obtained in Procedure 2); Procedure 4. Pay documentary stamp tax and creditable c. Certificate authorizing registration from the BIR (obtained in Procedure 3); withholding tax (CWT) at an authorized agent bank (AAB) d. Photocopy of official receipt of transfer tax payment (original copy to be pre- Time: 1 day sented) (obtained in Procedure 5); Cost: PHP 62,550 [documentary stamp tax (PHP 15 for every PHP 1,000 or a fraction e. Tax clearance certificate of real property taxes from the CTO (obtained in Proce- thereof of the property value) + creditable withholding tax of 6% of the selling price, dure 6); and fair market value, or zonal value, whichever is highest.] f. The transfer certificate of title (TCT) issued by the RD (in the name of the buyer) Note: Computation for CWT is not included in the cost reflected (obtained in Procedure 7). Comments: Prior to payment, applicant accomplishes BIR forms 2000-OT and 1606 for DST and CWT respectively, based on the ONETT computation sheets prepared Procedure 9*. Receive inspection from CAO by the BIR ONETT team. The applicant files the DST return and CWT return and pays Time: 1 day the taxes at the AAB of the Revenue District Office. Payment must be made through either a manager’s check or cashier’s check within 5 days after the close of the month Cost: No cost when the taxable document was signed or within 30 days from the sale, whichever *This procedure can be completed simultaneously with previous procedures. is earlier. Upon receipt of proof of tax payment from the taxpayer/applicant, the BIR immedi- ately issues a claim slip. Procedure 5*. Pay the transfer tax at the CTO Time: 1 day Cost: PHP 31,275 (0.75% of the property price) Comments: The transfer tax must be paid at the CTO. The documentation shall include: a. Photocopy of the Deed of sale; and b. Copy of the latest tax declaration. Procedure 6. Obtain tax clearance certificate of real property taxes from the Land Tax Division of the City Treasurer’s Office (CTO) Time: 1 day Cost: PHP 25 (PHP 10 for tax clearance + PHP 15 documentary stamp tax) Comments: The seller, after paying any arrears, obtains a tax clearance certificate from the CTO. The documentation shall include an original of the official receipt evidencing pay- ment by seller of realty taxes. Procedure 7. Secure registration with the Register of Deeds (RD) Time: 7 days Cost: PHP 21,071 {registration fee consisting of PHP 8,796 for first PHP 1,700,000 + PHP 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 199.56 legal research fee (1% of the registration fee) + PHP 30 judicial form fee + PHP 270 primary entry fee (PHP 30 per document) + PHP 360 registration fee for specific documents (PHP 120 per document) + PHP 90 fixed entry fee for specific documents (PHP 30 per document) + PHP 30 legal research fee for specific docu- ments (PHP 10 per document) + PHP 60 annotation fee (PHP 30 per document) + PHP 75 fee for issuance of new transfer certificate of title} Comments: The buyer applies for registration with the Register of Deeds. The documentation shall include: a. Copy of deed of absolute sale; b. Official receipt evidencing payment of transfer tax; c. Certificate Authorizing Registration from the BIR (CAR) including official receipts for payment of DST and CWT; d. Real property tax clearance from the City Treasurer’s Office; e. Original copy of owner’s duplicate of TCT (in the name of the seller); f. Original or certified true copy of the latest tax declaration; g. Notarized secretary’s certificate containing resolution of the board of directors of the seller approving the sale; h. Notarized secretary’s certificate containing resolution of the board of directors of the buyer approving the sale; and i. articles of incorporation of the buyer and by-laws. 163 Acknowledgments Contact details for local partners are available on the Doing Business in the Philippines 2011 Austere Panadero of the Department of Doing Business website at was produced by the Investment Climate the Interior and Local Government, for- http://subnational.doingbusiness.org Advisory Services of the World Bank mer League of Cities of the Philippines Group in collaboration with the Asian In- president Benjamin C. Abalos, Jr., Dr. stitute