It’s also a good option when you’re entering a new market as compared to immediately setting up a new business entity. Setting up a new company will cost you more when you only have a few staff in the beginning. The maintenance fees induced in setting up a new company might be better used and paid to a subcontracting company, particularly a PEO company and the savings can be used to grow the company.
If you do not have a company in the Philippines, searching candidates through various job search online platforms like Jobstreet, Linkedin, Glassdoor and Indeed and posting job advertisements on your social media accounts might not be the ideal way to scout talents. These talents may not want to work for you if you have no presence in the Philippines. Likewise, setting up a new company to support a minimum staff will not be the best use of your time and money. Administrative tasks like recruitment, maintaining, and training offshore team members also require a lot of time and energy, leaving you with little time for other tasks.
Alternatively, hiring a reliable staff leasing company or offshore firm will enable you to tap into a larger pool of top talents who fit into your organization. Having a staff leasing company to handle the hiring of highly skilled talents and other administrative tasks allows you to save time and focus on your core business. You also reduce security and liability risk associated with directly hiring talents.
To give you an idea of how much it costs to set up a company, please see the table below:
| One time Set up | Yearly Recurring | |
| SEC, Business Permit, BIR Registration, Statutories | ₱183,500.00 | |
| Estimated government Expenses (Assuming of 1M Autorized Capital) | ₱50,000.00 | |
| Accounting fees(25,000 per month * 12 months) | ₱336,000.00 | |
| Audit assistance | ₱16,800.00 | |
| Audited Financial Statement | ₱28,000.00 | |
| Business Permit Registration | 19,600.00 | |
| Business Permit registration government fees | ₱20,000.00 | |
| BIR Annual Registration Fee (1st yr included in set-up fee) | ₱500.00 | |
| Virtual office (2,000/month*12 months) | ₱24,000.00 | |
| Payroll fees for the first 10 employees
10,000/month* 12 months |
₱120,000.00 | |
| ₱ 233,500.00 | ₱564,900.00 |
In the succeeding years, these will be the following maintenance costs:
| Services | Monthly | Yearly |
| Accounting fees (Non-Operating)* | ₱5,500.00 | ₱66,000.00 |
| Accounting fees (Operating)* | ₱25,000.00 | ₱300,000.00 |
| Nominee Fee (1 position – Staff) | ₱2,500.00 | ₱30,000.00 |
| Audit Fee (Operating)* | ₱40,000.00 | |
| Retained Legal Fees** | ₱10,000.00 | ₱120,000.00 |
| Business Permit professional fee | ₱17,500.00 | |
| Payroll fees for the first 10 employees | ₱10,000.00 | ₱120,000.00 |
| ₱693,500.00 |
If you hire talent via staff leasing, you do away with these setup and recurring costs
Note:
- The cost herein does not include the salaries of staff and other reportorial requirements per government agencies.
- Business Permit expenses (based in gross receipts more or less 1.75%-2%)
Take a look at how much it will cost you when you pursue a leased staff. (Assuming a 20k salary and 17% total solutions fee)
An employee will cost Php 4,480.12 monthly. A business entity that offshores his team with at least 10 employees would have a monthly admin and business Permit recovery fee of Php 44,801.20. Annually, it will cost you 537,614.40. This is more than the estimated overhead fees of php 693,500.00 as computed above.