When Should I Register My Business?

when should i register my business philippines mom your own business

Frustratingly, this question is one of the things that hold Filipinos back from becoming full-fledged entrepreneurs. Many people are discouraged with all the red tape, back-and-forth required in getting business registration, permits. Dealing with government offices can be a pain that they’d rather stick to the predictability of their day jobs.

In the World Economic Forum Survey on competitiveness, the Philippines dropped 10 places from 47th to 57th in 2016. We are not doing well, and it shows!

Should I immediately register my business?

I’ve always had mixed feelings about immediately registering your business. On the one hand, there is the desire to do things the right way and have everything set up properly.

Definitely, if you are are acquiring a franchise, a distributorship, etc., or anything that involves B2B (business-to-business), you would need to register your business immediately.

BUT if are an aspiring entrepreneur planning to set up an online store or just check if the idea you are toying on will fly, you hesitate. And rightfully so. It doesn’t make sense to invest your time, effort and money spent on setting up a legal entity that may or may not make money.

Let’s ask a legal expert.

In the Philippine context, I’ve consulted with the staff of Senator Bam Aquino, and here is my message to them with their reply:

…. one of the most frequent questions we get asked is when is the right time to apply for business registration, permits, bir, etc? They are hesitant to do so on the onset, as they have not proven their business model profitable. In short, bakit mag register,formalize, etc kung wala pang kinikita.
Do we have a law on this that gives leeway to aspiring entrepreneurs?
Here is their response:

There is no law and they are currently considered part of the informal sector (emphasis mine). But once they need to issue receipts to transact with suppliers and others, they will need to register with BIR. This will require a business name registration from DTI and a permit from the local government unit.

We also raised this to a tax expert who happened to be the guest of Senator Aquino’s radio show yesterday and this is his response:

Best time to register is January and avoid the -ber months since the registration fee will double. Timing depends on the stabiltity of the business. Usually may mga ginagawang trials muna. For example, iyong business mo, di pa naman need ng working office, pwede muna na sa bahay mo itry.

So what does it mean?

I think this is a great relief for everyone who wants to try their hand at entrepreneurship before getting soaking wet. They can test the waters to see if their idea will sink or float.


Though it’s great we don’t have to register right now, it’s an eventuality  if you want to scale and grow your business.

There’s a time that comes when you’ve proven that your business model is profitable, and have to ask yourself if you’re content in staying where you are, or take the plunge and scale up.

If your online store is selling well and you want to expand, don’t hesitate to register.  Registering your business gives you much more credibility and opens more opportunities. Then from being a sole proprietor (DTI), you then scale to incorporating when the timing is right and it’s worth the trouble.

For our business, we wanted to be an established brand with a retail presence in department stores, so we chose to go straight for incorporation. You can learn more about how we started our small business here.

Bottom Line

When we registered our businesses, we had to file for all the permits, go back and forth signing documents, filling up forms. But these are just part and parcel of what millions of entrepreneurs do everyday.

In exchange for a bigger customer base, greater sales, and increased profits, it’s worth the risk of registering your business in your own perfect time.

One Reply to “When Should I Register My Business?”

  1. Red tape is something this government has to get rid off. So much wasted time lining up and filling forms.

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