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Last updated at June 14, 2022


Philippine Piso (PHP)



Time Zone


Key Country Facts


The Philippines was a colony of Spain for more than 300 years since 1571. Then, it became the first colony of United States of America for forty years. It is the first Asian country to gain independence from colonizers.

The Philippines today is a democratic and republican state with a presidential form of government as provided under the 1987 Philippine Constitution. Separation of powers is ensured through checks and balances among the three branches of government; the Executive, represented by the President and his/her Cabinet; the Legislative, represented by a Bicameral Congress composed of the Senate and the House of Representatives; and the Judiciary, with the power of judicial review.


The Philippines is the world’s 2nd largest archipelago nation situated in Southeast Asia in the Western Pacific Ocean, consisting of 7,100 islands with a total land area of approximately 300,000 square kilometers. Its islands are classified into three main geographical areas – Luzon, Visayas, and Mindanao. With its topography consisting of mountainous terrains, dense forests, plains, and coastal areas, the Philippines is rich in biodiversity. It is considered as one of the mega biodiversity countries in the world with a high percentage of flora and fauna endemism.


The climate is generally tropical , with a relatively cool season from December to February, when the north-east trade winds prevail, and a hot, humid and rainy season from May to November, when the south-west monsoon prevails. Between March and May, before the arrival of the summer monsoon, the temperature increases and reaches the highest levels of the year.


Because of its archipelagic nature, Philippines is a culturally diverse country. The culture is a blend of traditional Filipino and Spanish culture with influences from America and other Asian countries like China and Japan. Spanish rule brought Catholicism to the entire country, replacing the indigenous religions and culture, and American rule brought education.


  • Roman Catholics 82.9%
  • Muslim 4.6%
  • Christian 5.4%
  • Others 7.1%

Official Language

63.7% of Filipinos over the age of 5 can speak English (82% in Manila and 70% in the biggest island of Luzon). 96.4% of Filipinos speak Tagalog, the official language. There are 150 recognized languages and dialects spoken in homes across the Philippines.

Philippines HR at a Glance

Employment Law

The Filipino Labor Code is the country’s general employment legislation, which regulates the relationship between employees and their employer as well as all other employment-related matters. The law applies to all Filipino enterprises, joint ventures, and to all employment relationships between Filipino nationals and foreign enterprises.

There are other special laws specifying statutory minimum employment benefits and standards, with which an employer must comply legally. These include the Social Security and Sexual Harassment Laws and the National Health Insurance and Comprehensive Dangerous Drugs Acts.

The Philippines’ Department of Labor and Employment (DOLE) is the main government agency responsible for enforcing employment laws in the country. DOLE monitors and administers employers’ compliance with labor standards and addresses employment-related issues through the Office of the Secretary of Labor and Employment, or through its regional offices.

Employment Contract

Employment contracts are required. While they may be oral or written, they must satisfy the essential requirements and minimum statutory standards laid down in the Labor Code. Any element of an employment contract that fails to do so is considered invalid.

Employment contracts need to comply with basic minimum but can be bespoke format. Employers can add more stringent terms and conditions with respect to certain areas.

In general, employment contracts are written in English, but employers must provide dual language contracts, with the other language being Filipino, if the employee in question is a Filipino national. The aim is to ensure that both parties understand the exact terms of the arrangement. Furthermore, the contract must clearly state the employment terms relating to each employee type in order to avoid confusion or future disputes.

Maximum working hours are generally eight hours per day or 48 hours per week. Employees are entitled to a daily unpaid meal break of at least one hour or a paid meal break of 20 minutes.

The compulsory age of retirement is at 65, while optional retirement may start at age 60. This does not prevent the company and its employees, however, from entering into contracts or agreements such as a CBA or employment agreement with early retirement provisions below the minimum ages set by law.

If an employee requests for a Certificate of Employment, the employer is obliged to release it within 3 days from the time of request.

Work Rules

No such requirement for submission. In lieu of a company handbook, company is bound by labor legislation even in the absence of any handbook. It’s safer not to have a handbook, so employers don’t have a noose around the neck.

Probation Period / Trial Period

  • Probation is not mandatory and cannot exceed 6 months.
  • The services of an employee who has been engaged on a probationary basis may be terminated for a just cause, or when he/she fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his/her engagement.
  • Usually six months with careful advice without waiting until six months. It’s recommended to make decision by the end of the 5th month. Employers must give a reason why the employee is being terminated. The expectations and progress should be documented, especially in the case of poor performance.

Working Hours

The normal hours of work in a day is 8 hours. This includes breaks or rest period of less than one hour, but excludes meal periods, which shall not be less than one hour.

