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Home , Caloocan, Davao City, Mandaluyong, Mandaue, Manila, Marikina

COMPARING REGULATION IN 21 CITIES AND 178 ECONOMIES ©2008 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected]

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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 Group does not guarantee the accuracy of the data included in this work. The boundar- ies, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank Group concerning the legal status of any territory or the endorsement or acceptance of such boundaries.

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Contents

Doing Business in the Philippines 2008 is a new subnational Overview 5 report of the Doing Business series in East , following the Doing Business report in . Doing Business in the Philip- Starting a business 9 pines 2008 covers 21 cities that can be compared against each other, and with 178 economies around the world. The study Dealing with licenses 13 includes 15 cities in Metro : , Las Piñas, Registering property 17 , , , , , , Parañaque, , , City, San Juan, Data notes 22 , Valenzuela, 3 cities in the : , Lapu-Lapu and , as well as Tanauan, and . Comparisons Doing Business indicators 29 with national results (as measured in Manila) and the rest of List of procedures—starting a business 32 the world are based on the indicators in Doing Business 2008 and other subnational Doing Business reports. List of procedures—dealing with licenses 66 Since 2004, Doing Business publishes annual studies on the List of procedures—registering property 101 ways in which government regulations enhance or restrain business activity. The indicators discussed in this report and Acknowledgments 123 agreed with counterparts cover 3 Doing Business topics: start- ing a business, dealing with licenses and registering property. These indicators have been selected because they cover areas of local jurisdiction or practice. The indicators are used to This project is the result of cooperation between the National analyze the economic outcomes of the regulations and to Competitiveness Council, the International Finance Corpo- identify what reforms have worked, where and why. ration and the Asian Institute of Management Policy Center The methodology has limitations. Other areas important with support from the governments of and to business, such as the security of property from theft and through their respective aid agencies, Australian Agency looting, proximity to major markets, quality of infrastructure for International Development and Canadian International services, transparency of government procurement, macro- Development Agency. economic conditions or the quality of institutions are not studied directly by Doing Business. In order to make the data comparable across economies, the indicators refer to a spe- cific type of company—generally a limited liability company. 5

Overview

If you opened a business in Marikina, obtaining all the Manila, as the Philippines’ , represents registrations and permits would require 15 procedures. the Philippines in the global Doing Business report that To do the same in Valenzuela, you would spend 37 days covers 178 economies. Doing Business in the Philippines completing 22 procedures—more steps than anywhere 2008 expands 3 of the 10 Doing Business topics—starting else in the world. If you decided to build a warehouse in a business, dealing with licenses and registering prop- Davao, dealing with all the construction-related proce- erty—to another 20 cities.2 Doing Business classifies the dures would take you 60 days, 3 months less than the 21 cities based on their performance in each of these average in cities and placing Davao among topics. Fifteen of the 20 cities benchmarked for the first the world’s 10 fastest cities to complete construction- time are in the metropolitan of Manila, yet even related requirements. Despite the speed of the process, across these neighboring cities, the ease of doing busi- you would still need to complete 28 procedures, almost ness varies widely. 5 times more than in , the country with the Last year, Doing Business did not report any reforms lowest number of construction-related procedures. having taken place in the Philippines, represented by These examples illustrate 2 points: Manila. This is in line with the regional trend. Only 46% First, business regulations and their enforcement of the economies in and Pacific reformed in at vary widely across Philippine cities. The Local Govern- least one area covered by Doing Business between April ment Code of 1991 places business regulatory authority FIGURE 1.1 such as business permits, licenses and business tax in the East Asia and the Pacific lags behind in reforms hands of local governments. While all local governments Countries that made at least one positive reform in 2006/07 (%) share the same legal and institutional framework, they Eastern also interpret and implement national regulations differ- & 79 ently. Some local governments like Taguig and Marikina 63 have used their authority to simplify procedures and OECD reduce regulatory costs for businesses—and other Phil- high income 63 ippine cities could learn from their example. & North 59 Second, much reform, both at the national and local Sub-Saharan 52 level, is needed to reduce the high number of procedures Africa East Asia to start a business, deal with construction-related activi- & Pacific 46 ties and transfer a property title across Philippine cities. & 36 Although most procedures can be completed relatively quickly, the large number of them increases the hassle Source: Doing Business database. for businesses and creates opportunities for corruption.1 6 DOING BUSINESS IN THE PHILIPPINES 2008

2006 and June 2007 (figure 1.1). Only Latin America and between April 2006 and June 2007. Reformers simpli- the Caribbean reformed less, with 1 in 3 countries reform- fied business regulations, strengthened property rights, ing. Compare this with the pace of reform in Eastern eased tax burdens, improved access to credit and facili- Europe and Central Asia, the leading in terms of tated trade across borders. number of countries reforming for the third consecutive There are some reasons for optimism in the Phil- year, where 80% of the countries introduced reforms. ippines. The Anti–Red Tape Act was passed in 2007, Among the Philippines’ neighbors, some countries although it still needs to be implemented. The law intro- did reform. China is the most notable. For the second duced penalties for “fixers,” mandated that complete time in 5 years, China ranked among the top-10 reform- information about procedures and fees be publicly ers worldwide. China introduced a new property law displayed at government offices and required the intro- that put private property rights on equal footing with duction of performance-based tracking systems for those of the state. It also passed a new bankruptcy law public officials. The national government has also that gives secured creditors priority over other creditors. embarked on an ambitious project to create an online And construction became easier with the introduction one-stop shop to start a business—the Philippine Busi- of electronic processing of building permits. ness Registry. If successful, this would put the Philip- also made important reforms, strengthening investor pines among the world’s top performers in this topic. protections and expanding credit information by remov- The Bureau of Internal Revenue’s (BIR) regional ing the minimum loan size threshold for the public offices in Parañaque and Las Piñas created One Time credit registry. improved investor protections Transaction (ONETT) teams that facilitate the property and access to credit. registration processes by requiring officials to issue the Other large emerging markets, such as , tax clearances within specified time limits. Reforms need and , also improved in the ease of doing business to go beyond national policies. They need to be imple- last year. This should be a warning sign. Investors look mented in branches of the national agencies in all cities. for upside potential and they find it in economies that Local governments must also do their part to reduce are reforming—regardless of the starting point. Indeed, the burden of red tape on businesses. Some good exam- equity returns are highest in countries that are reforming ples already exist. Taguig and Marikina simplified and the most (figure 1.2). As other large emerging markets consolidated procedures to obtain a business permit. reform, maintaining the status quo means becoming less Makati, Marikina and Valenzuela shortened the maxi- competitive (figure 1.3). mum statutory time limit to obtain a building permit to Not only large economies are becoming more busi- 6 or 7 days, appreciably less than the 15-day period set ness-friendly. Around the world, the pace of reforms is by national law. swift—200 reforms in 98 economies were introduced FIGURE 1.3 Emerging markets are reforming FIGURE 1.2 Shareholders benefit from reform Ranking on ease of doing business (2007 to 2008)

3-year shareholder return (%) Turkey (65 to 57) 80 N Negative reforms Positive reforms N China (92 to 83) 60 Vietnam (94 to 91) N Philippines N N N N 40 N N N N N N N N N N N N N N N N N N N N N N Philippines (130 to 133) 20 N N N N N N Egypt (152 to 126) N N N N N N 0 –4–2 0 2 4 68 10 Number of reforms, 2003–06 178 (lowest) Source: Doing Business database, Morgan Stanley Capital International data. Source: Doing Business database. OVERVIEW 7

Comparing business regulations across Philippine upfront cost for the business even if they are reimbursed cities at the end of the contract. Registering property When compared internationally, cities in the Philip- pines do well in respect to the time to change the title of The same 8 procedures are required to register property a property, but lag behind in the number of procedures in all 21 cities. Yet, different local practices and levels of to start a business or deal with construction licenses. It administrative efficiency lead to wide differences in time takes on average 32 days to register property across the and cost across cities. Registering property is fastest in 21 cities, the same as , which ranks 56 globally Mandaluyong, where it takes 21 days; an entrepreneur in in this category. In contrast, the 18 procedures required Mandaue needs 6 weeks to do the same. The main sources on average to start a business would put Philippine of delays are the procedures required by national agencies— cities toward the bottom of the 178 economies ranked the BIR and the Registry of Deeds. These institutions by the number of procedures to start a business. Differ- account for about 75% of the time to register property. ent local government requirements and local practices drive the variation in procedures, time and cost across cities. Doing Business identifies these differences and What gets measured, gets done helps policy makers review them from a comparative perspective. Publishing comparative data on the ease of doing busi- ness inspires governments to reform. Since its start in Starting a business October 2003, the Doing Business project has inspired Local-level requirements account for 12 of the 23 proce- or informed 113 reforms in 98 economies around the dures to start a business in Davao, but just 4 (of a total world. Countries as diverse as or Mauritius have of 15) in Marikina and Taguig. Most procedures can used the Doing Business ranking to target improvements be done relatively quickly, but the time adds up due to and monitor progress. the high number of procedures; time needed to start a Comparisons among cities within a country are business ranges from 27 days in Taguig to 52 in Manila. even stronger drivers of reform. That was the case The cost of local-government fees and taxes also varies— in , where a subnational Doing Business study amounting to 3.7% of income per capita in Lapu-Lapu covering 12 states was first published in 2005. The study and 29% in Las Piñas—but in all places there is a multi- created competition to reform, as and tude of local fees and taxes, making for a complex system found it difficult to explain why it cost more to comply that requires entrepreneurs to first obtain assessments of with administrative procedures in their state or city as the fees that are later paid at different offices. Other fees, compared to their neighbors—despite sharing identical required by national-level regulation, are equivalent to federal laws and regulations. The second benchmarking about 10% of income per capita and are the same for in 2006 showed that 9 of the 12 states measured one all cities. The cost of printing the receipts and invoices year earlier had reformed in at least one of the areas ranges from 2% to 5% of income per capita. benchmarked by Doing Business. Governors realized that simple administrative reforms could make their states Dealing with licenses and cities nationally and globally competitive. Most The procedures to obtain construction-related authori- importantly, states could adopt best practices from their zations also vary by location. The process is easiest in reforming neighbors. Taguig, with 23 procedures, but more cumbersome in Cities in the Philippines can learn from each other Mandaue and Pasig, with 33 procedures. There are also and adopt good regulations and practices that already variations in time, due mainly to the time it takes to exist. A hypothetical Philippine city that would adopt obtain a permanent electricity connection, only 5 days in the better practices in the 3 areas covered by this report Tanauan, but 3 months in Metro Manila cities.3 Regard- would rank 125 of 178 economies on the ease of doing ing costs, construction-related procedures represent on business index. By reforming these 3 areas alone, the average 243.1% of income per capita. Electricity trans- ranking of the Philippines (as represented by Manila in formers are the main source of costs for construction- Doing Business 2008) could improve by 8 positions. This related procedures in some cities. They represent an would reduce the time to start a business to the 27 days 8 DOING BUSINESS IN THE PHILIPPINES 2008

TABLE 1.1 value, like in Mandaue—below the OECD average of Best practices in the Philippines compared internationally Global ranking 4.6%. Yet, even the best performing cities in the Phil- Indicator (178 economies) ippines lag relatively behind regarding the number of Days to deal with licenses procedures across the 3 areas (table 1.1). Tanauan (58 days) 6 Women entrepreneurs often benefit most from

Days to register property reforms that eliminate cumbersome regulations. Uganda Mandaluyong (21 days) 35 is an example. Having to live with complex regulations to start a business, women were easy targets for corrupt Cost to register property Mandaue (3.3% of property value) 54 officials—43% of female entrepreneurs reported harass- ment from government officials compared with 25% Cost to deal with licenses Makati, Manila (102.4% of income per capita) 61 of all entrepreneurs. When reforms simplified business start-up procedures, registrations shot up. The increase in Days to start a business 4 Taguig (27 days) 76 first-time business owners was 33% higher for women. Payoffs from reform can be large. Higher rankings Cost to start a business on the ease of doing business are associated with more Lapu-Lapu (17.0% of income per capita) 79 growth, more jobs and a smaller share of the economy in Number of procedures to register property the informal sector.5 Georgia, the top reformer in Doing All cities (8 procedures) 124 Business 2007, now has 15 registered businesses per 100 Number of procedures to deal with licenses 6 142 people—the same as . Simplified regulations Taguig (23 procedures) also encouraged entrepreneurs to start their own busi- Number of procedures to start a business 168 ness in Egypt (figure 1.4). Manila, Marikina, Taguig (15 procedures) Source: Doing Business database. Notes of Taguig, similar to Mexico and Chile. The cost would 1. Djankov, Simeon, Rafael La Porta, Florencio Lopez de be 17% of income per capita as in Lapu-Lapu, compa- Silanes and Andrei Shleifer. 2002. “The Regulation of rable to the Republic of Korea. Cutting the time to get Entry.” Quarterly Journal of Economics 1(118):1–37. construction licenses to build a warehouse to the level of 2. The cities belong to metro cities category. They were selected because they were identified by the National Tanauan—58 days—would put the Philippines ahead of Competitiveness Council as the priority cities for improv- New Zealand, which ranks 7 globally in this area. Adopt- ing the country’s competitiveness and attractiveness for ing the time to register property in Mandaluyong—21 investments. The metro city classification is adopted from days—would put the hypothetical Philippine city in the Asian Institute of Management–Policy Center’s Phil- position 35 worldwide, the same rank as the United ippine Cities Competitiveness Ranking Project (PCCRP). Kingdom. The cost would be cut to 3.3% of property Tanauan, the only non-metro city, was included as a test case for smaller cities. FIGURE 1.4 3. Metro Manila cities are served by only one electricity More entry after reform provider. Saudi Increase in business entry after reform (%) Arabia 4. World Bank. 2007. Doing Business 2008. Washington, 81 D.C.: World Bank Group. Egypt 72 5. Djankov, Simeon, Caralee McLiesh and Rita Ramalho. 2006. “Regulation and Growth.” Economics Letters 92(3): 395–401. Mauritius 52 6. World Bank. 2007. Doing Business 2008. Washington, D.C.: World Bank Group.

After Madagascar Guatemala reform Finland 26 22 23 24

Before reform Source: Doing Business database. 9

Starting a business

Countries differ significantly in the way they regulate compares to Brazil and is only 2 procedures fewer than entry of new businesses. In some, the process is straight- in Equatorial Guinea, the country with most procedures forward and affordable, while in others the process is to start a business. Yet, there are wide differences in the so cumbersome that entrepreneurs either bribe officials procedures, time and money an entrepreneur has to to speed up the process or simply run their business spend to complete the process across Philippine cities. informally. Without access to courts and credit, and in The main reason: different procedures and practices at constant fear of harassment by public officials, informal the local government level, different performance of businesses remain small and their productivity is low. local branches of national agencies, as well as variations When reforms make it easier to legalize their operations, in local taxes and fees. Entry requirements are easiest in the informal businesses are the first to register.1 Further- Taguig and relatively difficult in San Juan (table 2.1). more, the reforms to ease the entry of new firms are When compared globally, Philippine cities stand out relatively easy and not too costly to implement.2 Often in terms of the high number of procedures, which varies they do not require major legislative changes. from 15 to 23 across cities. Compare that with an average Starting a business in a Philippine city takes on of 9 procedures in East Asia and Pacific. No wonder that average 18 procedures and 35 days, and costs 27% of entrepreneurs in the Philippines resort to intermediaries income per capita. This is the same time as in China— who can speed up the process with informal dealings. In which ranks 100 of 178 economies on the time to start the Philippines, 11 procedures are required by national- a business—and a similar cost to that in Fiji, ranked 97 level regulations and are the same in all cities. These in the cost to start a business. The number of procedures include the verification of the availability of the company name and registration at the Securities and Exchange Commission (SEC), as well as procedures to register the 3 What’s measured? company for taxes, social security and health care. Doing Business in the Philippines 2008 measures all the necessary Some of these nationally-mandated requirements steps to enable a small or medium enterprise in general commercial or industrial activities to operate legally in 21 Philippine cities—including are redundant. For example, entrepreneurs need to buy all permits, inscriptions, notifications and inspections. The time and specialized accounting books, obtain authorization to cost required to complete each procedure under normal circumstances print receipts and have the printed receipts stamped are calculated, as well as the minimum paid-in capital requirement. It by the Bureau of Internal Revenue. The legalization of is assumed that all information is readily available to the entrepreneur, books and receipts is an outdated practice as enterprises that there has been no prior contact with officials and that all entities increasingly use electronic means of accounting. It has involved in the start-up process function without corruption. been argued that having books and receipts registered and stamped minimizes tax evasion. However, this is 10 DOING BUSINESS IN THE PHILIPPINES 2008

TABLE 2.1 FIGURE 2.1 Where is it easy to start a business—and where not Many procedures at the local level

Paid-in Number of procedures Ease of Cost minimum starting a (% of capital (% of City level* National level business Procedures Time income income per City (rank) (number) (days) per capita) capita) Manila 4 11 15 Taguig 1 15 27 22.8 6.9 Marikina 4 11 15 Lapu-Lapu 2 16 33 17.0 6.9 Taguig 4 11 15 Marikina 3 15 28 27.5 6.9 Caloocan 5 11 16 Cebu 4 16 32 23.9 6.9 Cebu 5 11 16 Mandaluyong 5 18 29 22.8 6.9 Lapu-Lapu 5 11 16 11 17 Mandaue 6 17 34 21.3 6.9 Mandaue 6 11 17 Caloocan 7 16 28 35.5 6.9 Parañaque 6 11 17 Parañaque 8 17 33 24.5 6.9 Pasay 6 6 11 17 9 17 37 21.6 6.9 Quezon City 7 11 18 Navotas 10 20 33 22.4 6.9 Makati 7 11 18 Tanauan 11 22 36 17.9 6.9 Mandaluyong 7 11 18 Malabon 12 19 31 31.2 6.9 Muntinlupa 8 11 19 Makati 13 18 32 37.2 6.9 Las Piñas 8 11 19 Pasay 14 17 35 35.2 6.9 Malabon 9 11 20 Valenzuela 14 22 37 21.0 6.9 Navotas San Juan 10 11 21 Manila 16 15 52 32.6 6.9 Pasig 11 11 22 Muntinlupa 17 18 40 25.4 6.9 Tanauan 11 11 22 Las Piñas 18 19 33 44.6 6.9 Valenzuela 11 11 22 Davao 19 23 42 20.7 6.9 Davao 12 11 23 Pasig 20 22 35 27.7 6.9

San Juan 21 21 39 27.5 6.9 * City level also includes Barangays. Note: The ease of starting a business rankings are the average of the city rankings on the proce- Source: Doing Business database. dures, time, cost and paid-in minimum capital for starting a business. See Data notes for details. Source: Doing Business database.

start a business adds up (figure 2.2).5 Even the city with not necessarily the case. Companies can find alterna- the shortest time to start a business, Taguig, would rank tive means of accounting to hide revenue from the tax only 76 of 178 economies, similar to Chile, and far from authority. Portugal eliminated the mandatory registra- the top performer, Australia, where start-up takes only 2 tion of company books in 2007. Already, 89% of coun- days. Registration with the SEC alone takes on average 3 tries do not require this procedure. days. The time to register with the Social Security System The number of procedures for starting a business varies between 2 and 7 days depending on the efficiency varies widely at the local level—from 4 in Marikina of the social security branch in that city. and Taguig to 12 in Davao (figure 2.1). In the former 2 The cost to start a business also varies across cities. cities, the business permit can be obtained by visiting In Lapu-Lapu, entrepreneurs spend the equivalent of the Business Permit and Licensing Office and paying the 17% of income per capita to open a business; for those fees at the City Treasurer’s Office. Inspections take place in Las Piñas, the cost is well more than double (figure once the business is up and running. Entrepreneurs in 2.2). Cost equivalent to 10% of income per capita are Tanauan must deal with 4 additional offices—the city’s required by national-level regulations and are the same local engineering and health departments plus the local in all cities. Total costs are lower than in Indonesia, units of the Philippine National Police and the Bureau where start-up costs represent 80% of income per capita, of Fire Protection4—and wait for 2 inspections prior to but high compared with (5.6%) and China starting operations, adding to the start-up costs and time. (8.4%). Local government fees and taxes—necessary to Eleven out of the 21 cities require a zoning clearance, obtain the business permit—drive the variation in the which often includes an inspection. This is in addition to cost to start a business across cities. Local government the clearance required from the (district). fees and taxes amount to (PHP) 2,661 Most procedures can be done expeditiously, but (about US$52) in Lapu-Lapu, but are 8 times more in due to the high number of procedures the total time to Las Piñas. Entrepreneurs in the Philippines need to put STARTING A BUSINESS 11

FIGURE 2.2 FIGURE 2.3 Starting a business in the Philippines—variation in time Starting a business in Taguig—easiest in the Philippines and cost Time (da ys) 22.8% Time Cost (days) (% of income per capita) 24 Las Piñas Cumulative cost 20 60 (% of income per capita) 40 16 Manila Makati 11.8% 50 East Asia Pasay, Caloocan 12 East Asia & Pacific Manila & Pacific Davao 30 Malabon 8 Muntinlupa Procedure 7: 40 Philippines Pasig Obtain business permit San Juan (21-city Marikina, San Juan Quezon City, Valenzuela, Muntinlupa 4 Philippines Tanauan, Pasay, Pasig, average) Parañaque (21-city Lapu-Lapu, Mandaue, Cebu average) 30 Parañaque, Las Piñas, Taguig, Mandaluyong 0 Cebu, Makati, Malabon, Navotas 20 Navotas 1 15 Mandaluyong Quezon City, Procedures Marikina, Caloocan Mandaue, Valenzuela Davao Source: Doing Business database. Taguig Tanauan 20 Lapu-Lapu

OECD 10 where entrepreneurs can obtain their business permits. 10 China Thailand Quezon City added new counters and expanded work- OECD ing hours during lunch hours and Saturdays to reduce

Source: Doing Business database. delays. It has also started to introduce inspections based on risks to health, safety or the environment, instead of automatically inspecting all businesses. aside a minimum of PHP 5,000 (about US$97) from Other cities have brought all relevant agencies the initial capital. This makes it more expensive for the under one roof or service center, the so-called “one-stop entrepreneur, who would be better off using the money shops.” Yet, the success of their implementation remains to get the business underway. to be proved. According to a recent government report, Not only is the cost relatively high, but finding out 74% of the cities have such one-stop shops, but the level how much is owed can be challenging. In all cities, multi- of implementation and efficiency varies.6 The Depart- ple fees and taxes apply including ’s permit fees, ment of Trade and Industry has also set-up National license fees, inspection fees, garbage fees, signboard fees Economic Research and Business Assistance Centers and processing fees. And these fees have to be paid every (NERBACs) in Cebu and Davao that bring together year. In Valenzuela, the entrepreneur has to go to differ- national and local government agencies. This is a start, ent offices to get an assessment of the fees and then pay but entrepreneurs still have to go from counter to coun- them at another office. Those doing business in San Juan ter to obtain their permits and clearances unlike in real get a preliminary estimate of fees and taxes after apply- one-stop shops where the applicant interacts with a ing for the business permit, and then must obtain a final single official, thus reducing procedures and opportuni- assessment after receiving the locational clearance and ties for corruption. Also, some of these service centers the fire clearance. Having multiple fees reduces transpar- operate only during the business permit renewal period ency and increases the risk for informal payments. Why at the beginning of the year. not combine all fees into a single payment at one office? Computerization has helped to reduce delays. “Before Things are improving in some cities. Taguig intro- it took up to a month to obtain the business permit, now duced a customer service center where the entrepreneur it only takes 3 days” says an entrepreneur in Lapu-Lapu. submits all the documents for the business permit Yet, entrepreneurs still have to visit the city offices several (figure 2.3). The staff at the customer service and not times to get their permit in most cities. Also, Philippine the entrepreneur takes care of the assessment of the cities are starting to go online. The application forms for fees. The entrepreneur receives the assessment and can the business permit can be downloaded from the Inter- immediately obtain the business permit. Marikina has net in 7 of the 21 cities, cutting one procedure from the an award-winning customer care center that delivers process. The company can also verify the availability of the permit and business plate directly to the business. the name and register online at the SEC Web site, but then Caloocan now offers modern, air-conditioned lounges a representative must visit the SEC office to pay the fees. 12 DOING BUSINESS IN THE PHILIPPINES 2008

The national government is working on the Philip- face multiple fees both at the national and local govern- pine Business Registry, which aims to become an online ment level in a nontransparent system. Cutting fees single access point for all requirements to start a busi- would also reduce the need for obtaining the assess- ness including those with the local governments that ment of fees. At a minimum, all fees could be combined decide to join the system. Mauritius introduced a similar into a single fixed fee and information on costs should system last year, cutting the time to start a business from be made easily available. 46 to 7 days. Once the system is operational, Philippine Introduce single access points businesses would obtain a single identification number for all their interactions with government agencies. The Since 2003, 24 countries have created one-stop shops, first phase of the system is to link the databases of the cutting on average 5 procedures and more than halving different agencies involved in business start-up such as start-up time.7 The project to create the online business business registries, the tax authority, social security and registry will take time to be fully integrated with all rele- the public health insurance system. vant agencies. Local governments like Taguig have already consolidated procedures to obtain a business permit, reducing the number of interactions for the entrepreneur. What to reform? Officials from the national-level agencies can be assigned to the one-stop shops too, but in order to operate effi- Eliminate excessive and unnecessary procedures ciently, these officials need to have approval authority. Cities could follow the example of Taguig and cut the requirements to obtain the business permit. Or even better, why not eliminate the requirement to obtain a Notes business permit for low-risk general commercial activi- 1. World Bank. 2007. Doing Business 2008. Washington ties all together? Top-performing countries, like Austra- D.C.: World Bank Group. lia and Canada, do not require a business license separate 2. The introduction of a fast-track system to start a business from registration for general commercial activities. Only in Portugal cut the time by 46 days in 2006. The reform was implemented in 5 months and cost US$350,000. licenses for specific sectors with health, environmental World Bank. 2005. Doing Business in 2006: Creating Jobs. or other risks exist. Another way to cut procedures Washington D.C.: World Bank Group. would be to eliminate the inspections required before 3. See the detailed description of the standard case in Data the business starts operations. Cebu created a joint team notes. of inspectors that visits the business after it receives the 4. The Philippine National Police and the Bureau of Fire business permit. The next step is to classify businesses by Protection are agencies attached to the Department of the risk levels, as Quezon City is starting to do, and focus the Interior and Local Government. inspections on those with higher risk instead of inspect- 5. Doing Business assumes that each procedure has a mini- ing all businesses. mum duration of one day. See Data notes for details. 6. Department of the Interior and Local Government. 2008. Consolidate and cut fees and taxes Report to the National Competitiveness Council. Makati, The Philippines. In Denmark, entrepreneurs pay nothing to start their business. Money to pay for government services is 7. World Bank. 2007. Doing Business 2008. Washington D.C.: World Bank Group. raised with taxes. In the Philippines, new businesses

13

Dealing with licenses

Emilito opened his first bookstore 2 years ago. Business number of procedures is also high in these cities. With is going well and he is planning to expand his distribu- 25 different requirements, they would rank 149 of 178 tion network to other cities. To do so, he has decided economies in the number of procedures. to build a warehouse. As he prepares the budget and timeline, he ponders. He has heard that in Davao it TABLE 3.1 only takes 2 months to obtain all the permits and utility Where is it easy to deal with construction licenses—and connections for the warehouse, compared to almost 5 where not? months in Metro Manila cities. Contractors who have Ease of dealing with Cost (% of been around for a long time have warned him about the licenses Procedures Time income per cumbersome process and the risk that one may end up City (rank) (number) (days) capita) paying “facilitation fees.” Makati 1 25 125 102.4 Across the 21 Philippine cities, the process consists Marikina 1 25 121 123.0 on average of 28 procedures that take 129 days and Las Piñas 3 25 134 115.7 cost 243.1% of income per capita. In East Asia and Taguig 4 23 121 136.1 Pacific, it takes an average of 19 procedures and 175 Valenzuela 4 25 123 129.2 days, and it costs 177% of income per capita. Obtaining Manila 6 24 203 102.4 Quezon City 7 28 141 123.0 construction-related approvals in the Philippines is rela- Davao 8 28 60 464.6 tively easier in Makati and Marikina (table 3.1). But the Caloocan 9 29 135 132.0 Tanauan 10 29 58 1072.3 What’s measured?1 Muntinlupa 11 30 141 127.0 Doing Business in the Philippines 2008 looks at licensing in the Navotas 12 27 145 142.8 construction industry as an example of licensing regulations that Cebu 13 31 83 476.5 businesses face. It measures the procedures, time and cost to build a Mandaluyong 13 29 155 135.1 standardized commercial warehouse, hook it up to basic utilities and Pasay 15 27 161 139.8 formally register it. These include submitting project documents (build- Parañaque 16 31 137 137.1 ing plans, site maps) to the authorities, obtaining all necessary licenses Mandaue 17 33 70 480.6 and permits, completing all required notifications and receiving neces- sary inspections. The time and cost to complete each procedure under Malabon 18 29 155 145.8 normal circumstances are calculated. All official fees associated with Lapu-Lapu 19 32 90 557.5 legally completing the procedures are included. The survey assumes Pasig 20 33 173 127.6 that the entrepreneur is aware of all existing regulations and does not San Juan 20 31 175 134.8 use an intermediary to complete the procedures unless required to do Note: The ease of dealing with licenses rankings are the average of the city rankings on the proce- so by law. dures, time, and cost to deal with construction licenses. See Data notes for details. Source: Doing Business database. 14 DOING BUSINESS IN THE PHILIPPINES 2008

The time to deal with licenses ranges between 58 are among the cities still using the old forms that do not and 203 days across the 21 cities (figure 3.1).2 The fast- require notarization. est cities, Tanauan and Davao, would rank 6 globally, Pre-construction clearances such as the locational ahead of New Zealand, which, at 65 days, ranks 7 in clearance from the City Planning and Development the time to deal with construction licenses. The main Office slow down the process and increase the costs. source of differences is the time to obtain the perma- Obtaining the locational clearance can take up to 15 nent electricity connection, which takes 3 months in days in some cities in Metro Manila but only 6 days Metro Manila cities.3 in Davao and 3 in Marikina. “Obtaining clearances in The cost to comply with all the procedures required Marikina is quite faster than in other cities. There are no to build a warehouse varies across the cities. It costs informal fees and dealings with the staff are transparent. 102.4% of income per capita in Makati and Manila but The contractor only has to make sure that all necessary 1,072.3% in Tanauan (figure 3.2). With the average cost documents are complete” says a builder. The cost of the of 243.1% of income per capita, the 21 cities in the Phil- locational clearance also varies across cities. Tanauan ippines rank above other countries in the region such charges a fixed fee of PHP 400 (about US$8) for the as Indonesia (286.8%), Vietnam (373.6%), and China locational clearance, whereas in Malabon the fee is based (840.2%). However, it costs less to complete construc- on the size of the warehouse and in our case amounts to tion-related procedures in neighboring Malaysia (10%) PHP 23,450 (about US$457).4 Another pre-construction or Thailand (10.7%). clearance is the one from the Barangay. In the Philip- At the pre-construction stage, there are differ- pines, the fees are set by each Barangay after consultation ent procedures across the cities (figure 3.3). In order with the community and then sent to the to apply for the building permit in cities like Pasay, for ratification. As a result, each Barangay may charge a company has to visit the City Assessor’s Office to different fees for its clearance for the same project. obtain a certified true copy of the tax declaration of real Building permit fees also created confusion among property and a tax clearance to certify that there are no contractors. A recently resolved legal dispute delayed arrears in property taxes. But in Makati, a photocopy of FIGURE 3.2 these documents can be submitted instead. Most cities Cost of dealing with licenses in Metro Manila require notarization of the locational clearance and/or the building permit applications. The Manila 102 new application forms for the building permit have a Makati 102 section for notarization. This is an example of a negative Las Piñas 115 reform because the new application forms increase the Quezon City 123 time and cost to obtain the permit. Davao and Mandaue Marikina 123 Muntinlupa 127 Pasig 128 FIGURE 3.1 Valenzuela 129 Number of days to deal with licenses Caloocan 132 San Juan 135 200 Manila Mandaluyong 135 Time (days) Taguig 136 East Asia San Juan Pasig Parañaque 137 & Pacific 160 Mandaluyong, Malabon, Pasay Pasay 140 Muntinlupa, Navotas Parañaque, Quezon City Navotas 143 Philippines Malabon 146 (21-city average) 120 Makati, Las Piñas, Caloocan Marikina, Taguig, Valenzuela Davao 465 Cebu 476 Lapu-Lapu 80 Cebu Mandaue 481 Mandaue Lapu-Lapu 558 Davao Tanauan 1072 Tanauan 40 0 500 Korea Malaysia East Asia Philippines Cost (% of 10% & Pacific (21-city average) income per capita) 177% 243%

Source: Doing Business database. Source: Doing Business database. DEALING WITH LICENSES 15

FIGURE 3.3 Number of pre-construction and post-construction procedures pines. When the builder submits the building plans for approval, the local fire marshal has to give a response Pre-Construction During construction within 5 working days from the date of referral. Failure Post-Construction Utilities to act within the said period means that the plans and specifications conform to all the requirements of the Fire Taguig 23 Code of the Philippines. Manila 24 An entrepreneur who wanted to obtain a build- Las Piñas 25

Makati 25 ing permit from Mandaluyong or Pasay would have to

Marikina 25 make separate visits to the Bureau of Fire Protection

Valenzuela 25 (BFP) to obtain the fire safety approval from the local

Navotas 27 fire marshal. By contrast, in Cebu, Marikina, Parañaque,

Pasay 27 Pasig and Valenzuela, there is a liaison officer who will Davao 28 take the plans to the BFP for approval. Similarly, in order Quezon City 28 to pay for the fire approval and the fire inspection certifi- Caloocan 29 cate fees, in Navotas, Mandaluyong, Pasig and Tanauan, Malabon 29

Tanauan 29 the contractor has to visit the BFP and the City Trea-

Mandaluyong 29 surer’s Office. Contractors in Navotas identify the BFP

Muntinlupa 30 “as a major bottleneck in the whole range of procedures

Cebu 31 in the building permit application.” Across the rest of the

Parañaque 31 cities in Metro Manila, the Visayas cities and Davao, the San Juan 31 assessment and payment for the BFP fees is at the Office Lapu-Lapu 32 of the Building Official (OBO). Mandaue 33 Adding to the number of procedures across the Pasig 33 21 cities are the random inspections from the BFP and 0 10 20 30 the OBO during construction. Random inspections Source: Doing Business database. offer opportunities for bribes and waste resources. The authorities lose out because they cannot systematically the implementation of the building permit fees set in monitor the structural soundness of the building and the Implementing Rules and Regulations of the National businesses lose time and money every time they have to Building Code. While the dispute lasted, the local stop construction to pay off an inspector. governments determined whether the new schedule of Post-construction procedures vary across cities. In fees—PHP 23 per square meter—should be applied. As most cities, the inspections for the certificate of occupancy of December 2007, the cities of Mandaue, Cebu, Lapu- and certificate of electrical inspection take place simulta- Lapu and Makati were still using the old fee schedule neously, whereas in Caloocan, Malabon, Mandaluyong, of PHP 12 per square meter while the remaining cities Muntinlupa, Pasig and San Juan the certificate of occu- had already enforced the new fees. After a Manila court pancy is a prerequisite for the certificate of electrical decision in February 2008, the new fees will need to be inspection. In the cities that process the certificates simul- implemented in all cities. taneously, the application for the certificate of occupancy There is a 15-day statutory limit for the issuance of includes a form for the certificate of electrical inspection. the building permit in the Philippines, but it only starts The contractor makes fewer visits to the respective offices from the date of payment of the building permit fees, and receives one joint inspection instead of inspectors not from the time of application. The local governments from different offices at different times. in Makati, Marikina and Valenzuela have already short- Utility connections add to the time and cost. In ened the statutory time period to 6 or 7 days, but in cities Metro Manila cities, it takes about 3 months to obtain like Davao and Parañaque, contractors complain about the permanent electricity connection for a warehouse, the time it takes to obtain the building permit—26 and compared with 4 days in Davao. The firm must pay upfront 23 days respectively. Experiences from around the world for the costs of the transformers plus the installation costs. show that statutory time limits are most effective when The installation costs are generally deducted from the coupled with ‘silence is consent’ rules. This is already electricity bills. The cost of the transformers is refunded the case with the fire safety approval in the Philip- in Metro Manila cities through annual deductions but for 16 DOING BUSINESS IN THE PHILIPPINES 2008 the other cities this cost is only recovered at the end of the random inspections. Countries with risk-based inspec- contract, which adds to the construction-related costs. tions do not compromise the general safety of their Cities in the Philippines could learn from neighbors citizens. Instead of visiting the site at whim, inspectors Singapore and , China, which are among the stick to a schedule based on the completion of each top-10 performers in the ease of dealing with licenses, construction phase. In countries as diverse as Finland as well as Thailand and Malaysia, which are among the and Nigeria, certified testing companies conduct test- top 30 performers. China introduced reforms whereby ing only after major stages of the construction project and now process applications for are completed. In Singapore, engineers and technical construction permits electronically and allow construc- experts are trained to become “qualified experts.” These tion companies to apply for safety certificates online, experts are employed by private companies, but have reducing delays by 2 weeks.5 a professional duty to the state to inspect construction sites and report any safety breaches they find. Increase the transparency and information about What to reform? the process Builders in the Philippines need to understand how Create one-stop shops to consolidate clearances the process works. Dealing with licenses can be facili- The cities in the Visayas and Parañaque could benefit from tated if there are flowcharts displayed in public places such reforms, cutting the requirements at the OBO for the or on the Internet. In 2001, the municipal authorities evaluation and approval of the building plans. Currently, in Riga () created a step-by-step guide with a list upon submitting the required documents for the build- of required documents and flowcharts showing which ing permit, the applicant has to visit different sections offices to visit when and with what documents, and to have the plans evaluated and approved. In other cities listing the offices’ addresses, working hours and contact surveyed, this is done internally. One-stop shops could number. This simple reform cut 2 months off the process centralize applications and process all project permits and and gave builders confidence and trust in the construc- clearances, minimizing processing time and red tape. tion permit process. Computerize licensing application and processing In Makati, the city government provides download- Notes able building permit application forms from the city 1. See the detailed description of the standard case in Data government’s Web site. Las Piñas and Muntinlupa have notes. computerized the processing of building permits since 2. Doing Business assumes that each procedure has a mini- 2003. Developers in Austria, Denmark, and the mum duration of one day. See Data notes for details. complete their application online. Further 3. Metro Manila cities are served by only one electricity developing and improving the online system will save provider. time for both the businesses and the government offi- 4. The cost is calculated as follows: PHP 18 per square meter plus a PHP 40 processing fee. Doing Business cials. It also removes interactions with different officials assumes a warehouse of approximately 14,000 square feet and the likelihood of under-the-table transactions. (1,300.6 square meters). See Data notes for details. Introduce risk-based inspections 5. World Bank. 2007. Doing Business 2008. Washington, D.C. World Bank Group. Countries with a system of risk-based inspections have fewer inspections on average than countries with 17

Registering property

Every cloud has a lining. The Napoleonic wars land.3 The benefits go beyond credit. Property titling can brought some of the fiercest battles Europe had seen. also significantly increase land values and investment.4 But to fund his conquests, Napoleon had all French Improving the security of property rights in was properties accurately mapped and registered for taxa- shown to increase productive activities.5 tion, saying “a good cadastre [property map] of the parcels will be the complement of my civil code.”1 Once TABLE 4.1 Where is it easy to register property—and where not? annexed, Belgium, the and Switzerland received the same system. Ease of Cost registering (% of There are better reasons for registering property property Procedures Time property than financing wars. Efficient property registration City (rank) (number) (days) value) systems provide legal security of property. The benefit Mandaluyong 1 8 21 4.5 of such a system is driven by this thinking: efficient and Muntinlupa 2 8 26 4.5 inexpensive property registration systems encourage Tanauan 3 8 32 3.5 every property holder to receive a formal title. Titlehold- Cebu 4 8 32 3.5 San Juan 4 8 26 4.5 ers can use their property as collateral to start a new Valenzuela 4 8 30 4.5 business or expand existing operations, thereby expand- Parañaque 7 8 27 4.5 2 ing incomes and contributing to economic growth. Pasig 8 8 30 4.5 Indeed, banks in countries lacking adequate creditor Las Piñas 9 8 25 4.5 information prefer land and buildings as collateral since Manila 10 8 33 4.2 they are difficult to move or hide. In the Philippines, 70% Navotas 11 8 31 4.5 of commercial bank loans to businesses are secured by Taguig 12 8 32 4.5 Mandaue 13 8 43 3.3 Malabon 14 8 32 4.5 What’s measured?6 Lapu-Lapu 15 8 41 3.7 Doing Business in the Philippines 2008 records the full sequence of Pasay 16 8 32 4.7 procedures, time and costs necessary when a business purchases land Marikina 17 8 32 4.7 and a building to transfer the property title from another business so that the buyer can use the property for expanding its business, as col- Makati 18 8 33 4.6 lateral in taking new loans or, if necessary, to sell to another business. Davao 19 8 33 4.8 It is assumed that the property is already registered and free of title Caloocan 20 8 33 4.8 dispute. Every required procedure is included, whether it is the respon- Quezon City 21 8 39 4.7 sibility of the seller or the buyer or must be completed by a third party Note: Rankings are the average of the city rankings on the procedures, time, and cost to register on their behalf. property. See Data notes for details. Source: Doing Business database. 18 DOING BUSINESS IN THE PHILIPPINES 2008

In Manila, registering property takes on average 8 try of Deeds (RD) and finally the issuance by the City procedures and 33 days, and costs 4.2% of the property Assessor’s Office (CAO) of a new tax declaration for value. Even though the 8 procedures required to register the building in the name of the buyer. In Mandaluyong, property are the same as in Manila, the time and cost vary the entrepreneur spends 21 days to register a property, considerably across cities in the Philippines due to differ- whereas twice that time is spent in Mandaue (43 days) ent administrative efficiencies and local practices. Regis- and Lapu-Lapu (41 days) (figure 4.1). tering property is relatively easier in Mandaluyong and The differences in the time to register property relatively more difficult in Quezon City—there, it takes 39 across the cities can be attributed mainly to the perfor- days and costs 4.7% of the property value (table 4.1). mance of local offices of national agencies—the local It is easier to register property in New Zealand than RD and regional district offices of the Bureau of Internal anywhere else in the world. The entire process can be Revenue (BIR) (figure 4.2). These institutions account completed with 2 online procedures at a cost of 0.1% of for 75% of the time to register property. While an entre- the property value. Lawyers certify land transfer docu- preneur has to wait 2 weeks in Las Piñas to register a ments for their clients and submit them electronically for deed, she can do it in 3 days in San Juan. Furthermore, registration. Confirmation is returned within minutes. wide variations are experienced across cities in obtaining But this efficiency is not limited to OECD countries— tax clearance at the BIR, commonly known as the certifi- some of the countries in East Asia and Pacific are not cate authorizing registration (CAR). It takes 25 days in far behind. In Thailand it takes 2 procedures and 2 days Lapu-Lapu but only 5 days in Parañaque and Las Piñas and in Kiribati it costs 0.1% of the property value to to obtain this certificate. transfer a property from one domestic private company The shorter time needed to obtain the CAR in Para- to another. ñaque and Las Piñas can be attributed to the creation Time is measured in calendar days, from the prepa- of a One Time Transaction (ONETT) team by the BIR’s ration of the deed of sale and ratification by notary regional district offices in these 2 cities. These ONETT public to the application for registration with the Regis- teams were mandated with time limits to complete the tax clearance. They also benefited from superior FIGURE 4.1 Time to register property varies across cities administrative oversight and staff performance manage- ment systems. As a result, the ONETT team handles the property transfer taxes and issues the CAR fast, usually Mandaluyong 21 Las Piñas 25 within 5 days. In contrast, regional district offices that Muntinlupa 26 do not yet have ONETT teams are often characterized San Juan 26 by lack of qualified personnel to conduct inspections Parañaque 27 to check the declared property value before issuing the Pasig 30 CAR, burdensome documentary requirements, and lack Valenzuela 30 Navotas 31 FIGURE 4.2 Cebu 32 BIR and RD are the main sources of delays in Mandaluyong Malabon 32 and Mandaue Marikina 32 Pasay 32 Time (days) Mandaue (43 days) Taguig 32 45 Apply for registration with Tanauan 32 40 the Registry of Deeds (RD) Caloocan 33 35 Davao 33 Obtain Certificate 30 Authorizing Registration Makati 33 (CAR) from the Bureau Manila 33 25 of Internal Revenue (BIR) Mandaluyong (21 days) Quezon City 39 20 Lapu-Lapu 41 15 Mandaue 43 10 0 10203040 Thailand Philippines East Asia 5 & Pacific 2 days (21-city average) 0 32 days 99 days Time (days) 1 Procedures 8 Source: Doing Business database. Source: Doing Business database. REGISTERING PROPERTY 19 of publicity about rules and regulations, all of which FIGURE 4.3 leads to delays in property registration. Cost to register property—lowest in Mandaue In general, land records are scattered among the BIR regional district offices instead of being consolidated in Mandaue 3.3 Tanauan a sole national database. This makes it more difficult and 3.5 Cebu 3.5 expensive for property buyers to track the authenticity Lapu-Lapu 3.7 of tax clearances of land titles. At the same time, the Manila 4.2 manual handling of deeds is a key reason for the delays Valenzuela 4.5 in the registration of deeds as it causes missing files, Muntinlupa 4.5 Mandaluyong 4.5 delays and typographical errors. San Juan 4.5 The cost to register property differs considerably Parañaque 4.5 across cities (figure 4.3). It is cheapest in Mandaue—3.3% Pasig 4.5 of the property value—compared with 4.8% in both Taguig 4.5 Davao and Caloocan. Notary public fees and property Navotas 4.5 transfer tax drive this variation. Notaries prepare and Malabon 4.5 Las Piñas 4.5 ratify the sales deed and account for 27–45% of total Makati 4.6 expenses. Often the city revenue code sets notary fee Pasay 4.7 schedules, though these may be outdated or simply Quezon City 4.7 not used. Doing Business recorded the most commonly Marikina 4.7 charged fees in each city. By law, according to each city’s Davao 4.8 Caloocan 4.8 revenue code and the chapter of the Integrated Bar of the 012345 Philippines, notaries can charge 1–3% of the property Cost (% of property value) Malaysia Philippines East Asia value to prepare and ratify the sales deed. In practice, the 2.4% (21-city average) & Pacific 4.4% 4.9% notaries in Mandaue, which charge on average 1%, are Source: Doing Business database. on the lower bound of the cost range; in contrast, notary fees of around 2% are commonly charged in Metro Manila cities. Similarly, the property transfer tax charges would climb 31 places in the global ranking regarding differ across cities. The City Treasurer’s Office charges the ease of property registration globally. This would a property transfer tax of 0.8% of the property value in bring it to the ranks of the Czech Republic (54) and well Davao and in Caloocan, but only 0.3% in Mandaue and above Malaysia (67) and Korea (68) on the ease of prop- 0.5% in Tanauan. erty registration globally. The costs for obtaining a certified copy of the Across countries, firms of all sizes report that their latest tax declaration from the CAO and the applica- property rights are better protected in countries with tion for registration with the RD—standardized across more efficient property registration. But the relationship cities—represent a substantial portion of the registration is stronger for small firms.7 The rich have few prob- costs. Obtaining a certified true copy of the latest tax lems protecting their property rights. They can afford declaration costs 1.5% of the property value in every the costs of investing in security systems and other city, whereas entrepreneurs in all cities pay PHP 17,631 measures to defend their property. But small entrepre- (about US$ 344) to apply for registration with the RD. neurs cannot. Reform can change this. Many developed Remember, New Zealand does not collect this fee at all. countries, and an increasing number of developing In general, time and costs to register property in countries, have simple, inexpensive, and fast property the Philippines compare favorably with OECD and registration processes. East Asia and Pacific countries, but the Philippines lags The Chamber of Thrift Banks noted that about 46% behind on the number of procedures. The example of of properties in the country remain informal. Currently, well-performing cities such as Mandaluyong shows there is a bill under consideration that, if adopted, will that low-performing cities can look for good practices hasten the process of property registration. This will within the Philippines—not just internationally. If other have the potential to boost loan portfolios by making it locations, including Manila, were to adopt the time to easier for prospective borrowers to use their properties register property in Mandaluyong (21 days) and the cost as collateral. Furthermore, there are ongoing reforms in Mandaue (3.3% of the property value), the Philippines to the land titling system in the Philippines and a land 20 DOING BUSINESS IN THE PHILIPPINES 2008 administration and management reform program (Land Replace the stamp and transfer taxes for a fixed Administration and Management Program-LAMP 2) is fee for property registration (instead of % of the being carried out by the Department of Environment property value) and Natural Resources. Other reforms could help in streamlining the property registration system in the Percentage-based fees may lead some entrepreneurs to Philippines, by cutting procedures, time and costs. undervalue their property to evade taxes, or simply to avoid registration completely. The government could establish a schedule of transfer and stamp fees and apply What to reform? it to property transfer transactions. The increase in reve- nue from new registrations can make up for the reduc- Introduce fast-track procedures tion in fees, as the recent reform in Egypt shows. One An entrepreneur currently spends on average 75% of year ago, registering a property in cost 5.9% of the the total time registering property at the BIR’s regional property value. Ninety percent of properties were either district office and at the local RD. These agencies may not registered or registered at below market values.8 be in need of some capacity building to reduce delays— When the Egyptian government lowered the total cost hiring qualified personnel to conduct inspections, train- to register from 5.9% of the property value to a fixed fee ing staff and computerizing to avoid missing files and of 2,000 Egyptian pounds (about US$348), revenue from overlapping titles. But such reforms take time especially property registration rose nearly 39% due to the increase in cities where ONETT does not exist. In order to speed in the number of registrations. up registration in the short term, the BIR and RD could Allow for payment of stamp tax at the BIR offer clients a choice of expedited procedures: pay a slightly higher fee and the registration is completed in Currently, the seller files the documentary stamp tax 1–2 days. Cases would be prioritized in a transparent return and capital gains tax return with the authorized manner, and those who prefer not to wait would be given agent bank in the regional district office of the relevant an official way to speed the process. This type of scheme city. The taxes are paid at the authorized agent bank is offered in a number of cities around the world, such to the BIR account, causing one additional procedure. as , Ulan-Bator and Kiev. However, in the Philippines cities could facilitate property registration by medium to long term the implementation of ONETT allowing entrepreneurs to pay the stamp tax when they should be extended to all cities. obtain the CAR from the BIR. , implemented a relevant reform, allowing entrepreneurs to pay notary Offer standardized sale-purchase contracts and fees at the notary office instead of at a designated bank. make the use of notaries optional Consolidate ownership and tax revenue records Most cities in the world do not require double verifica- tion—one by a notary public and one by the RD officials. At a minimum, create a single window interface for the Philippine cities do. Currently the sales deed must be entrepreneur, if not the government agencies. Instead ratified before the notary public and it is common for of the entrepreneur going to the RD and the CAO, she her to draft it and conduct the whole process on behalf of would visit only the RD—which in turn would update the parties. Philippine cities could cut one procedure by the tax records. The ultimate goal is to have all records standardizing sale-purchase contracts and making them combined into the same database, so that they are available to the public. Since records are kept updated automatically updated with every transfer. Belgrade is in the RD, this reform would eliminate the double veri- successfully implementing this reform. fication. In addition, it would significantly reduce costs, ensure fewer mistakes on contract forms and reduce the need to scrutinize the documents before registration. Notes After completing this form, the parties would submit 1. UNRCC (United Nations Regional Cartographic Confer- an application to the RD after paying transfer tax.Doing ence). 2004. Cadastral Template: A Worldwide Compari- Business records that 3 out of 4 countries in the world son of Cadastral Systems, Permanent Committee on GIS Infrastructure for Asia and Pacific, the University of Mel- manage property registration without mandating the use bourne and the International Federation of Surveyors, of notaries or lawyers, including the Philippine’s neigh- available at http://www. swisstopo.ch/cadastral bors Thailand, and , China. template2003. REGISTERING PROPERTY 21

2. Haidar, Jamal Ibrahim. 2007. “How Efficiently is Capital Created? Evidence from Property Registration Reform in Egypt.” In IFC, Smart Lessons in Advisory Services. Washington D.C. :World Bank Group. Available at smartlessons.ifc.org. 3. Enterprise Surveys. Available at www.enterprisesurveys. org. 4. Deininger, Klaus. 2003. Land Policies for Growth and Poverty Reduction, World Bank Policy Research Report series. New York, NY: Oxford University Press. 5. Field, Erica. 2003. “Entitled to Work: Urban Poverty Rights and Labor Supply in Peru.” Working Paper. Cam- bridge, MA: Department of Economics, Harvard Univer- sity. 6. See the detailed description of the standard case in Data notes. 7. Batra, Geeta, Daniel Kaufmann and Andrew Stone. 2003. Investment Climate Around the World. Washington, D.C.: World Bank. 8. OPIC (Office of Economic Development). July 2005. Issue Paper 1:2005. 22

Data notes

Starting a business Dealing with licenses Registering property

The indicators presented and analyzed inDoing Business have several (typically 4) rounds of interaction with the in the Philippines 2008 measure government regula- Doing Business in the Philippines 2008 team, through tion and the protection of property rights—and their face-to-face interviews, conference calls and written effect on businesses, especially small and medium-size correspondence. The data from surveys are subjected to domestic firms. The indicators document the degree of numerous tests for robustness, which lead to revisions or regulation, such as the number of procedures to start expansions of the information collected. a business or register commercial property. The data The Doing Business methodology offers several for all sets of indicators in Doing Business in the Philip- advantages. It is transparent, using factual information pines 2008 are for December 2007. In this project, Doing about what laws and regulations say and allowing multi- Business indicators have been created for 20 Philippine ple interactions with local respondents to clarify poten- cities—the complete list is available in page 3. The data tial misinterpretations of questions. Having representa- presented in this report for Manila and other economies tive samples of respondents is not an issue, as the texts is based on the global report Doing Business in 2008. of the relevant laws and regulations are collected and The Doing Business in the Philippines 2008 data are answers checked for accuracy. The methodology is inex- collected in a standardized way, following the methodol- pensive and easily replicable, so data can be collected in ogy developed by the Doing Business team. To start, the a large sample of economies. Because standard assump- Doing Business team, with academic advisers, designs a tions are used in the data collection, comparisons and survey. The survey uses a simple business case to ensure benchmarks are valid across economies. And the data comparability across economies and over time—with not only highlight the extent of obstacles to doing busi- assumptions about the legal form of the business, its ness; they also identify their source and point to the size, its location and the nature of its operations. Then, needed reform. the survey is customized to the particular case of the Limits to what is measured Philippines, using the data published for Manila in Doing Business 2008 as a baseline to capture differences The Doing Business methodology has 4 limitations that in business regulations across cities. Surveys are admin- should be considered when interpreting the data. First, istered through more than 220 local experts, including the data often focus on a specific business form—a lawyers, business consultants, construction firms, engi- limited liability company of a specified size—and may neers, local and national-level government officials and not be representative of the regulation on other busi- other professionals routinely administering or advising nesses, for example, sole proprietorships. Second, trans- on legal and regulatory requirements. These experts actions described in a standardized case study refer to DATA NOTES 23 a specific set of issues and may not represent the full set of issues a business encounters. Third, the measures Starting a business of time involve an element of judgment by the expert respondents. When sources indicate different estimates, Doing Business in the Philippines 2008 records all proce- the time indicators reported in Doing Business represent dures that are officially required for an entrepreneur to the median value of several responses given under the start up and formally operate an industrial or commer- assumptions of the standardized case. cial business. These include obtaining all necessary Finally, the methodology assumes that a business licenses and permits and completing any required noti- has full information on what is required and does not fications, verifications or inscriptions for the company waste time when completing procedures. In practice, and employees with relevant authorities. completing a procedure may take longer if the business After a study of laws, regulations and publicly avail- lacks information or is unable to follow up promptly. able information on business entry, a detailed list of Alternatively, the business may choose to disregard procedures is developed, along with the time and cost of some burdensome procedures. For both reasons the complying with each procedure under normal circum- time delays reported in Doing Business in the Philippines stances and the paid-in minimum capital requirements. 2008 would differ from the perceptions of entrepreneurs Subsequently, local incorporation lawyers and govern- reported in the World Bank Enterprise Surveys or other ment officials complete and verify the data. perception surveys. Information is also collected on the sequence in The laws and regulations underlying theDoing Busi- which procedures are to be completed and whether ness data are available on the Doing Business website at procedures may be carried out simultaneously. It is http://www.doingbusiness.org. All the sample surveys assumed that any required information is readily avail- and the details underlying the indicators are also able and that all agencies involved in the start-up process published on the website. Questions on the methodol- function without corruption. If answers by local experts ogy and challenges to data can be submitted through the differ, inquiries continue until the data are reconciled. site’s “Ask a Question” function. To make the data comparable across economies, several assumptions about the business and the proce- dures are used. Economy characteristics Assumptions about the business Gross national income (GNI) per capita The business: t Is a limited liability company. If there is more than one Doing Business in the Philippines 2008 reports 2006 type of limited liability company in the country, the limited income per capita as published in the World Bank’s liability form most popular among domestic firms is World Development Indicators 2007, which is US$1,420 chosen. Information on the most popular form is obtained from incorporation lawyers or the statistical office. for the Philippines. Income is calculated using the Atlas method (current US$). For cost indicators expressed as t Operates in the selected cities. a percentage of income per capita, 2006 GNI in local t Is 100% domestically owned and has 5 owners, none of currency units is used as the denominator. whom is a legal entity. t Has start-up capital of 10 times income per capita at the Region and income group end of 2006, paid in cash. Doing Business uses the World Bank regional and income t Performs general industrial or commercial activities, group classifications available at http://www.worldbank. such as the production or sale of products or services to the public. The business does not perform foreign trade org/data/countryclass. activities and does not handle products subject to a special Exchange rate tax regime, for example, liquor or tobacco. It is not using heavily polluting production processes. The exchange rate used in this report is: 1 USD = 51.31 t Leases the commercial plant and offices and is not a PHP proprietor of real estate. t Does not qualify for investment incentives or any special benefits. 24 DOING BUSINESS IN THE PHILIPPINES 2008 t Has at least 10 and up to 50 employees 1 month after the they are used by the majority of companies, and avoiding commencement of operations, all of them nationals. them cause substantial delays. t Has a turnover of at least 100 times income per capita. Only procedures required of all businesses are t Has a company deed 10 pages long. covered. Industry-specific procedures are excluded. For example, procedures to comply with environmental Procedures regulations are included only when they apply to all businesses conducting general commercial or industrial A procedure is defined as any interaction of the company activities. Procedures that the company undergoes to founder with external parties (for example, government connect to electricity, water, gas and waste disposal agencies, lawyers, auditors or notaries). Interactions services are not included. between company founders or company officers and Time employees are not counted as procedures. Procedures that must be completed in the same building but in Time is recorded in calendar days. The measure captures different offices are counted as separate procedures. the median duration that incorporation lawyers indi- If founders have to visit the same office several times cate is necessary to complete a procedure with mini- for different sequential procedures, each is counted mum follow-up with government agencies and no extra separately. The founders are assumed to complete all payments. It is assumed that the minimum time required procedures themselves, without middlemen, facilitators, for each procedure is 1 day. Although procedures may accountants or lawyers, unless the use of such a third take place simultaneously, they cannot start on the same party is mandated by law. If the services of professionals day (that is, simultaneous procedures start on consecu- are required, procedures conducted by such profession- tive days). A procedure is considered completed once als on behalf of the company are counted separately. the company has received the final document, such as Both pre- and post- incorporation procedures that are the company registration certificate or tax number. If a officially required for an entrepreneur to formally oper- procedure can be accelerated for an additional cost, the ate a business are recorded (table 5.1). fastest procedure is chosen. It is assumed that the entre- Procedures required for official correspondence or preneur does not waste time and commits to completing transactions with public agencies are also included. For each remaining procedure without delay. The time that example, if a company seal or stamp is required on offi- the entrepreneur spends on gathering information is cial documents, such as tax declarations, obtaining the ignored. It is assumed that the entrepreneur is aware seal or stamp is counted. Similarly, if a company must of all entry regulations and their sequence from the open a bank account before registering for sales tax or beginning but has had no prior contact with any of the value added tax, this transaction is included as a proce- officials. dure. Shortcuts are counted only if they fulfill 4 criteria: Cost they are legal, they are available to the general public, Cost is recorded as a percentage of the country’s income

TABLE 5.1 per capita. It includes all official fees and fees for legal or What does starting a business measure? professional services if such services are required by law. Procedures to legally start and operate a company Fees for purchasing and legalizing company books are t Preregistration (name verification, notarization) included if these transactions are required by law. The t Registration in the selected city t Postregistration (social security registration, company seal) company law, the commercial code and specific regula- Time required to complete each procedure tions and fee schedules are used as sources for calculat- t Does not include time spent gathering information ing costs. In the absence of fee schedules, a government t Each procedure starts on a separate day officer’s estimate is taken as an official source. In the t Procedure completed once final document is received t No prior contact with officials absence of a government officer’s estimate, estimates of Cost required to complete each procedure incorporation lawyers are used. If several incorporation t Official costs only, no bribes lawyers provide different estimates, the median reported t No professional fees unless services required by law value is applied. In all cases the cost excludes bribes. Paid-in minimum capital t Deposited in a bank or with a notary before registration begins

Source: Doing Business database. DATA NOTES 25

Paid-in minimum capital approvals and inspections. To make the data compa- rable across economies, several assumptions about the The paid-in minimum capital requirement reflects business, the warehouse project and the procedures are the amount that the entrepreneur needs to deposit in used. a bank or with a notary before registration and up to 3 months following incorporation and is recorded as Assumptions about the construction company a percentage of the country’s income per capita. The The business (BuildCo): amount is typically specified in the commercial code t Is a limited liability company. or the company law. Many countries have a minimum t Operates in the selected city. capital requirement but allow businesses to pay only a part of it before registration, with the rest to be paid t Is 100% domestically and privately owned. after the first year of operation. In Germany in June t Has 5 owners, none of whom is a legal entity. 2007 the minimum capital requirement for limited t Is fully licensed and insured to carry out construction liability companies was €25,000, of which at least projects, such as building warehouses. €12,500 was payable before registration. The paid-in t Has 20 builders and other employees, all of them nationals minimum capital recorded for Germany is therefore with the technical expertise and professional experience €12,500, or 42.8% of income per capita. In Serbia the necessary to obtain construction permits and approvals. minimum capital requirement was €500, of which only t Has at least 1 employee who is a licensed architect and half needed to be paid before registration. The paid-in registered with the local association of architects. minimum capital recorded for Serbia is therefore €250, t Has paid all taxes and taken out all necessary insurance or 8% of income per capita. applicable to its general business activity (for example, accidental insurance for construction workers and third- person liability insurance). This methodology was developed in Djankov, Simeon, Rafael la Porta, Florencio López-de-Silanes and Andrei t Owns the land on which the warehouse is built. Schleifer. 2002. "The Regulation of Entry." Quarterly Jour- Assumptions about the warehouse project nal of Economics 117(1):1–37, and is adopted here with minor changes. The warehouse: t Has 2 stories, both above ground, with a total surface of approximately 14,000 square feet (1,300.6 square meters). Dealing with licenses Each floor is 9 feet, 10 inches (3 meters) high. t Has road access and is located in the periurban area of Doing Business in the Philippines 2008 records all proce- the selected city (that is, is on the fringes of the city but dures required for a business in the construction indus- still within its official limits). It is not located in a special economic or industrial zone. try to build a standardized warehouse. These procedures include submitting all relevant project-specific docu- t Is located on a land plot of 10,000 square feet (929 square meters) that is 100% owned by BuildCo and is registered ments (for example, building plans and site maps) to the in the cadastre and land registry. authorities; obtaining all necessary clearances, licenses, t Is a new construction (there was no previous construction permits and certificates; completing all required notifi- on the land). cations; and receiving all necessary inspections. Doing t Has complete architectural and technical plans prepared Business also records procedures for obtaining all utility by a licensed architect. connections. Procedures necessary to register the prop- Will be connected to the following utilities—electricity, erty so that it can be used as collateral or transferred are t water, sewerage (sewage system, septic tank or their also counted. The survey divides the process of building equivalent) and one land phone line. The connection a warehouse into distinct procedures and calculates the to each utility network will be 32 feet, 10 inches (10 time and cost of completing each procedure in practice meters) long. under normal circumstances. t Will require a 10-ampere power connection and 140 Information is collected from experts in construc- kilowatts of electricity. tion licensing, including architects, construction lawyers, t Will require up to 100 cubic meters of water daily. construction firms, utility service providers and public officials who deal with building regulations, including 26 DOING BUSINESS IN THE PHILIPPINES 2008 t Will be used for general storage activities, such as storage information from local experts and specific regulations of books or stationery. The warehouse will not be used and fee schedules are used as sources for costs. If several for any goods requiring special conditions, such as food, local partners provide different estimates, the median chemicals or pharmaceuticals. reported value is used. t Will include all technical equipment required to make the warehouse fully operational. t Will take 30 weeks to construct (excluding all delays due Registering property to administrative and regulatory requirements).

