BMBE Law – Barangay Micro Business

Enterprise Registration and Benefits

What is the BMBE Law?

The BMBE law was approved and signed in November 2002 by President Gloria Macapagal-
Arroyo.

The BMBE Act aims and promotes creation and expansion of small businesses by providing
benefits and incentives that will help BMBE enterprises to grow and succeed.

The objective of the BMBE Act is for economic development by promoting entrepreneurial
mindset to Filipinos. Also it aims to create more quality life to Filipinos since BMBE Act will
create jobs and livelihood.

What is a BMBE?

BMBE stands for Barangay Micro Business Enterprise.

To qualify as BMBE, the business should be engaged in sale of services and products and it’s
total assets is not more than P3,000,000.00.

However, for purposes of the BMBE Act, the benefits and incentives provided will exclude the
following, even if they have assets not more than P3,000,000.00:

1. Service provided by an individual who practice its profession such as PRC Licensed Individuals
like doctors, accountants, lawyers, engineers, etc.
2. An enterprise which is involve or connected to large scale enterprises such as franchises

Benefits and Incentives of BMBE Registered

1. Exemption on Income Tax

2. Exemption on Minimum Wage Law coverage
3. Financing and special credit facility from such the following Land bank of the philippines,
development bank of the philippines, and many more
4. Assistance in technology, training and marketing from certain government agencies such as DTI,
DOST, UP-ISSI, CDA, TESTA and TLRC.

What is a BMBE Certificate of Authority?

In order to enjoy the benefits of RA 9178 – BMBE Act, an interested enterprise must register and
get Certificate of Authority for BMBE from the City Office of the Treasurer based on the
business address.
How to Apply for BMBE Certificate of Authority?

Both new and existing qualified enterprises can apply for BMBE Certificate of Authority from
the City Office of the Treasurer. Below are the requirements:

New BMBE Registration

Basic Requirements

1. BMBE Form 01 – filled up application form in triplicate copy signed by the authorized person
such as the owner or officer. Download the form here, BMBE Form 01.pdf
2. Passport ID size picture three (3) copies

Additional Requirements

With Assets of less than P300,000

1. Registration with SEC or DTI

2. Mayor’s Permit

With Assets of P300,000 to P3,000,000

1. Registration with SEC or DTI

2. Mayor’s Permit
3. Registration with BIR
4. Sworn Statement or Affidavit stating that the enterprise is micro in nature and based in
barangay
5. Sworn Statement of Assets and Liabilities
6. Image of the place of business
7. Image of the assets except cash, receivables and intangibles
8. Copy of Contracts of Loan if any
9. Income Tax Return

Renewal of BMBE Registration

With Assets of less than P300,000

1. Registration with SEC or DTI

2. Mayor’s Permit
3. Annual Information Return or Income Tax Return filed with the BIR

With Assets of P300,000 to P3,000,000

1. Registration with SEC or DTI

2. Mayor’s Permit
3. Registration with BIR
 4. Sworn Statement or Affidavit stating that the enterprise is micro in nature and based in
barangay
5. Sworn Statement of Assets and Liabilities
6. Image of the place of business
7. Image of the assets except cash, receivables and intangibles
8. Copy of Contracts of Loan if any
9. Income Tax Return filed with the BIR

The cost to register BMBE in City Office is encourage to be FREE but the LGUs are allowed to
collect of not more than P1,000.00.

How to Apply for Income Tax Exemption?

Once the BMBE Certificate of Authority is released by the City Treasurer, submit and apply for
Income Tax Exemption in the Bureau of Internal Revenue (BIR).

Below are the procedures and requirements:

BIR Requirements for Income Tax Exemption Application

1. Photocopy of BMBE’s Certificate of Authority

2. Sworn Statement of Assets with supporting documents
3. List of Branches, warehouse, factories,etc
4. List of Affiliates
5. Latest Audited Financial Statement, if applicable

Grounds for Termination of BMBE Certificate of Authority

1. Change of business address

2. Total Assets exceed P3,000,000
3. Voluntary surrender of the BMBE Certificate
4. Death of the sole proprietor
5. Non-compliance and violation of RA 9178
6. Consolidation or merger to an enterprise which is not BMBE registered
7. Sale of the BMBE enterprise
8. Falsification of documents
9. Closure of the BMBE enterprise