Employ
RecruitDoing Business in the Philippines
-
Drew Donnelly
- Published
- April 18, 2026
Do you want to expand your business into the Philippines or hire employees there? Here are some key things you need to know about a Philippines expansion.
- 5 ★ on G2
Let Remote People handle payroll, compliance, and HR admin worldwide so you can focus on building your team.
Philippines Economy Overview
Currency
₱ Philippine Peso (PHP)
Working hours
40 hours/week
Public/bank holidays
18 public holidays
Capital
Manila
Languages
Filipino (Tagalog) & English
Population
117.3 million
Minimum daily salary
PHP 573 – 610
Tax year
1st Jan – 31st Dec
Date format
DD/MM/YYYY
Misclassification penalties
Penalties for misclassification may include back-payment of minimum wage, overtime, paid vacation, pension and employment insurance contributions.
Fun fact
The Philippines is home to the Puerto Princesa Subterranean River National Park, which boasts the world’s longest navigable underground river.
Sitting on the edge of Southeast and East Asia, the Philippines is strategically positioned near key financial and business hubs such as Hong Kong, Singapore, Shanghai, and Tokyo. The country has one of the largest populations of highly educated English-speaking talent in the region, with salaries often lower than those of equivalent talent in more developed countries. These factors have contributed to the Philippines becoming a global hub for back-office operations.
Overview of Philippines's Economy
As an emerging market, the Philippines has transformed from a largely agricultural-based economy to a more diversified one. Today, the Philippine economy is characterized by several key sectors:
- Call Center and BPO Outsourcing: The Philippines has become a leading destination for call centers and Business Process Outsourcing (BPO), driving significant growth in white-collar jobs and contributing to the expansion of the middle class.
- Electronics Exports: The country is a crucial exporter of electronics, including chips, printers, and hard disk drives, making it an important player in the global electronics market.
- Shipbuilding and Repair: The Philippines is recognized globally for its shipbuilding and repair industry, ranking among the top shipbuilding nations.
- Agriculture: The country remains a major producer of agricultural products like sugar, coconuts, pineapples, and rice, contributing significantly to its economy.
- Tourism: Successful promotion campaigns such as “It’s More Fun in the Philippines” have boosted the country’s tourism sector, making it an increasingly popular destination for international travelers.
Additionally, millions of Filipinos work abroad as Overseas Filipino Workers (OFWs), sending back billions of dollars in remittances. These remittances play a critical role in fueling the growth of the services sector and supporting the national economy.
Taxes
Employer Tax: 10.40%
Social Security
10.4%
Employee Tax: 4.5%
Social Security
4.5%
Income Tax
Income taxes in the Philippines are levied on both federal and provincial/territorial levels, see details here.
Gross Income (PHP)
Up to 250,000
250,000 – 400,000
400,000 – 800,000
800,000 – 2,000,000
2,000,000 – 8,000,000
More than 8,000,000
Tax Rate
0%
15%
20%
25%
30%
35%
Business Regulation in the Philippines
Familiarizing yourself with the regulatory framework of the Philippines is crucial to maximize the odds of a successful expansion into the market. Here is a quick snapshot.
Business Registration
First and foremost, the Philippines’ “Revised Corporation Code,” effective in 2019, streamlines business incorporation with electronic filing systems. This allows single-person corporations and requires all businesses to register with the Securities and Exchange Commission (SEC).
Labor Laws
The “Labor Code of the Philippines” governs employment, ensuring rights such as standard working hours (8 hours/day), leave entitlements, and protections for both local and foreign workers.
Taxation
Corporate tax in the Philippines is set at 30%. Various incentives, like tax holidays in Special Economic Zones (SEZs), help attract foreign investments. Double taxation agreements with numerous countries prevent businesses from being taxed twice on the same income.
Benefits of Doing Business in Philippines
There are a number of undeniable benefits of doing business and expanding into a market like the Philippines. From government incentives for foreign companies to a well-educated workforce, here is an overview.
Strategic Location
The Philippines is located in Southeast Asia, making it an ideal place for businesses looking to tap into the rapidly growing markets of both Southeast and East Asia. Its also close to key financial and business hubs like Hong Kong, Singapore, Shanghai, and Tokyo.
On top of this, the country is a member of the Association of Southeast Asian Nations (ASEAN), which gives it access to a broader regional market through free trade agreements.
Skilled and Cost-Effective Workforce
The Philippines is home to a large, highly educated, and English-speaking workforce, with many holding tertiary education degrees, especially in areas like Information Technology (IT).
The relatively low labor costs compared to other neighbouring Asian countries with similar skill levels also make the Philippines an attractive destination for outsourcing and back-office operations.
Government Incentives
The Philippine government actively promotes foreign investment through various incentives. This includes incentives such as tax holidays, duty-free importation of capital equipment, and additional deductions for labor expenses.
On top of this, the Special Economic Zones (SEZs) provide additional benefits, such as infrastructure support, streamlined regulatory processes, and reduced tax rates.
Business Expansion Options in the Philippines
The most common structures for new foreign enterprises are subsidiaries (corporations) and branches. However, with that said, foreign businesses can establish their presence in the Philippines through several types of entities, including corporations, partnerships, representative offices, branch offices, regional headquarters (RHQ), and regional operating headquarters (ROHQ).
