Why Should You Set Up a Back BPO Office in the Philippines?

The Philippines has become one of the world’s favorite destinations for outsourcing, especially for businesses looking to build a reliable BPO office. Only in 2024, BPO (Business Process Outsourcing) contributed 8.5% to the Philippines’ GDP.

In this guide, we break down why setting up your Back BPO Office in the Philippines is a smart, strategic move for long-term growth.

What Makes the Philippines a Popular Choice for Outsourcing Back BPO Office?

Widely Accepted Night Shifts

This is one of the primary reasons companies choose the Philippines for a Back-Office BPO. This helps foreign companies run real-time operations with minimal disruption despite time differences.

Working on U.S., U.K., and Australian time zones has been common for years, so many Filipinos are already used to late schedules.

High English Skills

Another major advantage is the country’s strong English skills. This ensures smooth communication and reduces the risk of errors in customer support and data processing.

Cultural Alignment With Western Countries

Familiarity with Western media makes collaboration easier for global teams. This also helps in customer-facing operations, where tone and understanding matter.

A Large and Specialized Talent Pool

The country also offers a deep pool of skilled professionals across many fields, such as accounting, IT, marketing, human resources, software development, and data analytics.

Growing Infrastructure for Global Workflows

Modern office towers and strong IT parks make the Philippines an ideal location for professional outsourcing. All ensure that back-office operations remain secure and reliable.

Pros & Cons of Setting Up a Back BPO Office in the Philippines

You need to understand both the benefits and the challenges of setting up a back office in the Philippines. This helps you plan better and set realistic expectations for your operations.

Pros

• Lower hiring costs compared to the U.S., U.K., Australia, and other Western markets.
• Large skilled talent pool in many fields.
• Strong English skills, allowing for fluent and accurate communication.
• Flexible workforce for night shifts and foreign time zones.
• Easy setup logistics when using serviced offices or BPO providers.

Cons

• Recruitment can feel unfamiliar if you’re new to the local job market.
• Less direct control over remote teams, especially without on-site managers.
• Data security risks if proper IT safeguards aren’t in place.
• Compliance requirements (labor laws, payroll rules, permits) may be complex for foreign businesses.
• Possible time zone overlap issues.

How to Set up a Back Office in the Philippines?

Most companies follow the same foundation: find the right office space, register a legal entity, and hire the right team. With proper planning, you can build a smooth, secure, and efficient operation from the beginning.

Finding an Office Space for POD

A good workspace supports better productivity, stronger data security, and smooth day-to-day coordination. Roles such as finance, HR, accounting, and customer service will perform better in a controlled and well-equipped environment.

When choosing a workspace for your BPO team, you typically have 3 options:

• Serviced offices: These spaces are fully furnished and include essentials like high-speed internet, meeting rooms, IT support, and 24/7 security. Ideal for startups, SMEs, or companies testing the Philippine market.
• Coworking spaces: Flexible, affordable, and great for small teams or hybrid setups. These spaces offer community-focused environments and monthly scalability.
• Build-to-suit offices: Best for larger companies that need full customization. While more costly and time-consuming, this option gives you total control over layout, design, and operations.

Come to the locations, you can consider some key cities in the Philippines as below:

• Manila: The largest BPO hub with strong infrastructure, a deep talent pool, and many workspace options.
• Cebu: Known for its young workforce, strong English skills, and competitive costs.
• Davao: Lower operating costs, steady talent availability, and ideal for customer support and back-office teams.

⏩ If you need help finding the right BPO office, Flyscapes can guide you to the best options based on your team size, budget, and operational needs.

Setting Up a Local Entity

If you want full control over your back-office operations in the Philippines, you can establish a local entity. Each option below works for different goals, costs, and compliance levels.

► Representative Office

This setup works best if you don't plan to earn income in the Philippines. A representative office primarily supports administrative, coordination, and office work for your parent company.

To register, your foreign company must be at least two years old and able to transfer at least USD 30,000 to fund operations. You'll also need to appoint a local resident as your official representative.

This option is simpler, but it limits your ability to generate revenue locally.

► Foreign-owned domestic corporation

If you want long-term operations or the ability to generate revenue, a foreign-owned domestic corporation is a better option.

Many back-office companies choose the export-oriented structure, where at least 70% of income comes from abroad.

Key requirements include:

• 2–15 directors (local or foreign)
• A treasurer who is a Philippine resident
• A corporate secretary who is a Filipino citizen
• A small paid-up capital is needed (starting around USD 100,000)

This structure gives you full operational control but comes with more responsibilities—such as local HR rules, taxes, payroll, and compliance.

Recruiting Staff

The next step is recruiting staff for your office. You can do that through traditional BPO outsourcing or hiring through an Employer of Record (EOR).

► Using a Traditional BPO Provider

This option is ideal for companies handling straightforward, repetitive tasks.

BPO providers deliver ready-trained staff who can quickly take over standardized back-office functions. They usually include data entry, payroll processing, customer support, and other routine workflows.

This setup minimizes training time, lowers operational costs. It also helps ensure tasks are completed with consistent accuracy.

► Using EOR (Employer of Record)

EOR is an excellent option if you want to build a Philippine team rapidly without forming a legal entity. The EOR becomes the official employer on paper and compliance with local labor laws.

This significantly reduces administrative burden and enables you to onboard talent immediately, even while waiting for your local incorporation to be completed.

Unlike BPO outsourcing, the EOR model lets you maintain direct control over the team's tasks, structure, and performance.

FAQs

How to Register a BPO Office in the Philippines?

You can register as a representative office or a foreign-owned domestic corporation. The process typically runs through the SEC (Securities & Exchange Commission), appoints local officials, and meets capital requirements.

How Long Does It Usually Take to Establish a BPO Office in the Philippines?

Depending on the structure, incorporation can take 4–12 weeks. Using an EOR allows you to start hiring in just 1 to 2 weeks while formal registration is in progress.

How Much Does It Cost to Establish a Back BPO Office in the Philippines?

It will range from USD 30,000 for a representative office to higher investments for fully foreign-owned corporations.

Costs vary by your setup model. It will cost about $10-$25/hour per hour if hiring staff through a BPO provider. EOR remains the lowest-risk and most cost-effective option for many foreign companies.

Bottom Line

Setting up a back BPO office in the Philippines brings many benefits. Those are access to skilled talent, competitive costs, and strong scalability. Flyscapes will help you find the best office space in great locations in the Philippines.