HOME

ABOUT

PARTNERS

MANAGEMENT

CONTACT

MARKETING

FORUM

BUSINESS

BE AN EXPERT AUTHOR

How to Register as a Barangay Micro

Business Enterprise (BMBE) in the
Philippines

APRIL 24, 2013

490
Share

Tweet

BY

VICTORINO ABRUGAR

5
Share

5
Share

Pin 1

7 COMMENTS

0
Share

A micro business or enterprise is defined as any business activity

or enterprise engaged in industry, agribusiness and or services,
whether single proprietorship, cooperative, partnership or
corporation whose total assets, inclusive of those arising from
loans but exclusive of the land on which the particular business
entitys office, plant and equipment are situated, must have value
of not more than 3 million Pesos (Sec. 3. of R.A. 9501 otherwise
known as the Magna Carta for Micro, Small and Medium
Enterprises (MSMEs).
If your business or activity falls under the micro enterprise category, you might also be
eligible to be registered as a BMBE (Barangay Micro Business Enterprise) which may avail of
the following incentives provided by the government through R.A. 9178, otherwise known
as the Barangay Micro Business Enterprises Act of 2002:

1. Income tax
exemption from
income arising from
the operations of the
enterprise
2. Exemption from
the coverage of the
Minimum Wage Law
(BMBE employees
will still receive the
same social security
and health care benefits as other employees)
3. Priority to a special credit window set up specifically for the financing requirements of
BMBEs
4. Technology transfer, production and management training, and marketing assistance
programs for BMBE beneficiaries.
Sounds interesting, especially the income tax exemption? Lets continue

The BMBEs Act of 2002

The government, in its objective to strengthen Barangay Micro Business Enterprises in the
country and provide more jobs, livelihood and a better quality of life for Filipinos, has
enacted Republic Act 9178, otherwise known as the Barangay Micro Business Enterprises
Act of 2002.
R.A. 9178 is An Act to Promote the Establishment of Barangay Micro Business Enterprises
(BMBEs), Providing Incentives and Benefits therefore, and for Other Purposes
The BMBEs Act of 2002 encourages the formation and growth of barangay micro business
enterprises by granting them incentives and other benefits. The Act was signed into law by
President Gloria Macapagal-Arroyo on November 13, 2002.

What is BMBE and who are eligible

to register as BMBEs?
A BMBE is defined as any business enterprise
engaged in production, processing, or
manufacturing of products, including agroprocessing, as well as trading and services, with
total assets of not more than P3 million. These
assets include those arising from loans but not
the land on which the plant and equipment are
located. However, services rendered by any one, who is duly licensed by the government
after having passed a government licensure examination, in connection with the exercise of
ones profession (e.g., Accountant, Lawyer, Doctor, Architects, Civil Engineers, etc.) shall not
be included.

Is the government discouraging the professionals to start a micro business and want them
to just get a job as an employee instead? Im just asking. I think professionals also need aid
from the government when it comes to entrepreneurship especially that they have the
skills, knowledge, and potential to succeed in business. Besides, professionals, having
incurred a lot of money to review and pass the licensure exams, may not have any money
left to start an enterprise. So why exclude them?
Anyway, the DOF Department Order No. 17-04 also provides that, an enterprise can only
qualify for registration if it is not a branch, subsidiary, division or office of a large scale
enterprise and its policies and business modus operandi are not determined by a large scale
enterprise or by persons who are not owners or employees of the enterprise (i.e.,
franchises). So if you are a franchisee, you are not eligible to register as a BMBE.
In other words, a business or activity may be eligible to register as BMBE if they meet the
following criteria:
1. The business enterprise is engaged in production, processing, or manufacturing of
products, including agro-processing, as well as trading and services.

2. The business enterprise has total assets of P3 million or less including those arising from
loans but excluding the land on which the plant and equipment are located.
3. The business enterprise or service provider, in connection with his or her exercise of
profession, is not a professional who is duly licensed by the government after having passed
a government licensure examination (e.g. accountant, lawyer, doctor, etc.).
4. The business enterprise is not a branch, subsidiary, division or office of a large scale
enterprise or it is not a franchisee.

How to register as a Barangay Micro Business Enterprise (BMBE)?