of Management (AIM) Policy Cen- Edilberto de Jesus of the Asian Institute ter, by a team led by Gerlin May U. Cat- of Management, Alid David Camara of angui, Maria Lourdes Aranal-Sereno (up LINC-EG and Jesse O. Ang of IFC Philip- to August 2010), Tanya Lat and Aikaterini pines for their valuable support. Leris. The team comprised of Alejandro Espinosa-Wang, Charissa M. Fajardo, Ivy This project was made possible thanks Sabuga and Steve Almeda. The report was to the support of the Department of prepared under the general direction of Trade and Industry and the National Mierta Capaul and Zenaida Hernandez. Competitiveness Council. The project was funded by the Australian Agency Dobromir Christow, Geoffrey Walton, for International Development (AusAid), Hans C. Shrader, Sandra Pranoto and the Canadian International Development Soonhwa Yi reviewed the full text. Ales- Agency (CIDA), the United States Agency sio Zanelli, Andrey Marie D. Manalo, for International Development (USAID) Arturo D. Cariaga, Christian Cangao, through their Local Implementation of Elmer Harold Grande, Ericson Lameyra, National Competitiveness for Economic Frederic Bustelo, Joanna Nasr, Jose Angel Growth Program (LINC-EG), and the Becerra Marta, Lai-Lynn Angelica Bar- Investment Climate Advisory Services of cenas, Marietta S. Patag, Marie-Lily De- the World Bank Group. lion, Nadine Shamounki Ghannam, Pilar Sanchez-Bella, Rey Remonde, Rhodora More than 250 accountants, architects, M. Roy-Raterta, Kristine Mae Tabay, Van- business consultants, engineers, lawyers, essa Peralta, Nancy Landicho, Svetlana property experts and utility providers Bagaudinova and Yasmin Zand provided contributed to Doing Business in the Phil- valuable assistance at various stages of ippines 2011. The team wants to extend the project. The website (http://www. its special gratitude to the more than 260 doingbusiness.org/Philippines was devel- local city government officials and rep- oped by Graeme Littler, Felipe Iturralde, resentatives from national government Hashim Zia and Preeti Endlaw. The re- agencies who participated in the proj- port was designed by G. Quinn Informa- ect and who made valuable comments tion Design. during the consultation and data review period. The names of those wishing to be Special thanks go to Zenaida C. Maglaya acknowledged individually are listed on of the Department of Trade and Industry, the following pages. 164 Doing Business in the philippines 2011 s t r at e g ic pa rt n e r s Bata n g a s C i t y Wat e r Deputy Chief Fire Commissioner E n e r g y R e g u l at o ry Officer-in-Charge, Iloilo D i st r ic t Marshall, Valenzuela Atty. Joel Tan-Torres C omm i s sio n City S/Insp. Jaime Robles Mr. Nune Demalata Division Manager Regional Director, Head of the Standard and Ms. Honorata Perez BFP-Valenzuela Revenue Region No. 13, Compliance Monitoring Acting Registrar of Deeds, Cebu City Division Lapu-Lapu Sgt. Reynaldo Aguilan Bu r e au o f F i r e Atty. Jose Tan Engr. Ligario L. Galang, Jr. Atty. Marlo Cugtas P r o t e c t io n Chief Fire Marshall, Zamboanga City Revenue District Officer, F o l l o s c o, M o r a l l o s & Examiner, Las Piñas City Fire Marshall, RDO No. 81, Cebu City Herce Cagayan de Oro S/Insp. Jaime Ramirez Mr. Chit Coneri Ms. Maria Socorro Lozano Partner M.Insp. Benigno Director for Fire Safety RD-Malabon/Navotas Amomonpon, Jr. & Prevention, National Revenue District Officer, Atty. Jesusito Morallos Mr. Rodil Rivera Office RDO No. 113, Davao City City Fire Marshall, Associate Caloocan C/Supt. Rodrigo Abrazalin Mr. Noel B. Gonzales Examiner, Mandaue Atty. Geraldine Garcia C. Insp. Jeremy Diaz Mr. Ramonito C. Quijano Deputy Director, DFSP, BIR-RDO No. 24, Ms. Gwen L. Zaragosa National Office Valenzuela General Santos Cit y Head of Fire Safety Unit, Wat e r D i s t r ic t Cebu City Supt. Joselito Cortez Mr. Abdullah D. Bandrang Adm. Asst. VI, Muntinlupa Engr. Restituto Gabisan General Manager Ms. Vivian Dacanay BFP-Quezon City C ag aya n d e O r o E l e c t r ic P ow e r & Mr. Arn Gelangarin Head of Enforcement Sr. Supt. Ian Guerrero Registrar of Deeds, Pasay L ig h t C ompa n y Section, Davao City L a n d R e g i s t r at io n Atty. Robert Guillermo City Fire Marshall, Au t ho r i t y Insp. Danny Padayugdog Batangas City Special Connection Supervisor Registrar of Deeds, Pasig Chief Fire Safety C.Insp. Geranndie S. Agonos Chief, Land Division Atty. Policarpio Espenesin Engr. Carlito L. Hembrador, Jr. Evaluation Unit, Iloilo Bu r e au o f I n t e r na l Atty. Robert Leyretana City R ev e n u e C ag aya n D e O r o Wat e r OIC, Deputy Register of Insp. Joeffrey Animas D i st r ic t Deputy Administrator Deeds, Zamboanga City Revenue District Officer, Atty. Ronald Ortile Mr. Jaybee Robert Baginda Chief of Operations, Lapu- RDO No. 110 Assistant General Lapu Manager M a n i l a E l e c t r ic R e g i s t ry o f D e e d s Atty. Franklin Ladores C ompa n y SF04 Rodrigo O. Ygot, Jr. Engr. Bienvenido Batar, Jr. Legal Assistant, General Asst. Chief TSS, RDO No. President Santos City Fire Marshall, Las 113, Davao City C ha mb e r o f R e a l Piñas E stat e a n d Bu i l d e r s Mr. Manuel V. Pangilinan Ms. Corazon Mascaredo Ms. Perla M. Borja A s s o c iat io n C.Insp. Robert Pacis Assistant Vice President Officer-in-Charge, BIR - Malabon/Navotas National President General Santos City Fire Marshall, Engr. Ernesto Cabral Makati Ms. Lorna Dingle Mr. Jaime Cura Mr. Edgar G. Pampanga Mr. Jose S. Flores Vice President, Customer C. Insp. Samuel C. Tadeo Davao C i t y Wat e r Retail Services S o c ia l Se c u r i t y RDO No. 41 D i st r ic t Sys t e m City Fire Marshall, Mr. Leonardo Mabale Malabon Ms. Pura Parayno Ms. Mars Ann Dizon Engineer III / Commercial Sales Team Leader, Regional Director, SSS C.Insp. Rodrigo N. Reyes Dept. Zamboanga Batangas Business Center City Fire Marshall, Tech. Assistant, RDO No. Ms. Annalyn Cuaton Engr. John Paul George Randy Atty. Marcos Florendo, Jr. Mandaluyong 80, Mandaue Sandoval Ms. Lourdes Cuizon Customer Service Assistant Junior Attorney, SSS C.Insp. Nahum B. Tarroza Zamboanga Ms. Janette Ayag Manager, Valenzuela City Fire Marshall, ARO, RDO No. 80, Mandaue Business Center Atty. Jacinto T. Felizarta Ms. Emelda Faelnar Davao L ig h t & P ow e r Mandaue Engr. Antonio Sy, Jr. C ompa n y S o u t h C o ta bat o C.Insp. Rogelio V. Bongabong, E l e c t r ic C o o p e r at i v e , Jr. Asst. Revenue District M ay n i l a d Wat e r Officer, RDO No. 53 Manager, System Design Se rv ic e s , I n c . I n c . II Mr. Danilo G. Lino and Planning, Distribution City Fire Marshall, and Lines Institutional and Service Marikina Head Admin SERV, TSS Head, RDO No. 53 Engr. Warrel Sario Novaliches-Valenzuela Development Manager C. Insp. Antonio Razal, Jr. Mr. Geronimo D. Desesto Mr. Ruben L. Soriano Mr. Von Elbert Santiago D e pa rt m e n t o f City Fire Marshall, I n t e r io r a n d L o c a l V i s aya n E l e c t r ic Revenue Officer, RDO P h i l i pp i n e C ha mb e r Muntinlupa G ov e r n m e n t C ompa n y No. 53 o f C omm e r c e a n d C.Insp. Roderick Agito I n d u s t ry Ms. Daisy Loyola Undersecretary Executive Vice-President City Fire Marshall, Usec. Austere Panadero Vice President, National and Chief Operating Navotas Revenue District Officer, Officer RDO No. 51 Capital Region C. Insp. Felix B. Medes D e pa rt m e n t o f P u b l ic Mr. Antonio Keh Mr. Jaime Jose Aboitiz Ms. Liza Dimaya Wo r k s a n d H ig hways City Fire Marshall, Mr. Josephine S. Virtucio P h i l i pp i n e Manager, CRS-Meter Parañaque Executive Director, C o n s t ru c t o r s Reading Department C. Insp. Manuel M. Manuel Asst. Revenue District National Building Code A s s o c iat io n Mr. Robert Timogtimog Officer, RDO No. 42 Development Office Chief EMS, Parañaque Ms. Nimfa P. Sevilla Arch. Emmanuel Cuntapay Executive Director Z a mb oa n g a C i t y Insp. Alexander Baena E l e c t r ic C o o p e r at i v e Mr. Manolito Madrasto Revenue District Officer, D e pa rt m e n t o f T r a d e City Fire Marshall, Pasig RDO No. 93, Zamboanga a n d I n d u s t ry Register of Deeds Supervisor City Mr. Federico Perez C. Insp. Ricardo C. Perdigon Mr. Roberto Bucoy Undersecretary Registrar of Deeds, Cebu Chief Fire Safety Usec. Zenaida Maglaya City Z a mb oa n g a C i t y Evaluation Unit, San Juan Officer-in-Charge, Head Atty. Emmanuel Gimarino Wat e r D i s t r ic t Revenue Executive S/Insp. Felix Abad Assistant Regional Director, Davao General Manager