- Overview: Philippines
- Global HR Compliance
- Global PEO and Payroll
- Work Permit for Hiring Expats via PEO
- Expand without a company set up
- Contractor vs. Employee: Which Is Better?
Global Expansion Guide: Avoid Risks & Grow Faster Without a Company Set Up in the Philippines”
Become an international business and gain a presence in the Philippines, avoiding the risk or expense of setting up a company.
Global PEO & EOR Partner in the Philippines — the Right Choice for International Expansion
At Acumen International, we are committed to helping businesses expand their operations worldwide. With our expertise in global PEO and EOR services, we can help you conquer new markets and achieve your business goals.
Our global EOR service is ideal for companies looking to expand into the Philippines or other countries. With our help, you can gain access to a skilled workforce, local knowledge, and competitive pricing. We understand that every business is different and has unique needs, so we provide customized solutions for every client. We specialize in payroll processing, tax reporting, benefits administration, and business immigration support in the Philippines.
Our PEO and EOR solutions are ideal for companies expanding into the Philippines or other countries. With our help, you can gain access to a skilled workforce, local knowledge, and competitive pricing.
In this guide you’ll learn how to:
- Attract and compliantly pay commission-based sales reps
- Develop international sales and extra revenue opportunities, without setting up own companies overseas
- Enter more markets, test the markets before getting established there, and easily withdraw from the unattractive countries
- Avoid legal and compliance risks
- Design an efficient system of international sales with a strong team of global salesforces
The key to expanding seamlessly into the Philippines is finding and effectively managing local people. Just a single pair of boots on the ground is a game-changer. Immediate revenue increases with a skilled globally distributed salesforce, or expedited growth with foreign local IT pros; all benefits of a solid international team and presence in the global marketplace.
However, if your company is trying to go global, or is already in those early stages, chances are that you’re starting to understand how complicated global operations can be.
Learn How You Can Expand Your Business Globally Through Employment Fast, Easily, And Risk-Free!
Risks and Drawbacks of Setting Up a Foreign Entity in the Philippines
Companies expanding their operations into new markets face the challenge of managing and scaling an employee base across multiple countries that may speak different languages. To successfully expand abroad, companies have several options for enabling hiring in international markets. The most commonly used ways are by doing the following:
- Establishing an overseas entity
- Selecting independent contractors to handle tasks remotely.
- Work with a Global EOR (Employer of Record) partner.
The global traditional expansion approach is setting up a legal entity in another country. The upfront costs are enormous and take months to set up. Setting up a foreign entity can be complex, with too many variables to capture here. Labor law, compliance regulations, company structures with dozens of employees, and economic landscapes can differ significantly when people operate across borders. However, if you aim to operate in a single country for more than five years and employ dozens of staff, this option might be your best choice.
Hiring international employees requires you to be familiar with all local employment laws, tax calculations, and resident authorizations to run a successful business. In turn, this leads to more than just high expenses but also creates additional work for your accounting, legal, and HR departments. Until recently, the most common approach for global SaaS companies was to set up a foreign entity in every country they wanted to operate. This is still a viable option for companies looking to operate in that country for at least five years, who plan to employ dozens of people there, or who plan to acquire physical assets there. However, recent global trends have led many countries to halt the approval of new foreign entities, effectively shutting out new entrants.
Permanent Establishment Risk in the Philippines: Addressing the Concerns
You may think you can get away with conducting business overseas without registering a legal entity, but you would be wrong. You might need to register your business even if you're only sending an employee on a temporary assignment or establishing a small promotional office. Failing to do so can result in severe consequences.
Different countries have different laws regarding taxes, and a multinational company must take all of these into account when conducting business. The tax authorities in the Philippines can determine which elements of the company's economic activity take place in a particular country and how much profit is attributable to them. This can be a complex process, but ensuring that the company complies with all applicable laws is essential.
Flying Under the Radar of Local Tax Authorities in the Philippines
An organization's physical presence in a country over a sustained period can trigger a taxable presence, or a "permanent establishment" (PE), in that country. This may occur if the organization generates revenue directly from activities in that country or if the organization's activities contribute to the revenue of a group entity in that country.
As an organization operating overseas, it is essential to be cautious of triggering a Permanent Establishment (PE) under local laws, as this can expose your company to unexpected tax liabilities, fines, and reputational damage. Failure to properly register a PE can have severe consequences for your business, so it is crucial to understand the requirements of each country in which you operate.
Although the Organisation of Economic Co-operation and Development's (OECD) base erosion and profit shifting (BEPS) project has had many far-reaching outcomes, one of the most significant is the modification of the definition of a permanent establishment. This change has important implications for businesses operating in multiple jurisdictions, as it may affect their tax liability.
The OECD is using Action 7 of BEPS to tackle common tax-avoidance strategies used by multinational corporations to avoid paying taxes in the countries where they do business. The organization is trying to stop companies from sidestepping local tax authorities by establishing related distributors rather than agencies or commissionaires.
Risk-free Business Expansion to the Philippines with a Global Employer of Record
To expand your business in the Philippines, you must overcome many challenges and problems as a multinational company. Employment laws and regulations can be complex and challenging to understand, with even slight missteps resulting in severe penalties. Complying with labor laws, such as paying overtime, avoiding discrimination, and handling firing procedures, can be complicated.
