Comparison
| Factor | EOR | Own entity |
|---|---|---|
| Legal employer | The EOR | Your company |
| Set-up | No local entity needed | SEC registration, BIR tax registration, local business permits, employer registrations with SSS, PhilHealth and Pag-IBIG, and a bank account |
| Payroll and compliance | Handled by the EOR | Handled by you |
| Control | You manage daily work; the EOR is the legal employer | Full control |
| Best for | Testing the market, small teams and speed | Long-term presence and larger teams |
What Setting Up a Philippine Entity Involves
- Decide on the company structure.
- Register the company with the Securities and Exchange Commission.
- Obtain tax registration with the BIR.
- Obtain local business permits.
- Register as an employer with SSS, PhilHealth and Pag-IBIG.
- Open a bank account.
- Set up payroll and HR processes.
Foreign ownership and capital rules can apply depending on the business activity. Check the requirements with a local adviser.
When an EOR Makes Sense
- You are testing the Philippine market.
- You need one to a few hires.
- You need to hire without waiting for entity registration.
- Your long-term plans are uncertain.
When to Move to Your Own Entity
- Your Philippine team is growing.
- You intend to establish a long-term presence.
- You need full control over policies and benefits.
Many EOR providers support the transfer of employees to your own entity.
Legal Structure Matters
DOLE Department Order No. 174 prohibits labor-only contracting. Ask how the EOR arrangement is structured and whether the provider holds the employer obligations and registrations itself.