Procedures Doing Business in the Philippines 2008 records the full sequence of procedures necessary when a business A procedure is any interaction of the company’s employ- purchases land and a building to transfer the property ees or managers with external parties, including govern- title from another business so that the buyer can use ment agencies, notaries, the land registry, the cadastre, the property for expanding its business, as collateral in utility companies, public and private inspectors and taking new loans or, if necessary, to sell to another busi- technical experts apart from in- architects and ness. Every procedure required by law or necessary in engineers. Interactions between company employees, practice is included, whether it is the responsibility of such as development of the warehouse plans and inspec- the seller or the buyer or must be completed by a third tions conducted by employees, are not counted as party on their behalf. Local property lawyers, notaries procedures. Procedures that the company undergoes to and property registries provide information on proce- connect to electricity, water, sewerage and phone services dures as well as the time and cost to complete each of are included. All procedures that are legally or in prac- them. To make the data comparable across economies, tice required for building a warehouse are counted, even several assumptions about the parties to the transaction, if they may be avoided in exceptional cases. the property and the procedures are used. Time Assumptions about the parties Time is recorded in calendar days. The measure captures The parties (buyer and seller): the median duration that local experts indicate is neces- t "SFMJNJUFEMJBCJMJUZDPNQBOJFT sary to complete a procedure in practice. It is assumed t "SFMPDBUFEJOUIFQFSJVSCBOBSFBPGUIFTFMFDUFEDJUJFT that the minimum time required for each procedure t "SFEPNFTUJDBMMZBOEQSJWBUFMZPXOFE is 1 day. If a procedure can be accelerated legally for t )BWFFNQMPZFFTFBDI BMMPGXIPNBSFOBUJPOBMT an additional cost, the fastest procedure is chosen. It is t 1FSGPSNHFOFSBMDPNNFSDJBMBDUJWJUJFT assumed that BuildCo does not waste time and commits to completing each remaining procedure without delay. Assumptions about the property The time that BuildCo spends on gathering informa- The property: tion is ignored. It is assumed that BuildCo is aware of t )BTBWBMVFPGUJNFTJODPNFQFSDBQJUBćFTBMFQSJDF all building requirements and their sequence from the equals the value. beginning. t *TGVMMZPXOFECZUIFTFMMFS t )BTOPNPSUHBHFTBUUBDIFEBOEIBTCFFOVOEFSUIFTBNF Cost ownership for the past 10 years. Cost is recorded as a percentage of the country’s income t *TSFHJTUFSFEJOUIFMBOESFHJTUSZPSDBEBTUSF PSCPUI BOE is free of title disputes. per capita. Only official costs are recorded. All the fees t *T MPDBUFE JO B QFSJVSCBO DPNNFSDJBM [POF  BOE OP associated with completing the procedures to legally rezoning is required. build a warehouse are recorded, including those associ- t $POTJTUT PG MBOE BOE B CVJMEJOH ćF MBOE BSFB JT   ated with obtaining land use approvals and preconstruc- square feet (557.4 square meters). A 2-story warehouse of tion design clearances; receiving inspections before, 10,000 square feet (929 square meters) is located on the during and after construction; getting utility connec- land. The warehouse is 10 years old, is in good condition tions; and registering the warehouse property. Nonre- and complies with all safety standards, building codes and other legal requirements. The property of land and curring taxes required for the completion of the ware- building will be transferred in its entirety. house project also are recorded. The building code, DATA NOTES 27 t 8JMMOPUCFTVCKFDUUPSFOPWBUJPOTPSBEEJUJPOBMCVJMEJOH procedure without delay. If a procedure can be acceler- following the purchase. ated for an additional cost, the fastest legal procedure t )BT OP USFFT  OBUVSBM XBUFS TPVSDFT  OBUVSBM SFTFSWFT PS available and used by the majority of property owners is historical monuments of any kind. chosen. If procedures can be undertaken simultaneously, t 8JMM OPU CF VTFE GPS TQFDJBM QVSQPTFT  BOE OP TQFDJBM it is assumed that they are. It is assumed that the parties permits, such as for residential use, industrial plants, waste storage or certain types of agricultural activities, are involved are aware of all regulations and their sequence required. from the beginning. Time spent on gathering informa- t )BT OP PDDVQBOUT MFHBM PS JMMFHBM  BOE OP PUIFS QBSUZ tion is not considered. holds a legal interest in it. Cost Procedures Cost is recorded as a percentage of the property value, A procedure is defined as any interaction of the buyer or assumed to be equivalent to 50 times income per capita. the seller, their agents (if an agent is legally or in practice Only official costs required by law are recorded, includ- required) or the property with external parties, including ing fees, transfer taxes, stamp duties and any other government agencies, inspectors, notaries and lawyers. payment to the property registry, notaries, public agen- Interactions between company officers and employees cies or lawyers. Other taxes, such as capital gains tax or are not considered. All procedures that are legally or in value added tax, are excluded from the cost measure. practice required for registering property are recorded, Both costs borne by the buyer and those borne by even if they may be avoided in exceptional cases. It is the seller are included. If cost estimates differ among assumed that the buyer follows the fastest legal option sources, the median reported value is used. available and used by the majority of property owners. Although the buyer may use lawyers or other profes- sionals where necessary in the registration process, it is Ease of doing business assumed that it does not employ an outside facilitator in the registration process unless legally or in practice The ease of doing business index ranks selected cities required to do so (table 5.2). from 1 to 21. The index is calculated as the ranking on the simple average of city percentile rankings on each of Time the 3 topics covered in Doing Business in the Philippines Time is recorded in calendar days. The measure captures 2008. The ranking on each topic is the simple average of the median duration that property lawyers, notaries the percentile rankings on its component indicators. or registry officials indicate is necessary to complete The ease of doing business index is limited in scope. a procedure. It is assumed that the minimum time It does not account for a selected city´s proximity to required for each procedure is 1 day. Although proce- large markets, the quality of its infrastructure (other dures may take place simultaneously, they cannot start than services related to obtaining utility connections), on the same day. It is assumed that the buyer does not the security of property from theft and looting, macro- waste time and commits to completing each remaining economic conditions or the strength of underlying institutions. There remains a large unfinished agenda TABLE 5.2 for research into what regulation constitutes binding What does registering property measure? constraints, what package of reforms is most effective Procedures to legally transfer title on real property and how these issues are shaped by the country context. t Preregistration (checking for liens, notarizing sales agreement) The Doing Business indicators provide a new empiri- t Registration in the selected city t Postregistration (paying taxes, filing title with city) cal data set that may improve understanding of these Time required to complete each procedure issues. t Does not include time spent gathering information t Each procedure starts on a separate day t Procedure completed once final document is received t No prior contact with officials Cost required to complete each procedure t Official costs only, no bribes t No value added or capital gains taxes included

Source: Doing Business database.

29

Doing business indicators 30 DOING BUSINESS IN THE PHILIPPINES 2008

Starting a business

Paid-in minimum Ease of Cost capital starting a Procedures Time (% of income (% of income business City (number) (days) per capita) per capita) (rank) Caloocan 16 28 35.5 6.9 7 Cebu 16 32 23.9 6.9 4 Davao 23 42 20.7 6.9 19 Lapu-Lapu 16 33 17.0 6.9 2 Las Piñas 19 33 44.6 6.9 18 Makati 18 32 37.2 6.9 13 Malabon 19 31 31.2 6.9 12 Mandaluyong 18 29 22.8 6.9 5 Mandaue 17 34 21.3 6.9 6 Manila 15 52 32.6 6.9 16 Marikina 15 28 27.5 6.9 3 Muntinlupa 18 40 25.4 6.9 17 Navotas 20 33 22.4 6.9 10 Parañaque 17 33 24.5 6.9 8 Pasay 17 35 35.2 6.9 14 Pasig 22 35 27.7 6.9 20 Quezon City 17 37 21.6 6.9 9 San Juan 21 39 27.5 6.9 21 Taguig 15 27 22.8 6.9 1 Tanauan 22 36 17.9 6.9 11 Valenzuela 22 37 21.0 6.9 14

Dealing with licenses Registering property

Ease of Ease of Cost dealing with Cost registering Procedures Time (% of income licenses Procedures Time (% of property property City (number) (days) per capita) (rank) (number) (days) value) (rank) Caloocan 29 135 132.0 9 8 33 4.8 20 Cebu 31 83 476.5 13 8 32 3.5 4 Davao 28 60 464.6 8 8 33 4.8 19 Lapu-Lapu 32 90 557.5 19 8 41 3.7 15 Las Piñas 25 134 115.7 3 8 25 4.5 9 Makati 25 125 102.4 1 8 33 4.6 18 Malabon 29 155 145.8 18 8 32 4.5 14 Mandaluyong 29 155 135.1 13 8 21 4.5 1 Mandaue 33 70 480.6 17 8 43 3.3 13 Manila 24 203 102.4 6 8 33 4.2 10 Marikina 25 121 123.0 1 8 32 4.7 17 Muntinlupa 30 141 127.0 11 8 26 4.5 2 Navotas 27 145 142.8 12 8 31 4.5 11 Parañaque 31 137 137.1 16 8 27 4.5 7 Pasay 27 161 139.8 15 8 32 4.7 16 Pasig 33 173 127.6 20 8 30 4.5 8 Quezon City 28 141 123.0 7 8 39 4.7 21 San Juan 31 175 134.8 20 8 26 4.5 4 Taguig 23 121 136.1 4 8 32 4.5 12 Tanauan 29 58 1072.3 10 8 32 3.5 3 Valenzuela 25 123 129.2 4 8 30 4.5 4 ESTUDIOS DE CASOS t APERTURADATA DE EMPRESA NOTES 31

List of procedures 32

Starting a business

Caloocan The SEC 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 Standard company legal form: Corporation Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, Minimum capital requirement: USD 97 = PHP 5,000 obtain and stamp sales invoices, receipts and the books of accounts. Date as of: December 2007 Procedure 4. Obtain the community tax certificate (CTC) from the Procedure 1. Verify the availability of the company name with City Treasurer's Office (CTO) the Securities and Exchange Commission (SEC) Time: 1 day Time: 1 day Cost: PHP 500 Cost: PHP 40 Comments: The company must pay an annual community tax. The basic community Comments: The company can verify the availability of the company name on-line. tax depends on whether the juridical entity is a company, partnership or association. Verification is free but reservation of the name, once approved by the SEC, costs PHP Additional community tax (which shall not exceed PHP 10,000) depends on the 40 for the first 30 days. The company name can be reserved for a maximum of 120 value of real property owned by the company in the Philippines (PHP 2 for every PHP days for a fee of PHP 120, which is renewable upon expiration of the period. 5,000) and on the gross receipts including dividends/earnings derived from business in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is Procedure 2. Obtain bank certificate of deposit of the paid-in issued to the company upon payment of the community tax and is a prerequisite to capital from the Authorized Agent Bank (AAB) obtain the Barangay clearance. Time: 1 day Procedure 5. Obtain Barangay clearance Cost: No cost Time: 1 day Procedure 3. Register the company with the SEC and receive pre- Cost: PHP 300 (between PHP 50–PHP 800) registered taxpayer's identification number (TIN) Comments: This clearance is obtained from the Barangay where the business is Time: 3 days 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 Cost: 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capital own taxes, fees and charges. Barangay fees may depend on: stock or the subscription price of the subscribed capital stock, whichever is higher but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of a. The location and the area (size in square meters) of the place of business; or filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + b. The company’s paid-up capital and the area it occupies; or PHP 470 stock and transfer book (STB) required for new corporations; fee includes c. Whether they issue clearance plates or certificates. registration of the STB) Barangays in Caloocan issue certificates. Comments: The company can register online through SEC i-Register but must pay onsite at the SEC and obtain a TIN. The following documents are required for SEC Procedure 6. Notarize the business permit application form at registration: the City Legal Office (CLO) a. Company name verification slip; Time: 1 day b. Articles of incorporation and bylaws; Cost: No cost c. Treasurer's affidavit; Comments: The business permit application form can be downloaded from the d. Statement of assets and liabilities; Caloocan City website at www.caloocancity.gov.ph. Notarization at the CLO within e. Bank certificate of deposit of the paid-in capital; the City Hall is free. To obtain the business permit, the company must file the follow- f. Authority to verify the bank account; ing documents at the BPLO: g. Registration sheet with particulars on directors, officers, stockholders, and so a. SEC registration; forth; b. Articles of incorporation and bylaws; h. Written undertaking to comply with SEC reporting requirements. c. Barangay clearance; To obtain the TIN, the company has to file: d. Community tax certificate; a. Barangay clearance; e. Duly accomplished and notarized application form; b. Mayor's permit; f. Photocopy of contract of lease; c. Copy of the SEC issued registration certificate. g. Public legal liability insurance;  -*450'130$&%63&4t45"35*/("#64*/&44 33

h. Vicinity map; Procedure 13. Print receipts and invoices at the print shops i. Picture of establishment (outside and inside views). Time: 7 days Cost: PHP 3,500 (between PHP 3,000–PHP 3,800) Procedure 7. Obtain the business permit to operate at the Comments: The cost is based on the following specifications of the official receipt: Business Permit and Licensing Office (BPLO) 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Time: 3 days Cost: PHP 14,477 (PHP 1,457 business tax + PHP 2,410 mayor's permit fee + PHP 350 Procedure 14. Have receipts, invoices and books of accounts business plate/sticker + PHP 5,640 refuse fee + PHP 2,410 sanitary permit fee + PHP stamped by the BIR 150 building inspection fee + PHP 550 electrical inspection fee + PHP 500 mechani- Time: 1 day cal inspection fee + PHP 90 plumbing inspection fee + PHP 120 billboard/signboard Cost: No cost inspection fee + PHP 800 fire safety inspection fee) Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- Comments: The notarized application form is submitted at the BPLO for verification, ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR inspection and assessment of fees. The business permit fees and taxes are paid at the RDO or concerned office having jurisdiction over the principal place of business. CTO. The BPLO notifies the Health Department and the Bureau of Fire Protection and they will inspect the place of business after the release of the business permit. The company will be given a temporary sanitation permit from the Health Department, Procedure 15. Register with the Social Security System (SSS) which is valid for 30 days. Time: 3 days Cost: No cost Procedure 8*. Receive inspection from the BPLO Comments: To register with the SSS the company must submit the following docu- Time: 1 day ments: Cost: No cost a. Employer registration form (Form R-1); Comments: The BPLO conducts an inspection to verify that the business will b. Employment report (Form R-1A); conduct the activity it has stated in the application. Upon submission of the business c. List of employees, specifying their birth dates, positions, monthly salary and permit application, the business establishment is inspected on the same day. date of employment; d. Articles of incorporation, bylaws and SEC registration or the certificate of Procedure 9. Buy special books of accounts at bookstore registration with the Department of Trade and Industry (DTI). Time: 1 day Upon submission of the required documents, the SSS employer and employee Cost: PHP 400 numbers will be released. The employees may attend a SSS training seminar after Comments: Special books of accounts are required for registering for VAT. The books registration. SSS prefers that all members go through such training so that each of accounts are sold at bookstores nationwide. One set of journals consisting of four member is aware of their rights and obligations. books (cash receipts account, disbursements account, ledger, general journal) costs about PHP 400. Procedure 16. Register with the Philippines Health Insurance Company (PhilHealth) Procedure 10. Register for value added tax (VAT) at the Bureau of Time: 1 day Internal Revenue (BIR) Cost: No cost Time: 2 days Comments: To register with PhilHealth, the company must submit the following Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- documents: mentary stamp tax) a. Employer data record (Form ER1); Comments: After obtaining the TIN, the company must register with the BIR by b. Report of employee-members (Form ER2); paying the annual registration fee of PHP 500, at any duly accredited bank, using payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for c. SEC registration; documentary stamp tax). Upon registration, the BIR will issue to the company the d. BIR registration; certificate of registration—BIR Form No. 2303. e. Copy of business permit. Upon submission of the required documents, the company shall get the receiving Procedure 11. Pay the documentary stamp taxes (DST) 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 3,643 * This procedure is simultaneous with a previous procedure

Comments: The company must pay DST on the original issuance of shares of stock. STARTING A BUSINESS 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 Cebu month following registration with the SEC. Standard company legal form: Corporation Minimum capital requirement: USD 97 = PHP 5,000 Procedure 12. Obtain the authority to print receipts and invoices Date as of: December 2007 from the BIR Time: 1 day Procedure 1. Verify the availability of the company name with Cost: No cost (fees included in procedure 10) the Securities and Exchange Commission (SEC) Comments: The authority to print receipts and invoices must be secured before the Time: 1 day sales receipts and invoices may be printed. The company can ask any authorized Cost: PHP 40 printing company to print its official forms, or it can print its own forms (i.e., it uses Comments: The company can verify the availability of the company name on-line. its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Verification is free but reservation of the name, once approved by the SEC, costs PHP this purpose. To obtain the authority to print receipts and invoices from the BIR, the 40 for the first 30 days. The company name can be reserved for a maximum of 120 company must submit the following documents to the Revenue District Office (RDO) days for a fee of PHP 120, which is renewable upon expiration of the period. or concerned office having jurisdiction over the principal place of business: a. Duly completed application for authority to print receipts and invoices (BIR Procedure 2. Obtain bank certificate of deposit of the paid-in Form No.1906); capital from the Authorized Agent Bank (AAB) b. Job order; Time: 1 day c. Final and clear sample of receipts and invoices (machine-printed); Cost: No cost d. Application for registration (BIR Forms No. 1901 or 1903); e. TRU form or photocopy of TIN card; f. Proof of payment of annual registration fee (BIR Form No. 0605). 34 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 3. Register the company with the SEC and receive pre- Procedure 7. Notarize the business permit application form at registered taxpayer's identification number (TIN) the notary Time: 5 days Time: 1 day Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- Cost: PHP 20 tal stock or the subscription price of the subscribed capital stock, whichever is higher but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of Procedure 8. Obtain the business tax payment certificate (BTPC) filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + at the BTFD PHP 470 stock and transfer book (STB) required for new corporations; fee includes Time: 3 days registration of the STB) Cost: PHP 7,105 (PHP 3,643 business tax + PHP 2,000 permit fee + PHP 550 zoning Comments: The company can register online through SEC i-Register but must pay fee + PHP 50 City Health Department + PHP 365 garbage fee + PHP 182 Office of the onsite at the SEC and obtain a TIN. The following documents are required for SEC Building Official inspection fees + PHP 315 Bureau of Fire Protection fees) registration: Comments: The notarized application form is submitted to the BTFD for verification a. Company name verification slip; and assessment of the business permit fees and taxes. The business permit fees and b. Articles of incorporation and bylaws; taxes are paid at the CTO. Cebu has a joint inspection team (JIT) which comprises c. Treasurer's affidavit; representatives from the Zoning Department, Office of the Building Official, City d. Statement of assets and liabilities; Health Department, Bureau of Fire Protection and the Office of the Mayor. Upon issuance of the BTPC, the inspection clearances of the JIT will be scheduled and will e. Bank certificate of deposit of the paid-in capital; be conducted within sixty days from issuance of the BTPC. f. Authority to verify the bank account; g. Registration sheet with particulars on directors, officers, stockholders, and so Procedure 9. Buy special books of accounts at bookstore forth; Time: 1 day h. Written undertaking to comply with SEC reporting requirements. Cost: PHP 400 To obtain the TIN, the company has to file: Comments: Special books of accounts are required for registering for VAT. The books a. Barangay clearance; of accounts are sold at bookstores nationwide. One set of journals consisting of four b. Mayor's permit; books (cash receipts account, disbursements account, ledger, general journal) costs c. Copy of the SEC issued registration certificate. about PHP 400. The SEC 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 Procedure 10. Register for value added tax (VAT) at the Bureau of Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, Internal Revenue (BIR) obtain and stamp sales invoices, receipts and the books of accounts. Time: 2 days Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Procedure 4. Obtain the community tax certificate (CTC) from the mentary stamp tax) City Treasurer's Office (CTO) Comments: After obtaining the TIN, the company must register with the BIR by Time: 1 day paying the annual registration fee of PHP 500, at any duly accredited bank, using Cost: PHP 500 payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for documentary stamp tax). Upon registration, the BIR will issue to the company the Comments: The company must pay an annual community tax. The basic community certificate of registration—BIR Form No. 2303. tax depends on whether the juridical entity is a company, partnership or association. Additional community tax (which shall not exceed PHP 10,000) depends on the value of real property owned by the company in the Philippines (PHP 2 for every PHP Procedure 11. Pay the documentary stamp taxes (DST) 5,000) and on the gross receipts including dividends/earnings derived from business Time: 1 day in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is Cost: PHP 3,643 issued to the company upon payment of the community tax and is a prerequisite to Comments: The company must pay DST on the original issuance of shares of stock. obtain the Barangay clearance. 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 5. Obtain Barangay clearance month following registration with the SEC. Time: 1 day Cost: PHP 200 (between PHP 50–PHP 500) Procedure 12. Obtain the authority to print receipts and invoices Comments: This clearance is obtained from the Barangay where the business is from the BIR 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 Cost: No cost (fees included in procedure 10) own taxes, fees and charges. Barangay fees may depend on: Comments: The authority to print receipts and invoices must be secured before the a. The location and the area (size in square meters) of the place of business; or sales receipts and invoices may be printed. The company can ask any authorized b. The company’s paid-up capital and the area it occupies; or printing company to print its official forms, or it can print its own forms (i.e., it uses c. Whether they issue clearance plates or certificates. 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 Barangays in Cebu issue certificates. company must submit the following documents to the Revenue District Office (RDO) or concerned office having jurisdiction over the principal place of business: Procedure 6. Obtain the business permit application form from a. Duly completed application for authority to print receipts and invoices (BIR the Business Taxes and Fees Division (BTFD) Form No.1906); Time: 1 day b. Job order; Cost: No cost c. Final and clear sample of receipts and invoices (machine-printed); Comments: To obtain the business permit, the company must file the following d. Application for registration (BIR Forms No. 1901 or 1903); documents at the BTFD: e. TRU form or photocopy of TIN card; a. SEC registration; f. Proof of payment of annual registration fee (BIR Form No. 0605). b. Articles of incorporation and bylaws; c. Duly filled-up and notarized application form. Procedure 13. 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.  -*450'130$&%63&4t45"35*/("#64*/&44 35

Procedure 14. Have receipts, invoices and books of accounts Comments: The company can register online through SEC i-Register but must pay stamped by the BIR onsite at the SEC and obtain a TIN. The following documents are required for SEC registration: Time: 1 day a. Company name verification slip; Cost: No cost b. Articles of incorporation and bylaws; Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR c. Treasurer's affidavit; RDO or concerned office having jurisdiction over the principal place of business. d. Statement of assets and liabilities; e. Bank certificate of deposit of the paid-in capital; Procedure 15. Register with the Social Security System (SSS) f. Authority to verify the bank account; Time: 4 days g. Registration sheet with particulars on directors, officers, stockholders, and so Cost: No cost forth; Comments: To register with the SSS the company must submit the following docu- h. Written undertaking to comply with SEC reporting requirements. ments: To obtain the TIN, the company has to file: a. Employer registration form (Form R-1); a. Barangay clearance; b. Employment report (Form R-1A); b. Mayor's permit; c. List of employees, specifying their birth dates, positions, monthly salary and c. Copy of the SEC issued registration certificate. date of employment; The SEC issues pre-registered TINs only if the company’s application for registration d. Articles of incorporation, bylaws and SEC registration or the certificate of has been approved. The company must still register with the Bureau of Internal registration with the Department of Trade and Industry (DTI). Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, Upon submission of the required documents, the SSS employer and employee obtain and stamp sales invoices, receipts and the books of accounts. numbers will be released. The employees may attend a SSS training seminar after registration. SSS prefers that all members go through such training so that each Procedure 4. Obtain the community tax certificate (CTC) from the member is aware of their rights and obligations. City Treasurer's Office (CTO) Procedure 16. Register with the Philippines Health Insurance Time: 1 day Company (PhilHealth) Cost: PHP 500 Time: 1 day Comments: The company must pay an annual community tax. The basic community tax depends on whether the juridical entity is a company, partnership or association. Cost: No cost Additional community tax (which shall not exceed PHP 10,000) depends on the Comments: To register with PhilHealth, the company must submit the following value of real property owned by the company in the Philippines (PHP 2 for every PHP documents: 5,000) and on the gross receipts including dividends/earnings derived from business a. Employer data record (Form ER1); in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is b. Report of employee-members (Form ER2); issued to the company upon payment of the community tax and is a prerequisite to obtain the Barangay clearance. c. SEC registration; d. BIR registration; Procedure 5. Obtain Barangay clearance e. Copy of business permit. Time: 1 day Upon submission of the required documents, the company shall get the receiving Cost: PHP 50 (between PHP 10–PHP 100) copy of all the forms as proof of membership until PhilHealth releases the employer 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. STARTING A BUSINESS Barangay fees vary for each Barangay since they have the discretion to impose their Davao own taxes, fees and charges. Barangay fees may depend on: a. The location and the area (size in square meters) of the place of business; or Standard company legal form: Corporation b. The company’s paid-up capital and the area it occupies; or Minimum capital requirement: USD 97 = PHP 5,000 c. Whether they issue clearance plates or certificates. Date as of: December 2007 Barangays in Davao issue certificates. Procedure 1. Verify the availability of the company name with the Securities and Exchange Commission (SEC) Procedure 6. Obtain the business permit application form from Time: 1 day the Business Bureau–Permits and License Division (BBPLD) Cost: PHP 40 Time: 1 day Comments: The company can verify the availability of the company name on-line. Cost: No cost Verification is free but reservation of the name, once approved by the SEC, costs PHP Comments: To obtain the business permit, the company must file the following 40 for the first 30 days. The company name can be reserved for a maximum of 120 documents at the BBPLD: days for a fee of PHP 120, which is renewable upon expiration of the period. a. SEC registration; b. Articles of incorporation; Procedure 2. Obtain bank certificate of deposit of the paid-in c. Cedula of the corporation (if business application is submitted after July 30, capital from the Authorized Agent Bank (AAB) there’s no need to present the cedula); Time: 1 day d. Barangay clearance; Cost: PHP 150 e. Authorization letter from the owner of the company if third parties process and present the papers on behalf of the company. Procedure 3. Register the company with the SEC and receive pre- Davao has a one-stop shop center (OSSC) for the processing of the business permit registered taxpayer's identification number (TIN) but the company still has to visit different offices at the OSSC for the processing of Time: 3 days the permit. Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- tal stock or the subscription price of the subscribed capital stock, whichever is higher Procedure 7. Notarize the business permit application form at but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of the notary filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + Time: 1 day PHP 470 stock and transfer book (STB) required for new corporations; fee includes registration of the STB) Cost: PHP 50 36 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 8. Get assessment of the engineering fees from the documentary stamp tax). Upon registration, the BIR will issue to the company the City Engineer’s Office (CEO) certificate of registration—BIR Form No. 2303. Time: 2 days Procedure 18. Pay the documentary stamp taxes (DST) Cost: PHP 1,000 Time: 1 day Procedure 9*. Receive inspection from the CEO Cost: PHP 3,643 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 (fees included in procedure 8) such shares of stock. This payment with the BIR should be made on the 5th of the month following registration with the SEC. Procedure 10. Proceed to the City Health Office (CHO) for the sanitary permit fee Procedure 19. Obtain the authority to print receipts and invoices Time: 1 day from the BIR Cost: PHP 250 (between PHP 150–PHP 300) Time: 1 day Cost: No cost (fees included in procedure 17) Procedure 11. Obtain the locational clearance from the City Planning and Development Office (CPDO) 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 Time: 8 days printing company to print its official forms, or it can print its own forms (i.e., it uses Cost: PHP 330 its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Comments: This clearance confirms that the intended land use is in accordance with this purpose. To obtain the authority to print receipts and invoices from the BIR, the the local government's zoning ordinances. The location clearance is specific for the company must submit the following documents to the Revenue District Office (RDO) type of business that the company will put up in the space it is renting. or concerned office having jurisdiction over the principal place of business: a. Duly completed application for authority to print receipts and invoices (BIR Procedure 12*. Receive inspection for the locational clearance Form No.1906); from the CPDO b. Job order; Time: 1 day c. Final and clear sample of receipts and invoices (machine-printed); Cost: No cost (fees included in procedure 11) d. Application for registration (BIR Forms No. 1901 or 1903); Comments: Cost depends on the specific location of the business; inspection might e. TRU form or photocopy of TIN card; take up to 7 days depending on the workload of the CPDO. f. Proof of payment of annual registration fee (BIR Form No. 0605).

Procedure 13. Obtain the business permit to operate at the Procedure 20. Print receipts and invoices at the print shops BBPLD Time: 7 days Time: 6 days Cost: PHP 1,750 (between PHP 1,000–PHP 3,000) Cost: PHP 3,514 (PHP 1,000 fixed tax + PHP 364 initial payment + PHP 2,000 garbage Comments: The cost is based on the following specifications of the official receipt: fee + PHP 150 business plate) 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Comments: The company proceeds to the CTO to submit application form and requirements; get assessment of business permit fees and taxes; obtain the tax order Procedure 21. Have receipts, invoices and books of accounts of payment (TOP); and pay. stamped by the BIR Procedure 14*. Obtain the fire safety clearance from the Bureau Time: 1 day of Fire Protection (BFP) Cost: No cost Time: 2 days Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR Cost: PHP 451 (10% of regulatory fees paid during the processing of the business RDO or concerned office having jurisdiction over the principal place of business. permit) Comments: The company representative visits the BFP to ask for inspection and Procedure 22. Register with the Social Security System (SSS) obtain a clearance confirming that the business follows the fire safety regulations of Time: 2 days the Philippines. Cost: No cost Procedure 15*. Receive inspection for the fire safety clearance Comments: To register with the SSS the company must submit the following docu- from the BFP ments: Time: 1 day a. Employer registration form (Form R-1); Cost: No cost b. Employment report (Form R-1A); c. List of employees, specifying their birth dates, positions, monthly salary and Procedure 16. Buy special books of accounts at bookstore date of employment; Time: 1 day d. Articles of incorporation, bylaws and SEC registration or the certificate of Cost: PHP 400 registration with the Department of Trade and Industry (DTI). Comments: Special books of accounts are required for registering for VAT. The books Upon submission of the required documents, the SSS employer and employee of accounts are sold at bookstores nationwide. One set of journals consisting of four numbers will be released. The employees may attend a SSS training seminar after books (cash receipts account, disbursements account, ledger, general journal) costs registration. SSS prefers that all members go through such training so that each about PHP 400. member is aware of their rights and obligations.

Procedure 17. Register for value added tax (VAT) at the Bureau of Procedure 23. Register with the Philippines Health Insurance Internal Revenue (BIR) Company (PhilHealth) Time: 2 days Time: 1 day Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Cost: No cost mentary stamp tax) Comments: To register with PhilHealth, the company must submit the following Comments: After obtaining the TIN, the company must register with the BIR by documents: paying the annual registration fee of PHP 500, at any duly accredited bank, using a. Employer data record (Form ER1); payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for b. Report of employee-members (Form ER2);  -*450'130$&%63&4t45"35*/("#64*/&44 37

c. SEC registration; Procedure 5. Obtain the community tax certificate (CTC) from the d. BIR registration; City Treasurer's Office (CTO) 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 company must pay an annual community tax. The basic community and employee numbers within three months. tax depends on whether the juridical entity is a company, partnership or association. * This procedure is simultaneous with a previous procedure Additional community tax (which shall not exceed PHP 10,000) depends on the value of real property owned by the company in the Philippines (PHP 2 for every PHP STARTING A BUSINESS 5,000) and on the gross receipts including dividends/earnings derived from business Lapu-Lapu in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is issued to the company upon payment of the community tax and is a prerequisite to Standard company legal form: Corporation obtain the Barangay clearance. Minimum capital requirement: USD 97 = PHP 5,000 Date as of: December 2007 Procedure 6. Obtain the business permit application form from Procedure 1. Verify the availability of the company name with the CTO the Securities and Exchange Commission (SEC) Time: 1 day Time: 1 day Cost: No cost Cost: PHP 40 Comments: To obtain the business permit, the company must file the following required documents at the one-stop shop area of the CTO: Comments: The company can verify the availability of the company name on-line. Verification is free but reservation of the name, once approved by the SEC, costs PHP a. SEC registration; 40 for the first 30 days. The company name can be reserved for a maximum of 120 b. Barangay clearance; days for a fee of PHP 120, which is renewable upon expiration of the period. c. Filled-up application forms/or sworn statement; d. Contract of lease; Procedure 2. Obtain bank certificate of deposit of the paid-in e. Sketch map (with 2 photocopies). capital from the Authorized Agent Bank (AAB) Time: 1 day Procedure 7. Obtain business permit to operate from the CTO Cost: No cost Time: 6 days Cost: PHP 2,160 (PHP 364 business tax + PHP 1,000 mayor's permit fee + PHP 60 Procedure 3. Register the company with the SEC and receive pre- sanitary inspection fee + PHP 500 garbage fee + PHP 66 fire inspection fee + PHP 50 registered taxpayer's identification number (TIN) plate/sticker + PHP 10 tax clearance + PHP 10 police clearance + PHP 100 location Time: 4 days clearance fee). Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- Comments: The applicant submits the application form and requirements at the tal stock or the subscription price of the subscribed capital stock, whichever is higher CTO and obtains an assessment of the business permit fees and taxes, including an but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of assessment of real property tax (RPT). Assessment of the RPT is required even if the filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + entrepreneur is only renting the property. Payment of the business permit fees and PHP 470 stock and transfer book (STB) required for new corporations; fee includes taxes is also made at the CTO. The applicant presents the documents for the schedul- registration of the STB) ing of inspection clearances under the Joint Inspection Team (JIT). The company will Comments: The company can register online through SEC i-Register but must pay also obtain the claim stub for the release of the business permit. onsite at the SEC and obtain a TIN. The following documents are required for SEC registration: Procedure 8*. Obtain the real property tax (RPT) clearance at the a. Company name verification slip; Real Property Tax License and Fees Divisions at the CTO b. Articles of incorporation and bylaws; Time: 1 day c. Treasurer's affidavit; Cost: No cost d. Statement of assets and liabilities; Procedure 9. Buy special books of accounts 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 sheet with particulars on directors, officers, stockholders, and so Comments: Special books of accounts are required for registering for VAT. The books forth; of accounts are sold at bookstores nationwide. One set of journals consisting of four h. Written undertaking to comply with SEC reporting requirements. books (cash receipts account, disbursements account, ledger, general journal) costs To obtain the TIN, the company has to file: about PHP 400. a. Barangay clearance; b. Mayor's permit; Procedure 10. Register for value added tax (VAT) at the Bureau of c. Copy of the SEC issued registration certificate. Internal Revenue (BIR) The SEC issues pre-registered TINs only if the company’s application for registration Time: 2 days has been approved. The company must still register with the Bureau of Internal Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, mentary stamp tax) obtain and stamp sales invoices, receipts and the books of accounts. Comments: After obtaining the TIN, the company must register with the BIR by paying the annual registration fee of PHP 500, at any duly accredited bank, using Procedure 4. Obtain Barangay clearance payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for Time: 1 day documentary stamp tax). Upon registration, the BIR will issue to the company the certificate of registration—BIR Form No. 2303. Cost: PHP 150 (between PHP 100–PHP 200) Comments: This clearance is obtained from the Barangay where the business is Procedure 11. Pay the documentary stamp taxes (DST) 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 taxes, fees and charges. Barangay fees may depend on: Cost: PHP 3,643 a. The location and the area (size in square meters) of the place of business; or Comments: The company must pay DST on the original issuance of shares of stock. b. The company’s paid-up capital and the area it occupies; or 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 c. Whether they issue clearance plates or certificates. month following registration with the SEC. Barangays in Lapu-Lapu issue certificates. 38 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 12. Obtain the authority to print receipts and invoices STARTING A BUSINESS from the BIR Las Piñas Time: 1 day Standard company legal form: Corporation Cost: No cost (fees included in procedure 10) Minimum capital requirement: USD 97 = PHP 5,000 Comments: The authority to print receipts and invoices must be secured before the Date as of: December 2007 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 Procedure 1. Verify the availability of the company name with its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for the Securities and Exchange Commission (SEC) this purpose. To obtain the authority to print receipts and invoices from the BIR, the Time: 1 day company must submit the following documents to the Revenue District Office (RDO) or concerned office having jurisdiction over the principal place of business: Cost: PHP 40 a. Duly completed application for authority to print receipts and invoices (BIR Comments: The company can verify the availability of the company name on-line. Form No.1906); 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 b. Job order; days for a fee of PHP 120, which is renewable upon expiration of the period. c. Final and clear sample of receipts and invoices (machine-printed); d. Application for registration (BIR Forms No. 1901 or 1903); Procedure 2. Obtain bank certificate of deposit of the paid-in e. TRU form or photocopy of TIN card; capital from the Authorized Agent Bank (AAB) f. Proof of payment of annual registration fee (BIR Form No. 0605). Time: 1 day Cost: No cost Procedure 13. Print receipts and invoices at the print shops Time: 7 days Procedure 3. Register the company with the SEC and receive pre- Cost: PHP 2,500 (between PHP 2,500–PHP 3,000) registered taxpayer's identification number (TIN) 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 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- tal stock or the subscription price of the subscribed capital stock, whichever is higher Procedure 14. Have receipts, invoices and books of accounts but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of stamped by the BIR filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + Time: 1 day PHP 470 stock and transfer book (STB) required for new corporations; fee includes registration of the STB) Cost: No cost Comments: The company can register online through SEC i-Register but must pay Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- onsite at the SEC and obtain a TIN. The following documents are required for SEC ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR registration: RDO or concerned office having jurisdiction over the principal place of business. a. Company name verification slip; Procedure 15. Register with the Social Security System (SSS) b. Articles of incorporation and bylaws; Time: 4 days c. Treasurer's affidavit; Cost: No cost d. Statement of assets and liabilities; Comments: To register with the SSS the company must submit the following docu- e. Bank certificate of deposit of the paid-in capital; ments: f. Authority to verify the bank account; a. Employer registration form (Form R-1); g. Registration sheet with particulars on directors, officers, stockholders, and so b. Employment report (Form R-1A); forth; c. List of employees, specifying their birth dates, positions, monthly salary and h. Written undertaking to comply with SEC reporting requirements. date of employment; To obtain the TIN, the company has to file: d. Articles of incorporation, bylaws and SEC registration or the certificate of a. Barangay clearance; registration with the Department of Trade and Industry (DTI). b. Mayor's permit; Upon submission of the required documents, the SSS employer and employee c. Copy of the SEC issued registration certificate. numbers will be released. The employees may attend a SSS training seminar after The SEC issues pre-registered TINs only if the company’s application for registration registration. SSS prefers that all members go through such training so that each has been approved. The company must still register with the Bureau of Internal member is aware of their rights and obligations. Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, obtain and stamp sales invoices, receipts and the books of accounts. Procedure 16. Register with the Philippines Health Insurance Company (PhilHealth) Procedure 4. Obtain the community tax certificate (CTC) from the Time: 1 day City Treasurer's Office (CTO) Cost: No cost Time: 1 day Comments: To register with PhilHealth, the company must submit the following Cost: PHP 500 documents: Comments: The company must pay an annual community tax. The basic community a. Employer data record (Form ER1); tax depends on whether the juridical entity is a company, partnership or association. b. Report of employee-members (Form ER2); Additional community tax (which shall not exceed PHP 10,000) depends on the c. SEC registration; value of real property owned by the company in the Philippines (PHP 2 for every PHP 5,000) and on the gross receipts including dividends/earnings derived from business d. BIR registration; in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is e. Copy of business permit. issued to the company upon payment of the community tax and is a prerequisite to Upon submission of the required documents, the company shall get the receiving obtain the Barangay clearance. copy of all the forms as proof of membership until PhilHealth releases the employer and employee numbers within three months. Procedure 5. Obtain Barangay clearance * This procedure is simultaneous with a previous procedure Time: 1 day Cost: PHP 700 (between PHP 600–PHP 1,000) 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.  -*450'130$&%63&4t45"35*/("#64*/&44 39

Barangay fees vary for each Barangay since they have the discretion to impose their Comments: After obtaining the TIN, the company must register with the BIR by own taxes, fees and charges. Barangay fees may depend on: paying the annual registration fee of PHP 500, at any duly accredited bank, using a. The location and the area (size in square meters) of the place of business; or payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for documentary stamp tax). Upon registration, the BIR will issue to the company the b. The company’s paid-up capital and the area it occupies; or certificate of registration—BIR Form No. 2303. c. Whether they issue clearance plates or certificates. In Las Piñas, some Barangays charge PHP 600, including the clearance plate, while Procedure 14. Pay the documentary stamp taxes (DST) others charge PHP 750. The plate costs PHP 150. Time: 1 day Procedure 6. Obtain the business permit application form at the Cost: PHP 3,643 Business Permit and Licensing Office (BPLO) 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 obtain the business permit, the company must file the following documents at the BPLO: Procedure 15. Obtain the authority to print receipts and invoices a. SEC registration; from the BIR b. Barangay clearance; Time: 1 day c. Contract of lease. Cost: No cost (fees included in procedure 13) Comments: The authority to print receipts and invoices must be secured before the Procedure 7. Proceed to the Engineering Department for the sales receipts and invoices may be printed. The company can ask any authorized assessment of the engineering fees printing company to print its official forms, or it can print its own forms (i.e., it uses Time: 1 day 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 360 (PHP 150 electrical inspection fee + PHP 150 building inspection fee + company must submit the following documents to the Revenue District Office (RDO) PHP 60 plumbing inspection fee) or concerned office having jurisdiction over the principal place of business: Procedure 8. Obtain the locational clearance from the City a. Duly completed application for authority to print receipts and invoices (BIR Form No.1906); Planning and Development Office (CPDO) b. Job order; Time: 1 day c. Final and clear sample of receipts and invoices (machine-printed); Cost: PHP 300 d. Application for registration (BIR Forms No. 1901 or 1903); Comments: The company gets a signature from the CPDO for the locational clear- ance. e. TRU form or photocopy of TIN card; f. Proof of payment of annual registration fee (BIR Form No. 0605). Procedure 9. Proceed to the Bureau of Fire Protection (BFP) for the assessment of fire inspection fee and scheduling of an Procedure 16. Print receipts and invoices at the print shops inspection Time: 7 days Time: 1 day Cost: PHP 3,500 (between PHP 3,000–PHP 3,800) Cost: PHP 1,894 (PHP 1,320 retailer or PHP 2,468 manufacturing) 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. Comments: The inspection from the BFP takes place after the issuance of the busi- ness permit. Procedure 17. Have receipts, invoices and books of accounts Procedure 10. Obtain the business permit to operate at the BPLO stamped by the BIR Time: 5 days Time: 1 day Cost: PHP 17,288 (PHP 18 municipal license + PHP 3,000 retail or PHP 7,500 manu- Cost: No cost facturing for mayor's fee + PHP 8,000 retail or PHP 15,000 manufacturing for garbage Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- fee + PHP 20 miscellaneous + PHP 500 fiscal fee) ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR Comments: The company receives an account number at the Encoding Data Pro- RDO or concerned office having jurisdiction over the principal place of business. cessing (EDP) Unit of the CTO. Then the company obtains the assessment of business permit fees and taxes at the BPLO, receives the signed interview sheet and receives Procedure 18. Register with the Social Security System (SSS) final approval from the BPLO Chief. The business permit fees and taxes are paid at the Time: 3 days CTO. Inspection from the BPLO takes place after issuance of the business permit. Cost: No cost Comments: To register with the SSS the company must submit the following docu- Procedure 11*. Present the official receipt at the Sanitation ments: Department to obtain the sanitary permit a. Employer registration form (Form R-1); Time: 1 day b. Employment report (Form R-1A); Cost: PHP 1,000 c. List of employees, specifying their birth dates, positions, monthly salary and date of employment; Procedure 12. Buy special books of accounts at bookstore d. Articles of incorporation, bylaws and SEC registration or the certificate of Time: 1 day registration with the Department of Trade and Industry (DTI). Cost: PHP 300 Upon submission of the required documents, the SSS employer and employee Comments: Special books of accounts are required for registering for VAT. The books numbers will be released. The employees may attend a SSS training seminar after of accounts are sold at bookstores nationwide. One set of journals consisting of four registration. SSS prefers that all members go through such training so that each books (cash receipts account, disbursements account, ledger, general journal) costs member is aware of their rights and obligations. about PHP 300. Procedure 19. Register with the Philippines Health Insurance Procedure 13. Register for value added tax (VAT) at the Bureau of Company (PhilHealth) Internal Revenue (BIR) Time: 1 day Time: 2 days Cost: No cost Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Comments: To register with PhilHealth, the company must submit the following mentary stamp tax) documents: 40 DOING BUSINESS IN THE PHILIPPINES 2008

a. Employer data record (Form ER1); 5,000) and on the gross receipts including dividends/earnings derived from business b. Report of employee-members (Form ER2); in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is issued to the company upon payment of the community tax and is a prerequisite to c. SEC registration; obtain the Barangay clearance. d. BIR registration; e. Copy of business permit. Procedure 5. 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 650 (PHP 400 + PHP 250 clearance plate fee) and employee numbers within three months. Comments: This clearance is obtained from the Barangay where the business is * This procedure is simultaneous with a previous procedure located and is required to obtain the business permit from the city or municipality. STARTING A BUSINESS Barangay fees vary for each Barangay since they have the discretion to impose their own taxes, fees and charges. The fee charged by Barangays in Makati depends on the Makati paid-up capital of the corporation plus PHP 250 for the Barangay clearance plate. As Standard company legal form: Corporation expressed in Section 152 (c) of the Local Government Code of 1991, the application Minimum capital requirement: USD 97 = PHP 5,000 for the Barangay clearance shall be acted upon within seven (7) working days from the filing thereof. In the event that the clearance is not issued within the said period, Date as of: December 2007 the city or municipality may issue the Barangay clearance. Procedure 1. Verify the availability of the company name with the Securities and Exchange Commission (SEC) Procedure 6. Notarize the business permit and locational Time: 1 day clearance application forms at the notary Time: 1 day Cost: PHP 40 Cost: PHP 100 Comments: The company can verify the availability of the company name on-line. Verification is free but reservation of the name, once approved by the SEC, costs PHP Comments: The application forms for both business permit and locational clearance 40 for the first 30 days. The company name can be reserved for a maximum of 120 may be downloaded from the Makati City website at www.makati.gov.ph. days for a fee of PHP 120, which is renewable upon expiration of the period. Procedure 7. Obtain the locational clearance at the Urban Procedure 2. Obtain bank certificate of deposit of the paid-in Development Department–Zoning Administration Division (UDD- capital from the Authorized Agent Bank (AAB) ZAD) Time: 1 day Time: 4 days Cost: No cost Cost: PHP 2,700 (PHP 200 filing fee + PHP 2,500 processing fee equivalent to PHP 12.5 per square meter assuming an area of 200 square meters) Procedure 3. Register the company with the SEC and receive pre- Comments: To secure the locational clearance as per Ordinance-2000-78 the registered taxpayer's identification number (TIN) required documents are: Time: 3 days a. Vicinity/ location map; Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- b. Barangay clearance; tal stock or the subscription price of the subscribed capital stock, whichever is higher c. Contract of lease; but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of d. SEC registration; filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + PHP 470 stock and transfer book (STB) required for new corporations; fee includes e. Occupancy permit (building/unit); registration of the STB) f. Business permit application form. Comments: The company can register online through SEC i-Register but must pay onsite at the SEC and obtain a TIN. The following documents are required for SEC Procedure 8*. Receive inspection for the locational clearance registration: from the UDD-ZAD a. Company name verification slip; Time: 1 day b. Articles of incorporation and bylaws; Cost: No cost c. Treasurer's affidavit; d. Statement of assets and liabilities; Procedure 9. Obtain the business permit to operate at the Business Permits Office (BPO) e. Bank certificate of deposit of the paid-in capital; Time: 4 days f. Authority to verify the bank account; Cost: PHP 12,129 (PHP 729 business tax + PHP 6,000 mayor’s permit fee + PHP 5,400 g. Registration sheet with particulars on directors, officers, stockholders, and so garbage fee) forth; Comments: To obtain the business permit, the company must file the following h. Written undertaking to comply with SEC reporting requirements. documents at the BPO: To obtain the TIN, the company has to file: a. SEC registration; a. Barangay clearance; b. Locational clearance; b. Mayor's permit; c. Copy of the contract of lease; c. Copy of the SEC issued registration certificate. d. Articles of incorporation; The SEC issues pre-registered TINs only if the company’s application for registration e. Barangay clearance; 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 registration fee, f. Public liability insurance. obtain and stamp sales invoices, receipts and the books of accounts. After obtaining the locational clearance, the applicant goes to the BPO to submit ap- plication form and requirements; get assessment of business permit fees and taxes; Procedure 4. Obtain the community tax certificate (CTC) from the and obtain the approval of the City Administrator. The business permit fees and taxes City Treasurer's Office (CTO) are paid at the Business Tax Division. Time: 1 day Procedure 10*. Present the official receipt at the Makati Health Cost: PHP 500 Department (MHD) for the issuance of the sanitary permit Comments: The company must pay an annual community tax. The basic community Time: 1 day tax depends on whether the juridical entity is a company, partnership or association. Additional community tax (which shall not exceed PHP 10,000) depends on the Cost: PHP 600 value of real property owned by the company in the Philippines (PHP 2 for every PHP  -*450'130$&%63&4t45"35*/("#64*/&44 41

Procedure 11. Buy special books of accounts at bookstore c. List of employees, specifying their birth dates, positions, monthly salary and Time: 1 day date of employment; Cost: PHP 250 (between PHP 130–PHP 400) d. Articles of incorporation, bylaws and SEC registration or the certificate of registration with the Department of Trade and Industry (DTI). Comments: Special books of accounts are required for registering for VAT. The books of accounts are sold at bookstores nationwide. One set of journals consisting of four Upon submission of the required documents, the SSS employer and employee books (cash receipts account, disbursements account, ledger, general journal) costs numbers will be released. The employees may attend a SSS training seminar after about PHP 250. registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations. Procedure 12. Register for value added tax (VAT) at the Bureau of Internal Revenue (BIR) Procedure 18. Register with the Philippines Health Insurance Time: 2 days Company (PhilHealth) Time: 1 day Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- mentary stamp tax) Cost: No cost Comments: After obtaining the TIN, the company must register with the BIR by Comments: To register with PhilHealth, the company must submit the following paying the annual registration fee of PHP 500, at any duly accredited bank, using documents: payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for a. Employer data record (Form ER1); documentary stamp tax). Upon registration, the BIR will issue to the company the b. Report of employee-members (Form ER2); certificate of registration—BIR Form No. 2303. c. SEC registration; Procedure 13. Pay the documentary stamp taxes (DST) d. BIR registration; Time: 1 day e. Copy of business permit. Cost: PHP 3,643 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: The company must pay DST on the original issuance of shares of stock. and employee numbers within three months. 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 * This procedure is simultaneous with a previous procedure month following registration with the SEC. STARTING A BUSINESS

Procedure 14. Obtain the authority to print receipts and invoices Malabon from the BIR Standard company legal form: Corporation Time: 1 day Minimum capital requirement: USD 97 = PHP 5,000 Cost: No cost (fees included in procedure 12) Date as of: December 2007 Comments: The authority to print receipts and invoices must be secured before the Procedure 1. Verify the availability of the company name with 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 the Securities and Exchange Commission (SEC) its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Time: 1 day this purpose. To obtain the authority to print receipts and invoices from the BIR, the Cost: PHP 40 company must submit the following documents to the Revenue District Office (RDO) Comments: The company can verify the availability of the company name on-line. or concerned office having jurisdiction over the principal place of business: Verification is free but reservation of the name, once approved by the SEC, costs PHP a. Duly completed application for authority to print receipts and invoices (BIR 40 for the first 30 days. The company name can be reserved for a maximum of 120 Form No.1906); days for a fee of PHP 120, which is renewable upon expiration of the period. b. Job order; c. Final and clear sample of receipts and invoices (machine-printed); Procedure 2. Obtain bank certificate of deposit of the paid-in d. Application for registration (BIR Forms No. 1901 or 1903); capital from the Authorized Agent Bank (AAB) Time: 1 day e. TRU form or photocopy of TIN card; Cost: No cost f. Proof of payment of annual registration fee (BIR Form No. 0605).

Procedure 15. Print receipts and invoices at the print shops Procedure 3. Register the company with the SEC and receive pre- registered taxpayer's identification number (TIN) Time: 7 days Time: 3 days Cost: PHP 3,500 (between PHP 3,000–PHP 3,800) Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- Comments: The cost is based on the following specifications of the official receipt: tal stock or the subscription price of the subscribed capital stock, whichever is higher 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + Procedure 16. Have receipts, invoices and books of accounts PHP 470 stock and transfer book (STB) required for new corporations; fee includes stamped by the BIR registration of the STB) Time: 1 day Comments: The company can register online through SEC i-Register but must pay Cost: No cost onsite at the SEC and obtain a TIN. The following documents are required for SEC Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- registration: ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR a. Company name verification slip; RDO or concerned office having jurisdiction over the principal place of business. b. Articles of incorporation and bylaws; c. Treasurer's affidavit; Procedure 17. Register with the Social Security System (SSS) d. Statement of assets and liabilities; Time: 2 days e. Bank certificate of deposit of the paid-in capital; Cost: No cost f. Authority to verify the bank account; Comments: To register with the SSS the company must submit the following docu- ments: g. Registration sheet with particulars on directors, officers, stockholders, and so forth; a. Employer registration form (Form R-1); h. Written undertaking to comply with SEC reporting requirements. b. Employment report (Form R-1A); To obtain the TIN, the company has to file: a. Barangay clearance; 42 DOING BUSINESS IN THE PHILIPPINES 2008

b. Mayor's permit; Procedure 10. Obtain the business permit to operate at the BPLO c. Copy of the SEC issued registration certificate. Time: 4 days The SEC issues pre-registered TINs only if the company’s application for registration Cost: PHP 7,655 (PHP 3,000 business tax + PHP 100 mayor’s permit fee + PHP 200 has been approved. The company must still register with the Bureau of Internal business plate + garbage fee PHP 1,500 + PHP 1,000 sanitary inspection fee + PHP Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, 50 mayor’s certification + PHP 400 building inspection fee + PHP 400 electrical obtain and stamp sales invoices, receipts and the books of accounts. inspection fee + PHP 400 plumbing inspection fee + PHP 200 sign/billboard inspec- tion fee + PHP 405 fire fee (10% of all the fees from mayor’s permit to sign/billboard Procedure 4. Obtain the community tax certificate (CTC) from the inspection fee)) City Treasurer's Office (CTO) Comments: The applicant submits application form and requirements to the BPLO Time: 1 day and gets an assessment of the business permit fees and taxes. The business permit fees and taxes are paid at the CTO. Sanitary inspection and fire fees are paid as part Cost: PHP 500 of the fees to be paid before issuance of the business permit but inspections for the Comments: The company must pay an annual community tax. The basic community sanitary permit and fire safety take place after issuance of the business permit. tax depends on whether the juridical entity is a company, partnership or association. Additional community tax (which shall not exceed PHP 10,000) depends on the Procedure 11*. Receive inspection from the BPLO value of real property owned by the company in the Philippines (PHP 2 for every PHP 5,000) and on the gross receipts including dividends/earnings derived from business Time: 1 day in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is Cost: No cost issued to the company upon payment of the community tax and is a prerequisite to Comments: The inspection happens the day after the application for new business obtain the Barangay clearance. has been submitted. The business permit will only be released after the inspection takes place. Procedure 5. Obtain Barangay clearance Time: 1 day Procedure 12. Buy special books of accounts at bookstore Cost: PHP 300 (between PHP 100–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 for VAT. The books Barangay fees vary for each Barangay since they have the discretion to impose of accounts are sold at bookstores nationwide. One set of journals consisting of four their own taxes, fees and charges. Barangay fees may depend on: books (cash receipts account, disbursements account, ledger, general journal) costs a. The location and the area (size in square meters) of the place of business; or about PHP 400. b. The company’s paid-up capital and the area it occupies; or Procedure 13. Register for value added tax (VAT) at the Bureau of c. Whether they issue clearance plates or certificates. Internal Revenue (BIR) Barangays in Malabon issue certificates. Time: 2 days Procedure 6. Obtain the business permit application form at the Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Business Permit and Licensing Office (BPLO) mentary stamp tax) Time: 1 day Comments: After obtaining the TIN, the company must register with the BIR by paying the annual registration fee of PHP 500, at any duly accredited bank, using Cost: No cost payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for Comments: To obtain the business permit, the company must file the following documentary stamp tax). Upon registration, the BIR will issue to the company the documents at the BPLO: certificate of registration—BIR Form No. 2303. a. Two passport size pictures of the senior managing partner/president or general manager; Procedure 14. Pay the documentary stamp taxes (DST) b. Picture of the frontal view of the business establishment; Time: 1 day c. Community tax certificate for corporation; Cost: PHP 3,643 d. Barangay clearance; Comments: The company must pay DST on the original issuance of shares of stock. e. SEC registration or articles of incorporation; 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 f. Locational clearance/ official receipt of the filing and processing fees; month following registration with the SEC. g. Location sketch/ vicinity map; h. Contract of lease duly notarized/ letter of consent by the owner of the property. Procedure 15. Obtain the authority to print receipts and invoices from the BIR Procedure 7. Obtain the locational clearance from the City Time: 1 day Planning and Development Office (CPDO) Cost: No cost (fees included in procedure 13) Time: 2 days Comments: The authority to print receipts and invoices must be secured before the Cost: PHP 3,640 (PHP 40 filing fee + PHP 3,600 processing fee equivalent to PHP 18 sales receipts and invoices may be printed. The company can ask any authorized per square meter assuming an area of 200 square meters) printing company to print its official forms, or it can print its own forms (i.e., it uses Comments: Required documents for locational/ zoning clearance: its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for a. Notarized application form; 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) b. Copy of land title and contract of lease; or concerned office having jurisdiction over the principal place of business: c. Community tax certificate; a. Duly completed application for authority to print receipts and invoices (BIR d. Barangay clearance. Form No.1906); b. Job order; Procedure 8*. Receive inspection for the locational clearance from the CPDO c. Final and clear sample of receipts and invoices (machine-printed); d. Application for registration (BIR Forms No. 1901 or 1903); Time: 1 day e. TRU form or photocopy of TIN card; Cost: No cost f. Proof of payment of annual registration fee (BIR Form No. 0605). Procedure 9. Notarize the business permit application form and the locational clearance application form at the notary Procedure 16. Print receipts and invoices at the print shops Time: 1 day Time: 7 days Cost: PHP 100 Cost: PHP 3,500 (between PHP 3,000–PHP 3,800)  -*450'130$&%63&4t45"35*/("#64*/&44 43

Comments: The cost is based on the following specifications of the official receipt: but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + PHP 470 stock and transfer book (STB) required for new corporations; fee includes Procedure 17. Have receipts, invoices and books of accounts registration of the STB) stamped by the BIR Comments: The company can register online through SEC i-Register but must pay Time: 1 day onsite at the SEC and obtain a TIN. The following documents are required for SEC registration: Cost: No cost a. Company name verification slip; Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR b. Articles of incorporation and bylaws; RDO or concerned office having jurisdiction over the principal place of business. c. Treasurer's affidavit; d. Statement of assets and liabilities; Procedure 18. Register with the Social Security System (SSS) e. Bank certificate of deposit of the paid-in capital; Time: 2 days f. Authority to verify the bank account; Cost: No cost g. Registration sheet with particulars on directors, officers, stockholders, and so Comments: To register with the SSS the company must submit the following docu- forth; ments: h. Written undertaking to comply with SEC reporting requirements. a. Employer registration form (Form R-1); To obtain the TIN, the company has to file: b. Employment report (Form R-1A); a. Barangay clearance; c. List of employees, specifying their birth dates, positions, monthly salary and b. Mayor's permit; date of employment; c. Copy of the SEC issued registration certificate. d. Articles of incorporation, bylaws and SEC registration or the certificate of registration with the Department of Trade and Industry (DTI). The SEC 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 Upon submission of the required documents, the SSS employer and employee Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, numbers will be released. The employees may attend a SSS training seminar after obtain and stamp sales invoices, receipts and the books of accounts. registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations. Procedure 4. Obtain the community tax certificate (CTC) from the Procedure 19. Register with the Philippines Health Insurance City Treasurer's Office (CTO) Company (PhilHealth) Time: 1 day Time: 1 day Cost: PHP 500 Cost: No cost Comments: The company must pay an annual community tax. The basic community tax depends on whether the juridical entity is a company, partnership or association. Comments: To register with PhilHealth, the company must submit the following Additional community tax (which shall not exceed PHP 10,000) depends on the documents: value of real property owned by the company in the Philippines (PHP 2 for every PHP a. Employer data record (Form ER1); 5,000) and on the gross receipts including dividends/earnings derived from business b. Report of employee-members (Form ER2); in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is c. SEC registration; issued to the company upon payment of the community tax and is a prerequisite to obtain the Barangay clearance. d. BIR registration; e. Copy of business permit. Procedure 5. 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 500 (between PHP 100–PHP 1,000) and employee numbers within three months. Comments: This clearance is obtained from the Barangay where the business is * This procedure is simultaneous with a previous procedure located and is required to obtain the business permit from the city or municipality. STARTING A BUSINESS Barangay fees vary for each Barangay since they have the discretion to impose their Mandaluyong own taxes, fees and charges. Barangay fees may depend on: a. The location and the area (size in square meters) of the place of business; or Standard company legal form: Corporation b. The company’s paid-up capital and the area it occupies; or Minimum capital requirement: USD 97 = PHP 5,000 c. Whether they issue clearance plates or certificates. Date as of: December 2007 Procedure 1. Verify the availability of the company name with Procedure 6. Obtain the business permit application form at the the Securities and Exchange Commission (SEC) Business Permit and Licensing Office (BPLO) Time: 1 day Time: 1 day Cost: PHP 40 Cost: No cost Comments: The company can verify the availability of the company name on-line. Comments: To obtain the business permit, the company must file the following Verification is free but reservation of the name, once approved by the SEC, costs PHP documents at the BPLO: 40 for the first 30 days. The company name can be reserved for a maximum of 120 a. Completed application form; days for a fee of PHP 120, which is renewable upon expiration of the period. b. Barangay clearance; c. Locational clearance; Procedure 2. Obtain bank certificate of deposit of the paid-in d. SEC registration; capital from the Authorized Agent Bank (AAB) e. Articles of incorporation; Time: 1 day f. Contract of lease; Cost: No cost g. Pictures of establishment (front – showing left and right neighbors, and inside) Procedure 3. Register the company with the SEC and receive pre- on photo paper; registered taxpayer's identification number (TIN) h. Community tax (cedula – current year). Time: 3 days Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- tal stock or the subscription price of the subscribed capital stock, whichever is higher 44 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 7. Notarize the business permit application form at company must submit the following documents to the Revenue District Office (RDO) the notary or concerned office having jurisdiction over the principal place of business: Time: 1 day a. Duly completed application for authority to print receipts and invoices (BIR Form No.1906); Cost: PHP 50 b. Job order; Procedure 8. Obtain the locational clearance from the City c. Final and clear sample of receipts and invoices (machine-printed); Planning and Development Office (CPDO) d. Application for registration (BIR Forms No. 1901 or 1903); Time: 2 days e. TRU form or photocopy of TIN card; Cost: PHP 885 (PHP 89 filing fee + PHP 600 equivalent to PHP 3 per square meter for f. Proof of payment of annual registration fee (BIR Form No. 0605). commercial establishments assuming an area of 200 square meters, land use fees x 1.25 multiplier for processing fee + PHP 46 certificate fee) Procedure 15. Print receipts and invoices at the print shops Time: 7 days Procedure 9*. Receive inspection for the locational clearance Cost: PHP 3,500 (between PHP 3,000–PHP 3,800) from the CPDO 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 8) Comments: The number of days to complete depends on the time the entrepreneur Procedure 16. Have receipts, invoices and books of accounts filed for a new business. During the peak season, which is during the first quarter of stamped by the BIR the year, the inspection will be scheduled on a much later date. But if the entrepre- Time: 1 day neur has registered a new business after the peak season, then they may conduct the actual inspection on an earlier date before the release of the business permit. Cost: No cost Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- Procedure 10. Obtain the business permit to operate at the BPLO ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR RDO or concerned office having jurisdiction over the principal place of business. Time: 3 days Cost: PHP 4,207 (PHP 364 business tax + PHP 1,000 mayor’s permit fee + PHP 1,250 Procedure 17. Register with the Social Security System (SSS) garbage charges + PHP 400 sanitary fee + PHP 120 building inspection fee + PHP 200 electrical inspection fee + PHP 62 plumbing inspection fee + PHP 111 sign/ Time: 2 days billboard inspection fee + PHP 439 fire fee + PHP 60 sticker fee + PHP 200 plate fee) Cost: No cost Comments: The applicant submits application form and requirements to the BPLO Comments: To register with the SSS the company must submit the following docu- and gets an assessment of business permit fees and taxes, as well as the tax order of ments: payment (TOP). The business permit fees and taxes are paid at the CTO. Inspection a. Employer registration form (Form R-1); from the BPLO takes place after issuance of the business permit. b. Employment report (Form R-1A); c. List of employees, specifying their birth dates, positions, monthly salary and Procedure 11. Buy special books of accounts at bookstore date of employment; Time: 1 day d. Articles of incorporation, bylaws and SEC registration or the certificate of Cost: PHP 300 (between PHP 200–PHP 400) registration with the Department of Trade and Industry (DTI). Comments: Special books of accounts are required for registering for VAT. The books Upon submission of the required documents, the SSS employer and employee of accounts are sold at bookstores nationwide. One set of journals consisting of four numbers will be released. The employees may attend a SSS training seminar after books (cash receipts account, disbursements account, ledger, general journal) costs registration. SSS prefers that all members go through such training so that each about PHP 300. member is aware of their rights and obligations.

