Freelancing 101: How to Register your Business as a Sole Proprietor (PH)

Ever since the BIR released the memo and urged the online sellers or freelance workers to register their business as mandated by law by the end of July, Filipino’s world turned upside down including me because 1. profit in online business is so small that it’s not even big enough to make a living or pay your bills. 2. The business registration process is not easy and processing it is too much of a hassle. 3. We still haven’t fight Covid-19 yet and going out to process the registration is still scary. But, to prove that you are a law-abiding citizen of the Philippines, we still need to register our businesses no matter how big or small it is.

What is my reason for registering my business

Because I want everything to be legal so I decided to register as a Sole Proprietor
The law requires it and I want to be a law-abiding citizen of the Philippines even though… nah! that’s another story to tell
It is one of the requirements if you want to avail housing loans or car loans and most especially it’s for my visa application (this is my main reason).

How to Register your Business as a Sole Proprietor

1. Get your Business name registered at DTI (Department of Trade and Industry)

For me, this is the easiest part of this whole process, as it does not require you to go out just to have your business name registered. You can simply go to DTI Portal, fill-up the form and pay it online via bank transfer, GCASH etc. The only hardest thing is thinking about what would be your Business Name. After the registration process, you will now receive your DTI Certificate via your registered email.

2. Get a permit to your Local Government Units

Get your barangay clearance and Mayor’s permit. *skip this part because BIR already removes Mayor’s permit to make the process as easy as possible.

3. Go and register your business in Bureau of Internal Revenue (BIR)

Before going to BIR office, you need to make sure that you have your requirements ready and complete.

Part 1:

BIR Form 1905 – If you are previously employed like me, you need to request for RDO transfer and change of status from employed to self-employed.

*The transfer of RDO may take 3-5 working days or up to 7 working days.

Part 2:

Present all the requirements to the BIR Officer for assessment.

BIR Form 1901 – Application for Registration
DTI Certificate, Proof of address and Valid IDs
BIR Form 0605 – Payment registration form

Part 3:

Releasing of documents

BIR Form 2303 – Certificate of Registration
Stamped BIR Form 1901
BIR Form 0605
Books of Account
Authority to print receipt *They usually offer BIR accredited printing shop, just ask for the instruction.
Official Receipt / Invoice

4. You are now finally registered

Take note of the deadlines in paying your taxes to avoid late penalties.

What I did to avoid the hassle of Business Registration

Since online business registration is a talk of the town nowadays and the deadline from BIR will come to a near, some of the influencers and known online worker personalities that I know of and followed were having live streaming or online discussion, I happen to saw Demi Bernice FB page and to my luck, she’s having a live streaming with the Upcloud Accounting Founder, Jac Cantos and they were discussing taxation and process of registering your online business.

It actually took me 2 weeks to contact Jac as I’m trying to figure out the business registration process on my own #FeelingIndependent. But I realized I couldn’t do it because as a beginner, and this is my very first time to process the tax by myself, there are some processes that I couldn’t understand even if I read it several times and also, it feels like it is too much of a hassle for me too because aside from working full time online as a VA (Virtual Assistant), I also have my small online selling “The Chum Baker” business to manage so I have a very little time to process everything and I can’t afford going back and forth as there are no any means of transportation because of GCQ and also availing the Grab service will cost me a huge amount of money.

After 2 weeks, I finally sent an inquiry to their website, Upcloud Accounting, and Jac sent a message and we scheduled a free 15-min consultation the next day. Jac is accommodating enough to handle all of my queries about registering my business and finally decided to avail of their service.

How much does it cost?

Here’s the breakdown of how much I paid after availing of their service.

Php 8000 Professional Fee – but Jac is very generous and gave me a 2k discount, so I will only pay Php 6000.
Php 5000 – estimated breakdown for all the Government process and it varies depending of course on your RDO
Php 2999 – this will be my monthly payment on processing the accounting/bookkeeping. As I said, Jac is very generous, so he gave me an additional PhP1000 discount. This will start after the successful business registration.

I would like to express my gratitude to Jac because he is so kind and understanding, I asked him if it’s ok to pay only half until I get my July payout and he’s so kind enough to let me pay the Php5000 first so that his team can start to process my business registration and pay the remaining which is his professional fee once I received my July payout. Thank you JAC! *not sponsored, just expressing my gratitude*

True enough, after I pay the Php 5000, his team started the business registration process. I gave them the documents that they need (DTI Certificates for my VA and ChumBaker, Property Tax, Valid ID and signed Authorization Letter). I also informed them that I still need to transfer the RDO, Mara, who is assigned to process my business registration, get my previous RDO and proceed with the RDO transfer and now I’m just waiting for their next instructions.

Why I opted to get additional help?

Someone asked me, why getting help from someone when you can process it yourself? I just simply give this answer, for me, time is more important than money, you cannot get the lost time but money can earn anytime.

Don’t get me wrong with this idea, it is just me and we all have different opinions with regards to that. But for me, once you lost the time doing a tedious process, you cannot get it back unlike earning money.

Time for me is precious, especially during this time of the pandemic. I cannot afford to lose my time doing a long process which I don’t even know how to begin with it wherein there are people that offer their professional services for a very affordable price to make the process easier for us.

Imagine the number of hours you will lose in traffic, lining up, going back and forth, etc. Wherein, with those lost time, I am able to do my work, sell and market my products or even come up with a new goodie recipe right?

Pandemic or not, I will still get their service because through that I will be able to consume my time productively to earn money and they can also help me with tax deadlines, filing etc.

If you are convinced and want to know how good their service is, you may check their socials or go visit their website.

Share your thoughts and experience too. Comment below, I’d love to read all your comments!

Stay Safe!