Can You Hire in the Philippines Without a Philippine Entity?
5 min read
This guide is for foreign founders and managers who want their first Filipino hire to be legal, and aren’t sure whether they must incorporate first. You’ll get a direct answer, a three-question tool, a side-by-side table and a checklist of what hiring directly involves.
Key Takeaways
- You don’t always need your own Philippine company. Each route trades setup effort, cost and risk differently.
- Employing someone yourself means registering as an employer and running payroll, remittances and 13th month pay.
- An Employer of Record (EOR) is one option, not the only one. It carries a service fee and a commitment period, so read the terms.
Do I need a Philippine entity to hire Filipino staff?
Short answer: only if you want to be the employer yourself. Employing staff directly means incorporating a Philippine company and registering it with the BIR, SSS, PhilHealth, Pag-IBIG and the local government. The other two routes skip that step. Here are all three:
- Your own entity. You incorporate with the SEC and become the employer. Foreign-owned companies can face sector and capital rules, so check with the SEC.
- A contractor. You engage an independent freelancer or business by written agreement. It fits when they truly run their own work.
- An Employer of Record (EOR). A provider legally employs the person in the Philippines on your behalf, while you direct the day-to-day work.
Not sure which fits? Try the tool.
Find your path in three questions
Two trade-offs sit behind those results. A contractor can be reclassified if the relationship looks like employment: Philippine courts look at who controls how the work is done, not only the contract title. And an EOR costs a monthly service fee and comes with a commitment period. Neither is a reason to avoid an option. Both are reasons to read the terms first. For the worker’s side of the numbers, see our contractor vs employee cost guide.
Entity vs contractor vs EOR: side by side
These are general patterns. Your agreement and facts can change them.
| What matters | Your own entity | Contractor | Employer of Record |
|---|---|---|---|
| Who employs | Your Philippine company. | Nobody. They run their own business. | The EOR is the legal employer. You direct the work. |
| Setup | SEC incorporation and agency registrations before the first hire. | A written agreement. No registrations on your side. | Service agreement and onboarding. No entity of your own. |
| Ongoing admin | Payroll, tax withholding, monthly remittances, filings and 13th month pay are yours. | The contractor handles their own taxes and contributions. | The provider handles payroll, tax filing and statutory benefit compliance. |
| Main trade-off | Most control, heaviest setup and compliance load. | Flexible, but reclassification risk if you control how the work is done. | A monthly service fee and a commitment period. |
| Often suits | A larger or long-term local team. | Someone who runs their own work, maybe for several clients. | One or a few long-term hires you direct, without a local entity. |
Swipe sideways on small screens.
What does hiring directly involve?
Zero-Ten Park’s published list is a useful reality check. Beyond registration, you handle monthly SSS, PhilHealth, Pag-IBIG and BIR withholding remittances, 13th month pay, statutory leave and due-process rules for any termination.
On 13th month pay, DOLE guidance says rank-and-file employees receive it no later than December 24 each year. None of this is exotic. It just needs an owner.
Where does an EOR fit?
An EOR can suit a foreign company that wants one or a few Filipino employees without its own entity. Zero-Ten Park’s published scope covers onboarding and legal employment, payroll and tax filing, statutory benefit compliance and HR support. Read the EOR wiki for the full picture.
- Fee: the service page lists US$230 per employee per month, and the wiki lists a lower rate for larger teams. Confirm the current rate.
- Commitment: 12 months, renewing automatically unless either side gives 30 days’ written notice. Ending early can trigger liquidated damages equal to the remaining term’s operational costs.
- Funding: the wiki describes three pre-funded accounts per staff member: a security deposit, a prepaid payroll fund and a contingency reserve.
- Extras: HMO and similar benefits are agreed case by case, not automatic.
- Fit: an EOR is not the only legal route, and a 12-month term may not suit a short project.
Want a second opinion on your route? Book a free 15-minute consultation.
Book a consultationFAQ
Can a foreign company hire employees in the Philippines without setting up a company?
Yes, through two routes. You can engage a genuine independent contractor, or use an Employer of Record (EOR) that legally employs the person on your behalf. Employing staff yourself requires a registered Philippine employer. Each route has trade-offs, so confirm the terms in writing.
Is an Employer of Record the only legal way to hire in the Philippines without an entity?
No. A genuine independent contractor arrangement can also work without a Philippine entity, as long as the person truly runs their own work. If you direct how, when and where they work, the relationship may be treated as employment whatever the contract says. For a specific case, ask DOLE or a labor lawyer.
What is the commitment period for Zero-Ten Park’s EOR service?
Zero-Ten Park’s published wiki lists a standard commitment of 12 months, renewing automatically unless either side gives 30 days’ written notice. Ending early can trigger liquidated damages equal to the remaining term’s operational costs. Confirm the current terms in writing before you sign.
Questions about your own hire?
Tell us your role, timeline and how you work with the person. We’ll walk through your options, including ones that don’t involve us. You can also read about Zero-Ten Park’s Employer of Record service.
