EOR vs Setting Up Your Own Philippine Entity: What Should Australian Businesses Do?
Updated July 2026
Setting up a Philippine entity costs AUD $15,000 to $40,000 in setup fees and takes 3 to 6 months before you can issue compliant employment contracts. An EOR like Team Up Now employs your Philippine staff through its own registered entity from day one, at AUD $300 per employee per month with no setup cost. For most Australian businesses hiring fewer than 30 to 50 people, the EOR is the faster, cheaper, and lower-risk path to compliant Philippine employment.
EOR: ready in days
Own entity: 3–6 months
EOR: no setup cost
Own entity: AUD $15k–$40k upfront
EOR: AUD $300/month
Own entity: accounting + legal ongoing
How do an EOR and a Philippine entity compare across key factors?
| Factor | EOR (Team Up Now) | Own Philippine Entity |
|---|---|---|
| Time to first hire | From day one — contracts issued in days | 3 to 6 months minimum to register and hire |
| Setup cost | Nil — no entity registration required | AUD $15,000 to $40,000 in legal, registration, and accounting fees |
| Ongoing compliance | Managed by EOR — SSS, PhilHealth, Pag-IBIG, BIR, 13th month | Your responsibility — requires Philippine accountant, HR, and legal retainer |
| Minimum staff to justify | 1 person (Team Up Now has no minimum) | Typically 50 or more staff to amortise setup and overhead |
| Monthly EOR or admin cost | AUD $300 per employee per month (Team Up Now) | Ongoing Philippine accounting, payroll admin, audit, and registered address costs — not published, varies |
| Employment contracts | Issued under EOR's registered Philippine entity | Issued under your Philippine entity |
| Control over staff | Full — you direct all work | Full — you direct all work |
| Permanent establishment risk | EOR absorbs the Philippine employment structure | You own the entity — full Philippine tax and regulatory obligations |
| Can staff work from home | Yes | Yes |
| Can you open a physical Manila office | Yes — arranged separately from the EOR | Yes — under your company |
| Exit / wind-down | No lock-in — transition with reasonable notice | Deregistering a Philippine company is a lengthy and costly process |
When does setting up your own Philippine entity make sense?
You have 50 or more Philippine staff and the EOR fee exceeds the cost of running an entity
At high headcount, the AUD $300 monthly EOR fee compounds. When total EOR fees exceed the ongoing cost of a Philippine accounting retainer, HR team, and registered entity, the entity model begins to make financial sense.
Your business strategy includes a long-term Philippine operational hub
If you are building a major offshore operation — not just a support team — owning the entity gives you full control over IP, employment terms, and office infrastructure over a long horizon.
You require a Philippine entity for regulatory or contractual reasons
Some industries and government contracts in the Philippines require a locally registered company. If your work scope mandates a Philippine legal entity, an EOR cannot substitute for that requirement.
When does using an EOR make more sense than a Philippine entity?
You are hiring fewer than 20 staff and your team may grow or shrink over time
The EOR fee scales exactly with your team size. You add a hire and pay one more monthly fee. You reduce the team and pay less. An owned entity has fixed overhead regardless of headcount fluctuation.
You want to be compliant from day one without a 3 to 6 month wait
Philippine entity registration involves SEC, BIR, SSS, PhilHealth, Pag-IBIG, and local government registration. That process takes months. An EOR is ready to issue contracts within days.
You want to avoid ongoing Philippine compliance overhead
A Philippine entity requires a local accounting firm, monthly payroll and statutory filings, annual audit (above certain thresholds), registered office address, and corporate secretarial maintenance. An EOR absorbs all of this for AUD $300 per employee per month.
You want to de-risk the hiring decision before committing long-term
An EOR lets you hire, test the model, and scale up — with no lock-in. If the offshore arrangement works, you can explore an entity later from a position of confidence rather than committing AUD $15,000 to $40,000 upfront.
Frequently asked questions about EOR vs Philippine entity
How much does it cost to set up a company in the Philippines?
Setting up a Philippine company involves registration fees with the Securities and Exchange Commission (SEC), Bureau of Internal Revenue (BIR), SSS, PhilHealth, Pag-IBIG, and local government units. Legal fees, accounting setup, and registered agent costs typically bring the total to AUD $15,000 to $40,000. This does not include the ongoing cost of a Philippine accounting retainer, payroll administrator, and annual audit.
How long does it take to set up a company in the Philippines?
Philippine company registration typically takes 3 to 6 months from start to first payroll, depending on the business structure, capitalization, and registration queue times with the SEC and BIR. An EOR like Team Up Now can issue employment contracts and run compliant payroll within days of engagement.
At what point does it make sense to set up a Philippine entity instead of using an EOR?
The crossover point depends on the fully-loaded cost of running a Philippine entity compared to the EOR fee at your headcount. Most advisers place the crossover at 30 to 50 staff, where the fixed cost of a Philippine accounting and HR function becomes cheaper per employee than an EOR service fee. Below that number, an EOR is typically lower in total cost and significantly lower in operational overhead.
Does using an EOR in the Philippines create permanent establishment risk for my Australian business?
Using a Philippines EOR like Team Up Now means the employment relationship is between Team Up Now's Philippine entity and your workers. Your Australian business contracts Team Up Now for services. This structure is specifically designed to avoid your Australian business creating a permanent establishment in the Philippines through employment. You should confirm your specific situation with a qualified tax adviser, as permanent establishment analysis depends on the facts of each arrangement.
Can I transition from a Team Up Now EOR to my own Philippine entity later?
Yes. If your business reaches a size where owning a Philippine entity makes sense, Team Up Now can support a transition. Your staff's employment transfers from Team Up Now's Philippine entity to yours. The process involves new employment contracts, payroll migration, and statutory re-registration. Team Up Now can advise on the transition at any point.
Not sure which path is right for your business?
Book a 30-minute call with Julius or Anna. They will tell you honestly whether an EOR or a Philippine entity makes sense at your current size.
Entity setup cost and timeline figures (AUD $15,000 to $40,000; 3 to 6 months) are based on Team Up Now's experience supporting clients through Philippine entity consideration. Actual costs vary by structure, law firm, and registration timeline. This page provides general information and is not legal or tax advice. Confirm your specific situation with a qualified Philippine corporate lawyer and Australian tax adviser.