Building More: How to Start a Construction Business in the Philippines

In the Philippines, we are seeing significant growth in the construction industry, with an increasing number of infrastructure projects driven by both government proposals and private local business initiatives. Starting a construction business in the country can be a promising venture, and many are beginning to recognize how financially rewarding the local construction landscape can be. This, along with the influx of foreign investors, continues to make the Philippines an attractive destination for financial and property investment from both international and local business entities.

Starting a construction business in the Philippines offers clear advantages, but there is a strict process that must be followed to ensure high-quality output from all construction projects. Whether you are an experienced professional or a newcomer to construction business management, there are several ways to begin building your own construction company in the Philippines. In this article, we will provide a general overview of the essential steps needed to start a local construction business.

Figure Out What Your Business Is All About

The first thing to do when starting a construction business, or any business, for that matter, is to figure out exactly what your enterprise is going to be all about. For construction businesses, the dream can be big, but beginners in the industry should take a step back and look at the future realistically before setting achievable goals based on their current capabilities.

It’s nice to imagine becoming the next DATEM or DMCI. However, at the start, it’s more practical to lay out smaller goals that contribute to the bigger picture. If you’re planning to start a construction firm, what is the ultimate objective? Do you envision a company that handles general property development, or are you leaning toward a more specialized niche, like designing patios or personalized backyards? These are the questions you and your team need to answer before officially launching your venture to establish a construction company in the Philippines.

Create A Business Plan

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Once a business goal is solidified, the next step is to begin planning how the business will operate. From here, the process becomes specific to the type of construction business you plan to pursue. Business plans are essential, as they provide a formal introduction to your business and outline how it is meant to function.

An analysis of the branch of the construction industry you’ve chosen should also be conducted and incorporated into the business plan. The characteristics of this branch should influence how your construction business operates to ensure it runs efficiently, stays streamlined, and progresses faster than existing competitors.

Below are the contents that should be included in your business plan:

• Executive Summary
• Company Description
• Market Analysis
• Service or Product Descriptions
• Plans For Marketing And Sales
• Funding request (For businesses that require loans or financial investments.)

Get Your Permits And Licenses

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After preparing and finalizing your business plan and securing safe funding, the next important step is to obtain all the necessary permits and licenses required to legally operate as a construction company in the Philippines. Below are some of the essential permits and licenses that a hopeful business entity should secure before starting operations in the country. Note that additional requirements may apply depending on your region and the specific nature of your business.

• Business TIN Number (Bureau of Internal Revenue)
• Barangay Clearance
• Mayor’s Permit/ Business Permit
• Business Name Registration Certificate (Department of Trade and Industry)

It is highly likely that you will be hiring a team to work alongside you in the construction company. Below are some permits you need to acquire before proceeding with operations.

• SSS Employer’s Registration
• Pag-IBIG Employer’s Registration
• PhilHealth Employer Registration
• Department of Labor and Employment Permit

In addition to the requirements needed to start operating your construction business in the Philippines, you must also secure a PCAB license. A PCAB (Philippine Contractor’s Accreditation Board) license is mandatory for any contractor or sub-contractor intending to legally operate in the local construction industry.

According to Republic Act No. 4566, as amended by Presidential Decree No. 1746, it is illegal to engage in construction work in the Philippines without first obtaining a PCAB license. There are two types of PCAB licenses: a regular license and a special license. The appropriate license for your business depends on the nature of your company’s projects.

Find Your Suppliers, Hire Your Staff, Buy Your Equipment

Once you have secured all the necessary licenses and permits for your construction venture, you can start sourcing the material suppliers needed to begin operations. Hiring staff should also be a priority, along with purchasing the equipment you need or finding a reliable place to rent. The basic structure of your business should already be in place, and the next step is to fill it in with the necessary resources.

Starting A Construction Business In The Philippines

Beginning your journey to a successful future in the construction industry is possible if you know where to get all the right tools you’ll need along the way. A solid business plan, permits and licenses, resources, and most of all, a clear goal will definitely help boost your budding business and bring you closer to the goals you’ve laid out for yourself. Following the basic guidelines and doing more research to gain insights into starting a construction business in your chosen niche will make success even more attainable.

References:

• Business Permits & Licenses For Business In The Philippines. (2017, May 7). Business News Philippines. Retrieved July 18, 2023, from https://www.businessnews.com.ph/business-permits-philippines-20170507/
• Construction Industry Authority of the Philippines (CIAP). (n.d.). Contractor’s Licensing and Registration. Construction Industry Authority of the Philippines. Retrieved July 18, 2023, from http://construction.gov.ph/program_and_services/contractors-licensing-and-registration/
• Martilyo. (2021, July 15). How to Start and Run a Construction Business in the Philippines. Martilyo. Retrieved July 18, 2023, from https://martilyo.com/blog/start-construction-business-philippines/
• rachitect. (n.d.). How to Become a Construction Contractor in the Philippines. Rachitect. Retrieved July 18, 2023, from https://rachitect.com/how-to-become-a-construction-contractor-in-the-philippines/
• Triple i Consulting Inc. (n.d.). How to Get a PCAB License in the Philippines – Triple i Consulting. Triple i Consulting Inc. Retrieved July 18, 2023, from https://www.tripleiconsulting.com/permits-and-licenses/how-to-get-pcab-license-philippines/
• U.S. Small Business Administration. (2023, June 12). Write your business plan | U.S. Small Business Administration. SBA. Retrieved July 18, 2023, from https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan