Outsourcing, Offshoring, Accounting & Project Management, CRM Consulting and Corporate services

Do we need to incorporate in the Philippines?

This is a common question we are often asked. The simple answer is that your situation should be evaluated case by case. On this page we will go over some of the key issues.

Operational Control bar

Many companies will start with the slider moved more to the right in the beginning as it reduces risk, startup capital, etc. Over time, as outsourcing operations grow, in size (and thus investment) companies tend to take more control of processes themselves. We are happy to support clients as they make this move over time. There is no right way to grow. There are a list of factors to consider when setting up, and which factors you prefer for Brealant to handle and which you plan to handle. Below you will see a discussion of the factors to consider, then you speak to one of our account managers to guide you.

 

Physical Infrastructure

  1. Facilities (Furniture, Office Space): It is ideal to start with a nice operating environment. Many will choose serviced offices as a logical place to begin.
  2. Computers and Systems: This includes PCs, servers, VPNs, networking, and telecom systems. Again it is logical for many small to medium sized companies looking at outsourcing to procure managed services. 
  3. Security systems, cameras, card key access, etc. 

 

Management Systems

  1. Recruitment and HR: An outsourcing business is all about the people. You need to locate the right staff, have procedures in place to retain them, and labor compliance ensure that your hiring is in line with industry laws. Also included here is support for expat managers and their visa needs. 
  2. Finance, accounting, and regulatory. It may be easier to outsource these important but in some cases non-strategic functions. 
  3. Technical support and facilities management. Someone has to make sure it all stays running, again sometimes a non-strategic function. 

Depending on your evaluation of the above issues, you will decide if you want to incorporate or if you want to use Brealant's staff leasing. Some clients also do both, for regulatory or control reasons. We are happy to support both options. Note these options below can generally be customized. 

 

Option #1: Full Incorporation

This scenario you form a company, hire your accountants, hire your IT, and rent an office (or a building). This is often the long term goal for large enterprises. We can support this option as your long term goal, or your short term goal.


 Client Brealant
 Office & FurnitureCheck mark symbol
Facilities Management & Security Check mark symbol
 IT Systems & SWCheck mark symbol
 IT SupportCheck mark symbol
Recruiting Check mark symbol
HR & Payroll Check mark symbol
Finance  & ComplianceCheck mark symbol
Expat SupportCheck mark symbol
AuditCheck mark symbol
 

Option #2: Hybrid

This scenario you form a company that employs your staff. However, this company is hosted in our offices, and Brealant manages payroll, compliance, accounting, recruiting, and HR. This option is best for companies that have rules requiring all staff to be company employees. 

 Client Brealant
 Office & Furniture
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Facilities Management & Security 
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 IT Systems & SWCheck mark symbol
 IT SupportCheck mark symbol
Recruiting Check mark symbol
HR & Payroll Check mark symbol*Check mark symbol
Finance  & ComplianceCheck mark symbol*Check mark symbol
Expat SupportCheck mark symbol
AuditCheck mark symbol

*Brealant and client co-manage these functions. 

 

Option #3: Staff Leasing

In this scenario you staff are employed by Brealant, but work for you in offices provided by brealant. All salaries are fully transparent. You are not required to pay a fee to setup a company, nor are you required to do any IT.  


 Client Brealant
 Office & Furniture
Check mark symbol
Facilities Management & Security 
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 IT Systems & SWCheck mark symbol
 IT SupportCheck mark symbol
Recruiting Check mark symbol
HR & Payroll Check mark symbol
Finance  & ComplianceCheck mark symbol
Expat SupportCheck mark symbol
AuditCheck mark symbol

A comparison of options

Below is a comparison of the factors of Outsourcing, managed operations, and incorporation

comparison of the factors of Outsourcing, managed operations, and incorporation

As you can see in the above comparison that many issues faced in the outsourcing model are solved in the managed services model. As noted above on this page, Brealant can also build a solution for you where we merge Incorporating and Managed Operations. Clients sometimes seek this hybrid model to gain full legal control over the staff in the Philippines, while maintaining the audit and local expertise experience of Brealant. 

What's next?

Now that you have read the basics on the choices, you likely have a hunch on what approach is best for your enterprise. As a next step, we suggest that you talk to one of our accountant managers to give you some quality advice. Also remember that many of Brealant's clients transition over time transition over time from one service type to another. For example it is common for companies that choose the incorporation route to also use staff leasing in the interim while the company setup is in process (certain types of corporate entity such as PEZA Registration can take up to a year).