Outsourcing Customer Service to the Philippines

Moving customer service operations to the Philippines is often a preferred way for companies to expand their support capabilities and reduce operational costs. However, in order to maximize the value, it is important to understand the local market and choose a model that goes well with your long-term business plans.

In this article, we will walk you through the essentials of outsourcing your customer service to the Philippines, including key considerations, popular options, and the step-by-step process to help you move forward with clarity and confidence.

Why Do Companies Choose the Philippines for Outsourcing Their Customer Service Operations?

The Philippine outsourcing industry is well-established, focused on providing high-volume, high-quality support for global clients. Its appeal lies in a combination of multiple operational strengths, not just one single advantage:

• Highly Skilled Talent Pool: A workforce fluent in English and trained to communicate with empathy and professionalism, which are key traits for front-line customer service roles.
• Lower Operating Costs: Labor and overhead costs are significantly lower without sacrificing the quality of service and responsiveness. 
• Workforce Flexibility: Access to teams that are attuned to working flexible hours and rotating night shifts, providing you with 24/7 coverage. 
• Adaptable to Global Work Cultures: An adaptable workforce, culturally attuned to Western and global practices, which helps them better understand international customers to communicate effectively.

Common Industries Outsourcing Their Operations to the Philippines

Think about your biggest customer service challenges: maybe it’s keeping up with demand, finding people with the right skills, or controlling costs. For many businesses facing these hurdles, the Philippines has become a strategic partner. 

Here’s how that partnership plays out across different industries:

• E-Commerce: Quick, consistent support for returns, shipping, and product queries helps to keep customers loyal. Outsourcing helps e-commerce businesses scale during peak seasons.
• SaaS and Tech: Product troubleshooting and onboarding require clear, technically competent support agents. Outsourced teams often come with professional and certified training, which fits well here.
• Telecommunication: Managing large call volumes while keeping customer satisfaction high demands trained, scalable teams that are easily available through outsourcing to the Philippines.
• Finance and Fintech: Speed and accuracy are necessary within the finance world; outsourced professionals are trained for this.
• Travel & Hospitality: 24/7 support is often expected, and Filipino outsourcing teams can handle last-minute changes or emergencies across different geographies.

Choosing the Right Outsourcing Model: Incorporation, EOR, or BPO

Deciding how to structure your customer service outsourcing in the Philippines involves a fundamental trade-off: control versus flexibility.

You have three main ways; traditional BPOs, setting up your own company, and using an Employer of Record. 

While many businesses previously relied on BPOs, the trend has shifted to using EORs or incorporation because of the inherent flexibility and control offered by these choices.

The exact model you opt for depends largely on your specific needs and goals.

Let’s take a look at each of these models: 

1. Incorporating Your Own Company

If you plan to build a long-term, scalable customer support operation with full control over recruitment, training, and quality standards, setting up your own company in the Philippines is the recommended option. 

You can set up a 100% foreign-owned company in the Philippines and manage your team the way you want. While this involves more administrative work, it also creates a stable foundation for growth and ensures consistency across your support operations. 

Depending on your goals, a Branch Office or Representative Office may also be worth considering.

Emerhub’s team of experts will assist you throughout the incorporation process, including legal registration, tax and payroll compliance, and HR setup.

2. Employer of Record (EOR) For Hiring Dedicated Resources

If you want to hire in the Philippines without setting up a local company, using an Employer of Record in the Philippines is a flexible and low-risk option. The EOR becomes the legal employer, handling payroll, benefits, and labor compliance, while you retain control over day-to-day management and team performance. This setup works well for businesses exploring the market, starting small, or scaling without the delays of full incorporation. The EOR can bring your existing remote team members on board within 2-5 working days or help you recruit and onboard the talent you need. 

3. Traditional BPO Outsourcing

If speed is a priority and control is less of a concern, a traditional BPO setup is often a suitable option. This approach works well for companies dealing with short-term needs, seasonal volume spikes, or noncore functions that do not require regular oversight or fixed service standards.

However, keep in mind that while it’s easy to implement, it generally limits your ability to influence team culture, quality standards, and the overall customer experience.

Process of Incorporating Your Customer Service Company in the Philippines

Setting up your own company gives you full control and flexibility.  However, it requires careful planning and expert assistance. Emerhub’s local experts help you navigate the process smoothly and set you up for long-term success.

Step 1: Determine Legal Structure and Ownership

Choosing the right legal entity for your customer service operation in the Philippines is a foundational decision with long-term implications.

Our local experts recommend setting up a domestic corporation that permits full foreign ownership. We provide tailored advice on structuring your company to ensure full compliance with ownership requirements and align with your specific business objectives in the Philippine market.

Step 2: Secure Company Name with the SEC

The next crucial step is securing a unique and compliant company name with the Securities and Exchange Commission (SEC) in the Philippines. During this, you should provide 3 business name options. 

Our team will handle the thorough checking and reservation process with the SEC on your behalf, ensuring your chosen name meets all requirements and is secured efficiently.

Step 3: Prepare and File SEC Registration Documents

After name reservation, the next step is to prepare and file the necessary registration documents with the Philippine SEC. Ensuring these documents are accurate, complete, and compliant with all SEC regulations is important to ensure a smooth registration process. 

Our legal experts will work closely with you to prepare and file all necessary documentation. 

The following are the necessary documents required during the company registration:

• Articles of Incorporation
• By-Laws
• Treasurer’s Affidavit
• Business name reservation certificate
• Proof of business address
• Other Supporting Documents, such as passport copies of shareholders/directors

Step 4: Obtain Local Government Permits (LGU)

To operate legally at your chosen location in the Philippines, securing the necessary permits from the Local Government Unit (LGU) is mandatory. 

This typically involves obtaining a Barangay Clearance (local community approval) and a Mayor’s Permit (city/municipality level). These permits are tied to your physical or virtual office address. 

If you haven’t secured an office yet, our team can provide guidance on suitable locations or set up a virtual office solution for initial registration purposes

Step 5: Register for Taxes and Social Security Contributions

As an employer in the Philippines, registering with various government agencies is a mandatory step once your company is incorporated. This includes registering with the Bureau of Internal Revenue (BIR) for tax obligations and with social security agencies like the SSS (Social Security System), PhilHealth (national health insurance), and Pag-IBIG (housing development fund).

Step 6: Open a Corporate Bank Account

The final key step in establishing your customer service company is opening a corporate bank account in the Philippines. This allows you to manage your company’s finances, receive payments, and disburse salaries. 

Our team will guide you through the documentation requirements and setup process with local banks, ensuring a smooth and efficient establishment of your financial infrastructure in the Philippines.

Ready to build your customer service team in the Philippines? Get in touch, and our experts will guide you through the next steps.