Barangay Micro Business Enterprise (BMBE) Registration Guide

Small businesses are seen as the backbone of local economies in the Philippines—vital for job creation, poverty alleviation, and grassroots economic development. That’s why the Barangay Micro Business Enterprises (BMBEs) Act of 2002 was enacted: to promote and support the growth of small-scale enterprises nationwide.

In this guide, we’ll outline the main criteria for qualifying for BMBE registration, walk you through the application process, and explain the benefits of certification—including tax exemptions and access to financial assistance.

We’ll also introduce Wise Business as a cost-effective solution for micro businesses that are expanding beyond their local barangay and engaging with international suppliers or clients.

What are the main criteria to qualify as a BMBE?

To qualify as a BMBE and enjoy the advantages that come with certification, a business must meet the following requirements:

• Total business assets must not exceed 3 million PHP, including those arising from loans but excluding the value of the land where the business operates.¹
• The business must be involved in either the production, processing, or manufacturing of products (including agro-processing), trading (buying and selling goods), or providing services.
• Businesses offering services that require a government-issued professional license (like doctors or lawyers) and those that are subsidiaries of larger corporations cannot qualify.
• The business must be registered with the appropriate government agency: DTI (for sole proprietors), SEC (for corporations or partnerships), or CDA (for cooperatives).

The benefits of BMBE certification

Upon successful registration as a BMBE, your enterprise can take advantage of the following benefits:

• Income tax exemption: Certified BMBEs are exempt from paying income tax on income derived from their business operations. This allows for greater reinvestment of profits and improved cash flow.
• Minimum wage law exemption: BMBEs may negotiate employee wages below the statutory minimum for workers hired after BMBE registration. However, BMBEs must still provide mandatory benefits such as SSS, PhilHealth, and Pag-IBIG contributions.²
• Local tax and permit relief: Many local government units (LGUs) offer fee reductions or exemptions from local business taxes and charges for BMBEs, helping lower overall operational costs.³
• Priority access to credit: Banks and government financial institutions are encouraged to prioritize loans for BMBEs, often through special credit windows with favorable or subsidized terms.
• Technology, training, and marketing support: BMBEs gain access to free or low-cost training, mentorship, and technology transfer programs through agencies such as the DTI, TESDA, and DOST, helping improve business skills and competitiveness.

BMBE registration procedure

Documents required for the BMBE Certificate of Authority

The documents required may vary depending on your LGU and the total value of your business assets. However, you will generally need some or all of the following:

• Correctly filled-out and signed BMBE Form 01
• Three passport-size ID photos
• Proof of business name registration (DTI, SEC, or CDA certificate)
• Mayor’s Permit or City/Municipal Business Permit
• Sworn Statement of Assets, detailing all assets (excluding land) with a total value not exceeding 3 million PHP
• Certificate of Registration from the Bureau of Internal Revenue (BIR)
• Latest Income Tax Return (ITR)

Steps to secure the BMBE Certificate of Authority

Once you’ve prepared all the necessary documents, follow these steps to apply:

1. Visit the City or Municipal Hall of the LGU where your business operates.
2. Submit the completed BMBE Form 01 and supporting documents to the Office of the City or Municipal Treasurer (OCMT).
3. The Treasurer will evaluate your application to confirm that you meet the eligibility requirements.
4. Your application will be processed within 15 working days after submission.
5. Once approved, the Treasurer will issue your BMBE Certificate of Authority, which is valid for 2 years and renewable thereafter.

The LGU does not charge any fee for issuing the Certificate of Authority. However, it may collect a fee of up to PHP 1,000 to cover administrative costs for registration and monitoring.

BIR registration and compliance

After getting your BMBE Certificate of Authority, your business automatically becomes exempt from the Minimum Wage Law.

However, this exemption does not automatically extend to income tax. To enjoy income tax exemption, you must register or update your registration with the Bureau of Internal Revenue (BIR) through your local Revenue District Office (RDO) and have your BMBE status officially recorded as tax-exempt.

At the RDO, you may be required to submit some or all of the following documents:

• A copy of your BMBE Certificate of Authority
• A sworn statement of assets of the BMBE and/or its affiliates, with supporting documents
• A certified list of your branches, sales outlets, production sites, storage facilities, and warehouses
• A certified list of affiliates
• Your latest audited financial statement, Account Information Form, or an equivalent document

If your business is new, this step may be completed as part of your initial BIR registration using Form 1901 (for sole proprietors) or Form 1903 (for corporations and partnerships).

If your business is already registered with the BIR, you must update your registration records using Form 1905 to reflect your new BMBE status and ensure your income tax exemption is properly recorded.⁴

Upon registration, the BIR will issue Form 2303 (Certificate of Registration), which confirms your business’s TIN and BMBE tax exemption status. This certificate must be clearly displayed at your place of business at all times.

Ongoing compliance obligations

Even with an income tax exemption, BMBEs are still required to comply with other tax obligations—such as withholding tax and value-added or percentage tax—and to maintain proper books of accounts and financial statements.⁵

Here’s a quick summary of the key obligations that still apply:

• The standard 3,000,000 PHP gross sales threshold determines if your business must register for VAT.
• BMBEs must still comply with withholding tax rules on employee compensation, rent, and other applicable payments.
• Even with no income tax due, BMBEs must still file annual information and income tax returns (such as BIR Form 1701 or 1702).
• BMBEs must issue official receipts or invoices that are marked as "BMBE-Exempt".⁶ These must be properly authorized and registered through your designated RDO.
• The BMBE Certificate of Authority must be renewed every two years by submitting an updated application and proof of continued eligibility, such as the latest ITR.

Grow your BMBE with Wise Business

Completing your BMBE and BIR registration officially establishes your small business as a legitimate and trusted part of the local economy. Staying compliant is essential, which is why keeping up with your filings and renewals is crucial to continue enjoying the tax exemptions and other benefits that come with being a BMBE.

Failure to comply can result in fines, the cancellation of your BMBE status, and liability for back taxes, interest, and penalties. To avoid these issues, keep a close eye on your 3,000,000 PHP asset ceiling, and if you’re approaching that limit, start planning early for a smooth shift to another tax regime—such as the 8% optional income tax—to avoid any sudden tax surprises.

Once your BMBE Certificate of Authority is secured and your compliance obligations are under control, you can focus on growing your business. For many microenterprises in the Philippines, that growth may include engaging with clients and suppliers abroad.

Why not consider Wise Business as a cost-effective, low-hassle solution for managing international transactions? It helps you avoid high foreign exchange conversion fees, hidden exchange rate markups and other complications common with traditional banks.

With a Wise Business account, BMBEs can access more than 10 local account details in multiple currencies (such as USD, EUR, or GBP) and receive international payments with minimal fees.

• Obtain account details to receive payments in USD, EUR, GBP, SGD, HKD and more for a one-time fee of 1,400 PHP.
• Zero fees when you get paid via ACH, FAST, InstaPay/PESONet, & other local transfers.
• Send money to pay invoices, suppliers & contractors fast, with less fees
• Always get the mid-market rate with transparent conversion fees starting from 0.57%.
• Pay your bills and ad-hoc overseas expenses using the Wise Business card without hefty foreign transaction fees.
• Seamless integrations with popular accounting software.

➡️Get started with Wise Business today

Sources:

1. RA 9178 BMBE Handbook.PDF
2. Minimum Wage for Micro Business Employees in the Philippines — Respicio & Co.
3. The carrot and the stick - PWC
4. Documentary Requirements - Applying of Income Tax Exemption of a BMBE
5. Tax Exemptions for Barangay Micro Business Enterprises in the Philippines
6. BMBE Registration and BIR Form 2303 Requirements in the Philippines

Sources checked on 30th October 2025