How to Register a Business in the

Philippines: Requirements and Permits

Steps to Legally Register and Operate a Business
in the Philippines
There are a number of government agencies you must register with in addition to opening
a bank account when starting a business in the Philippines and hiring employees. It is
essential to register your business to avoid any legal problems once business operations
begin. The following are the required steps K&C will perform on your behalf to legally
register your new business in the Philippines. Most of the steps can NOT be performed
simultaneously. These required steps must be performed one at a time.

1. Secure Business Name with the Securities and

Exchange Commission (SEC)
The first step is to register your preferred corporate name with the SEC while our lawyers
work on the company’s articles of incorporation and by-laws. Once the AOI and By-laws
are drafted, you may open the TITF account with your preferred bank.

2. Open Corporate Bank Account

Companies applying for incorporation must open a TITF account with its preferred bank.
The TITF account will serve as the temporary depository account of the required paid-up
capital of the corporation. The basic requirements for the opening of a TITF account
include the proposed articles of incorporation and by-laws, account opening forms with
the specimen signature card to be accomplished by the treasurer-in-trust, valid
identification cards of the treasurer-in-trust, and the minimum deposit required by the
bank which ranges from P10,000.00 to P50,000.00 depending on bank. The bank will issue
a certificate of deposit which is among the documentary requirements to be submitted to
the SEC.

3. Register with the Securities and Exchange

Commission (SEC)
Once a bank certificate of deposit is issued, and provided the following documentary
requirements are complete, the application for registration may be submitted to the SEC:

 Name Reservation and Payment Form

 Notarized Articles of Incorporation and By-laws
 Treasurer’s Affidavit
 Bank Certificate of Deposit or Proof of Inward Remittance
 Duly accomplished SEC Form F-100 (for corporations with more than 40% foreign
equity)
SEC registration takes 10 to 15 working days upon submission of complete documentary
requirements, provided there are no holidays during this time period.

4. Register with the Bureau of Internal Revenue

(BIR)
After SEC registration, a company must obtain a taxpayer identification number (TIN),
register its books of accounts, and apply for authority to print official receipts from the
Bureau of Internal Revenue (BIR), the national taxing authority in the Philippines.

5. Register with the Social Security System (SSS)

All companies must be registered with the SSS and must secure an employer number
which will be used as reference for the remittance of monthly contributions. To register
with the SSS, the following documents have to be submitted:

 Employer Registration Form (R-1)

 Employment Report Form (R-1A)
 SEC Registration, Articles of Incorporation, and By-laws

6. Register with PhilHealth

PhilHealth is a medical insurance program administered by the Philippine Health
Insurance Corporation (PHIC). All employers are required to register their employees with
this agency as stated in the New National Health Insurance Act (RA 7875 / RA 9241). To
register with PhilHealth, the following documents are required:

 Employer Data Record (ER1)

 Report of Employee-Members (ER2)
 SEC Registration, Articles of Incorporation, and By-laws

7. Register with Pag-IBIG

Pag-IBIG Fund is also known as the Home Development Mutual Fund (HDMF), a housing
loan which is mandatory for all employees covered by the Social Security System (SSS).
The Pag-IBIG Fund also provides other types of loans for qualified individuals.

8. Obtain a Mayor’s or Business Permit

The following documents are required to secure a business permit:

 SEC Registration, Articles of Incorporation, and By-laws

 Locational Clearance
 Lease Contract
 Barangay Clearance
Barangay Clearance
This clearance is obtained from the Barangay where the business/company is located.
The fees depend on the company’s paid-up capital plus an additional amount for taxes,
fees, and other charges which may vary for each barangay. The basic document required
is the notarized lease contract between the company and the lessor of its registered
office.
Locational Clearance
The following documents are required to secure a locational clearance:

 Location Map
 Barangay Clearance
 Lease Contract
 SEC Registration Documents
 Occupancy Permit (Building/Unit)
 Business Permit Application Form

Medical devices regulations in the Philippines are overseen by the Center of Device Regulation, Radiation
Health, and Research (CDRRHR) of the Food and Drug Administration, Department of Health. Republic Act
No. 9711 was enacted into law in August 2009 creating the Food and Drug Administration (FDA) in the
Department of Health (DOH), strengthening the regulatory authority over food, drug, cosmetics, medical
devices and other health devices.