Procedure 12. Register for value added tax (VAT) at the Bureau of Procedure 18. Register with the Philippines Health Insurance Internal Revenue (BIR) Company (PhilHealth) Time: 1 day Time: 1 day Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Cost: No cost mentary stamp tax) Comments: To register with PhilHealth, the company must submit the following Comments: After obtaining the TIN, the company must register with the BIR by documents: paying the annual registration fee of PHP 500, at any duly accredited bank, using a. Employer data record (Form ER1); payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for documentary stamp tax). Upon registration, the BIR will issue to the company the b. Report of employee-members (Form ER2); certificate of registration—BIR Form No. 2303. c. SEC registration; d. BIR registration; Procedure 13. Pay the documentary stamp taxes (DST) e. Copy of business permit. Time: 1 day Upon submission of the required documents, the company shall get the receiving Cost: PHP 3,643 copy of all the forms as proof of membership until PhilHealth releases the employer Comments: The company must pay DST on the original issuance of shares of stock. and employee numbers within three months. The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of * This procedure is simultaneous with a previous procedure such shares of stock. This payment with the BIR should be made on the 5th of the month following registration with the SEC. STARTING A BUSINESS Mandaue Procedure 14. Obtain the authority to print receipts and invoices Standard company legal form: Corporation from the BIR Minimum capital requirement: USD 97 = PHP 5,000 Time: 1 day Date as of: December 2007 Cost: No cost (fees included in procedure 12) Comments: The authority to print receipts and invoices must be secured before the Procedure 1. Verify the availability of the company name with sales receipts and invoices may be printed. The company can ask any authorized the Securities and Exchange Commission (SEC) printing company to print its official forms, or it can print its own forms (i.e., it uses Time: 1 day its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Cost: PHP 40 this purpose. To obtain the authority to print receipts and invoices from the BIR, the Comments: The company can verify the availability of the company name on-line. Verification is free but reservation of the name, once approved by the SEC, costs PHP  -*450'130$&%63&4t45"35*/("#64*/&44 45

40 for the first 30 days. The company name can be reserved for a maximum of 120 business permit, the company must file the following required documents at the days for a fee of PHP 120, which is renewable upon expiration of the period. Business Permit and Licensing Office (BPLO): a. Application form for business permit; Procedure 2. Obtain bank certificate of deposit of the paid-in b. Barangay clearance; capital from the Authorized Agent Bank (AAB) c. Locational clearance; Time: 1 day d. SEC registration ; Cost: No cost e. Company profile (pre-formatted). Procedure 3. Register the company with the SEC and receive pre- The notarized form and requirements are submitted to the BPLO. registered taxpayer's identification number (TIN) Procedure 7. Acquire the realty tax clearance from the Realty Tax Time: 5 days Division of the CTO Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- Time: 1 day tal stock or the subscription price of the subscribed capital stock, whichever is higher but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of Cost: No cost filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + Comments: The company still needs to get the realty tax clearance so that the PHP 470 stock and transfer book (STB) required for new corporations; fee includes Mandaue City Government can check if the owner of the land, where the company registration of the STB) leases the office, has paid the appropriate taxes for the property. If the owner of Comments: The company can register online through SEC i-Register but must pay the land/real property has unpaid realty dues, the owner of the land/real property onsite at the SEC and obtain a TIN. The following documents are required for SEC should pay them first before the business applicant (lessee) can process his/her registration: 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 shall only sign a. Company name verification slip; the application form of the entrepreneur. The company should get the photocopy of b. Articles of incorporation and bylaws; the tax declaration of the building from the owner. c. Treasurer's affidavit; d. Statement of assets and liabilities; Procedure 8. Obtain the locational clearance at the City Planning e. Bank certificate of deposit of the paid-in capital; and Development Office (CPDO) f. Authority to verify the bank account; Time: 1 day g. Registration sheet with particulars on directors, officers, stockholders, and so Cost: PHP 770 forth; Comments: The cost is computed based on the declared capital. The company only h. Written undertaking to comply with SEC reporting requirements. needs to pay the relevant fee for the locational clearance and obtain a signature from the officer at the CPDO. To obtain the TIN, the company has to file: a. Barangay clearance; Procedure 9. Obtain the business permit to operate at the City b. Mayor's permit; Administrator's Office (CAO) c. Copy of the SEC issued registration certificate. Time: 4 days The SEC issues pre-registered TINs only if the company’s application for registration Cost: PHP 4,416 (PHP 1,403 mayor’s permit fee + PHP 245 public safety fee + PHP has been approved. The company must still register with the Bureau of Internal 440 sanitary inspection fee + PHP 401 business tax + PHP 140 fire certificate + PHP Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, 1,238 garbage fee + PHP 550 business plate) obtain and stamp sales invoices, receipts and the books of accounts. Comments: The applicant obtains the assessment of the business permit fees and taxes and pays at the CTO. The company is given forty 45 days upon receipt of the Procedure 4. Obtain the community tax certificate (CTC) from the business permit to submit copies of the sanitary permit and fire certificate to the City Treasurer's Office (CTO) CAO. Time: 1 day Cost: PHP 500 Procedure 10. Buy special books of accounts at bookstore Comments: The company must pay an annual community tax. The basic community Time: 1 day tax depends on whether the juridical entity is a company, partnership or association. Cost: PHP 400 Additional community tax (which shall not exceed PHP 10,000) depends on the Comments: Special books of accounts are required for registering for VAT. The books value of real property owned by the company in the Philippines (PHP 2 for every PHP of accounts are sold at bookstores nationwide. One set of journals consisting of four 5,000) and on the gross receipts including dividends/earnings derived from business books (cash receipts account, disbursements account, ledger, general journal) costs in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is about PHP 400. issued to the company upon payment of the community tax and is a prerequisite to obtain the Barangay clearance. Procedure 11. Register for value added tax (VAT) at the Bureau of Procedure 5. Obtain Barangay clearance Internal Revenue (BIR) Time: 2 days Time: 1 day Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Cost: PHP 300 (between PHP 50–PHP 500) mentary stamp tax) Comments: This clearance is obtained from the Barangay where the business is Comments: After obtaining the TIN, the company must register with the BIR by located and is required to obtain the business permit from the city or municipality. paying the annual registration fee of PHP 500, at any duly accredited bank, using Barangay fees vary for each Barangay since they have the discretion to impose payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for their own taxes, fees and charges. Barangay fees may depend on: documentary stamp tax). Upon registration, the BIR will issue to the company the a. The location and the area (size in square meters) of the place of business; or certificate of registration—BIR Form No. 2303. b. The company’s paid-up capital and the area it occupies; or c. Whether they issue clearance plates or certificates. Procedure 12. Pay the documentary stamp taxes (DST) Barangays in Mandaue issue certificates. Time: 1 day Cost: PHP 3,643 Procedure 6. Notarize the business permit and tax clearance Comments: The company must pay DST on the original issuance of shares of stock. application forms at the City Legal Office (CLO) 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: Business permit and tax clearance application forms may be down- loaded at the Mandaue City website at www.mandauecity.gov.ph. To obtain the 46 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 13. Obtain the authority to print receipts and invoices STARTING A BUSINESS from the BIR Manila Time: 1 day Standard company legal form: Corporation Cost: No cost (fees included in procedure 11) Minimum capital requirement: USD 97 = PHP 5,000 Comments: The authority to print receipts and invoices must be secured before the Date as of: December 2007 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 Procedure 1. Verify the availability of the company name with its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for the Securities and Exchange Commission (SEC) this purpose. To obtain the authority to print receipts and invoices from the BIR, the Time: 1 day company must submit the following documents to the Revenue District Office (RDO) or concerned office having jurisdiction over the principal place of business: Cost: PHP 40 a. Duly completed application for authority to print receipts and invoices (BIR Comments: The company can verify the availability of the company name on-line. Form No.1906); 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 b. Job order; days for a fee of PHP 120, which is renewable upon expiration of the period. c. Final and clear sample of receipts and invoices (machine-printed); d. Application for registration (BIR Forms No. 1901 or 1903); Procedure 2. Obtain bank certificate of deposit of the paid-in e. TRU form or photocopy of TIN card; capital from the Authorized Agent Bank (AAB) f. Proof of payment of annual registration fee (BIR Form No. 0605). Time: 1 day Cost: No cost Procedure 14. Print receipts and invoices at the print shops Time: 7 days Procedure 3. Register the company with the SEC and receive pre- Cost: PHP 2,500 (between PHP 2,500–PHP 3,000) registered taxpayer's identification number (TIN) 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 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- tal stock or the subscription price of the subscribed capital stock, whichever is higher Procedure 15. Have receipts, invoices and books of accounts but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of stamped by the BIR filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + Time: 1 day PHP 470 stock and transfer book (STB) required for new corporations; fee includes registration of the STB) Cost: No cost Comments: The company can register online through SEC i-Register but must pay Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- onsite at the SEC and obtain a TIN. The following documents are required for SEC ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR registration: RDO or concerned office having jurisdiction over the principal place of business. a. Company name verification slip; Procedure 16. Register with the Social Security System (SSS) b. Articles of incorporation and bylaws; Time: 4 days c. Treasurer's affidavit; Cost: No cost d. Statement of assets and liabilities; Comments: To register with the SSS the company must submit the following docu- e. Bank certificate of deposit of the paid-in capital; ments: f. Authority to verify the bank account; a. Employer registration form (Form R-1); g. Registration sheet with particulars on directors, officers, stockholders, and so b. Employment report (Form R-1A); forth; c. List of employees, specifying their birth dates, positions, monthly salary and h. Written undertaking to comply with SEC reporting requirements. date of employment; To obtain the TIN, the company has to file: d. Articles of incorporation, bylaws and SEC registration or the certificate of a. Barangay clearance; registration with the Department of Trade and Industry (DTI). b. Mayor's permit; Upon submission of the required documents, the SSS employer and employee c. Copy of the SEC issued registration certificate. numbers will be released. The employees may attend a SSS training seminar after The SEC issues pre-registered TINs only if the company’s application for registration registration. SSS prefers that all members go through such training so that each has been approved. The company must still register with the Bureau of Internal member is aware of their rights and obligations. Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, obtain and stamp sales invoices, receipts and the books of accounts. Procedure 17. Register with the Philippines Health Insurance Company (PhilHealth) Procedure 4. Obtain the community tax certificate (CTC) from the Time: 1 day City Treasurer's Office (CTO) Cost: No cost Time: 1 day Comments: To register with PhilHealth, the company must submit the following Cost: PHP 500 documents: Comments: The company must pay an annual community tax. The basic community a. Employer data record (Form ER1); tax depends on whether the juridical entity is a company, partnership or association. b. Report of employee-members (Form ER2); Additional community tax (which shall not exceed PHP 10,000) depends on the c. SEC registration; value of real property owned by the company in the Philippines (PHP 2 for every PHP 5,000) and on the gross receipts including dividends/earnings derived from business d. BIR registration; in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is e. Copy of business permit. issued to the company upon payment of the community tax and is a prerequisite to Upon submission of the required documents, the company shall get the receiving obtain the Barangay clearance. copy of all the forms as proof of membership until PhilHealth releases the employer and employee numbers within three months. 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.  -*450'130$&%63&4t45"35*/("#64*/&44 47

Barangay fees vary for each Barangay since they have the discretion to impose their Procedure 13. Have receipts, invoices and books of accounts own taxes, fees and charges. Barangay fees may depend on: stamped by the BIR a. The location and the area (size in square meters) of the place of business; or Time: 1 day b. The company’s paid-up capital and the area it occupies; or Cost: No cost c. Whether they issue clearance plates or certificates. Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR Procedure 6. Obtain the business permit to operate at the RDO or concerned office having jurisdiction over the principal place of business. Business Promotion and Development Office (BPDO) Time: 11 days Procedure 14. Register with the Social Security System (SSS) Cost: PHP 11,372 (PHP 900 sanitary permit fee + 0.2% of capital for license fee + PHP Time: 7 days 2,000 permit fee for businesses engaged in retail + PHP 2,500 garbage collection fee Cost: No cost + PHP 360 occupational tax + PHP 905 occupational police clearance/health clear- Comments: To register with the SSS the company must submit the following docu- ance + PHP 1,500 plumbing inspection fee + PHP 850 electrical inspection fee + PHP ments: 500 building permit fee + PHP 400 sign board permit fee) a. Employer registration form (Form R-1); Procedure 7. Receive inspection from the BPDO b. Employment report (Form R-1A); Time: 1 day c. List of employees, specifying their birth dates, positions, monthly salary and date of employment; Cost: No cost d. Articles of incorporation, bylaws and SEC registration or the certificate of registra- Procedure 8. Buy special books of accounts at bookstore tion with the Department of Trade and Industry (DTI). Time: 1 day Upon submission of the required documents, the SSS employer and employee numbers will be released. The employees may attend a SSS training seminar after Cost: PHP 400 registration. SSS prefers that all members go through such training so that each Comments: Special books of accounts are required for registering for VAT. The books member is aware of their rights and obligations. of accounts are sold at bookstores nationwide. One set of journals consisting of four books (cash receipts account, disbursements account, ledger, general journal) costs Procedure 15. Register with the Philippines Health Insurance about PHP 400. Company (PhilHealth) Procedure 9. Register for value added tax (VAT) at the Bureau of Time: 1 day Internal Revenue (BIR) Cost: No cost Time: 2 days Comments: To register with PhilHealth, the company must submit the following documents: Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- mentary stamp tax) a. Employer data record (Form ER1); Comments: After obtaining the TIN, the company must register with the BIR by b. Report of employee-members (Form ER2); paying the annual registration fee of PHP 500, at any duly accredited bank, using c. SEC registration; payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for d. BIR registration; documentary stamp tax). Upon registration, the BIR will issue to the company the e. Copy of business permit. certificate of registration—BIR Form No. 2303. 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 Procedure 10. Pay the documentary stamp taxes (DST) and employee numbers within three months. Time: 1 day Cost: PHP 3,643 STARTING A BUSINESS Comments: The company must pay DST on the original issuance of shares of stock. Marikina The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Standard company legal form: Corporation such shares of stock. This payment with the BIR should be made on the 5th of the Minimum capital requirement: USD 97 = PHP 5,000 month following registration with the SEC. Date as of: December 2007 Procedure 11. Obtain the authority to print receipts and invoices Procedure 1. Verify the availability of the company name with from the BIR the Securities and Exchange Commission (SEC) Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 9) Cost: PHP 40 Comments: The authority to print receipts and invoices must be secured before the Comments: The company can verify the availability of the company name on-line. sales receipts and invoices may be printed. The company can ask any authorized Verification is free but reservation of the name, once approved by the SEC, costs PHP printing company to print its official forms, or it can print its own forms (i.e., it uses 40 for the first 30 days. The company name can be reserved for a maximum of 120 its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for days for a fee of PHP 120, which is renewable upon expiration of the period. 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) Procedure 2. Obtain bank certificate of deposit of the paid-in or concerned office having jurisdiction over the principal place of business: capital from the Authorized Agent Bank (AAB) a. Duly completed application for authority to print receipts and invoices (BIR Form No.1906); Time: 1 day b. Job order; Cost: No cost c. Final and clear sample of receipts and invoices (machine-printed); Procedure 3. Register the company with the SEC and receive pre- d. Application for registration (BIR Forms No. 1901 or 1903); registered taxpayer's identification number (TIN) e. TRU form or photocopy of TIN card; Time: 3 days f. Proof of payment of annual registration fee (BIR Form No. 0605). Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- tal stock or the subscription price of the subscribed capital stock, whichever is higher Procedure 12. Print receipts and invoices at the print shops but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of Time: 14 days filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + Cost: PHP 4,000 (between PHP 3,000–PHP 5,000) PHP 470 stock and transfer book (STB) required for new corporations; fee includes registration of the STB) 48 DOING BUSINESS IN THE PHILIPPINES 2008

Comments: The company can register online through SEC i-Register but must pay Procedure 8. Buy special books of accounts at bookstore onsite at the SEC and obtain a TIN. The following documents are required for SEC Time: 1 day registration: Cost: PHP 400 a. Company name verification slip; Comments: Special books of accounts are required for registering for VAT. The books b. Articles of incorporation and bylaws; of accounts are sold at bookstores nationwide. One set of journals consisting of four c. Treasurer's affidavit; books (cash receipts account, disbursements account, ledger, general journal) costs d. Statement of assets and liabilities; about PHP 400. e. Bank certificate of deposit of the paid-in capital; Procedure 9. Register for value added tax (VAT) at the Bureau of f. Authority to verify the bank account; Internal Revenue (BIR) g. Registration sheet with particulars on directors, officers, stockholders, and so forth; Time: 2 days h. Written undertaking to comply with SEC reporting requirements. Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- mentary stamp tax) To obtain the TIN, the company has to file: Comments: After obtaining the TIN, the company must register with the BIR by a. Barangay clearance; paying the annual registration fee of PHP 500, at any duly accredited bank, using b. Mayor's permit; payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for c. Copy of the SEC issued registration certificate. documentary stamp tax). Upon registration, the BIR will issue to the company the The SEC issues pre-registered TINs only if the company’s application for registration certificate of registration—BIR Form No. 2303. 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 registration fee, Procedure 10. Pay the documentary stamp taxes (DST) obtain and stamp sales invoices, receipts and the books of accounts. Time: 1 day Cost: PHP 3,643 Procedure 4. Obtain the community tax certificate (CTC) from the Comments: The company must pay DST on the original issuance of shares of stock. City Treasurer's Office (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. Comments: The company must pay an annual community tax. The basic community tax depends on whether the juridical entity is a company, partnership or association. Procedure 11. Obtain the authority to print receipts and invoices Additional community tax (which shall not exceed PHP 10,000) depends on the from the BIR value of real property owned by the company in the Philippines (PHP 2 for every PHP Time: 1 day 5,000) and on the gross receipts including dividends/earnings derived from business Cost: No cost (fees included in procedure 9) in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is Comments: The authority to print receipts and invoices must be secured before the issued to the company upon payment of the community tax and is a prerequisite to sales receipts and invoices may be printed. The company can ask any authorized obtain the Barangay clearance. 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 5. Obtain Barangay clearance this purpose. To obtain the authority to print receipts and invoices from the BIR, the Time: 1 day company must submit the following documents to the Revenue District Office (RDO) Cost: PHP 800 or concerned office having jurisdiction over the principal place of business: Comments: This clearance is obtained from the Barangay where the business is a. Duly completed application for authority to print receipts and invoices (BIR located and is required to obtain the business permit from the city or municipality. Form No.1906); Barangay fees vary for each Barangay since they have the discretion to impose their b. Job order; own taxes, fees and charges. Barangay fees may depend on: c. Final and clear sample of receipts and invoices (machine-printed); a. The location and the area (size in square meters) of the place of business; or d. Application for registration (BIR Forms No. 1901 or 1903); b. The company’s paid-up capital and the area it occupies; or e. TRU form or photocopy of TIN card; c. Whether they issue clearance plates or certificates. f. Proof of payment of annual registration fee (BIR Form No. 0605). Barangays in Marikina issue certificates. Procedure 12. Print receipts and invoices at the print shops Procedure 6. Obtain the business permit to operate at the Time: 7 days Business Permit and Licensing Office (BPLO) Cost: PHP 3,500 (between PHP 3,000–PHP 3,800) Time: 2 days Comments: The cost is based on the following specifications of the official receipt: Cost: PHP 8,167 (PHP 1,822 business tax + PHP 360 mayor’s permit fee + PHP 15 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. signboard fee + PHP 5,460 garbage charges for trading or PHP 6,480 for manufactur- ing) Procedure 13. Have receipts, invoices and books of accounts Comments: The business permit application form can be downloaded from the stamped by the BIR Marikina City website at www.city.marikina.gov.ph. To obtain the business permit, Time: 1 day the company must file the following documents for approval at the BPLO: Cost: No cost a. Barangay clearance; Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- b. Photos of establishment (showing signboard and sidewalk); ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR c. SEC registration. RDO or concerned office having jurisdiction over the principal place of business. The applicant submits the application form and requirements to the BPLO and gets an assessment of the business permit fees and taxes. The business permit fees and Procedure 14. Register with the Social Security System (SSS) taxes are paid at the CTO. The business permit and business plates will be delivered Time: 5 days to the place of business. Marikina City inspection clearances (engineering inspection, Cost: No cost occupational permit, police clearance, sanitary inspection and fire inspection) are conducted after issuance of the business permit, anytime of the year but before the Comments: To register with the SSS the company must submit the following docu- renewal of the business permit. ments: a. Employer registration form (Form R-1); Procedure 7*. Receive inspection from the BPLO b. Employment report (Form R-1A); Time: 1 day c. List of employees, specifying their birth dates, positions, monthly salary and Cost: No cost date of employment;  -*450'130$&%63&4t45"35*/("#64*/&44 49

d. Articles of incorporation, bylaws and SEC registration or the certificate of The SEC issues pre-registered TINs only if the company’s application for registration registration with the Department of Trade and Industry (DTI). has been approved. The company must still register with the Bureau of Internal Upon submission of the required documents, the SSS employer and employee Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, numbers will be released. The employees may attend a SSS training seminar after obtain and stamp sales invoices, receipts and the books of accounts. registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations. Procedure 4. Obtain the community tax certificate (CTC) from the City Treasurer's Office (CTO) Procedure 15. Register with the Philippines Health Insurance Time: 1 day Company (PhilHealth) Cost: PHP 500 Time: 1 day Comments: The company must pay an annual community tax. The basic community Cost: No cost tax depends on whether the juridical entity is a company, partnership or association. Comments: To register with PhilHealth, the company must submit the following Additional community tax (which shall not exceed PHP 10,000) depends on the documents: value of real property owned by the company in the Philippines (PHP 2 for every PHP 5,000) and on the gross receipts including dividends/earnings derived from business a. Employer data record (Form ER1); in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is b. Report of employee-members (Form ER2); issued to the company upon payment of the community tax and is a prerequisite to c. SEC registration; obtain the Barangay clearance. d. BIR registration; e. Copy of business permit. Procedure 5. 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 600 (between PHP 200–PHP 5,000) and employee numbers within three months. Comments: This clearance is obtained from the Barangay where the business is * This procedure is simultaneous with a previous procedure 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 STARTING A BUSINESS own taxes, fees and charges. Barangay fees may depend on: Muntinlupa a. The location and the area (size in square meters) of the place of business; or Standard company legal form: Corporation b. The company’s paid-up capital and the area it occupies; or Minimum capital requirement: USD 97 = PHP 5,000 c. Whether they issue clearance plates or certificates. Date as of: December 2007 Procedure 6. Proceed to the Muntinlupa Business Center (MBC) Procedure 1. Verify the availability of the company name with to submit application form and requirements; and obtain the Securities and Exchange Commission (SEC) endorsement from the Business Permit and Licensing Office Time: 1 day (BPLO) Cost: PHP 40 Time: 1 day Comments: The company can verify the availability of the company name on-line. Cost: No cost Verification is free but reservation of the name, once approved by the SEC, costs PHP Comments: The business permit application form can be downloaded from the 40 for the first 30 days. The company name can be reserved for a maximum of 120 Muntinlupa City website at www.muntinlupacity.gov.ph. To obtain the business days for a fee of PHP 120, which is renewable upon expiration of the period. permit, the company must file the following documents at the MBC: Procedure 2. Obtain bank certificate of deposit of the paid-in a. SEC registration; capital from the Authorized Agent Bank (AAB) b. Articles of incorporation and bylaws; Time: 1 day c. Contract of lease; Cost: No cost d. Certificate of occupancy; e. Fire clearance. Procedure 3. Register the company with the SEC and receive pre- registered taxpayer's identification number (TIN) Procedure 7. Present the endorsement from the BPLO at the Time: 3 days Bureau of Fire Protection (BFP) to obtain the fire clearance Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- Time: 3 days tal stock or the subscription price of the subscribed capital stock, whichever is higher Cost: PHP 429 (PHP 449 retail or PHP 409 manufacturing for fire fee) but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of Comments: The company presents the endorsement from the BPLO for the process- filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + ing of the fire clearance certificate to the BFP and the employees there arrange for PHP 470 stock and transfer book (STB) required for new corporations; fee includes the date and time of inspection. registration of the STB) Comments: The company can register online through SEC i-Register but must pay Procedure 8*. Receive inspection for the fire clearance from the onsite at the SEC and obtain a TIN. The following documents are required for SEC BFP registration: Time: 1 day a. Company name verification slip; Cost: No cost b. Articles of incorporation and bylaws; c. Treasurer's affidavit; Procedure 9. Obtain the certificate of occupancy in the name of d. Statement of assets and liabilities; the tenant from the Office of the Building Official (OBO) e. Bank certificate of deposit of the paid-in capital; Time: 7 days f. Authority to verify the bank account; Cost: PHP 2,100 (for occupancy permit) g. Registration sheet with particulars on directors, officers, stockholders, and so forth; Procedure 10. Obtain the business permit to operate at the MBC h. Written undertaking to comply with SEC reporting requirements. Time: 3 days To obtain the TIN, the company has to file: Cost: PHP 4,287 (PHP 182 business tax + PHP 1,725 mayor’s permit fee + PHP 600 sanitary fee + PHP 850 zoning clearance + PHP 100 signboard fee + PHP 30 miscel- a. Barangay clearance; laneous + PHP 1,000 retail or PHP 600 manufacturing for garbage fee) b. Mayor's permit; c. Copy of the SEC issued registration certificate. 50 DOING BUSINESS IN THE PHILIPPINES 2008

Comments: The company must go back to the MBC-BPLO Computer Billing Section a. Employer registration form (Form R-1); to get assessment of the business permit fees and taxes. Then the company pays and b. Employment report (Form R-1A); obtains the official receipt at the MBC-Treasury Window. c. List of employees, specifying their birth dates, positions, monthly salary and date of employment; Procedure 11. Buy special books of accounts at bookstore d. Articles of incorporation, bylaws and SEC registration or the certificate of Time: 1 day registration with the Department of Trade and Industry (DTI). Cost: PHP 400 Upon submission of the required documents, the SSS employer and employee Comments: Special books of accounts are required for registering for VAT. The books numbers will be released. The employees may attend a SSS training seminar after of accounts are sold at bookstores nationwide. One set of journals consisting of four registration. SSS prefers that all members go through such training so that each books (cash receipts account, disbursements account, ledger, general journal) costs member is aware of their rights and obligations. about PHP 400. Procedure 18. Register with the Philippines Health Insurance Procedure 12. Register for value added tax (VAT) at the Bureau of Company (PhilHealth) Internal Revenue (BIR) Time: 1 day Time: 2 days Cost: No cost Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Comments: To register with PhilHealth, the company must submit the following mentary stamp tax) documents: Comments: After obtaining the TIN, the company must register with the BIR by a. Employer data record (Form ER1); paying the annual registration fee of PHP 500, at any duly accredited bank, using payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for b. Report of employee-members (Form ER2); documentary stamp tax). Upon registration, the BIR will issue to the company the c. SEC registration; certificate of registration—BIR Form No. 2303. d. BIR registration; e. Copy of business permit. Procedure 13. Pay the documentary stamp taxes (DST) 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 3,643 and employee numbers within three months. Comments: The company must pay DST on the original issuance of shares of stock. * This procedure is simultaneous with a previous procedure 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 STARTING A BUSINESS month following registration with the SEC. Navotas Standard company legal form: Corporation Procedure 14. Obtain the authority to print receipts and invoices Minimum capital requirement: USD 97 = PHP 5,000 from the BIR Date as of: December 2007 Time: 1 day Cost: No cost (fees included in procedure 12) Procedure 1. Verify the availability of the company name with Comments: The authority to print receipts and invoices must be secured before the the Securities and Exchange Commission (SEC) 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: PHP 40 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 Comments: The company can verify the availability of the company name on-line. company must submit the following documents to the Revenue District Office (RDO) Verification is free but reservation of the name, once approved by the SEC, costs PHP or concerned office having jurisdiction over the principal place of business: 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. a. Duly completed application for authority to print receipts and invoices (BIR Form No.1906); Procedure 2. Obtain bank certificate of deposit of the paid-in b. Job order; capital from the Authorized Agent Bank (AAB) c. Final and clear sample of receipts and invoices (machine-printed); Time: 1 day d. Application for registration (BIR Forms No. 1901 or 1903); Cost: No cost e. TRU form or photocopy of TIN card; f. Proof of payment of annual registration fee (BIR Form No. 0605). Procedure 3. Register the company with the SEC and receive pre- registered taxpayer's identification number (TIN) Procedure 15. Print receipts and invoices at the print shops Time: 3 days Time: 7 days Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- Cost: PHP 3,500 (between PHP 3,000–PHP 3,800) tal stock or the subscription price of the subscribed capital stock, whichever is higher Comments: The cost is based on the following specifications of the official receipt: but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + PHP 470 stock and transfer book (STB) required for new corporations; fee includes Procedure 16. Have receipts, invoices and books of accounts registration of the STB) stamped by the BIR Comments: The company can register online through SEC i-Register but must pay Time: 1 day onsite at the SEC and obtain a TIN. The following documents are required for SEC registration: Cost: No cost a. Company name verification slip; Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR b. Articles of incorporation and bylaws; RDO or concerned office having jurisdiction over the principal place of business. c. Treasurer's affidavit; d. Statement of assets and liabilities; Procedure 17. Register with the Social Security System (SSS) e. Bank certificate of deposit of the paid-in capital; Time: 5 days f. Authority to verify the bank account; Cost: No cost g. Registration sheet with particulars on directors, officers, stockholders, and so Comments: To register with the SSS the company must submit the following docu- forth; ments: h. Written undertaking to comply with SEC reporting requirements.  -*450'130$&%63&4t45"35*/("#64*/&44 51

To obtain the TIN, the company has to file: Procedure 10. Get assessment of the inspection fees at the Office a. Barangay clearance; of the Building Official (OBO) b. Mayor's permit; Time: 1 day c. Copy of the SEC issued registration certificate. Cost: PHP 1,274 (PHP 640 building inspection fee + PHP 120 plumbing inspection The SEC issues pre-registered TINs only if the company’s application for registration fee + PHP 314 mechanical inspection fee + PHP 200 electrical inspection fee) 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 registration fee, Procedure 11. Proceed to the City Health Office (CHO) for the obtain and stamp sales invoices, receipts and the books of accounts. sanitary permit Time: 1 day Procedure 4. Obtain the community tax certificate (CTC) from the Cost: No cost City Treasurer's Office (CTO) Comments: The company shall present the official receipt at the CHO to get the Time: 1 day sanitary permit. There is no need for inspection. Cost: PHP 500 Comments: The company must pay an annual community tax. The basic community Procedure 12. Obtain the business permit to operate at the BPLO tax depends on whether the juridical entity is a company, partnership or association. Time: 4 days Additional community tax (which shall not exceed PHP 10,000) depends on the Cost: PHP 2,812 (PHP 182 business tax + PHP 500 mayor's permit fee + PHP 1,125 value of real property owned by the company in the Philippines (PHP 2 for every PHP garbage fee + PHP 10 mayor's certificate + PHP 110 sign/board fee + PHP 350 busi- 5,000) and on the gross receipts including dividends/earnings derived from business ness plate + PHP 35 sticker + PHP 500 sanitary permit) in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is Comments: The company must go back to the BPLO to submit the application form issued to the company upon payment of the community tax and is a prerequisite to and requirements and get an assessment of the business permit fees and taxes. The obtain the Barangay clearance. business permit fees and taxes are paid at the CTO.

Procedure 5. Obtain Barangay clearance Procedure 13. Buy special books of accounts at bookstore Time: 1 day Time: 1 day Cost: PHP 300 (between PHP 100–PHP 500) Cost: PHP 400 Comments: This clearance is obtained from the Barangay where the business is Comments: Special books of accounts are required for registering for VAT. The books located and is required to obtain the business permit from the city or municipality. of accounts are sold at bookstores nationwide. One set of journals consisting of four Barangay fees vary for each Barangay since they have the discretion to impose their books (cash receipts account, disbursements account, ledger, general journal) costs own taxes, fees and charges. Barangay fees may depend on: about PHP 400. 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. Register for value added tax (VAT) at the Bureau of c. Whether they issue clearance plates or certificates. Internal Revenue (BIR) Barangays in Navotas issue certificates. Time: 2 days Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Procedure 6. Obtain the business permit application form at the mentary stamp tax) Business Permit and Licensing Office (BPLO) Comments: After obtaining the TIN, the company must register with the BIR by Time: 1 day paying the annual registration fee of PHP 500, at any duly accredited bank, using Cost: No cost payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for documentary stamp tax). Upon registration, the BIR will issue to the company the Comments: To obtain the business permit, the company must file the following certificate of registration—BIR Form No. 2303. required documents at the BPLO: a. SEC registration; Procedure 15. Pay the documentary stamp taxes (DST) b. Articles of incorporation and bylaws Time: 1 day c. Community tax certificate; Cost: PHP 3,643 d. Barangay clearance; Comments: The company must pay DST on the original issuance of shares of stock. e. Locational clearance; The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of f. Contract of lease, duly notarized and proof of ownership of lessor; such shares of stock. This payment with the BIR should be made on the 5th of the g. Picture and sketch of business establishment. month following registration with the SEC.

Procedure 7. Receive inspection from the BPLO Procedure 16. Obtain the authority to print receipts and invoices Time: 1 day from BIR Cost: No cost Time: 1 day Cost: No cost (fees included in procedure 14) Procedure 8. Notarize the business permit application form at Comments: The authority to print receipts and invoices must be secured before the the notary 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 its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Cost: PHP 50 this purpose. To obtain the authority to print receipts and invoices from the BIR, the Comments: The notarization can be made at the Legal Office of the Navotas City company must submit the following documents to the Revenue District Office (RDO) Hall or any other notarial firms near the City Hall premises. or concerned office having jurisdiction over the principal place of business: a. Duly completed application for authority to print receipts and invoices (BIR Procedure 9. Obtain the locational clearance from the City Form No.1906); Planning and Development Office (CPDO) b. Job order; Time: 1 day c. Final and clear sample of receipts and invoices (machine-printed); Cost: PHP 850 (PHP 50 processing fee + PHP 800 equivalent to PHP 4 per square d. Application for registration (BIR Forms No. 1901 or 1903); meter assuming an area of 200 square meters) e. TRU form or photocopy of TIN card; Comments: The company gets the signature from the CPDO. f. Proof of payment of annual registration fee (BIR Form No. 0605). 52 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 17. Print receipts and invoices at the print shops Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- Time: 7 days tal stock or the subscription price of the subscribed capital stock, whichever is higher but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of Cost: PHP 3,500 (between PHP 3,000–PHP 3,800) filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + Comments: The cost is based on the following specifications of the official receipt: PHP 470 stock and transfer book (STB) required for new corporations; fee includes 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. registration of the STB) Comments: The company can register online through SEC i-Register but must pay Procedure 18. Have receipts, invoices and books of accounts onsite at the SEC and obtain a TIN. The following documents are required for SEC stamped by the BIR registration: Time: 1 day a. Company name verification slip; Cost: No cost b. Articles of incorporation and bylaws; Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- c. Treasurer's affidavit; ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR d. Statement of assets and liabilities; RDO or concerned office having jurisdiction over the principal place of business. e. Bank certificate of deposit of the paid-in capital; Procedure 19. Register with the Social Security System (SSS) f. Authority to verify the bank account; Time: 2 days g. Registration sheet with particulars on directors, officers, stockholders, and so Cost: No cost forth; Comments: To register with the SSS the company must submit the following docu- h. Written undertaking to comply with SEC reporting requirements. ments: To obtain the TIN, the company has to file: a. Employer registration form (Form R-1); a. Barangay clearance; b. Employment report (Form R-1A); b. Mayor's permit; c. List of employees, specifying their birth dates, positions, monthly salary and c. Copy of the SEC issued registration certificate. date of employment; The SEC issues pre-registered TINs only if the company’s application for registration d. Articles of incorporation, bylaws and SEC registration or the certificate of has been approved. The company must still register with the Bureau of Internal registration with the Department of Trade and Industry (DTI). Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, Upon submission of the required documents, the SSS employer and employee obtain and stamp sales invoices, receipts and the books of accounts. numbers will be released. The employees may attend a SSS training seminar after registration. SSS prefers that all members go through such training so that each Procedure 4. Obtain the community tax certificate (CTC) from the member is aware of their rights and obligations. City Treasurer's Office (CTO) Time: 1 day Procedure 20. Register with the Philippines Health Insurance Cost: PHP 500 Company (PhilHealth) Comments: The company must pay an annual community tax. The basic community Time: 1 day tax depends on whether the juridical entity is a company, partnership or association. Cost: No cost Additional community tax (which shall not exceed PHP 10,000) depends on the Comments: To register with PhilHealth, the company must submit the following value of real property owned by the company in the Philippines (PHP 2 for every PHP documents: 5,000) and on the gross receipts including dividends/earnings derived from business in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is a. Employer data record (Form ER1); issued to the company upon payment of the community tax and is a prerequisite to b. Report of employee-members (Form ER2); obtain the Barangay clearance. c. SEC registration; d. BIR registration; Procedure 5. Obtain Barangay clearance e. Copy of business permit. Time: 1 day Upon submission of the required documents, the company shall get the receiving Cost: PHP 500 (between PHP 400–PHP 1,000) 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 STARTING A BUSINESS own taxes, fees and charges. Barangay fees may depend on: Parañaque a. The location and the area (size in square meters) of the place of business; or Standard company legal form: Corporation b. The company’s paid-up capital and the area it occupies; or Minimum capital requirement: USD 97 = PHP 5,000 c. Whether they issue clearance plates or certificates. Date as of: December 2007 Barangays in Parañaque issue plates.

Procedure 1. Verify the availability of the company name with Procedure 6. Obtain the locational clearance from the City the Securities and Exchange Commission (SEC) Planning and Development Office (CPDO) Time: 1 day Time: 2 days Cost: PHP 40 Cost: PHP 350 (between PHP 200–PHP 500) Comments: The company can verify the availability of the company name on-line. Verification is free but reservation of the name, once approved by the SEC, costs PHP Procedure 7. Notarize the business permit application form at 40 for the first 30 days. The company name can be reserved for a maximum of 120 the City Legal Office (CLO) days for a fee of PHP 120, which is renewable upon expiration of the period. Time: 1 day Procedure 2. Obtain bank certificate of deposit of the paid-in Cost: PHP 50 capital from the Authorized Agent Bank (AAB) Comments: The business permit application form can be downloaded from the Time: 1 day Parañaque City website at www.parañaque.gov.ph. Cost: No cost Procedure 8. Obtain the business permit to operate at the Procedure 3. Register the company with the SEC and receive pre- Business Permit and Licensing Office (BPLO) registered taxpayer's identification number (TIN) Time: 4 days Time: 3 days  -*450'130$&%63&4t45"35*/("#64*/&44 53

Cost: PHP 5,412 (PHP 364 business tax + PHP 600 mayor’s permit fee + PHP 3,000 Procedure 14. Print receipts and invoices at the print shops garbage fee + PHP 500 sanitary fee + PHP 50 building fee + PHP 27 electrical fee + Time: 7 days PHP 60 signboard fee + PHP 29 plumbing fee + PHP 50 miscellaneous + PHP 732 fire Cost: PHP 3,500 (between PHP 3,000–PHP 3,800) inspection fee) Comments: The cost is based on the following specifications of the official receipt: Comments: To obtain the business permit, the company must file the following 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. documents at the BPLO: a. SEC registration; Procedure 15. Have receipts, invoices and books of accounts b. Barangay clearance; stamped by the BIR c. Contract of lease; Time: 1 day d. Photocopy of occupancy permit; Cost: No cost e. Picture of establishment. Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- Subsequently the statement of account for the assessed business permit fees and ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR taxes will be received from the Electronic Data Processing (EDP) office. The business RDO or concerned office having jurisdiction over the principal place of business. permit fees and taxes are paid at the CTO. Procedure 16. Register with the Social Security System (SSS) Procedure 9*. Present the official receipt at the City Health Office Time: 5 days (CHO) to obtain the sanitation permit Cost: No cost Time: 1 day Comments: To register with the SSS the company must submit the following docu- Cost: PHP 500 ments: Comments: Inspection is not required. The company is only required to get the sani- a. Employer registration form (Form R-1); tation permit after the payment of the fees and before release of business permit. b. Employment report (Form R-1A); c. List of employees, specifying their birth dates, positions, monthly salary and Procedure 10. Buy special books of accounts at bookstore date of employment; Time: 1 day d. Articles of incorporation, bylaws and SEC registration or the certificate of Cost: PHP 400 registration with the Department of Trade and Industry (DTI). Comments: Special books of accounts are required for registering for VAT. The books Upon submission of the required documents, the SSS employer and employee of accounts are sold at bookstores nationwide. One set of journals consisting of four numbers will be released. The employees may attend a SSS training seminar after books (cash receipts account, disbursements account, ledger, general journal) costs registration. SSS prefers that all members go through such training so that each about PHP 400. member is aware of their rights and obligations.

Procedure 11. Register for value added tax (VAT) at the Bureau of Procedure 17. Register with the Philippines Health Insurance Internal Revenue (BIR) Company (PhilHealth) Time: 2 days Time: 1 day Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Cost: No cost mentary stamp tax) Comments: To register with PhilHealth, the company must submit the following Comments: After obtaining the TIN, the company must register with the BIR by documents: paying the annual registration fee of PHP 500, at any duly accredited bank, using a. Employer data record (Form ER1); payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for documentary stamp tax). Upon registration, the BIR will issue to the company the b. Report of employee-members (Form ER2); certificate of registration—BIR Form No. 2303. c. SEC registration; d. BIR registration; Procedure 12. Pay the documentary stamp taxes (DST) e. Copy of business permit. Time: 1 day Upon submission of the required documents, the company shall get the receiving Cost: PHP 3,643 copy of all the forms as proof of membership until PhilHealth releases the employer Comments: The company must pay DST on the original issuance of shares of stock. and employee numbers within three months. The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of * This procedure is simultaneous with a previous procedure such shares of stock. This payment with the BIR should be made on the 5th of the month following registration with the SEC. STARTING A BUSINESS Pasay Procedure 13. Obtain the authority to print receipts and invoices Standard company legal form: Corporation from the BIR Minimum capital requirement: USD 97 = PHP 5,000 Time: 1 day Date as of: December 2007 Cost: No cost (fees included in procedure 11) Comments: The authority to print receipts and invoices must be secured before the Procedure 1. Verify the availability of the company name with sales receipts and invoices may be printed. The company can ask any authorized the Securities and Exchange Commission (SEC) printing company to print its official forms, or it can print its own forms (i.e., it uses Time: 1 day its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Cost: PHP 40 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) Comments: The company can verify the availability of the company name on-line. or concerned office having jurisdiction over the principal place of business: 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 a. Duly completed application for authority to print receipts and invoices (BIR days for a fee of PHP 120, which is renewable upon expiration of the period. Form No.1906); b. Job order; Procedure 2. Obtain bank certificate of deposit of the paid-in c. Final and clear sample of receipts and invoices (machine-printed); capital from the Authorized Agent Bank (AAB) d. Application for registration (BIR Forms No. 1901 or 1903); Time: 1 day e. TRU form or photocopy of TIN card; Cost: No cost f. Proof of payment of annual registration fee (BIR Form No. 0605). 54 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 3. Register the company with the SEC and receive pre- The company must proceed to the BPLO to submit the application form and require- registered taxpayer's identification number (TIN) ments, get approval of the application and obtain the business account number (BAN). Then the company goes to the CTO for the assessment of the business fees Time: 3 days and taxes, pays at the Teller Division and obtains an official receipt. Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- tal stock or the subscription price of the subscribed capital stock, whichever is higher Procedure 7*. Proceed to the City Planning and Development but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + Office (CPDO) for the locational clearance PHP 470 stock and transfer book (STB) required for new corporations; fee includes Time: 2 days registration of the STB) Cost: PHP 400 Comments: The company can register online through SEC i-Register but must pay Comments: The company must secure an assessment of fees for the locational clear- onsite at the SEC and obtain a TIN. The following documents are required for SEC ance before going to the CTO for the assessment of business permit fees and taxes. registration: After the payment of fees but before the issuance of the business permit, the officer a. Company name verification slip; at CPDO shall counter-sign under the locational clearance portion of the business b. Articles of incorporation and bylaws; permit application form. c. Treasurer's affidavit; Procedure 8*. Proceed to the Engineering Office for the electrical d. Statement of assets and liabilities; and mechanical permit e. Bank certificate of deposit of the paid-in capital; Time: 2 days f. Authority to verify the bank account; Cost: PHP 556 (annual inspection fees: PHP 120 building + PHP 296 sanitary/plumb- g. Registration sheet with particulars on directors, officers, stockholders, and so ing + PHP 60 electrical + PHP 80 mechanical) forth; Comments: The company must secure an assessment of the fees for building, h. Written undertaking to comply with SEC reporting requirements. electrical, plumbing, mechanical, and other requirements before going to the CTO To obtain the TIN, the company has to file: for the assessment of business permit fees and taxes. After the payment of fees but a. Barangay clearance; before the issuance of the business permit, the engineer at the Engineering Office shall counter-sign under the electrical and mechanical permit portion of the busi- b. Mayor's permit; ness permit application form. c. Copy of the SEC issued registration certificate. The SEC issues pre-registered TINs only if the company’s application for registration Procedure 9*. Proceed to the Bureau of Fire Protection (BFP) for has been approved. The company must still register with the Bureau of Internal counter-signing of the business permit application Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, Time: 2 days obtain and stamp sales invoices, receipts and the books of accounts. Cost: PHP 1,219 Procedure 4. Obtain the community tax certificate (CTC) from the Comments: The company gets an assessment of fee for fire clearance and the City Treasurer's Office (CTO) receives an order of payment for the fire certificate from the BFP before going to the CTO for the assessment of business permit fees and taxes. After the payment of fees Time: 1 day but before the issuance of the business permit, the local fire marshal shall counter- Cost: PHP 500 sign under the BFP portion of the business permit application form. Comments: The company must pay an annual community tax. The basic community tax depends on whether the juridical entity is a company, partnership or association. Procedure 10. Buy special books of accounts at bookstore Additional community tax (which shall not exceed PHP 10,000) depends on the Time: 1 day value of real property owned by the company in the Philippines (PHP 2 for every PHP Cost: PHP 400 5,000) and on the gross receipts including dividends/earnings derived from business in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is Comments: Special books of accounts are required for registering for VAT. The books issued to the company upon payment of the community tax and is a prerequisite to of accounts are sold at bookstores nationwide. One set of journals consisting of four obtain the Barangay clearance. books (cash receipts account, disbursements account, ledger, general journal) costs about PHP 400. Procedure 5. Obtain Barangay clearance Procedure 11. Register for value added tax (VAT) at the Bureau of Time: 1 day Internal Revenue (BIR) Cost: PHP 800 (between PHP 500–PHP 2,000) Time: 2 days 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. Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Barangay fees vary for each Barangay since they have the discretion to impose their mentary stamp tax) own taxes, fees and charges. Barangay fees may depend on: Comments: After obtaining the TIN, the company must register with the BIR by a. The location and the area (size in square meters) of the place of business; or paying the annual registration fee of PHP 500, at any duly accredited bank, using payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for b. The company’s paid-up capital and the area it occupies; or documentary stamp tax). Upon registration, the BIR will issue to the company the c. Whether they issue clearance plates or certificates. certificate of registration—BIR Form No. 2303. Barangays in Pasay issue certificates. Procedure 12. Pay the documentary stamp taxes (DST) Procedure 6. Obtain the business permit to operate at the Time: 1 day Business Permit and Licensing Office (BPLO) Cost: PHP 3,643 Time: 9 days Comments: The company must pay DST on the original issuance of shares of stock. Cost: PHP 11,584 (PHP 364 business tax + PHP 5,500 mayor's permit fee + PHP 400 The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of office/display + PHP 300 signboard + PHP 500 sanitary fee + PHP 3,500 garbage fee such shares of stock. This payment with the BIR should be made on the 5th of the + PHP 20 police clearance + PHP 1,000 sticker/plate) month following registration with the SEC. Comments: The business permit application form can be downloaded from the Pasay City website at www.pasay.gov.ph. To obtain the business permit, the com- Procedure 13. Obtain the authority to print receipts and invoices pany must file the following documents at the BPLO: from BIR a. SEC registration; Time: 1 day b. Barangay clearance; Cost: No cost (fees include in procedure 11) c. Contract of lease. 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 printing company to print its official forms, or it can print its own forms (i.e., it uses  -*450'130$&%63&4t45"35*/("#64*/&44 55 its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Comments: The company can verify the availability of the company name on-line. this purpose. To obtain the authority to print receipts and invoices from the BIR, the Verification is free but reservation of the name, once approved by the SEC, costs PHP company must submit the following documents to the Revenue District Office (RDO) 40 for the first 30 days. The company name can be reserved for a maximum of 120 or concerned office having jurisdiction over the principal place of business: days for a fee of PHP 120, which is renewable upon expiration of the period. a. Duly completed application for authority to print receipts and invoices (BIR Form No.1906); Procedure 2. Obtain bank certificate of deposit of the paid-in b. Job order; capital from the Authorized Agent Bank (AAB) c. Final and clear sample of receipts and invoices (machine-printed); Time: 1 day d. Application for registration (BIR Forms No. 1901 or 1903); Cost: No cost e. TRU form or photocopy of TIN card; Procedure 3. Register the company with the SEC and receive pre- f. Proof of payment of annual registration fee (BIR Form No. 0605). registered taxpayer's identification number (TIN) Procedure 14. Print receipts and invoices at the print shops Time: 3 days Time: 7 days Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- tal stock or the subscription price of the subscribed capital stock, whichever is higher Cost: PHP 3,500 (between PHP 3,000–PHP 3,800) but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of Comments: The cost is based on the following specifications of the official receipt: filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. PHP 470 stock and transfer book (STB) required for new corporations; fee includes registration of the STB) Procedure 15. Have receipts, invoices and books of accounts Comments: The company can register online through SEC i-Register but must pay stamped by the BIR onsite at the SEC and obtain a TIN. The following documents are required for SEC Time: 1 day registration: Cost: No cost a. Company name verification slip; Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- b. Articles of incorporation and bylaws; ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR c. Treasurer's affidavit; RDO or concerned office having jurisdiction over the principal place of business. d. Statement of assets and liabilities; Procedure 16. Register with the Social Security System (SSS) e. Bank certificate of deposit of the paid-in capital; Time: 5 days f. Authority to verify the bank account; Cost: No cost g. Registration sheet with particulars on directors, officers, stockholders, and so forth; Comments: To register with the SSS the company must submit the following docu- ments: h. Written undertaking to comply with SEC reporting requirements. a. Employer registration form (Form R-1); To obtain the TIN, the company has to file: b. Employment report (Form R-1A); a. Barangay clearance; c. List of employees, specifying their birth dates, positions, monthly salary and b. Mayor's permit; date of employment; c. Copy of the SEC issued registration certificate. d. Articles of incorporation, bylaws and SEC registration or the certificate of The SEC issues pre-registered TINs only if the company’s application for registration registration with the Department of Trade and Industry (DTI). has been approved. The company must still register with the Bureau of Internal Upon submission of the required documents, the SSS employer and employee Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, numbers will be released. The employees may attend a SSS training seminar after obtain and stamp sales invoices, receipts and the books of accounts. registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations. Procedure 4. Obtain the community tax certificate (CTC) from the City Treasurer's Office (CTO) Procedure 17. Register with the Philippines Health Insurance Time: 1 day Company (PhilHealth) Cost: PHP 500 Time: 1 day Comments: The company must pay an annual community tax. The basic community Cost: No cost tax depends on whether the juridical entity is a company, partnership or association. Comments: To register with PhilHealth, the company must submit the following Additional community tax (which shall not exceed PHP 10,000) depends on the documents: value of real property owned by the company in the Philippines (PHP 2 for every PHP 5,000) and on the gross receipts including dividends/earnings derived from business a. Employer data record (Form ER1); in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is b. Report of employee-members (Form ER2); issued to the company upon payment of the community tax and is a prerequisite to c. SEC registration; obtain the Barangay clearance. d. BIR registration; e. Copy of business permit. Procedure 5. Obtain Barangay clearance Time: 1 day 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 Cost: PHP 500 (between PHP 0–PHP 1,000) and employee numbers within three months. Comments: This clearance is obtained from the Barangay where the business is * This procedure is simultaneous with a previous procedure 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 STARTING A BUSINESS own taxes, fees and charges. Barangay fees may depend on: Pasig a. The location and the area (size in square meters) of the place of business; or Standard company legal form: Corporation b. The company’s paid-up capital and the area it occupies; or Minimum capital requirement: USD 97 = PHP 5,000 c. Whether they issue clearance plates or certificates. Date as of: December 2007 Procedure 6. Obtain the business permit application form at the Procedure 1. Verify the availability of the company name with Business Permit and Licensing Office (BPLO) the Securities and Exchange Commission (SEC) Time: 1 day Time: 1 day Cost: No cost Cost: PHP 40 56 DOING BUSINESS IN THE PHILIPPINES 2008

Comments: To obtain the business permit, the company must file the following Procedure 15. Buy special books of accounts at bookstore documents at the BPLO: Time: 1 day a. SEC registration; Cost: PHP 400 b. Application form; Comments: Special books of accounts are required for registering for VAT. The books c. Barangay clearance; of accounts are sold at bookstores nationwide. One set of journals consisting of four d. Community tax certificate; books (cash receipts account, disbursements account, ledger, general journal) costs about PHP 400. e. Contract of lease; f. Sketch of location of establishment; Procedure 16. Register for value added tax (VAT) at the Bureau of g. Fire safety certificate. Internal Revenue (BIR) Time: 2 days Procedure 7. Notarize the business permit application form at the notary Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- mentary stamp tax) Time: 1 day Comments: After obtaining the TIN, the company must register with the BIR by Cost: PHP 50 paying the annual registration fee of PHP 500, at any duly accredited bank, using payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for Procedure 8. Proceed to the Office of the Building Official (OBO) documentary stamp tax). Upon registration, the BIR will issue to the company the to get the assessment of the building and plumbing inspection certificate of registration—BIR Form No. 2303. fees Time: 1 day Procedure 17. Pay the documentary stamp taxes (DST) Cost: PHP 680 (PHP 480 building inspection fee + PHP 200 plumbing inspection fee) Time: 1 day Cost: PHP 3,643 Procedure 9. Proceed to the Electrical and Mechanical Office Comments: The company must pay DST on the original issuance of shares of stock. (EMO) to get the assessment of the electrical and mechanical The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of inspection fees such shares of stock. This payment with the BIR should be made on the 5th of the month following registration with the SEC. Time: 1 day Cost: PHP 3,840 (PHP 1,400 electrical inspection fee + PHP 2,440 mechanical inspec- Procedure 18. Obtain the authority to print receipts and invoices tion fee) from the BIR Procedure 10. Obtain the business permit to operate at the BPLO Time: 1 day Time: 7 days Cost: No cost (fees included in procedure 16) Cost: PHP 2,622 (PHP 1,822 business tax + PHP 600 mayor's permit + PHP 200 busi- Comments: The authority to print receipts and invoices must be secured before the ness plates registration fee) 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 Comments: The company gets the assessment of the business permit fees and taxes its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for and obtains the printed tax order of payment (TOP) from the Electronic Data Process- this purpose. To obtain the authority to print receipts and invoices from the BIR, the ing unit of the BPLO. Then the company proceeds to the CTO to secure final approval company must submit the following documents to the Revenue District Office (RDO) of the TOP and pay business permit fees and taxes at the cashier. or concerned office having jurisdiction over the principal place of business: Procedure 11*. Proceed to the Health Department to present the a. Duly completed application for authority to print receipts and invoices (BIR Form No.1906); official receipt and obtain the sanitary permit b. Job order; Time: 1 day c. Final and clear sample of receipts and invoices (machine-printed); Cost: PHP 600 d. Application for registration (BIR Forms No. 1901 or 1903); Comments: After the payment of fees but before the issuance of the business permit, the company presents the official receipt at the Health Department to get e. TRU form or photocopy of TIN card; the temporary sanitary permit. The permanent permit is issued after inspection of f. Proof of payment of annual registration fee (BIR Form No. 0605). the business establishment and within 15 days upon issuance of the business permit. Procedure 19. Print receipts and invoices at the print shops Procedure 12*. Proceed to the City Environment and Natural Time: 7 days Resource Office (City ENRO) for the environmental 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: PHP 800 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. Comments: After the payment of fees but before the issuance of the business permit, the company presents the official receipt at City ENRO to get the temporary Procedure 20. Have receipts, invoices and books of accounts environmental permit. The permanent permit is issued after inspection of the busi- stamped by the BIR ness establishment and within 15 days upon issuance of the business permit. Time: 1 day Cost: No cost Procedure 13*. Proceed to the Bureau of Fire Protection (BFP) for Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- the fire safety certificate ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR Time: 1 day RDO or concerned office having jurisdiction over the principal place of business. Cost: PHP 45 Comments: After the payment of fees but before the issuance of the business Procedure 21. Register with the Social Security System (SSS) permit, the company presents the official receipt at the BFP to get the temporary fire Time: 3 days safety certificate. The permanent permit is issued after inspection of the business Cost: No cost establishment and within 15 days upon issuance of the business permit. Comments: To register with the SSS the company must submit the following docu- ments: Procedure 14*. Receive inspection from the BPLO a. Employer registration form (Form R-1); Time: 1 day b. Employment report (Form R-1A); Cost: No cost c. List of employees, specifying their birth dates, positions, monthly salary and date of employment;  -*450'130$&%63&4t45"35*/("#64*/&44 57

d. Articles of incorporation, bylaws and SEC registration or the certificate of The SEC issues pre-registered TINs only if the company’s application for registration registration with the Department of Trade and Industry (DTI). has been approved. The company must still register with the Bureau of Internal Upon submission of the required documents, the SSS employer and employee Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, numbers will be released. The employees may attend a SSS training seminar after obtain and stamp sales invoices, receipts and the books of accounts. registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations. Procedure 4. Obtain Barangay clearance Time: 1 day Procedure 22. Register with the Philippines Health Insurance Cost: PHP 500 (between PHP 0–PHP 600) Company (PhilHealth) Comments: This clearance is obtained from the Barangay where the business is Time: 1 day located and is required to obtain the business permit from the city or municipality. Cost: No cost Barangay fees vary for each Barangay since they have the discretion to impose their Comments: To register with PhilHealth, the company must submit the following own taxes, fees and charges. Barangay fees may depend on: documents: a. The location and the area (size in square meters) of the place of business; or a. Employer data record (Form ER1); b. The company’s paid-up capital and the area it occupies; or b. Report of employee-members (Form ER2); c. Whether they issue clearance plates or certificates. c. SEC registration; Barangays in Quezon City issue certificates (there are 142 Barangays). If the clear- d. BIR registration; ance is not acted upon by the Barangay within seven (7) days after filing thereof, it may be issued by the mayor (Quezon City Revenue Code (As Amended, 2006), e. Copy of business permit. Chapter 5. Regulatory and Service Fees, Article 21. Mayor’s Permit Fees, Section 73). 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 Procedure 5. Obtain the community tax certificate (CTC) from the and employee numbers within three months. City Treasurer's Office (CTO) * This procedure is simultaneous with a previous procedure Time: 1 day STARTING A BUSINESS Cost: PHP 500 Quezon City Comments: The company must pay an annual community tax. The basic community tax depends on whether the juridical entity is a company, partnership or association. Standard company legal form: Corporation Additional community tax (which shall not exceed PHP 10,000) depends on the Minimum capital requirement: USD 97 = PHP 5,000 value of real property owned by the company in the Philippines (PHP 2 for every PHP Date as of: December 2007 5,000) and on the gross receipts including dividends/earnings derived from business in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is Procedure 1. Verify the availability of the company name with issued to the company upon payment of the community tax and is a prerequisite to the Securities and Exchange Commission (SEC) obtain the Barangay clearance. Time: 1 day Cost: PHP 40 Procedure 6. Obtain the business permit application form at the Comments: The company can verify the availability of the company name on-line. Business Permit 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 Cost: PHP 50 days for a fee of PHP 120, which is renewable upon expiration of the period. Comments: To obtain the business permit, the company must file the following documents at the BPLO: Procedure 2. Obtain bank certificate of deposit of the paid-in a. SEC registration; capital from the Authorized Agent Bank (AAB) b. Barangay clearance; Time: 1 day c. Locational clearance; Cost: No cost d. Certificate of electrical inspection; Procedure 3. Register the company with the SEC and receive pre- e. Fire safety inspection certification. registered taxpayer's identification number (TIN) Procedure 7. Notarize the business permit application form at Time: 3 days the notary Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- Time: 1 day tal stock or the subscription price of the subscribed capital stock, whichever is higher but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of Cost: PHP 50 filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + PHP 470 stock and transfer book (STB) required for new corporations; fee includes Procedure 8. Obtain the fire clearance from the the Bureau of Fire registration of the STB) Protection (BFP) Comments: The company can register online through SEC i-Register but must pay Time: 1 day onsite at the SEC and obtain a TIN. The following documents are required for SEC Cost: PHP 200 registration: a. Company name verification slip; Procedure 9. Obtain the business permit to operate at the BPLO b. Articles of incorporation and bylaws; Time: 6 days c. Treasurer's affidavit; Cost: PHP 3,906 (PHP 1,831 business tax + PHP 200 mayor’s permit + PHP 150 d. Statement of assets and liabilities; sanitary permit + PHP 50 signboard fee + PHP 250 plate + PHP 100 QCBRB + PHP 545 zoning clearance + PHP 780 garbage fee) e. Bank certificate of deposit of the paid-in capital; Comments: The company submits application from and requirements at the BPLO f. Authority to verify the bank account; for evaluation of the application and encoding of data. Then the company is given g. Registration sheet with particulars on directors, officers, stockholders, and so a claim stub for the date when the company needs to come back to the BPLO to get forth; the processed documents. Then the company proceeds to the CTO to get the assess- h. Written undertaking to comply with SEC reporting requirements. ment of the business permit fees and taxes and pay at the CTO’s taxpayer’s lounge. To obtain the TIN, the company has to file: The locational clearance should be accomplished 90 days after the issuance of the a. Barangay clearance; business permit; no inspection is needed. Inspection from the BPLO takes place after issuance of the business permit. b. Mayor's permit; c. Copy of the SEC issued registration certificate. 58 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 10. Buy special books of accounts at bookstore d. Articles of incorporation, bylaws and SEC registration or the certificate of Time: 1 day registration with the Department of Trade and Industry (DTI). Cost: PHP 400 Upon submission of the required documents, the SSS employer and employee numbers will be released. The employees may attend a SSS training seminar after Comments: Special books of accounts are required for registering for VAT. The books registration. SSS prefers that all members go through such training so that each of accounts are sold at bookstores nationwide. One set of journals consisting of four member is aware of their rights and obligations. books (cash receipts account, disbursements account, ledger, general journal) costs about PHP 400. Procedure 17. Register with the Philippines Health Insurance Procedure 11. Register for value added tax (VAT) at the Bureau of Company (PhilHealth) Internal Revenue (BIR) Time: 1 day Time: 2 days Cost: No cost Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Comments: To register with PhilHealth, the company must submit the following mentary stamp tax) documents: Comments: After obtaining the TIN, the company must register with the BIR by a. Employer data record (Form ER1); paying the annual registration fee of PHP 500, at any duly accredited bank, using b. Report of employee-members (Form ER2); payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for c. SEC registration; documentary stamp tax). Upon registration, the BIR will issue to the company the d. BIR registration; certificate of registration—BIR Form No. 2303. e. Copy of business permit. Procedure 12. Pay the documentary stamp taxes (DST) 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 3,643 Comments: The company must pay DST on the original issuance of shares of stock. STARTING A BUSINESS The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of San Juan such shares of stock. This payment with the BIR should be made on the 5th of the month following registration with the SEC. Standard company legal form: Corporation Minimum capital requirement: USD 97 = PHP 5,000 Procedure 13. Obtain the authority to print receipts and invoices Date as of: December 2007 from the BIR Procedure 1. Verify the availability of the company name with Time: 1 day the Securities and Exchange Commission (SEC) Cost: No cost (fees included in procedure 11) Time: 1 day Comments: The authority to print receipts and invoices must be secured before the Cost: PHP 40 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 Comments: The company can verify the availability of the company name on-line. its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Verification is free but reservation of the name, once approved by the SEC, costs PHP this purpose. To obtain the authority to print receipts and invoices from the BIR, the 40 for the first 30 days. The company name can be reserved for a maximum of 120 company must submit the following documents to the Revenue District Office (RDO) days for a fee of PHP 120, which is renewable upon expiration of the period. or concerned office having jurisdiction over the principal place of business: a. Duly completed application for authority to print receipts and invoices (BIR Procedure 2. Obtain bank certificate of deposit of the paid-in Form No.1906); capital from the Authorized Agent Bank (AAB) b. Job order; Time: 1 day c. Final and clear sample of receipts and invoices (machine-printed); Cost: No cost d. Application for registration (BIR Forms No. 1901 or 1903); Procedure 3. Register the company with the SEC and receive pre- e. TRU form or photocopy of TIN card; registered taxpayer's identification number (TIN) f. Proof of payment of annual registration fee (BIR Form No. 0605). Time: 3 days Procedure 14. Print receipts and invoices at the print shops Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- tal stock or the subscription price of the subscribed capital stock, whichever is higher Time: 7 days but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of Cost: PHP 3,500 (between PHP 3,000–PHP 3,800) filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + Comments: The cost is based on the following specifications of the official receipt: PHP 470 stock and transfer book (STB) required for new corporations; fee includes 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. registration of the STB) Comments: The company can register online through SEC i-Register but must pay Procedure 15. Have receipts, invoices and books of accounts onsite at the SEC and obtain a TIN. The following documents are required for SEC stamped by the BIR registration: Time: 1 day a. Company name verification slip; Cost: No cost b. Articles of incorporation and bylaws; Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- c. Treasurer's affidavit; ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR d. Statement of assets and liabilities; RDO or concerned office having jurisdiction over the principal place of business. e. Bank certificate of deposit of the paid-in capital; Procedure 16. Register with the Social Security System (SSS) f. Authority to verify the bank account; Time: 7 days g. Registration sheet with particulars on directors, officers, stockholders, and so forth; Cost: No cost h. Written undertaking to comply with SEC reporting requirements. Comments: To register with the SSS the company must submit the following docu- ments: To obtain the TIN, the company has to file: a. Employer registration form (Form R-1); a. Barangay clearance; b. Employment report (Form R-1A); b. Mayor's permit; c. List of employees, specifying their birth dates, positions, monthly salary and c. Copy of the SEC issued registration certificate. date of employment;  -*450'130$&%63&4t45"35*/("#64*/&44 59