Philippines Employer of Record (EOR)
Similar to a professional employer organization (PEO), a Philippines employer of record (EOR) hires employees on behalf of a company, managing all employment-related legalities and compliance. The Philippines EOR becomes the official legal employer of your Philippines team. This method is fast and efficient, making it perfect for companies that need to quickly deploy staff on the ground.
An EOR handles payroll, benefits, taxes, and compliance with local labor laws, allowing businesses to focus on their core activities. They may also provide additional services, such as Philippines talent acquisition and visa support.
For more general information on compliant employment, check out our 9 Key Steps for Hiring Philippines Employees.
Recruitment Agencies
Recruitment agencies in the Philippines help businesses expand by connecting them with skilled local talent across various industries.
Remote People provides recruitment solutions that simplify hiring and ensure compliance with Philippines labor laws.
For businesses looking to grow in the Philippines, Remote People offers the expertise and resources needed to build a local workforce quickly and effectively, making it a practical solution for market expansion.
Philippines Professional Employer Organizations (PEO)
A Professional Employer Organization (PEO) and an Employer of Record (EOR) are third-party services that help businesses manage human resources, compliance, and payroll without having a direct legal entity in the host country. In the Philippines, engaging with a PEO or EOR can really simplify and expedite the process of hiring and managing employees. It ensures compliance with labor laws, manages statutory contributions, and advises on proper termination procedures, mitigating legal risks.
Partnering with a professional employer organization (PEO) allows companies to employ local staff in Philippines without the need to establish a legal entity. This approach is quicker and less expensive, making it ideal for businesses testing the Philippines market or those with limited operations. PEOs handle administrative tasks and ensure that companies comply with Philippines regulations, reducing the complexity and risk associated with hiring local employees.
Subsidiary Incorporation
The most common structures are subsidiaries (corporations) and branches. To establish a subsidiary in the Philippines, foreign businesses must comply with specific incorporation requirements.
A subsidiary can be 100% Filipino-owned, 60% Filipino-owned, or 40.01% to 100% foreign-owned, based on the Foreign Investments Act provisions. Key documents for incorporation include the Articles of Incorporation, By-Laws, and, if required, endorsements from other government agencies. Additionally, foreign corporations must secure a License to Operate from the SEC to function legally in the country. This streamlines their entry into the Philippine market without undergoing the full incorporation process.
Branch Registration
A branch office in the Philippines operates as an extension of its parent company, with the foreign parent being liable for all debts. The minimum paid-up capital requirement is USD 200,000, which can be reduced to USD 100,000 if the branch is involved in advanced technology or will employ at least fifty direct employees. For Domestic Market Enterprises (DME) that sell goods and services locally, the required capitalization is USD 200,000. Export-oriented branches, where 60% or more of gross sales come from exports, are exempt and can register with as little as PHP 5,000.
Requirements for setting up a branch include submitting the SEC Application Form No. F-103, a certified copy of the Board Resolution authorizing the branch, audited financial statements of the parent company, certified copies of the Articles of Incorporation of the parent company, a Certificate of Inward Remittance, and a Certificate of Bank Deposit for the initial capitalization amount. Additionally, endorsements from relevant government agencies and the acceptance of the appointment by the Resident Agent are necessary.
Business Opportunities in the Philippines
Expanding into the Philippines offers numerous benefits for businesses due to its strategic location, large English-speaking workforce, and favorable economic environment.
| Business Opportunity | Reasons |
|---|---|
| Business Process Outsourcing (BPO) | The Philippines has established itself as a global leader in the BPO industry, offering a large pool of English-speaking, highly skilled professionals at competitive costs. The government provides incentives and support for the BPO sector, and there are opportunities in various subsectors, such as customer service, technical support, and back-office operations. |
| Tourism and Hospitality | The Philippines boasts a wealth of natural and cultural attractions, including pristine beaches, scenic landscapes, and vibrant festivals. The government has identified tourism as a key growth sector and is investing in infrastructure and marketing initiatives to attract more visitors. There are opportunities in hotel and resort development, ecotourism, and adventure tourism. |
| Infrastructure Development | The Philippine government has launched an ambitious infrastructure program called “Build, Build, Build” to address the country’s infrastructure gaps and support economic growth. There are opportunities for foreign investors to participate in public-private partnership (PPP) projects in transportation, energy, water, and telecommunications. |
| Retail and E-commerce | The Philippines has a growing middle class with increasing purchasing power, driving demand for consumer goods and services. The country’s large, young population is also highly connected and tech-savvy, presenting opportunities in e-commerce and digital services. There is potential for foreign retailers to enter the market through partnerships with local companies or by setting up their own operations. |
| Renewable Energy | The Philippines is committed to increasing the share of renewable energy in its power mix to reduce dependence on imported fossil fuels and mitigate the impacts of climate change. There are opportunities for investors in solar, wind, hydropower, and geothermal energy projects, supported by government incentives and feed-in tariff schemes. |
These business opportunities are bolstered by the Philippine government’s initiatives to enhance the ease of doing business, encourage economic liberalization, and attract foreign investment.
The country’s legal system is designed to support foreign investments with various entry options, including subsidiary incorporation and branch registration, each with specific regulatory requirements. The Philippines also offers a range of incentives and protections to foreign businesses, including compliance with local labor laws and efficient payroll management through PEO/EOR services.
As the country advances its reforms, expands infrastructure, and strengthens ties with both regional and global markets, the prospects for business growth and success in the Philippines are set to rise.
