A Simple Guide to Hiring Remote Workers in the Philippines as a Foreign Company

You’ve probably heard about companies hiring from the Philippines.

Maybe you’re curious. Maybe you’re skeptical. Maybe you’re just trying to figure out if this is actually legal and how the hell you’d even start.

Here’s what you need to know: hiring remote workers from the Philippines is completely legal, surprisingly simple, and way less complicated than most people think.

But there’s a right way and a wrong way to do it.

The Numbers Tell the Story

The Philippines has become the outsourcing capital of the world for a reason.

The country’s Business Process Outsourcing (BPO) industry is massive, well-regulated, and actively supported by the government.

Filipino workers aren’t just cheap labor.

They’re skilled professionals who speak English fluently, understand Western business culture, and work in a mature, established remote work ecosystem.

The rates are competitive. Really competitive.

You’re looking at $800-1,500/month for full-time work that would cost you $4,000-6,000/month in the US—without sacrificing quality.

And the talent pool? Deep. From customer support to software development to executive assistance, the skills are there.

Is This Actually Legal?

Yes.

When you hire a Filipino as an independent contractor, you’re not breaking any laws. Not in your country, not in theirs.

The Philippine government wants this to happen. They’ve built an entire industry around it.

But here’s the catch: you need to hire them as contractors, not employees.

That distinction matters. A lot.

What You Don’t Have to Do as a Foreign Employer

When you hire someone as an independent contractor in the Philippines, your life gets way easier.

You don’t withhold Philippine income taxes. You don’t register with their Bureau of Internal Revenue.

You don’t provide local benefits like SSS, PhilHealth, or Pag-IBIG (their social security systems). You don’t pay 13th month pay.

The contractor handles all of that themselves.

The Gray Area Nobody Talks About

Here’s something interesting: Filipino contractors are technically supposed to register with the BIR as self-employed professionals and file quarterly tax returns.

But enforcement is minimal. Most contractors don’t formally register until they need proof of income for a loan or visa.

This rarely affects you as the foreign employer. Just know that it exists.

Your Country-Specific Requirements

If you’re in the United States: Collect a W-8BEN form from your contractor. This documents their foreign status and prevents backup withholding. You won’t issue a 1099-NEC for foreign contractors.

If you’re in the UK or Australia: Same principle. Treat them as foreign vendors, not local employees. Document the independent contractor relationship clearly.

That’s it. That’s the compliance piece.

The Contract That Protects You

You need a written agreement. Not a handshake. Not a Slack message. A real contract.

What Must Be in Your Contract

Your contract must include:

A clear statement that this is an independent contractor relationship, not employment.

Scope of work and deliverables. What exactly are you paying for?

Payment terms. Hourly, project-based, or monthly retainer.

Timeline. Deadlines and milestones.

A non-disclosure agreement to protect your sensitive data and intellectual property.

Clarification that the contractor isn’t entitled to statutory employee benefits.

Where to Find Filipino Remote Workers

You’ve got options.

Some platforms focus specifically on Filipino talent and let you communicate directly without intermediary fees.

Others are broader freelance marketplaces that require more vetting time.

Then there are specialized staffing services and managed companies with pre-vetted candidates.

Timeline Expectations

Here’s what to expect:

Managed companies with pre-vetted pools: 60 minutes to 1 week.

Freelance platforms: 1-2 weeks ( quality varies).

Independent hiring: 2-4 weeks on average.

The Traditional Hiring Breakdown

A traditional hiring process breaks down like this:

1. Define the role (1-3 days)
2. Post and source candidates (3-7 days)
3. Screen and interview (1-2 weeks)
4. Check references (2-4 days)
5. Onboard and train (varies)

How to Actually Vet Candidates

Resumes lie. Or at least, they don’t tell the whole story.

Beyond the Resume

Check reviews from previous clients if available.

Conduct video interviews.

Assess technical skills, communication clarity, problem-solving ability, and cultural fit.

Use scenario-based questions relevant to your industry.

Request examples of past projects.

Ask about their experience with the specific tools you use.

The Real Skills Test

Then give them a real task. A trial task. Something small that verifies they can actually do what they say they can do.

This single step eliminates more bad hires than anything else you can do.

Payment Structure Options

You can structure payment as:

Per project (good for defined deliverables).

Hourly (good for ongoing work with variable hours).

Monthly retainer (good for consistent, predictable workload).

Pick whatever makes sense for the work you’re hiring for.

Mistakes That Will Cost You

The Big Six That Sink Foreign Employers

Not having a clear contract. This is your primary protection. Don’t skip it.

Misclassifying contractors as employees. This creates serious compliance issues in both countries.

Micromanaging. Treating contractors like direct reports blurs the line between contractor and employee. Give them autonomy.

Not testing technical capabilities. Assess real skills, not just what’s on their resume.

Ignoring communication quality. If they can’t communicate clearly in the interview, it won’t get better when they’re working for you.

Not checking references. Previous client feedback is invaluable. Use it.

The Simple Truth

Hiring in the Philippines is straightforward when you treat contractors as contractors, use clear written contracts, and avoid employee-like control.

The legal framework is simpler than you think.

You’re not dealing with Philippine employment law or tax withholding when there’s no local entity involved.

The real work is finding the right person and setting clear expectations upfront.

If you handle those two things, everything else falls into place.