The SEC issues pre-registered TINs only if the company’s application for registration Procedure 11. Obtain the fire clearance from the Bureau of Fire has been approved. The company must still register with the Bureau of Internal Protection (BFP) Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, Time: 3 days obtain and stamp sales invoices, receipts and the books of accounts. Cost: PHP 179 (10% of the regulatory fees to be paid for the mayor's permit) Procedure 4. Obtain the community tax certificate (CTC) from the Comments: The fire clearance fee is paid at the CTO. City Treasurer's Office (CTO) Time: 1 day Procedure 12*. Receive inspection for the fire clearance from the BFP Cost: PHP 500 Time: 1 day Comments: The company must pay an annual community tax. The basic community tax depends on whether the juridical entity is a company, partnership or association. Cost: No cost Additional community tax (which shall not exceed PHP 10,000) depends on the value of real property owned by the company in the Philippines (PHP 2 for every PHP Procedure 13. Obtain the business permit to operate at the BPLO 5,000) and on the gross receipts including dividends/earnings derived from business Time: 3 days in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is Cost: PHP 5,428 (PHP 3,643 business license + PHP 600 mayor’s permit fee + PHP issued to the company upon payment of the community tax and is a prerequisite to 720 garbage fee + PHP 240 sanitary permit fee + PHP 175 inspection fees + PHP 50 obtain the Barangay clearance. signboard fee) Comments: Proceed to the BPLO to submit application form and requirements for Procedure 5. Obtain Barangay clearance encoding. Get final assessment and pay the business permit fees and taxes at the Time: 1 day License Division of the CTO. Cost: PHP 500 Comments: This clearance is obtained from the Barangay where the business is Procedure 14. Buy special books of accounts 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 Cost: PHP 400 own taxes, fees and charges. In San Juan, Barangays issue certificates and the clear- Comments: Special books of accounts are required for registering for VAT. The books ance fee is uniform for all Barangays as per city ordinance. of accounts are sold at bookstores nationwide. One set of journals consisting of four books (cash receipts account, disbursements account, ledger, general journal) costs Procedure 6. Obtain the business permit application form at the about PHP 400. Business Permit and Licensing Office (BPLO) Time: 1 day Procedure 15. Register for value added tax (VAT) at the Bureau of Cost: No cost Internal Revenue (BIR) Comments: To obtain the mayor’s business permit, the company must file the fol- Time: 2 days lowing documents at the BPLO: Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- a. SEC registration; mentary stamp tax) b. Barangay clearance; Comments: After obtaining the TIN, the company must register with the BIR by c. Locational clearance; paying the annual registration fee of PHP 500, at any duly accredited bank, using payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for d. Fire clearance; documentary stamp tax). Upon registration, the BIR will issue to the company the e. Sanitary permit; certificate of registration—BIR Form No. 2303. f. Picture of establishment. Procedure 16. Pay the documentary stamp taxes (DST) Procedure 7. Request preliminary assessment of business permit Time: 1 day fees and taxes from the CTO Cost: PHP 3,643 Time: 1 day Comments: The company must pay DST on the original issuance of shares of stock. Cost: No cost 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 8. Obtain the locational clearance from the City month following registration with the SEC. Planning and Development Office (CPDO) Time: 4 days Procedure 17. Obtain the authority to print receipts and invoices Cost: PHP 2,800 (PHP 2,000 equivalent to PHP 10 per square meter assuming an from the BIR area of 200 square meters x 1.25 processing fee + PHP 100 application fee + PHP 200 Time: 1 day certificate fee) Cost: No cost (fees inlcuded in procedure 15) Comments: The company must submit the following documents: Comments: The authority to print receipts and invoices must be secured before the a. SEC registration; sales receipts and invoices may be printed. The company can ask any authorized b. Barangay clearance; 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 c. Contract of lease; this purpose. To obtain the authority to print receipts and invoices from the BIR, the d. Application form from the BPLO. company must submit the following documents to the Revenue District Office (RDO) or concerned office having jurisdiction over the principal place of business: Procedure 9*. Notarize the locational clearance and business a. Duly completed application for authority to print receipts and invoices (BIR permit application forms at the notary Form No.1906); Time: 1 day b. Job order; Cost: PHP 100 c. Final and clear sample of receipts and invoices (machine-printed); d. Application for registration (BIR Forms No. 1901 or 1903); Procedure 10*. Receive inspection for the locational clearance e. TRU form or photocopy of TIN card; from the CPDO f. fProof of payment of annual registration fee (BIR Form No. 0605). Time: 1 day Cost: No cost Procedure 18. Print receipts and invoices at the print shops Time: 7 days Cost: PHP 3,500 (between PHP 3,000–PHP 3,800) 60 DOING BUSINESS IN THE PHILIPPINES 2008

Comments: The cost is based on the following specifications of the official receipt: but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + PHP 470 stock and transfer book (STB) required for new corporations; fee includes Procedure 19. Have receipts, invoices and books of accounts registration of the STB) stamped by the BIR Comments: The company can register online through SEC i-Register but must pay Time: 1 day onsite at the SEC and obtain a TIN. The following documents are required for SEC registration: Cost: No cost a. Company name verification slip; Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR b. Articles of incorporation and bylaws; RDO or concerned office having jurisdiction over the principal place of business. c. Treasurer's affidavit; d. Statement of assets and liabilities; Procedure 20. Register with the Social Security System (SSS) e. Bank certificate of deposit of the paid-in capital; Time: 6 days f. Authority to verify the bank account; Cost: No cost g. Registration sheet with particulars on directors, officers, stockholders, and so Comments: To register with the SSS the company must submit the following docu- forth; ments: h. Written undertaking to comply with SEC reporting requirements. a. Employer registration form (Form R-1); To obtain the TIN, the company has to file: b. Employment report (Form R-1A); a. Barangay clearance; c. List of employees, specifying their birth dates, positions, monthly salary and b. Mayor's permit; date of employment; c. Copy of the SEC issued registration certificate. d. Articles of incorporation, bylaws and SEC registration or the certificate of registration with the Department of Trade and Industry (DTI). The SEC 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 Upon submission of the required documents, the SSS employer and employee Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, numbers will be released. The employees may attend a SSS training seminar after obtain and stamp sales invoices, receipts and the books of accounts. registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations. Procedure 4. Obtain the community tax certificate (CTC) from the Procedure 21. Register with the Philippines Health Insurance City Treasurer's Office (CTO) Company (PhilHealth) Time: 1 day Time: 1 day Cost: PHP 500 Cost: No cost Comments: The company must pay an annual community tax. The basic community tax depends on whether the juridical entity is a company, partnership or association. Comments: To register with PhilHealth, the company must submit the following Additional community tax (which shall not exceed PHP 10,000) depends on the documents: value of real property owned by the company in the Philippines (PHP 2 for every PHP a. Employer data record (Form ER1); 5,000) and on the gross receipts including dividends/earnings derived from business b. Report of employee-members (Form ER2); in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is c. SEC registration; issued to the company upon payment of the community tax and is a prerequisite to obtain the Barangay clearance. d. BIR registration; e. Copy of business permit. Procedure 5. 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 500 and employee numbers within three months. Comments: This clearance is obtained from the Barangay where the business is * This procedure is simultaneous with a previous procedure located and is required to obtain the business permit from the city or municipality. STARTING A BUSINESS Barangay fees vary for each Barangay since they have the discretion to impose their Taguig own taxes, fees and charges. Barangay fees may depend on: a. The location and the area (size in square meters) of the place of business; or Standard company legal form: Corporation b. The company’s paid-up capital and the area it occupies; or Minimum capital requirement: USD 97 = PHP 5,000 c. Whether they issue clearance plates or certificates. Date as of: December 2007 Barangays in Taguig issue certificates. Procedure 1. Verify the availability of the company name with the Securities and Exchange Commission (SEC) Procedure 6. Obtain and notarize the business permit application Time: 1 day form at the Business Permit and Licensing Office (BPLO) Cost: PHP 40 Time: 1 day Comments: The company can verify the availability of the company name on-line. Cost: PHP 50 Verification is free but reservation of the name, once approved by the SEC, costs PHP Comments: To obtain the business permit, the company must file the following 40 for the first 30 days. The company name can be reserved for a maximum of 120 documents at the BPLO: days for a fee of PHP 120, which is renewable upon expiration of the period. a. SEC registration; b. Application form duly notarized; Procedure 2. Obtain bank certificate of deposit of the paid-in c. Barangay clearance; capital from the Authorized Agent Bank (AAB) d. Corporate community tax (Cedula); Time: 1 day e. Contract of lease; Cost: No cost f. Insurance (comprehensive general liability); Procedure 3. Register the company with the SEC and receive pre- g. Location sketch. registered taxpayer's identification number (TIN) Once the documents are filled, the officer at the Customer Service will forward the Time: 3 days forms to the following offices: (1) at the BPLO for the assessment of fees and tax or- der of payment; and (2) at the Health Department for calculation of sanitary inspec- Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- tion fee. Inspection from the BPLO takes place after issuance of the business permit. tal stock or the subscription price of the subscribed capital stock, whichever is higher  -*450'130$&%63&4t45"35*/("#64*/&44 61

The company may notarize the application form outside of the City Hall or the staff Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- at the City Hall may notarize it if the company pays PHP 50 for the notary service. ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR RDO or concerned office having jurisdiction over the principal place of business. Procedure 7. Obtain the business permit to operate at the BPLO Time: 2 days Procedure 14. Register with the Social Security System (SSS) Cost: PHP 5,023 (PHP 157 business tax for manufacturer or PHP 25 business tax for Time: 3 days retailer + PHP 938 garbage fee + PHP 1,000 mayor’s permit for manufacturer or PHP Cost: No cost 500 mayor’s permit fee for retailer + PHP 500 sanitary fee + PHP 150 sticker/plate fee Comments: To register with the SSS the company must submit the following docu- + PHP 10 medical/health fee + PHP 250 sanitary inspection fee + PHP 400 building ments: inspection fee + PHP 500 mechanical inspection fee + PHP 400 electrical inspection a. Employer registration form (Form R-1); fee + PHP 250 signboard fee + PHP 200 fire permit fee + PHP 585 fire fee) b. Employment report (Form R-1A); Comments: Business permit fees and taxes are paid at the CTO. Inspection from the BPLO takes place after issuance of the business permit. c. List of employees, specifying their birth dates, positions, monthly salary and date of employment; Procedure 8. Buy special books of accounts at bookstore d. Articles of incorporation, bylaws and SEC registration or the certificate of Time: 1 day registration with the Department of Trade and Industry (DTI). Cost: PHP 400 Upon submission of the required documents, the SSS employer and employee numbers will be released. The employees may attend a SSS training seminar after Comments: Special books of accounts are required for registering for VAT. The books registration. SSS prefers that all members go through such training so that each of accounts are sold at bookstores nationwide. One set of journals consisting of four member is aware of their rights and obligations. books (cash receipts account, disbursements account, ledger, general journal) costs about PHP 400. Procedure 15. Register with the Philippines Health Insurance Procedure 9. Register for value added tax (VAT) at the Bureau of Company (PhilHealth) Internal Revenue (BIR) Time: 1 day Time: 2 days Cost: No cost Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Comments: To register with PhilHealth, the company must submit the following mentary stamp tax) documents: Comments: After obtaining the TIN, the company must register with the BIR by a. Employer data record (Form ER1); paying the annual registration fee of PHP 500, at any duly accredited bank, using b. Report of employee-members (Form ER2); payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for c. SEC registration; documentary stamp tax). Upon registration, the BIR will issue to the company the d. BIR registration; certificate of registration—BIR Form No. 2303. e. Copy of business permit. Procedure 10. Pay the documentary stamp taxes (DST) 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: PHP 3,643 Comments: The company must pay DST on the original issuance of shares of stock. STARTING A BUSINESS The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of Tanauan such shares of stock. This payment with the BIR should be made on the 5th of the Standard company legal form: Corporation month following registration with the SEC. Minimum capital requirement: USD 97 = PHP 5,000 Procedure 11. Obtain the authority to print receipts and invoices Date as of: December 2007 from the BIR Procedure 1. Verify the availability of the company name with Time: 1 day the Securities and Exchange Commission (SEC) Cost: No cost (fees inlcuded in procedure 9) Time: 1 day Comments: The authority to print receipts and invoices must be secured before the Cost: PHP 40 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 Comments: The company can verify the availability of the company name on-line. its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Verification is free but reservation of the name, once approved by the SEC, costs PHP this purpose. To obtain the authority to print receipts and invoices from the BIR, the 40 for the first 30 days. The company name can be reserved for a maximum of 120 company must submit the following documents to the Revenue District Office (RDO) days for a fee of PHP 120, which is renewable upon expiration of the period. or concerned office having jurisdiction over the principal place of business: a. Duly completed application for authority to print receipts and invoices (BIR Procedure 2. Obtain bank certificate of deposit of the paid-in Form No.1906); capital from the Authorized Agent Bank (AAB) b. Job order; Time: 1 day c. Final and clear sample of receipts and invoices (machine-printed); Cost: No cost d. Application for registration (BIR Forms No. 1901 or 1903); Procedure 3. Register the company with the SEC and receive pre- e. TRU form or photocopy of TIN card; registered taxpayer's identification number (TIN) f. Proof of payment of annual registration fee (BIR Form No. 0605). Time: 3 days Procedure 12. Print receipts and invoices at the print shops Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- tal stock or the subscription price of the subscribed capital stock, whichever is higher Time: 7 days but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of Cost: PHP 3,500 (between PHP 3,000–PHP 3,800) filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + Comments: The cost is based on the following specifications of the official receipt: PHP 470 stock and transfer book (STB) required for new corporations; fee includes 1/2 bond paper (8 ½ x 5 ½ cm) in duplicate, black print, carbonless for 10 booklets. registration of the STB) Comments: The company can register online through SEC i-Register but must pay Procedure 13. Have receipts, invoices and books of accounts onsite at the SEC and obtain a TIN. The following documents are required for SEC stamped by the BIR registration: Time: 1 day a. Company name verification slip; Cost: No cost b. Articles of incorporation and bylaws; 62 DOING BUSINESS IN THE PHILIPPINES 2008

c. Treasurer's affidavit; Procedure 9*. Receive inspection from the ED d. Statement of assets and liabilities; Time: 1 day e. Bank certificate of deposit of the paid-in capital; Cost: No cost (fees included in procedure 8) f. Authority to verify the bank account; g. Registration sheet with particulars on directors, officers, stockholders, and so Procedure 10. Obtain the business permit to operate at the BPLO forth; Time: 9 days h. Written undertaking to comply with SEC reporting requirements. Cost: 1,874 (PHP 729 business tax + PHP 200 mayor's permit + PHP 500 garbage fee To obtain the TIN, the company has to file: + PHP 20 application fee + PHP 20 police fee + PHP 50 calling fee + PHP 20 medical certificate fee + PHP 20 mayor's clearance + PHP 300 business plate + PHP 15 sticker) a. Barangay clearance; Comments: The company must obtain an assessment of the business permit fees b. Mayor's permit; and taxes at the BPLO. Business permit fees and taxes are paid at the CTO. c. Copy of the SEC issued registration certificate. The SEC issues pre-registered TINs only if the company’s application for registration Procedure 11*. Obtain the police clearance and pay fee at the has been approved. The company must still register with the Bureau of Internal Philippine National Police (PNP) Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, Time: 1 day obtain and stamp sales invoices, receipts and the books of accounts. Cost: PHP 400 Procedure 4. Obtain the community tax certificate (CTC) from the Procedure 12*. Present the official receipt (OR) at the Health and City Treasurer's Office (CTO) Sanitation Department for the sanitary permit Time: 1 day Time: 1 day Cost: PHP 500 Cost: PHP 40 Comments: The company must pay an annual community tax. The basic community tax depends on whether the juridical entity is a company, partnership or association. Procedure 13*. Present the OR at the Bureau of Fire Protection Additional community tax (which shall not exceed PHP 10,000) depends on the value of real property owned by the company in the Philippines (PHP 2 for every PHP (BFP) for the fire clearance 5,000) and on the gross receipts including dividends/earnings derived from business Time: 2 days in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is Cost: PHP 185 (10% of regulatory fees paid during the processing of the business issued to the company upon payment of the community tax and is a prerequisite to permit) obtain the Barangay clearance. Comments: The company presents the OR of the assessed fees to the BFP in order to arrange for the inspection. The company obtains the fire clearance after the inspec- Procedure 5. Obtain Barangay clearance tion takes place. Time: 1 day Cost: PHP 500 (between PHP 100–PHP 1,000) Procedure 14*. Obtain the annual inspection certificate from the Comments: This clearance is obtained from the Barangay where the business is ED located and is required to obtain the business permit from the city or municipality. Time: 2 days Barangay fees vary for each Barangay since they have the discretion to impose their Cost: No cost own taxes, fees and charges. Barangay fees may depend on: a. The location and the area (size in square meters) of the place of business; or Procedure 15. Buy special books of accounts at bookstore 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 400 Barangays in Tanauan issue certificates. Comments: Special books of accounts are required for registering for VAT. The books of accounts are sold at bookstores nationwide. One set of journals consisting of four Procedure 6. Obtain the business permit application form at the books (cash receipts account, disbursements account, ledger, general journal) costs Business Permit and Licensing Office (BPLO) about PHP 400. Time: 1 day Procedure 16. Register for value added tax (VAT) at the Bureau of Cost: No cost Internal Revenue (BIR) Comments: To obtain the business permit, the company must file the following documents at the BPLO: Time: 2 days a. SEC registration; Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- mentary stamp tax) b. Two ID pictures; Comments: After obtaining the TIN, the company must register with the BIR by c. Barangay clearance; paying the annual registration fee of PHP 500, at any duly accredited bank, using d. Residence certificate; payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for e. Police clearance; documentary stamp tax). Upon registration, the BIR will issue to the company the f. Medical certificate; certificate of registration—BIR Form No. 2303. g. Sanitary permit; Procedure 17. Pay the documentary stamp taxes (DST) h. Bureau of Fire Protection clearance; Time: 1 day i. Certificate of inspection; Cost: PHP 3,643 j. Photocopy of land tax (to be taken from the owner of the land). 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 7. Receive inspection from the Tax Mapping Section of such shares of stock. This payment with the BIR should be made on the 5th of the the BPLO month following registration with the SEC. Time: 1 day Cost: No cost Procedure 18. Obtain the authority to print receipts and invoices from the BIR Procedure 8. Proceed to the Engineering Department (ED) for the Time: 1 day assessment of the signboard fee Cost: No cost (fees included in procedure 16) Time: 2 days Comments: The authority to print receipts and invoices must be secured before the Cost: PHP 480 sales receipts and invoices may be printed. The company can ask any authorized  -*450'130$&%63&4t45"35*/("#64*/&44 63 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 Valenzuela 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) Standard company legal form: Corporation or concerned office having jurisdiction over the principal place of business: Minimum capital requirement: USD 97 = PHP 5,000 a. Duly completed application for authority to print receipts and invoices (BIR Date as of: December 2007 Form No.1906); Procedure 1. Verify the availability of the company name with b. Job order; the Securities and Exchange Commission (SEC) c. Final and clear sample of receipts and invoices (machine-printed); Time: 1 day d. Application for registration (BIR Forms No. 1901 or 1903); Cost: PHP 40 e. TRU form or photocopy of TIN card; Comments: The company can verify the availability of the company name on-line. f. 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 19. Print receipts and invoices at the print shops days for a fee of PHP 120, which is renewable upon expiration of the period. Time: 4 days Cost: PHP 2,000 (between PHP 1,000–PHP 2,500) Procedure 2. Obtain bank certificate of deposit of the paid-in Comments: The cost is based on the following specifications of the official receipt: capital from the Authorized Agent Bank (AAB) 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 20. Have receipts, invoices and books of accounts stamped by the BIR Procedure 3. Register the company with the SEC and receive pre- Time: 1 day registered taxpayer's identification number (TIN) Cost: No cost Time: 3 days Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- Cost: PHP 2,452 (PHP 1,457 filing fee equivalent to 1/5 of 1% of the authorized capi- ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR tal stock or the subscription price of the subscribed capital stock, whichever is higher RDO or concerned office having jurisdiction over the principal place of business. but not less than PHP 1,000 + PHP 15 legal research fee (LRF) equivalent to 1% of filing fee but not less than PHP 10 + PHP 510 articles of incorporation and bylaws + Procedure 21. Register with the Social Security System (SSS) PHP 470 stock and transfer book (STB) required for new corporations; fee includes Time: 5 days registration of the STB) Cost: No cost Comments: The company can register online through SEC i-Register but must pay onsite at the SEC and obtain a TIN. The following documents are required for SEC Comments: To register with the SSS the company must submit the following docu- registration: ments: a. Company name verification slip; a. Employer registration form (Form R-1); b. Articles of incorporation and bylaws; b. Employment report (Form R-1A); c. Treasurer's affidavit; c. List of employees, specifying their birth dates, positions, monthly salary and date of employment; d. Statement of assets and liabilities; d. Articles of incorporation, bylaws and SEC registration or the certificate of e. Bank certificate of deposit of the paid-in capital; registration with the Department of Trade and Industry (DTI). f. Authority to verify the bank account; Upon submission of the required documents, the SSS employer and employee g. Registration sheet with particulars on directors, officers, stockholders, and so numbers will be released. The employees may attend a SSS training seminar after forth; registration. SSS prefers that all members go through such training so that each h. Written undertaking to comply with SEC reporting requirements. member is aware of their rights and obligations. To obtain the TIN, the company has to file: Procedure 22. Register with the Philippines Health Insurance a. Barangay clearance; Company (PhilHealth) b. Mayor's permit; Time: 1 day c. Copy of the SEC issued registration certificate. Cost: No cost The SEC 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 Comments: To register with PhilHealth, the company must submit the following Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, documents: obtain and stamp sales invoices, receipts and the books of accounts. a. Employer data record (Form ER1); b. Report of employee-members (Form ER2); Procedure 4. Obtain the community tax certificate (CTC) from City c. SEC registration; Treasurer's Office (CTO) d. BIR registration; Time: 1 day e. Copy of business permit. Cost: PHP 500 Upon submission of the required documents, the company shall get the receiving Comments: The company must pay an annual community tax. The basic community copy of all the forms as proof of membership until PhilHealth releases the employer tax depends on whether the juridical entity is a company, partnership or association. and employee numbers within three months. Additional community tax (which shall not exceed PHP 10,000) depends on the * This procedure is simultaneous with a previous procedure value of real property owned by the company in the Philippines (PHP 2 for every PHP 5,000) and on the gross receipts including dividends/earnings derived from business in the Philippines during the preceding year (PHP 9 for every PHP 5,000). The CTC is issued to the company upon payment of the community tax and is a prerequisite to obtain the Barangay clearance.

Procedure 5. Obtain Barangay clearance Time: 1 day Cost: PHP 300 (between PHP 200–PHP 500) 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. 64 DOING BUSINESS IN THE PHILIPPINES 2008

Barangay fees vary for each Barangay since they have the discretion to impose their Cost: PHP 400 own taxes, fees and charges. Barangay fees may depend on: Comments: Special books of accounts are required for registering for VAT. The books a. The location and the area (size in square meters) of the place of business; or of accounts are sold at bookstores nationwide. One set of journals consisting of four b. The company’s paid-up capital and the area it occupies; or books (cash receipts account, disbursements account, ledger, general journal) costs about PHP 400. c. Whether they issue clearance plates or certificates. Barangays in Valenzuela issue certificates (there are 32 Barangays). Procedure 16. Register for value added tax (VAT) at the Bureau of Internal Revenue (BIR) Procedure 6. Obtain business permit application form at the Business Permit and Licensing Office (BPLO) Time: 2 days Cost: PHP 530 (PHP 500 registration fee + PHP 15 certification fee + PHP 15 docu- Time: 1 day mentary stamp tax) Cost: No cost Comments: After obtaining the TIN, the company must register with the BIR by Comments: To obtain the business permit, the company must file the following paying the annual registration fee of PHP 500, at any duly accredited bank, using documents at the BPLO: payment form—BIR Form No. 0605 (plus PHP 15 for the certification and PHP 15 for a. SEC registration; documentary stamp tax). Upon registration, the BIR will issue to the company the b. Business permit in six (6) copies with sketch of the location of the building at certificate of registration—BIR Form No. 2303. the back; c. Barangay clearance; Procedure 17. Pay the documentary stamp taxes (DST) d. Community tax certificate; Time: 1 day e. Contract of lease; Cost: PHP 3,643 f. Fire safety clearance; 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 g. Locational clearance. such shares of stock. This payment with the BIR should be made on the 5th of the month following registration with the SEC. Procedure 7. Obtain the locational clearance from the City Engineer's Office (CEO) Procedure 18. Obtain the authority to print receipts and invoices Time: 2 days from the BIR Cost: PHP 450 (PHP 50 filing fee + PHP 400 processing fee equivalent to PHP 2 per Time: 1 day square meter for commercial businesses assuming an area of 200 square meters) Cost: No cost (fees included in procedure 16) Procedure 8*. Receive inspection for the locational clearance 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 from the CEO printing company to print its official forms, or it can print its own forms (i.e., it uses Time: 1 day its computers to print loose-leaf invoice forms) after obtaining a permit from BIR for Cost: No cost 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) Procedure 9. Obtain the sanitation assessment from the Health or concerned office having jurisdiction over the principal place of business: Department a. Duly completed application for authority to print receipts and invoices (BIR Time: 1 day Form No.1906); Cost: PHP 200 b. Job order; c. Final and clear sample of receipts and invoices (machine-printed); Procedure 10. Request the fire safety inspection from the Bureau d. Application for registration (BIR Forms No. 1901 or 1903); of Fire Protection (BFP) e. TRU form or photocopy of TIN card; Time: 1 day f. Proof of payment of annual registration fee (BIR Form No. 0605). Cost: No cost Procedure 19. Print receipts and invoices at the print shops Procedure 11. Obtain the fire safety clearance from the BFP Time: 7 days Time: 1 day Cost: PHP 3,500 (between PHP 3,000–PHP 3,800) Cost: PHP 209 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 12. Get assessment of the engineering fees from the CEO Procedure 20. Have receipts, invoices and books of accounts Time: 1 day stamped by the BIR Cost: PHP 910 (PHP 120 building inspection fee + PHP 500 annual electrical inspec- Time: 1 day tion fee + PHP 200 annual mechanical inspection fee + PHP 60 annual plumbing Cost: No cost inspection fee + PHP 30 annual signboards inspection fee) Comments: After the printing of receipts and invoices, a Printer’s Certificate of Deliv- ery (PCD) is issued, which the company shall have stamped as “Registered” by the BIR Procedure 13. Obtain the business permit to operate at the BPLO RDO or concerned office having jurisdiction over the principal place of business. Time: 4 days Cost: PHP 2,200 (PHP 600 tax for general merchandise + PHP 600 mayor's permit + Procedure 21. Register with the Social Security System (SSS) PHP 600 garbage fee + PHP 300 peace and order fund + PHP 100 plate/sticker) Time: 5 days Comments: The applicant submits the application form and requirements at the Cost: No cost BPLO and gets an assessment of the business permit fees and taxes. The business Comments: To register with the SSS the company must submit the following docu- permit fees and taxes are paid at the CTO. ments: Procedure 14*. Receive inspection from the BPLO a. Employer registration form (Form R-1); Time: 1 day b. Employment report (Form R-1A); Cost: No cost c. List of employees, specifying their birth dates, positions, monthly salary and date of employment; Procedure 15. Buy special books of accounts at bookstore d. Articles of incorporation, bylaws and SEC registration or the certificate of registration with the Department of Trade and Industry (DTI). Time: 1 day  -*450'130$&%63&4t45"35*/("#64*/&44 65

Upon submission of the required documents, the SSS employer and employee numbers will be released. The employees may attend a SSS training seminar after registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations.

Procedure 22. Register with the Philippines Health Insurance Company (PhilHealth) Time: 1 day 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; e. Copy of business permit. 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 is simultaneous with a previous procedure 66

Dealing with licenses

Caloocan time to complete the construction may be shorter if the warehouse is to be built in an industrial area versus other areas. In Caloocan, the cost is based on the Caloocan Procedures to build a warehouse City Zoning Ordinance. Warehouse Value: USD 380,011 = PHP 19,500,000 Date as of: December 2007 Procedure 6. Receive inspection for the locational clearance from Procedure 1. Obtain certified true copy (CTC) of the land title the CPDO from the Registry of Deeds (RD) Time: 1 day Time: 2 days Cost: No cost (fees included in procedure 5) Cost: PHP 30 Comments: The CPDO conducts an inspection of the property before issuance of the locational clearance. Comments: The company must obtain a CTC of the land title as proof of ownership of the land on which the warehouse is to be built. Procedure 7. Obtain the locational clearance from the CPDO Procedure 2*. Obtain CTC of the tax declaration of real property Time: 13 days from the City Assessor’s Office (CAO) Cost: No cost Time: 2 days Comments: The company goes to the CPDO to obtain the locational clearance. Cost: PHP 50 Procedure 8. Apply for the building permit at the Office of the Comments: The company must obtain a CTC of the tax declaration of real property Building Official (OBO) so that it can identify the property by its index number. Time: 1 day Procedure 3*. Obtain lot plan with site map from the geodetic Cost: PHP 500 (filing fee) engineer Comments: The company must obtain the building permit along with the electri- Time: 3 days cal, sanitary, and mechanical permits, and have the design, plans, and technical specifications of the project approved to ensure they are compliant with the design Cost: PHP 1,000 codes, and safety laws and regulations. Caloocan City is still using the old forms for Comments: The company must obtain the lot plan with site map from a geodetic building permit applications which do not require notarization. The cost of the build- engineer to confirm the location of the land purported to be in the land title. A lot ing permit is based on the National Building Code of the Philippines/ Presidential plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Decree No. 1096 and the National Building Code Development Office Memorandum vey, or at least after an analysis has been conducted of the lot technical description Circular No. 01 S-2005. appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site map. The company may pay more or less, depending on the geodetic engineer and Procedure 9. Obtain fire safety evaluation and correction sheet the city where the warehouse is to be built. on the building plans from the local fire marshal at the Bureau of Procedure 4*. Obtain Barangay clearance Fire Protection (BFP) Time: 2 days Time: 7 days Cost: PHP 100 Cost: PHP 19,500 (0.1% of the estimated value of the building) Comments: This clearance confirms that the intended land use is compliant with Comments: This approval is required to confirm that the plans and specifications the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they conform to all the fire safety and control requirements of the Fire Code of the Philip- have the discretion to impose their own taxes, fees and charges. pines. The company submits the plans and the recommendation letter from the Building Official to the local fire marshal to obtain approval. As per National Building Code, the fire marshal shall give his/her recommendation within five working days Procedure 5. Request the locational clearance from the City from date of referral. Failure to act within the said period shall mean that the plans Planning and Development Office (CPDO) and specifications conform to all the requirements of the Fire Code of the Philip- Time: 1 day pines. Cost: PHP 4,350 (PHP 3 per square meter + PHP 300 filing fee + PHP 150 inspection fee) Comments: This clearance confirms that the intended land use conforms to the local government’s zoning ordinances, wherein a Barangay clearance is required. The  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 67

Procedure 10. Obtain the building permit from the OBO Procedure 20. Receive inspection for the CEI from the OBO Time: 4 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 based on PHP 30 per square meter to account for ancillary costs such as electrical, Procedure 21. Obtain the CEI from the OBO mechanical and plumbing fees) Time: 1 day Comments: After the building permit application is approved, the Building Official Cost: No cost releases the order of payment for the company to pay at the City Treasurer’s Office. Comments: After inspection, the company obtains the certificate from the OBO. Once the company has paid the building permit fees, it will present the official receipt to the Receiving/Releasing Section for recording and issuance of the permit. Procedure 22. Request connection for electricity from Procedure 11. Receive inspection from the BFP Time: 1 day Time: 1 day Cost: No cost Cost: No cost (fees included in procedure 9) Comments: The electric company is Manila Electric Company (Meralco). The company visits Meralco to request the connection and submit the certificate of electrical Comments: During the construction of the warehouse, the BFP will conduct an inspection and electrical plans. Meralco conducts an inspection of the warehouse and inspection of the site at random, to determine whether the plans and fire safety in the following weeks the technical staff visit the site for the electricity connection. precautions are being observed (section 1.202 of the Fire Code of the Philippines). The cost of the transformers is PHP 106,850 per transformer (two needed). The service deposit is PHP 138,580. Both the transformer and service deposit are refundable Procedure 12. Receive inspection from the OBO after the first year through annual deductions to the electricity bill or through checks Time: 1 day computed at 25% of the applicant’s annual gross distribution revenue. Cost: No cost (fees included in procedure 10) Comments: During the construction of the warehouse, the OBO will conduct an Procedure 23. Receive inspection for electricity from Meralco inspection of the site at random, to determine whether the construction follows the Time: 1 day approved building plans and design. Cost: No cost

Procedure 13. Request the fire safety inspection certificate (FSIC) Procedure 24. Obtain connection for electricity from Meralco from the BFP Time: 88 days Time: 1 day Cost: No cost Cost: PHP 3,901 (10% of building permit fees) Comments: After construction of the warehouse, the company requests the BFP Procedure 25*. Request connection for water and sewage from for an inspection of the site to certify that the required fire safety construction, fire , Inc (Maynilad) protective and/or warning systems are properly installed and in good working condi- Time: 1 day tion. Cost: PHP 6,411 (installation fee paid during application) Procedure 14. Receive inspection for the FSIC from the BFP Comments: The water company is Maynilad. The company visits Maynilad to request the connection and inspection time takes two weeks. Maynilad subcontracts Time: 1 day the installation with a contractor and the time of actual installation depends on the Cost: No cost (fees included in procedure 13) contractor.

Procedure 15. Obtain the FSIC from the BFP Procedure 26*. Receive inspection for water and sewage Time: 1 day connection from Maynilad Cost: No cost Time: 1 day Comments: After inspection, the company obtains the certificate from the BFP. Cost: No cost

Procedure 16. Request the certificate of occupancy from the OBO Procedure 27*. Obtain water and sewage connection from Time: 1 day Maynilad Cost: PHP 20,000 (PHP 1,000 per one million of the project value) Time: 30 days Comments: The company must secure first the occupancy certificate before Cost: No cost applying for the certificate of electrical inspection. The time for inspection will be scheduled when the company visits the OBO to apply for the certificate. A building Procedure 28*. Obtain telephone connection from the telephone official inspects the site and certifies that the project as built conforms to the design, company plans, and the actual cost of the project. Time: 5 days Procedure 17. Receive inspection for the certificate of occupancy Cost: PHP 1,310 (installation fee and unit) from the OBO Comments: There are two telephone companies providing landline services in Time: 1 day Caloocan. These are Philippine Long Distance Co. (PLDT) and Globelines. For PLDT, the cost is PHP 1,500 and there is a lock-in period of 24 months for the regular Cost: No cost (fees included in procedure 16) phone line. For Globelines, there is no cost if the applicant provides proof of financial capability. Otherwise, the applicant has to pay PHP 1,310. There is a lock-in period of Procedure 18. Obtain the certificate of occupancy from the OBO 12 months for the regular phone line. The case study assumes that the company will Time: 3 days request services from Globelines as this is the option favorable to the company. Cost: No cost Comments: After inspection, the company obtains the certificate from the OBO. Procedure 29*. Secure the tax declaration of improvement from the CAO Procedure 19. Request the certificate of electrical inspection (CEI) Time: 1 day from the Electrical Division of the OBO Cost: No cost Time: 1 day Comments: The company must update the official records to include the newly Cost: No cost built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the Comments: The company visits the Electrical Division of the OBO to request the building plan and certificate of occupancy every month to notify them of the new certificate of electrical inspection and schedule for an inspection to certify that the building construction. This may take less time if the company submits the above as-built plans correspond to the actual completed construction works. documents to the CAO, since it can obtain the new tax declaration within that day. * This procedure is simultaneous with a previous procedure 68 DOING BUSINESS IN THE PHILIPPINES 2008

DEALING WITH LICENSES specifications of the project approved to ensure they are compliant with the design Cebu codes, and safety laws and regulations. While in other cities the company would go to the BFP to request for the local Fire Mashall’s recommendations with respect to Procedures to build a warehouse fire safety and control requirements (done while the application for building permit Warehouse Value: USD 380,011 = PHP 19,500,000 is being processed), in Cebu, the OBO has a Liaison Officer who would go to the BFP Date as of: December 2007 on behalf of the company to get the recommendation.

Procedure 1. Obtain certified true copy (CTC) of the land title Procedure 9. Get evaluation and approval of the architectural from the Registry of Deeds (RD) plans from the OBO Time: 3 days Time: 1 day Cost: PHP 30 Cost: No cost (fees included in procedure 15) Comments: The company must obtain a CTC of the land title as proof of ownership Comments: Upon submitting the required documents for the building permit, the of the land on which the warehouse is to be built. company has to visit different sections to have the plans evaluated and approved.

Procedure 2*. Obtain CTC of the tax declaration of real property Procedure 10. Get evaluation and approval of the civil/ structural from the City Assessor’s Office (CAO) plans from the OBO Time: 1 day Time: 1 day Cost: PHP 30 Cost: No cost (fees included in procedure 15) Comments: The company must obtain a CTC of the tax declaration of real property so that it can identify the property by its index number. Procedure 11. Get evaluation and approval of the line and grade plans from the OBO Procedure 3*. Obtain lot plan with site map from the geodetic Time: 1 day engineer Cost: No cost (fees included in procedure 15) Time: 2 days Cost: PHP 1,250 Procedure 12. Get evaluation and approval of the sanitary and Comments: The company must obtain the lot plan with site map from a geodetic plumbing plans from the OBO engineer to confirm the location of the land purported to be in the land title. A lot Time: 1 day plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Cost: No cost (fees included in procedure 15) vey, or at least after an analysis has been conducted of the lot technical description appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site map. The company may pay more or less, depending on the geodetic engineer and Procedure 13. Get evaluation and approval of the electrical plans the city where the warehouse is to be built. Time: 1 day Cost: No cost (fees included in procedure 15) Procedure 4*. Obtain Barangay clearance Time: 2 days Procedure 14. Obtain the parking compliance from the City Cost: PHP 200 (between PHP 100–PHP 300) Mayor’s Office (CMO) Comments: This clearance confirms that the intended land use is compliant with Time: 1 day the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they Cost: No cost have the discretion to impose their own taxes, fees and charges. Procedure 15. Obtain the building permit from the OBO Procedure 5. Request the locational clearance from the City Time: 30 days Planning and Development Office (CPDO) Cost: PHP 44,211 (as of December 2007, the city used the older formula in the Time: 1 day National Building Code of the Philippines for the cost of the building permit. This was Cost: PHP 20,604 (PHP 1,000 + 1/10 of 1% of the total estimated cost of the project PHP 12 per square meter. The computation here is based on PHP 19 per square meter in excess of PHP 100,000 for zoning fee + 1% of the zoning fee for legal and research to account for ancillary costs such as electrical, mechanical and plumbing fees plus fee PHP 19,500 for the cost of the fire safety approval.) Comments: This clearance confirms that the intended land use conforms to the Comments: After the building permit application is approved, the Building Official local government’s zoning ordinances, wherein a Barangay clearance is required. The releases the order of payment for the company to pay at the City Treasurer’s Office. time to complete the construction may be shorter if the warehouse is to be built in After the official receipt is presented to the Receiving/Releasing Section for record- an industrial area versus other areas. The cost is based on the Housing and Land Use ing, the Head of the Processing Division will endorse the application to the Mayor’s Regulatory Board (HLURB) Schedule of Fees 1998. Office for approval of the parking plans. After getting parking compliance, the Head of the Processing Division will endorse the application to the Building Official for Procedure 6. Receive inspection for the locational clearance from approval of the building permit. the CPDO Procedure 16. Receive inspection from the Bureau of Fire Time: 1 day Protection (BFP) Cost: No cost (fees included in procedure 5) Time: 1 day Comments: The CPDO conducts an inspection of the property before issuance of Cost: No cost (fees included in procedure 15) the locational clearance. Comments: During the construction of the warehouse, the BFP will conduct an Procedure 7. Obtain the locational clearance from the CPDO inspection of the site at random, to determine whether the plans and fire safety precautions are being observed (section 1.202 of the Fire Code of the Philippines). Time: 6 days Cost: No cost Procedure 17. Receive inspection from the OBO Comments: The company goes to the CPDO to obtain the locational clearance. Time: 1 day Cost: No cost (fees included in procedure 15) Procedure 8. Apply for the building permit at the Office of the Comments: During the construction of the warehouse, the OBO will conduct an Building Official (OBO) inspection of the site at random, to determine whether the construction follows the Time: 1 day approved building plans and design. Cost: No cost Comments: The company must obtain the building permit along with the electri- cal, sanitary, and mechanical permits, and have the design, plans, and technical  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 69

Procedure 18. Request the fire safety inspection certificate (FSIC) Procedure 28*. Receive inspection for water connection from from the BFP MCWD Time: 1 day Time: 1 day Cost: PHP 2,471 (10% of building permit fees) Cost: No cost Comments: After construction of the warehouse, the company requests the BFP for an inspection of the site to certify that the required fire safety construction, fire Procedure 29*. Obtain water connection from MCWD protective and/or warning systems are properly installed and in good working condi- Time: 15 days tion. Cost: No cost

Procedure 19. Receive inspection for the FSIC from the BFP Procedure 30*. Obtain telephone connection from the telephone Time: 1 day company Cost: No cost (fees included in procedure 18) Time: 5 days Cost: PHP 1,310 (installation fee and unit) Procedure 20. Obtain the FSIC from the BFP Comments: There are two telephone companies providing landline services in Time: 3 days Cebu. These are Philippine Long Distance Co. (PLDT) and Globelines. For PLDT, the Cost: No cost cost is PHP 1,500 and there is a lock-in period of 12 months for the regular phone Comments: After inspection, the company goes to the BFP to obtain the certificate line. For Globelines, there is no cost if the applicant provides proof of financial and submit it to the OBO in order to process the occupancy certificate. capability. Otherwise, the applicant has to pay PHP 1,310. There is a lock-in period of 12 months for the regular phone line. The case study assumes that the company will Procedure 21. Request the certificate of occupancy and certificate request services from Globelines as this is the option favorable to the company. of electrical inspection (CEI) from the OBO Time: 1 day Procedure 31*. Secure the tax declaration of improvement at the CAO Cost: PHP 3,000 Time: 3 days Comments: The application for the certificate of occupancy includes a form for the certificate of electrical inspection. The certificates are prerequisites for the electricity Cost: No cost connection and are released after a team of inspectors (architectural, structural, elec- Comments: The company must update the official records to include the newly trical, mechanical, and sanitary) inspects the site and certifies that the warehouse as built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the built conforms to the design, plans, and cost of the project. building plan and certificate of occupancy every month to notify them of the new building construction. This may take less time if the company submits the above Procedure 22. Receive inspection for the certificate of occupancy documents to the CAO. The tax declaration of improvement is released after an ap- and CEI from the OBO praiser inspects the property on the same or the following day. Time: 1 day * This procedure is simultaneous with a previous procedure Cost: No cost (fees included in procedure 21) DEALING WITH LICENSES Davao Procedure 23. Obtain the certificate of occupancy and CEI from the OBO Procedures to build a warehouse Time: 3 days Warehouse Value: USD 380,011 = PHP 19,500,000 Cost: No cost Date as of: December 2007 Procedure 1. Obtain certified true copy (CTC) of the land title Procedure 24. Request connection for electricity from Visayan from the Registry of Deeds (RD) Electric Co. (VECO) Time: 2 days Time: 1 day Cost: PHP 70 Cost: PHP 269,385 (cost of three 50kVA transformers) Comments: The company must obtain a CTC of the land title as proof of ownership Comments: The electric company is VECO. The company visits VECO to request the of the land on which the warehouse is to be built. connection and submit the certificate of electrical inspection and electrical plans. VECO conducts an inspection of the warehouse and in the following weeks the tech- Procedure 2*. Obtain lot plan with site map from the geodetic nical staff visit the site for the electric connection. The cost of the transformers is PHP 89,795 per transformer (three needed) and is refunded upon termination of contract. engineer The lines and labor costs amounting to PHP 30,000 are refunded a year after the start Time: 2 days of contract through a deduction to monthly bills computed at 25% of the applicant’s Cost: PHP 500 annual gross distribution revenue. 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 25. Receive inspection for electricity from VECO 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. The going rate is PHP 1,500 per geodetic lot plan with site map. The company may pay more or less, depending on the geodetic engineer and Comments: The electrical engineer of VECO will conduct an inspection and review the city where the warehouse is to be built. the electrical plan of the warehouse.

Procedure 26. Obtain connection for electricity from VECO Procedure 3*. Obtain Barangay clearance Time: 1 day Time: 19 days Cost: PHP 50 Cost: No cost Comments: This clearance confirms that the intended land use is compliant with Procedure 27*. Request connection for water from the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they Water District (MCWD) have the discretion to impose their own taxes, fees and charges. Time: 1 day Procedure 4. Request the locational clearance from the City Cost: PHP 4,700 (installation fee paid during application) Planning and Development Office (CPDO) Comments: The local service provider is the MCWD. Cebu has no sewage system. Time: 1 day Cost: PHP 2,250 (PHP 1.5 per square meter + PHP 300 filing fee) 70 DOING BUSINESS IN THE PHILIPPINES 2008

Comments: This clearance confirms that the intended land use conforms to the Comments: During the construction of the warehouse, the BFP will conduct an local government’s zoning ordinances, wherein a Barangay clearance is required. The inspection of the site at random, to determine whether the plans and fire safety time to complete the construction may be shorter if the warehouse is to be built in precautions are being observed (section 1.202 of the Fire Code of the Philippines). an industrial area versus other areas. Procedure 12. Receive inspection from the OBO Procedure 5. Notarize the locational clearance at the notary Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 10) Cost: PHP 100 Comments: During the construction of the warehouse, the OBO will conduct an inspection of the site at random, to determine whether the construction follows the Procedure 6. Receive inspection for the locational clearance from approved building plans and design. the CPDO Time: 1 day Procedure 13. Request the fire safety inspection certificate (FSIC) Cost: No cost (fees included in procedure 4) from the BFP Comments: The CPDO conducts an inspection of the property before issuance of Time: 1 day the locational clearance. Cost: PHP 1,641 (10% of total fees for certificate of occupancy) Comments: After construction of the warehouse, the company requests the BFP Procedure 7. Obtain the locational clearance from the CPDO for an inspection of the site to certify that the required fire safety construction, fire Time: 2 days protective and/or warning systems are properly installed and in good working condi- Cost: No cost tion. Comments: The company goes to the CPDO to obtain the locational clearance. Procedure 14. Receive inspection for the FSIC from the BFP Procedure 8. Apply for the building permit at the Office of the Time: 1 day Building Official (OBO) Cost: No cost (fees included in procedure 13) Time: 1 day Procedure 15. Obtain the FSIC from the BFP Cost: PHP 100 (filing fee) Time: 3 days Comments: The company must obtain the building permit along with the electri- cal, sanitary, and mechanical permits, and have the design, plans, and technical Cost: No cost specifications of the project approved to ensure they are compliant with the design Comments: After inspection, the company obtains the certificate from the BFP. codes, and safety laws and regulations. To obtain the building permit, the company gets the application forms and checklist from the Receiving Section at the OBO. The Procedure 16. Obtain validation from Zoning Administrator at receiving personnel will check if all documents in the checklist are satisfied. In Davao the CPDO the building permit application need not be notarized since the city is using the old Time: 2 days application forms which do not require notarization. Cost: PHP 300 (filing fee) Procedure 9. Obtain fire safety evaluation and correction sheet Comments: This is clearance confirms that the warehouse has complied with the on the building plans from the local fire marshal at the Bureau of issued locational clearance. The company submits the completed forms for the application of certificate of occupancy including certificate of completion, approved Fire Protection (BFP) building plans, and location clearance to the Zoning Administrator for validation that Time: 7 days the completed project conforms to the issued locational clearance. This validation is Cost: PHP 19,500 (0.1% of the estimated value of the building) a prerequisite for obtaining the certificate of occupancy. Comments: After the building permit application is approved, the Building Of- ficial releases the order of payment for the company to pay at the City Treasurer’s Procedure 17*. Receive inspection for Zoning Administrator’s Office. The approval from the fire marshal is required to confirm that the plans and validation from the CPDO specifications conform to all the fire safety and control requirements of the Fire Code Time: 1 day of the Philippines. Upon presentation of the official receipts, the company submits Cost: No cost all the documents and plans together with the endorsement letter from the Building Official to the local to obtain approval from the latter with respect to fire safety and Comments: After submission, inspection may take place in the afternoon or the fol- control requirements. As per National Building Code, the shall give his/her recom- lowing day conducted by the CPDO, wherein the Zoning Administrator holds office. mendation within five working days from date of referral. Failure to act within said period shall mean that the plans and specifications conform to all the requirements Procedure 18. Request the certificate of occupancy and certificate of the Fire Code of the Philippines. While the company is getting approval from the of electrical inspection (CEI) from the OBO local fire marshal, processing of application, checking plans and specifications by the Time: 1 day technical staff of the OBO is ongoing. Cost: PHP 16,506 (project value/1.2 million x 1,000 plus PHP 60 plumbing fee + PHP 96 electrical fee + PHP 100 filing fee) Procedure 10. Obtain the building permit from the OBO Comments: The application for the certificate of occupancy includes a form for the Time: 18 days certificate of electrical inspection. The certificates are prerequisites for the electricity Cost: PHP 39,018 (according to the National Building Code of the Philippines the connection and are released after a team of inspectors (architectural, structural, elec- cost of the building permit is PHP 23 per square meter. The computation here is trical, mechanical, and sanitary) inspects the site and certifies that the warehouse as based on PHP 30 per square meter to account for ancillary costs such as electrical, built conforms to the design, plans, and cost of the project. mechanical and plumbing fees) Comments: After the local fire marshal’s approval, the company submits all docu- Procedure 19. Receive inspection for the certificate of occupancy ments to the Pre-Evaluation Section at the OBO. After pre-evaluation, the Receiving and CEI from the OBO Section officially receives the application for Building Permit. Upon receipt, the Build- Time: 1 day ing Official assigns the application to the Chief Processing and Evaluation Division Cost: No cost (fees included in procedure 18) (CPED) for technical evaluation of plans. The CPED refers to the Chief of Enforcement who recommends the application for the approval of the Building Official. The approved application is forwarded to the Records Section of the Administrative Divi- Procedure 20. Obtain the certificate of occupancy and CEI from sion for releasing of the building permit, duly stamped with the permit number. the OBO Time: 5 days Procedure 11. Receive inspection from the BFP Cost: PHP 500 Time: 1 day Cost: No cost (fees inlcuded in procedure 9)  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 71

Procedure 21. Request connection for electricity from Davao DEALING WITH LICENSES Light and Electric Company (DLEC) Lapu-Lapu Time: 1 day Procedures to build a warehouse Cost: PHP 255,000 (cost of three 50kVA transformers) Warehouse Value: USD 380,011 = PHP 19,500,000 Comments: The electric company is DLEC. The company visits DLEC to request the Date as of: December 2007 connection. DLEC conducts an inspection of the warehouse and in the following days the technical staff visit the site for the electric connection. The cost of the Procedure 1. Obtain certified true copy (CTC) of the land title transformers is PHP 85,000 (three needed) and is refunded upon termination of the from the Registry of Deeds (RD) contract. The installation cost of PHP 45,000 is refunded after a year through deduc- Time: 2 days tions to monthly bills computed at 25% of the applicant’s annual gross distribution revenue. Cost: PHP 30 Comments: The company must obtain a CTC of the land title as proof of ownership Procedure 22. Receive inspection for electricity from DLEC of the land on which the warehouse is to be built. Time: 1 day Procedure 2*. Obtain CTC of the tax declaration of real property Cost: No cost from the City Assessor’s Office (CAO) Procedure 23. Obtain connection for electricity from DLEC Time: 2 days Time: 2 days Cost: PHP 30 Cost: No cost Comments: The company must obtain a CTC of the tax declaration of real property so that it can identify the property by its index number. Procedure 24*. Request connection for water and sewage from Davao Water District (DWD) Procedure 3*. Obtain lot plan with site map from the geodetic Time: 1 day engineer Time: 3 days Cost: PHP 1,500 (installation fee paid during application) Cost: PHP 1,250 Comments: The local service provider is DWD. The company visits DWD to request the connection; connection is effected some days after the inspection. 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 25*. Receive inspection for water and sewage 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 connection from DWD appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site Time: 1 day map. The company may pay more or less, depending on the geodetic engineer and Cost: No cost the city where the warehouse is to be built.

Procedure 26*. Obtain water and sewage connection from DWD Procedure 4*. Obtain Barangay clearance Time: 5 days Time: 2 days Cost: No cost Cost: PHP 100 Comments: This clearance confirms that the intended land use is compliant with Procedure 27*. Obtain telephone connection from the telephone the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they company have the discretion to impose their own taxes, fees and charges. Time: 4 days Cost: PHP 1,500 (installation fee and unit) Procedure 5. Request the locational clearance from the City Comments: There are two telephone companies providing landline services in Planning and Development Office (CPDO) Davao. These are Philippine Long Distance Co. (PLDT) and Bayantel. For PLDT, the Time: 1 day cost is PHP 2,100 (PHP 1,500 installation fee and unit + PHP 600 deposit (monthly Cost: PHP 20,400 (PHP 1,000 + 1/10 of 1% of the total estimated cost of the project rate)) and there is a lock-in period of 12 months for the regular phone line. For Bay- in excess of PHP 100,000) antel, the cost is PHP 2,449 (PHP 1,550 installation fee and unit + PHP 899 deposit Comments: This clearance confirms that the intended land use conforms to the (monthly rate)) and there is a lock-in period of 12 months for the regular phone line. local government’s zoning ordinances, wherein a Barangay clearance is required. The The case study assumes that the company will request services from PLDT as this is time to complete the construction may be shorter if the warehouse is to be built in the option favorable to the company. an industrial area versus other areas. The cost is based on the Housing and Land Use Regulatory Board (HLURB) Schedule of Fees 1998. Procedure 28*. Secure the tax declaration of improvement at the City Assessor’s Office (CAO) Procedure 6. Receive inspection for the locational clearance from Time: 2 days the CPDO Cost: No cost Time: 1 day Comments: The company must update the official records to include the newly Cost: No cost (fees included in procedure 5) built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the Comments: The CPDO conducts an inspection of the property before issuance of building plan and certificate of occupancy every month to notify them of the new the locational clearance. building construction. This may take less time if the company submits the above documents to the CAO. The tax declaration of improvement is released after an ap- Procedure 7. Obtain the locational clearance from the CPDO praiser inspects the property on the same or the following day. Time: 8 days * This procedure is simultaneous with a previous procedure Cost: No cost Comments: The company goes to the CPDO to obtain the locational clearance.

