Knowledge Process Outsourcing
The application of the development, structure and functioning of select portions or all of your business, offshore and/or onshore, with the force of professionals and workers available, and the capital-of therein; encompassing all of our Practice Areas and Services.
- Business Registration & Incorporation for Expatriate Entrepreneurs and/or Foreign Owned Subsidiaries, wholly owned-or not
- Company Registration for Appropriate Business Vehicle to Match the Philippine Administrative Division and it’s Governmental Tax Incentive Plan (PEZA/BOI/DTI)
- Corporate Law
- Corporate Litigation
- Due Diligence and Operational Due Diligence
- Feasibility Studies
- Immigration Services (please see “Our Services”)
- Intellectual Property
- Labor Law Concerns
- Mergers & Acquisitions
- New Market Entry
- Tax Law
Knowledge Process Outsourcing in The Philippines
One of our main practice areas at Duran & Duran-Schulze Law is assistance in the knowledge process outsourcing (KPO) sector.
To facilitate the growth of KPOs in the country, the Philippine government has come up with a slew of incentives and initiatives, ranging from tax holidays to labor law amendments.
Understanding these incentives as well as special regulations governing BPOs and KPOs is key in successfully establishing and running such a company in the county. We at Duran & Duran-Schulze Law offer our expertise in this area to help you maximize your opportunities and minimize your risks.
The Growth of KPOs
Growth in business process outsourcing or BPO has been a significant anchor in the Philippines’ economic progress. By outsourcing their service and support needs to countries like the Philippines, BPO clients are able to concentrate on their core business functions.
Recently, however, more and more clients have been engaging in knowledge process outsourcing or KPO. In contrast to BPO, KPO involves transferring clients’ core functions to overseas sources like the Philippines, and is therefore considered a higher-value service compared to BPO.
Why the Philippines?
The wealth of skills and talent in the Philippines plus relatively low business costs makes it a logical choice for KPO services. The country now closely competes with India for supremacy in this industry, offering highly-skilled and trained workforce in such areas as biotechnology, insurance market services, legal services, animation and design.
BPO, KPO, and information technology-enabled services (ITES) are part of the government’s Investment Priorities Plan, which is an annual list of industries and activities promoted by the Philippine’s Department of Trade and Industry through its Board of Investments.
Industries on this list are afforded incentives that include:
- four to six years’ income tax holiday
- more opportunities for income tax reduction
- exemption from export taxes and certain duties and fees
- employment of foreign nationals in supervisory or technical positions
- simplified importation and customs procedures
Additionally, more incentives have been put in place for companies who set up their operations in Philippine Economic Zone Authority (PEZA) ecozones and IT locations.
In addition to the investment incentives mentioned above, KPO, BPO and ITES investors may also benefit from other tax incentives that include:
- preferential tax rate of 10% of net income for companies operating as regional operating headquarters
- 15% withholding tax rate for Filipino employees with managerial or technical functions, with an annual gross compensation of P975,000. The lower tax rate allows the investing company to attract highly-qualified Filipino talents to work for the firm.
- suppliers of PEZA-registered outsourcing companies do not need a BIR certification to qualify for 0% VAT
Qualified foreign investors for eligible projects (including BPOs, KPOs and ITES) may also take advantage of other incentives such as the opportunity to transfer foreign exchange not purchased from the Philippine banking system.
How We Can Help You
Our lawyers at Duran & Duran-Schulze Law can assist you in the process of establishing your company so you can take full advantage of available incentives.
We can also help you come up with an effective employee structure, and devise a scheme that will attract the most qualified employees. We also assist in getting appropriate visas and work permits for foreign national employees.
Many KPOs and BPOs have turned to us for assistance and guidance in setting up their business and getting it operational in as little time as possible.
We also offer our services in all our practice areas to guide you throughout your company’s operations.