How To Start A Business In Davao

There’s an endless list of reasons to invest in Davao, ranging from its typhoon-free climate; to its competitive start-up costs; to its strategic position as gateway to the sub-regional trade bloc known as the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area.

That’s not to mention the friendly locals who are ever easy to do business with.

Whether you’re planning to open a small, family-owned enterprise or a large corporation, the following are the first few things you need to know about setting up a business in this Southern Philippine capital.

Registering the business in Davao

The first step to putting up a business in Davao City is to come up with a unique business name, which must be approved by the Department of Trade and Industry if the business is a sole proprietorship.

If it is a corporation, approval should be sought from the Securities and Exchange Commission. A paid up capital of at least 6.25% of the authorized capital stock must be deposited in any authorized agent bank, and a notarized copy of the articles of incorporation must be submitted to the SEC.

Temporary Operation – Laying the Groundwork

Entrepreneurs are given the opportunity to start doing business in Davao pending the completion of the process. There are a few steps leading to the issuance of the TAO or Temporary Authority to Operate and Compliance Form from the Business Bureau, Permits and License Division (BBPLD), starting with payment of the annual community tax and acquisition of a community tax certificate or CTC.

A barangay clearance certificate is also to be obtained from the barangay where the business is to be located, as well as a print-out of the encoded business permit application form which can be downloaded from the BBPLD website. This document must then be brought to the City Legal Office for notarization and submitted to the BBPLD for the issuance of the TAO and BBPLD Compliance Form.

Operation of the business in Davao

While a business is running with temporary permission from the concerned government office, registration with the Bureau of Internal Revenue must be processed.

Part of this is submitting special books of accounts to the BIR, applying for a Certificate of Registration and Taxpayer Identification Number or TIN (still at the BIR) and payment of a registration fee and documentary stamp taxes.

From the same office, an authority to print receipts and invoices must be secured prior to printing of the same.

The purchased books of accounts and the printer’s certificate of delivery or PCD must then be submitted to the BIR for stamping before they can be used.

Employee Benefits

All employers are required to register their businesses with the Social Security System or SSS for the benefit of all employees.

There will be a few requirements for this, such as a filled in employer registration form (Form R-1) and employer report (Form R-1RA.) Aside from signing up with the SSS, business owners are also required to register with the Philippine Health Insurance Company or Philhealth which is the national health service provider in the the country.

There will as well be a number of requirements, such as filled in employer and employee data forms, BIR registration and copy of business permit.

Davao City is actually the second easiest city in the Philippines to start a business, according to a recent Doing Business Survey. This means you can open a store or firm in as little as 27 days, depending on how large and complex the required preparations are.

It would be advisable to come and visit Davao city for yourself so you can look into your potential market and devise a more effective business plan.

About Cheryl Ann:
Cheryl Ann is a resident of Davao. She is sharing on this site her experiences, as well as give tips on how to enjoy living in Davao as a local.

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2 thoughts on “How To Start A Business In Davao

  1. What the laws about operating a business from a house are? Like if we wanted to have a big house instead of an office in a building, is that possible in Davao?

  2. Hi there

    Im from the middle east and im planning to open business in davao as restaurant and night club , per in mind im planning to settle down there but im no yet marry to filipino citizen , can i run business and own condo there or its will be difficult , as well the business will be run by local employees and the foreigner will be me only me as owner

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