Procedure 8. Apply for the building permit at the Office of the Building Official (OBO) Time: 1 day Cost: No cost Comments: The company must obtain the building permit along with the electrical, sanitary, and mechanical permits, and have the design, plans, and technical specifi- 72 DOING BUSINESS IN THE PHILIPPINES 2008 cations of the project approved to ensure they are compliant with the design codes, Comments: During the construction of the warehouse, the OBO will conduct an and safety laws and regulations. inspection of the site at random, to determine whether the construction follows the approved building plans and design. Procedure 9. Obtain fire safety evaluation and correction sheet on the building plans from the local fire marshal at the Bureau of Procedure 18. Obtain connection to the city’s sewage system Fire Protection (BFP) Time: 1 day Time: 7 days Cost: No cost Cost: PHP 19,500 (0.1% of the estimated value of the building) Procedure 19. Request the fire safety inspection certificate (FSIC) Comments: This approval is required to confirm that the plans and specifications conform to all the fire safety and control requirements of the Fire Code of the from the BFP Philippines. Upon presentation of the official receipts, the company submits all Time: 1 day the documents and plans together with the endorsement letter from the Building Cost: PHP 2,471 (10% of building permit fees) Official to the local fire marshal to obtain approval from the latter with respect to fire Comments: After construction of the warehouse, the company requests the BFP safety and control requirements. As per National Building Code, the fire marshal shall for an inspection of the site to certify that the required fire safety construction, fire give his/her recommendation within five working days from date of referral. Failure protective and/or warning systems are properly installed and in good working condi- to act within said period shall mean that the plans and specifications conform to all tion. the requirements of the Fire Code of the Philippines. While awaiting approval from the fire marshal, the company goes from desk to desk to have the plans evaluated Procedure 20. Receive inspection for the FSIC from the BFP and approved. Time: 1 day Procedure 10. Get evaluation and approval of the architectural Cost: No cost (fees included in procedure 19) plans from the OBO Procedure 21. Obtain the FSIC from the BFP Time: 1 day Time: 7 days Cost: No cost (fees included in procedure 15) Cost: No cost Comments: Upon submitting the required documents for the building permit, the company has to visit different sections to have the plans evaluated and approved. Comments: At the OBO, the company is given an endorsement for the BFP to conduct final inspection with regards to fire safety, which the company takes to the Procedure 11. Get evaluation and approval of the civil/ structural BFP for the scheduling of an inspection. After the inspection, the company goes back to the BFP to obtain the certificate and submit it to the OBO in order to process the plans from the OBO occupancy certificate. Time: 1 day Cost: No cost (fees included in procedure 15) Procedure 22. Request the certificate of occupancy and certificate of electrical inspection (CEI) from the OBO Procedure 12. Get evaluation and approval of the line and grade Time: 1 day plans from the OBO Cost: PHP 1,750 Time: 1 day Comments: The application for the certificate of occupancy includes a form for the Cost: No cost (fees included in procedure 15) certificate of electrical inspection. The certificates are prerequisites for the electricity connection and are released after a team of inspectors (architectural, structural, elec- Procedure 13. Get evaluation and approval of the sanitary, trical, mechanical, and sanitary) inspects the site and certifies that the warehouse as sewage and plumbing plans from the OBO built conforms to the design, plans, and cost of the project. Time: 1 day Cost: No cost (fees included in procedure 15) Procedure 23. Receive inspection for the certificate of occupancy and CEI from the OBO Procedure 14. Get evaluation and approval of the electrical plans Time: 1 day from the OBO Cost: No cost (fees included in procedure 22) Time: 1 day Cost: No cost (fees included in procedure 15) Procedure 24. Obtain the certificate of occupancy and CEI from the OBO Procedure 15. Obtain the building permit from the OBO Time: 14 days Time: 16 days Cost: No cost Cost: PHP 24,711 (as of December 2007, the city used the older formula in the National Building Code of the Philippines for the cost of the building permit. This was Procedure 25. Request connection for electricity from PHP 12 per square meter. The computation here is based on PHP 19 per square meter Electric Company (MECO) to account for ancillary costs such as electrical, mechanical and plumbing fees) Time: 1 day Comments: After the building permit application is approved, the Building Official Cost: PHP 330,000 (cost of three 50kVA transformers) releases the order of payment for the company to pay at the City Treasurer’s Office. Comments: The electric company is MECO. The company visits MECO to request Once the company has paid the building permit fees, it will present the official the connection and submit the certificate of electrical inspection and electrical receipt to the Receiving/Releasing Section for recording and issuance of the permit. plans. MECO conducts an inspection of the warehouse and in the following days the technical staff visit the site for the electricity connection. The cost of the transformers Procedure 16. Receive inspection from the BFP is PHP 110,000 per transformer (three needed) and is refunded upon termination of Time: 1 day contract while lines and labor costs of PHP 170,000 are refunded a year after the start Cost: No cost (fees included in procedure 9) of contract. The refund is through a deduction to monthly bills computed at 25% of Comments: During the construction of the warehouse, the BFP will conduct an the applicant’s annual gross distribution revenue. inspection of the site at random, to determine whether the plans and fire safety precautions are being observed (section 1.202 of the Fire Code of the Philippines). Procedure 26. Receive inspection for electricity from MECO Time: 1 day Procedure 17. Receive inspection from the OBO Cost: No cost Time: 1 day Cost: No cost (fees included in procedure 15) Procedure 27. Obtain connection for electricity from MECO Time: 13 days Cost: No cost  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 73

Procedure 28*. Request connection for water from Metro Cebu appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site Water District (MCWD) map. The company may pay more or less, depending on the geodetic engineer and the city where the warehouse is to be built. Time: 1 day Cost: PHP 4,700 (installation fee paid during application) Procedure 4*. Obtain Barangay clearance Comments: The local service provider is MCWD. The company visits MCWD to Time: 1 day request the connection; connection is effected some days after the inspection. Cost: PHP 300 Procedure 29*. Receive inspection for water connection from Comments: This clearance confirms that the intended land use is compliant with MCWD the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they have the discretion to impose their own taxes, fees and charges. Time: 1 day Cost: No cost Procedure 5. Request the locational clearance from the City Planning and Development Office (CPDO) Procedure 30*. Obtain water connection from MCWD Time: 1 day Time: 13 days Cost: PHP 8,503 (PHP 5 per square meter + PHP 2,000 filing fee) Cost: No cost Comments: This clearance confirms that the intended land use conforms to the local government’s zoning ordinances, wherein a Barangay clearance is required. Procedure 31*. Obtain telephone connection from the telephone The time to complete the construction may be shorter if the warehouse is to be built company in an industrial area versus other areas. The cost is based on the Las Piñas Zoning Time: 5 days Ordinance. Cost: PHP 1,310 (installation fee and unit) Comments: There are two telephone companies providing landline services in Procedure 6. Receive inspection for the locational clearance from Lapu-Lapu. These are Philippine Long Distance Co. (PLDT) and Globelines. They only the CPDO provide permanent telephone connection. For PLDT, the cost is PHP 1,500 and there Time: 1 day is a lock-in period of 12 months for the regular phone line. For Globelines, there is no Cost: No cost (fees included in procedure 5) cost if the applicant provides proof of financial capability. Otherwise, the applicant has to pay PHP 1,310. There is a lock-in period of 12 months for the regular phone Comments: The CPDO conducts an inspection of the property before issuance of line. The case study assumes that the company will request services from Globelines the locational clearance. as this is the option favorable to the company. Procedure 7. Obtain the locational clearance from the CPDO Procedure 32*. Secure the tax declaration of improvement at the Time: 3 days CAO Cost: No cost Time: 2 days Comments: The company goes to the CPDO to obtain the locational clearance. Cost: No cost Procedure 8. Apply for the building permit at the Office of the Comments: The company must update the official records to include the newly built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the Building Official (OBO) building plan and certificate of occupancy every month to notify them of the new Time: 1 day building construction. This may take less time if the company submits the above Cost: PHP 700 (filing fee) documents to the CAO. The tax declaration of improvement is released after an ap- Comments: The company must obtain the building permit along with the electrical, praiser inspects the property on the same or the following day. sanitary, and mechanical permits, and have the design, plans, and technical specifi- * This procedure is simultaneous with a previous procedure cations of the project approved to ensure they are compliant with the design codes, and safety laws and regulations. To obtain the building permit, the company gets the DEALING WITH LICENSES application forms and checklist from the Receiving Section at the OBO. The receiving Las Piñas personnel will check if all documents in the checklist are satisfied. Procedures to build a warehouse Warehouse Value: USD 380,011 = PHP 19,500,000 Procedure 9. Obtain fire safety evaluation and correction sheet Date as of: December 2007 on the building plans from the local fire marshal at the Bureau of Fire Protection (BFP) Procedure 1. Obtain certified true copy (CTC) of the land title Time: 7 days from the Registry of Deeds (RD) Cost: PHP 19,500 (0.1% of the estimated value of the building) Time: 3 days Comments: This approval is required to confirm that the plans and specifications Cost: PHP 30 conform to all the fire safety and control requirements of the Fire Code of the Comments: The company must obtain a CTC of the land title as proof of ownership Philippines. Upon presentation of the official receipts, the company submits all of the land on which the warehouse is to be built. the documents and plans together with the endorsement letter from the Building Official to the local fire marshal to obtain approval from the latter with respect to fire Procedure 2*. Obtain CTC of the tax declaration of real property safety and control requirements. As per National Building Code, the fire marshal shall give his/her recommendation within five working days from date of referral. Failure from the City Assessor’s Office (CAO) to act within said period shall mean that the plans and specifications conform to all Time: 1 day the requirements of the Fire Code of the Philippines. While the company is getting Cost: PHP 100 approval from the local fire marshal, processing of application, checking plans and Comments: The company must obtain a CTC of the tax declaration of real property specifications by the technical staff of the OBO is ongoing. so that it can identify the property by its index number. Procedure 10. Obtain the building permit from the OBO Procedure 3*. Obtain lot plan with site map from the geodetic Time: 11 days engineer Cost: PHP 39,018 (according to the National Building Code of the Philippines the Time: 3 days 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: PHP 1,000 mechanical and plumbing fees) Comments: The company must obtain the lot plan with site map from a geodetic After the building permit application is approved, the Building Official engineer to confirm the location of the land purported to be in the land title. A lot Comments: releases the order of payment for the company to pay at the City Treasurer’s Office. 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 74 DOING BUSINESS IN THE PHILIPPINES 2008

Once the company has paid the building permit fees, it will present the official Procedure 21*. Request connection for water and sewage from receipt to the Receiving/Releasing Section for recording and issuance of the permit. Maynilad Water Services, Inc (Maynilad) Time: 1 day Procedure 11. Receive inspection from the BFP Cost: PHP 6,411 (installation fee paid during application) Time: 1 day Comments: The water company is Maynilad. The company visits Maynilad to Cost: No cost (fees included in procedure 9) request the connection and inspection time takes two weeks. Maynilad subcontracts Comments: During the construction of the warehouse, the BFP will conduct an the installation with a contractor and the time of actual installation depends on the inspection of the site at random, to determine whether the plans and fire safety contractor. precautions are being observed (section 1.202 of the Fire Code of the Philippines). Procedure 22*. Receive inspection for water and sewage Procedure 12. Request the fire safety inspection certificate (FSIC) connection from Maynilad from the BFP Time: 1 day Time: 1 day Cost: No cost Cost: PHP 3,901 (10% of building permit fees) Comments: After construction of the warehouse, the company requests the BFP Procedure 23*. Obtain water and sewage connection from for an inspection of the site to certify that the required fire safety construction, fire Maynilad protective and/or warning systems are properly installed and in good working condi- Time: 30 days tion. Cost: No cost Procedure 13. Receive inspection for the FSIC from the BFP Procedure 24*. Obtain telephone connection from the telephone Time: 1 day company Cost: No cost (fees included in procedure 12) Time: 5 days Procedure 14. Obtain the FSIC from the BFP Cost: PHP 1,310 (installation fee and unit) Time: 2 days Comments: There are two telephone companies providing landline services in Las Piñas. These are Philippine Long Distance Co. (PLDT) and Globelines. For PLDT, the Cost: No cost cost is PHP 1,500 and there is a lock-in period of 24 months for the regular phone Comments: After inspection, the company obtains the certificate from the BFP. line. For Globelines, there is no cost if the applicant provides proof of financial capability. Otherwise, the applicant has to pay PHP 1,310. There is a lock-in period of Procedure 15. Request the certificate of occupancy and certificate 12 months for the regular phone line. The case study assumes that the company will of electrical inspection (CEI) from the OBO request services from Globelines as this is the option favorable to the company. Time: 1 day Cost: PHP 2,700 (PHP 2,000 basic fee + PHP 700 filing fee) Procedure 25*. Secure the tax declaration of improvement at the Comments: The application for the certificate of occupancy includes a form for the CAO certificate of electrical inspection. The certificates are prerequisites for the electricity Time: 3 days connection and are released after a team of inspectors (architectural, structural, elec- Cost: No cost trical, mechanical, and sanitary) inspects the site and certifies that the warehouse as Comments: The company must update the official records to include the newly built conforms to the design, plans, and cost of the project. built warehouse for tax purposes. The company submits to the CAO a copy of the building plan and certificate of occupancy. The tax declaration of improvement is Procedure 16. Receive inspection for the certificate of occupancy released after an appraiser inspects the property on the same or the following day. and CEI from the OBO * This procedure is simultaneous with a previous procedure Time: 1 day DEALING WITH LICENSES Cost: No cost (fees included in procedure 15) Makati Procedure 17. Obtain the certificate of occupancy and CEI from Procedures to build a warehouse the OBO Warehouse Value: USD 380,011 = PHP 19,500,000 Time: 8 days Date as of: December 2007 Cost: PHP 800 Procedure 1. Obtain lot plan with site map from the geodetic Procedure 18. Request connection for electricity from Meralco engineer Time: 1 day Time: 3 days Cost: No cost Cost: PHP 1,750 Comments: The electric company is Manila Electric Company (Meralco). The com- Comments: The company must obtain the lot plan with site map from a geodetic pany visits Meralco to request the connection and submit the certificate of electrical engineer to confirm the location of the land purported to be in the land title. A lot inspection and electrical plans. Meralco conducts an inspection of the warehouse plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- and in the following weeks the technical staff visit the site for the electricity connec- vey, or at least after an analysis has been conducted of the lot technical description tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site service deposit is PHP 138,580. Both the transformer and service deposit are refund- map. The company may pay more or less, depending on the geodetic engineer and able after the first year through annual deductions to the electricity bill or through the city where the warehouse is to be built. checks computed at 25% of the applicant’s annual gross distribution revenue. Procedure 2*. Obtain Barangay clearance Procedure 19. Receive inspection for electricity from Meralco Time: 2 days Time: 1 day Cost: PHP 250 (PHP 150 construction permit + PHP 100 additional floor area) Cost: No cost Comments: This clearance confirms that the intended land use is compliant with the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they Procedure 20. Obtain connection for electricity from Meralco have the discretion to impose their own taxes, fees and charges. Time: 88 days Cost: No cost Procedure 3. Apply for locational clearance from the Urban Development Department (UDD) Time: 1 day  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 75

Cost: PHP 16,458 (PHP 12.5 per square meter + PHP 200 filing fee) Comments: During the construction of the warehouse, the OBO will conduct an Comments: This clearance confirms that the intended land use conforms to the inspection of the site at random, to determine whether the construction follows the local government’s zoning ordinances, wherein a Barangay clearance is required. The approved building plans and design. time to complete the construction may be shorter if the warehouse is to be built in an industrial area versus other areas. Procedure 12. Request the fire safety inspection certificate (FSIC) from the BFP Procedure 4. Notarize locational clearance at the notary Time: 1 day Time: 1 day Cost: PHP 2,471 (10% of building permit fees) Cost: PHP 50 Comments: After construction of the warehouse, the company requests the BFP Comments: The company pays PHP 50 at the Zoning Office for the notarization. The for an inspection of the site to certify that the required fire safety construction, fire staff of the Zoning Office will have the application notarized with an official receipt. protective and/or warning systems are properly installed and in good working condi- tion. Procedure 5. Receive inspection for locational clearance from the UDD Procedure 13. Receive inspection for the FSIC from the BFP Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 3) Cost: No cost (fees included in procedure 12) Comments: The UDD conducts an inspection of the property before issuance of the locational clearance. Procedure 14. Obtain the FSIC from the BFP Time: 1 day Procedure 6. Obtain locational clearance from the UDD Cost: No cost Time: 4 days Comments: After inspection, the company obtains the certificate from the BFP. Cost: No cost Comments: The company goes to the UDD to obtain the locational clearance. Procedure 15. Request the certificate of occupancy and certificate of electrical inspection (CEI) from the OBO Procedure 7. Obtain fire safety evaluation and correction sheet Time: 1 day on the building plans from the local fire marshal at the Bureau of Cost: No cost Fire Protection (BFP) Comments: The application for the certificate of occupancy includes a form for the Time: 7 days certificate of electrical inspection. The certificates are prerequisites for the electricity Cost: PHP 19,500 (0.1% of the estimated value of the building) connection and are released after a team of inspectors (architectural, structural, elec- trical, mechanical, and sanitary) inspects the site and certifies that the warehouse as Comments: This approval is required to confirm that the plans and specifications built conforms to the design, plans, and cost of the project. conform to all the fire safety and control requirements of the Fire Code of the Philip- pines. The company submits the plans and the recommendation letter from the Procedure 16. Receive inspection for the certificate of occupancy Building Official to the local fire marshal to obtain approval. As per National Building Code, the fire marshal shall give his/her recommendation within five working days and CEI from the OBO from date of referral. Failure to act within the said period shall mean that the plans Time: 1 day and specifications conform to all the requirements of the Fire Code of the Philip- Cost: No cost pines. Procedure 17. Obtain the certificate of occupancy and CEI from Procedure 8. Apply for the building permit at the Office of the the OBO Building Official (OBO) Time: 5 days Time: 1 day Cost: PHP 1,700 (PHP 1,600 basic fee + PHP 100 inspection fee) Cost: No cost Comments: The City Government of Makati does not charge for the CEI provided Comments: The company must obtain the building permit along with the electrical, that there will be no additional loads to be installed based on the approved plan. sanitary, and mechanical permits, and have the design, plans, and technical specifi- cations of the project approved to ensure they are compliant with the design codes, Procedure 18. Request connection for electricity from Meralco and safety laws and regulations. Time: 1 day Procedure 9. Obtain the building permit from the OBO Cost: No cost Comments: The electric company is Manila Electric Company (Meralco). The com- Time: 5 days pany visits Meralco to request the connection and submit the certificate of electrical Cost: PHP 24,711 (as of December 2007, the city used the older formula in the inspection and electrical plans. Meralco conducts an inspection of the warehouse National Building Code of the Philippines for the cost of the building permit. This was and in the following weeks the technical staff visit the site for the electricity connec- PHP 12 per square meter. The computation here is based on PHP 19 per square meter tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The to account for ancillary costs such as electrical, mechanical and plumbing fees) service deposit is PHP 138,580. Both the transformer and service deposit are refund- Comments: After the building permit application is approved, the Building Official able after the first year through annual deductions to the electricity bill or through releases the order of payment for the company to pay at the City Treasurer’s Office. checks computed at 25% of the applicant’s annual gross distribution revenue. Once the company has paid the building permit fees, it will present the official receipt to the Receiving/Releasing Section for recording and issuance of the permit. Procedure 19. Receive inspection for electricity from Meralco Time: 1 day Procedure 10. Receive inspection from the BFP Cost: No cost Time: 1 day Cost: No cost (fees included in procedure 7) Procedure 20. Obtain connection for electricity from Meralco Comments: During the construction of the warehouse, the BFP will conduct an Time: 88 days inspection of the site at random, to determine whether the plans and fire safety Cost: No cost precautions are being observed (section 1.202 of the Fire Code of the Philippines). Procedure 21*. Request connection for water and sewage Procedure 11. Receive inspection from the OBO from Maynilad Water Services, Inc (Maynilad) or Time: 1 day Company, Inc (Manila Water) Cost: No cost (fees included in procedure 9) Time: 1 day Cost: PHP 6,411 (installation fee paid during application) 76 DOING BUSINESS IN THE PHILIPPINES 2008

Comments: There are two private water providers for Makati. Maynilad services the appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site west zone and Manila Water services the east zone. The company visits the water map. The company may pay more or less, depending on the geodetic engineer and company to request the connection and pays PHP 6,411 for Maynilad or PHP 6,635 the city where the warehouse is to be built. for Manila Water. Inspection time takes two weeks and the connection is effected some days after the inspection. The case study assumes that the company will Procedure 4*. Obtain Barangay clearance request water from Maynilad as this is the option favorable to the company. Time: 1 day Cost: PHP 500 Procedure 22*. Receive inspection for water and sewage connection from Maynilad or Manila Water Comments: This clearance confirms that the intended land use is compliant with the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they Time: 1 day have the discretion to impose their own taxes, fees and charges. Cost: No cost Procedure 5. Request the locational clearance from the City Procedure 23*. Obtain water and sewage connection from Planning and Development Office (CPDO) Maynilad or Manila Water Time: 1 day Time: 30 days Cost: PHP 23,450 (PHP 18 per square meter + PHP 40 processing fee) Cost: No cost Comments: This clearance confirms that the intended land use conforms to the local government’s zoning ordinances, wherein a Barangay clearance is required. The Procedure 24*. Obtain telephone connection from the telephone time to complete the construction may be shorter if the warehouse is to be built in company an industrial area versus other areas. The cost is based on the Malabon City Revenue Time: 5 days Code. Cost: PHP 1,310 (installation fee and unit) Procedure 6. Receive inspection for the locational clearance from Comments: There are two telephone companies providing landline services in Makati. These are Philippine Long Distance Co. (PLDT) and Globelines. For PLDT, the the CPDO cost is PHP 1,500 and there is a lock-in period of 24 months for the regular phone Time: 1 day line. For Globelines, there is no cost if the applicant provides proof of financial Cost: No cost (fees included in procedure 5) capability. Otherwise, the applicant has to pay PHP 1,310. There is a lock-in period of Comments: The CPDO conducts an inspection of the property before issuance of 12 months for the regular phone line. The case study assumes that the company will the locational clearance. request services from Globelines as this is the option favorable to the company. Procedure 7. Obtain the locational clearance from the CPDO Procedure 25*. Secure the tax declaration of improvement at the Time: 3 days City Assessor’s Office (CAO) Cost: No cost Time: 2 days Comments: The company goes to the CPDO to obtain the locational clearance. Cost: No cost Comments: The company must update the official records to include the newly Procedure 8. Apply for the building permit at the Office of the built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the Building Official (OBO) building plan and certificate of occupancy every month to notify them of the new building construction. This may take less time if the company submits the above Time: 1 day documents and a sworn declaration of the property to the CAO. The tax declaration Cost: No cost of improvement is released after an appraiser inspects the property on the same or Comments: The company must obtain the building permit along with the electrical, the following day. sanitary, and mechanical permits, and have the design, plans, and technical specifi- * This procedure is simultaneous with a previous procedure cations of the project approved to ensure they are compliant with the design codes, and safety laws and regulations. To obtain the building permit, the company gets the DEALING WITH LICENSES application forms and checklist from the Receiving Section at the OBO. The receiving Malabon personnel will check if all documents in the checklist are satisfied. Procedures to build a warehouse Procedure 9. Notarize building permit at the notary Warehouse Value: USD 380,011 = PHP 19,500,000 Time: 1 day Date as of: December 2007 Cost: PHP 100 Procedure 1. Obtain certified true copy (CTC) of the land title from the Registry of Deeds (RD) Procedure 10. Obtain fire safety evaluation and correction sheet Time: 2 days on the building plans from the local fire marshal at the Bureau of Fire Protection (BFP) Cost: PHP 30 Time: 7 days Comments: The company must obtain a CTC of the land title as proof of ownership of the land on which the warehouse is to be built. Cost: PHP 19,500 (0.1% of the estimated value of the building) Comments: This approval is required to confirm that the plans and specifications Procedure 2*. Obtain CTC of the tax declaration of real property conform to all the fire safety and control requirements of the Fire Code of the from the City Assessor’s Office (CAO) Philippines. Upon presentation of the official receipts, the company submits all the documents and plans together with the endorsement letter from the Building Time: 1 day Official to the local fire marshal to obtain approval from the latter with respect to fire Cost: PHP 50 safety and control requirements. As per National Building Code, the fire marshal shall Comments: The company must obtain a CTC of the tax declaration of real property give his/her recommendation within five working days from date of referral. Failure so that it can identify the property by its index number. to act within said period shall mean that the plans and specifications conform to all the requirements of the Fire Code of the Philippines. While the company is getting Procedure 3*. Obtain lot plan with site map from the geodetic approval from the local fire marshal, processing of application, checking plans and engineer specifications by the technical staff of the OBO is ongoing. Time: 3 days Procedure 11. Obtain the building permit from the OBO Cost: PHP 1,250 Time: 23 days 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 Cost: PHP 39,018 (according to the National Building Code of the Philippines the plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- cost of the building permit is PHP 23 per square meter. The computation here is vey, or at least after an analysis has been conducted of the lot technical description based on PHP 30 per square meter to account for ancillary costs such as electrical, mechanical and plumbing fees)  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 77

Comments: After the building permit application is approved, the Building Official Comments: The electric company is Manila Electric Company (Meralco). The com- releases the order of payment for the company to pay at the City Treasurer’s Office. pany visits Meralco to request the connection and submit the certificate of electrical Once the company has paid the building permit fees, it will present the official inspection and electrical plans. Meralco conducts an inspection of the warehouse receipt to the Receiving/Releasing Section for recording and issuance of the permit. and in the following weeks the technical staff visit the site for the electricity connec- tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The Procedure 12. Receive inspection from the BFP service deposit is PHP 138,580. Both the transformer and service deposit are refund- Time: 1 day able after the first year through annual deductions to the electricity bill or through checks computed at 25% of the applicant’s annual gross distribution revenue. Cost: No cost (fees included in procedure 10) Comments: During the construction of the warehouse, the BFP will conduct an Procedure 23. Receive inspection for electricity from Meralco inspection of the site at random, to determine whether the plans and fire safety Time: 1 day precautions are being observed (section 1.202 of the Fire Code of the Philippines). Cost: No cost Procedure 13. Request the fire safety inspection certificate (FSIC) from the BFP Procedure 24. Obtain connection for electricity from Meralco Time: 1 day Time: 88 days Cost: PHP 3,901 (10% of building permit fees) Cost: No cost Comments: After construction of the warehouse, the company requests the BFP Procedure 25*. Request connection for water and sewage from for an inspection of the site to certify that the required fire safety construction, fire protective and/or warning systems are properly installed and in good working condi- Maynilad Water Services, Inc (Maynilad) tion. Time: 1 day Cost: PHP 6,411 (installation fee paid during application) Procedure 14. Receive inspection for the FSIC from the BFP Comments: The water company is Maynilad. The company visits Maynilad to Time: 1 day request the connection and inspection time takes two weeks. Maynilad subcontracts Cost: No cost (fees included in procedure 13) the installation with a contractor and the time of actual installation depends on the contractor. Procedure 15. Obtain the FSIC from the BFP Time: 2 days Procedure 26*. Receive inspection for water and sewage connection from Maynilad Cost: No cost Time: 1 day Comments: After inspection, the company obtains the certificate from the BFP. Cost: No cost Procedure 16. Request the certificate of occupancy from the OBO Procedure 27*. Obtain water and sewage connection from Time: 1 day Maynilad Cost: PHP 11,000 (floor area x 10, 000/1.2 million, the result is multiplied by PHP 1,000) Time: 30 days Comments: The company must secure first the occupancy certificate before Cost: No cost applying for the certificate of electrical inspection. The time for inspection will be scheduled when the company visits the OBO to apply for the certificate. OBO Procedure 28*. Obtain telephone connection from the telephone inspects the site and certifies that the project as built conforms to the design, plans, company and the actual cost of the project. Time: 5 days Cost: PHP 999 (installation fee and unit) Procedure 17. Receive inspection for the certificate of occupancy Comments: There are three telephone companies providing landline services for from the OBO Malabon. The cost is PHP 1,500 for Philippine Long Distance Co. (PLDT), PHP 1,310 Time: 1 day for Globelines, and PHP 999 for Bayantel. There is a lock-in period of 24, 12 and 12 Cost: No cost (fees included in procedure 16) months respectively for the regular phone line. The case study assumes that the company will request services from Bayantel as this is the option favorable to the Procedure 18. Obtain the certificate of occupancy from the OBO company. Time: 1 day Procedure 29*. Secure the tax declaration of improvement at the Cost: No cost CAO Procedure 19. Request the certificate of electrical inspection (CEI) Time: 2 days from the OBO Cost: No cost Time: 13 days Comments: The company must update the official records to include the newly Cost: No cost (fees included in procedure 11) built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the building plan and building permit every month to notify them of the new building Comments: The company visits the Electrical Division of the OBO to request the construction. The tax declaration of improvement is released the day after an ap- certificate of electrical inspection and schedule for an inspection to certify that the praiser inspects the property. as-built plans correspond to the actual completed construction works. * This procedure is simultaneous with a previous procedure

Procedure 20. Receive inspection for the CEI from the OBO DEALING WITH LICENSES Time: 1 day Mandaluyong Cost: PHP 50 (inspection fee) Procedures to build a warehouse Procedure 21. Obtain the CEI from the OBO Warehouse Value: USD 380,011 = PHP 19,500,000 Time: 1 day Date as of: December 2007 Cost: No cost Procedure 1. Obtain certified true copy (CTC) of the land title from the Registry of Deeds (RD) Procedure 22. Request connection for electricity from Meralco Time: 3 days Time: 1 day Cost: PHP 30 Cost: No cost Comments: The company must obtain a CTC of the land title as proof of ownership of the land on which the warehouse is to be built. 78 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 2*. Obtain CTC of the tax declaration of real property safety and control requirements. As per National Building Code, the fire marshal shall from the City Assessor’s Office (CAO) give his/her recommendation within five working days from date of referral. Failure to act within said period shall mean that the plans and specifications conform to all Time: 1 day the requirements of the Fire Code of the Philippines. While the company is getting Cost: PHP 10 approval from the local fire marshal, processing of application, checking plans and Comments: The company must obtain a CTC of the tax declaration of real property specifications by the technical staff of the OBO is ongoing. The fire fund fees are paid so that it can identify the property by its index number. at the City Treasurer’s Office (CTO).

Procedure 3*. Obtain lot plan with site map from the geodetic Procedure 10. Receive the fire safety approval from the local fire engineer marshal at the BFP Time: 3 days Time: 1 day Cost: PHP 2,000 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 11. Obtain the building permit from the OBO plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Time: 12 days vey, or at least after an analysis has been conducted of the lot technical description Cost: PHP 39,018 (according to the National Building Code of the Philippines the appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site cost of the building permit is PHP 23 per square meter. The computation here is map. The company may pay more or less, depending on the geodetic engineer and based on PHP 30 per square meter to account for ancillary costs such as electrical, the city where the warehouse is to be built. mechanical and plumbing fees) Procedure 4*. Obtain Barangay clearance Comments: After the building permit application is approved, the Building Official releases the order of payment for the company to pay at the CTO. Once the company Time: 2 days has paid the building permit fees, it will present the official receipt to the Receiving/ Cost: PHP 1,000 (between PHP 500–PHP 1,500) Releasing Section for recording and issuance of the permit. Comments: This clearance confirms that the intended land use is compliant with the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they Procedure 12. Receive inspection from the BFP have the discretion to impose their own taxes, fees and charges. Time: 1 day Cost: No cost (fees inlcuded in procedure 9) Procedure 5. Request the locational clearance from the City Comments: During the construction of the warehouse, the BFP will conduct an Planning and Development Office (CPDO) inspection of the site at random, to determine whether the plans and fire safety Time: 1 day precautions are being observed (section 1.202 of the Fire Code of the Philippines). Cost: PHP 5,013 (PHP 3 per square meter for land use fee) + 25% of land use fee + PHP 89 filing fee + PHP 46 certificate fee) Procedure 13. Request the fire safety inspection certificate (FSIC) Comments: This clearance confirms that the intended land use conforms to the and obtain the order of payment from the BFP local government’s zoning ordinances, wherein a Barangay clearance is required. Time: 1 day The time to complete the construction may be shorter if the warehouse is to be built Cost: PHP 3,901 (10% of building permit fees) in an industrial area versus other areas. The cost is based on the Mandaluyong City Zoning Ordinance. Comments: After construction of the warehouse, the company requests the BFP for an inspection of the site to certify that the required fire safety construction, fire Procedure 6. Receive inspection for the locational clearance from protective and/or warning systems are properly installed and in good working condi- tion. The FSIC fees are paid at the CTO. the CPDO Time: 1 day Procedure 14. Receive inspection for the FSIC from the BFP Cost: No cost (fees included in procedure 5) Time: 1 day Comments: The CPDO conducts an inspection of the property before issuance of Cost: No cost (fees included in procedure 13) the locational clearance. Procedure 15. Obtain the FSIC from the BFP Procedure 7. Obtain the locational clearance from the CPDO Time: 7 days 13 days Time: Cost: No cost No cost Cost: Comments: After inspection, the company obtains the certificate from the BFP. Comments: The company goes to the CPDO to obtain the locational clearance. Procedure 16. Request the certificate of occupancy from the OBO Procedure 8. Apply for the building permit at the Office of the Time: 1 day Building Official (OBO) Cost: PHP 20,000 (PHP 1,000 per million of the project value) Time: 1 day Comments: The company must secure first the occupancy certificate before Cost: No cost applying for the certificate of electrical inspection. The time for inspection will be Comments: The company must obtain the building permit along with the electrical, scheduled when the company visits the OBO to apply for the certificate. A building sanitary, and mechanical permits, and have the design, plans, and technical specifi- official inspects the site and certifies that the project as built conforms to the design, cations of the project approved to ensure they are compliant with the design codes, plans, and the actual cost of the project. and safety laws and regulations. To obtain the building permit, the company gets the application forms and checklist from the Receiving Section at the OBO. The receiving Procedure 17. Receive inspection for the certificate of occupancy personnel will check if all documents in the checklist are satisfied. from the OBO Time: 1 day Procedure 9. Request fire safety evaluation and correction sheet Cost: No cost (fees included in procedure 16) on the building plans and order of payment from the local fire marshal at the Bureau of Fire Protection (BFP) Procedure 18. Obtain the certificate of occupancy from the OBO Time: 7 days Time: 8 days Cost: PHP 19,500 (0.1% of the estimated value of the building) Cost: No cost Comments: This approval is required to confirm that the plans and specifications conform to all the fire safety and control requirements of the Fire Code of the Procedure 19. Request the certificate of electrical inspection (CEI) Philippines. Upon presentation of the official receipts, the company submits all from the OBO the documents and plans together with the endorsement letter from the Building Official to the local fire marshal to obtain approval from the latter with respect to fire Time: 1 day  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 79

Cost: No cost (fees inlcuded in procedure 11) Comments: The company must update the official records to include the newly Comments: The company visits the Electrical Division of the OBO to request the built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the build- certificate of electrical inspection and schedule for an inspection to certify that the ing plan, building permit and certificate of occupancy every month to notify them as-built plans correspond to the actual completed construction works. The certificate of the new building construction. This may take less time if the company submits itself has no charge. However, the inspection fee, which is 10% of electrical fees paid, the above documents to the CAO since the tax declaration of improvement will be is being charged. Prior to application of the certificate of electrical inspection, the released after three days. company must have secured the certificate of occupancy. * This procedure is simultaneous with a previous procedure

DEALING WITH LICENSES Procedure 20. Receive inspection for the CEI from the OBO Time: 1 day Mandaue Cost: No cost Procedures to build a warehouse Warehouse Value: USD 380,011 = PHP 19,500,000 Procedure 21. Obtain the CEI from the OBO Date as of: December 2007 Time: 2 days Cost: No cost Procedure 1. Obtain certified true copy (CTC) of the land title from the Registry of Deeds (RD) Procedure 22. Request connection for electricity from Meralco Time: 2 days Time: 1 day Cost: PHP 30 Cost: No cost Comments: The company must obtain a CTC of the land title as proof of ownership Comments: The electric company is Manila Electric Company (Meralco). The com- of the land on which the warehouse is to be built. pany visits Meralco to request the connection and submit the certificate of electrical inspection and electrical plans. Meralco conducts an inspection of the warehouse Procedure 2*. Obtain CTC of the tax declaration of real property and in the following weeks the technical staff visit the site for the electricity connec- from the City Assessor’s Office (CAO) tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The Time: 1 day service deposit is PHP 138,580. Both the transformer and service deposit are refund- Cost: PHP 50 able after the first year through annual deductions to the electricity bill or through checks computed at 25% of the applicant’s annual gross distribution revenue. Comments: The company must obtain a CTC of the tax declaration of real property so that it can identify the property by its index number. Procedure 23. Receive inspection for electricity from Meralco Procedure 3*. Obtain lot plan with site map from the geodetic Time: 1 day engineer Cost: No cost Time: 2 days Procedure 24. Obtain connection for electricity from Meralco Cost: PHP 1,500 Time: 88 days 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 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 25*. Request connection for water and sewage from appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site Manila Water Company, Inc (Manila Water) map. The company may pay more or less, depending on the geodetic engineer and Time: 1 day the city where the warehouse is to be built. Cost: PHP 6,635 (installation fee paid during application) Comments: The water company is Manila Water. The company visits Manila Water to Procedure 4*. Obtain Barangay clearance request the connection and inspection time takes two weeks. Connection is effected Time: 2 days some days after the inspection. Cost: PHP 200 (between PHP 100–PHP 250) Comments: This clearance confirms that the intended land use is compliant with Procedure 26*. Receive inspection for water and sewage the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they connection from Manila Water have the discretion to impose their own taxes, fees and charges. Time: 1 day Cost: No cost Procedure 5. Request the locational clearance from the City Planning and Development Office (CPDO) Procedure 27*. Obtain water and sewage connection from Manila Time: 1 day Water Cost: PHP 24,750 (PHP 5,000 + 1/10 of 1% of the total estimated cost of the project Time: 21 days in excess of PHP 2,000,000 + 10% increase) Cost: No cost Comments: This clearance confirms that the intended land use conforms to the local government’s zoning ordinances, wherein a Barangay clearance is required. The Procedure 28*. Obtain telephone connection from the telephone time to complete the construction may be shorter if the warehouse is to be built in company an industrial area versus other areas. The cost is based on the Housing and Land Use Regulatory Board (HLURB) Schedule of Fees 2004. Time: 5 days Cost: PHP 1,310 (installation fee and unit) Procedure 6. Receive inspection for the locational clearance from Comments: There are two telephone companies providing landline services in the CPDO Mandaluyong. These are Philippine Long Distance Co. (PLDT) and Globelines. For Time: 1 day PLDT, the cost is PHP 1,500 and there is a lock-in period of 24 months for the regular phone line. For Globelines, there is no cost if the applicant provides proof of financial Cost: No cost (fees included in procedure 5) capability. Otherwise, the applicant has to pay PHP 1,310. There is a lock-in period of Comments: The CPDO conducts an inspection of the property before issuance of 12 months for the regular phone line. The case study assumes that the company will the locational clearance. request services from Globelines as this is the option favorable to the company. Procedure 7. Obtain the locational clearance from the CPDO Procedure 29*. Secure the tax declaration of improvement at the Time: 3 days CAO Cost: No cost Time: 3 days Comments: The company goes to the CPDO to obtain the locational clearance. Cost: No cost 80 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 8. Apply for the building permit from the City Comments: After the building permit application is approved, the company obtains Engineering Office (CEO) the order of payment and pays the fees at the CEO. Once the company has paid the building permit fees, it will present the official receipt to the Receiving/Releasing Time: 1 day Section for recording and issuance of the permit. Cost: No cost Comments: The company must obtain the building permit along with the electrical, Procedure 17. Receive inspection from the BFP sanitary, and mechanical permits, and have the design, plans, and technical specifi- Time: 1 day cations of the project approved to ensure they are compliant with the design codes, and safety laws and regulations. For companies that will construct building in a land Cost: No cost (fees included in procedure 9) they do not own, they are required to present a duly notarized copy of the contract Comments: During the construction of the warehouse, the BFP will conduct an of lease or contract of sale. Mandaue does not require notarization of the business inspection of the site at random, to determine whether the plans and fire safety permit since it is using the old forms. precautions are being observed (section 1.202 of the Fire Code of the Philippines).

Procedure 9. Obtain fire safety evaluation and correction sheet Procedure 18. Receive inspection from the CEO on the building plans from the local fire marshal at the Bureau of Time: 1 day Fire Protection (BFP) Cost: No cost (fees included in procedure 16) Time: 7 days Comments: During the construction of the warehouse, the CEO will conduct an Cost: PHP 19,500 (0.1% of the estimated value of the building) inspection of the site at random, to determine whether the construction follows the approved building plans and design. Comments: This approval is required to confirm that the plans and specifications conform to all the fire safety and control requirements of the Fire Code of the Philippines. Upon presentation of the official receipts, the company submits all Procedure 19. Obtain connection to the city’s sewage system the documents and plans together with the endorsement letter from the Building Time: 1 day Official to the local fire marshal to obtain approval from the latter with respect to fire Cost: No cost safety and control requirements. As per National Building Code, the fire marshal shall give his/her recommendation within five working days from date of referral. Failure Procedure 20. Request the fire safety inspection certificate (FSIC) to act within said period shall mean that the plans and specifications conform to all from the BFP the requirements of the Fire Code of the Philippines. While awaiting approval from Time: 1 day the fire marshal, the company goes from desk to desk to have the plans evaluated and approved. Cost: PHP 2,471 (10% of building permit fees) Comments: After construction of the warehouse, the company requests the BFP Procedure 10. Get evaluation and approval of the architectural for an inspection of the site to certify that the required fire safety construction, plans from the CEO fire protective and/or warning systems are properly installed and in good working condition. The company will go to the CEO to apply for certificate of occupancy. In Time: 1 day the CEO, the applicant is given endorsement to the BFP to conduct final inspection Cost: No cost (fees included in procedure 16) with regards to fire safety. The company goes to the BFP with the endorsement to Comments: Upon submitting the required documents for the building permit, the inform about the fire safety inspection and certificate. The BFP will then advise of the company has to visit different sections to have the plans evaluated and approved. inspection schedule.

Procedure 11. Get evaluation and approval of the civil/ structural Procedure 21. Receive inspection for the FSIC from the BFP plans from the CEO Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 20) Cost: No cost (fees included in procedure 16) Procedure 22. Obtain the FSIC from the BFP Procedure 12. Get evaluation and approval of the line and grade Time: 3 days plans from the CEO Cost: No cost Time: 1 day Comments: After inspection, the company obtains the certificate from the BFP. Cost: No cost (fees included in procedure 16) Procedure 23. Request the certificate of occupancy and certificate Procedure 13. Get evaluation and approval of the sanitary and of electrical inspection (CEI) from the CEO plumbing plans from the CEO Time: 1 day Time: 1 day Cost: PHP 1,600 Cost: No cost (fees included in procedure 16) Comments: The application for the certificate of occupancy includes a form for the certificate of electrical inspection. The certificates are prerequisites for the electricity Procedure 14. Get evaluation and approval of the electrical plans connection and are released after a team of inspectors (architectural, structural, elec- from the CEO trical, mechanical, and sanitary) inspects the site and certifies that the warehouse as Time: 1 day built conforms to the design, plans, and cost of the project. Cost: No cost (fees included in procedure 16) Procedure 24. Receive inspection for the certificate of occupancy Procedure 15. Obtain the Mayor’s clearance from the City Mayor’s and CEI from the CEO Office (CMO) Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 23) Cost: No cost (fees included in procedure 16) Procedure 25. Obtain the certificate of occupancy and CEI from Comments: The Mayor’s clearance is a local procedure (Executive Order No. 10 the CEO 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. Time: 10 days Cost: No cost Procedure 16. Obtain the building permit from the CEO Time: 5 days Procedure 26. Request connection for electricity from Visayan Cost: PHP 24,711 (as of December 2007, the city used the older formula in the Electric Corporation (VECO) National Building Code of the Philippines for the cost of the building permit. This was Time: 1 day PHP 12 per square meter. The computation here is based on PHP 19 per square meter Cost: PHP 269,385 (cost of three 50kVA transformers) to account for ancillary costs such as electrical, mechanical and plumbing fees)  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 81

Comments: The electric company is VECO. The company visits VECO to request the DEALING WITH LICENSES connection and submit the certificate of electrical inspection and electrical plans. Manila VECO conducts an inspection of the warehouse and in the following days the techni- cal staff visit the site for the electric connection. The cost of the transformers is PHP Procedures to build a warehouse 89,795 per transformer (three needed) and is refunded upon termination of contract. Warehouse Value: USD 380,011 = PHP 19,500,000 The lines and labor costs amounting to PHP 30,000 are refunded a year after the start Date as of: December 2007 of contract through a deduction to monthly bills computed at 25% of the applicant’s annual gross distribution revenue. Procedure 1. Obtain certified true copy (CTC) of the land title from the Registry of Deeds (RD) Procedure 27. Receive inspection for electricity from VECO Time: 5 days Time: 1 day Cost: PHP 72 Cost: No cost Comments: The company must obtain a CTC of the land title as proof of ownership Comments: The electrical engineer of VECO will conduct an inspection and review of the land on which the warehouse is to be built. the electrical plan of the warehouse. Procedure 2*. Obtain CTC of the tax declaration of real property Procedure 28. Obtain connection for electricity from VECO from the City Assessor’s Office (CAO) Time: 19 days Time: 1 day Cost: No cost Cost: PHP 60 Comments: The company must obtain a CTC of the tax declaration of real property Procedure 29*. Request connection for water from Metro Cebu so that it can identify the property by its index number. Water District (MCWD) Time: 1 day Procedure 3*. Obtain lot plan with site map from the geodetic Cost: PHP 4,700 (installation fee paid during application) engineer Comments: Local service provider is the MCWD. According to MCWD, application Time: 3 days fee for permanent connection amounts to PHP 4,700. Cost: PHP 1,000 Comments: The company must obtain the lot plan with site map from a geodetic Procedure 30*. Receive inspection for water connection from engineer to confirm the location of the land purported to be in the land title. A lot MCWD 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. The going rate is PHP 1,500 per geodetic lot plan with site map. The company may pay more or less, depending on the geodetic engineer and Procedure 31*. Obtain water connection from MCWD the city where the warehouse is to be built. 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: This clearance confirms that the intended land use is compliant with the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they Time: 5 days have the discretion to impose their own taxes, fees and charges. Cost: PHP 1,310 (installation fee and unit) Comments: There are two telephone companies providing landline services in Procedure 5. Obtain the locational clearance from the Mayor Mandaue. These are Philippine Long Distance Co. (PLDT) and Globelines. They only Time: 20 days provide permanent telephone connection. For PLDT the cost is PHP 1,500 and there Cost: PHP 2,296 is a lock-in period of 12 months for the regular phone line. For Globelines, there is no cost if the applicant provides proof of financial capability. Otherwise, the applicant Comments: This clearance confirms that the intended land use conforms to the has to pay PHP 1,310. There is a lock-in period of 12 months for the regular phone local government’s zoning ordinances, wherein a Barangay clearance is required. line. The case study assumes that the company will request services from Globelines as this is the option favorable to the company. Procedure 6. Obtain the building permit from the Office of the Building Official (OBO) Procedure 33*. Secure the tax declaration of improvement at the Time: 65 days CAO Cost: PHP 39,733 (according to the National Building Code of the Philippines the Time: 2 days cost of the building permit is PHP 23 per square meter. The computation here is Cost: No cost based on PHP 30 per square meter to account for ancillary costs such as electrical, mechanical and plumbing fees + PHP 600 filing fee + PHP 115 for location with Comments: The company must update the official records to include the newly respect to abutment to street) built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the build- ing plan and certificate of occupancy every month to notify them of the new build- Comments: The company must obtain the building permit along with the electrical, ing construction. The company also submits the building plan and building permit sanitary, and mechanical permits, and have the design, plans, and technical specifi- to the CAO in order to process the application. The tax declaration of improvement is cations of the project approved to ensure they are compliant with the design codes, released after an appraiser inspects the property on the same or the following day. and safety laws and regulations. * This procedure is simultaneous with a previous procedure Procedure 7. Notarize the building permit at the notary Time: 1 day Cost: PHP 200

Procedure 8. Request the fire safety inspection certificate (FSIC) from the Bureau of Fire Protection (BFP) Time: 1 day Cost: No cost Comments: The City of Manila issues the building permit with only a notation that the construction covered by such permit shall be subject to a fire safety inspection later on after the warehouse has been completed. Thus, the evaluation/inspection 82 DOING BUSINESS IN THE PHILIPPINES 2008

by the responsible officer of the BFP is done only after the construction has been Procedure 20*. Request connection for water and sewage from completed and at the time the company is already applying for the certificate of Maynilad Water Services, Inc (Maynilad) occupancy. Time: 1 day Procedure 9. Receive inspection for the FSIC from the BFP Cost: PHP 6,411 (installation fee paid during application) Time: 1 day Comments: The water company is Maynilad. The company visits Maynilad to request the connection and inspection time takes two weeks. Maynilad subcontracts Cost: No cost the installation with a contractor and the time of actual installation depends on the contractor. Procedure 10. Obtain the FSIC from the BFP Time: 14 days Procedure 21*. Receive inspection for water and sewage Cost: PHP 19,500 (0.1% of the estimated value of the building) connection from Maynilad Time: 1 day Procedure 11*. Request the certificate of electrical inspection Cost: No cost (CEI) from the Electrical Section Time: 1 day Procedure 22*. Obtain water and sewage connection from Cost: No cost Maynilad Comments: In Manila, the electrical inspection certificate is one of the documents Time: 30 days required to be submitted when the company applies for the issuance of a certificate Cost: No cost of occupancy. Thus, this means that the electrical inspection has to be conducted first in order to determine whether or not the electrical installation in a building or Procedure 23*. Obtain telephone connection from the telephone structure has been completed in accordance with the approved plans and specifica- tion on file with the Building Official and that the same is in accordance with the company Philippine Electrical Code provisions. For the electrical inspection, the electrical Time: 5 days engineer of the city government concerned usually conducts the inspection. Cost: PHP 1,500 (installation fee and unit)

Procedure 12*. Receive inspection for the CEI from the Electrical Procedure 24*. Secure the tax declaration of improvement at the Section CAO Time: 1 day Time: 1 day Cost: No cost Cost: No cost Comments: The company must update the official records to include the newly Procedure 13*. Obtain the CEI from the Electrical Section built warehouse for tax purposes. Time: 1 day * This procedure is simultaneous with a previous procedure Cost: PHP 600 DEALING WITH LICENSES Procedure 14*. Request the occupancy certificate from the OBO Marikina Time: 1 day Procedures to build a warehouse Cost: No cost Warehouse Value: USD 380,011 = PHP 19,500,000 Comments: The OBO inspects the site and certifies that the project as built con- Date as of: December 2007 forms to the design, plans, and the actual cost of the project. Procedure 1. Obtain certified true copy (CTC) of the land title Procedure 15*. Receive inspection for the occupancy certificate from the Registry of Deeds (RD) from the OBO Time: 1 day Time: 1 day Cost: PHP 30 Cost: No cost Comments: The company must obtain a CTC of the land title as proof of ownership of the land on which the warehouse is to be built. Procedure 16*. Obtain occupancy certificate from the OBO Time: 10 days Procedure 2*. Obtain CTC of the tax declaration of real property Cost: PHP 3,122 from the City Assessor’s Office (CAO) Time: 1 day Procedure 17. Request connection for electricity from Meralco Cost: PHP 20 Time: 1 day Comments: The company must obtain a CTC of the tax declaration of real property Cost: No cost so that it can identify the property by its index number. Comments: The electric company is Manila Electric Company (Meralco). The com- pany visits Meralco to request the connection and submit the certificate of electrical Procedure 3*. Obtain lot plan with site map from the geodetic inspection and electrical plans. Meralco conducts an inspection of the warehouse engineer and in the following weeks the technical staff visit the site for the electricity connec- Time: 3 days tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The Cost: PHP 1,000 service deposit is PHP 138,580. Both the transformer and service deposit are refund- able after the first year through annual deductions to the electricity bill or through Comments: The company must obtain the lot plan with site map from a geodetic checks computed at 25% of the applicant’s annual gross distribution revenue. 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 18. Receive inspection for electricity from Meralco vey, or at least after an analysis has been conducted of the lot technical description appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site Time: 1 day map. The company may pay more or less, depending on the geodetic engineer and Cost: No cost the city where the warehouse is to be built.

Procedure 19. Obtain connection for electricity from Meralco Procedure 4*. Obtain Barangay clearance Time: 88 days Time: 2 days Cost: No cost Cost: PHP 500  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 83

Comments: This clearance confirms that the intended land use is compliant with Procedure 12. Request the fire safety inspection certificate (FSIC) the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they from the BFP have the discretion to impose their own taxes, fees and charges. Time: 1 day Procedure 5. Request the locational clearance and apply for the Cost: No cost (Marikina City does not charge the 10% of the building permit fees) building permit at the Office of the Building Official (OBO) Comments: After construction of the warehouse, the company requests the BFP for an inspection of the site to certify that the required fire safety construction, fire Time: 1 day protective and/or warning systems are properly installed and in good working condi- Cost: PHP 1,940 (PHP 1,000 + 1/10 of 1% in excess of PHP 100,000) tion. Comments: This clearance confirms that the intended land use conforms to the local government’s zoning ordinances, wherein a Barangay clearance is required. The Procedure 13. Receive inspection for the FSIC from the BFP time to complete the construction may be shorter if the warehouse is to be built in Time: 1 day an industrial area versus other areas. The company can apply simultaneously for the Cost: No cost locational clearance and building permit. However, if found that the project does not conform to land use, the processing of building permit is automatically terminated. The Receiving Section of the Office of the Local Building Official will receive and give Procedure 14. Obtain the FSIC from the BFP a bar code number. The company will be given a slip of paper on when to return, Time: 2 days usually five to seven days after receipt of the application. The documents are then Cost: No cost forwarded to the Office of the Local Building Official for evaluation and processing Comments: After inspection, the company obtains the certificate from the BFP. (under the no contact rule between the applicant and permit processors/evalua- tors). After processing and evaluation, the documents are returned to the Receiving Procedure 15. Request the certificate of occupancy and certificate Section in the City Hall and then forwarded to the Mayor’s Office for clearance. While in other cities the company would go to the BFP to request for the local Fire Mashall’s of electrical inspection (CEI) from the OBO recommendations with respect to fire safety and control requirements (done while Time: 1 day the application for building permit is being processed), in Marikina, the OBO has a Cost: PHP 19,300 (cost is based on construction cost i.e. construction cost between Liaison Officer who would go the BFP on behalf of the company to get the recom- PHP 850,000–PHP 1,200,000=PHP 1,000; every million or portion thereof in excess of mendation. PHP 1,200,000=PHP 1,000) Comments: The application for the certificate of occupancy includes a form for the Procedure 6. Receive inspection for the locational clearance from certificate of electrical inspection. The certificates are prerequisites for the electricity the OBO connection and are released after a team of inspectors (architectural, structural, elec- Time: 1 day trical, mechanical, and sanitary) inspects the site and certifies that the warehouse as built conforms to the design, plans, and cost of the project. Cost: No cost (fees included in procedure 5) Comments: The OBO conducts an inspection of the property before issuance of the Procedure 16. Receive inspection for the certificate of occupancy locational clearance. and CEI from the OBO Procedure 7. Obtain the locational clearance from the OBO Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 15) Cost: No cost Procedure 17. Obtain the certificate of occupancy and CEI from Comments: The company goes to the OBO to obtain the locational clearance. the OBO Procedure 8. Notarize the building permit at the notary Time: 3 days Time: 1 day Cost: PHP 600 Cost: PHP 100 Procedure 18. Request connection for electricity from Meralco Procedure 9. Obtain the building permit from the OBO Time: 1 day Time: 11 days Cost: No cost Cost: PHP 58,518 (according to the National Building Code of the Philippines, the Comments: The electric company is Manila Electric Company (Meralco). The com- cost of the building permit is PHP 23 per square meter. The computation here is pany visits Meralco to request the connection and submit the certificate of electrical based on PHP 30 per square meter to account for ancillary costs such as electri- inspection and electrical plans. Meralco conducts an inspection of the warehouse cal, mechanical and plumbing fees plus PHP 19,500 for the cost of the fire safety and in the following weeks the technical staff visit the site for the electricity connec- approval) tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The service deposit is PHP 138,580. Both the transformer and service deposit are refund- Comments: After the building permit application is approved, the Building Official able after the first year through annual deductions to the electricity bill or through releases the order of payment for the company to pay at the City Treasurer’s Office. checks computed at 25% of the applicant’s annual gross distribution revenue. Once the company has paid the building permit fees, it will present the official receipt to the Receiving/Releasing Section for recording and issuance of the permit. Procedure 19. Receive inspection for electricity from Meralco Procedure 10. Receive inspection from the Bureau of Fire Time: 1 day Protection (BFP) Cost: No cost Time: 1 day Procedure 20. Obtain connection for electricity from Meralco Cost: No cost (fees included in procedure 9) Time: 88 days Comments: During the construction of the warehouse, the BFP will conduct an Cost: No cost inspection of the site at random, to determine whether the plans and fire safety precautions are being observed (section 1.202 of the Fire Code of the Philippines). Procedure 21*. Request connection for water and sewage from Procedure 11. Receive inspection from the OBO Manila Water Company, Inc (Manila Water) Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 9) Cost: PHP 6,635 (installation fee paid during application) Comments: During the construction of the warehouse, the OBO will conduct an Comments: The water company is Manila Water. The company visits Manila Water to inspection of the site at random, to determine whether the construction follows the request the connection and inspection time takes two weeks. Connection is effected approved building plans and design. some days after the inspection. 84 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 22*. Receive inspection for water and sewage Comments: This clearance confirms that the intended land use is compliant with connection from Manila Water the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they have the discretion to impose their own taxes, fees and charges. Time: 1 day Cost: No cost Procedure 5. Request the locational clearance from the City Zoning Administration Office (CZAO) Procedure 23*. Obtain water and sewage connection from Manila Water Time: 1 day Cost: PHP 6,600 (PHP 4 per square meter x 1.25 processing fee + PHP 100 filing fee) Time: 21 days Comments: This clearance confirms that the intended land use conforms to the Cost: No cost local government’s zoning ordinances, wherein a Barangay clearance is required. The time to complete the construction may be shorter if the warehouse is to be built Procedure 24*. Obtain telephone connection from the telephone in an industrial area versus other areas. The cost is based on the Muntinlupa City company Zoning Ordinance. Time: 5 days Cost: PHP 999 (installation fee and unit) Procedure 6. Receive inspection for the locational clearance from Comments: There are three telephone companies providing landline services for the CZAO Marikina. The cost is PHP 1,500 for Philippine Long Distance Co. (PLDT), PHP 1,310 Time: 1 day for Globelines, and PHP 999 for Bayantel. There is a lock-in period of 24, 12 and 12 Cost: No cost (fees included in procedure 5) months respectively for the regular phone line. The case study assumes that the company will request services from Bayantel as this is the option favorable to the Procedure 7. Obtain the locational clearance from the CZAO company. Time: 3 days Procedure 25*. Secure the tax declaration of improvement at the Cost: No cost CAO Comments: The company goes to the CZAO to obtain the locational clearance. Time: 3 days Procedure 8. Obtain fire safety evaluation and correction sheet Cost: No cost on the building plans from the local fire marshal at the Bureau of Comments: The company must update the official records to include the newly built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the Fire Protection (BFP) building plan and certificate of occupancy every month to notify them of the new Time: 7 days building construction. This may take less time if the company submits the above Cost: PHP 19,500 (0.1% of the estimated value of the building) documents to the CAO, since it can obtain the new tax declaration within that day. Comments: This approval is required to confirm that the plans and specifications The tax declaration of improvement is released the day after an appraiser inspects conform to all the fire safety and control requirements of the Fire Code of the the property. Philippines. Upon presentation of the official receipts, the company submits all * This procedure is simultaneous with a previous procedure the documents and plans together with the endorsement letter from the Building Official to the local fire marshal to obtain approval from the latter with respect to fire DEALING WITH LICENSES safety and control requirements. As per National Building Code, the fire marshal shall Muntinlupa give his/her recommendation within five working days from date of referral. Failure to act within said period shall mean that the plans and specifications conform to all Procedures to build a warehouse the requirements of the Fire Code of the Philippines. Warehouse Value: USD 380,011 = PHP 19,500,000 Date as of: December 2007 Procedure 9. Apply for the building permit at the Office of the Procedure 1. Obtain certified true copy (CTC) of the land title Building Official (OBO) from the Registry of Deeds (RD) Time: 1 day Time: 2 days Cost: PHP 500 (filing fee) Cost: PHP 30 Comments: The company must obtain the building permit along with the electrical, sanitary, and mechanical permits, and have the design, plans, and technical specifi- Comments: The company must obtain a CTC of the land title as proof of ownership cations of the project approved to ensure they are compliant with the design codes, of the land on which the warehouse is to be built. and safety laws and regulations. To obtain the building permit, the company gets the application forms and checklist from the Receiving Section at the OBO. The receiving Procedure 2*. Obtain CTC of the tax declaration of real property personnel will check if all documents in the checklist are satisfied. from the City Assessor’s Office (CAO) Time: 1 day Procedure 10. Notarize the building permit at the notary Cost: PHP 20 Time: 1 day Comments: The company must obtain a CTC of the tax declaration of real property Cost: PHP 100 so that it can identify the property by its index number. Procedure 11. Obtain the building permit from the OBO Procedure 3*. Obtain lot plan with site map from the geodetic Time: 13 days engineer Cost: PHP 39,018 (according to the National Building Code of the Philippines the Time: 3 days cost of the building permit is PHP 23 per square meter. The computation here is Cost: PHP 2,000 based on PHP 30 per square meter to account for ancillary costs such as electrical, Comments: The company must obtain the lot plan with site map from a geodetic mechanical and plumbing fees) engineer to confirm the location of the land purported to be in the land title. A lot Comments: After the building permit application is approved, the Building Official plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- releases the order of payment for the company to pay at the City Treasurer’s Office. vey, or at least after an analysis has been conducted of the lot technical description Once the company has paid the building permit fees, it will present the official appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site receipt to the Receiving/Releasing Section for recording and issuance of the permit. map. The company may pay more or less, depending on the geodetic engineer and the city where the warehouse is to be built. Procedure 12. Receive inspection from the BFP Time: 1 day Procedure 4*. Obtain Barangay clearance Cost: No cost (fees included in procedure 8) Time: 2 days Cost: PHP 100  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 85

Comments: During the construction of the warehouse, the BFP will conduct an and in the following weeks the technical staff visit the site for the electricity connec- inspection of the site at random, to determine whether the plans and fire safety tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The precautions are being observed (section 1.202 of the Fire Code of the Philippines). service deposit is PHP 138,580. Both the transformer and service deposit are refund- able after the first year through annual deductions to the electricity bill or through Procedure 13. Receive inspection from the OBO checks computed at 25% of the applicant’s annual gross distribution revenue. Time: 1 day Cost: No cost (fees included in procedure 11) Procedure 24. Receive inspection for electricity from Meralco Time: 1 day Comments: During the construction of the warehouse, the OBO will conduct an inspection of the site at random, to determine whether the construction follows the Cost: No cost approved building plans and design. Procedure 25. Obtain connection for electricity from Meralco Procedure 14. Request the fire safety inspection certificate (FSIC) Time: 88 days from the BFP Cost: No cost Time: 1 day Cost: PHP 3,901 (10% of building permit fees) Procedure 26*. Request connection for water and sewage from Comments: After construction of the warehouse, the company requests the BFP Maynilad Water Services, Inc (Maynilad) for an inspection of the site to certify that the required fire safety construction, fire Time: 1 day protective and/or warning systems are properly installed and in good working condi- Cost: PHP 6,411 (installation fee paid during application) tion. Comments: The water company is Maynilad. The company visits Maynilad to request the connection and inspection time takes two weeks. Maynilad subcontracts Procedure 15. Receive inspection for the FSIC from the BFP the installation with a contractor and the time of actual installation depends on the Time: 1 day contractor. Cost: No cost (fees included in procedure 14) Procedure 27*. Receive inspection for water and sewage Procedure 16. Obtain the FSIC from the BFP connection from Maynilad Time: 2 days Time: 1 day Cost: No cost Cost: No cost Comments: After inspection, the company obtains the certificate from the BFP. Procedure 28*. Obtain water and sewage connection from Procedure 17. Request the certificate of occupancy from the OBO Maynilad Time: 1 day Time: 30 days Cost: PHP 13,006 (floor area x 10,000/1 million x PHP 1,000) Cost: No cost Comments: The company must secure first the occupancy certificate before applying for the certificate of electrical inspection. The time for inspection will be Procedure 29*. Obtain telephone connection from the telephone scheduled when the company visits the OBO to apply for the certificate. A building company official inspects the site and certifies that the project as built conforms to the design, Time: 5 days plans, and the actual cost of the project. Cost: PHP 1,310 (installation fee and unit) Procedure 18. Receive inspection for the certificate of occupancy Comments: There are two telephone companies providing landline services in Muntinlupa. These are Philippine Long Distance Co. (PLDT) and Globelines. For from the OBO PLDT, the cost is PHP 1,500 and there is a lock-in period of 24 months for the regular Time: 1 day phone line. For Globelines, there is no cost if the applicant provides proof of financial Cost: No cost (fees included in procedure 17) capability. Otherwise, the applicant has to pay PHP 1,310. There is a lock-in period of 12 months for the regular phone line. The case study assumes that the company will Procedure 19. Obtain the certificate of occupancy from the OBO request services from Globelines as this is the option favorable to the company. Time: 8 days Procedure 30*. Secure the tax declaration of improvement at the Cost: No cost CAO Procedure 20. Request the certificate of electrical inspection (CEI) Time: 1 day from the OBO Cost: No cost Time: 1 day Comments: The company must update the official records to include the newly Cost: PHP 80 built warehouse for tax purposes by submitting a copy of the building plan and certificate of occupancy to the CAO. Comments: The company visits the Electrical Division of the OBO to request the certificate of electrical inspection and schedule for an inspection to certify that the * This procedure is simultaneous with a previous procedure as-built plans correspond to the actual completed construction works. DEALING WITH LICENSES

Procedure 21. Receive inspection for the CEI from the OBO Navotas Time: 1 day Procedures to build a warehouse Cost: No cost (fees included in procedure 20) Warehouse Value: USD 380,011 = PHP 19,500,000 Date as of: December 2007 Procedure 22. Obtain the CEI from the OBO Procedure 1. Obtain certified true copy (CTC) of the land title Time: 1 day from the Registry of Deeds (RD) Cost: No cost Time: 2 days Procedure 23. Request connection for electricity from Meralco Cost: PHP 50 Time: 1 day Comments: The company must obtain a CTC of the land title as proof of ownership of the land on which the warehouse is to be built. Cost: No cost Comments: The electric company is Manila Electric Company (Meralco). The com- pany visits Meralco to request the connection and submit the certificate of electrical inspection and electrical plans. Meralco conducts an inspection of the warehouse 86 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 2*. Obtain CTC of the tax declaration of real property give his/her recommendation within five working days from date of referral. Failure from the City Assessor’s Office (CAO) to act within said period shall mean that the plans and specifications conform to all the requirements of the Fire Code of the Philippines. While the company is getting Time: 1 day approval from the local fire marshal, processing of application, checking plans and Cost: PHP 80 specifications by the technical staff of the OBO is ongoing. In Navotas, the fire fees Comments: The company must obtain a CTC of the tax declaration of real property are computed at the BFP and payment is made at the City Treasurer’s Office (CTO). so that it can identify the property by its index number. Procedure 10. Receive fire safety approval from the local fire Procedure 3*. Obtain lot plan with site map from the geodetic marshal at the BFP engineer Time: 2 days 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 11. Obtain the building permit from the OBO engineer to confirm the location of the land purported to be in the land title. A lot Time: 9 days plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Cost: PHP 39,018 (according to the National Building Code of the Philippines the vey, or at least after an analysis has been conducted of the lot technical description cost of the building permit is PHP 23 per square meter. The computation here is appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site based on PHP 30 per square meter to account for ancillary costs such as electrical, map. The company may pay more or less, depending on the geodetic engineer and mechanical and plumbing fees) the city where the warehouse is to be built. Comments: After the building permit application is approved, the Building Official Procedure 4*. Obtain Barangay clearance releases the 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 the Receiving/ Time: 2 days Releasing Section for recording and issuance of the permit. Cost: PHP 200 Comments: This clearance confirms that the intended land use is compliant with Procedure 12. Receive inspection from the BFP the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they Time: 1 day have the discretion to impose their own taxes, fees and charges. Cost: No cost (fees included in procedure 9) Procedure 5. Request the locational clearance from the City Comments: During the construction of the warehouse, the BFP will conduct an inspection of the site at random, to determine whether the plans and fire safety Planning and Development Office (CPDO) precautions are being observed (section 1.202 of the Fire Code of the Philippines). Time: 1 day Cost: PHP 13,056 (PHP 10 per square meter + PHP 50 processing fee) Procedure 13. Receive inspection from the OBO Comments: This clearance confirms that the intended land use conforms to the Time: 1 day local government’s zoning ordinances, wherein a Barangay clearance is required. The Cost: No cost (fees included in procedure 11) time to complete the construction may be shorter if the warehouse is to be built in Comments: During the construction of the warehouse, the OBO will conduct an an industrial area versus other areas. The cost is based on the Comprehensive Land inspection of the site at random, to determine whether the construction follows the Use Plan of Navotas. approved building plans and design.