BFP-Taguig Ms. Nora J. Tembrevilla City Mr. Leonardo Rey Vasquez Supt. Peter Se Atty. Asteria E. Cruzabra acknowledgments 165 l o c a l g ov e r n m e n t of f ic ia l s Bata ng as C i t y C a l oo c a n C i t y Atty. Cesar M. Dataya Lapu-Lapu City Official, City Government City Assessor, City of Makati Hon. Eduardo Dimacuha Hon. Enrico Echeverri Government of Davao Hon. Arturo Radaza Mr. J. Romoles Penilla City Mayor, City City Mayor, City City Mayor, City Government of Batangas Government of Caloocan Engr. Jose Dureza Gestuveo Government of Lapu-Lapu City Assessor, City Building Official, City Government of Makati Engr. Melinda Aclan Mr. Russel Ramirez Government of Davao Mr. Teodulo N. Ybañez Mr. Gerardo San Gabriel Head, Building Permit City Administrator, City City Administrator, City Division, City Engineering Government of Caloocan Engr. Mario Luis J. Jacinto Government of Lapu-Lapu Assistant Department Office, City Government Head, City Planning and Head, IMCO, City of Batangas Ms. Aurora Ciego Development Office, City Engr. Perla Amar Government of Makati Officer-in-Charge, City Government of Davao Officer-in-Charge, City Ms. Yolanda R. Distura Planning and Develoment Planning and Develoment M a l a bon C i t y Chief, Business Permits Office, City Government Engr. Gloria Lumapas Office, City Government and Licensing Office, City of Caloocan Chief of Processing, Office of Lapu-Lapu Hon. Canuto Senen Oreta Government of Batangas of the Building Official, Engr. Lourdes Eustaquio City Government of Davao Ms. Elenita Catagcatag City Mayor, City Ms. Maria Teresa Geron Chief of Processing, Office City Treasurer, City Government of Malabon City Treasurer, City of the Building Official, Mr. Rodrigo Riova Government of Lapu-Lapu Engr. Benjamin Villacorta Government of Batangas City Government of City Treasurer, City Government of Davao Arch. Ferdinand Lim City Administrator, City Caloocan Government of Malabon Engr. Januario Godoy Chief, Architectural Coordinator, City Mr. Edgardo Galapong Mr. Roberto Teo Division, City Engineering Ms. Evangeline S. Arenga Planning and Development Revenue Examiner, City Assistant City Office, City Government Administrator, City City Assessor, City Office, City Government Treasurer’s Office, City of Lapu-Lapu Government of Malabon of Batangas Government of Caloocan Government of Davao Mr. Manuel Tumulak Mr. Roderick Castillo Engr. Adela B. Hernandez Atty. Melanie Malaya City Assessor, City City Engineer, City Chief, Business Permits G e n e r a l S a n to s Government of Lapu-Lapu Planning Officer, City City Government of Malabon Government of Batangas and Licensing Office, City Government of Caloocan Engr. Rogelio Veloso Atty. Eric Sevilla Ms. Judy A. Tumambing Hon. Pedro Acharon, Jr. Officer-in-Charge, City Chief, Business Permits City Assessor, City Mr. Anthony Pulmano City Mayor, City Engineering Office, City and Licensing Office, City Government of Batangas City Assessor, City Government of General Government of Lapu-Lapu Government of Malabon Government of Caloocan Santos Engr. Edgardo Yanga C ag aya n de Oro Engr. Reynaldo Reyes Mr. Mar Dospueblos L as P i ñas C i t y Office of the Building City City Engineer/Building City Administrator, City Official, City Government Official , City Government Government of General Hon. Vergel Aguilar Hon. Constantino Jaraula City Mayor, City of Malabon of Caloocan Santos City Mayor, City Government of Las Piñas Government of Cagayan Ms. Daisy Santiago Mr. Nael Cruspero M a n da lu yong Licensing Officer II, Coordinator, City Engr. Rosabella Bantog de Oro City Engineer, City City Business Permits and Planning and Development Mr. Atinodoro A. Asequia Licensing Office, City Office, City Government Government of Las Piñas Hon. Benjamin Abalos, Jr. City Assessor, City Government of Caloocan of General Santos Mr. Jimmy Castillano City Mayor, City Government of Cagayan Government of de Oro Mr. Leonardo Denopol Media Officer, City C e bu C i t y City Assessor, City Government of Las Piñas Mandaluyong Engr. Isidro Borja Government of General Mr. Arman Comandao Hon. Tomas Osmeña Engr. Crisostomo Chan PEO IV, City Planning and Santos Coordinator, City Development Office, City City Mayor, City Engineer