The registration of BMBE in the Philippines is processed and done in the Office of the
Treasurer of the city or municipality where the business is located. Thus you may want to
visit your City or Municipality office to inquire more about this.
The requirements for BMBE registration are different for those micro business enterprises
with assets of P300,000 and less and those with assets of P300,001 to P3,000,000, in which
the former have fewer requirements to be submitted than the latter.
Basic requirements for new applicants and for BMBEs applying for renewal of
registration:
a. Duly filled out application form (BMBE Form 01) in triplicate, signed by the owner or
manager of the entity applying for registration (you may download BMBE Form 01 here
which I got from Paranaque.gov.ph website).
b. Three passport size ID pictures
Additional requirements for new applicants:

A. For those with assets worth three hundred thousand pesos (P300,000) and less
1. Registration as a business entity or enterprise from the appropriate government agency
(e.g., Securities and Exchange Commission (SEC) registration in the case of corporation,

partnership or association; Cooperative Development Authority (CDA) registration in the

case of cooperative; Department of Trade and Industry (DTI) business name registration in
the case of sole proprietorship)
2. Mayors Permit or City/ Municipal Business Permit

B. For those with assets worth more than three hundred thousand pesos (P300, 000) up to
three million pesos (P3,000,000.00)
1. Registration as a business entity as explained above in item A.1
2. Taxpayer Identification Number (TIN)
3. Certificate of Registration from the Bureau of Internal Revenue (BIR)
4. Mayors Permit or City/Municipal Business Permit
5. Sworn affidavit executed by the sole proprietor or the President of the enterprise, as the
case may be, that the enterprise is barangay-based and micro-business in nature and scope
6. Sworn Statement of Assets and Liabilities supported by pertinent documents
7. Pictures of the place of business and its assets, other than cash, receivables and
intangibles
8. Copy of Loan Contract/s, if any, and duly-notarized Certification of Amortization
Payments on the Loan
9. Income Tax Return (ITR).
Additional requirements for the renewal of BMBE registration:

C. For those with assets worth three hundred thousand pesos (P300,000) and less
1. Documents previously listed in item A.1 for new applicants with assets worth three
hundred thousand pesos and less
2. Annual Information Return (for the year immediately preceding the renewal of
registration) duly filed with the BIR, together with its attachments

D. For those with assets worth more than three hundred thousand pesos (P300,000) up to
three million pesos (P3,000,000.00)
1. Documents previously mentioned in item B.1-8
2. Annual Information Return (for the year immediately preceding the renewal of
registration) duly filed with the BIR, together with its attachments

Steps and procedures for registering as a BMBE

The following are the procedures for BMBE registration and getting the Certificate of
Authority as a BMBE:
a. Accomplish BMBE Form 01 in triplicate and submit to the Office of the Municipal or City
Treasurer.
b. The Municipal or City Treasurer evaluates the application. The application shall be
processed within 15 working days upon submission; otherwise, the BMBE shall be deemed
registered.
c. A registered BMBE shall be issued a Certificate of Authority as proof of registration,
effective for a period of two years. The application is renewable every two years.

How much will it cost to register?

According to Section 4 of the Act, registration and issuance of the Certificate of Authority of
the LGU is free of charge and shall be done promptly. However, to cover the administrative
costs of registering and monitoring the BMBEs, the LGUs are allowed to charge a fee not
exceeding P1,000.00.

How to avail for the Income Tax Exemption?

To avail with the income tax exemption, the BMBE must register with the BIR Revenue
District Office (RDO) where the principal office or place of business is located and submit
the following documents:
a. Copy of the BMBEs Certificate of Authority
b. Sworn Statement of Assets of the BMBE and/or its affiliates, supported by pertinent
documents
c. Certified list of branches, sales outlets, places of production, warehouses and storage
facilities

d. Certified list of affiliates

e. Latest audited Financial Statement or Account Information Form or its equivalent
What document should be filed with BIR by an income tax exempt BMBE?
Instead of an income tax return, an income tax exempt BMBE is required to submit an
Annual Information Return. This is filed on or before the 15th day of the 4th month after the
close of the taxable year with an Account Information Form, which contains data from its
financial statement and Sworn Statement of Assets Owned and/or Used.
However, while a registered BMBE could be exempt from income tax, its Income Tax
Exemption privilege may be revoked for any of the following reasons:
1. Transfer of place of business
2. Value of its total assets exceeds P3M
3. Voluntary surrender of the Certificate of Authority
4. Death of the registered individual owner of the BMBE; violation or noncompliance with
the provisions of R.A. 9178
5. Merger or consolidation with an entity which is not eligible to be a BMBE
6. Sale or transfer of the BMBE, if it is a sole proprietorship without prejudice to the
transferee applying for registration
7. Submission of fake or falsified documents;
8. Retirement from business, or cessation/suspension of operations for one year; and
9. Making false or omitting required declarations or statements.
For more information, please read DTIs Handbook Guide to Republic Act (RA) 9178:
BMBEs Act of 2002 which also includes the full text of RA 9178 and its implementing rules
and regulations (IRR) including the supplementary guidelines or clarifications issued by
concerned agencies.
For questions and discussions, we can discuss this topic in our online business forums.