Procedure 6. Receive inspection for the locational clearance from Procedure 14. Request the fire safety inspection certificate (FSIC) the CPDO and obtain the order of payment from the BFP Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 5) Cost: PHP 3,901 (10% of building permit fees) Comments: The CPDO conducts an inspection of the property before issuance of Comments: After construction of the warehouse, the company requests the BFP the locational clearance. for an inspection of the site to certify that the required fire safety construction, fire protective and/or warning systems are properly installed and in good working condi- Procedure 7. Obtain the locational clearance from the CPDO tion. The FSIC fees are paid at the CTO. Time: 7 days Cost: No cost Procedure 15. Receive inspection for FSIC from the BFP Comments: The company goes to the CPDO to obtain the locational clearance. Time: 1 day Cost: No cost (fees included in procedure 14) Procedure 8. Apply for the building permit at the Office of the Building Official (OBO) Procedure 16. Obtain the FSIC from the BFP Time: 1 day Time: 3 days Cost: No cost Cost: No cost Comments: The company must obtain the building permit along with the electrical, Comments: After inspection, the company obtains the certificate from the BFP. sanitary, and mechanical permits, and have the design, plans, and technical specifi- cations of the project approved to ensure they are compliant with the design codes, Procedure 17. Request the certificate of occupancy and certificate and safety laws and regulations. To obtain the building permit, the company gets the of electrical inspection (CEI) from the OBO application forms and checklist from the Receiving Section at the OBO. The receiving Time: 1 day personnel will check if all documents in the checklist are satisfied. Cost: PHP 19,000 (PHP 1,000 per million) Procedure 9. Request fire safety evaluation and correction sheet Comments: The application for the certificate of occupancy includes a form for the on the building plans and order of payment from the local fire certificate of electrical inspection. The certificates are prerequisites for the electricity marshal at the Bureau of Fire Protection (BFP) connection and are released after a team of inspectors (architectural, structural, elec- trical, mechanical, and sanitary) inspects the site and certifies that the warehouse as Time: 7 days built conforms to the design, plans, and cost of the project. Cost: PHP 19,500 (0.1% of the estimated value of the building) Comments: This approval is required to confirm that the plans and specifications Procedure 18. Receive inspection for the certificate of occupancy conform to all the fire safety and control requirements of the Fire Code of the and CEI from the OBO Philippines. Upon presentation of the official receipts, the company submits all Time: 1 day the documents and plans together with the endorsement letter from the Building Official to the local fire marshal to obtain approval from the latter with respect to fire Cost: No cost (fees included in procedure 17) safety and control requirements. As per National Building Code, the fire marshal shall  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 87

Procedure 19. Obtain the certificate of occupancy and CEI from DEALING WITH LICENSES the OBO Parañaque Time: 13 days Procedures to build a warehouse Cost: No cost Warehouse Value: USD 380,011 = PHP 19,500,000 Date as of: December 2007 Procedure 20. Request connection for electricity from Meralco Time: 1 day Procedure 1. Obtain certified true copy (CTC) of the land title Cost: No cost from the Registry of Deeds (RD) Comments: The electric company is Manila Electric Company (Meralco). The com- Time: 1 day pany visits Meralco to request the connection and submit the certificate of electrical Cost: PHP 30 inspection and electrical plans. Meralco conducts an inspection of the warehouse Comments: The company must obtain a CTC of the land title as proof of ownership and in the following weeks the technical staff visit the site for the electricity connec- of the land on which the warehouse is to be built. tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The service deposit is PHP 138,580. Both the transformer and service deposit are refund- Procedure 2*. Obtain CTC of the tax declaration of real property able after the first year through annual deductions to the electricity bill or through checks computed at 25% of the applicant’s annual gross distribution revenue. from the City Assessor’s Office (CAO) Time: 1 day Procedure 21. Receive inspection for electricity from Meralco Cost: PHP 60 Time: 1 day Comments: The company must obtain a CTC of the tax declaration of real property Cost: No cost so that it can identify the property by its index number.

Procedure 22. Obtain connection for electricity from Meralco Procedure 3*. Obtain lot plan with site map from the geodetic Time: 88 days engineer Cost: No cost Time: 3 days Cost: PHP 1,500 Procedure 23*. Request connection for water and sewage from Comments: The company must obtain the lot plan with site map from a geodetic Maynilad Water Services, Inc (Maynilad) engineer to confirm the location of the land purported to be in the land title. A lot Time: 1 day 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 6,411 (installation fee paid during application) appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site Comments: The water company is Maynilad. The company visits Maynilad to map. The company may pay more or less, depending on the geodetic engineer and request the connection and inspection time takes two weeks. Maynilad subcontracts the city where the warehouse is to be built. the installation with a contractor and the time of actual installation depends on the contractor. Procedure 4*. Obtain Barangay clearance Time: 2 days Procedure 24*. Receive inspection for water and sewage Cost: PHP 350 connection from Maynilad Comments: This clearance confirms that the intended land use is compliant with Time: 1 day the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they Cost: No cost have the discretion to impose their own taxes, fees and charges.

Procedure 25*. Obtain water and sewage connection from Procedure 5. Request locational clearance from the City Planning Maynilad and Development Office (CPDO) Time: 30 days Time: 1 day Cost: No cost Cost: PHP 6,646 (PHP 4 per square meter for land use fee + 25% of land use fee + PHP 146 filing fee) Procedure 26*. Obtain telephone connection from the telephone Comments: This clearance confirms that the intended land use conforms to the company local government’s zoning ordinances, wherein a Barangay clearance is required. Time: 5 days The time to complete the construction may be shorter if the warehouse is to be Cost: PHP 1,310 (installation fee and unit) built in an industrial area versus other areas. Upon receipt of the application by the CPDO and after conducting necessary inspections, the form will be submitted to Comments: There are two telephone companies providing landline services in the Mayor’s Office for approval. The company may follow-up the application in the Navotas. These are Philippine Long Distance Co. (PLDT) and Globelines. For PLDT, the Mayor’s Office to release the clearance in order to expedite the procedure or just wait cost is PHP 1,500 and there is a lock-in period of 24 months for the regular phone until it is sent back to the Planning Office for signature of the Local Zoning Officer, line. For Globelines, there is no cost if the applicant provides proof of financial which takes longer. The cost is based on the Parañaque City Zoning Ordinance. capability. Otherwise, the applicant has to pay PHP 1,310. There is a lock-in period of 12 months for the regular phone line. The case study assumes that the company will request services from Globelines as this is the option favorable to the company. Procedure 6. Receive inspection for the locational clearance from the CPDO Procedure 27*. Secure the tax declaration of improvement at the Time: 1 day CAO Cost: No cost (fees included in procedure 5) Time: 2 days Comments: This inspection takes place to verify whether the actual location of the Cost: No cost proposed structure is conforming to land use and classification. The company can not start construction or even apply for building permit without securing first the Comments: The company must update the official records to include the newly locational clearance. built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the building plan and certificate of occupancy every month to notify them of the new building construction. This may take less time if the company submits the above Procedure 7. Obtain mayor’s clearance at the City Mayor’s Office documents to the CAO, since it can obtain the new tax declaration within that day. (CMO) The tax declaration of improvement is released after an appraiser inspects the Time: 1 day property on the same or the following day. Cost: No cost * This procedure is simultaneous with a previous procedure Comments: The applicant must secure mayor’s clearance (mayor’s signature to confirm that the land where the project will be carried out is conforming to its use) before the locational clearance or the building permit can be processed. 88 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 8. Obtain the locational clearance from the CPDO Procedure 17. Receive inspection from the Bureau of Fire Time: 4 days Protection (BFP) Cost: No cost Time: 1 day Comments: The company applies for the locational clearance at the CPDO, picks Cost: No cost (fees included in procedure 16) it up from the Mayor’s Office a few days later (and after the inspection takes place), Comments: During the construction of the warehouse, the BFP will conduct an then sends it back to CPDO for the Zoning Officer’s signature. inspection of the site at random, to determine whether the plans and fire safety precautions are being observed (section 1.202 of the Fire Code of the Philippines). Procedure 9. Apply for the building permit at the Office of the Building Official (OBO) Procedure 18. Request the fire safety inspection certificate (FSIC) Time: 1 day from the BFP Cost: PHP 500 (filing fee) Time: 1 day Comments: The company must obtain the building permit along with the electri- Cost: PHP 3,045 (10% of fees paid in the occupancy certificate) cal, sanitary, and mechanical permits, and have the design, plans, and technical Comments: After construction of the warehouse, the company requests the BFP specifications of the project approved to ensure they are compliant with the design for an inspection of the site to certify that the required fire safety construction, fire codes, and safety laws and regulations. To obtain the building permit, the company protective and/or warning systems are properly installed and in good working condi- gets the application forms and checklist from the Receiving Section at the OBO. The tion. In Parañaque: Fire fund fee is the basic fire fee that goes to the BFP. Most cities receiving personnel will check if all documents in the checklist are satisfied. While in collect the whole fire fund fee during the application for building permit (included other cities the company would go to the BFP to request for the local Fire Mashall’s in the building permit fees). The city of Parañaque collects only the half during the recommendations with respect to fire safety and control requirements (done while building permit processing and the other half during occupancy. Fire fund fee is the application for building permit is being processed), in Parañaque, the OBO has computed at 0.1% of construction cost as stated in the Fire Code. They also calculate a Liaison Officer who would go the BFP on behalf of the company to get the recom- the fire cost based on the occupancy fee and not the building permit fees. mendation. Procedure 19. Receive inspection for the FSIC from the BFP Procedure 10. Notarize building permit at the notary Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 18) Cost: PHP 100 Procedure 20. Obtain the FSIC from the BFP Procedure 11. Get evaluation and approval of the architectural Time: 2 days plans from the OBO Cost: No cost Time: 1 day Comments: After inspection, the company obtains the certificate from the BFP. Cost: No cost (fees included in procedure 16) Comments: Upon submitting the required documents for the building permit, the Procedure 21. Request the certificate of occupancy and certificate company has to visit different sections to have the plans evaluated and approved. of electrical inspection (CEI) from the OBO Time: 1 day Procedure 12. Get evaluation and approval of the civil/structural Cost: PHP 30,450 (PHP 200 inspection fee + PHP 1,000 per million of the project + plans from the OBO PHP 500 filing fee + PHP 9,750 half of fire fund) Time: 1 day Comments: The application for the certificate of occupancy includes a form for the Cost: No cost (fees included in procedure 16) certificate of electrical inspection. The certificates are prerequisites for the electricity connection and are released after a team of inspectors (architectural, structural, elec- Procedure 13. Get evaluation and approval of the line and grade trical, mechanical, and sanitary) inspects the site and certifies that the warehouse plans from the OBO as built conforms to the design, plans, and cost of the project. The company has to Time: 1 day submit to the OBO the fire safety inspection certificate and official receipt of the building permit. Cost: No cost (fees included in procedure 16)

Procedure 14. Get evaluation and approval of the sanitary and Procedure 22. Receive inspection for the certificate of occupancy plumbing plans from the OBO and CEI from the OBO Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 21) Cost: No cost (fees included in procedure 16)

Procedure 15. Get evaluation and approval of the electrical plans Procedure 23. Obtain the certificate of occupancy and CEI from from the OBO the OBO Time: 5 days Time: 1 day Cost: PHP 750 Cost: No cost (fees included in procedure 16)

Procedure 16. Obtain the building permit from the OBO Procedure 24. Request connection for electricity from Meralco Time: 1 day Time: 16 days Cost: No cost Cost: PHP 48,768 (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 electric company is Manila Electric Company (Meralco). The com- based on PHP 30 per square meter to account for ancillary costs such as electrical, pany visits Meralco to request the connection and submit the certificate of electrical mechanical and plumbing fees plus half of the fire fund PHP 9,750 (PHP 19,500.00 inspection and electrical plans. Meralco conducts an inspection of the warehouse fire fund or cost of fire safety approval). and in the following weeks the technical staff visit the site for the electricity connec- tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The Comments: The staff of the OBO will prepare the order of payment and forward it to service deposit is PHP 138,580. Both the transformer and service deposit are refund- the Building Official for approval and signature. Upon receipt of the plans approved able after the first year through annual deductions to the electricity bill or through by the local fire marshal, the order of payment will be released for the applicant to checks computed at 25% of the applicant’s annual gross distribution revenue. pay at the City Treasurer’s Office. Once the company has paid the building permit fees, it will present the official receipt to the Receiving/Releasing Section for record- ing and issuance of the permit. Procedure 25. Receive inspection for electricity from Meralco Time: 1 day Cost: No cost  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 89

Procedure 26. Obtain connection for electricity from Meralco Procedure 3*. Obtain lot plan with site map from the geodetic Time: 88 days engineer Cost: No cost Time: 3 days Cost: PHP 1,000 Procedure 27*. Request connection for water and sewage from Comments: The company must obtain the lot plan with site map from a geodetic Maynilad Water Services, Inc (Maynilad) engineer to confirm the location of the land purported to be in the land title. A lot Time: 1 day plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Cost: PHP 6,411 (installation fee paid during application) vey, or at least after an analysis has been conducted of the lot technical description appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site Comments: The water company is Maynilad. The company visits Maynilad to map. The company may pay more or less, depending on the geodetic engineer and request the connection and inspection time takes two weeks. Maynilad subcontracts the city where the warehouse is to be built. the installation with a contractor and the time of actual installation depends on the contractor. Procedure 4*. Obtain Barangay clearance Procedure 28*. Receive inspection for water and sewage Time: 2 days connection from Maynilad Cost: PHP 100 Time: 1 day Comments: This clearance confirms that the intended land use is compliant with the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they Cost: No cost have the discretion to impose their own taxes, fees and charges. Procedure 29*. Obtain water and sewage connection from Procedure 5. Request the locational clearance from the City Maynilad Planning and Development Office (CPDO) Time: 30 days Time: 1 day Cost: No cost Cost: PHP 8,625 (PHP 5 per square meter (land use fee) + 25% land use fee + PHP 300 inspection fee + PHP 200 application fee) Procedure 30*. Obtain telephone connection from the telephone company Comments: This clearance confirms that the intended land use conforms to the local government’s zoning ordinances, wherein a Barangay clearance is required. The Time: 5 days time to complete the construction may be shorter if the warehouse is to be built in Cost: PHP 1,310 (installation fee and unit) an industrial area versus other areas. According to the City Planning Office, commer- Comments: There are two telephone companies providing landline services in cial projects such as warehouse with floor areas more than 1,000 square meters are Parañaque. These are Philippine Long Distance Co. (PLDT) and Globelines. For PLDT, required to apply for environmental compliance certificate (ECC) prior to issuance of the cost is PHP 1,500 and there is a lock-in period of 24 months for the regular location clearance. Before the locational clearance is processed, the Planning Office phone line. For Globelines, there is no cost if the applicant provides proof of financial requires a copy of the application for ECC received by the Lake Development capability. Otherwise, the applicant has to pay PHP 1,310. There is a lock-in period of Authority (LLDA). 12 months for the regular phone line. The case study assumes that the company will request services from Globelines as this is the option favorable to the company. Procedure 6. Receive inspection for the locational clearance from the CPDO Procedure 31*. Secure the tax declaration of improvement at the Time: 1 day CAO Cost: No cost (fees included in procedure 5) Time: 9 days Comments: The CPDO conducts an inspection of the property before issuance of Cost: No cost the locational clearance. Comments: The company must update the official records to include the newly built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the Procedure 7. Obtain the locational clearance from the CPDO building plan and certificate of occupancy every month to notify them of the new Time: 12 days building construction. The company submits the certificate of occupancy, building Cost: No cost permit, plans, and tax declaration of the land in order to process the application. The tax declaration of improvement is released after an appraiser inspects the property Comments: The company goes to the CPDO to obtain the locational clearance. within seven working days. Procedure 8. Obtain the environmental clearance from the * This procedure is simultaneous with a previous procedure Laguna Lake Development Authority (LLDA) DEALING WITH LICENSES Time: 1 day Pasay Cost: PHP 600 Procedures to build a warehouse Comments: An ECC is required to a proposed project if it will pose environmental Warehouse Value: USD 380,011 = PHP 19,500,000 effects. If not, the company should get a clearance from the LLDA as required by the CPDO. This is the certificate of non-coverage (CNC) that certifies the project Date as of: December 2007 as exempted form obtaining ECC. Not all cities require companies to secure CNC Procedure 1. Obtain certified true copy (CTC) of the land title because according to the DENR/LLDA, it is upon the discretion of cities if they want verification from them that the project is indeed exempted from ECC application. In from the Registry of Deeds (RD) Pasay, they require it for projects with floor area more than 1,000 square meters. Time: 1 day Cost: PHP 30 Procedure 9. Apply for the building permit at the Office of the Comments: The company must obtain a CTC of the land title as proof of ownership Building Official (OBO) of the land on which the warehouse is to be built. Time: 1 day Cost: No cost Procedure 2*. Obtain CTC of the tax declaration of real property Comments: The company must obtain the building permit along with the electrical, and tax clearance from the City Assessor’s Office (CAO) sanitary, and mechanical permits, and have the design, plans, and technical specifi- Time: 1 day cations of the project approved to ensure they are compliant with the design codes, Cost: PHP 150 (PHP 80 + PHP 20 documentary stamp for CTC + PHP 50 for tax and safety laws and regulations. To obtain the building permit, the company gets the clearance) application forms and checklist from the Receiving Section at the OBO. The receiving Comments: The company must obtain a CTC of the tax declaration of real property personnel will check if all documents in the checklist are satisfied. so that it can identify the property by its index number and a tax clearance as a proof that there are no arrears in realty taxes. 90 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 10. Obtain fire safety evaluation and correction sheet Procedure 18. Receive inspection for the certificate of occupancy on the building plans from the local fire marshal at the Bureau of and CEI from the OBO Fire Protection (BFP) Time: 1 day Time: 7 days Cost: No cost (fees included in procedure 17) Cost: PHP 19,500 (0.1% of the estimated value of the building) Comments: This approval is required to confirm that the plans and specifications Procedure 19. Obtain the certificate of occupancy and CEI from conform to all the fire safety and control requirements of the Fire Code of the the OBO Philippines. Upon presentation of the official receipts, the company submits all Time: 13 days the documents and plans together with the endorsement letter from the Building Cost: PHP 1,250 Official to the local fire marshal to obtain approval from the latter with respect to fire safety and control requirements. As per National Building Code, the fire marshal shall Procedure 20. Request connection for electricity from Meralco give his/her recommendation within five working days from date of referral. Failure to act within said period shall mean that the plans and specifications conform to all Time: 1 day the requirements of the Fire Code of the Philippines. While the company is getting Cost: No cost approval from the local fire marshal, processing of application, checking plans and Comments: The electric company is Manila Electric Company (Meralco). The com- specifications by the technical staff of the OBO is ongoing. pany visits Meralco to request the connection and submit the certificate of electrical inspection and electrical plans. Meralco conducts an inspection of the warehouse Procedure 11. Obtain the building permit from the OBO and in the following weeks the technical staff visit the site for the electricity connec- Time: 11 days tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The service deposit is PHP 138,580. Both the transformer and service deposit are refund- Cost: PHP 39,018 (according to the National Building Code of the Philippines the able after the first year through annual deductions to the electricity bill or through cost of the building permit is PHP 23 per square meter. The computation here is checks computed at 25% of the applicant’s annual gross distribution revenue. based on PHP 30 per square meter to account for ancillary costs such as electrical, mechanical and plumbing fees) Procedure 21. Receive inspection for electricity from Meralco Comments: After the building permit application is approved, the building official releases the order of payment for the company to pay at the City Treasurer’s Office. Time: 1 day Once the company has paid the building permit fees, it will present the official Cost: No cost receipt to the Receiving/Releasing Section for recording and issuance of the permit. Procedure 22. Obtain connection for electricity from Meralco Procedure 12. Receive inspection from the BFP Time: 88 days Time: 1 day Cost: No cost Cost: No cost (fees included in procedure 10) Comments: During the construction of the warehouse, the BFP will conduct an Procedure 23*. Request connection for water and sewage from inspection of the site at random, to determine whether the plans and fire safety Maynilad Water Services, Inc (Maynilad) precautions are being observed (section 1.202 of the Fire Code of the Philippines). Time: 1 day Cost: PHP 6,411 (installation fee paid during application) Procedure 13. Receive inspection from the OBO Comments: The water company is Maynilad. The company visits Maynilad to Time: 1 day request the connection and inspection time takes two weeks. Maynilad subcontracts Cost: No cost (fees inlcuded in procedure 11) the installation with a contractor and the time of actual installation depends on the Comments: During the construction of the warehouse, the OBO will conduct an contractor. inspection of the site at random, to determine whether the construction follows the approved building plans and design. Procedure 24*. Receive inspection for water and sewage connection from Maynilad Procedure 14. Request the fire safety inspection certificate (FSIC) Time: 1 day from the BFP Cost: No cost Time: 1 day Cost: PHP 3,901 (10% of building permit fees) Procedure 25*. Obtain water and sewage connection from Comments: After construction of the warehouse, the company requests the BFP Maynilad for an inspection of the site to certify that the required fire safety construction, fire Time: 30 days protective and/or warning systems are properly installed and in good working condi- Cost: No cost tion. Procedure 26*. Obtain telephone connection from the telephone Procedure 15. Receive inspection for the FSIC from the BFP company Time: 1 day Time: 5 days Cost: No cost (fees included in procedure 14) Cost: PHP 1,310 (installation fee and unit) Procedure 16. Obtain the FSIC from the BFP Comments: There are two telephone companies providing landline services in Pasay. These are Philippine Long Distance Co. (PLDT) and Globelines. For PLDT, the Time: 13 days cost is PHP 1,500 and there is a lock-in period of 24 months for the regular phone Cost: No cost line. For Globelines, there is no cost if the applicant provides proof of financial Comments: After inspection, the company obtains the certificate from the BFP. capability. Otherwise, the applicant has to pay PHP 1,310. There is a lock-in period of 12 months for the regular phone line. The case study assumes that the company will Procedure 17. Request the certificate of occupancy and certificate request services from Globelines as this is the option favorable to the company. of electrical inspection (CEI) from the OBO Procedure 27*. Secure the tax declaration of improvement at the Time: 1 day CAO Cost: PHP 20,000 (PHP 1,000 per million of the project value) Time: 2 days Comments: The application for the certificate of occupancy includes a form for the certificate of electrical inspection. The certificates are prerequisites for the electricity Cost: No cost connection and are released after a team of inspectors (architectural, structural, elec- Comments: The company must update the official records to include the newly trical, mechanical, and sanitary) inspects the site and certifies that the warehouse as built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the built conforms to the design, plans, and cost of the project. building plan and certificate of occupancy every month to notify them of the new building construction. This may take less time if the company submits the above  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 91 documents to the CAO, since it can obtain the new tax declaration within that day. Comments: As per memorandum of the City Administrator, applications for build- The tax declaration of improvement is released after an appraiser inspects the ing permit should have secured first the Environmental Clearance from the City property on the same or the following day. Environment and Natural Resources Office (CENRO). * This procedure is simultaneous with a previous procedure Procedure 9*. Notarize the environmental clearance at the City DEALING WITH LICENSES ENRO Pasig Time: 1 day Procedures to build a warehouse Cost: PHP 100 Warehouse Value: USD 380,011 = PHP 19,500,000 Date as of: December 2007 Procedure 10. Apply for the building permit at the Office of the Building Official (OBO) Procedure 1. Obtain certified true copy (CTC) of the land title Time: 1 day from the Registry of Deeds (RD) Cost: No cost Time: 3 days Comments: The company must obtain the building permit along with the electrical, Cost: PHP 30 sanitary, and mechanical permits, and have the design, plans, and technical specifi- Comments: The company must obtain a CTC of the land title as proof of ownership cations of the project approved to ensure they are compliant with the design codes, of the land on which the warehouse is to be built. and safety laws and regulations. To obtain the building permit, the company gets the application forms and checklist from the Receiving Section at the OBO. The receiving Procedure 2*. Obtain CTC of the tax declaration of real property personnel will check if all documents in the checklist are satisfied. While in other from the City Assessor’s Office (CAO) cities the company would go to the BFP to request for the local Fire Mashall’s recom- mendations with respect to fire safety and control requirements (done while the Time: 1 day application for building permit is being processed), in Pasig, the OBO has a Liaison Cost: PHP 50 Officer who would go the BFP on behalf of the company to get the recommendation. Comments: The company must obtain a CTC of the tax declaration of real property so that it can identify the property by its index number. Procedure 11. Notarize the building permit at the notary Time: 1 day Procedure 3*. Obtain lot plan with site map from the geodetic Cost: PHP 150 engineer Time: 4 days Procedure 12. Obtain the building permit from the OBO Cost: PHP 1,250 Time: 26 days Comments: The company must obtain the lot plan with site map from a geodetic Cost: PHP 52,518 (according to the National Building Code of the Philippines, the engineer to confirm the location of the land purported to be in the land title. A lot cost of the building permit is PHP 23 per square meter. The computation here is plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- based on PHP 27.5 per square meter to account for ancillary costs such as mechani- vey, or at least after an analysis has been conducted of the lot technical description cal and plumbing fees plus PHP 19,500 for the cost of fire safety approval. The electri- appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site cal fees are paid separately at the Electrical Section) map. The company may pay more or less, depending on the geodetic engineer and Comments: The cost of the building permit does not include the fees for the electri- the city where the warehouse is to be built. cal permit since the Electrical Section is a separate office from that of the OBO. After the building permit application is approved, the Building Official releases the order Procedure 4*. Obtain Barangay clearance of payment for the company to pay at the City Treasurer’s Office (CTO). Once the Time: 2 days company has paid the building permit fees, it will present the official receipt to the Cost: PHP 225 Receiving/Releasing Section for recording and issuance of the permit. Comments: This clearance confirms that the intended land use is compliant with the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they Procedure 13. Receive an inspection from the Bureau of Fire have the discretion to impose their own taxes, fees and charges. Protection (BFP) Time: 1 day Procedure 5. Request the locational clearance from the City Cost: No cost (fees included in procedure 12) Planning and Development Office (CPDO) Comments: During the construction of the warehouse, the BFP will conduct an Time: 1 day inspection of the site at random, to determine whether the plans and fire safety Cost: PHP 2,600 (PHP 2 per square meter) precautions are being observed (section 1.202 of the Fire Code of the Philippines). Comments: This clearance confirms that the intended land use conforms to the local government’s zoning ordinances, wherein a Barangay clearance is required. The Procedure 14. Receive inspection from the OBO time to complete the construction may be shorter if the warehouse is to be built in Time: 1 day an industrial area versus other areas. Cost: No cost (fees included in procedure 12) Comments: During the construction of the warehouse, the OBO will conduct an Procedure 6. Receive inspection for the locational clearance from inspection of the site at random, to determine whether the construction follows the the CPDO approved building plans and design. Time: 1 day Cost: No cost (fees included in procedure 5) Procedure 15. Apply for the electrical permit and receive order of Comments: The CPDO conducts an inspection of the property before issuance of payment at the Electrical Section the locational clearance. Time: 1 day Cost: PHP 3,000 Procedure 7. Obtain the locational clearance from the CPDO Comments: Application, processing, and release of the electrical permit, temporary Time: 13 days utility permit, and certificate of electrical inspection are done in the Electrical Sec- Cost: No cost tion. The company after obtaining the building permit can apply for the electrical permit at the Electrical Section. The Head of the Electrical Section will then release Comments: The company goes to the CPDO to obtain the locational clearance. the order of payment for the company to pay at the CTO. Procedure 8. Obtain the environmental clearance from the City Environment and Natural Resources Office (City ENRO) Time: 3 days Cost: No cost 92 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 16. Obtain the electrical permit at the Electrical able after the first year through annual deductions to the electricity bill or through Section checks computed at 25% of the applicant’s annual gross distribution revenue. Time: 2 days Procedure 27. Receive inspection for electricity from Meralco Cost: No cost (fees included in procedure 15) Time: 1 day Procedure 17. Request the fire safety inspection certificate (FSIC) Cost: No cost and obtain the order of payment from the BFP Procedure 28. Obtain connection for electricity from Meralco Time: 1 day Time: 88 days Cost: PHP 3,901 (10% of building permit fees) Cost: No cost Comments: After construction of the warehouse, the company requests the BFP for an inspection of the site to certify that the required fire safety construction, fire protective and/or warning systems are properly installed and in good working condi- Procedure 29*. Request connection for water and sewage from tion. The FSIC fees are paid at the CTO. Manila Water Company, Inc (Manila Water) Time: 1 day Procedure 18. Receive inspection for the FSIC from the BFP Cost: PHP 6,635 (installation fee paid during application) Time: 1 day Comments: The water company is Manila Water. The company visits Manila Water to Cost: No cost (fees included in procedure 17) request the connection and inspection time takes two weeks. Connection is effected some days after the inspection. Procedure 19. Obtain the FSIC from the BFP Time: 2 days Procedure 30*. Receive inspection for water and sewage Cost: No cost connection from Manila Water 1 day Comments: After inspection, the company obtains the certificate from the BFP. Time: Cost: No cost Procedure 20. Request the certificate of occupancy from the OBO Time: 1 day Procedure 31*. Obtain water and sewage connection from Manila Cost: PHP 20,500 (PHP 1,000 for every 1 million of the project cost + PHP 500 inspec- Water tion fee) Time: 21 days Comments: The company must secure first the occupancy certificate before Cost: No cost applying for the certificate of electrical inspection. The time for inspection will be scheduled when the company visits the OBO to apply for the certificate. A Building Procedure 32*. Obtain telephone connection from the telephone Official inspects the site and certifies that the project as built conforms to the design, company plans, and the actual cost of the project. Time: 5 days Cost: PHP 999 (installation fee and unit) Procedure 21. Receive inspection for the certificate of occupancy Comments: There are three telephone companies providing landline services from the OBO for Pasig. The cost is PHP 1,500 for Philippine Long Distance Co. (PLDT), PHP 1,310 Time: 1 day for Globelines, and PHP 999 for Bayantel. There is a lock-in period of 24, 12 and 12 Cost: No cost (fees included in procedure 20) months respectively for the regular phone line. The case study assumes that the company will request services from Bayantel as this is the option favorable to the Procedure 22. Obtain the certificate of occupancy from the OBO company. Time: 17 days Cost: No cost Procedure 33*. Secure the tax declaration of improvement at the CAO Procedure 23. Request the certificate of electrical inspection (CEI) Time: 9 days from the Electrical Section Cost: No cost Time: 1 day Comments: The company must update the official records to include the newly Cost: PHP 1,000 built warehouse for tax purposes. The OBO furnishes CAO a copy of certificate of occupancy. In practice, the company submits the certificate of occupancy, building Comments: The company visits the Electrical Section to request the certificate of permit, plans, and tax declaration of the land in order to process the application. The electrical inspection and schedule for an inspection to certify that the as-built plans tax declaration of improvement is released after an appraiser inspects the property correspond to the actual completed construction works. within seven working days. Procedure 24. Receive inspection for the CEI from the Electrical * This procedure is simultaneous with a previous procedure Section DEALING WITH LICENSES Time: 1 day Quezon City Cost: No cost (fees included in procedure 23) Procedures to build a warehouse Procedure 25. Obtain the CEI from the Electrical Section Warehouse Value: USD 380,011 = PHP 19,500,000 Date as of: December 2007 Time: 1 day Cost: No cost Procedure 1. Obtain certified true copy (CTC) of the land title from the Registry of Deeds (RD) Procedure 26. Request connection for electricity from Meralco Time: 3 days 1 day Time: Cost: PHP 30 No cost Cost: Comments: The company must obtain a CTC of the land title as proof of ownership Comments: The electric company is Manila Electric Company (Meralco). The com- of the land on which the warehouse is to be built. pany visits Meralco to request the connection and submit the certificate of electrical inspection and electrical plans. Meralco conducts an inspection of the warehouse Procedure 2*. Obtain lot plan with site map from the geodetic and in the following weeks the technical staff visit the site for the electricity connec- engineer tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The service deposit is PHP 138,580. Both the transformer and service deposit are refund- Time: 3 days Cost: PHP 1,250  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 93

Comments: The company must obtain the lot plan with site map from a geodetic based on PHP 30 per square meter to account for ancillary costs such as electrical, engineer to confirm the location of the land purported to be in the land title. A lot mechanical and plumbing fees) plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- Comments: After evaluating the plans, the Building Official will review/approve the vey, or at least after an analysis has been conducted of the lot technical description assessment of corresponding fees and endorse it to the City Mayor for review and appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site approval (this will take 3 days). The fees are paid at the City Treasurer’s Office. Once map. The company may pay more or less, depending on the geodetic engineer and the company has paid the building permit fees, it will present the official receipt to the city where the warehouse is to be built. the Receiving/Releasing Section for recording and issuance of the permit.

Procedure 3*. Obtain Barangay clearance Procedure 10. Receive inspection from the BFP Time: 2 days Time: 1 day Cost: PHP 300 Cost: No cost (fees included in procedure 8) Comments: This clearance confirms that the intended land use is compliant with Comments: During the construction of the warehouse, the BFP will conduct an the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they inspection of the site at random, to determine whether the plans and fire safety have the discretion to impose their own taxes, fees and charges. precautions are being observed (section 1.202 of the Fire Code of the Philippines).

Procedure 4. Request the locational clearance from the City Procedure 11. Receive inspection from the OBO Planning and Development Office (CPDO) Time: 1 day Time: 1 day Cost: No cost (fees included in procedure 9) Cost: PHP 2,195 (PHP 1.5 per square meter + PHP 200 verification fee + PHP 45 filing Comments: During the construction of the warehouse, the OBO will conduct an fee) inspection of the site at random, to determine whether the construction follows the Comments: This clearance confirms that the intended land use conforms to the approved building plans and design. local government’s zoning ordinances, wherein a Barangay clearance is required. The time to complete the construction may be shorter if the warehouse is to be built in Procedure 12. Request the fire safety inspection certificate (FSIC) an industrial area versus other areas. The cost is based on Quezon City Revenue Code from the BFP of 1993 as amended in 2002. Time: 1 day Procedure 5. Receive inspection for the locational clearance from Cost: PHP 3,901 (10% of building permit fees) the CPDO Comments: After construction of the warehouse, the company requests the BFP for an inspection of the site to certify that the required fire safety construction, fire Time: 1 day protective and/or warning systems are properly installed and in good working condi- Cost: No cost (fees included in procedure 4) tion. Comments: The CPDO conducts an inspection of the property before issuance of the locational clearance. Procedure 13. Receive inspection for the FSIC from the BFP Time: 1 day Procedure 6. Obtain the locational clearance from the CPDO Cost: No cost (fees included in procedure 12) Time: 3 days Cost: No cost Procedure 14. Obtain the FSIC from the BFP Comments: The company goes to the CPDO to obtain the locational clearance. Time: 8 days Cost: No cost Procedure 7. Apply for the building permit at the Office of the Comments: After inspection, the company obtains the certificate from the BFP. Building Official (OBO) Time: 1 day Procedure 15. Request the certificate of electrical inspection (CEI) Cost: No cost from the OBO Comments: The company must obtain the building permit along with the electrical, Time: 1 day sanitary, and mechanical permits, and have the design, plans, and technical specifi- Cost: No cost (fees included in procedure 9) cations of the project approved to ensure they are compliant with the design codes, and safety laws and regulations. To obtain the building permit, the company gets the Comments: The company visits the Electrical Division to request the certificate of application forms and checklist from the Receiving Section at the OBO. The receiving electrical inspection and schedule for an inspection to certify that the as-built plans personnel will check if all documents in the checklist are satisfied. correspond to the actual completed construction works.

Procedure 8. Obtain fire safety evaluation and correction sheet Procedure 16. Receive inspection for the CEI from the OBO on the building plans from the local fire marshal at the Bureau of Time: 1 day Fire Protection (BFP) Cost: No cost (fees included in procedure 9) Time: 7 days Procedure 17. Obtain the CEI from the OBO Cost: PHP 19,500 (0.1% of the estimated value of the building) Time: 1 day Comments: This approval is required to confirm that the plans and specifications Cost: No cost conform to all the fire safety and control requirements of the Fire Code of the Philippines. Upon presentation of the official receipts, the company submits all the documents and plans together with the endorsement letter from the Building Procedure 18. Request the occupancy certificate from the OBO Official to the local fire marshal to obtain approval from the latter with respect to fire Time: 1 day safety and control requirements. As per National Building Code, the fire marshal shall Cost: PHP 16,000 give his/her recommendation within five working days from date of referral. Failure Comments: The OBO inspects the site and certifies that the project as built to act within said period shall mean that the plans and specifications conform to all conforms to the design, plans, and the actual cost of the project. The certificate of the requirements of the Fire Code of the Philippines. While the company is getting electrical inspection and the fire safety inspection certificate are required prior to ap- approval from the local fire marshal, processing of application, checking plans and plication for the certificate of occupancy. The cost is based on the Amended Quezon specifications by the technical staff of the OBO is ongoing. City Revenue Code of 1993.

Procedure 9. Obtain the building permit from the OBO Procedure 19. Receive inspection for the occupancy certificate Time: 11 days from the OBO 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 Cost: No cost (fees inlcuded in procedure 18) 94 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 20. Obtain occupancy certificate from the OBO DEALING WITH LICENSES Time: 6 days San Juan Cost: No cost Procedures to build a warehouse Warehouse Value: USD 380,011 = PHP 19,500,000 Procedure 21. Request connection for electricity from Meralco Date as of: December 2007 Time: 1 day Cost: No cost Procedure 1. Obtain development permit from the City Council Comments: The electric company is Manila Electric Company (Meralco). The com- Time: 30 days pany visits Meralco to request the connection and submit the certificate of electrical Cost: No cost inspection and electrical plans. Meralco conducts an inspection of the warehouse Comments: San Juan City requires a development permit for warehouse projects and in the following weeks the technical staff visit the site for the electricity connec- with floor area more than 1,000 square meters. tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The service deposit is PHP 138,580. Both the transformer and service deposit are refund- Procedure 2. Obtain certified true copy (CTC) of the land title able after the first year through annual deductions to the electricity bill or through checks computed at 25% of the applicant’s annual gross distribution revenue. from the Registry of Deeds (RD) Time: 3 days Procedure 22. Receive inspection for electricity from Meralco Cost: PHP 30 Time: 1 day Comments: The company must obtain a CTC of the land title as proof of ownership Cost: No cost of the land on which the warehouse is to be built.

Procedure 23. Obtain connection for electricity from Meralco Procedure 3*. Obtain CTC of the tax declaration of real property Time: 88 days from the City Assessor’s Office (CAO) Cost: No cost Time: 1 day Cost: PHP 40 Procedure 24*. Request connection for water and sewage Comments: The company must obtain a CTC of the tax declaration of real property from Maynilad Water Services, Inc (Maynilad) or Manila Water so that it can identify the property by its index number. Company, Inc (Manila Water) Time: 1 day Procedure 4*. Obtain lot plan with site map from the geodetic Cost: PHP 6,411 (installation fee paid during application) engineer Time: 3 days Comments: There are two private water providers for Quezon City. Maynilad services the west zone and Manila Water services the east zone. The company visits Cost: PHP 1,000 the water company to request the connection and pays PHP 6,411 for Maynilad or Comments: The company must obtain the lot plan with site map from a geodetic PHP 6,635 for Manila Water. Inspection time takes two weeks and the connection is engineer to confirm the location of the land purported to be in the land title. A lot effected some days after the inspection. The case study assumes that the company plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- will request water from Maynilad as this is the option favorable to the company. vey, or at least after an analysis has been conducted of the lot technical description appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site Procedure 25*. Receive inspection for water and sewage map. The company may pay more or less, depending on the geodetic engineer and connection from Maynilad or Manila Water the city where the warehouse is to be built. Time: 1 day Procedure 5*. Obtain Barangay clearance Cost: No cost Time: 2 days Procedure 26*. Obtain water and sewage connection from Cost: PHP 100 Maynilad or Manila Water Comments: This clearance confirms that the intended land use is compliant with the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they Time: 30 days have the discretion to impose their own taxes, fees and charges. Cost: No cost Procedure 6. Request locational clearance from the City Planning Procedure 27*. Obtain telephone connection from the telephone and Development Office (CPDO) company Time: 1 day Time: 5 days Cost: PHP 16,550 (PHP 10 per square meter (land use fee) + 25% of land use fee + Cost: PHP 999 (installation fee and unit) PHP 100 inspection fee + PHP 200 certificate fee) Comments: There are three telephone companies providing landline services for Comments: This clearance confirms that the intended land use conforms to the Quezon City. The cost is PHP 1,500 for Philippine Long Distance Co. (PLDT), PHP 1,310 local government’s zoning ordinances, wherein a Barangay clearance is required. for Globelines, and PHP 999 for Bayantel. There is a lock-in period of 24, 12 and 12 The time to complete the construction may be shorter if the warehouse is to be built months respectively for the regular phone line. The case study assumes that the in an industrial area versus other areas. The cost is based on the San Juan Zoning company will request services from Bayantel as this is the option favorable to the Ordinance. company. Procedure 7. Notarize locational clearance at the notary Procedure 28*. Secure the tax declaration of improvement at the Time: 1 day City Assessor’s Office (CAO) Cost: PHP 50 Time: 9 days Cost: No cost Procedure 8. Receive inspection for locational clearance from the Comments: The company must update the official records to include the newly CPDO built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the build- Time: 1 day ing plan to notify them of the new building construction. The company will submit the certificate of occupancy and copy of land title to process the application. The Cost: No cost (fees included in procedure 6) tax declaration of improvement is released after an appraiser inspects the property Comments: The CPDO conducts an inspection of the property before issuance of within seven working days. the locational clearance. * This procedure is simultaneous with a previous procedure Procedure 9. Obtain locational clearance from the CPDO Time: 1 day  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 95

Cost: No cost Comments: After construction of the warehouse, the company requests the BFP Comments: The company goes to the CPDO to obtain the locational clearance. for an inspection of the site to certify that the required fire safety construction, fire protective and/or warning systems are properly installed and in good working condi- Procedure 10. Apply for the building permit at the Office of the tion. Building Official (OBO) Procedure 17. Receive inspection for the FSIC from the BFP Time: 1 day Time: 1 day Cost: No cost Cost: No cost (fees included in procedure 16) Comments: The company must obtain the building permit along with the electrical, sanitary, and mechanical permits, and have the design, plans, and technical specifi- Procedure 18. Obtain the FSIC from the BFP cations of the project approved to ensure they are compliant with the design codes, and safety laws and regulations. To obtain the building permit, the company gets the Time: 19 days application forms and checklist from the Receiving Section at the OBO. The receiving Cost: No cost personnel will check if all documents in the checklist are satisfied. Comments: After inspection, the company obtains the certificate from the BFP.

Procedure 11. Obtain fire safety evaluation and correction sheet Procedure 19*. Receive inspection for the certificate of on the building plans from the local fire marshal at the Bureau of occupancy from the OBO Fire Protection (BFP) Time: 1 day Time: 7 days Cost: No cost (fees included in procedure 15) Cost: PHP 19,500 (0.1% of the estimated value of the building) Comments: This approval is required to confirm that the plans and specifications Procedure 20. Obtain the certificate of occupancy from the OBO conform to all the fire safety and control requirements of the Fire Code of the Time: 4 days Philippines. Upon presentation of the official receipts, the company submits all Cost: No cost the documents and plans together with the endorsement letter from the Building Official to the local fire marshal to obtain approval from the latter with respect to fire Procedure 21. Request the certificate of electrical inspection (CEI) safety and control requirements. As per National Building Code, the fire marshal shall give his/her recommendation within five working days from date of referral. Failure from the OBO to act within said period shall mean that the plans and specifications conform to all Time: 1 day the requirements of the Fire Code of the Philippines. While the company is getting Cost: No cost (fees included in procedure 12) approval from the local fire marshal, processing of application, checking plans and Comments: The company visits the Electrical Division to request the certificate of specifications by the technical staff of the OBO is ongoing. electrical inspection and schedule for an inspection to certify that the as-built plans correspond to the actual completed construction works. Procedure 12. Obtain the building permit from the OBO Time: 7 days Procedure 22. Receive inspection for the CEI from the OBO 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 Cost: No cost based on PHP 30 per square meter to account for ancillary costs such as electrical, mechanical and plumbing fees) Procedure 23. Obtain the CEI from the OBO Comments: After evaluating the plans, the Building Official will review/approve the Time: 1 day assessment of corresponding fees and endorse it to the City Mayor for review and Cost: No cost approval (this will take three days). The fees are paid at the City Treasurer’s Office. Once the company has paid the building permit fees, it will present the official receipt to the Receiving/Releasing Section for recording and issuance of the permit. Procedure 24. Request connection for electricity from Meralco Time: 1 day Procedure 13. Receive inspection from the BFP Cost: No cost Time: 1 day Comments: The electric company is Manila Electric Company (Meralco). The com- Cost: No cost (fees included in procedure 11) pany visits Meralco to request the connection and submit the certificate of electrical inspection and electrical plans. Meralco conducts an inspection of the warehouse Comments: During the construction of the warehouse, the BFP will conduct an and in the following weeks the technical staff visit the site for the electricity connec- inspection of the site at random, to determine whether the plans and fire safety tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The precautions are being observed (section 1.202 of the Fire Code of the Philippines). service deposit is PHP 138,580. Both the transformer and service deposit are refund- able after the first year through annual deductions to the electricity bill or through Procedure 14. Receive inspection from the OBO checks computed at 25% of the applicant’s annual gross distribution revenue. Time: 1 day Cost: No cost (fees included in procedure 12) Procedure 25. Receive inspection for electricity from Meralco Comments: During the construction of the warehouse, the OBO will conduct an Time: 1 day inspection of the site at random, to determine whether the construction follows the Cost: No cost approved building plans and design. Procedure 26. Obtain connection for electricity from Meralco Procedure 15. Request the certificate of occupancy from the OBO Time: 88 days Time: 1 day Cost: No cost Cost: PHP 10,000 Comments: The company must secure first the occupancy certificate before Procedure 27*. Request connection for water and sewage from applying for the certificate of electrical inspection. The time for inspection will be Manila Water Company, Inc (Manila Water) scheduled when the company visits the OBO to apply for the certificate. A Building Time: 1 day Official inspects the site and certifies that the project as built conforms to the design, plans, and the actual cost of the project. Cost: PHP 6,635 (installation fee paid during application) Comments: The water company is Manila Water. The company visits Manila Water to Procedure 16. Request the fire safety inspection certificate (FSIC) request the connection and inspection time takes two weeks. Connection is effected from the BFP some days after the inspection. Time: 1 day Cost: PHP 3,901 (10% of building permit fees) 96 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 28*. Receive inspection for water and sewage City Mayor for final approval. The applicant will be advised through a phone call by connection from Manila Water the Customer Service if the locational clearance is ready for pick up. Application for building permit can be done simultaneously with the application for locational clear- Time: 1 day ance. The number of days to complete the locational clearance is longer than that of Cost: No cost the building permit. Since locational clearance is a prerequisite in getting building permit, the whole process might take long. The Office of the Building Official upon Procedure 29*. Obtain water and sewage connection from Manila receipt of the two applications will conduct cursory review to assess if it will pass or Water fail. The Customer Service Representatives normally phone call applicants if permits/ Time: 21 days clearances are ready for release. Cost: No cost Procedure 4. Receive inspection for the locational clearance from Procedure 30*. Obtain telephone connection from the telephone the City Planning and Development Office (CPDO) company Time: 1 day Time: 5 days Cost: No cost (fees included in procedure 3) Cost: PHP 1,310 (installation fee and unit) Comments: The CPDO conducts an inspection of the property before issuance of Comments: There are two telephone companies providing landline services in San the locational clearance. Juan. These are Philippine Long Distance Co. (PLDT) and Globelines. For PLDT, the cost is PHP 1,500 and there is a lock-in period of 24 months for the regular phone Procedure 5. Obtain the locational clearance from the OBO line. For Globelines, there is no cost if the applicant provides proof of financial Time: 1 day capability. Otherwise, the applicant has to pay PHP 1,310. There is a lock-in period of Cost: No cost 12 months for the regular phone line. The case study assumes that the company will Comments: The company goes to the OBO to obtain the locational clearance. request services from Globelines as this is the option favorable to the company. Procedure 6. Obtain fire safety evaluation and correction sheet Procedure 31*. Secure the tax declaration of improvement at the on the building plans from the local fire marshal at the Bureau of CAO Fire Protection (BFP) Time: 1 day Time: 7 days Cost: PHP 100 (processing fee) Cost: PHP 19,500 (0.1% of the estimated value of the building) Comments: The company must update the official records to include the newly built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the Comments: This approval is required to confirm that the plans and specifications building plan and certificate of occupancy every month to notify them of the new conform to all the fire safety and control requirements of the Fire Code of the building construction. This may take less time if the company submits the above Philippines. Upon presentation of the official receipts, the company submits all documents to the CAO, since it can obtain the new tax declaration within that day. the documents and plans together with the endorsement letter from the Building The tax declaration of improvement is released after an appraiser inspects the Official to the local fire marshal to obtain approval from the latter with respect to fire property on the same day. safety and control requirements. As per National Building Code, the fire marshal shall give his/her recommendation within five working days from date of referral. Failure * This procedure is simultaneous with a previous procedure to act within said period shall mean that the plans and specifications conform to all DEALING WITH LICENSES the requirements of the Fire Code of the Philippines. While the company is getting approval from the local fire marshal, processing of application, checking plans and Taguig specifications by the technical staff of the OBO is ongoing. Procedures to build a warehouse Warehouse Value: USD 380,011 = PHP 19,500,000 Procedure 7. Obtain the building permit from the OBO Date as of: December 2007 Time: 5 days Cost: PHP 39,018 (according to the National Building Code of the Philippines the Procedure 1. Obtain lot plan with site map from the geodetic cost of the building permit is PHP 23 per square meter. The computation here is engineer based on PHP 30 per square meter to account for ancillary costs such as electrical, Time: 3 days mechanical and plumbing fees) Cost: PHP 1,250 Comments: After the building permit application is approved, the Building Official releases the order of payment for the company to pay at the City Treasurer’s Office. Comments: The company must obtain the lot plan with site map from a geodetic Once the company has paid the building permit fees, it will present the official engineer to confirm the location of the land purported to be in the land title. A lot receipt to the Receiving/Releasing Section for recording and issuance of the permit. 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 appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site Procedure 8. Receive inspection from the BFP map. The company may pay more or less, depending on the geodetic engineer and Time: 1 day the city where the warehouse is to be built. Cost: No cost (fees included in procedure 6) Comments: During the construction of the warehouse, the BFP will conduct an Procedure 2*. Obtain Barangay clearance inspection of the site at random, to determine whether the plans and fire safety Time: 2 days precautions are being observed (section 1.202 of the Fire Code of the Philippines). Cost: PHP 500 Comments: This clearance confirms that the intended land use is compliant with Procedure 9. Receive inspection from the OBO the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they Time: 1 day have the discretion to impose their own taxes, fees and charges. Cost: No cost (fees inlcuded in procedure 7) Comments: During the construction of the warehouse, the OBO will conduct an Procedure 3. Request the locational clearance and apply for the inspection of the site at random, to determine whether the construction follows the building permit at the Office of the Building Official (OBO) approved building plans and design. Time: 1 day Cost: PHP 6,553 (PHP 5 per square meter + PHP 50 filing fee) Procedure 10. Request the fire safety inspection certificate (FSIC) Comments: Application forms and checklist are available from the Customer Ser- from the BFP vice Counter of the Local Building Official. After completing all required documents, Time: 1 day the company/owner/contractor goes to the receiving section window to file the Cost: PHP 3,901 (10% of building permit fees) application. The locational clearance is issued by the OBO wherein a barangay clear- Comments: After construction of the warehouse, the company requests the BFP ance is required. The applicant files the application at the Customer Service Counter for an inspection of the site to certify that the required fire safety construction, fire of the OBO. The Building Official, after review, will endorse the application to the  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 97 protective and/or warning systems are properly installed and in good working condi- Procedure 21*. Obtain water and sewage connection from Manila tion. Water Time: 21 days Procedure 11. Receive inspection for the FSIC from the BFP Cost: No cost Time: 1 day Cost: No cost (fees included in procedure 10) Procedure 22*. Obtain telephone connection from the telephone company Procedure 12. Obtain the FSIC from the BFP Time: 5 days Time: 3 days Cost: PHP 1,310 (installation fee and unit) Cost: No cost Comments: There are two telephone companies providing landline services in Comments: After inspection, the company obtains the certificate from the BFP. Taguig. These are Philippine Long Distance Co. (PLDT) and Globelines. For PLDT, the cost is PHP 1,500 and there is a lock-in period of 24 months for the regular phone Procedure 13. Request the certificate of occupancy and certificate line. For Globelines, there is no cost if the applicant provides proof of financial of electrical inspection (CEI) from the OBO capability. Otherwise, the applicant has to pay PHP 1,310. There is a lock-in period of Time: 1 day 12 months for the regular phone line. The case study assumes that the company will Cost: PHP 19,500 (PHP 1,000 per million of the project value) request services from Globelines as this is the option favorable to the company. Comments: The application for the certificate of occupancy includes a form for the Procedure 23*. Secure the tax declaration of improvement at the certificate of electrical inspection. The certificates are prerequisites for the electricity connection and are released after a team of inspectors (architectural, structural, elec- City Assessor’s Office (CAO) trical, mechanical, and sanitary) inspects the site and certifies that the warehouse as Time: 3 days built conforms to the design, plans, and cost of the project. Cost: No cost Comments: The company must update the official records to include the newly Procedure 14. Receive inspection for the certificate of occupancy built warehouse for tax purposes. The OBO furnishes CAO a copy of building plan and CEI from the OBO and certificate of occupancy on a weekly basis to notify them of the new building Time: 1 day construction. The company will submit the floor plan, list of machineries and equip- Cost: No cost (fees included in procedure 13) ments with acquisition cost, and as-built plan in order to process the application. The tax declaration of improvement is released after an appraiser inspects the property Procedure 15. Obtain the certificate of occupancy and CEI from on the following day. the OBO * This procedure is simultaneous with a previous procedure Time: 4 days DEALING WITH LICENSES Cost: PHP 1,000 Tanauan Procedure 16. Request connection for electricity from Meralco Procedures to build a warehouse Warehouse Value: USD 380,011 = PHP 19,500,000 Time: 1 day Date as of: December 2007 Cost: No cost Comments: The electric company is Manila Electric Company (Meralco). The com- Procedure 1. Obtain a certified true copy (CTC) of the land title pany visits Meralco to request the connection and submit the certificate of electrical from the Registry 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- tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The Cost: PHP 30 service deposit is PHP 138,580. Both the transformer and service deposit are refund- Comments: The company must obtain a CTC of the land title as proof of ownership able after the first year through annual deductions to the electricity bill or through of the land on which the warehouse is to be built. checks computed at 25% of the applicant’s annual gross distribution revenue. Procedure 2*. Obtain CTC of the tax declaration of real property Procedure 17. Receive inspection for electricity from Meralco from the City Assessor’s Office (CAO) Time: 1 day Time: 1 day Cost: No cost Cost: PHP 20 Comments: The company must obtain a CTC of the tax declaration of real property Procedure 18. Obtain connection for electricity from Meralco so that it can identify the property by its index number. Time: 88 days Cost: No cost Procedure 3*. Obtain lot plan with site map from the geodetic engineer Procedure 19*. Request connection for water and sewage from Time: 2 days Manila Water Company, Inc (Manila Water) Cost: PHP 1,500 Time: 1 day Comments: The company must obtain the lot plan with site map from a geodetic Cost: PHP 6,635 (installation fee paid during application) engineer to confirm the location of the land purported to be in the land title. A lot Comments: The water company is Manila Water. The company visits Manila Water to plan with site map is signed, sealed, and prepared after a meticulous geodetic sur- request the connection and inspection time takes two weeks. Connection is effected vey, or at least after an analysis has been conducted of the lot technical description some days after the inspection. appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site map. The company may pay more or less, depending on the geodetic engineer and Procedure 20*. Receive inspection for water and sewage the city where the warehouse is to be built. connection from Manila Water Procedure 4*. Obtain Barangay clearance Time: 1 day Time: 2 days Cost: No cost Cost: PHP 50 Comments: This clearance confirms that the intended land use is compliant with the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they have the discretion to impose their own taxes, fees and charges. 98 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 5. Obtain the zoning certificate from the City Mayor’s based on PHP 30 per square meter to account for ancillary costs such as electrical, Office (CMO) mechanical and plumbing fees) Time: 1 day Comments: After the building permit application is approved, the Building Official releases the order of payment for the company to pay at the City Treasurer’s Office Cost: PHP 100 (CTO). Once the company has paid the building permit fees, it will present the official Comments: The company must obtain a zoning certificate to determine the clas- receipt to the Receiving/Releasing Section for recording and issuance of the permit. sification of land where the project will be constructed. Procedure 14. Receive inspection from the BFP Procedure 6. Request the locational clearance from the City Time: 1 day Planning and Development Office (CPDO) Cost: No cost (fees included in procedure 11) Time: 1 day Comments: During the construction of the warehouse, the BFP will conduct an Cost: PHP 400 (fixed rate) inspection of the site at random, to determine whether the plans and fire safety Comments: This clearance confirms that the intended land use conforms to the precautions are being observed (section 1.202 of the Fire Code of the Philippines). local government’s zoning ordinances, wherein a Barangay clearance is required. The time to complete the construction may be shorter if the warehouse is to be built in Procedure 15. Receive inspection from the OBO an industrial area versus other areas. Time: 1 day Procedure 7. Notarize the locational clearance at the notary Cost: No cost (fees included in procedure 13) Time: 1 day Comments: During the construction of the warehouse, the OBO will conduct an inspection of the site at random, to determine whether the construction follows the Cost: PHP 100 approved building plans and design.

Procedure 8. Receive inspection for the locational clearance from Procedure 16. Request the fire safety inspection certificate (FSIC) the CPDO from 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: The CPDO conducts an inspection of the property before issuance of Comments: After construction of the warehouse, the company requests the BFP the locational clearance. for an inspection of the site to certify that the required fire safety construction, fire protective and/or warning systems are properly installed and in good working condi- Procedure 9. Obtain the locational clearance from the CPDO tion. The company obtains the order of payment from the BFP and the FSIC fees are Time: 1 day paid at the CTO. Cost: No cost Comments: The company goes to the CPDO to obtain the locational clearance. Procedure 17. Receive inspection for the FSIC from the BFP Time: 1 day Procedure 10. Apply for the building permit at the Office of the Cost: No cost (fees included in procedure 16) Building Official (OBO) Time: 1 day Procedure 18. Obtain the FSIC from the BFP Cost: No cost Time: 3 days Comments: The company must obtain the building permit along with the electrical, Cost: No cost sanitary, and mechanical permits, and have the design, plans, and technical specifi- Comments: After inspection, the company obtains the certificate from the BFP. cations of the project approved to ensure they are compliant with the design codes, and safety laws and regulations. To obtain the building permit, the company gets the Procedure 19. Request the certificate of occupancy and certificate application forms and checklist from the Receiving Section at the OBO. The receiving of electrical inspection (CEI) from the OBO personnel will check if all documents in the checklist are satisfied. Time: 1 day Procedure 11. Request the fire safety approval and obtain the Cost: PHP 16,250 (project cost (19,500,000)/1,200,000 x 1,000) order of payment from the local fire marshal at the Bureau of Fire Comments: The application for the certificate of occupancy includes a form for the certificate of electrical inspection. The certificates are prerequisites for the electricity Protection (BFP) connection and are released after a team of inspectors (architectural, structural, elec- Time: 7 days trical, mechanical, and sanitary) inspects the site and certifies that the warehouse as Cost: PHP 19,500 (0.1% of the estimated value of the building) built conforms to the design, plans, and cost of the project. Comments: This approval is required to confirm that the plans and specifications conform to all the fire safety and control requirements of the Fire Code of the Procedure 20. Receive inspection for the certificate of occupancy Philippines. Upon presentation of the official receipts, the company submits all and CEI from the OBO the documents and plans together with the endorsement letter from the Building Time: 1 day Official to the local fire marshal to obtain approval from the latter with respect to fire Cost: No cost (fees included in procedure 19) safety and control requirements. As per National Building Code, the fire marshal shall give his/her recommendation within five working days from date of referral. Failure to act within said period shall mean that the plans and specifications conform to all Procedure 21. Obtain the certificate of occupancy and CEI from the requirements of the Fire Code of the Philippines. While the company is getting the OBO approval from the local fire marshal, processing of application, checking plans and Time: 13 days specifications by the technical staff of the OBO is ongoing. The fire fund fees are paid Cost: PHP 150 at the City Treasurer’s Office (CTO). Procedure 22. Request connection for electricity from Procedure 12. Obtain the fire safety approval from the local fire Electric Cooperative (Batelec) marshal at the BFP Time: 1 day 2 days Time: Cost: PHP 696,000 (cost of three 50kVA transformers and installation) No cost Cost: Comments: The electric company is Batelec. The company visits Batelec to request the connection. Batelec conducts an inspection of the warehouse and in the follow- Procedure 13. Obtain the building permit from the OBO ing days the technical staff visit the site for the electric connection. The cost of the Time: 5 days transformers is PHP 202,000 per transformer (three needed) while the cost of instal- Cost: PHP 39,018 (according to the National Building Code of the Philippines the lation (labor and materials) is PHP 90,000. Both costs are non-refundable. cost of the building permit is PHP 23 per square meter. The computation here is  -*450'130$&%63&4t%&"-*/(8*5)-*$&/4&4 99

Procedure 23. Receive inspection for electricity from Batelec Procedure 3*. Obtain lot plan with site map from the geodetic Time: 1 day engineer Cost: No cost Time: 2 days Cost: PHP 700 Procedure 24. Obtain connection for electricity from Batelec Comments: The company must obtain the lot plan with site map from a geodetic Time: 3 days 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 25*. Request connection for water and sewage from appearing on the title. The going rate is PHP 1,500 per geodetic lot plan with site Tanauan Water District (TWD) map. The company may pay more or less, depending on the geodetic engineer and the city where the warehouse is to be built. Time: 1 day Cost: PHP 2,980 (installation fee paid during application) Procedure 4*. Obtain Barangay clearance Comments: The water company is TWD. The company visits TWD to request the Time: 2 days connection; connection is effected some days after inspection. Cost: PHP 150 Procedure 26*. Receive inspection for water and sewage Comments: This clearance confirms that the intended land use is compliant with the Barangay’s zoning ordinances. Barangay fees vary for each Barangay since they connection from TWD have the discretion to impose their own taxes, fees and charges. Time: 1 day Cost: No cost Procedure 5. Request the locational clearance and apply for the building permit at the City Engineering Department (CED) Procedure 27*. Obtain water and sewage connection from TWD Time: 1 day Time: 5 days Cost: PHP 3,302 (PHP 2.5 per square meter + PHP 50 filing fee) Cost: No cost Comments: This clearance confirms that the intended land use conforms to the local government’s zoning ordinances. Computation based on Valenzuela City Procedure 28*. Obtain telephone connection from the telephone Revenue Code. The company must obtain the building permit along with the electri- company cal, sanitary, and mechanical permits, and have the design, plans, and technical Time: 5 days specifications of the project approved to ensure they are compliant with the design Cost: PHP 1,310 (installation fee and unit) codes, and safety laws and regulations. To obtain the building permit, the company gets the application forms and checklist from the Receiving Section at the CED. The Comments: There are two telephone companies providing landline services in receiving personnel will check if all documents in the checklist are satisfied. While in Tanauan City. These are Philippine Long Distance Co. (PLDT) and Globelines. They other cities the company would go to the BFP to request for the local fire marshal’s only provide permanent telephone connection. For PLDT the cost is PHP 1,500 and recommendations with respect to fire safety and control requirements (done while there is a lock-in period of 12 months for the regular phone line. For Globelines, the application for building permit is being processed), in Valenzuela the CED has a there is no cost if the applicant provides proof of financial capability. Otherwise, the Liaison Officer who would go the BFP on behalf of the company to get the recom- applicant has to pay PHP 1,310. There is a lock-in period of 12 months for the regular mendation. phone line. The case study assumes that the company will request services from Globelines as this is the option favorable to the company. Procedure 6. Receive inspection for the locational clearance from Procedure 29*. Secure the tax declaration of improvement at the the CED CAO Time: 1 day Time: 3 days Cost: No cost (fees included in procedure 5) Cost: No cost Comments: The CED conducts an inspection of the property before issuance of the locational clearance. Comments: The company must update the official records to include the newly built warehouse for tax purposes. The OBO furnishes to the CAO a copy of the building plan and certificate of occupancy to notify them of the new building Procedure 7. Obtain the locational clearance from the CED construction. In practice, to expedite the procedure, the company will submit the Time: 1 day above documents to the CAO. The tax declaration of improvement is released after Cost: No cost an appraiser inspects the property on the same or the following day. Comments: The company goes to the CED to obtain the locational clearance. * This procedure is simultaneous with a previous procedure

DEALING WITH LICENSES Procedure 8. Notarize the building permit at the notary Time: 1 day Valenzuela Cost: PHP 100 Procedures to build a warehouse Warehouse Value: USD 380,011 = PHP 19,500,000 Procedure 9. Obtain the building permit from the CED Date as of: December 2007 Time: 14 days Cost: PHP 58,518 (according to the National Building Code of the Philippines, the Procedure 1. Obtain certified true copy (CTC) of the land title cost of the building permit is PHP 23 per square meter. The computation here is from the Registry of Deeds (RD) based on PHP 30 per square meter to account for ancillary costs such as electri- Time: 1 day cal, mechanical and plumbing fees plus PHP 19,500 for the cost of the fire safety Cost: PHP 30 approval) Comments: The company must obtain a CTC of the land title as proof of ownership Comments: After the building permit application is approved, the Building Official of the land on which the warehouse is to be built. releases the order of payment for the company to pay at the City Treasurer’s Office. Once the company has paid the building permit fees, it will present the official Procedure 2*. Obtain CTC of the tax declaration of real property receipt to the Receiving/Releasing Section for recording and issuance of the permit. from the City Assessor’s Office (CAO) Procedure 10. Receive inspection from the Bureau of Fire Time: 1 day Protection (BFP) Cost: PHP 25 (PHP 10 + PHP 15 documentary stamp) Time: 1 day Comments: The company must obtain a CTC of the tax declaration of real property Cost: No cost (fees included in procedure 9) so that it can identify the property by its index number. 100 DOING BUSINESS IN THE PHILIPPINES 2008

Comments: During the construction of the warehouse, the BFP will conduct an Procedure 19. Receive inspection for electricity from Meralco inspection of the site at random, to determine whether the plans and fire safety Time: 1 day precautions are being observed (section 1.202 of the Fire Code of the Philippines). Cost: No cost

Procedure 11. Receive inspection from the CED Procedure 20. Obtain connection for electricity from Meralco Time: 1 day Time: 88 days Cost: No cost (fees included in procedure 9) Cost: No cost Comments: During the construction of the warehouse, the CED will conduct an inspection of the site at random, to determine whether the construction follows the Procedure 21*. Request connection for water and sewage from approved building plans and design. Maynilad Water Services, Inc (Maynilad) Procedure 12. Request the fire safety inspection certificate (FSIC) Time: 1 day from the BFP Cost: PHP 6,411 (installation fee paid during application) Time: 1 day Comments: The water company is Maynilad. The company visits Maynilad to request the connection and inspection time takes two weeks. Maynilad subcontracts Cost: PHP 3,901 (10% of building permit fees) the installation with a contractor and the time of actual installation depends on the Comments: After construction of the warehouse, the company requests the BFP contractor. for an inspection of the site to certify that the required fire safety construction, fire protective and/or warning systems are properly installed and in good working condi- Procedure 22*. Receive inspection for water and sewage tion. connection from Maynilad Procedure 13. Receive inspection for the FSIC from the BFP Time: 1 day Time: 1 day Cost: No cost Cost: No cost (fees included in procedure 12) Procedure 23*. Obtain water and sewage connection from Procedure 14. Obtain the FSIC from the BFP Maynilad Time: 1 day Time: 30 days Cost: No cost Cost: No cost Comments: After inspection, the company obtains the certificate from the BFP. Procedure 24*. Obtain telephone connection from the telephone Procedure 15. Request the certificate of occupancy and certificate company of electrical inspection (CEI) from the CED Time: 5 days Time: 1 day Cost: PHP 999 (installation fee and unit) Cost: PHP 20,000 (PHP 1,000 per million of the project value) Comments: There are three telephone companies providing landline services for Valenzuela. The cost is PHP 1,500 for Philippine Long Distance Co. (PLDT), PHP 1,310 Comments: The application for the certificate of occupancy includes a form for the for Globelines, and PHP 999 for Bayantel. There is a lock-in period of 24, 12 and 12 certificate of electrical inspection. The certificates are prerequisites for the electricity months respectively for the regular phone line. The case study assumes that the connection and are released after a team of inspectors (architectural, structural, elec- company will request services from Bayantel as this is the option favorable to the trical, mechanical, and sanitary) inspects the site and certifies that the warehouse as company. built conforms to the design, plans, and cost of the project. Procedure 25*. Secure the tax declaration of improvement at the Procedure 16. Receive inspection for the certificate of occupancy CAO and CEI from the CED Time: 3 days Time: 1 day Cost: No cost Cost: No cost (fees included in procedure 15) Comments: The OBO furnishes to the CAO a copy of the building plan and certifi- Procedure 17. Obtain the certificate of occupancy and CEI from cate of occupancy upon request of the latter. The company also submits the building permit and certificate of occupancy in order to process the application. The tax the CED declaration of improvement is released after an appraiser inspects the property on Time: 3 days the same or the following day. Cost: No cost * This procedure is simultaneous with a previous procedure

Procedure 18. Request connection for electricity from Meralco Time: 1 day Cost: No cost Comments: The electric company is Manila Electric Company (Meralco). The com- pany visits Meralco to request the connection and submit the certificate of electrical inspection and electrical plans. Meralco conducts an inspection of the warehouse and in the following weeks the technical staff visit the site for the electricity connec- tion. The cost of the transformers is PHP 106,850 per transformer (two needed). The service deposit is PHP 138,580. Both the transformer and service deposit are refund- able after the first year through annual deductions to the electricity bill or through checks computed at 25% of the applicant’s annual gross distribution revenue. INDICADORES DE DOINGDATA BUSINESS NOTES 101101

Registering property

Caloocan Comments: After paying the taxes in procedure 3, the seller must obtain a tax clearance (or certificate authorizing registration) from the BIR. This certificate will Property value: USD 71,006 = PHP 3,643,315 authorize the registration of the property. Date as of: December 2007 The documentation shall include: Procedure 1. Prepare the deed of sale and ratify it by the notary a. Certified true copy of transfer certificate of title (in the name of seller/original Time: 1 day certificate of title (OCT)) Cost: PHP 72,866 (1–3% of property value) b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) Comments: Anyone can prepare the document, however, the deed of sale must be ratified before the notary public and it is common for him to draft it and conduct the c. Tax identification numbers. whole process on behalf of the parties. d. Notarized deed of absolute sale, but only photocopy shall be retained by the BIR. Procedure 2. Obtain certified true copy of latest tax declaration from the City Assessor’s Office (CAO) Procedure 5. Obtain tax clearance certificate of real estate taxes Time: 1 day from the City Treasurer’s Office (CTO) Cost: PHP 100 (PHP 50 per real property unit (RPU), loose documentary stamp not Time: 2 days required) Cost: PHP 50 Comments: The seller obtains a certified true copy of the latest tax declaration from Comments: The seller, after paying any due amounts, obtains a tax clearance the CAO. certificate from the CTO. The documentation shall include: an original of the official receipt evidencing pay- Procedure 3. Pay documentary stamp tax and capital gains tax at ment by seller of realty taxes. an authorized agent bank (AAB) Time: 1 day Procedure 6. Pay the transfer tax at the CTO Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital Time: 1 day gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not Cost: PHP 30,057 (0.825% of property price) included in the cost reflected) Comments: The documentation shall include: Comments: The seller files the documentary stamp tax return and capital gains a. Certificate authorizing registration from the BIR (obtained in procedure 4) tax return with the AAB. This is done within 5 days after the close of the month b. Realty tax clearance from the CTO (obtained in procedure 5) when the taxable document was signed or within 30 days after the sale, whichever is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure tax is 6.0% of capital gains based on selling price, fair market value or zonal value, 4). whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair market value, whichever is higher. Procedure 7. Secure registration with the Registry of Deeds (RD) The documentation shall include: Time: 10 days a. Original copy and photocopy of notarized deed of sale (obtained in procedure Cost: PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP 1) 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 registry entry fee + PHP 60 transfer certificate of title) b. Certified true copy of transfer certificate of title (in the name of seller) Comments: The buyer applies for registration with the RD. The following internal c. Certified true copy of latest tax declaration (in the name of seller) (obtained in steps take place after the application is submitted: procedure 2). 1. The Entry clerk receives and enters all documents in the primary Entry Book Procedure 4. Obtain certificate authorizing registration (CAR) (Judicial form No. 39) and notes therein the day, hour and minute of reception of all instrument in the order in which they are received. from the Bureau of Internal Revenue (BIR) 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- Time: 14 days signment. Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) 3. Documents/titles are assigned by the RD to the Land Registration Examiner (LRE) who prepares computation and order of payment of registration fees. 102 DOING BUSINESS IN THE PHILIPPINES 2008

4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Cost: PHP 90 (PHP 30 per real property unit (RPU) + PHP 15 per loose documentary are computed based on a schedule of fees approved by the Department of stamp) Justice. Comments: The seller obtains a certified true copy of the latest tax declaration from 5. Upon the payment of the fees, the document is forwarded to the LRE who the CAO. reviews the same and determines whether or not it is ready to register. The owner’s copy of the title is compared to the title on file, produced by Records Procedure 3. Pay documentary stamp tax and capital gains tax at Officer/Vault keeper. an authorized agent bank (AAB) 6. If the instrument is not ready to be registered, the LRE recommends its denial Time: 1 day to the RD. If the instrument is ready, the LRE likewise recommends to the RD Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital the registration of the document through a routing slip. gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not 7. RD reviews examination, and once same is approved, assigns documents to included in the cost reflected) clerk for action, with instruction on the route slip. Comments: The seller files the documentary stamp tax return and capital gains 8. If the transaction involves issuance of title, Records Officer/Judicial Form tax return with the AAB. This is done within 5 days after the close of the month Custodian records the transaction in the logbook releases sets of title forms when the taxable document was signed or within 30 days after the sale, whichever (judicial form) and assigns the corresponding title control number to the set is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains of titles issued to the action clerk. tax is 6.0% of capital gains based on selling price, fair market value or zonal value, 9. Assigned employee acts on the documents, as instructed. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair 10. Final registration – RD signs titles and documents. market value, whichever is higher. 11. Release of documents – by the releasing clerk to the buyer who should be The documentation shall include: ready with ID and copies of official receipts of the registration fees. a. Original copy and photocopy of notarized deed of sale (obtained in procedure The documentation shall include: 1) a. Articles of incorporation and bylaws of the buyer b. Certified true copy of transfer certificate of title (in the name of seller) b. Secretary’s certificate containing the resolution of the board of directors of c. Certified true copy of latest tax declaration (in the name of seller) (obtained in buyer approving the sale procedure 2). c. Original copy of owner’s duplicate of the transfer certificate of title (in the name of seller) Procedure 4. Obtain certificate authorizing registration (CAR) d. Certificate authorizing registration from the BIR (obtained in procedure 4) from the Bureau of Internal Revenue (BIR) Time: 14 days e. Realty tax clearance from the CTO (obtained in procedure 5) Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) f. Official receipt of transfer tax payment (obtained in procedure 6) Comments: After paying the taxes in procedure 3, the seller must obtain a tax g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) clearance (or certificate authorizing registration) from the BIR. This certificate will (obtained in procedure 3). authorize the registration of the property. Procedure 8. Apply with the CAO for the issuance of a new tax The documentation shall include: declaration over the building and the land in the name of buyer a. Certified true copy of transfer certificate of title (in the name of seller /original certificate of title (OCT)) Time: 3 days b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Cost: No cost procedure 2) Comments: The buyer applies with the CAO for the issuance of a new tax declaration c. Tax identification numbers. over the building in his name. This procedure includes an inspection in Caloocan. d. Notarized deed of absolute sale, but only photocopy shall be retained by the The documentation shall include: BIR. a. Photocopy of notarized deed of sale (obtained in procedure 1) b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Procedure 5. Obtain tax clearance certificate of real estate taxes procedure 2) from the City Treasurer’s Office (CTO) c. Certificate authorizing registration from the BIR (obtained in procedure 4) Time: 1 day d. Realty tax clearance from the CTO (obtained in procedure 5) Cost: PHP 45 (PHP 30 for tax clearance + PHP 15 for loose documentary stamp) e. Photocopy of official receipt of transfer tax payment (original copy to be Comments: The seller, after paying any due amounts, obtains a tax clearance presented) (obtained in procedure 6) certificate from the CTO. f. The TCT issued by the RD (in the name of the buyer). The documentation shall include: an original of the official receipt evidencing pay- REGISTERING PROPERTY ment by seller of realty taxes. Cebu Procedure 6. Pay the transfer tax at the CTO Property value: USD 71,006 = PHP 3,643,315 Time: 1 day Date as of: December 2007 Cost: PHP 18,217 (0.5% of property price) Procedure 1. Prepare the deed of sale and ratify it by the notary Comments: The documentation shall include: Time: 1 day a. Certificate authorizing registration from the BIR (obtained in procedure 4) Cost: PHP 36,433 (1% of property value) b. Realty tax clearance from the CTO (obtained in procedure 5) Comments: Anyone can prepare the document, however, the deed of sale must be c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure ratified before the notary public and it is common for him to draft it and conduct the 4). whole process on behalf of the parties. The cost to complete the procedure is set by the Integrated Bar of the Philippines-Cebu Chapter through a resolution. In practice Procedure 7. Secure registration with the Registry of Deeds (RD) however, the amount to complete the procedure may vary, since the resolution Time: 10 days is just a guideline and not a hard and fast rule. Consequently, the lawyers and the Cost: PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP transacting parties can negotiate on the amount, which could either be lower or 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 higher than the amount stated in the resolution. registry entry fee + PHP 60 transfer certificate of title) Comments: The buyer applies for registration with the RD. The following internal Procedure 2. Obtain certified true copy of latest tax declaration steps take place after the application is submitted: from the City Assessor’s Office (CAO) 1. The Entry clerk receives and enters all documents in the primary Entry Book Time: 1 day (Judicial form No. 39) and notes therein the day, hour and minute of reception of all instrument in the order in which they are received.  -*450'130$&%63&4t3&(*45&3*/(1301&35: 103

2. Documents are then brought to the RD or Deputy Registry of Deeds for as- Procedure 2. Obtain certified true copy of latest tax declaration signment. from the City Assessor’s Office (CAO) 3. Documents/titles are assigned by the RD to the Land Registration Examiner Time: 1 day (LRE) who prepares computation and order of payment of registration fees. Cost: PHP 80 (PHP 25 per real property unit (RPU) + PHP 15 per loose documentary 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees stamp) are computed based on a schedule of fees approved by the Department of Comments: The seller obtains a certified true copy of the latest tax declaration from Justice. the CAO. 5. Upon the payment of the fees, the document is forwarded to the LRE who reviews the same and determines whether or not it is ready to register. The Procedure 3. Pay documentary stamp tax and capital gains tax at owner’s copy of the title is compared to the title on file, produced by Records an authorized agent bank (AAB) Officer/Vault keeper. Time: 2 days 6. If the instrument is not ready to be registered, the LRE recommends its denial to the RD. If the instrument is ready, the LRE likewise recommends to the RD Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital the registration of the document through a routing slip. gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not included in the cost reflected) 7. RD reviews examination, and once same is approved, assigns documents to clerk for action, with instruction on the route slip. Comments: The seller files the documentary stamp tax return and capital gains tax return with the AAB. This is done within 5 days after the close of the month 8. If the transaction involves issuance of title, Records Officer/Judicial Form when the taxable document was signed or within 30 days after the sale, whichever Custodian records the transaction in the logbook releases sets of title forms is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains (judicial form) and assigns the corresponding title control number to the set tax is 6.0% of capital gains based on selling price, fair market value or zonal value, of titles issued to the action clerk. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair 9. Assigned employee acts on the documents, as instructed. market value, whichever is higher. 10. Final registration – RD signs titles and documents. The documentation shall include: 11. Release of documents – by the releasing clerk to the buyer who should be a. Original copy and photocopy of notarized deed of sale (obtained in procedure ready with ID and copies of official receipts of the registration fees. 1) The documentation shall include: b. Certified true copy of transfer certificate of title (in the name of seller) a. Articles of incorporation and bylaws of the buyer c. Certified true copy of latest tax declaration (in the name of seller) (obtained in b. Secretary’s certificate containing the resolution of the board of directors of procedure 2). buyer approving the sale c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Procedure 4. Obtain certificate authorizing registration (CAR) of seller) from the Bureau of Internal Revenue (BIR) d. Certificate authorizing registration from the BIR (obtained in procedure 4) Time: 14 days e. Realty tax clearance from the CTO (obtained in procedure 5) Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) f. Official receipt of transfer tax payment (obtained in procedure 6) Comments: After paying the taxes in procedure 3, the seller must obtain a tax g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) clearance (or certificate authorizing registration) from the BIR. This certificate will (obtained in procedure 3). authorize the registration of the property. The documentation shall include: Procedure 8. Apply with the CAO for the issuance of a new tax a. Certified true copy of transfer certificate of title (in the name of seller /original declaration over the building and the land in the name of buyer certificate of title (OCT)) Time: 3 days b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Cost: No cost procedure 2) Comments: The buyer applies with the CAO for the issuance of a new tax declaration c. Tax identification numbers. over the building in his name. This procedure includes an inspection in Cebu. d. Notarized deed of absolute sale, but only photocopy shall be retained by the The documentation shall include: BIR. a. Photocopy of notarized deed of sale (obtained in procedure 1) b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Procedure 5. Obtain tax clearance certificate of real estate taxes procedure 2) from the City Treasurer’s Office (CTO) c. Certificate authorizing registration from the BIR (obtained in procedure 4) Time: 1 day d. Realty tax clearance from the CTO (obtained in procedure 5) Cost: PHP 25 e. Photocopy of official receipt of transfer tax payment (original copy to be Comments: The seller, after paying any due amounts, obtains a tax clearance presented) (obtained in procedure 6) certificate from the CTO. f. The TCT issued by the RD (in the name of the buyer). The documentation shall include: an original of the official receipt evidencing pay- ment by seller of realty taxes. REGISTERING PROPERTY Davao Procedure 6. Pay the transfer tax at the CTO Property value: USD 71,006 = PHP 3,643,315 Time: 1 day Date as of: December 2007 Cost: PHP 29,147 (0.8% of property price) Comments: The documentation shall include: Procedure 1. Prepare the deed of sale and ratify it by the notary a. Certificate authorizing registration from the BIR (obtained in procedure 4) Time: 1 day b. Realty tax clearance from the CTO (obtained in procedure 5) Cost: PHP 72,866 (1–3% of property value) c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Comments: Anyone can prepare the document, however, the deed of sale must be 4). ratified before the notary public and it is common for him to draft it and conduct the whole process on behalf of the parties. The cost to complete the procedure is set by Procedure 7. Secure registration with the Registry of Deeds (RD) the Integrated Bar of the Philippines-Cebu Chapter through a resolution. In practice Time: 10 days however, the amount to complete the procedure may vary, since the resolution is just a guideline and not a hard and fast rule. Consequently, the lawyers and the Cost: PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP transacting parties can negotiate on the amount, which could either be lower or 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 higher than the amount stated in the resolution. registry entry fee + PHP 60 transfer certificate of title) Comments: The buyer applies for registration with the RD. The following internal steps take place after the application is submitted: 104 DOING BUSINESS IN THE PHILIPPINES 2008

1. The Entry clerk receives and enters all documents in the primary Entry Book however, the amount to complete the procedure may vary, since the resolution (Judicial form No. 39) and notes therein the day, hour and minute of reception is just a guideline and not a hard and fast rule. Consequently, the lawyers and the of all instrument in the order in which they are received. transacting parties can negotiate on the amount, which could either be lower or 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- higher than the amount stated in the resolution. signment. 3. Documents/titles are assigned by the RD to the Land Registration Examiner Procedure 2. Obtain certified true copy of latest tax declaration (LRE) who prepares computation and order of payment of registration fees. from the City Assessor’s Office (CAO) 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Time: 1 day are computed based on a schedule of fees approved by the Department of Cost: PHP 60 (PHP 5 per real property unit (RPU)+ PHP 25 per loose documentary Justice. stamp) 5. Upon the payment of the fees, the document is forwarded to the LRE who Comments: The seller obtains a certified true copy of the latest tax declaration from reviews the same and determines whether or not it is ready to register. The the CAO. owner’s copy of the title is compared to the title on file, produced by Records Officer/Vault keeper. Procedure 3. Pay documentary stamp tax and capital gains tax at 6. If the instrument is not ready to be registered, the LRE recommends its denial an authorized agent bank (AAB) to the RD. If the instrument is ready, the LRE likewise recommends to the RD Time: 1 day the registration of the document through a routing slip. Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital 7. RD reviews examination, and once same is approved, assigns documents to gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not clerk for action, with instruction on the route slip. included in the cost reflected) 8. If the transaction involves issuance of title, Records Officer/Judicial Form Comments: The seller files the documentary stamp tax return and capital gains Custodian records the transaction in the logbook releases sets of title forms tax return with the AAB. This is done within 5 days after the close of the month (judicial form) and assigns the corresponding title control number to the set when the taxable document was signed or within 30 days after the sale, whichever of titles issued to the action clerk. is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains 9. Assigned employee acts on the documents, as instructed. tax is 6.0% of capital gains based on selling price, fair market value or zonal value, 10. Final registration – RD signs titles and documents. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair market value, whichever is higher. 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. The documentation shall include: a. Original copy and photocopy of notarized deed of sale (obtained in procedure 1) The documentation shall include: b. Certified true copy of transfer certificate of title (in the name of seller) a. Articles of incorporation and bylaws of the buyer c. Certified true copy of latest tax declaration (in the name of seller) (obtained in b. Secretary’s certificate containing the resolution of the board of directors of procedure 2). buyer approving the sale c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Procedure 4. Obtain certificate authorizing registration (CAR) of seller) from the Bureau of Internal Revenue (BIR) d. Certificate authorizing registration from the BIR (obtained in procedure 4) Time: 25 days e. Realty tax clearance from the CTO (obtained in procedure 5) Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) f. Official receipt of transfer tax payment (obtained in procedure 6) Comments: After paying the taxes in procedure 3, the seller must obtain a tax g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) clearance (or certificate authorizing registration) from the BIR. This certificate will (obtained in procedure 3). authorize the registration of the property. The documentation shall include: Procedure 8. Apply with the CAO for the issuance of a new tax declaration over the building and the land in the name of buyer a. Certified true copy of transfer certificate of title (in the name of seller /original certificate of title (OCT)) Time: 3 days b. Certified true copy of latest tax declaration (in the name of seller) (obtained 2) Cost: PHP 50 (PHP 25 per RPU) c. Tax identification numbers. Comments: The buyer applies with the CAO for the issuance of a new tax declara- d. Notarized deed of absolute sale, but only photocopy shall be retained by the tion over the building in his name. This procedure includes an inspection in Davao. BIR. The documentation shall include: a. Photocopy of notarized deed of sale (obtained in procedure 1) Procedure 5. Obtain tax clearance certificate of Real Estate Taxes b. Certified true copy of latest tax declaration (in the name of seller) (obtained in from the City Treasurer’s Office (CTO) procedure 2) Time: 1 day c. Certificate authorizing registration from the BIR (obtained in procedure 4) Cost: PHP 30 (PHP 5 + PHP 25 per loose documentary stamp) d. Realty tax clearance from the CTO (obtained in procedure 5) Comments: The seller, after paying any due amounts, obtains a tax clearance e. Photocopy of official receipt of transfer tax payment (original copy to be certificate from the CTO. presented) (obtained in procedure 6) The documentation shall include: an original of the official receipt evidencing pay- f. The TCT issued by the RD (in the name of the buyer). ment by seller of realty taxes. REGISTERING PROPERTY Procedure 6. Pay the transfer tax at the CTO Lapu-Lapu Time: 1 day Property value: USD 71,006 = PHP 3,643,315 Cost: PHP 27,325 (0.75% of property price) Date as of: December 2007 Comments: The documentation shall include: a. Certificate authorizing registration from the BIR (obtained in procedure 4) Procedure 1. Prepare the deed of sale and ratify it by the notary b. Realty tax clearance from the CTO (obtained in procedure 5) Time: 1 day c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Cost: PHP 36,433 (1% of property value) 4). Comments: Anyone can prepare the document, however, the deed of sale must be ratified before the notary public and it is common for him to draft it and conduct the whole process on behalf of the parties. The cost to complete the procedure is set by the Integrated Bar of the Philippines-Cebu Chapter through a resolution. In practice  -*450'130$&%63&4t3&(*45&3*/(1301&35: 105

Procedure 7. Secure registration with the Registry of Deeds (RD) REGISTERING PROPERTY Time: 10 days Las Piñas Cost: PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Property value: USD 71,006 = PHP 3,643,315 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 Date as of: December 2007 registry entry fee + PHP 60 transfer certificate of title) Comments: The buyer applies for registration with the RD. The following internal Procedure 1. Prepare the deed of sale and ratify it by the notary steps take place after the application is submitted: Time: 1 day 1. The Entry clerk receives and enters all documents in the primary Entry Book Cost: PHP 72,866 (1–3% of property value) (Judicial form No. 39) and notes therein the day, hour and minute of reception Comments: Anyone can prepare the document, however, the deed of sale must be of all instrument in the order in which they are received. ratified before the notary public and it is common for him to draft it and conduct the 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- whole process on behalf of the parties. signment. 3. Documents/titles are assigned by the RD to the Land Registration Examiner Procedure 2. Obtain certified true copy of latest tax declaration (LRE) who prepares computation and order of payment of registration fees. from the City Assessor’s Office (CAO) 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Time: 1 day are computed based on a schedule of fees approved by the Department of Cost: PHP 200 (PHP 100 per real property unit (RPU), loose documentary stamp not Justice. required) 5. Upon the payment of the fees, the document is forwarded to the LRE who Comments: The seller obtains a certified true copy of the latest tax declaration from reviews the same and determines whether or not it is ready to register. The the CAO. owner’s copy of the title is compared to the title on file, produced by Records Officer/Vault keeper. Procedure 3. Pay documentary stamp tax and capital gains tax at 6. If the instrument is not ready to be registered, the LRE recommends its denial an authorized agent bank (AAB) to the RD. If the instrument is ready, the LRE likewise recommends to the RD the registration of the document through a routing slip. Time: 1 day 7. RD reviews examination, and once same is approved, assigns documents to Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital clerk for action, with instruction on the route slip. gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not included in the cost reflected) 8. If the transaction involves issuance of title, Records Officer/Judicial Form Custodian records the transaction in the logbook releases sets of title forms Comments: The seller files the documentary stamp tax return and capital gains (judicial form) and assigns the corresponding title control number to the set tax return with the AAB. This is done within 5 days after the close of the month of titles issued to the action clerk. when the taxable document was signed or within 30 days after the sale, whichever is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains 9. Assigned employee acts on the documents, as instructed. tax is 6.0% of capital gains based on selling price, fair market value or zonal value, 10. Final registration – RD signs titles and documents. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair 11. Release of documents – by the releasing clerk to the buyer who should be market value, whichever is higher. ready with ID and copies of official receipts of the registration fees. The documentation shall include: a. Original copy and photocopy of notarized deed of sale (obtained in procedure The documentation shall include: 1) a. Articles of incorporation and bylaws of the buyer b. Certified true copy of transfer certificate of title (in the name of seller) b. Secretary’s certificate containing the resolution of the board of directors of c. Certified true copy of latest tax declaration (in the name of seller) (obtained in buyer approving the sale procedure 2). c. Original copy of owner’s duplicate of the transfer certificate of title (in the name of seller) Procedure 4. Obtain certificate authorizing registration (CAR) d. Certificate authorizing registration from the BIR (obtained in procedure 4) from the Bureau of Internal Revenue (BIR) e. Realty tax clearance from the CTO (obtained in procedure 5) Time: 5 days f. Official receipt of transfer tax payment (obtained in procedure 6) Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) Comments: After paying the taxes in procedure 3, the seller must obtain a tax (obtained in procedure 3). clearance (or certificate authorizing registration) from the BIR. This certificate will authorize the registration of the property. Procedure 8. Apply with the CAO for the issuance of a new tax The documentation shall include: declaration over the building and the land in the name of buyer a. Certified true copy of transfer certificate of title (in the name of seller /original Time: 1 day certificate of title (OCT)) Cost: No cost b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) Comments: The buyer applies with the CAO for the issuance of a new tax declara- tion over the building in his name. c. Tax identification numbers. The documentation shall include: d. Notarized deed of absolute sale, but only photocopy shall be retained by the BIR. a. Photocopy of notarized deed of sale (obtained in procedure 1) b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Procedure 5. Obtain tax clearance certificate of real estate taxes procedure 2) from the City Treasurer’s Office (CTO) c. Certificate authorizing registration from the BIR (obtained in procedure 4) Time: 1 day d. Realty tax clearance from the CTO (obtained in procedure 5) Cost: PHP 50 e. Photocopy of official receipt of transfer tax payment (original copy to be Comments: The seller, after paying any due amounts, obtains a tax clearance presented) (obtained in procedure 6) certificate from the CTO. f. The TCT issued by the RD (in the name of the buyer). The documentation shall include: an original of the official receipt evidencing pay- ment by seller of realty taxes.

Procedure 6. Pay the transfer tax at the CTO Time: 1 day Cost: PHP 18,217 (0.5% of property price) Comments: The documentation shall include: 106 DOING BUSINESS IN THE PHILIPPINES 2008

a. Certificate authorizing registration from the BIR (obtained in procedure 4) REGISTERING PROPERTY b. Realty tax clearance from the CTO (obtained in procedure 5) Makati c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Property value: USD 71,006 = PHP 3,643,315 4). Date as of: December 2007 Procedure 7. Secure registration with the Registry of Deeds (RD) Procedure 1. Prepare the deed of sale and ratify it by the notary Time: 14 days Time: 1 day Cost: PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: PHP 72,866 (1–3% of property value) 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 Comments: Anyone can prepare the document, however, the deed of sale must be registry entry fee + PHP 60 transfer certificate of title) ratified before the notary public and it is common for him to draft it and conduct the Comments: The buyer applies for registration with the RD. The following internal whole process on behalf of the parties. steps take place after the application is submitted: 1. The Entry clerk receives and enters all documents in the primary Entry Book Procedure 2. Obtain certified true copy of latest tax declaration (Judicial form No. 39) and notes therein the day, hour and minute of reception from the City Assessor’s Office (CAO) of all instrument in the order in which they are received. Time: 1 day 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- Cost: PHP 110 (PHP 50 per real property unit (RPU) + PHP 5 per loose documentary signment. stamp) 3. Documents/titles are assigned by the RD to the Land Registration Examiner Comments: The seller obtains a certified true copy of the latest tax declaration from (LRE) who prepares computation and order of payment of registration fees. the CAO. 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees are computed based on a schedule of fees approved by the Department of Procedure 3. Pay documentary stamp tax and capital gains tax at Justice. an authorized agent bank (AAB) 5. Upon the payment of the fees, the document is forwarded to the LRE who Time: 1 day reviews the same and determines whether or not it is ready to register. The owner’s copy of the title is compared to the title on file, produced by Records Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital Officer/Vault keeper. gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not included in the cost reflected) 6. If the instrument is not ready to be registered, the LRE recommends its denial to the RD. If the instrument is ready, the LRE likewise recommends to the RD Comments: The seller files the documentary stamp tax return and capital gains the registration of the document through a routing slip. tax return with the AAB. This is done within 5 days after the close of the month when the taxable document was signed or within 30 days after the sale, whichever 7. RD reviews examination, and once same is approved, assigns documents to is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains clerk for action, with instruction on the route slip. tax is 6.0% of capital gains based on selling price, fair market value or zonal value, 8. If the transaction involves issuance of title, Records Officer/Judicial Form whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair Custodian records the transaction in the logbook releases sets of title forms market value, whichever is higher. (judicial form) and assigns the corresponding title control number to the set The documentation shall include: of titles issued to the action clerk. a. Original copy and photocopy of notarized deed of sale (obtained in procedure 9. Assigned employee acts on the documents, as instructed. 1) 10. Final registration – RD signs titles and documents. b. Certified true copy of transfer certificate of title (in the name of seller) 11. Release of documents – by the releasing clerk to the buyer who should be c. Certified true copy of latest tax declaration (in the name of seller) (obtained in ready with ID and copies of official receipts of the registration fees. procedure 2). The documentation shall include: a. Articles of incorporation and bylaws of the buyer Procedure 4. Obtain certificate authorizing registration (CAR) b. Secretary’s certificate containing the resolution of the board of directors of from the Bureau of Internal Revenue (BIR) buyer approving the sale Time: 14 days c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) of seller) Comments: After paying the taxes in procedure 3, the seller must obtain a tax d. Certificate authorizing registration from the BIR (obtained in procedure 4) clearance (or certificate authorizing registration) from the BIR. This certificate will e. Realty tax clearance from the CTO (obtained in procedure 5) authorize the registration of the property. f. Official receipt of transfer tax payment (obtained in procedure 6) The documentation shall include: g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) a. Certified true copy of transfer certificate of title in the name of seller/ original (obtained in procedure 3). certificate of title (OCT) b. Certified true copy of latest tax declaration in the name of seller (obtained in Procedure 8. Apply with the CAO for the issuance of a new tax procedure 2) declaration over the building and the land in the name of buyer c. Tax identification numbers Time: 1 day d. Notarized deed of absolute sale, but only photocopy shall be retained by the Cost: PHP 300 (PHP 150 per RPU) BIR. Comments: The buyer applies with the CAO for the issuance of a new tax declara- tion over the building in his name. Procedure 5. Obtain tax clearance certificate of real estate taxes The documentation shall include: from the City Treasurer’s Office (CTO) a. Photocopy of notarized deed of sale (obtained in procedure 1) Time: 2 days b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Cost: PHP 50 procedure 2) Comments: The seller, after paying any due amounts, obtains a tax clearance c. Certificate authorizing registration from the BIR (obtained in procedure 4) certificate from the CTO. d. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: an original of the official receipt evidencing pay- ment by seller of realty taxes. e. Photocopy of official receipt of transfer tax payment (original copy to be presented) (obtained in procedure 6) Procedure 6. Pay the transfer tax at the CTO f. The TCT issued by the RD (in the name of the buyer). Time: 1 day Cost: PHP 21,860 (0.6% of property price) Comments: The documentation shall include:  -*450'130$&%63&4t3&(*45&3*/(1301&35: 107

a. Certificate authorizing registration from the BIR (obtained in procedure 4) REGISTERING PROPERTY b. Realty tax clearance from the CTO (obtained in procedure 5) Malabon c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Property value: USD 71,006 = PHP 3,643,315 4). Date as of: December 2007 Procedure 7. Secure registration with the Registry of Deeds (RD) Procedure 1. Prepare the deed of sale and ratify it by the notary Time: 10 days Time: 1 day Cost: PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: PHP 72,866 (1–3% of property value) 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 Comments: Anyone can prepare the document, however, the deed of sale must be registry entry fee + PHP 60 transfer certificate of title) ratified before the notary public and it is common for him to draft it and conduct the Comments: The buyer applies for registration with the RD. The following internal whole process on behalf of the parties. steps take place after the application is submitted: 1. The Entry clerk receives and enters all documents in the primary Entry Book Procedure 2. Obtain certified true copy of latest tax declaration (Judicial form No. 39) and notes therein the day, hour and minute of reception from the City Assessor’s Office (CAO) of all instrument in the order in which they are received. Time: 1 day 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- Cost: PHP 236 (PHP 100 per real property unit (RPU) + PHP 18 per loose documen- signment. tary stamp) 3. Documents/titles are assigned by the RD to the Land Registration Examiner Comments: The seller obtains a certified true copy of the latest tax declaration from (LRE) who prepares computation and order of payment of registration fees. the CAO. 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees are computed based on a schedule of fees approved by the Department of Procedure 3. Pay documentary stamp tax and capital gains tax at Justice. an authorized agent bank (AAB) 5. Upon the payment of the fees, the document is forwarded to the LRE who Time: 1 day reviews the same and determines whether or not it is ready to register. The owner’s copy of the title is compared to the title on file, produced by Records Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital Officer/Vault keeper. gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not included in the cost reflected) 6. If the instrument is not ready to be registered, the LRE recommends its denial to the RD. If the instrument is ready, the LRE likewise recommends to the RD Comments: The seller files the documentary stamp tax return and capital gains the registration of the document through a routing slip. tax return with the AAB. This is done within 5 days after the close of the month when the taxable document was signed or within 30 days after the sale, whichever 7. RD reviews examination, and once same is approved, assigns documents to is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains clerk for action, with instruction on the route slip. tax is 6.0% of capital gains based on selling price, fair market value or zonal value, 8. If the transaction involves issuance of title, Records Officer/Judicial Form whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair Custodian records the transaction in the logbook releases sets of title forms market value, whichever is higher. (judicial form) and assigns the corresponding title control number to the set The documentation shall include: of titles issued to the action clerk. a. Original copy and photocopy of notarized deed of sale (obtained in procedure 9. Assigned employee acts on the documents, as instructed. 1) 10. Final registration – RD signs titles and documents. b. Certified true copy of transfer certificate of title (in the name of seller) 11. Release of documents – by the releasing clerk to the buyer who should be c. Certified true copy of latest tax declaration (in the name of seller) (obtained in ready with ID and copies of official receipts of the registration fees. procedure 2). The documentation shall include: a. Articles of incorporation and bylaws of the buyer Procedure 4. Obtain certificate authorizing registration (CAR) b. Secretary’s certificate containing the resolution of the board of directors of from the Bureau of Internal Revenue (BIR) buyer approving the sale Time: 14 days c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) of seller) Comments: After paying the taxes in procedure 3, the seller must obtain a tax d. Certificate authorizing registration from the BIR (obtained in procedure 4) clearance (or certificate authorizing registration) from the BIR. This certificate will e. Realty tax clearance from the CTO (obtained in procedure 5) authorize the registration of the property. f. Official receipt of transfer tax payment (obtained in procedure 6) The documentation shall include: g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) a. Certified true copy of transfer certificate of title (in the name of seller /original (obtained in procedure 3). certificate of title (OCT)) b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Procedure 8. Apply with the CAO for the issuance of a new tax procedure 2) declaration over the building and the land in the name of buyer c. Tax identification numbers. Time: 3 days d. Notarized deed of absolute sale, but only photocopy shall be retained by the Cost: PHP 400 (PHP 200 per RPU) BIR. Comments: The buyer applies with the CAO for the issuance of a new tax declaration over the building in his name. This procedure includes an inspection in Makati. Procedure 5. Obtain tax clearance certificate of real estate taxes The documentation shall include: from the City Treasurer’s Office (CTO) a. Photocopy of notarized deed of sale (obtained in procedure 1) Time: 1 day b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Cost: PHP 100 procedure 2) Comments: The seller, after paying any due amounts, obtains a tax clearance c. Certificate authorizing registration from the BIR (obtained in procedure 4) certificate from the CTO. d. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: an original of the official receipt evidencing pay- ment by seller of realty taxes. e. Photocopy of official receipt of transfer tax payment (original copy to be presented) (obtained in procedure 6) Procedure 6. Pay the transfer tax at the CTO f. The TCT issued by the RD (in the name of the buyer). Time: 1 day Cost: PHP 18,217 (0.5% of property price) Comments: The documentation shall include: 108 DOING BUSINESS IN THE PHILIPPINES 2008

a. Certificate authorizing registration from the BIR (obtained in procedure 4) REGISTERING PROPERTY b. Realty tax clearance from the CTO (obtained in procedure 5) Mandaluyong c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Property value: USD 71,006 = PHP 3,643,315 4). Date as of: December 2007 Procedure 7. Secure registration with the Registry of Deeds (RD) Procedure 1. Prepare the deed of sale and ratify it by the notary Time: 10 days Time: 1 day Cost: PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: PHP 72,866 (1–3% of property value) 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 Comments: Anyone can prepare the document, however, the deed of sale must be registry entry fee + PHP 60 transfer certificate of title) ratified before the notary public and it is common for him to draft it and conduct the Comments: The buyer applies for registration with the RD. The following internal whole process on behalf of the parties. steps take place after the application is submitted: 1. The Entry clerk receives and enters all documents in the primary Entry Book Procedure 2. Obtain certified true copy of latest tax declaration (Judicial form No. 39) and notes therein the day, hour and minute of reception from the City Assessor’s Office (CAO) of all instrument in the order in which they are received. Time: 1 day 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- Cost: PHP 50 (PHP 10 per per real property unit(RPU) + PHP 15 per loose documen- signment. tary stamp) 3. Documents/titles are assigned by the RD to the Land Registration Examiner Comments: The seller obtains a certified true copy of the latest tax declaration from (LRE) who prepares computation and order of payment of registration fees. the CAO. 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees are computed based on a schedule of fees approved by the Department of Procedure 3. Pay documentary stamp tax and capital gains tax at Justice. an authorized agent bank (AAB) 5. Upon the payment of the fees, the document is forwarded to the LRE who Time: 1 day reviews the same and determines whether or not it is ready to register. The owner’s copy of the title is compared to the title on file, produced by Records Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital Officer/Vault keeper. gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not included in the cost reflected) 6. If the instrument is not ready to be registered, the LRE recommends its denial to the RD. If the instrument is ready, the LRE likewise recommends to the RD Comments: The seller files the documentary stamp tax return and capital gains the registration of the document through a routing slip. tax return with the AAB. This is done within 5 days after the close of the month when the taxable document was signed or within 30 days after the sale, whichever 7. RD reviews examination, and once same is approved, assigns documents to is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains clerk for action, with instruction on the route slip. tax is 6.0% of capital gains based on selling price, fair market value or zonal value, 8. If the transaction involves issuance of title, Records Officer/Judicial Form whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair Custodian records the transaction in the logbook releases sets of title forms market value, whichever is higher. (judicial form) and assigns the corresponding title control number to the set The documentation shall include: of titles issued to the action clerk. a. Original copy and photocopy of notarized deed of sale (obtained in procedure 9. Assigned employee acts on the documents, as instructed. 1) 10. Final registration – RD signs titles and documents. b. Certified true copy of transfer certificate of title (in the name of seller) 11. Release of documents – by the releasing clerk to the buyer who should be c. Certified true copy of latest tax declaration (in the name of seller) (obtained in ready with ID and copies of official receipts of the registration fees. procedure 2). The documentation shall include: a. Articles of incorporation and bylaws of the buyer Procedure 4. Obtain certificate authorizing registration (CAR) b. Secretary’s certificate containing the resolution of the board of directors of from the Bureau of Internal Revenue (BIR) buyer approving the sale Time: 10 days c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) of seller) Comments: After paying the taxes in procedure 3, the seller must obtain a tax d. Certificate authorizing registration from the BIR (obtained in procedure 4) clearance (or certificate authorizing registration) from the BIR. This certificate will e. Realty tax clearance from the CTO (obtained in procedure 5) authorize the registration of the property. f. Official receipt of transfer tax payment (obtained in procedure 6) The documentation shall include: g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) a. Certified true copy of transfer certificate of title (in the name of seller /original (obtained in procedure 3). certificate of title (OCT)) b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Procedure 8. Apply with the CAO for the issuance of a new tax procedure 2) declaration over the building and the land in the name of buyer c. Tax identification numbers. Time: 3 days d. Notarized deed of absolute sale, but only photocopy shall be retained by the Cost: PHP 200 (PHP 100 per RPU) BIR. Comments: The buyer applies with the CAO for the issuance of a new tax declara- tion over the building in his name. This procedure includes an inspection in Malabon Procedure 5. Obtain tax clearance certificate of real estate taxes and preparation of a Field Appraisal and Assessment Sheet (FAAS). from the City Treasurer’s Office (CTO) The documentation shall include: Time: 1 day a. Photocopy of notarized deed of sale (obtained in procedure 1) Cost: PHP 10 b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Comments: The seller, after paying any due amounts, obtains a tax clearance procedure 2) certificate from the CTO. c. Certificate authorizing registration from the BIR (obtained in procedure 4) The documentation shall include: an original of the official receipt evidencing pay- d. Realty tax clearance from the CTO (obtained in procedure 5) ment by seller of realty taxes. e. Photocopy of official receipt of transfer tax payment (original copy to be presented) (obtained in procedure 6) Procedure 6. Pay the transfer tax at the CTO Time: 1 day f. The TCT issued by the RD (in the name of the buyer). Cost: PHP 18,217 (0.5% of property price) Comments: The documentation shall include:  -*450'130$&%63&4t3&(*45&3*/(1301&35: 109

a. Certificate authorizing registration from the BIR (obtained in procedure 4) REGISTERING PROPERTY b. Realty tax clearance from the CTO (obtained in procedure 5) Mandaue c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Property value: USD 71,006 = PHP 3,643,315 4). Date as of: December 2007 Procedure 7. Secure registration with the Registry of Deeds (RD) Procedure 1. Prepare the deed of sale and ratify it by the notary Time: 5 days Time: 1 day Cost: PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: PHP 36,433 (1% of property value) 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 Comments: Anyone can prepare the document, however, the deed of sale must be registry entry fee + PHP 60 transfer certificate of title) ratified before the notary public and it is common for him to draft it and conduct the Comments: The buyer applies for registration with the RD. The following internal whole process on behalf of the parties. The cost to complete the procedure is set by steps take place after the application is submitted: the Integrated Bar of the Philippines-Cebu Chapter through a resolution. In practice 1. The Entry clerk receives and enters all documents in the primary Entry Book however, the amount to complete the procedure may vary, since the resolution (Judicial form No. 39) and notes therein the day, hour and minute of reception is just a guideline and not a hard and fast rule. Consequently, the lawyers and the of all instrument in the order in which they are received. transacting parties can negotiate on the amount, which could either be lower or 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- higher than the amount stated in the resolution. signment. 3. Documents/titles are assigned by the RD to the Land Registration Examiner Procedure 2. Obtain certified true copy of latest tax declaration (LRE) who prepares computation and order of payment of registration fees. from the City Assessor’s Office (CAO) 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Time: 1 day are computed based on a schedule of fees approved by the Department of Cost: PHP 70 (PHP 10 per per real property unit (RPU)+ PHP 25 per loose documen- Justice. tary stamp) 5. Upon the payment of the fees, the document is forwarded to the LRE who Comments: The seller obtains a certified true copy of the latest tax declaration from reviews the same and determines whether or not it is ready to register. The the CAO. owner’s copy of the title is compared to the title on file, produced by Records Officer/Vault keeper. Procedure 3. Pay documentary stamp tax and capital gains tax at 6. If the instrument is not ready to be registered, the LRE recommends its denial an authorized agent bank (AAB) to the RD. If the instrument is ready, the LRE likewise recommends to the RD Time: 1 day the registration of the document through a routing slip. Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital 7. RD reviews examination, and once same is approved, assigns documents to gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not clerk for action, with instruction on the route slip. included in the cost reflected) 8. If the transaction involves issuance of title, Records Officer/Judicial Form Comments: The seller files the documentary stamp tax return and capital gains Custodian records the transaction in the logbook releases sets of title forms tax return with the AAB. This is done within 5 days after the close of the month (judicial form) and assigns the corresponding title control number to the set when the taxable document was signed or within 30 days after the sale, whichever of titles issued to the action clerk. is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains 9. Assigned employee acts on the documents, as instructed. tax is 6.0% of capital gains based on selling price, fair market value or zonal value, 10. Final registration – RD signs titles and documents. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair market value, whichever is higher. 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. The documentation shall include: The documentation shall include: a. Original copy and photocopy of notarized deed of sale (obtained in procedure 1) a. Articles of incorporation and bylaws of the buyer b. Certified true copy of transfer certificate of title (in the name of seller) b. Secretary’s certificate containing the resolution of the board of directors of buyer approving the sale c. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2). c. Original copy of owner’s duplicate of the transfer certificate of title (in the name of seller) Procedure 4. Obtain certificate authorizing registration (CAR) d. Certificate authorizing registration from the BIR (obtained in procedure 4) from the Bureau of Internal Revenue (BIR) e. Realty tax clearance from the CTO (obtained in procedure 5) Time: 25 days f. Official receipt of transfer tax payment (obtained in procedure 6) Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) Comments: After paying the taxes in procedure 3, the seller must obtain a tax (obtained in procedure 3). clearance (or certificate authorizing registration) from the BIR. This certificate will authorize the registration of the property. Procedure 8. Apply with the CAO for the issuance of a new tax The documentation shall include: declaration over the building and the land in the name of buyer a. Certified true copy of transfer certificate of title (in the name of seller /original Time: 1 day certificate of title (OCT)) Cost: PHP 200 (PHP 100 per RPU) b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Comments: The buyer applies with the CAO for the issuance of a new tax declara- procedure 2) tion over the building in his name. c. Tax identification numbers. The documentation shall include: d. Notarized deed of absolute sale, but only photocopy shall be retained by the a. Photocopy of notarized deed of sale (obtained in procedure 1) BIR. b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) Procedure 5. Obtain tax clearance certificate of real estate taxes c. Certificate authorizing registration from the BIR (obtained in procedure 4) from the City Treasurer’s Office (CTO) d. Realty tax clearance from the CTO (obtained in procedure 5) Time: 1 day e. Photocopy of official receipt of transfer tax payment (original copy to be Cost: PHP 10 presented) (obtained in procedure 6) Comments: The seller, after paying any due amounts, obtains a tax clearance f. The TCT issued by the RD (in the name of the buyer). certificate from the CTO. The documentation shall include: an original of the official receipt evidencing pay- ment by seller of realty taxes. 110 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 6. Pay the transfer tax at the CTO e. Photocopy of official receipt of transfer tax payment (original copy to be Time: 1 day presented) (obtained in procedure 6) Cost: PHP 10,930 0.3% of property price f. The TCT issued by the RD (in the name of the buyer). Comments: The documentation shall include: REGISTERING PROPERTY a. Certificate authorizing registration from the BIR (obtained in procedure 4) Manila b. Realty tax clearance from the CTO (obtained in procedure 5) Property value: USD 71,006 = PHP 3,643,315 c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Date as of: December 2007 4). Procedure 1. Prepare the deed of sale and ratify it by the notary Procedure 7. Secure registration with the Registry of Deeds (RD) Time: 1 day 10 days Time: Cost: PHP 54,650 (1.5% of property value) PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: Comments: Anyone can prepare the document, however, the deed of sale must be 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 ratified before the notary public and it is common for him to draft it and conduct the registry entry fee + PHP 60 transfer certificate of title) whole process on behalf of the parties. Comments: The buyer applies for registration with the RD. The following internal steps take place after the application is submitted: Procedure 2. Obtain certified true copy of latest tax declaration 1. The Entry clerk receives and enters all documents in the primary Entry Book from the City Assessor’s Office (CAO) (Judicial form No. 39) and notes therein the day, hour and minute of reception Time: 1 day of all instrument in the order in which they are received. Cost: PHP 100 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- signment. Comments: The seller obtains a certified true copy of the latest tax declaration from the CAO. 3. Documents/titles are assigned by the RD to the Land Registration Examiner (LRE) who prepares computation and order of payment of registration fees. Procedure 3. Pay documentary stamp tax and capital gains tax at 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees an authorized agent bank (AAB) are computed based on a schedule of fees approved by the Department of Justice. Time: 1 day 5. Upon the payment of the fees, the document is forwarded to the LRE who Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital reviews the same and determines whether or not it is ready to register. The gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not owner’s copy of the title is compared to the title on file, produced by Records included in the cost reflected) Officer/Vault keeper. Comments: The seller files the documentary stamp tax return and capital gains 6. If the instrument is not ready to be registered, the LRE recommends its denial tax return with the AAB. This is done within 5 days after the close of the month to the RD. If the instrument is ready, the LRE likewise recommends to the RD when the taxable document was signed or within 30 days after the sale, whichever the registration of the document through a routing slip. is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains tax is 6.0% of capital gains based on selling price, fair market value or zonal value, 7. RD reviews examination, and once same is approved, assigns documents to whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair clerk for action, with instruction on the route slip. market value, whichever is higher. 8. If the transaction involves issuance of title, Records Officer/Judicial Form The documentation shall include: Custodian records the transaction in the logbook releases sets of title forms (judicial form) and assigns the corresponding title control number to the set a. Original copy and photocopy of notarized deed of sale (obtained in procedure of titles issued to the action clerk. 1) 9. Assigned employee acts on the documents, as instructed. b. Certified true copy of transfer certificate of title (in the name of seller) 10. Final registration – RD signs titles and documents. c. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2). 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. Procedure 4. Obtain certificate authorizing registration (CAR) The documentation shall include: from the Bureau of Internal Revenue (BIR) a. Articles of incorporation and bylaws of the buyer Time: 14 days b. Secretary’s certificate containing the resolution of the board of directors of Cost: PHP 100 buyer approving the sale Comments: After paying the taxes in procedure 3, the seller must obtain a tax c. Original copy of owner’s duplicate of the transfer certificate of title (in the name clearance (or certificate authorizing registration) from the BIR. This certificate will of seller) authorize the registration of the property. d. Certificate authorizing registration from the BIR (obtained in procedure 4) The documentation shall include: e. Realty tax clearance from the CTO (obtained in procedure 5) a. Certified true copy of transfer certificate of title (in the name of seller /original f. Official receipt of transfer tax payment (obtained in procedure 6) certificate of title (OCT)) g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) b. Certified true copy of latest tax declaration (in the name of seller) (obtained in (obtained in procedure 3). procedure 2) c. Tax identification numbers. Procedure 8. Apply with the CAO for the issuance of a new tax d. Notarized deed of absolute sale, but only photocopy shall be retained by the declaration over the building and the land in the name of buyer BIR. Time: 3 days Cost: No cost Procedure 5. Obtain tax clearance certificate of real estate taxes Comments: The buyer applies with the CAO for the issuance of a new tax declaration from the City Treasurer’s Office (CTO) over the building in his name. This procedure includes an inspection in Mandaue. Time: 2 days The documentation shall include: Cost: PHP 50 a. Photocopy of notarized deed of sale (obtained in procedure 1) Comments: The seller, after paying any due amounts, obtains a tax clearance b. Certified true copy of latest tax declaration (in the name of seller) (obtained in certificate from the CTO. procedure 2) The documentation shall include: an original of the official receipt evidencing pay- c. Certificate authorizing registration from the BIR (obtained in procedure 4) ment by seller of realty taxes. d. Realty tax clearance from the CTO (obtained in procedure 5)  -*450'130$&%63&4t3&(*45&3*/(1301&35: 111

Procedure 6. Pay the transfer tax at the CTO e. Photocopy of official receipt of transfer tax payment (original copy to be Time: 1 day presented) (obtained in procedure 6) Cost: PHP 27,325 (0.75% of property price) f. The TCT issued by the RD (in the name of the buyer). Comments: The documentation shall include: REGISTERING PROPERTY a. Certificate authorizing registration from the BIR (obtained in procedure 4) Marikina b. Realty tax clearance from the CTO (obtained in procedure 5) Property value: USD 71,006 = PHP 3,643,315 c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Date as of: December 2007 4). Procedure 1. Prepare the deed of sale and ratify it by the notary Procedure 7. Secure registration with the Registry of Deeds (RD) Time: 1 day 10 days Time: Cost: PHP 72,866 (1–3% of property value) PHP 17,631(PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: Comments: Anyone can prepare the document, however, the deed of sale must be 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 ratified before the notary public and it is common for him to draft it and conduct the registry entry fee + PHP 60 transfer certificate of title) whole process on behalf of the parties. Comments: The buyer applies for registration with the RD. The following internal steps take place after the application is submitted: Procedure 2. Obtain certified true copy of latest tax declaration 1. The Entry clerk receives and enters all documents in the primary Entry Book from the City Assessor’s Office (CAO) (Judicial form No. 39) and notes therein the day, hour and minute of reception Time: 1 day of all instrument in the order in which they are received. Cost: PHP 80 (PHP 20 per real property unit (RPU) + PHP 20 per loose documentary 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- stamp) signment. Comments: The seller obtains a certified true copy of the latest tax declaration from 3. Documents/titles are assigned by the RD to the Land Registration Examiner the CAO. (LRE) who prepares computation and order of payment of registration fees. 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Procedure 3. Pay documentary stamp tax and capital gains tax at are computed based on a schedule of fees approved by the Department of an authorized agent bank (AAB) Justice. Time: 1 day 5. Upon the payment of the fees, the document is forwarded to the LRE who reviews the same and determines whether or not it is ready to register. The Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital owner’s copy of the title is compared to the title on file, produced by Records gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not Officer/Vault keeper. included in the cost reflected) 6. If the instrument is not ready to be registered, the LRE recommends its denial Comments: The seller files the documentary stamp tax return and capital gains to the RD. If the instrument is ready, the LRE likewise recommends to the RD tax return with the AAB. This is done within 5 days after the close of the month the registration of the document through a routing slip. when the taxable document was signed or within 30 days after the sale, whichever is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains 7. RD reviews examination, and once same is approved, assigns documents to tax is 6.0% of capital gains based on selling price, fair market value or zonal value, clerk for action, with instruction on the route slip. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair 8. If the transaction involves issuance of title, Records Officer/Judicial Form market value, whichever is higher. Custodian records the transaction in the logbook releases sets of title forms The documentation shall include: (judicial form) and assigns the corresponding title control number to the set of titles issued to the action clerk. a. Original copy and photocopy of notarized deed of sale (obtained in procedure 1) 9. Assigned employee acts on the documents, as instructed. b. Certified true copy of transfer certificate of title (in the name of seller) 10. Final registration – RD signs titles and documents. c. Certified true copy of latest tax declaration (in the name of seller) (obtained in 11. Release of documents – by the releasing clerk to the buyer who should be procedure 2). ready with ID and copies of official receipts of the registration fees. The documentation shall include: Procedure 4. Obtain certificate authorizing registration (CAR) a. Articles of incorporation and bylaws of the buyer from the Bureau of Internal Revenue (BIR) b. Secretary’s certificate containing the resolution of the board of directors of Time: 14 days buyer approving the sale Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Comments: After paying the taxes in procedure 3, the seller must obtain a tax of seller) clearance (or certificate authorizing registration) from the BIR. This certificate will d. Certificate authorizing registration from the BIR (obtained in procedure 4) authorize the registration of the property. e. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: f. Official receipt of transfer tax payment (obtained in procedure 6) a. Certified true copy of transfer certificate of title (in the name of seller /original g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) certificate of title (OCT)) (obtained in procedure 3). b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) Procedure 8. Apply with the CAO for the issuance of a new tax c. Tax identification numbers. declaration over the building and the land in the name of buyer d. Notarized deed of absolute sale, but only photocopy shall be retained by the Time: 3 days BIR. Cost: No cost Comments: The buyer applies with the CAO for the issuance of a new tax declara- Procedure 5. Obtain tax clearance certificate of real estate taxes tion over the building in his name. from the City Treasurer’s Office (CTO) The documentation shall include: Time: 1 day a. Photocopy of notarized deed of sale (obtained in procedure 1) Cost: PHP 20 b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Comments: The seller, after paying any due amounts, obtains a tax clearance procedure 2) certificate from the CTO. c. Certificate authorizing registration from the BIR (obtained in procedure 4) The documentation shall include: an original of the official receipt evidencing pay- d. Realty tax clearance from the CTO (obtained in procedure 5) ment by seller of realty taxes. 112 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 6. Pay the transfer tax at the CTO e. Photocopy of official receipt of transfer tax payment (original copy to be Time: 1 day presented) (obtained in procedure 6) Cost: PHP 27,325 (0.75% of property price) f. The TCT issued by the RD (in the name of the buyer). Comments: The documentation shall include: REGISTERING PROPERTY a. Certificate authorizing registration from the BIR (obtained in procedure 4) Muntinlupa b. Realty tax clearance from the CTO (obtained in procedure 5) Property value: USD 71,006 = PHP 3,643,315 c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Date as of: December 2007 4). Procedure 1. Prepare the deed of sale and ratify it by the notary Procedure 7. Secure registration with the Registry of Deeds (RD) Time: 1 day 10 days Time: Cost: PHP 72,866 (1–3% of property value) PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: Comments: Anyone can prepare the document, however, the deed of sale must be 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 ratified before the notary public and it is common for him to draft it and conduct the registry entry fee + PHP 60 transfer certificate of title) whole process on behalf of the parties. Comments: The buyer applies for registration with the RD. The following internal steps take place after the application is submitted: Procedure 2. Obtain certified true copy of latest tax declaration 1. The Entry clerk receives and enters all documents in the primary Entry Book from the City Assessor’s Office (CAO) (Judicial form No. 39) and notes therein the day, hour and minute of reception Time: 1 day of all instrument in the order in which they are received. Cost: PHP 24 (PHP 12 per real property unit (RPU), loose documentary stamp not 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- required) signment. Comments: The seller obtains a certified true copy of the latest tax declaration from 3. Documents/titles are assigned by the RD to the Land Registration Examiner the CAO. (LRE) who prepares computation and order of payment of registration fees. 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Procedure 3. Pay documentary stamp tax and capital gains tax at are computed based on a schedule of fees approved by the Department of an authorized agent bank (AAB) Justice. Time: 1 day 5. Upon the payment of the fees, the document is forwarded to the LRE who reviews the same and determines whether or not it is ready to register. The Cost: PHP 54,665 (1.5% of property value (documentary stamp tax) + 6.0% of capital owner’s copy of the title is compared to the title on file, produced by Records gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not Officer/Vault keeper. included in the cost reflected) 6. If the instrument is not ready to be registered, the LRE recommends its denial Comments: The seller files the documentary stamp tax return and capital gains to the RD. If the instrument is ready, the LRE likewise recommends to the RD tax return with the AAB. This is done within 5 days after the close of the month the registration of the document through a routing slip. when the taxable document was signed or within 30 days after the sale, whichever is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains 7. RD reviews examination, and once same is approved, assigns documents to tax is 6.0% of capital gains based on selling price, fair market value or zonal value, clerk for action, with instruction on the route slip. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair 8. If the transaction involves issuance of title, Records Officer/Judicial Form market value, whichever is higher. Custodian records the transaction in the logbook releases sets of title forms The documentation shall include: (judicial form) and assigns the corresponding title control number to the set of titles issued to the action clerk. a. Original copy and photocopy of notarized deed of sale (obtained in procedure 1) 9. Assigned employee acts on the documents, as instructed. b. Certified true copy of transfer certificate of title (in the name of seller) 10. Final registration – RD signs titles and documents. c. Certified true copy of latest tax declaration (in the name of seller) (obtained in 11. Release of documents – by the releasing clerk to the buyer who should be procedure 2). ready with ID and copies of official receipts of the registration fees. The documentation shall include: Procedure 4. Obtain certificate authorizing registration (CAR) a. Articles of incorporation and bylaws of the buyer from the Bureau of Internal Revenue (BIR) b. Secretary’s certificate containing the resolution of the board of directors of Time: 10 days buyer approving the sale Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Comments: After paying the taxes in procedure 3, the seller must obtain a tax of seller) clearance (or certificate authorizing registration) from the BIR. This certificate will d. Certificate authorizing registration from the BIR (obtained in procedure 4) authorize the registration of the property. e. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: f. Official receipt of transfer tax payment (obtained in procedure 6) a. Certified true copy of transfer certificate of title (in the name of seller /original g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) certificate of title (OCT)) (obtained in procedure 3). b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) Procedure 8. Apply with the CAO for the issuance of a new tax c. Tax identification numbers. declaration over the building and the land in the name of buyer d. Notarized deed of absolute sale, but only photocopy shall be retained by the Time: 3 days BIR. Cost: PHP 200 (PHP 100 per RPU) Comments: The buyer applies with the CAO for the issuance of a new tax declara- tion over the building in his name. Procedure 5. Obtain tax clearance certificate of real estate taxes The documentation shall include: from the City Treasurer’s Office (CTO) a. Photocopy of notarized deed of sale (obtained in procedure 1) Time: 1 day b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Cost: PHP 30 procedure 2) Comments: The seller, after paying any due amounts, obtains a tax clearance c. Certificate authorizing registration from the BIR (obtained in procedure 4) certificate from the CTO. d. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: an original of the official receipt evidencing pay- ment by seller of realty taxes.  -*450'130$&%63&4t3&(*45&3*/(1301&35: 113