1- Establishment Licensing Requirement and Product

Ownership
Businesses involved in the importation, exportation, trading, and distribution of medical devices in the
Philippines need to obtain a license to operate (LTO) and a certificate of product registration (CPR) from
the Food and Drug Administration (FDA). When registering a product in the Philippines, the local
company must secure a License to Operate (LTO) from FDA before applying for product registration.
Document required for applying the LTO as importer/wholesaler/exporter are as follows:

 Notarized Application Form and Joint Affidavit of Undertaking

 Notarized Electronic Copy (E-copy) Affidavit
 List of Medical Devices to be Imported/Distributed
 Photocopy of the Pharmacist’s Board Registration Certificate, PRC-ID, valid PTR,
Duties and Responsibilities, Certificate of Attendance of Owner/Pharmacist to an
FDA/BFAD Seminar on Licensing of Drug/Medical Device Establishments and
Outlets
 Location Plan and Floor Plan (office and storage room/warehouse) with dimensions
 Photocopy of the Business Name Registration
 If single proprietorship, registration from the Department of Trade and Industry
 If corporation/partnership, registration from the Securities and Exchange
Commission (SEC) and Articles of Incorporation
 ID pictures of the Owner/Authorized Representative and Pharmacist (not computer
generated)
 Photocopy of Notarized Contract of Lease for the space of the office and storage to
be occupied or any proof of ownership if it is owned by the applicant.
Additional requirements:

IMPORTER:

 Foreign Agency Agreement with each supplier/source duly authenticated by the

Territorial Philippine Consulate
  Certificate of Registration of the Manufacturer and its conformity with GMP issued
by a Government Health Authority or valid ISO Certification for Medical Device.
Should be duly authenticated by the Territorial Philippine Consulate.

WHOLESALER:

 Notarized valid Contract/Agreement with each FDA (BFAD) licensed

supplier/manufacturer
 Copy of the License to Operate (LTO) of the contracted manufacturer/supplier
 Copy of the Certificate of the Product Registration to be distributed

EXPORTER:

 Notarized valid Contract/Agreement with each FDA (BFAD) licensed

supplier/manufacturer
 Copy of the License to Operate (LTO) of the contracted manufacturer/supplier
 Copy of the Certificate of the Product Registration to be distributed
Any establishment with License to Operate may apply for the certificate of product registration (CPR). Holder
of Certificate of product registration is the product owner and will act as liaison between the foreign
manufacturer and the authority.

Registration fee and validity of License to Operate:

2- Medical Device Product Registration Procedure

Regulators in the Philippines are currently developing more substantive requirements for medical devices and
currently only specific devices are subject to mandatory registration. The following is the list of medical device
that required for mandatory registration and all are registered through the same evaluation route regardless of its
classification and registration status in other regulatory agencies:

2.1- List of medical devices that required for mandatory registration:

Devices not required to register may be sold after obtaining a Certificate of Exemption from the Department of
Health.

2.3- Registration Fee and Timeline

The validity of Certificate of Product Registration has been extended from 1 year to 5 years. Thus, new
application and renewal of application will have a certificate with validity of 5 years.

Philippines Pharmaceutical Registration: An
Overview
February 8, 2002 Leave a comment
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Foreign pharmaceutical companies control at least 75% of the local drug market in the Philippines.
Foreign firms’ market share is divided between several countries, with U.S. producers accounting for
about 10% of the market, and Switzerland, Germany, Australia, France, and the U.K. contributing
 similar amounts. According to the U. S. Department of Commerce, U.S. exports to the Philippines
grew by 21.6% in 2000 to $8.79 billion and increased another 3.4% in the first quarter of 2001 (final
2001 figures are not yet available).

In order to market a pharmaceutical product in the Philippines, the product must first be registered to
the Philippine Bureau of Food and Drugs. The pharmaceutical registration process is relatively
straightforward (though as is often in the case in developing countries, having the right connections is
also just as important). An application for registration should include:

1. Letter of application and Accomplish Form No. 8

2. Suggested Retail Price
3. Copy of valid agreement between manufacturer and trade, distributor / importer / exporter
4. Unit dose and batch formulation
5. Technical specifications of finished product
6. Certificate of analysis of active raw materials
7. Certificate of analysis of finished product
8. Full description of methods used
9. Details of the assay and other test procedures for finished product including data analysis
10. Detailed report of stability studies to justify claimed shelf life
11. Representative sample in market or commercial presentation
12. Unattached generic labeling materials
13. Certificate of approval of PMS (Presidential Management Staff)
14. Bio-availability / bio-equivalence studies (for Rifampicin products)
15. Dissolution profile for drug product under List B (B prime)
16. Copy of latest Certificate of Product Registration

Additional regulations apply for imported products, products in plastic containers, and for new drugs.
This information is available from the Philippine Department of Health.

he Philippines is the 11th most attractive pharmaceutical market in the Asia-Pacific region and the
third-largest pharmaceutical market in ASEAN, after Indonesia and Thailand. The country’s
pharmaceutical industry is projected to grow by 4.5 per cent annually over the next five years
reaching P164 billion in 2018 from P146 billion in 2014 representing the value output or production of
industry, including research based pharmaceutical and generic companies, according to IMS
Consulting for the Pharmaceutical Healthcare Association of the Philippines (PHAP). The Filipino
pharmaceuticals is one of the fastest growing industries in the country and has grown year to year. Of
the world’s Top 20 pharmaceutical companies, over 14 have manufacturing facilities in the
Philippines. Business registration in the pharmaceutical industry in the Philippines is a growing and
expanding financial opportunity too. The pharmaceutical manufacturing sector ranks is listed in the
top 22 per cent of the 240 sectors in the Philippines. 

“The Philippines is growing in so many ways; with one of the youngest populations in Asia, rapidly
increasing income and the ‘middle class’, foreign investment and business investment in outsourcing
and technology operations, and a large amount of overseas Filipino workers paying contributing large
amounts to GDP from across the globe. The shift has been made from infectious disease to
noncommunicable disease; with diet, alcohol and low exercise causing heart disease and other
conditions to grow rapidly. Healthcare products and medicines are in demand in the Philippines, but
the cost and availability in an out-of-pocket market means many products are out of geographical and
financial reach for many”, says Dr Edward Booty, CEO, Allied World Healthcare, the Philippines. 

The Philippines has a higher utilization rate of lower-cost generics than other Asia-Pacific countries
with comparable GDPs. Generic medicine prescriptions by physicians has also increased by 7
percentage points since 2011 (from 66 per cent in June 2011 to 73 per cent in June 2014) enhancing
patient access to medicines.

The government’s bulk procurement of pharmaceutical products has also helped bring down prices of
medicines to Filipino patients. Changing manufacturing scenario Foreign drug companies account for
over 75 per cent of the pharmaceutical market. Some of the biggest foreign drug companies in the
Philippines are Sanofi, Pfizer and GlaxoSmithKline. It is also seen that there has been a huge growth
in generic drugs made by domestic and foreign pharmaceutical companies in the Philippines. The
fastest growing companies include Novartis’ generic arm Sandoz, Taiwan’s Orient Europharma
(OEP) and Getz Pharma of Pakistan. In total, there are more than 500 drug traders, 700 drug
importers, and 5,000 drug distributors in the Philippines. Over the years, the MNCs which had
manufacturing plants in the country closed down their facilities, and began to import from corporate
production centres abroad, or turn to local contract manufacturers. At the moment, only few
pharmaceutical multinationals have manufacturing facilities in the Philippines. However, the ones with
manufacturing plants find it cost-efficient to produce in the country. GlaxoSmithKline is one example
which has sustained its manufacturing in the Philippines.

“The importation of medicines (and other goods) has been traditionally challenging in the Philippines,
but a number of reforms are underway to streamline and improve this process. Manufacturing in-
country is a request many countries make to improve the number of high quality, local jobs – but a
pharma manufacturer cannot fully decentralize their operations as that would remove economies of
scale, and thus strategic choices will have to be made for global pharma as to whether the market
size, improved government relations, and potential reduction of logistics and taxation costs would
make economic sense overall”, comments Dr Booty on the changing Filipino scenario.

While many multinationals abandoned the Philippines, the local manufacturing industry became
livelier. The number of laboratories declined over the years, as many were not able to cope with
technological advancement and increasingly stringent requirements, but the ones that survived are
Good Manufacturing Practices (GMP) compliant and at par with the latest technologies.

In the same haste, pharmaceutical companies in the Philippines also undertake various activities in
the course of their business operations, which require the use of IPR. As part of their worldwide R&D,
originator companies are conducting clinical trials in the Philippines in an increasing number, such
that the Philippines is now ranked third in South East Asia, next to Thailand and Singapore in terms of
the number of pharmaceutical industry sponsored clinical trials, according to KPMG Report.

Government Initiatives
The Philippines government has doubled its efforts in improving the pharmaceutical market. This
increased intervention under the universal health care initiative and a growing acceptance of generic
drugs has caused a shake-up in the sector. Adding up to the complexity, optimistic growth forecasts
indicate a huge potential for the private sector.

Talking about the various initiatives taken by the Philippines government in the pharmaceutical
sector, Dr Booty says, “The Philippines government grew their ‘Health for All’ programme over the
past few years, with various programmes to improve digital services, deploy medical workers to rural
areas, create integrated ‘Service Delivery Networks’ and combat a number of other health challenges.
The pharma sector has seen a number of innovations, ranging from ePharmacy ordering, to local
health data innovations, to cross-pharma access programs in lower-income communities. Novartis
and Allied World Healthcare are pioneering community healthcare access models and financing
schemes, helping connect communities to essential healthcare support.”

Some of the initiatives taken by the Filipino government are:

● BnB Project: The Philippine government established Botika ng Barangay with the aim of increasing
the accessibility to health care products to people in rural areas where prices are 50 – 70 per cent
cheaper compared to leading brands. Botika ng Barangay refers to a drug outlet managed by a
legitimate community organization (CO or nongovernment organization (NGO) and/or the Local
Government unit (LGU), with a trained operator and a supervising pharmacist. This provides primary,
non-prescription generic drugs listed in the Philippine National Drug Formulary (PNDF) and selected
prescription drugs are sold/made available.

● Republic Act A 9502: Cheaper Medicine Act- The Philippine Government in 2007 created RA 9502
with the intention to achieve better health outcomes for Filipinos by assuring that quality medicines
are accessible and affordable to as many Filipinos especially the poor. The law and its implementing
Rules and Regulation intend to make medicines more accessible and affordable to Filipinos by
enforcing provision that improve market competition, availability, contain costs, improve health care
provider and consumers behaviour, and when instances so require, even regulate prices.  
.

© 2020 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights
reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the
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