Outsourcing to the Philippines: How to Setup a BPO Company

The business process outsourcing (BPO) industry is a highly lucrative industry that’s taking the world by storm. According to the Oxford Business Group, the global BPO industry will be worth $250 billion by the year 2020.

In the Philippines, the BPO industry has grown at an annual compound rate of 10% for the past decade, making it the largest source of private employment opportunities. In 2015 alone, the industry generated 1.2 million direct jobs and US$ 22 billion in revenues. This 2017, the IT-BPM or BPO industry has overtaken OFW remittances in terms of revenue. This is projected to continue to rise in the coming years.

Because of its fast and steady growth, Datamark named the Philippines as the top offshore BPO destination in 2016, outranking India. The steady upward trend of the BPO industry in the country has prompted many foreign direct investors to start a business in the Philippines.

Take advantage of this trend and start your own company in the country! Here’s a guide on how to set up a BPO company in the Philippines:

1. Develop a business plan.

Performing a feasibility study and creating a business plan is paramount to any business venture. What type of business would you like to build? What budget range are you working with? These days, it’s not just customer support that’s being outsourced.

Determine the BPO sub-sector that you want your company to be built for. The common sub-sectors include knowledge process outsourcing or back offices, animation and graphic design work, customer support, software development, game development, design engineering, or medical transcription.

2. Register your business.

Most foreign investors turn to third-party agencies for expert guidance when fulfilling their business registration and documentation.

There are a number of Philippine government agencies that foreigners need to know concerning their registration such as PEZA, DTI-BOI, and SEC.

Business name registration can be filed with the Department of Trade and Industry (DTI) if it’s going to be under sole proprietorship. Meanwhile, business registration needs to go through the Bureau of Internal Revenue (BIR) as well to get a unique Business Tax Identification Number (TIN). On the other hand, if your business will be registered under a corporation, partnership, or association in the Philippines, you need to register with the Securities and Exchange Commission (SEC).

The Board of Investments (BOI), a regulatory branch of the DTI, provides incentives to foreigners who provide employment opportunities to Filipinos. Such incentives include income tax holiday, exemption from taxes and duties, and non-fiscal incentives, among many others.

If there’s a specific location in the Philippines where you want to operate your business, registering with PEZA (Philippine Economic Zone Authority) is necessary. PEZA also provides incentives to foreign-owned businesses who operate in economic zones, such as specific tax exemptions for three to eight years.

In addition, expats or foreigners looking to start a business in the Philippines need to process their visas at the Bureau of Immigration.

3. Choose your business location and find an office.

Decide where you want to operate in the Philippines. Major cities ideal for BPO operations include Metro Manila, Bacolod City, Cebu, Davao, Baguio, and other major cities. Remember that accessibility of location is very important for your future employees. Your business consultancy firm in the Philippines can provide recommendations about locations and office spaces that are suitable to your business model.

How many seats do you plan to fill? What office features are important for your business? These are the information pertinent to determining the perfect location and office space.

Once you’ve chosen a specific location and office space, you need to secure a Mayor’s Permit to operate your business in that local government.

4. Assemble your team.

Your managers, human resource personnel, and administrative staff are the key people needed to start a successful BPO company in the Philippines. Determine your organizational structure and the key team members, such as your operations manager, HR manager, training manager, and IT manager.

5. Process work visas and permits.

If you plan to bring in foreigners who will help you manage your BPO business in the Philippines, you need to secure working visas for them. However, the idea of BPO is that most professionals and workers will be hired in the Philippines. Before your start your visa processing, you need to have your business registration and articles of incorporation in order. You also need to prove that the foreign national you are hiring will be taking over a managerial, executive, technical, or highly confidential position in your company.

6. Train your talents.

Once you’ve hired the necessary team members and employees, start training them! You can consult with a training BPO consultant to arm your new employees with the skills needed to succeed in the new career you’ve set for them.

Communicate the career path and growth that you offer to your new employees. Continuous training and development programs will make them feel valued, thus enriching their experience in your company. This also encourages them to become engaged with the mission and vision of your BPO startup.

If you and your key players are well versed in the sub-sector you’ve chosen, then you can combine yours and their expertise in coming up with a training manual that’s both effective and efficient.

Your new BPO company is all set up!

Now that you have a BPO company operating in the Philippines, you need to work on sustainability and achieve the metrics you’ve set for your team. As a startup business, it’s a work in progress. Ironing out kinks in your system can be achieved with the help of your managers and your employees.

Filipinos are very hospitable and open-minded. Don’t hesitate to ask for their opinion and recommendations. Cultivate a healthy and dynamic work culture for an increased employee engagement and satisfaction.

Remember, your BPO company is not just yours alone, but is a business venture that you share with the rest of your employees. Enjoy your new company and everything else that the Philippines has to offer.

Comment (1)

  • Jim January 8, 2019 at 2:55 am Reply

    Hello! Someone in my Myspace group shared this site with us so I came to look it over.
    I’m definitely enjoying the information. I’m bookmarking and will be tweeting this to my followers!

    Exceptional blog and brilliant style and design.
    There’s certainly a lot to know about this subject.
    I like all of the points you’ve made. Ahaa, its nice dialogue about this paragraph here at this webpage, I have read all that, so now me also commenting at this place.

Leave Your Comment

Your email address will not be published.