Procedure 6. Pay the transfer tax at the CTO e. Photocopy of official receipt of transfer tax payment (original copy to be Time: 1 day presented) (obtained in procedure 6) Cost: PHP 18,217 (0.5% of property price) f. The TCT issued by the RD (in the name of the buyer). Comments: The documentation shall include: REGISTERING PROPERTY a. Certificate authorizing registration from the BIR (obtained in procedure 4) Navotas b. Realty tax clearance from the CTO (obtained in procedure 5) Property value: USD 71,006 = PHP 3,643,315 c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Date as of: December 2007 4). Procedure 1. Prepare the deed of sale and ratify it by the notary Procedure 7. Secure registration with the Registry of Deeds (RD) Time: 1 day 10 days Time: Cost: PHP 72,866 (1–3% of property value) PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: Comments: Anyone can prepare the document, however, the deed of sale must be 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 ratified before the notary public and it is common for him to draft it and conduct the registry entry fee + PHP 60 transfer certificate of title) whole process on behalf of the parties. Comments: The buyer applies for registration with the RD. The following internal steps take place after the application is submitted: Procedure 2. Obtain certified true copy of latest tax declaration 1. The Entry clerk receives and enters all documents in the primary Entry Book from the City Assessor’s Office (CAO) (Judicial form No. 39) and notes therein the day, hour and minute of reception Time: 1 day of all instrument in the order in which they are received. Cost: PHP 160 (PHP 50 per real property unit (RPU) + PHP 30 per loose documentary 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- stamp) signment. Comments: The seller obtains a certified true copy of the latest tax declaration from 3. Documents/titles are assigned by the RD to the Land Registration Examiner the CAO. (LRE) who prepares computation and order of payment of registration fees. 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Procedure 3. Pay documentary stamp tax and capital gains tax at are computed based on a schedule of fees approved by the Department of an authorized agent bank (AAB) Justice. Time: 1 day 5. Upon the payment of the fees, the document is forwarded to the LRE who reviews the same and determines whether or not it is ready to register. The Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital owner’s copy of the title is compared to the title on file, produced by Records gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not Officer/Vault keeper. included in the cost reflected) 6. If the instrument is not ready to be registered, the LRE recommends its denial Comments: The seller files the documentary stamp tax return and capital gains to the RD. If the instrument is ready, the LRE likewise recommends to the RD tax return with the AAB. This is done within 5 days after the close of the month the registration of the document through a routing slip. when the taxable document was signed or within 30 days after the sale, whichever is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains 7. RD reviews examination, and once same is approved, assigns documents to tax is 6.0% of capital gains based on selling price, fair market value or zonal value, clerk for action, with instruction on the route slip. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair 8. If the transaction involves issuance of title, Records Officer/Judicial Form market value, whichever is higher. Custodian records the transaction in the logbook releases sets of title forms The documentation shall include: (judicial form) and assigns the corresponding title control number to the set of titles issued to the action clerk. a. Original copy and photocopy of notarized deed of sale (obtained in procedure 1) 9. Assigned employee acts on the documents, as instructed. b. Certified true copy of transfer certificate of title (in the name of seller 10. Final registration – RD signs titles and documents. c. Certified true copy of latest tax declaration (in the name of seller) (obtained in 11. Release of documents – by the releasing clerk to the buyer who should be procedure 2). ready with ID and copies of official receipts of the registration fees. The documentation shall include: Procedure 4. Obtain certificate authorizing registration (CAR) a. Articles of incorporation and bylaws of the buyer from the Bureau of Internal Revenue (BIR) b. Secretary’s certificate containing the resolution of the board of directors of Time: 14 days buyer approving the sale Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Comments: After paying the taxes in procedure 3, the seller must obtain a tax of seller) clearance (or certificate authorizing registration) from the BIR. This certificate will d. Certificate authorizing registration from the BIR (obtained in procedure 4) authorize the registration of the property. e. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: f. Official receipt of transfer tax payment (obtained in procedure 6) a. Certified true copy of transfer certificate of title (in the name of seller /original g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) certificate of title (OCT)) (obtained in procedure 3). b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) Procedure 8. Apply with the CAO for the issuance of a new tax c. Tax identification numbers. declaration over the building and the land in the name of buyer d. Notarized deed of absolute sale, but only photocopy shall be retained by the Time: 1 day BIR. Cost: PHP 50 (PHP 50 per transfer regardless of the number of RPU) Comments: The buyer applies with the CAO for the issuance of a new tax declara- Procedure 5. Obtain tax clearance certificate of real estate taxes tion over the building in his name. from the City Treasurer’s Office (CTO) The documentation shall include: Time: 1 day a. Photocopy of notarized deed of sale (obtained in procedure 1) Cost: PHP 30 b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Comments: The seller, after paying any due amounts, obtains a tax clearance procedure 2) certificate from the CTO. c. Certificate authorizing registration from the BIR (obtained in procedure 4) The documentation shall include: an original of the official receipt evidencing pay- d. Realty tax clearance from the CTO (obtained in procedure 5) ment by seller of realty taxes. 114 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 6. Pay the transfer tax at the CTO e. Photocopy of official receipt of transfer tax payment (original copy to be Time: 2 days presented) (obtained in procedure 6) Cost: PHP 18,217 (0.5% of property price) f. The TCT issued by the RD (in the name of the buyer). Comments: The documentation shall include: REGISTERING PROPERTY a. Certificate authorizing registration from the BIR (obtained in procedure 4) Parañaque b. Realty tax clearance from the CTO (obtained in procedure 5) Property value: USD 71,006 = PHP 3,643,315 c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Date as of: December 2007 4). Procedure 1. Prepare the deed of sale and ratify it by the notary Procedure 7. Secure registration with the Registry of Deeds (RD) Time: 1 day 10 days Time: Cost: PHP 72,866 (1–3% of property value) PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: Comments: Anyone can prepare the document, however, the deed of sale must be 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 ratified before the notary public and it is common for him to draft it and conduct the registry entry fee + PHP 60 transfer certificate of title) whole process on behalf of the parties. Comments: The buyer applies for registration with the RD. The following internal steps take place after the application is submitted: Procedure 2. Obtain certified true copy of latest tax declaration 1. The Entry clerk receives and enters all documents in the primary Entry Book from the City Assessor’s Office (CAO) (Judicial form No. 39) and notes therein the day, hour and minute of reception Time: 1 day of all instrument in the order in which they are received. Cost: PHP 100 (PHP 50 per real property unit (RPU), loose documentary stamp not 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- required) signment. Comments: The seller obtains a certified true copy of the latest tax declaration from 3. Documents/titles are assigned by the RD to the Land Registration Examiner the CAO. (LRE) who prepares computation and order of payment of registration fees. 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Procedure 3. Pay documentary stamp tax and capital gains tax at are computed based on a schedule of fees approved by the Department of an authorized agent bank (AAB) Justice. Time: 1 day 5. Upon the payment of the fees, the document is forwarded to the LRE who reviews the same and determines whether or not it is ready to register. The Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital owner’s copy of the title is compared to the title on file, produced by Records gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not Officer/Vault keeper. included in the cost reflected) 6. If the instrument is not ready to be registered, the LRE recommends its denial Comments: The seller files the documentary stamp tax return and capital gains to the RD. If the instrument is ready, the LRE likewise recommends to the RD tax return with the AAB. This is done within 5 days after the close of the month the registration of the document through a routing slip. when the taxable document was signed or within 30 days after the sale, whichever is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains 7. RD reviews examination, and once same is approved, assigns documents to tax is 6.0% of capital gains based on selling price, fair market value or zonal value, clerk for action, with instruction on the route slip. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair 8. If the transaction involves issuance of title, Records Officer/Judicial Form market value, whichever is higher. Custodian records the transaction in the logbook releases sets of title forms The documentation shall include: (judicial form) and assigns the corresponding title control number to the set of titles issued to the action clerk. a. Original copy and photocopy of notarized deed of sale (obtained in procedure 1) 9. Assigned employee acts on the documents, as instructed. b. Certified true copy of transfer certificate of title (in the name of seller) 10. Final registration – RD signs titles and documents. c. Certified true copy of latest tax declaration (in the name of seller) (obtained in 11. Release of documents – by the releasing clerk to the buyer who should be procedure 2). ready with ID and copies of official receipts of the registration fees. The documentation shall include: Procedure 4. Obtain certificate authorizing registration (CAR) a. Articles of incorporation and bylaws of the buyer from the Bureau of Internal Revenue (BIR) b. Secretary’s certificate containing the resolution of the board of directors of Time: 5 days buyer approving the sale Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Comments: After paying the taxes in procedure 3, the seller must obtain a tax of seller) clearance (or certificate authorizing registration) from the BIR. This certificate will d. Certificate authorizing registration from the BIR (obtained in procedure 4) authorize the registration of the property. e. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: f. Official receipt of transfer tax payment (obtained in procedure 6) a. Certified true copy of transfer certificate of title (in the name of seller /original g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) certificate of title (OCT)) (obtained in procedure 3). b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) Procedure 8. Apply with the CAO for the issuance of a new tax c. Tax identification numbers. declaration over the building and the land in the name of buyer d. Notarized deed of absolute sale, but only photocopy shall be retained by the Time: 1 day BIR. Cost: PHP 230 (PHP 100 per RPU + PHP 30 for certified true copy) Comments: The buyer applies with the CAO for the issuance of a new tax declara- Procedure 5. Obtain tax clearance certificate of real estate taxes tion over the building in his name. from the City Treasurer’s Office (CTO) The documentation shall include: Time: 1 day a. Photocopy of notarized deed of sale (obtained in procedure 1) Cost: PHP 50 b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Comments: The seller, after paying any due amounts, obtains a tax clearance procedure 2) certificate from the CTO. c. Certificate authorizing registration from the BIR (obtained in procedure 4) The documentation shall include: an original of the official receipt evidencing pay- d. Realty tax clearance from the CTO (obtained in procedure 5) ment by seller of realty taxes.  -*450'130$&%63&4t3&(*45&3*/(1301&35: 115

Procedure 6. Pay the transfer tax at the CTO e. Photocopy of official receipt of transfer tax payment (original copy to be Time: 1 day presented) (obtained in procedure 6) Cost: PHP 18,217 (0.5% of property price) f. The TCT issued by the RD (in the name of the buyer). Comments: The documentation shall include: REGISTERING PROPERTY a. Certificate authorizing registration from the BIR (obtained in procedure 4) Pasay b. Realty tax clearance from the CTO (obtained in procedure 5) Property value: USD 71,006 = PHP 3,643,315 c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Date as of: December 2007 4). Procedure 1. Prepare the deed of sale and ratify it by the notary Procedure 7. Secure registration with the Registry of Deeds (RD) Time: 1 day 14 days Time: Cost: PHP 72,866 (1–3% of property value) PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: Comments: Anyone can prepare the document, however, the deed of sale must be 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 ratified before the notary public and it is common for him to draft it and conduct the registry entry fee + PHP 60 transfer certificate of title) whole process on behalf of the parties. Comments: The buyer applies for registration with the RD. The following internal steps take place after the application is submitted: Procedure 2. Obtain certified true copy of latest tax declaration 1. The Entry clerk receives and enters all documents in the primary Entry Book from the City Assessor’s Office (CAO) (Judicial form No. 39) and notes therein the day, hour and minute of reception Time: 1 day of all instrument in the order in which they are received. Cost: PHP 120 (PHP 40 per per real property unit(RPU) + PHP 20 per loose documen- 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- tary stamp) signment. Comments: The seller obtains a certified true copy of the latest tax declaration from 3. Documents/titles are assigned by the RD to the Land Registration Examiner the CAO. (LRE) who prepares computation and order of payment of registration fees. 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Procedure 3. Pay documentary stamp tax and capital gains tax at are computed based on a schedule of fees approved by the Department of an authorized agent bank (AAB) Justice. Time: 1 day 5. Upon the payment of the fees, the document is forwarded to the LRE who reviews the same and determines whether or not it is ready to register. The Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital owner’s copy of the title is compared to the title on file, produced by Records gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not Officer/Vault keeper. included in the cost reflected) 6. If the instrument is not ready to be registered, the LRE recommends its denial Comments: The seller files the documentary stamp tax return and capital gains to the RD. If the instrument is ready, the LRE likewise recommends to the RD tax return with the AAB. This is done within 5 days after the close of the month the registration of the document through a routing slip. when the taxable document was signed or within 30 days after the sale, whichever is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains 7. RD reviews examination, and once same is approved, assigns documents to tax is 6.0% of capital gains based on selling price, fair market value or zonal value, clerk for action, with instruction on the route slip. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair 8. If the transaction involves issuance of title, Records Officer/Judicial Form market value, whichever is higher. Custodian records the transaction in the logbook releases sets of title forms The documentation shall include: (judicial form) and assigns the corresponding title control number to the set of titles issued to the action clerk. a. Original copy and photocopy of notarized deed of sale (obtained in procedure 1) 9. Assigned employee acts on the documents, as instructed. b. Certified true copy of transfer certificate of title (in the name of seller) 10. Final registration – RD signs titles and documents. c. Certified true copy of latest tax declaration (in the name of seller) (obtained in 11. Release of documents – by the releasing clerk to the buyer who should be procedure 2). ready with ID and copies of official receipts of the registration fees. The documentation shall include: Procedure 4. Obtain certificate authorizing registration (CAR) a. Articles of incorporation and bylaws of the buyer from the Bureau of Internal Revenue (BIR) b. Secretary’s certificate containing the resolution of the board of directors of Time: 14 days buyer approving the sale Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Comments: After paying the taxes in procedure 3, the seller must obtain a tax of seller) clearance (or certificate authorizing registration) from the BIR. This certificate will d. Certificate authorizing registration from the BIR (obtained in procedure 4) authorize the registration of the property. e. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: f. Official receipt of transfer tax payment (obtained in procedure 6) a. Certified true copy of transfer certificate of title (in the name of seller /original g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) certificate of title (OCT)) (obtained in procedure 3). b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) Procedure 8. Apply with the CAO for the issuance of a new tax c. Tax identification numbers. declaration over the building and the land in the name of buyer d. Notarized deed of absolute sale, but only photocopy shall be retained by the Time: 3 days BIR. Cost: PHP 200 (PHP 100 per RPU) Comments: The buyer applies with the CAO for the issuance of a new tax declaration Procedure 5. Obtain tax clearance certificate of real estate taxes over the building in his name. This procedure includes an inspection in Parañaque. from the City Treasurer’s Office (CTO) The documentation shall include: Time: 1 day a. Photocopy of notarized deed of sale (obtained in procedure 1) Cost: PHP 40 b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Comments: The seller, after paying any due amounts, obtains a tax clearance procedure 2) certificate from the CTO. c. Certificate authorizing registration from the BIR (obtained in procedure 4) The documentation shall include: an original of the official receipt evidencing pay- d. Realty tax clearance from the CTO (obtained in procedure 5) ment by seller of realty taxes. 116 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 6. Pay the transfer tax at the CTO e. Photocopy of official receipt of transfer tax payment (original copy to be Time: 1 day presented) (obtained in procedure 6) Cost: PHP 27,325 (0.75% of property price) f. The TCT issued by the RD (in the name of the buyer). Comments: The documentation shall include: REGISTERING PROPERTY a. Certificate authorizing registration from the BIR (obtained in procedure 4) Pasig b. Realty tax clearance from the CTO (obtained in procedure 5) Property value: USD 71,006 = PHP 3,643,315 c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Date as of: December 2007 4). Procedure 1. Prepare the deed of sale and ratify it by the notary Procedure 7. Secure registration with the Registry of Deeds (RD) Time: 1 day 10 days Time: Cost: PHP 72,866 (1–3% of property value) PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: Comments: Anyone can prepare the document, however, the deed of sale must be 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 ratified before the notary public and it is common for him to draft it and conduct the registry entry fee + PHP 60 transfer certificate of title) whole process on behalf of the parties. Comments: The buyer applies for registration with the RD. The following internal steps take place after the application is submitted: Procedure 2. Obtain certified true copy of latest tax declaration 1. The Entry clerk receives and enters all documents in the primary Entry Book from the City Assessor’s Office (CAO) (Judicial form No. 39) and notes therein the day, hour and minute of reception Time: 1 day of all instrument in the order in which they are received. Cost: PHP 100 (PHP 30 per real property unit (RPU) + PHP 20 per loose documentary 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- stamp) signment. Comments: The seller obtains a certified true copy of the latest tax declaration from 3. Documents/titles are assigned by the RD to the Land Registration Examiner the CAO. (LRE) who prepares computation and order of payment of registration fees. 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Procedure 3. Pay documentary stamp tax and capital gains tax at are computed based on a schedule of fees approved by the Department of an authorized agent bank (AAB) Justice. Time: 1 day 5. Upon the payment of the fees, the document is forwarded to the LRE who reviews the same and determines whether or not it is ready to register. The Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital owner’s copy of the title is compared to the title on file, produced by Records gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not Officer/Vault keeper. included in the cost reflected) 6. If the instrument is not ready to be registered, the LRE recommends its denial Comments: The seller files the documentary stamp tax return and capital gains to the RD. If the instrument is ready, the LRE likewise recommends to the RD tax return with the AAB. This is done within 5 days after the close of the month the registration of the document through a routing slip. when the taxable document was signed or within 30 days after the sale, whichever is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains 7. RD reviews examination, and once same is approved, assigns documents to tax is 6.0% of capital gains based on selling price, fair market value or zonal value, clerk for action, with instruction on the route slip. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair 8. If the transaction involves issuance of title, Records Officer/Judicial Form market value, whichever is higher. Custodian records the transaction in the logbook releases sets of title forms The documentation shall include: (judicial form) and assigns the corresponding title control number to the set of titles issued to the action clerk. a. Original copy and photocopy of notarized deed of sale (obtained in procedure 1) 9. Assigned employee acts on the documents, as instructed. b. Certified true copy of transfer certificate of title (in the name of seller) 10. Final registration – RD signs titles and documents. c. Certified true copy of latest tax declaration (in the name of seller) (obtained in 11. Release of documents – by the releasing clerk to the buyer who should be procedure 2). ready with ID and copies of official receipts of the registration fees. The documentation shall include: Procedure 4. Obtain certificate authorizing registration (CAR) a. Articles of incorporation and bylaws of the buyer from the Bureau of Internal Revenue (BIR) b. Secretary’s certificate containing the resolution of the board of directors of Time: 14 days buyer approving the sale Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Comments: After paying the taxes in procedure 3, the seller must obtain a tax of seller) clearance (or certificate authorizing registration) from the BIR. This certificate will d. Certificate authorizing registration from the BIR (obtained in procedure 4) authorize the registration of the property. e. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: f. Official receipt of transfer tax payment (obtained in procedure 6) a. Certified true copy of transfer certificate of title (in the name of seller/original g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) certificate of title (OCT)) (obtained in procedure 3). b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) Procedure 8. Apply with the CAO for the issuance of a new tax c. Tax identification numbers. declaration over the building and the land in the name of buyer d. Notarized deed of absolute sale, but only photocopy shall be retained by the Time: 3 days BIR. Cost: No cost Comments: The buyer applies with the CAO for the issuance of a new tax declaration Procedure 5. Obtain tax clearance certificate of real estate taxes over the building in his name. This procedure includes an inspection in Pasay. from the City Treasurer’s Office (CTO) The documentation shall include: Time: 1 day a. Photocopy of notarized deed of sale (obtained in procedure 1) Cost: PHP 50 b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Comments: The seller, after paying any due amounts, obtains a tax clearance procedure 2) certificate from the CTO. c. Certificate authorizing registration from the BIR (obtained in procedure 4) The documentation shall include: an original of the official receipt evidencing pay- d. Realty tax clearance from the CTO (obtained in procedure 5) ment by seller of realty taxes.  -*450'130$&%63&4t3&(*45&3*/(1301&35: 117

Procedure 6. Pay the transfer tax at the CTO e. Photocopy of official receipt of transfer tax payment (original copy to be Time: 1 day presented) (obtained in procedure 6) Cost: PHP 18,217 (0.5% of property price) f. The TCT issued by the RD (in the name of the buyer). Comments: The documentation shall include: REGISTERING PROPERTY a. Certificate authorizing registration from the BIR (obtained in procedure 4) Quezon City b. Realty tax clearance from the CTO (obtained in procedure 5) Property value: USD 71,006 = PHP 3,643,315 c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Date as of: December 2007 4). Procedure 1. Prepare the deed of sale and ratify it by the notary Procedure 7. Secure registration with the Registry of Deeds (RD) Time: 1 day 10 days Time: Cost: PHP 72,866 (1–3% of property value) PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: Comments: Anyone can prepare the document, however, the deed of sale must be 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 ratified before the notary public and it is common for him to draft it and conduct the registry entry fee + PHP 60 transfer certificate of title) whole process on behalf of the parties. Comments: The buyer applies for registration with the RD. The following internal steps take place after the application is submitted: Procedure 2. Obtain certified true copy of latest tax declaration 1. The Entry clerk receives and enters all documents in the primary Entry Book from the City Assessor’s Office (CAO) (Judicial form No. 39) and notes therein the day, hour and minute of reception Time: 1 day of all instrument in the order in which they are received. Cost: PHP 100 (PHP 50 per real property unit (Real Property Unit), loose documen- 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- tary stamp not required) signment. Comments: The seller obtains a certified true copy of the latest tax declaration from 3. Documents/titles are assigned by the RD to the Land Registration Examiner the CAO. (LRE) who prepares computation and order of payment of registration fees. 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Procedure 3. Pay documentary stamp tax and capital gains tax at are computed based on a schedule of fees approved by the Department of an authorized agent bank (AAB) Justice. Time: 1 day 5. Upon the payment of the fees, the document is forwarded to the LRE who reviews the same and determines whether or not it is ready to register. The Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital owner’s copy of the title is compared to the title on file, produced by Records gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not Officer/Vault keeper. included in the cost reflected) 6. If the instrument is not ready to be registered, the LRE recommends its denial Comments: The seller files the documentary stamp tax return and capital gains to the RD. If the instrument is ready, the LRE likewise recommends to the RD tax return with the AAB. This is done within 5 days after the close of the month the registration of the document through a routing slip. when the taxable document was signed or within 30 days after the sale, whichever is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains 7. RD reviews examination, and once same is approved, assigns documents to tax is 6.0% of capital gains based on selling price, fair market value or zonal value, clerk for action, with instruction on the route slip. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair 8. If the transaction involves issuance of title, Records Officer/Judicial Form market value, whichever is higher. Custodian records the transaction in the logbook releases sets of title forms The documentation shall include: (judicial form) and assigns the corresponding title control number to the set of titles issued to the action clerk. a. Original copy and photocopy of notarized deed of sale (obtained in procedure 1) 9. Assigned employee acts on the documents, as instructed. b. Certified true copy of transfer certificate of title (in the name of seller) 10. Final registration – RD signs titles and documents. c. Certified true copy of latest tax declaration (in the name of seller) (obtained in 11. Release of documents – by the releasing clerk to the buyer who should be procedure 2). ready with ID and copies of official receipts of the registration fees. The documentation shall include: Procedure 4. Obtain certificate authorizing registration (CAR) a. Articles of incorporation and bylaws of the buyer from the Bureau of Internal Revenue (BIR) b. Secretary’s certificate containing the resolution of the board of directors of Time: 21 days buyer approving the sale Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Comments: After paying the taxes in procedure 3, the seller must obtain a tax of seller) clearance (or certificate authorizing registration) from the BIR. This certificate will d. Certificate authorizing registration from the BIR (obtained in procedure 4) authorize the registration of the property. e. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: f. Official receipt of transfer tax payment (obtained in procedure 6) a. Certified true copy of transfer certificate of title (in the name of seller/original g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) certificate of title (OCT)) (obtained in procedure 3). b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) Procedure 8. Apply with the CAO for the issuance of a new tax c. Tax identification numbers. declaration over the building and the land in the name of buyer d. Notarized deed of absolute sale, but only photocopy shall be retained by the Time: 1 day BIR. Cost: PHP 200 (PHP 100 per RPU) Comments: The buyer applies with the CAO for the issuance of a new tax declara- Procedure 5. Obtain tax clearance certificate of real estate taxes tion over the building in his name. from the City Treasurer’s Office (CTO) The documentation shall include: Time: 2 days a. Photocopy of notarized deed of sale (obtained in procedure 1) Cost: PHP 50 b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Comments: The seller, after paying any due amounts, obtains a tax clearance procedure 2) certificate from the CTO. c. Certificate authorizing registration from the BIR (obtained in procedure 4) The documentation shall include: an original of the official receipt evidencing pay- d. Realty tax clearance from the CTO (obtained in procedure 5) ment by seller of realty taxes. 118 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 6. Pay the transfer tax at the CTO e. Photocopy of official receipt of transfer tax payment (original copy to be Time: 1 day presented) (obtained in procedure 6) Cost: PHP 27,325 (0.75% of property price) f. The TCT issued by the RD (in the name of the buyer). Comments: The documentation shall include: REGISTERING PROPERTY a. Certificate authorizing registration from the BIR (obtained in procedure 4) San Juan b. Realty tax clearance from the CTO (obtained in procedure 5) Property value: USD 71,006 = PHP 3,643,315 c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Date as of: December 2007 4). Procedure 1. Prepare the deed of sale and ratify it by the notary Procedure 7. Secure registration with the Registry of Deeds (RD) Time: 1 day 10 days Time: Cost: PHP 72,866 (1–3% of property value) PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: Comments: Anyone can prepare the document, however, the deed of sale must be 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 ratified before the notary public and it is common for him to draft it and conduct the registry entry fee + PHP 60 transfer certificate of title) whole process on behalf of the parties. Comments: The buyer applies for registration with the RD. The following internal steps take place after the application is submitted: Procedure 2. Obtain certified true copy of latest tax declaration 1. The Entry clerk receives and enters all documents in the primary Entry Book from the City Assessor’s Office (CAO) (Judicial form No. 39) and notes therein the day, hour and minute of reception Time: 1 day of all instrument in the order in which they are received. Cost: PHP 60 (PHP 30 per real property unit(RPU), loose documentary stamp not 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- required) signment. Comments: The seller obtains a certified true copy of the latest tax declaration from 3. Documents/titles are assigned by the RD to the Land Registration Examiner the CAO. (LRE) who prepares computation and order of payment of registration fees. 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Procedure 3. Pay documentary stamp tax and capital gains tax at are computed based on a schedule of fees approved by the Department of an authorized agent bank (AAB) Justice. Time: 1 day 5. Upon the payment of the fees, the document is forwarded to the LRE who reviews the same and determines whether or not it is ready to register. The Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital owner’s copy of the title is compared to the title on file, produced by Records gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not Officer/Vault keeper. included in the cost reflected) 6. If the instrument is not ready to be registered, the LRE recommends its denial Comments: The seller files the documentary stamp tax return and capital gains to the RD. If the instrument is ready, the LRE likewise recommends to the RD tax return with the AAB. This is done within 5 days after the close of the month the registration of the document through a routing slip. when the taxable document was signed or within 30 days after the sale, whichever is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains 7. RD reviews examination, and once same is approved, assigns documents to tax is 6.0% of capital gains based on selling price, fair market value or zonal value, clerk for action, with instruction on the route slip. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair 8. If the transaction involves issuance of title, Records Officer/Judicial Form market value, whichever is higher. Custodian records the transaction in the logbook releases sets of title forms The documentation shall include: (judicial form) and assigns the corresponding title control number to the set of titles issued to the action clerk. a. Original copy and photocopy of notarized deed of sale (obtained in procedure 1) 9. Assigned employee acts on the documents, as instructed. b. Certified true copy of transfer certificate of title (in the name of seller) 10. Final registration – RD signs titles and documents. c. Certified true copy of latest tax declaration (in the name of seller) (obtained in 11. Release of documents – by the releasing clerk to the buyer who should be procedure 2). ready with ID and copies of official receipts of the registration fees. The documentation shall include: Procedure 4. Obtain certificate authorizing registration (CAR) a. Articles of incorporation and bylaws of the buyer from the Bureau of Internal Revenue (BIR) b. Secretary’s certificate containing the resolution of the board of directors of Time: 14 days buyer approving the sale Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Comments: After paying the taxes in procedure 3, the seller must obtain a tax of seller) clearance (or certificate authorizing registration) from the BIR. This certificate will d. Certificate authorizing registration from the BIR (obtained in procedure 4) authorize the registration of the property. e. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: f. Official receipt of transfer tax payment (obtained in procedure 6) a. Certified true copy of transfer certificate of title (in the name of seller /original g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) certificate of title (OCT)) (obtained in procedure 3). b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) Procedure 8. Apply with the CAO for the issuance of a new tax c. Tax identification numbers. declaration over the building and the land in the name of buyer d. Notarized deed of absolute sale, but only photocopy shall be retained by the Time: 2 days BIR. Cost: PHP 100 (PHP 50 per RPU) Comments: The buyer applies with the CAO for the issuance of a new tax declaration Procedure 5. Obtain tax clearance certificate of real estate taxes over the building in his name. This procedure includes an inspection in Quezon City. from the City Treasurer’s Office (CTO) The documentation shall include: Time: 2 days a. Photocopy of notarized deed of sale (obtained in procedure 1) Cost: PHP 50 b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Comments: The seller, after paying any due amounts, obtains a tax clearance procedure 2) certificate from the CTO. c. Certificate authorizing registration from the BIR (obtained in procedure 4) The documentation shall include: an original of the official receipt evidencing pay- d. Realty tax clearance from the CTO (obtained in procedure 5) ment by seller of realty taxes.  -*450'130$&%63&4t3&(*45&3*/(1301&35: 119

Procedure 6. Pay the transfer tax at the CTO e. Photocopy of official receipt of transfer tax payment (original copy to be Time: 1 day presented) (obtained in procedure 6) Cost: PHP 18,217 (0.5% of property price) f. The TCT issued by the RD (in the name of the buyer). Comments: The documentation shall include: REGISTERING PROPERTY a. Certificate authorizing registration from the BIR (obtained in procedure 4) Taguig b. Realty tax clearance from the CTO (obtained in procedure 5) Property value: USD 71,006 = PHP 3,643,315 c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Date as of: December 2007 4). Procedure 1. Prepare the deed of sale and ratify it by the notary Procedure 7. Secure registration with the Registry of Deeds (RD) Time: 1 day 3 days Time: Cost: PHP 72,866 (1–3% of property value) PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: Comments: Anyone can prepare the document, however, the deed of sale must be 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 ratified before the notary public and it is common for him to draft it and conduct the registry entry fee + PHP 60 transfer certificate of title) whole process on behalf of the parties. Comments: The buyer applies for registration with the RD. The following internal steps take place after the application is submitted: Procedure 2. Obtain tax clearance certificate of real estate taxes 1. The Entry clerk receives and enters all documents in the primary Entry Book from the City Treasurer’s Office (CTO) (Judicial form No. 39) and notes therein the day, hour and minute of reception Time: 1 day of all instrument in the order in which they are received. Cost: PHP 50 (PHP 10 per real property unit (RPU)+ PHP 30 per loose documentary 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- stamp) signment. Comments: The seller, after paying any due amounts, obtains a tax clearance 3. Documents/titles are assigned by the RD to the Land Registration Examiner certificate from the CTO. (LRE) who prepares computation and order of payment of registration fees. The documentation shall include: an original of the official receipt evidencing pay- 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees ment by seller of realty taxes. are computed based on a schedule of fees approved by the Department of Justice. Procedure 3. Obtain certified true copy of latest tax declaration 5. Upon the payment of the fees, the document is forwarded to the LRE who from the City Assessor’s Office (CAO) reviews the same and determines whether or not it is ready to register. The Time: 1 day owner’s copy of the title is compared to the title on file, produced by Records Officer/Vault keeper. Cost: PHP 80 (1.5% of property value (documentary stamp tax) + 6.0% of capital gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not 6. If the instrument is not ready to be registered, the LRE recommends its denial included in the cost reflected) to the RD. If the instrument is ready, the LRE likewise recommends to the RD the registration of the document through a routing slip. Comments: The seller obtains a certified true copy of the latest tax declaration from the CAO. 7. RD reviews examination, and once same is approved, assigns documents to clerk for action, with instruction on the route slip. Procedure 4. Pay documentary stamp tax and capital gains tax at 8. If the transaction involves issuance of title, Records Officer/Judicial Form an authorized agent bank (AAB) Custodian records the transaction in the logbook releases sets of title forms (judicial form) and assigns the corresponding title control number to the set Time: 1days of titles issued to the action clerk. Cost: PHP 54,650 (PHP 100 + PHP 15 documentary stamp) 9. Assigned employee acts on the documents, as instructed. Comments: The seller files the documentary stamp tax return and capital gains 10. Final registration – RD signs titles and documents. tax return with the AAB. This is done within 5 days after the close of the month when the taxable document was signed or within 30 days after the sale, whichever 11. Release of documents – by the releasing clerk to the buyer who should be is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains ready with ID and copies of official receipts of the registration fees. tax is 6.0% of capital gains based on selling price, fair market value or zonal value, The documentation shall include: whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair a. Articles of incorporation and bylaws of the buyer market value, whichever is higher. b. Secretary’s certificate containing the resolution of the board of directors of The documentation shall include: buyer approving the sale a. Original copy and photocopy of notarized deed of sale (obtained in procedure c. Original copy of owner’s duplicate of the transfer certificate of title (in the name 1) of seller) b. Certified true copy of transfer certificate of title (in the name of seller) d. Certificate authorizing registration from the BIR (obtained in procedure 4) c. Certified true copy of latest tax declaration (in the name of seller) (obtained in e. Realty tax clearance from the CTO (obtained in procedure 5) procedure 3). f. Official receipt of transfer tax payment (obtained in procedure 6) g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) Procedure 5. Obtain certificate authorizing registration (CAR) (obtained in procedure 3). from the Bureau of Internal Revenue (BIR) Time: 14 days Procedure 8. Apply with the CAO for the issuance of a new tax Cost: PHP 115 declaration over the building and the land in the name of buyer Comments: After paying the taxes in procedure 3, the seller must obtain a tax Time: 3 days clearance (or certificate authorizing registration) from the BIR. This certificate will Cost: PHP 200 (PHP 100 per RPU) authorize the registration of the property. Comments: The buyer applies with the CAO for the issuance of a new tax declara- The documentation shall include: tion over the building in his name. This procedure includes an inspection in San Juan. a. Certified true copy of transfer certificate of title in the name of seller/ original The documentation shall include: certificate of title (OCT) a. Photocopy of notarized deed of sale (obtained in procedure 1) b. Certified true copy of latest tax declaration in the name of seller (obtained in procedure 3) b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) c. Tax identification numbers. c. Certificate authorizing registration from the BIR (obtained in procedure 4) d. Notarized deed of absolute sale, but only photocopy shall be retained by the BIR. d. Realty tax clearance from the CTO (obtained in procedure 5) 120 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 6. Pay the transfer tax at the CTO e. Photocopy of official receipt of transfer tax payment (original copy to be Time: 1 day presented) (obtained in procedure 6) Cost: PHP 18,217 (0.5% of property price) f. The TCT issued by the RD (in the name of the buyer). Comments: The documentation shall include: REGISTERING PROPERTY a. Certificate authorizing registration from the BIR (obtained in procedure 4) Tanauan b. Realty tax clearance from the CTO (obtained in procedure 5) Property value: USD 71,006 = PHP 3,643,315 c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Date as of: December 2007 4). Procedure 1. Prepare the deed of sale and ratify it by the notary Procedure 7. Secure registration with the Registry of Deeds (RD) Time: 1 day 10 days Time: Cost: PHP 36,433 (1% of property value) PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: Comments: Anyone can prepare the document, however, the deed of sale must be 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 ratified before the notary public and it is common for him to draft it and conduct the registry entry fee + PHP 60 transfer certificate of title) whole process on behalf of the parties. Comments: The buyer applies for registration with the RD. The following internal steps take place after the application is submitted: Procedure 2. Obtain certified true copy of latest tax declaration 1. The Entry clerk receives and enters all documents in the primary Entry Book from the City Assessor’s Office (CAO) (Judicial form No. 39) and notes therein the day, hour and minute of reception Time: 1 day of all instrument in the order in which they are received. Cost: PHP 40 (PHP 20 per real property unit (RPU), loose documentary stamp not 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- required) signment. Comments: The seller obtains a certified true copy of the latest tax declaration from 3. Documents/titles are assigned by the RD to the Land Registration Examiner the CAO. (LRE) who prepares computation and order of payment of registration fees. 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Procedure 3. Pay documentary stamp tax and capital gains tax at are computed based on a schedule of fees approved by the Department of an authorized agent bank (AAB) Justice. Time: 1 day 5. Upon the payment of the fees, the document is forwarded to the LRE who reviews the same and determines whether or not it is ready to register. The Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital owner’s copy of the title is compared to the title on file, produced by Records gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not Officer/Vault keeper. included in the cost reflected) 6. If the instrument is not ready to be registered, the LRE recommends its denial Comments: The seller files the documentary stamp tax return and capital gains to the RD. If the instrument is ready, the LRE likewise recommends to the RD tax return with the AAB. This is done within 5 days after the close of the month the registration of the document through a routing slip. when the taxable document was signed or within 30 days after the sale, whichever is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains 7. RD reviews examination, and once same is approved, assigns documents to tax is 6.0% of capital gains based on selling price, fair market value or zonal value, clerk for action, with instruction on the route slip. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair 8. If the transaction involves issuance of title, Records Officer/Judicial Form market value, whichever is higher. Custodian records the transaction in the logbook releases sets of title forms The documentation shall include: (judicial form) and assigns the corresponding title control number to the set of titles issued to the action clerk. a. Original copy and photocopy of notarized deed of sale (obtained in procedure 1) 9. Assigned employee acts on the documents, as instructed. b. Certified true copy of transfer certificate of title (in the name of seller) 10. Final registration – RD signs titles and documents. c. Certified true copy of latest tax declaration (in the name of seller) (obtained in 11. Release of documents – by the releasing clerk to the buyer who should be procedure 2). ready with ID and copies of official receipts of the registration fees. The documentation shall include: Procedure 4. Obtain certificate authorizing registration (CAR) a. Articles of incorporation and bylaws of the buyer from the Bureau of Internal Revenue (BIR) b. Secretary’s certificate containing the resolution of the board of directors of Time: 14 days buyer approving the sale Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Comments: After paying the taxes in procedure 3, the seller must obtain a tax of seller) clearance (or certificate authorizing registration) from the BIR. This certificate will d. Certificate authorizing registration from the BIR (obtained in procedure 4) authorize the registration of the property. e. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: f. Official receipt of transfer tax payment (obtained in procedure 6) a. Certified true copy of transfer certificate of title (in the name of seller/original g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) certificate of title (OCT)) (obtained in procedure 3). b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) Procedure 8. Apply with the CAO for the issuance of a new tax c. Tax identification numbers. declaration over the building and the land in the name of buyer d. Notarized deed of absolute sale, but only photocopy shall be retained by the Time: 3 days BIR. Cost: PHP 250 (PHP 125 per RPU) Comments: The buyer applies with the CAO for the issuance of a new tax declaration Procedure 5. Obtain tax clearance certificate of real estate taxes over the building in his name. This procedure includes an inspection in Taguig. from the City Treasurer’s Office (CTO) The documentation shall include: Time: 2 days a. Photocopy of notarized deed of sale (obtained in procedure 1) Cost: PHP 20 b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Comments: The seller, after paying any due amounts, obtains a tax clearance certifi- procedure 2) cate from the Treasurer’s Office of the Local Government Unit (Tanauan). c. Certificate authorizing registration from the BIR (obtained in procedure 4) The documentation shall include: an original of the official receipt evidencing pay- d. Realty tax clearance from the CTO (obtained in procedure 5) ment by seller of realty taxes.  -*450'130$&%63&4t3&(*45&3*/(1301&35: 121

Procedure 6. Pay the transfer tax at the CTO e. Photocopy of official receipt of transfer tax payment (original copy to be Time: 1 day presented) (obtained in procedure 6) Cost: PHP 18,217 (0.5% of property price) f. The TCT issued by the RD (in the name of the buyer). Comments: The documentation shall include: REGISTERING PROPERTY a. Certificate authorizing registration from the BIR (obtained in procedure 4) Valenzuela b. Realty tax clearance from the CTO (obtained in procedure 5) Property value: USD 71,006 = PHP 3,643,315 c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure Date as of: December 2007 4). Procedure 1. Prepare the deed of sale and ratify it by the notary Procedure 7. Secure registration with the Registry of Deeds (RD) Time: 1 day 10 days Time: Cost: PHP 72,866 (1–3% of property value) PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP Cost: Comments: Anyone can prepare the document, however, the deed of sale must be 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 ratified before the notary public and it is common for him to draft it and conduct the registry entry fee + PHP 60 transfer certificate of title) whole process on behalf of the parties. Comments: The buyer applies for registration with the RD. The following internal steps take place after the application is submitted: Procedure 2. Obtain certified true copy of latest tax declaration 1. The Entry clerk receives and enters all documents in the primary Entry Book from the City Assessor’s Office (CAO) (Judicial form No. 39) and notes therein the day, hour and minute of reception Time: 1 day of all instrument in the order in which they are received. Cost: PHP 60 (PHP 10 per real property unit (RPU) + PHP 20 per loose documentary 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- stamp) signment. Comments: The seller obtains a certified true copy of the latest tax declaration from 3. Documents/titles are assigned by the RD to the Land Registration Examiner the CAO. (LRE) who prepares computation and order of payment of registration fees. 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees Procedure 3. Pay documentary stamp tax and capital gains tax at are computed based on a schedule of fees approved by the Department of an authorized agent bank (AAB) Justice. Time: 1 day 5. Upon the payment of the fees, the document is forwarded to the LRE who reviews the same and determines whether or not it is ready to register. The Cost: PHP 54,650 (1.5% of property value (documentary stamp tax) + 6.0% of capital owner’s copy of the title is compared to the title on file, produced by Records gains (capital gains tax). Note: Computation for capital gains (capital gains tax) is not Officer/Vault keeper. included in the cost reflected) 6. If the instrument is not ready to be registered, the LRE recommends its denial Comments: The seller files the documentary stamp tax return and capital gains to the RD. If the instrument is ready, the LRE likewise recommends to the RD tax return with the AAB. This is done within 5 days after the close of the month the registration of the document through a routing slip. when the taxable document was signed or within 30 days after the sale, whichever is earlier. The taxes are paid at the AAB to the account of the BIR. The capital gains 7. RD reviews examination, and once same is approved, assigns documents to tax is 6.0% of capital gains based on selling price, fair market value or zonal value, clerk for action, with instruction on the route slip. whichever is higher. The documentary stamp tax is 1.5% based on selling price or fair 8. If the transaction involves issuance of title, Records Officer/Judicial Form market value, whichever is higher. Custodian records the transaction in the logbook releases sets of title forms The documentation shall include: (judicial form) and assigns the corresponding title control number to the set of titles issued to the action clerk. a. Original copy and photocopy of notarized deed of sale (obtained in procedure 1) 9. Assigned employee acts on the documents, as instructed. b. Certified true copy of transfer certificate of title (in the name of seller) 10. Final registration – RD signs titles and documents. c. Certified true copy of latest tax declaration (in the name of seller) (obtained in 11. Release of documents – by the releasing clerk to the buyer who should be procedure 2). ready with ID and copies of official receipts of the registration fees. The documentation shall include: Procedure 4. Obtain certificate authorizing registration (CAR) a. Articles of incorporation and bylaws of the buyer from the Bureau of Internal Revenue (BIR) b. Secretary’s certificate containing the resolution of the board of directors of Time: 14 days buyer approving the sale Cost: PHP 115 (PHP 100 + PHP 15 documentary stamp) c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Comments: After paying the taxes in procedure 3, the seller must obtain a tax of seller) clearance (or certificate authorizing registration) from the BIR. This certificate will d. Certificate authorizing registration from the BIR (obtained in procedure 4) authorize the registration of the property. e. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: f. Official receipt of transfer tax payment (obtained in procedure 6) a. Certified true copy of transfer certificate of title (in the name of seller/original g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) certificate of title (OCT)) (obtained in procedure 3). b. Certified true copy of latest tax declaration (in the name of seller) (obtained in procedure 2) Procedure 8. Apply with the CAO for the issuance of a new tax c. Tax identification numbers. declaration over the building and the land in the name of buyer d. Notarized deed of absolute sale, but only photocopy shall be retained by the Time: 2 days BIR. Cost: PHP 30 (no cost to transfer tax declaration, PHP 30 for certified true copy TCT) Comments: The buyer applies with the CAO for the issuance of a new tax declara- Procedure 5. Obtain tax clearance certificate of real estate taxes tion over the building in his name. This procedure includes an inspection in Tanauan. from the City Treasurer’s Office (CTO) The documentation shall include: Time: 2 days a. Photocopy of notarized deed of sale (obtained in procedure 1) Cost: PHP 50 b. Certified true copy of latest tax declaration (in the name of seller) (obtained in Comments: The seller, after paying any due amounts, obtains a tax clearance procedure 2) certificate from the CTO. c. Certificate authorizing registration from the BIR (obtained in procedure 4) The documentation shall include: an original of the official receipt evidencing pay- d. Realty tax clearance from the CTO (obtained in procedure 5) ment by seller of realty taxes. 122 DOING BUSINESS IN THE PHILIPPINES 2008

Procedure 6. Pay the transfer tax at the CTO (judicial form) and assigns the corresponding title control number to the set Time: 1 day of titles issued to the action clerk. Cost: PHP 18,217 (0.5% of property price) 9. Assigned employee acts on the documents, as instructed. Comments: The documentation shall include: 10. Final registration – RD signs titles and documents. a. Certificate authorizing registration from the BIR (obtained in procedure 4) 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. Realty tax clearance from the CTO (obtained in procedure 5) The documentation shall include: c. Official receipt of the BIR (for documentary stamp tax) (obtained in procedure 4). a. Articles of incorporation and bylaws of the buyer b. Secretary’s certificate containing the resolution of the board of directors of Procedure 7. Secure registration with the Registry of Deeds (RD) buyer approving the sale Time: 7 days c. Original copy of owner’s duplicate of the transfer certificate of title (in the name Cost: PHP 17,631 (PHP 8,796 for properties with a value up to PHP 1,700,000 + PHP of seller) 90 for every PHP 20,000 or fraction thereof in excess of PHP 1,700,000 + PHP 30 d. Certificate authorizing registration from the BIR (obtained in procedure 4) registry entry fee + PHP 60 transfer certificate of title) e. Realty tax clearance from the CTO (obtained in procedure 5) Comments: The buyer applies for registration with the RD. The following internal f. Official receipt of transfer tax payment (obtained in procedure 6) steps take place after the application is submitted: g. Official receipts of the BIR (for capital gains tax and documentary stamp tax) 1. The Entry clerk receives and enters all documents in the primary Entry Book (obtained in procedure 3). (Judicial form No. 39) and notes therein the day, hour and minute of reception of all instrument in the order in which they are received. Procedure 8. Apply with the CAO for the issuance of a new tax 2. Documents are then brought to the RD or Deputy Registry of Deeds for as- declaration over the building and the land in the name of buyer signment. Time: 3 days 3. Documents/titles are assigned by the RD to the Land Registration Examiner Cost: No cost (LRE) who prepares computation and order of payment of registration fees. Comments: The buyer applies with the CAO for the issuance of a new tax declara- 4. Pay registration fee to the cashier, who shall issue official receipt. Fixed fees tion over the building in his name. are computed based on a schedule of fees approved by the Department of Justice. The documentation shall include: 5. Upon the payment of the fees, the document is forwarded to the LRE who a. Photocopy of notarized deed of sale (obtained in procedure 1) reviews the same and determines whether or not it is ready to register. The b. Certified true copy of latest tax declaration (in the name of seller) (obtained in owner’s copy of the title is compared to the title on file, produced by Records procedure 2) Officer/Vault keeper. c. Certificate authorizing registration from the BIR (obtained in procedure 4) 6. If the instrument is not ready to be registered, the LRE recommends its denial d. Realty tax clearance from the CTO (obtained in procedure 5) to the RD. If the instrument is ready, the LRE likewise recommends to the RD e. Photocopy of official receipt of transfer tax payment (original copy to be the registration of the document through a routing slip. presented) (obtained in procedure 6) 7. RD reviews examination, and once same is approved, assigns documents to f. The TCT issued by the RD (in the name of the buyer). clerk for action, with instruction on the route slip. 8. If the transaction involves issuance of title, Records Officer/Judicial Form Custodian records the transaction in the logbook releases sets of title forms 123

Acknowledgments

Doing Business in the Philippines 2008 was prepared by a The project was sponsored by the IFC Philippines team led by Gerlin May U. Catangui, Allen Dennis and Advisory Services, the Doing Business project and FIAS, Zenaida Hernández Uriz. The team comprised Jamal a multi-donor investment climate advisory service of the Ibrahim Haidar and Aikaterini Leris with the collaboration World Bank Group. of the Asian Institute of Management (AIM) Policy Center especially Steve Almeda, Ronald Cartagena, Nancy Landicho More than 42 lawyers and 66 accountants, architects, and Ivy Sabuga. Mierta Capaul, Kim Jacinto-Henares, R. business consultants, contractors, CPAs, engineers and Mukami Kariuki, Federico M. Macaranas, Euan Marshall, property specialists coordinated by the AIM Policy Center Marialisa Motta, Russell Muir and Hans C. Shrader reviewed contributed to Doing Business in the Philippines 2008. The the text. Valuable assistance was received from Fernanda Integrated Bar of the Philippines (IBP) National Secretariat Almeida, Lumen Balboa, Josephine Bassinette, Karim Ouled and IBP Makati Chapter and the law firms Aguilar Law Belayachi, Diego Borrero Magaña, Claudia Contreras, Office, Angara Abello Concepcion Regala and Cruz Law Jeanette Cordero, Alejandro Espinosa-Wang, Andrey Marie Firm, Arañas Law Office, A.Q. Ancheta and Partners, Manalo, Dana Omran, Rebecca Ong, Rita Ramalho, Yara Calalang Law Office, Coronel Castro Law Offices, Disini and Salem, Sylvia Solf and Lihong Wang. The report was edited by Disini Law Office, Espedido Law Office, Fernandez Aguja Linda Moll and designed by Kim Bieler. Law, Gempesaw, Gempesaw & Castillo, KPMG Manabat San Agustin & Co., May S. Aguilar Law Firm, M. R. Lepiten This project was made possible thanks to the support of & Associates, Nisce Mamuric Guinto Rivera and Alcantara the National Competitiveness Council, especially David Law Office, Poblador Bautista and Reyes Law Offices, Balangue, Cesar B. Bautista, Boy Fulgencio and Ruy Moreno; Redula Sanchez Boholst Borbajo Ceriza Law Offices, Suelto the Department of Trade and Industry, especially Rhodora Delgra Claudio Loreja-Cosape Quilatan and Associates, Leaño and Zenaida C. Maglaya; the Board of Investments, in Sta. Ana Law Office, Tiongson & Antenor-Cruz Law Office, particular Celeste and Maria Teresa Semana . Valenzuela Law Office, and Villaraza & Angcangco were The Department of the Interior and Local Government’s especially helpful. The team wants to extend its special Austere Panadero; and the Philippine Business Registry’s gratitude to the more than 110 local government officials, Whilner Morales also provided support. national government officials, strategic partners and private sector representatives who participated in the project and The governments of Australia and Canada and their who made valuable comments during the consultation respective aid agencies, Agency for International period. Their names are listed on the following pages. Development (AusAid) and Canadian International Development Agency (CIDA) provided support and funding for the project. 124 DOING BUSINESS IN THE PHILIPPINES 2008

PRIVATE PROFESSIONALS

A.Q. ANCHETA AND PARTNERS NISCE MAMURIC GUINTO RIVERA Atty. Marie Jo Hiponia-Millendez ALCANTARA LAW OFFICE Atty. Bob Guinto ANGARA ABELLO CONCEPCION Atty. Jose Roberto L. Mamuric REGALA CRUZ Atty. Rosanno P. Nisce Atty. Christiane Alonzo Atty. Teodoro Regala PHILIPPINE ASSOCIATION OF Atty. Marie Glenn Sorila REALTY APPRAISERS Mr. Rafael Fajardo ARAÑAS LAW OFFICE President Atty. Rolando P. Arañas PHILIPPINE ASSOCIATION OF CALALANG LAW OFFICE REALTORS BOARD Atty. Ciriaco Calalang Ms. Estelita Patdu CPA/Former Director CORONEL CASTRO LAW OFFICES Atty. Gilbert S. Coronel POBLADOR BAUTISTA AND REYES LAW OFFICES COLLIER’S INTERNATIONAL Atty. Jaime Hofileña Ms. Marissa Benitez Director-Valuation/Residential REDULA SANCHEZ BOHOLST Sales and Leasing BORBAJO CERIZA LAW OFFICES Atty. Lolito Borbajo CUERVO APPRAISERS Mr. Ramon Cuervo SQUARE METERS REALTY Chairman Ms. Christina Domingo Realtor DASMAN REALTY DEVELOPMENT Engr. Gil Dejon STA. ANA LAW OFFICE Engineer Atty. Jose Sta. Ana

DISINI AND DISINI LAW OFFICE SUELTO DELGRA CLAUDIO LOREJA-COSAPE QUILATAN AND Atty. Rowena Disini ASSOCIATES Atty. Martin Delgra ESPEDIDO LAW OFFICE Atty. Martin Suelto Atty. Eugene Espedido TAXMASTER-WONG GROUP OF FERNANDEZ AGUJA LAW OFFICE COMPANIES Atty. Rita Fernandez Mr. Alfredo Darag GEMPESAW, GEMPESAW & Operation Assistant CASTILLO TIONGSON & ANTENOR-CRUZ Atty. Carmelo Jose Gempesaw LAW OFFICE G.O. EASTERN CONSTRUCTION Atty. Norman Tiongson Engr. Luis Octaviano VALENZUELA LAW OFFICE Engineer Atty. Librado Valenzuela

GM PROPERTIES VALUEWORLD APPRAISER, INC. Mr. George Mendoza Mr. Oscar Baraquero Realtor Executive Vice President

INTEGRATED BAR OF THE VILLARAZA & ANGCANGCO LAW PHILIPPINES OFFICE Atty. Rodolfo De Los Santos Atty. Aida Araceli G. Roxas-Rivera KPMG MANABAT SAN AGUSTIN Atty. Sylvette Y. Tankiang & CO. Atty. Rester John Nonato

M.R. LEPITEN & ASSOCIATES Atty. Magdalena Lepiten

MAY S. AGUILAR LAW FIRM Atty. May Aguilar ACKNOWLEDGMENTS 125

LOCAL GOVERNMENT OFFICIALS

CALOOCAN Ms. Aphrodite Maala SAN JUAN City Assessor, City Assessor’s Atty. Melanie T. Soriano- Office Mr. Edgardo Briones Chief of Office, Business Permit City Assessor, City Assessor’s and Licensing Office MARIKINA Office Mr. Anthony Pulmano Mr. Tomas C. Aguilar Ms. Lorenza Ching City Assessor, OIC, City Head, City Planning and City Budget Officer Assessor’s Office Development Office Arch. Romeo Gonzales Engr. Reynaldo Reyes Engr. Alan Diega City Building Official, Office of Building Official, OIC, Office of Chief of Permit Section, City the Building Official the Building Official Engineer’s Office Ms. Alicia Mediodia DAVAO Mr. Apolonio Santos OIC, Business Permit and Head, Business Permit and Licensing Office Mr. Isagani Carillo Licensing Office Tax Mapper III, City Assessor’s TAGUIG Office MUNTINLUPA Arch. Joselito Mastrili Ms. Villa Dureza Mr. Rodolfo Oliquino City Building Official, Office of Asst. Division Chief, Business Department Head, Business the Building Official Bureau Permit and Licensing Office Mr. Jeffe Minglana Engr. Roberto U. Teo Ms. Melanie Sandoval OIC, Business Permit and Asst. City Administrator City Assessment Operations Licensing Office Officer II, City Assessor’s Office LAPU-LAPU TANAUAN Engr. Ferdinand Lim NAVOTAS Engr. Francisco Carandang Chief of Processing Division, Arch. Jerry Magpayo City Engineer, City Engineer’s City Engineer’s Office City Building Official, Office of Office the Building Official LAS PIÑAS Mr. Fernando Manzanero Ms. Marita Trinidad OIC/Licensing Officer III, Mr. Jimi Castillano Head, Business Permit and Business Permit and Licensing City Information Officer Licensing Office Office Ms. Annaliza Rodelas-Gonzalez MAKATI PARAÑAQUE City Assessor, City Assessor’s Office Engr. Annabel Mañigo Engr. Al Maglinte OIC-Chief of Enforcement Acting Chief, Processing/ VALENZUELA Division, Office of the Building Evaluation Division, Office of Official the Building Official Engr. Anita Robles Engr. Nelson Morales Ms. Soledad Samonte City Building Official, Office of City Engineer, City Engineer’s City Assessor, City Assessor’s the Building Official Office Office Engr. Merlinda Panganiban Mr. Hermie Zapanta Head, Urban Development License Inspector, Business Department Permit and Licensing Office MALABON PASAY Engr. Marcelino Galvez Engr. Renato Sanchez Engineer III, Office of the City Engineer/Building Official, Building Official City Engineer’s Office Engr. Benjie Villacorta PASIG Head, City Planning and Development Office Atty. Reynaldo Dionisio City Administrator MANDALUYONG Ms. Dianeth L. Valencia Ms. Catherine D.L. Arce Chief, Business Permit and Chief, Business Permit and Licensing Office Licensing Office Engr. Crisanto Roxas QUEZON CITY City Engineer/ OIC Building Mr. Jose Castro Official, City Engineer’s Office City Assessor, City Assessor’s Mr. Gener R. Sison Office City Assessor, City Assessor’s Engr. Rolando Mamaid Office Chief of Processing Division, Office of the Building Official MANDAUE Mr. Pacifico Maghacot Engr. Marivic Cabigas Asst. City Administrator/OIC- Chief of Processing Division, Business Permit and Licensing City Engineer’s Office Office Mr. Cipriano Jamora Assistant Operations, Business Permit and Licensing Office 126 DOING BUSINESS IN THE PHILIPPINES 2008

STRATEGIC PARTNERS

A-A PRINTING PRESS HUA HONG COMMERCIAL PRESS SEVEN LAKES PRINTING PRESS UNIVERSITY OF SAN CARLOS Malabon City San Pablo City Dr. Vicky Zosa Director, CHED Zonal Research AMISTOSO PRINTERS IMPRENTA SAN PABLO SOCIAL SECURITY SYSTEM Center Mandaue City San Pablo City Ms. Emily Lim Accounts Officer, Caloocan WONG GROUP OF COMPANIES ASIAN INSTITUTE OF INTEGRATED BAR OF THE PHIL. Branch Mr. Jack. C. Wong MANAGEMENT (IBP) NATIONAL SECRETARIAT Ms. Gina Caberte President Dr. Federico M. Macaranas, Ph.D. Atty. Feliciano Bautista Section Head-Inspectorate Executive Director, AIM Policy National President Section, Cebu Branch Center Ms. Ma. Ingrida Sison Ms. Corazon Tecson-Jimenez IBP-MAKATI CHAPTER Atty. Danilo Cortina Head, Field Inspectorate, Davao Associate Director, AIM Policy Branch Center President Engr. Bes Basubas Mr. Greg Atienza ISLA PRINTING PRESS Field Inspectorate Division, Executive Managing Director, Lapu-Lapu City Lapu-Lapu Branch Alumni Relations Office Engr. Adel Balmaceda LAMP 2 PROJECT MANAGEMENT ASSOCIATION OF CPAS IN OFFICE Section Head-Admin. Division, PUBLIC PRACTICE Makati 1 Branch Mr. Danilo R. Antonio Ms. Judith Lopez Deputy Executive Director, Land Ms. Jocelyn Callosa President Administration and Management Accounts Officer, Makati 2 Project (LAMP) Branch ATENEO DE DAVAO UNIVERSITY Ms. Aida Cruz Ms. Christine Omar COUNCIL Dean, School of Business and OF THE PHILIPPINES Membership Staff, Las Piñas Branch Governance Atty. Susan Paraguya President Ms. Marilou Gangan BUREAU OF INTERNAL REVENUE Field Inspectorate-Accounts Ms. Regina Camarillo-dela Cruz, LIBRA PRINTHOUSE INC. Officer, Malabon Branch CPA Ms. Amelia Guillermo Assistant Revenue District Officer (RD No. 32) Section Head-Coverage MANNA PRINTS and Collection Section, Mandaluyong Branch CAPPRINT FORMS AND TRADING CORP Ms. Madel Cheng MERALCO Las Piñas City Field Inspectorate, Marikina Mr. Ernesto M. Cabral Branch Sr. Manager & Head, Central CHAMBER OF REAL ESTATE AND Mr. Edward Bengzon BUILDERS’ ASSOCIATION (CREBA, Sales INC.) Field Inspectorate, Branch Ms. Myrna De los Reyes NATIONAL COMPETITIVENESS COUNCIL Executive Officer Ms. Pearl Sigue Amb. Cesar B. Bautista Data Encoder-Membersip COPYLANDIA Co-Chair (Private Sector) Assistance Center, Pasay-Roxas Makati City Branch PHILIPPINE ASSOCIATION OF REALTY APPRAISERS Mr. Soriano Salvador DE LA SALLE LIPA UNIVERSITY Mr. Rafael Fajardo Administrative, Pasig Branch Ms. Nerissa Lucasia President Ms. Thelma Lizada Chairperson, Business Management Department Senior Analyst, Cubao Branch PHILIPPINE ASSOCIATION OF REALTY CONSULTANTS Ms. Fe Lantitoc DCT PRINTSHOP Ms. Carol Alvarez Senior Membership Service Davao City Representative-Novaliches President Branch DEPARTMENT OF THE INTERIOR Ms. Marilou Bautista AND LOCAL GOVERNMENT PHILIPPINE CHAMBER OF COMMERCE AND INDUSTRY OIC-Field Inspectorate, San Usec. Austere Panadero Mr. Samie Lim Francisco Del Monte Branch Undersecretary National President Ms. Mila Mutya DEPARTMENT OF TRADE AND Service Bureau Staff, San Juan INDUSTRY PHILIPPINE CONSTRUCTORS Branch ASSOCIATION, INC. Sec. Peter B. Favila Mr. Jomari Acub Mr. Manolito Madrasto Secretary Accounts Officer-Field Executive Director Usec. Zenaida C. Maglaya Inspectorate, Taguig Branch Undersecretary PHILHEALTH Ms. Irene Catangui Dir. Maria Teresita Semana-Santiago Ms. Chato Noche Membership and Processing Division, Lipa City Branch Director, Board of Investments- Officer, Contribution Section, OSAC PhilHealth Ms. Joy Samson Branch Mr. Whilner A. Morales Accounts Officer-Field Inspectorate, Valenzuela Branch Project Manager, Philippine SECURITIES AND EXCHANGE Business Registry COMMISSION S.P. CASTRO AND ASSOCIATES Mr. Rene Fajardo Atty. Ferdinand Sales Ms. Emma Fernandez OIC, Construction Industry Asst. Director, Corporate HR Manager Association of the Philippines and Partnership Registration Division SYCIP GORRES VELAYO GM PRESS Mr. David Balangue Davao City Managing Partner WWW.DOINGBUSINESS.ORG

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