Top bars in the Philippines earn from $3 to $11 million per year. Sounds profitable, right? But as an expat, you may face challenges. First, these are legal requirements that may differ significantly from those in your home country. Let’s take a closer look at the process of opening a bar in the Philippines.

Research and Planning

Planning is the first step. Here is a list of the main tasks that must be solved before launching a bar.

1. Analyze your competitors. Go to the bars. Check the location, the menu, how many people visit them and at what hours, etc.
2. Create a business plan. It should include financial planning, marketing strategy, target audience, potential profit, etc. Opening a large bar in the Philippines costs 2 to 4 million pesos ($37,000–$74,000). A small bar costs from 500,000 pesos to 1 million pesos ($9,000–$18,000).
3. Find a place to rent or buy.
4. Create a concept and design and come up with a name.
5. Obtain licenses and permits (more on this later).
6. Find suppliers.
7. Hire staff.

Legal and Financial Requirements

Let’s start by defining the business structure of the future bar. Possible options:

• Sole proprietorship. All profits, expenses, and liabilities belong to one person. Legal registration is performed at the Department of Trade and Industry.
• Partnership. This is cooperation with other people.
• Corporation. This is an association of 5–15 shareholders whose liability is proportional to the number of their shares in the company. Both corporations and partnerships require registration at the Securities and Exchange Commission (SEC).

Once the decision is made, you can proceed with the registration process. Key steps:

1. Register at the DTI or SEC.

2. Obtain a business permit and license. You will need:

• Tax Identification Number
• Barangay (an administrative unit, usually a city or village, where your business is located) Clearance
• Certificate from the DTI or SEC
• Cedula (a document on payment of a residence tax)
• Sanitary Permit, as well as a medical certificate issued by the City Health Officer for employees
• Lease agreement or certificate of ownership of the premises

3. Register at the Bureau of Internal Revenue and the Social Security System.

On this site, you can find a list of the relevant institutions with numbers, addresses, and websites.

As an entrepreneur, you are obliged to pay taxes. Their amount depends on the business structure of your bar. For more information on tax rates, visit the BIR website. And here, you can read the tax FAQ.

The legal system can be a mystery to an expatriate, so it’s worth contacting trustworthy legal and financial advisors.

Location and Design

When it comes to choosing a location, you have two options: rent or buy. In both cases, the bar should be in a good area: where a lot of people pass by, where there are many houses, and which is clearly visible from the road. 

In the Philippines, you can buy a ready-made bar, but this step requires analysis. Is it being sold because it’s not profitable, or is the owner just retiring?

The rental price varies depending on the location and square footage. For example, in Cebu City, a 300 m2 space can cost about $1,100 per month. Here, you can find prices for commercial real estate.

Hiring and Training Staff 

Hiring staff should be flexible. For example, a bartender and a cook should definitely have solid skills. But when hiring waiters, the main thing is that the employee should be in line with your company’s values, friendly, fast, and attentive. The rest of the skills can be mastered with your help.

How many staff members should a bar have? It depends on its size. But even in a small bar, there should be at least one waiter, bartender, cook, security guard, and preferably an administrator on the shift. Approximate salaries for bar staff can be found here.

Choosing a POS System

To conveniently manage orders and keep track of inventory, you need a POS system. This is a program that stores information about the quantity of goods in the warehouse, all menu items, and their prices. When taking an order, the waiter chooses a dish, which is automatically transferred to the POS terminal to the kitchen (and the cook knows what to cook), and the corresponding amount of products is removed from the warehouse.

The system works in real time and even offline. The owner can control everything that happens in the bar through the app. Learn more about this to automate your bar.

Marketing and Promotion

Promoting a bar is a mixture of science and art. A bright concept, attractive design, social media promotion, happy hours, events (stand-ups, concepts), special offers for regular customers, etc. will help you to get ahead.

Final Words

Opening a bar in the Philippines is a profitable but challenging business. Actually, just like in any other country. As an expat, you will face differences in legislation, mentality, and customer behavior. However, consultations with financial, legal, and business advisors can help you settle in and launch a successful business.