What Philippine hotels need to go live: BIR, Mayor's permit, DOT

1. Register the business itself

Everything else depends on this, so it comes first.

If you are operating as a sole proprietor, that means registering your business name with the DTI. If you are setting up a corporation or partnership, it is the SEC instead. A cooperative goes to the CDA.

Which you choose has consequences well beyond paperwork — liability, how you are taxed, how easily you can bring in a partner later — and it is worth an hour with an accountant before you file rather than after.

2. Barangay clearance

Your barangay confirms that a business may operate at that address. It is usually quick and inexpensive, and the Mayor's permit will ask for it, so it has to come before the next step rather than alongside it.

3. Mayor's permit — the business licence

This is the licence to operate in that municipality, and it is where the local requirements land: a fire safety inspection certificate, a sanitary permit, sometimes an occupancy permit for the building itself, and for accommodation, sometimes a zoning check.

It is renewed annually, usually in January, and municipalities are not sentimental about the deadline.

4. BIR registration

This is the step that turns you into a business that can legally issue a receipt, and it is the one most first-time operators underestimate.

You register with the Revenue District Office covering your address, and you come out with a Certificate of Registration, your TIN, and — critically — authority for your receipts. Official receipts and sales invoices must be BIR-authorised, whether printed or issued by a system.

5. If you serve food, add the food permits

A kitchen brings its own layer: sanitary permits for the premises and health certificates for the people handling food, renewed on their own schedule.

It also brings a legal obligation most new operators do not think about until the first customer presents a card — the senior citizen and PWD discount. It is statutory, it comes with a VAT exemption on the eligible share of the bill, and you are required to record the cardholder's details. Whatever you use to ring up a sale has to handle it correctly, because a hand-written adjustment on a receipt is not a defensible position.

6. DOT accreditation — optional, and worth understanding

Department of Tourism accreditation is not required to operate an accommodation business. It is a voluntary standard, and plenty of good small properties do not have it.

What it gets you is credibility with travellers, eligibility for some DOT programmes and promotions, and in some LGUs a smoother relationship with the local tourism office. What it costs you is an inspection against their standards and a renewal cycle.

For a beachfront resort chasing international guests it is usually worth it. For a six-room inn serving domestic weekend traffic, it often is not — and being told it is mandatory when it is not is a common way for new operators to lose a month.

7. The employer obligations, once you hire

The moment you have staff you have a second set of registrations: SSS, PhilHealth and Pag-IBIG, with employer contributions on top of salaries, remitted monthly.

Budget for the contributions, not just the wage. It is a routine surprise in the first quarter of operating.

A realistic order of operations

DTI or SEC first, then barangay clearance, then the Mayor's permit with its inspections, then BIR — and food permits alongside if there is a kitchen. DOT afterwards, if you want it. Employer registrations when you hire.

Expect it to take longer than anyone tells you, and expect at least one office to want a document nobody mentioned. Keep certified copies of everything in one folder, because each step asks for the outputs of the last.

How long it takes, and what trips people up

Plan for weeks rather than days, and for the sequence to matter more than the effort. Each office wants the output of the previous one, so a delay at the barangay is a delay at the Mayor's permit, which is a delay at the BIR.

The recurring stumbles we see are these:

• Starting the fit-out before the permits. If an inspection fails on something structural, you are rebuilding rather than adjusting.
• Assuming DOT accreditation is mandatory and losing a month on it before opening. It is not.
• Deciding VAT registration by guesswork rather than with an accountant, then discovering the receipts you have been issuing are wrong.
• Forgetting the renewal cycle. The Mayor's permit comes round every January, and the queue in the second week is not where you want to be.
• Budgeting salaries without the employer share of SSS, PhilHealth and Pag-IBIG on top.

What it costs to get through it

We are not going to quote figures, because they vary by municipality, by the size of the building, and by the year — and a stale number here would be worse than none.

What is worth planning for is the shape of it. There are filing fees at each stage, and they are individually small. The inspections are where the real money can appear: a fire safety or sanitary requirement that means work on the building is not a fee, it is a project, and it is the single most common reason an opening date moves.

Two practical suggestions. Ask your LGU's business permits office for their current checklist before you design anything, rather than after — they will usually give it to you, and it is more current than anything you will read online. And budget a contingency specifically for inspection findings, separate from your fit-out budget, because the two get confused and the fit-out always wins.

Where software comes into this

Mostly it does not, and any vendor implying they can shortcut a Mayor's permit is not being straight with you.

Where it does matter is afterwards: your registered name, address and TIN have to appear on what you issue, VAT has to be broken out correctly if you are registered, and senior and PWD discounts have to be computed rather than estimated. Worth knowing separately: an official receipt or sales invoice issued by a computerised system needs that specific system to hold its own BIR Permit to Use — a business's registration alone does not extend to whatever software happens to print the bill. Ask any vendor directly whether their system holds one, rather than assuming a correct-looking receipt means it does.