Suppose you don’t have time for the challenges of managing a global workforce. In that case, outsourcing global employment functions to an expert global PEO and EOR (Employer of Record) company like Acumen International can be a good decision. Our expert team can handle any HR problems, from tax compliance to employee terminations. We can help you expand your business globally without concern for legal problems related to employment in the Philippines.
Top 10 Reasons to Choose Acumen Global Employer of Record & PEO in the Philippines
1. Legal Guidance by Acumen Global EOR & PEO Partner in the Philippines
As a business owner operating across national boundaries, you must know the employment-related aspects of business in a foreign country. There are multiple layers of regulation governing employee activities, which can be costly and time-consuming to navigate, particularly for small businesses. Ensuring the correct application of these laws will help reduce your company’s risks and costs – and ensure that you comply with the labor regulations. Acumen provides business advisory services to companies planning to expand into the market in the Philippines. It assists global organizations in setting up, maintaining, and transitioning their operations in the Philippines.
2. Access to the Global Talent Pool via a Global Employer of Record in the Philippines
The world is your oyster when it comes to talent acquisition. There is no limit to where your talent can take you. With the help of Global Employer of Record services, you can easily hire the best person in the world for the job, regardless of location. This way, you can create a global talent acquisition strategy to help your business thrive.
3. Rapid Remote Work Enablement in the Philippines
A Global Employer of Record helps to accommodate remote work by providing employees with competitive benefits and no changes to their day-to-day work life. A global EOR allows employees or contractors to move to a country of their choice, where they can legally work without worrying about losing their job or changing their current lifestyle. A global Employer of Record allows you to quickly enable your organization for remote work.
4. Worker Misclassification Risk Prevention with a Global Employer of Record in the Philippines
Employee misclassification? A global Employer of Record can help you avoid expensive fines and lawsuits in the Philippines, so you can run ahead of changing regulations globally.
If you expand your business by hiring international independent contractors, be aware that their work might be too similar to what’s required of full-time employees according to local government regulations. This could put you at risk of violating employment and tax laws. To avoid penalties, consider hiring a global EOR (Employer of Record) company to manage your contractors in compliance with all applicable regulations.
Our team of HR professionals and legal experts will help you stay compliant, no matter where your employees or contractors are from.
5. Global PEO & EOR Services – 100% Global Employment Compliance in the Philippines
Hiring the right talent is a highly important procedure that’s why you need to be informed about local laws and regulations, maintain compliance with the labor, tax laws, and immigration regulations and ensure your business complies with local labor laws in the Philippines.
Addressing all these challenges would get your business off to a good start if solved correctly. That’s what you get with hiring via Acumen International, our Global Employer of Record and Professional Employment Organization (PEO). We help facilitate an extension of your HR department in the Philippines and solve all hiring-related issues. Our team helps you take care of employee setup, such as providing compliant employment contracts, payment processing, ensuring compliance, helping in communication with your newly hired employee, payroll management, etc., that helps you focus on what’s most important: the accomplishment of your business goals.
If you use an Employer of Record, regulation changes will not necessarily affect your ability to hire talent globally. No matter what changes come about, you can protect your company by leveraging a Global Employer of Record solution. This way, your employees can live where they are legally allowed to work and stay with your company.
6. Single End-to-end Global Employment Solution
Acumen International provides a convenient, all-in-one solution for expanding your business quickly and efficiently. With our solution, you can have your new employees up and running in just 72 hours. And because our solution is tailored to businesses with small or no HR and legal departments, you don’t have to worry about the hassle of managing payroll and benefits yourself.
7. Compliant Employment Contracts in the Philippines
Suppose you plan business operations in the Philippines. In that case, you will inevitably need help creating compliant employment contracts for your workforce in the Philippines If you want to learn about employment-related tax requirements, Acumen can provide comprehensive legal advice to help avoid legal pitfalls. Our service includes comprehensive employment consulting, including legal assistance with employment contract creation, according to labor law and tax regulations, mandatory employee benefits, vacations, social security contributions, tax deductions, withholdings, and more in the Philippines. By partnering with Acumen, you reduce your dependence on local infrastructure and experts in these areas. Additionally, we offer assistance with other services that can reduce your expansion costs and hiring time by up to 80%.
Acumen International Employer of Record (EOR) in the Philippines can ensure that new hires comply with local laws and regulations and handle all contracting issues. With a Global Employer of Record, you can hire local and foreign workforce with locally compliant contracts and know that your intellectual property is protected.
9. 365/24/7 Support in the Philippines
The Employer of Record handles the HR and payroll for the in-country employees across all time zones in the languages of the countries you operate in.
10. Facilitated Business Transition with a Global Employer of Record
If you’re planning to merge with or acquire another company, you may wonder about the legalities of transferring your employees from one company to another. This is referred to as an “employee transfer,” It involves many risks, paperwork can be complicated and costly, and is often rife with errors. Think of a global Employer of Record as the bridge between your companies during the transition period; the legal entity will manage all employee-related information transfers and communication before and after the merger, acquisitions, or a close-down.