IV, City Ms. Rodilon Lacap Engineering Office, City Planning and Development Government of Cagayan Government of Cebu Office, City Government de Oro City Treasurer, City Government of Las Piñas Atty. Michael Rama Government of General of Mandaluyong Mr. Lino Daral Vice Mayor , City Mr. Romy Gervacio Santos Ms. Catherine de Leon Arce City Treasurer, City Government of Cebu City Assessor, City Engr. John Marc Reyes Government of Las Piñas BPLO Chief , City Government of Cagayan Arch. Florante Catalan Government of de Oro Acting City Engineer, City Ms. Nida Lagrisola Architect IV, City Government of General Mandaluyong Mr. James Dunque Engineering Office, City Santos Coordinator, City Planning and Development Engr. Crisanto Roxas TM IV, City Assessor’s Government of Cebu City Engineer, City Office, City Government Office, City Government of Cagayan de Oro Mr. Eustaquio B. Cesa I l oi l o C i t y of Las Piñas Government of City Assessor, City Mandaluyong Mr. Ramon Antonio Mendoza Government of Cebu Hon. Jerry Treñas Mr. Bonifacio Riguera Chief, Business Permits Mr. Gener Sison LTOO IV, City Treasurer’s City Mayor, City Ms. Leizl C. Gonzaga Government of Iloilo and Licensing Office, City City Assessor, City Office, City Government Government of of Cagayan de Oro Assistant City Assessor, Government of Las Piñas City Government of Cebu Ms. Nilda Amatorio Mandaluyong Engr. Manny Ramonal Chief, Business Permits Mrs. Ofelia Oliva and Licensing Office, City M a k at i C i t y Ms. Claire Umali Engineer II , City I.T. Division Head, Engineering Office, City City Treasurer, City Government of Iloilo Government of Cebu Hon. Jejomar Binay City Government of Government of Cagayan Arch. Regina C. Gregorio City Mayor, City Mandaluyong de Oro Engr. Josefa T. Ylanan Architect III, City Government of Makati Engr. Edgar Patriana Building Official, City Engineering Office, City M a n dau e C i t y Government of Cebu Ms. Marjorie de Vera Engineer III, Office of the Government of Iloilo Acting City Administrator, Building Official, City Mr. Efrain Habaradas City Government of Hon. Jonas Cortes Government of Cagayan Davao C i t y City Assessor, City Makati City Mayor, City de Oro Government of Iloilo Government of Mandaue Hon. Rodrigo Duterte Ms. Ramila C. Cruzado Mrs. Estrella Sagaral City Mayor, City Engr. Llane L. Opinion Chief, Business Permits Atty. Briccio Joseph Boholst Coordinator, City Government of Davao OIC, City Engeineering and Licensing Office, City City Administrator, City Planning and Development Office, City Government Government of Makati Government of Mandaue Office, City Government Atty. Wendell Avisado of Iloilo Engr. Merlina Panganiban Ms. Erlinda Balansag of Cagayan de Oro City Administrator, City Government of Davao Mr. Jose Roni Peñalosa Head, Urban Development City Treasurer, City Coordinator, City Department, City Government of Mandaue Atty. Jhopee Agustin Government of Makati Planning and Development Ms. Avita Mendoza Head, Business Bureau , Office, City Government City Government of Davao Engr. Annabelle Maniego City Assessor, City of Iloilo Government of Mandaue Chief of Enforcement, Office of the Building 166 Doing Business in the philippines 2011 Arch. Florentino Nimor Mr. Roy Entena Pas ay C i t y Mr. Jose Castro Mr. Jeffe Minglana Coordinator, City Staff, City Government of City Assessor, City Chief, Business Permits Planning and Development Muntinlupa Hon. Wenceslao Trinidad Government of Quezon and Licensing Office, City Office, City Government City Mayor, City Government of Taguig of Mandaue Mr. Rodolfo Oliquino Government of Pasay Mr. Victor B. Endriga Chief, Business Permits City Treasurer, City Engr. Antonio Sanchez and Licensing Office, Atty. Ernestina B. Carbajal Government of Quezon Va l e n z u e l a C i t y City Engineer, City City Government of City Administrator, City Government of Mandaue Muntinlupa Government of Pasay Mr. Pacifico Maghacot Hon. Sherwin Gatchalian Chief, Business Permits City Mayor, City Ms. Caroline Timbol Atty. Gary Domingo and Licensing Office, City Government of Valenzuela M a r i k i na C i t y Head, City Zoning Chief, Business Permits Government of Quezon Administration Office, and Licensing Office, City Atty. Rogelio Peig Hon. Maria Lourdes Fernando City Government of Government of Pasay Engr. Isagani Verzosa, Jr. City Administrator, City City Mayor, City Muntinlupa Building Official, City Government of Valenzuela Government of Marikina Mr. Fernando M. Fandiño Government of Quezon City Assessor, City Atty. Cecilyn Andrade Ms. Gloria Buenaventura Navotas C i t y Government of Pasay Mr. Tomasito Cruz Chief, Business Permits Acting City Administrator, Head, City Planning and and Licensing Office, City City Government of Hon. Tobias Reynaldo Engr. Edwin Javaluyas Development Office, City Government of Valenzuela Marikina Tiangco City Engineer, City Government of Quezon City Mayor, City Government of Pasay Atty. Ard Henry Binwag Mr. Jun Aguilar Government of Navotas City Assessor, City Head, City Planning and Engr. Merlita Lagmay S a n J ua n C i t y Government of Valenzuela Development Office, City Ms. Ma. Corazon Barciles Head, City Planning and Government of Marikina City Assessor, City Development Office, City Hon. Joseph Victor Ejercito Engr. Anita Robles Government of Navotas Government of Pasay City Mayor, City City Engineer, City Mr. Alfredo Aguilar, Jr. Government of San Juan Government of Valenzuela Chief, Business Permits Arch. Jerry Magpayo and Licensing Office, City Building Official, City Pasi g C i t y Atty. Ranulfo Dacalos Ms. Josefina Aurantes Government of Marikina Government of Navotas City Administrator, City Head, City Planning and Hon. Robert Eusebio, Jr. Government of San Juan Development Office, City Mr. Romeo Canlas Ms . Marita Trinidad City Mayor, City Government of Valenzuela LAOO III, City Assessor’s Chief, Business Permits Government of Pasig Mr. Edgardo Briones Office, City Government and Licensing Office, City City Assessor, City Atty. Benjamin Angeles Government of San Juan Z a mboa n g a C i t y of Marikina Government of Navotas City Assessor, City Engr. Allan Diega Government of Pasig Arch. Romeo Gonzales Hon. Celso Lobregat Chief of Permits, City Pa r a ñaqu e C i t y Building Official, City City Mayor , City Engineering Office, City Ma. Lourdes Austria Government of San Juan Government of Zamboanga Government of Marikina Hon. Florencio Bernabe, Jr. Executive Asst. V, Mayor’s City Mayor, City Office, City Government Ms. Alicia Mediodia Mr. Antonio Orendain, Jr. Ms. Thelma Quilingking Government of Parañaque of Pasig OIC, Business Permits and City Administrator, City Assistant Treasurer, City Licensing Office, City Government of Zamboanga Government of Marikina Atty. Nelson S. de Jesus Arch. Raul Silva Government of San Juan City Administrator, City Building Official, City Ms. Luz Agbayani Government of Parañaque Government of Pasig Ms. Ma. Aura Robles Project Development M u n t i n lu pa C i t y Head, City Planning and IV, City Planning and Ms. Josephine Aguirre Ms. Luisa Soriano Development Office, City Development Office, City Hon. Aldrin San Pedro Officer-in-Charge, Head, City Planning and Government of San Juan Government of Zamboanga City Mayor, City Licensing, City Development Office, City Government of Government of Parañaque Government of Pasig Mr. Erwin Bernardo Tag u i g C i t y City Assessor, City Muntinlupa Mr. Benigno Rivera Ms. Ma. Theresa Hernandez Government of Zamboanga Mr. Angel Abad Head, City Planning and Officer-in-Charge, Hon. Sigfrido Tiñga Officer-in-Charge, Development Office, City Business Permits and City Mayor, City Ms. Melinda Cabato City Assessor’s Office, Government of Parañaque Licensing Office, City Government of Taguig Head, City Planning and City Government of Government of Pasig Development Office, City Ms. Erlinda A. Rodriguez Mr. Wilfredo C. Villar Government of Zamboanga Muntinlupa City Administrator, City Chief, Business Permits Engr. Ed Bautista and Licensing Office, City Q u e z on C i t y Government of Taguig Engr. Luis Despalo Head, City Planning and Government of Parañaque City Engineer, City Hon. Feliciano Belmonte, Jr. Mr. Francisco Endriga Government of Zamboanga Development Office, City Assessor, City City Government of Ms. Soledad Samonte City Mayor, City City Assessor, City Government of Quezon Government of Taguig Ms. Soledad Li Muntinlupa City Treasurer, City Government of Parañaque