Setting up a BPO Back Office in the Philippines: A Guide for Foreign Companies

The Philippines is one of the most popular destinations for companies looking to move their back office and non-client facing roles offshore. With a deep pool of skilled professionals, the region enables businesses to reduce overhead costs, support 24/7 operations, and scale without losing their competitive edge.

Not sure where to begin, or which setup model suits your team? This article explores how you can set up a back office BPO in the Philippines and the models that make expansion in the region simple, legal, and scalable.

Why should you set up your BPO back office in the Philippines?

Overview of the Business Process Outsourcing Industry in the Philippines

The Philippines has established a reputation as a key location for foreign companies outsourcing their back office operations. In 2024 alone, the Business Process Outsourcing (BPO) sector contributed 8.5% to the Philippines’ GDP, cementing its role as one of the country’s most resilient economic engines.

This is especially because the country boasts a highly skilled and young workforce with a strong command of the English language. Commonly outsourced services to Philippines include:

• Marketing and content creation
• Customer support contact centers
• Human resources and accounting
• IT and software development
• Data analytics and processing

How Filipino Work Culture Supports Back Office Outsourcing

Several factors make the Philippines one of the most popular locations for outsourcing back-office teams by overseas companies. Culturally speaking, the country shares a strong affinity for Western culture, making communication and relatability between cross-border teams more efficient.  

Another encouraging social factor is that working night shifts to accommodate different time zones is a widely accepted practice for Filipinos. This allows you to offer 24-hour customer service options for your clients, which in turn sets you apart from competitors. Refer to our guide to remote work across time zones for US companies hiring in the Philippines for more information.

As mentioned earlier, The Philippines offers an experienced and large English speaking talent pool. This also helps you ensure that your prospective candidates provide the same service standards as their Western counterparts while costing less than half.

Pros and cons of establishing a BPO back office in the Philippines

Suppose you are considering outsourcing some of your back office duties to the Philippines. In that case, you must consider both the benefits and drawbacks of setting up a BPO back office for your foreign company and how these factor into your overall business objectives and allocated budget:

BeneBenefits of back office outsourcing in the Philippines	Challenges of back office outsourcing in the Philippines
Lower cost of hiring compared to similar positions in Western markets	Navigating a recruitment campaign in a different market
Access to a wider more technically skilled talent pool	Less control over your potential remote teams and role assignment
Simpler logistics versus setting up a local office space	Managing data security risks for your intellectual property
Better flexibility for your range of services (24-hour customer service, in-house IT)	Ensuring compliance with unfamiliar local HR and payroll regulations

RecruitGo has local teams in most of the key markets in Southeast Asia. We can help you navigate the challenges of outsourcing remote back office roles through our comprehensive range of services, which include international employee recruitment, managing tax and payroll compliance, and setting up remote hubs for your back office teams.

Options for setting up a BPO back office in the Philippines

Incorporating a Local Entity in the Philippines for Back Office Operations

If you’re looking to establish a legal presence in the Philippines to manage your back office operations directly, there are two primary structures you can consider: a representative office or a foreign-owned domestic corporation. 

A representative office is suitable if you don’t plan to earn local income, allowing you to manage administrative and support functions from within the Philippines. To qualify, your parent company must be at least two years old, financially stable, and able to remit a minimum of USD 30,000 in capital. Registration goes through the Securities and Exchange Commission (SEC), and a local resident must be appointed as the official representative.

Alternatively, a foreign-owned domestic corporation allows you to generate revenue or run long-term back office operations. If your main goal is to relegate back office responsibilities, then you could opt for an export entity that generates 70% of its income from abroad. The company registration process is quicker, but has specific requirements:

• 2-15 directors, can all be foreign nationals or entities
• You need a treasurer in trust (must be a resident of the Philippines)
• The corporate secretary must be a citizen of the Philippines
• Paid-up capital starting at USD 100.00 (recommended to invest at least 6-12 months worth of planned expenses)

Both options allow you to hire and manage back office staff directly but come with added responsibilities related to local HR, tax, and compliance. 

Explore the full company registration process here to learn more about timelines, documentation, and regulatory steps. 

Outsourcing Through Traditional BPO Providers

For companies with simple, repeatable tasks such as data entry, payroll processing, or basic customer support, outsourcing to a traditional BPO provider can be a fast and cost-effective solution. 

These providers supply pre-trained staff to handle routine back office functions that follow standardized workflows. Because the work is often templated or process-driven, there’s usually no need for specialized expertise or deep familiarity with your internal systems.

However, this approach may fall short if you require highly skilled talent, tight integration with in-house teams, or long-term team building. In such cases, setting up a legal entity or partnering with an employer of Record (EOR) offers greater flexibility, transparency, and long-term scalability.

Hiring Through an Employer of Record (EOR)

An Employer of Record (EOR) is another practical alternative if you want to start hiring in the Philippines immediately before setting up a local entity. It’s especially valuable if you want to test the market, build a remote team quickly, or begin operations while your company incorporation is still underway.

By serving as the legal employer, the EOR takes on responsibility for employment contracts, payroll, benefits, and local compliance. This helps reduce setup costs and administrative load while keeping your operations aligned with local labor laws.

Compared to traditional BPO providers that manage teams under their own structure, the EOR model gives you direct oversight of hiring, team structure, and internal workflows. Here’s how the two model compare:

Traditional Back Office Provider	Employer of Record (EOR)
Assigns outsourced staff managed by their internal team	Lets you hire and manage your own remote team
Often project-based or limited in scope	Ideal for long-term team-building and dedicated operations
Operates under the provider’s structure and branding	Your team works under your direction and brand
Offers less flexibility and oversight	Offers full control over staffing, roles, and output
Limited transparency on employee management	Transparent, legally compliant HR and payroll handled on your behalf
Rarely handles local labor disputes or terminations	Handles employee offboarding, disputes, and claims on your behalf

At RecruitGo, our EOR service in the Philippines empowers you to hire, manage, and grow your remote team with ease and confidence. We ensure that you have the final say in all decisions while still providing you with a cost-effective option for setting up a BPO Back office in the Philippines.

Ready to establish your back office BPO in the Philippines? Contact RecruitGo experts today to explore the most efficient solutions tailored to your business needs!