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Philippine entity
Philippine entity is a company registered with the Philippine Securities and Exchange Commission that can employ people in its own name. Without one, you are not a local employer no matter how many Slack seats you buy.
Also called SEC company, local corporation
How it works
Registration is a stack, not a form. SEC papers, BIR registration, a mayor’s permit, a barangay clearance, and employer numbers at SSS, PhilHealth, and Pag-IBIG. Foreign-owned domestic market enterprises also run into paid-up capital rules that practitioners quote in the $100,000 to $200,000 range unless an exception applies. Timeline is months. Bank accounts, a registered office, and a local signatory are part of the same pile. Once it exists, direct hire is ordinary: you sign the contract, you remit, you keep time records, you run twin-notice if you exit someone. PEZA incentives, if you want them, attach to an enterprise you control, not to an EOR you rent. Building an entity for one executive assistant is usually the expensive way to buy a payslip.
Example: a U.S. firm wants three finance seats and a five-year plan. Entity cost in professional fees might land $18,000 to $35,000 before capital. Three EOR seats at a few hundred dollars a month each are cheaper in year one and slower to unwind in year five if headcount is still three. The decision flips when headcount and tax position say the office is real.
How it differs
An EOR is someone else’s entity. Permanent establishment is a tax risk that can exist even without an entity if you look too much like a local business. A nominee employer is a name on paper with no operations. That is not this.
Common errors
Calling a virtual office plus a contractor invoice an entity. Assuming Delaware papers work at SSS. Starting PEZA paperwork through a vendor that does not own the enterprise.