Who Can Register as a BMBE – One can register as a BMBE if it is a
business entity or enterprise, whether operated as a sole proprietorship
or a corporation, partnership, cooperative or association,
organized/incorporated and existing under Philippine laws:

(a) Engaged in the production, processing or manufacturing of products or
commodities, including agro-processing, trading and services, and which
activities are barangay-based and micro-business in nature and scope:
Provided, That “services” shall exclude those rendered by (i) natural
persons who are duly licensed by the government after having passed a
government licensure examination in connection with the exercise of one’s
profession, and (ii) juridical persons such as partnerships or
corporations engaged in consultancy, advisory and similar services where
the performance of such services are essentially carried out through
licensed professionals; and

(b) Whose total assets, real or personal, inclusive of those arising from
loans but exclusive of the land on which the particular business entity’s
office, plant and equipment are situated, shall not be more than Three
Million Pesos (P3,000,000.00) or as may be adjusted by the Small and
Medium Enterprises Development (SMED) Council as mandated under R.A. 6977
as amended by R.A. 8289: Provided, That for the purpose of registering as
a BMBE, the assets must be owned and used for the conduct of its business
as such BMBE.

A business enterprise shall be considered “barangay-based” if (i) the
majority of its employees are residents of the municipality where its
principal place of business is located; or (ii) its principal activity
consists in the application/use of a particular skill peculiar to the
locality or of raw materials predominantly sourced from the area; or
(iii) its business operations are confined within the territorial
jurisdiction of the municipality or LGU in which its principal place of
business is located: Provided, however, That the enterprise may establish
warehouses, buying stations, sales outlets, and booking or administrative
offices anywhere in the Philippines, subject to pertinent rules and
registration requirements of the concerned LGUs and other government
agencies where such warehouses, outlets, stations or offices are
established.

It shall be considered “micro-business in nature and scope” if: (i) its
principal activity is primarily for livelihood, or determined by the SMED
Council or DTI as a priority area for development or government
assistance; (ii) the enterprise is not a branch, subsidiary, division or
office of a large scale enterprise; and (iii) its policies and business
modus operandi are not determined by a large scale enterprise or by
persons who are not owners or employees of the enterprise.

Documents to be Submitted by the Applicant-Business Entity or Enterprise
– To determine the value of the assets of the business entity or
enterprise applying for registration as a BMBE, the Office of the City or
Municipal Treasurer shall require the submission of the following
documents, together with the duly-accomplished Application for
Registration or BMBE Form:

(a) For a new applicant:

1. Registration as a business entity or enterprise from the appropriate
government agency (e.g., Securities and Exchange Commission (SEC)
registration in the case of corporation, partnership or association;
Cooperatives Development Authority (CDA) registration in the case of
cooperative; Department of Trade and Industry (DTI) business name
registration in the case of sole proprietorship);

2. Taxpayer Identification Number (TIN);

3. Certificate of Registration from the Bureau of Internal Revenue (BIR);

4. Mayor’s Permit or City/Municipal Business Permit;

5. Sworn affidavit executed by the sole proprietor or the President of
the enterprise, as the case may be, that the enterprise is barangay-based
and micro-business in nature and scope,;

6. Sworn Statement of Assets and Liabilities showing the values of assets
owned and to be used in the conduct of business, which shall be supported
by pertinent information such as the date of acquisition, acquisition
cost and depreciated value. In case of asset acquired during the year of
registration, it shall be supported by any of the following:

I) invoice

II) official receipt

III) contract document or deed

7. Pictures of the place of business and its assets, other than cash,
receivables and intangibles;

8. Copy of Loan Contract/s, if any, and Duly-Notarized Certification of
Amortization Payments on the Loan; and

9. Income Tax Return (ITR) with proof that it has been duly filed with
the BIR, including attachments, if any, (for an existing business only).

Incentives And Benefits -

Exemption from Taxes and Fees. - All BMBEs shall be exempt from income
tax for income arising from the operations of the enterprise.

Exemption from the Coverage of the Minimum Wage Law. - The BMBEs shall be
exempt from the coverage of the Minimum Wage Law: Provided, That all
employees covered under the Act shall be entitled to the same benefits
given to any regular employee such as social security and healthcare
benefits.

Credit Delivery. - Land Bank of the Philippines (LBP), the Development
Bank of the Philippines (DBP), the Small Business Guarantee and Finance
Corporation (SBGFC), and the People’s Credit and Finance Corporation
(PCFC) shall set up a special credit window that will service the
financing needs of BMBEs registered under the Act consistent with the
Bangko Sentral ng Pilipinas (BSP) policies, rules and regulations. The
Government Service Insurance System (GSIS) and Social Security System
(SSS) shall likewise set up a special credit window that will serve the
financing needs of their respective members who wish to establish a BMBE.
The concerned financial institutions (FIs) are encouraged to wholesale
the funds to accredited private financial institutions including
community-based organizations such as credit, cooperatives,
non-government organizations (NGOs) and people’s organizations, which
will in turn, directly provide credit support to BMBEs.

All loans from whatever sources granted to BMBEs under the 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.

Any existing laws to the contrary notwithstanding, interests, commissions
and discounts derived from the loans by the LBP, DBP, PCFC and SBGFC
granted to BMBEs as well as loans extended by the GSIS and SSS to their
respective member- employees under the Act shall be exempt from gross
receipts tax (GRT).

To minimize the risks in lending to the BBEs, the SBGFC and the Quedan
and Rural Credit Guarantee Corporation (QUEDANCOR) under the Department
of Agriculture, in case of agribusiness activities, shall set up a
special guarantee window to provide the necessary credit guarantee to
BMBEs under their respective guarantee programs.

Technology Transfer, Production and Management Training, and Marketing
Assistance. - A BMBE Development Fund shall be set up with an endowment
of Three Hundred Million Pesos (P300,000,000.00) from the Philippine
Amusement and Gaming Corporation (PAGCOR) and shall be administered by
the SMED Council.

Trade and Investment Promotion. - The data gathered from business
registration shall be made accessible to and shall be utilized by private
sector organizations and non-government organizations for purposes of
business matching, trade and investment promotion.

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