BARANGAY MICRO BUSINESS
determined by the SMED council or DTI
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
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
o Micro-business in nature and scope
Principal activity is for livelihood, or
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
- 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
o Processing of application within 15 working
days upon submission of COMPLETE
documents (exceeds 15 WD: deemed
registered)
o Issuance of Certificate of Authority
- Cost of Registration
 o Free of Charge
o Administrative Costs of LGUs 1K
- 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
o 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.
- 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.
o Agencies may avail of the said fund for
technology transfer, production and
management training and marketing
assistance to BMBEs.
- Trade and Investment Promotion