Arch. Joselito Mastrili Engr. Basilio Benitez Atty. Paquito Ochoa, Jr. Government of Zamboanga Arch. Elmor Vita City Administrator, City Head, City Planning and Assistant Building Development Office, City Official, City Government Building Official, City Government of Quezon Government of Parañaque Government of Taguig of Muntinlupa p r i vat e se c tor r e sp on de n t s Mr. Joel Abanico Engr. Corina Ang Agency and Allied Services Mrs. Gloria Besacruz Mrs. Alexandria Caag Liaison Officer, Filinvest Project Engineer, Vertical Inc. Independent Document Liaison Officer, Torio & Alabang Builders Mr. Rudyard Balbuena Processor Associates CPA’s Mr. Marlon Adatu Atty. Rolando Arañas Paralegal, Picaso, Atty. Annah Fiona Bojos Mr. Alejandro Cabading Head of Paralegal, Owner, Arañas Law Office Boycotan, Feder & Santos Partner, Lepiten and Bojos Proprietor, Cabading Follosco Law Office Ms. Nilfa Bandiola Law Office Accounting Office Ms. Ma. Esther Azaola Mr. Isabelo Agosto Documentation Clerk, Secretary, Gonzales & Ms. Annie Brazil Atty. Virgilio Cabanlet Site Engineer, Association Hautea Law Office Sarte Accounting Office Administrative Officer, Owner, Cabanlet Law of Construction & Engr. Alex Barbara FAR Management Office Informal Workers Ms. Glorie Babia Consultancy and Liaison Officer, ACC and Cost Engineer, J. Santos Accounting Office Atty. Ciriaco Calalang Ms. Carolina Alvarez Associate Construction Inc. Lawyer, Calalang Law Broker, CQA Realty Engr. Noel Brosas Office Ms. Jennifer Baguio Mr. Allan Basarte Project Engineer, Finbar Atty. Domingo Amores Office Manager, Atoc Partner, Basarte & Realty & Development Atty. Alfredo Camins Owner, Amores Law Office Siclot & Associates Law Associates Corp. Owner / Attorney-at-Law, Firm and Immigration Firm Engr. Salvador Benitez Alfredo Camins Law Office Mr. Florencio Andanar Mr. Ricardo Bugayong Liaison Officer, Caveat Mr. Federico Bajar Contractor, Modern Personnel Manager, Oreta Mr. Joey Candasua Law Office Consultant / Chairman Stone Construction & AM & Co. Inc. Manager / Owner, JMC / CEO, Surefire Security Development Corp. International Trading & Services, Co. acknowledgments 167 Ms. Grace Caper Mr. Wilfredo Guerzon Jr. Mr. Magno Francisco Mateo, Mr. Roger Pare Mr. Robinson Varona Liaison Officer, Capacillo President, FGM Builders Jr. Manager / Realtor Estate Legal Researcher, Muzones Law Office Resources & Development Proprietor / Principal Broker, RC Pare Realty Law Office Corporation Accountant, MY Mateo Atty. Susan Cariaga Accounting Office Ms. Mary Jane Pata Mr. Robert Verano Partner, Cariaga Law Mr. Gamiel Gumapon Encoder / Liaison, Everlast Liaison Officer, First Offices Co. Paralegal, Follosco, Atty. Vicente Bernardo Construction Florida Business Corp. Morallos & Herce Mayo, Jr. Atty. Rey Cartojano Partner, Mayo Austria Ms. Beth Pingco Ms. Irene Villa Managing Partner, Mrs. Brenda Ignacio Mayo Liaison Officer, Librado Accounting Clerk, Miguel Cartojano Peria & Owner, BSU Business Valenzuela Law Firm Dizon Accounting Office Associates Management Services Ms. Michelle Meguillo Supervisor, NtrazBiz Mr. Luisito Poblete Ms. Rodelyn Villamil Engr. Emmanuel Cordero Engr. Ricky Israel Company Liaison Officer, KLIK Liaison Officer / Legal Engineer, Marcohly Project Coordinator, 4E Business Company Secretary, Mayo Austria Builders & Designers Builders Corp. Mr. Gil Mendez Mayo Liaison Officer, Ontract Mr. Erwin Ponegal Mr. Lynwood Crespo Mr. Jupli Jahaddin Business Solution Co. Liaison Officer, Business Ms. Delia Villareal Liaison Officer, First Owner / Manager, A & J Outsourcing Solution Liaison Officer, none Florida Business Service Consolidated Mr. Jun Mercado Company Liaison Officer, Isla Lipana Mr. Ben Ramos Engr. Erwin Villasanta Mrs. Marife Labana & Co. Owner, Benram Admin Head, DMCI Ms. Rina Blanca Cristobal Legal Secretary / Construction Construction Secretary, Santiago, Delos Accounting Staff, Tambago Ms. Neneth Mogada Santos & Associates and Diaz Law Office Bookeeper, Cabading Mr. Cezar Ramos Accounting Office Liaison Officer, N. R. Mr. Salvador Cristobal Arch. Melvin Lataquin Custudio Inc. Liaison Officer, Alcon Private Practice, Lataquin, Engr. Jonathan Montecillo Builders Lataquin, Lataquin and Proprietor, JMJ Mr. Johnny Juan Regino Associates Architechtural- Paralegal, RC Lesedo Law Mr. Ramon Cuervo Structural Marketing Office President, RA Cuervo, Inc. Ms. Jocelyn Lemosnero Accounting Clerk, Atty. Rex Muzones Mrs. Tess Reyes Mr. Joel de Abanico Raymond Sabado Owner, Muzones Law Liaison Officer, G. G. Uy Liaison Officer, Filinvest Accounting Office Office Construction Alabang Atty. Magdalena Lepiten Bojos Engr. Aristeo Ventura Nacion Ms. Liza Rivera Ms. Maricel De Chavez Managing Partner, Lepiten Asst. Operations Manager, Liaison Officer, P-Link Legal Secretary, Tambago and Bojos Law Office Monolith Construction & Business Service Center Law Office Development Corporation Ms. Virginia Lim Engr. Dennie Sahak Ms. Jane de los Reyes Real Estate Broker Engr. Rizal Alberto Nolido Project Consultant, A & J Secretary, 6th Builders & / President, Virginia Chairman, R. A. Nolido Consolidated Developers Escobar-Lim Realtor / Construction Corporation Mr. Rodolfo Trance Atty. Percival De Mesa GenSan - Sar Realtors Salangsang Board Mr. Alfonso Nonato Owner, De Mesa Law Branch Manager, Asian Legal Assistant, Manuel Office Mr. Deo Antonio Llamas Appraisal Company and Associates Law Offices Engr. Gil Dejon Realtor, Kingdom Builders Engr. Rogelio San Miguel Ms. Joselyn Notarte Property Manager / Arch. Luzon Llames Legal Secretary, Amores Project Engineer, FMC Administrator, Dasman Architect, Luzon Llames Law Office Construction Realty Architects & Partners Mr. Roque Nuñez Atty. Apollo Sangalang Atty. Rey Eduardo Delos Mr. Cesar Lopez Liaison Officer, Century Managing Partner, Reyes Owner / CPA Practitioner, Properties Inc. Parungao, Singson & Owner, Delos Reyes Law Lopez Accounting & Sangalang Lawyers and Accounting Office Auditing Office Ms. Jeanette Oberio Owner, JT Oberio Realty Atty. Emilio Santiago Ms. Ivy Digal Ms. Arlene Lozano Owner / Lawyer, The Law Project Engineer, RD Legal Staff, Gempesaw, Mrs. Anita Ogena Firm of Santiago, Delos Pilipinas Construction Gempesaw and Cast Accountant, Private Santos and Associates Corporation Practitioner Mr. Edsel Maandal Engr. Philip Simbulan Atty. Froilan Doyaoen- Licensed Real Estate Mr. Kyser Adan Olaso Cost Engineer, New San Pagayatan Appraiser & Member, Phil. Project Manager, ACO Jose Builders Associate, Follosco, Appraisers and Realtors Construction Morallos & Herce Mr. Ricardo Tandas Association (PARA) Ms. Annabelle Opamin Liaison Officer, Danao & Mr. Pablo Edora Mr. Joseph Magadia Partner, Into-Opamin & Associates Project Coordinator, Liaison Officer, De Mesa Associates ACRO Industrial Dev’t., & Ms. Agnes Tandoc Law Office Mr. Emmanuel Pacatang Office Manager, Agustin & Construction Mr. Ram Mahigab Administrator, Aura Associates Law Office Atty. Alma Ermino Liaison Officer, BS&O Builders Practicing Lawyer, Mr. Robert Telipada Somido-Ermino Law Office Ms. Ma. Elena Malaga Atty. Franco Pagaran Collector / Liaison Manager / Owner, BE Partner, Pagaran and Seno Officer, N. S. Bonaria & Atty. Eugene Espedido Construction Law Offices Co. CPAs Managing Partner, Espedido and Famador Law Atty. Jose Roberto Mamuric Atty. Eliud Pailagao, Jr. Mr. Ricardo Temperosa Firm Managing Partner, Nisce, Counselor-at-Law, Assistant Admin, New Mamuric, Guinto, Rivera & Pailagao Law Office Kanlaon Atty. Israel Fagela Alcantara Law Offices Lawyer, Platon, Martinez, Mr. Arnel Pajarillo Ms. Rosario Umania Flores, San Pedro, Leano Mr. Emmanuel Marasigan Liaison Officer, Royalink Liaison Officer, Mavina Law Offices Paralegal, Carlos- Business Construction Group Inc. Marasigan Law Office Mr. Alvin Pangilinan Mr. Librado Valenzuela Atty. Carmelo Jose Gempesaw Senior Partner, Gempesaw, Engr. Steve Marquez Liaison Officer, Celleja Owner / Attorney-at-Law, Gempesaw and Cast Owner, ER Marquez Law Office Librado Valenzuela Law Surveying & Engineering Firm Mr. Mat Godilo Engr. Ruel Panugao Services President, Cerolino - Mr. Rogelio Valle Liaison Officer, Ontract Business Solution Co. Atty. Maricris Martin Panugao Construction Liaison Officer, Capacillo Associate Lawyer, Bernas Company Law Office Mr. Nelson Gonzales Law Office Liaison Officer, Armcon Company Incorporated Investment Climate Advisory Services of the World Bank Group HTTP://SUBNATIONAL.DOINGBUSINESS.ORG