LGU business permit

After the SEC gives your company legal existence and the BIR registers it as a taxpayer, there's one more layer: the Local Government Unit (LGU). This is the city or municipality where your business is physically located, and it's the office that issues your Business Permit — sometimes called the Mayor's Permit.

You need this to legally operate at your address. Here's how it works.

Korp handles the LGU permit for you today — our team runs the process end to end, alongside BIR registration. We're also building it into your dashboard, so you'll soon track it the same way you track your incorporation. Questions in the meantime? Talk to an expert.

What the LGU permit actually does#

The Business Permit is local authorization to operate in a specific city or municipality. Where the SEC recognizes your company nationally and the BIR registers you as a taxpayer, the LGU regulates whether you can run a business at your particular location. It's tied to your registered address, so if you move or open another site, you deal with that location's LGU separately.

When it happens in the sequence#

The LGU permit generally comes last in the initial registration flow:

1. SEC — your company legally exists.
2. BIR — your company is registered as a taxpayer.
3. LGU — your company is authorized to operate at its address.

In practice there's some back-and-forth, since a few LGUs want to see BIR registration and some clearances before finalizing, while the BIR may want proof of address that the LGU touches. But the Business Permit is typically the final piece before you're fully operational.

What you'll need#

Requirements vary by city or municipality, but most LGUs ask for some combination of:

• SEC Certificate of Incorporation, Articles of Incorporation, and By-laws
• BIR registration (Certificate of Registration)
• Proof of business address — lease contract or, if you own it, the land title, plus the tax declaration
• Barangay Business Clearance from the barangay where you're located
• Occupancy permit or building-related clearances, depending on the space
• Locational or zoning clearance confirming your business is allowed at that address
• Fire Safety Inspection Certificate from the Bureau of Fire Protection
• Sanitary permit and, in some cases, health certificates for staff

The exact list, and the order you collect them in, differs from one LGU to the next. This is the part of registration with the least standardization across the country.

The registration steps#

The flow usually looks like this:

1. Get your Barangay Business Clearance#

The barangay is the smallest local unit. Most LGUs won't process the business permit until you have this clearance from the barangay covering your address.

2. Secure locational or zoning clearance#

The LGU confirms your business type is permitted at your location. A restaurant, a warehouse, and an office each face different zoning rules.

3. Pass the required inspections#

Fire safety and sanitary inspections are the common ones. Some LGUs schedule these before issuing the permit; others allow provisional operation and inspect after.

4. Assessment of fees and local taxes#

The LGU computes your business tax (often based on capitalization for a new business, then on gross receipts in later years), plus regulatory fees and charges.

5. Pay and claim the permit#

Once fees are settled and clearances are in, the LGU issues the Business Permit and the accompanying plate or sticker to display at your premises.

What you're signing up for after registration#

The Business Permit isn't permanent. It has to be renewed every year, and the renewal window is tight:

Missing the January deadline is one of the more common and avoidable penalties new companies run into, because it comes so soon after setup.

A note on timing and cost#

LGU processing is the most variable part of registration. A straightforward permit in an efficient city can be done in a few days; a complex location, or one needing multiple clearances and inspections, can stretch to several weeks.

Costs vary widely too, since local business tax and fees are set by each LGU. For planning purposes, our full setup includes a provision of PHP 10,000 for LGU government fees, adjusted based on the actual costs at your location.

What you'll see in your dashboard#

A preview of what we're building. Names and steps may change — the service itself is available today, handled by our team.

The LGU permit will be tracked in your dashboard the same way as your incorporation and BIR registration: a progress tracker with status pills, and clear flags when something needs you.

Starting it. Once BIR registration is done, your dashboard will offer to start the permit process for your registered address. Your company documents and address details carry over — the main new inputs are location-specific, like your lease and space details.

Tracking it. The planned stages:

1. clearances in progress — we collect the barangay clearance and the locational or zoning clearance for your address.
2. inspections scheduled — fire safety and sanitary inspections are arranged, and we keep you posted on anything your premises need.
3. assessment and payment — the LGU assesses your business tax and fees, and we settle them against your PHP 10,000 provision, flagging any difference before paying.
4. permit released — your Business Permit and its plate or sticker are issued; the documents land in your dashboard and we send the physical items to you.

Because renewal comes every January, your dashboard will also surface the renewal deadline ahead of time rather than leaving you to remember it.