BARANGAY MICRO

BUSINESS ENTERPRISES
Republic Act No. 9178 (BMBEs Act of 2002)

OBJECTIVE
-

Aims to integrate micro enterprises in the

informal sector into the mainstream of
the economy.

BMBEs
-

Any business enterprise engaged in

production, processing, or manufacturing
of products, including agro-processing, as
well as trading and services, with total
assets of not more than 3M. Such assets
shall include those rising from loans but
not the land on which the plant and
equipment are located.
Services shall exclude those rendered
by any one, who is duly licensed in the
government after having passed a
government licensure examination, in
connection with the exercise of ones
profession

Requirements
o Basic Requirements (new applicants
and for renewal of registration)
BMBE Form 01
3 passport sized ID pictures
o Additional Requirements (new
applicants)
Assets 300k
Business entry registration
Mayor's Permit or City/Municipal
Business Permit
300k < Assets 3M
Same as above
TIN
BIR Certificate of Registration
Sworn Affidavit for being
barangay-based and micro
business in nature
Sworn Statements of Assets and
Liabilities
Pictures of the Place of Business
and its assets
Copy of Loan Contracts
ITR
o Additional Requirements (registration
renewal)
Assets 300k
Same as new applicants
300k < Assets 3M
Same as new applicants
Annual Information Return

Procedures
o Go to the OFFICE OF THE TREASURER
of the city/municipality where the
business is located
o Submission of 3 copies of Form 01

REGISTRATION AND RENEWAL

-

Qualifications
o Total Assets 3 Million (exclusive of
land)
Cash
PH peso: actual currency value
Foreign Currency: official
exchange rate
Other Assets
acquisition/historical cost net of
reasonable depreciation or book
value, whichever is HIGHER
Real Property
acquisition cost net of
depreciation, otherwise current
zonal value determined by the
BIR
o Barangay-based:
Majority of its employees are
residents of the municipality of the
principal place of business
Principal activity consists in the
application/use of a particular skill
or of raw materials in the locality

Business operations are confined

within the territorial jurisdiction of
the municipality
Micro-business in nature and scope
Principal activity is for livelihood, or
determined by the SMED council or
DTI as a priority area for
development or government
assistance
Not a branch, subsidiary, division
or office of a large scale enterprise
Policies and business modus
operandi are not determined by a
large scale enterprise

o
-

Processing of application within 15

working days upon submission of
COMPLETE documents (exceeds 15
WD: deemed registered)
Issuance of Certificate of Authority

Cost of Registration
o Free of Charge
o Administrative Costs of LGUs 1K

Exemption from the Coverage of the

Minimum Wage Law
o Automatic exemption once registered
as BMBE
o EE still entitled to the same benefits
given to any regular ee. (e.g. SSS,
healthcare benefits)
o Prospective Application
o Mutual agreement between ER and EE
on the acceptable wage rate

Credit Delivery
o Set up a special credit window that will
service the financing needs of BMBEs.
o All loans from whatever sources
granted to BMBEs under this Act shall
be considered as part of alternative
compliance to Presidential Decree No.
717, otherwise known as the Agri-Agra
Law, or to Republic Act No. 6977,
known as the Magna Carta for Small
and Medium Enterprises, as amended.
For purposes of compliance with
Presidential Decree No. 717 and
Republic Act No. 6977, as amended,
loans granted to BMBEs under this Act
shall be computed at twice the
amount of the face value of the loans
o Any existing laws to the contrary
notwithstanding, interests,
commissions and discounts derived
from the loans under this Act shall be
exempt from gross receipts tax (GRT)
o Non-compliance: penalty fine of not
less than 500k payable to BMBE
Development Fund

Technology Transfer, Production and

Management Training, and Marketing
Assistance
o BMBE Development Fund shall be set
up with an endowment of 300M from
PAGCOR and shall be administered by
the SMED Council.

Effective for 2 years, renewable every 2

years

INCENTIVES AND BENEFITS (must be

registered)
-

Exemption from Taxes and Fees

o Purely related from its business
operations
o Must be registered with BIR to avail of
the exemption.
Registration Fee: 500.00
Requirements:
Certificate of Authority
Sworn Statement of Assets of
BMBE and/or its affiliates
Certified list of branches, sales
outlets, places of production,
warehouses and storage facilities
Certified list of affiliates
Latest audited FS or Account
Information Form or its
equivalent
Income exempt BMBE: Annual
Information Return with an
Account Information form
o Revocable
Transfer of place of business
Total Assets 3M
Voluntary surrender of the
Certificate of Authority
Death of registered individual
owner of the BMBE
Violation or non-compliance with
the provisions of R.A. 9178
Merger/Consolidation with an entity
not eligible to be a BMBE
Sale or transfer of the BMBE
Submission of fake or falsified
documents
Retirement from business or
cessation/suspension of operations
for 1 year

Making false/omitting required

declarations or statements
LGUs are also encouraged to either
reduce the amount of local taxes, fees,
and charges imposed or exempt the
BMBEs from local taxes, fees, and
charges.

Agencies may avail of the said fund for

technology transfer, production and
management training and marketing
assistance to BMBEs.

Trade and Investment Promotion

Reference:
http://www.businessesfightingcorruption.org/laws/
RA_9178.pdf

Prepared by:
Abellanosa, K. N.
Adolfo, A. C.
Dayo, Y. J.