Doing Business in the Philippines with a PEO/EOR
The increasing reliance on technology in the Philippines is making the country more internationally-connected. The market is rich in opportunities in a number of industries, including transportation, science, and communications and the fact that English is spoken widely by its 101 million inhabitants makes it an especially friendly destination for foreign investment.
That said, the legal system, and indeed the administrative systems of government, are yet to modernize to facilitate the entry of foreign companies, and for that reason partnering with a reputable professional employer organization (PEO) or employer of record (EOR) is a smart move.
Why use a PEO/EOR in the Philippines?
While the available marketing opportunities are a source of enthusiasm for foreign investors, the same cannot be said about the prospect of dealing with the Philippines complex regulatory environment. The laws in the Philippines are complex and at times contradictory, making it important to find local employment experts who really know that they are doing.
A PEO/EOR can be an excellent partner in this regard, not least because having staff on the ground in a country helps manage the big picture of compliance as well as the finer details of day-to-day employment.
Horizons
Singapore-headquartered Horizons has been assisting its customers with tailored, locally-based solutions in the Philippines since 2017. Horizons is a PEO/EOR service that brings in local experts for a whole suite of human resources help: recruitment, hiring, compliance, and payroll administration.
Horizons promises to help reduce the risk involved in overseas hiring. Using their services can help new businesses gain a foothold in a competitive Philippines market while postponing the necessity of legal entity setup. Their client base is broad, and their growth in new countries is laid on a strong foundation of local knowledge.
GlobalizationPedia has identified some of Horizons’ key advantages compared to its competitors in the growing global EOR/PEO space:
- Horizons owns a local entity in the Philippines and does not subcontract to a third-party such like some other EOR providers: Deel, Remote or Multiplier.
- They’re the Singapore Chamber of Commerce‘s official EOR partner in the Philippines.
- Physical presences in the Philippines with offices and a team of experts in Manila & Cebu, in addition to their offices abroad in Austin, Toronto & Berlin.
- Flexible & scalable pricing & flexible contract terms without long-term commitments.
- An efficient HR management platform with a dedicated support team onsite.
- Premium health insurance options available for your Philippines staff members.
- Horizons takes a consultative approach, and can advise on a tax-optimized payroll structure.
Website: Horizons
Sky Executive
SkyExecutive is a recruitment agency and PEO, meaning it can combine recruitment and day-to-day employment needs for companies looking to expand into the Philippines. This makes the process of expanding into the Philippines much more streamlined and removes the need to secure the input of multiple agencies. SkyExecutive prides itself on its network of local consultants, as that local expertise is vital for companies looking for a smooth transition into a new business environment.
Website: Skyexecutive.global
Global PEO Services
Global PEO Services offers a primarily tech-based solution for companies looking to manage the process of setting up abroad. Global PEO Services prides itself on offering an end-to-end solution that helps foreign investors with aspects from setting up businesses to managing payroll. With capacities in countries the world over, the company is having success in helping companies do that, but any company looking for a more bespoke solution should consider a PEO/EOR with local consultants rather than a technology product that can be used in any country.
Website: Globalpeoservices.com
Why are Deel, Remote, or other companies missing?
Deel, Remote, and other market-leading EORs are fine companies – but they may not be the best choice for hiring in the Philippines due to several factors:
- Such companies often prioritize hyper-growth, driven by investor demands for rapid expansion, over ensuring compliance with local regulations and protecting the interests of their customers. This can lead to potential legal and financial risks for companies utilizing their EOR services.
Example: A company focused on hyper-growth might encourage employers to hire de-facto employees as contractors, opening the client up to employee misclassification risk unnecessarily. This is especially tempting for them on emerging markets like the Philippines, where the cost of compliance can be comparable to their high fees.
- In the past, we’ve seen that such ‘young & tech-driven’ providers may not meet the necessary license requirements for providing EOR services in the Philippines – as may take years to apply for – further jeopardizing compliance.
Example: Local knowledge is the key to success on emerging markets like the Philippines. Local licensure, legal knowledge, and HR best practice all come from practical experience on the ground. For example, knowing about the Philippines Night Work Differential, and paying it accordingly, can save your company from litigation. Or, knowing that annual leave isn’t required in the first year of service, but in many roles would be expected (depending on the industry), would make your talent search easier. Having a trusted Philippines EOR or Philippines PEO partner will help make your expansion a clear success.
- Relying on a virtual-only support team can make it challenging to address any issues or concerns that may arise, potentially causing delays or disruptions in operations.
Example: If there are no local support staff in-country, your Philippines employees may be left without answers to their important questions. If you go with a company that outsources their support staff to another time zone or to non-HR specialists, you risk losing candidates, or worse, employees.
As such, it is recommended to carefully evaluate EOR providers based on their track record of compliance, experience in the Philippines, and support capabilities, rather than solely on their growth and pricing potential.
Request a Proposal
If you are looking to expand your business operations into the Philippines, GlobalizationPedia can connect you with a PEO that best fits your needs at a cost-effective price. Fill out the form below and we’ll use our extensive database of strategic partnerships to provide you with a full rundown with the best potential PEO matches for your company.