Reference: RA 9178, R.A. 9501, DTI Department Administrative Order (DAO) No. 1, Series
of 2003, Department of Finance Department Order No. 17-04, Revenue Memorandum

Circular No. 40-2004, Revenue Memorandum Circular No. 52-2004

Victorino Abrugar is a business consultant, blogger, speaker and

entrepreneur. He's the founder of Optixor, Inc., a digital marketing
company based in the Philippines. Follow him on Twitter at
@viclogic.

FILED UNDER: BUSINESS, SMALL BUSINESS

TAGGED WITH: BUSINESS IN THE PHILIPPINES, BUSINESS REGISTRATION, ENTREPRENEURSHIP, MICRO

BUSINESS, MICRO ENTERPRISE

COMMENTS

Peter Chan says

August 29, 2013 at 10:46 am

Question. since BMBEs are exempt of income tax, what happens to the WTX
imposed by clients who belong to the top 100? will I receive a rebate at the end of
the year? or should I state to client that I am exempt of income tax?
Reply

Mercy says
November 25, 2014 at 1:08 pm

Hi,Am lending money with 3% interest.I have a total asset if 300k now.should I
register?thanks
Reply

Alfredo Jr Dagondon says

May 26, 2015 at 2:32 pm

Hi, my parents has a small eatery (carenderia), is this kind of business part of
processing and manufacturing? Their assets are less 300k. So can they register?tnx
Reply

Aya says
July 13, 2015 at 7:44 am

Hi,
I am a CPA, and I have a laundry business. Our asset is below Php3M. Am I allowed
to apply for BMBE? Also, I am currently employed in an auditing firm, how am I
suppose to declare my income tax returns? Thanks!
Reply

John Michael Tan says

March 11, 2016 at 6:58 pm

Hello po Maam/Sir,
Paank po pag nkaregister na sa BIR ang business..pwede la ba apply as BMBE?
nameet po nmin lahat ng requirements for applicayion of BMBE. THANKS! Sana
mag reply kau
Reply

John Michael Tan says

March 11, 2016 at 6:59 pm

Hello po Maam/Sir,
Paano po pag nkaregister na sa BIR ang business..pwede pa ba apply as BMBE?
nameet po nmin lahat ng requirements for applicayion of BMBE. THANKS!
Sana mag reply kau
Reply

John Michael Tan says

March 11, 2016 at 6:59 pm

Hello po Maam/Sir,
Paano po pag nkaregister na sa BIR ang business..pwede pa ba apply as BMBE?
nameet po nmin lahat ng requirements for applicayion of BMBE. THANKS! Sana
mag reply kau
Reply

LEAVE A REPLY
Your email address will not be published. Required fields are marked *
Comment

Name *

Email *

Website

Please answer question below before you submit comment. Thank you. *

= 28

POST COMMENT

Search this website

WE RECOMMEND

LIKE US ON FACEBOOK

BusinessTips.ph
12,319 likes

Like Page

Share

Be the first of your friends to like this

GET OUR LATEST BUSINESS TIPS

Enter Your Email Address

SUBMIT

LATEST ARTICLES

20 Differences between a
Freelancer and an
Entrepreneur

BusinessCoach Inc. April

2016 Business Seminar
Schedule

The Differences between

Successful and
Unsuccessful
Entrepreneurs
(Infographic)

How to Earn Dollars in the

Philippines from Blogging
by following these 10
Steps

10 Tips for Starting a

Small Business in the
Philippines

TOP BUSINESS ARTICLES

How to Register Business

Name with DTI

Philippines

How to Register Your

Business with the BIR
Philippines

How to Close a Business in

the Philippines

51 Home-Based Business
Ideas in the Philippines

How to Register a
Corporation with SEC
Philippines (Stock
Corporation)

TOP MARKETING ARTICLES

The Most Powerful SEO

Technique in the Universe

36 Ways to Rock Your

Small Business Online

Integrating Search
Marketing and My
Experience at MORCon
2013

Whats the Best SEO

Technique for Websites
and Blogs?

What is the Essence of

SEO?

COPYRIGHT 2016 BUSINESSTIPS.PH ALL RIGHTS RESERVED ARCHIVES ADVERTISE TERMS,

DISCLAIMER & PUBLIC POLICY