A day-off of 24 consecutive hours after 6 days of work should be scheduled by the employer.


Entitlement to overtime pay or any other minimum conditions of employment laid down by the Labor Code

Generally, employers cannot require employees to render overtime work except in certain exemptions, and provided compensation is paid. Employers must include in the contract that the employee agrees to perform overtime work.

Overtime pay refers to the additional compensation for work performed beyond eight hours a day. Overtime pay rates for work in excess of eight hours vary when it is rendered on an ordinary workday, special nonworking holiday, regular holiday, a rest day or performed from 10p.m. to 6a.m.:

  • Ordinary working day: Plus 25% of the hourly rate
  • Scheduled rest day : Plus 30% of the hourly rate
  • Special nonworking holiday: Plus 30% of the hourly rate
  • Regular holiday: Plus 30% of the hourly rate
  • Night-shift differential perform work between 10 p.m. and 6 a.m. : Plus 10% of the hourly rate

Sample Computations

  • If an employee works overtime on an ordinary working day, the number of overtime hours is rated at [regular hourly rate x 125%];
  • If employee renders overtime on a scheduled rest day the number of overtime hours is rated at [regular hourly rate x 130%],
  • If employee renders overtime on a scheduled rest day, which at the same time is a special nonworking holiday, the number of overtime hours is rated at [regular hourly rate x 130% x 150%];
  • If the employee renders overtime on a regular holiday, the number of overtime hours is rated at [regular hourly rate x 200% x 130%];
  • If the employee renders overtime on a regular holiday, which at the same time is a scheduled rest day of the employee, the number of overtime hours is rated at [regular hourly rate x 200% x 130% x 130%];
  • If the employee renders overtime on a regular holiday, which at the same time is a scheduled rest day of the employee and rendered work from 10p.m. to 6a.m., the number of overtime hours is rated at [regular hourly rate x 200% x 130% x 130%x110%].

Those employees exempted from rendering overtime are the following: Government employees, Managers, Officers, Field personnel, Family members of an employer if they depend on that employer for support, Domestic helpers and people in the personal service of another, and Employees who are paid by results, as determined by the Secretary of the Philippines’ DOLE.


  • A 13th month bonus in Philippines is mandatory, and an additional Christmas 14th month bonus is customary. All employers are required to pay their rank-and-file employees the 13th month pay, regardless of the nature of their employment and irrespective of the methods by which their wages are paid, provided they worked for at least one month during a calendar year. The 13th month pay of a rank-and-file employee should be equivalent to at least 1/12 of the total basic salary that the employee earns within a calendar year. It should be paid no later than December 24th of each year. Nonetheless, an employer may give its rank-and-file employees half of the required 13th month pay before the opening of the regular school year in June and the other half on or before December 24th. The frequency of payment of the 13th month pay may also be the subject of an agreement between the employer and the collective bargaining agent of its rank-and-file employees.
  • The Labor Code distinguishes a rank-and-file employee from a managerial employee. A managerial employee is one who is vested with powers of prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign, or discipline employees, or to effectively recommend such managerial actions. All employees not falling within this definition are considered rank-and-file employees. Bonuses for managerial and other key officers are typically based on company’s performance.


  • The Philippines takes termination seriously. As a result, it’s an arduous process. Termination may only occur for just or authorized causes, but the employer bears the burden of proving the lawfulness of the employee’s dismissal. Employees must provide a 30-day resignation notice outlining whether it’s with just cause. Basically, there’s no such thing as hire and fire “at will.”
  • Filipino laws recognize two categories of cause for terminating employment contracts: just cause and authorized cause. An employee who is dismissed for a just cause is not entitled to severance or termination pay.
  • Staff members dismissed for an authorized cause receive severance pay that is equivalent to at least a half or full month’s pay for every year of service, depending on the reason for their termination.
  • Twin-notice process: First notice is when the employee is informed of the violation or infraction. Employers will normally set up a grievance committee where the employee has a chance to be heard. The meeting should be set 5 days after the first notice. There will be a period of up to 30 days for review and investigation, following which a decision is made, and the second notice (a dismissal notice) is sent to the employee.
  • Authorized causes could be automation, downsizing, restructuring, due to financial losses. Depending on the cause, the amount of severance will be half or one month for each year of service.
  • Paperwork and documentation are important and recommended.

Directors (Registered)

Directors fees are not paid as salary. They are taxed at 5% (3 million and below) or at 10% (above 3 million). In January 2018, rates changed (formerly 10% or 15%).

Notice Period

30 days in general but depends on the level of the position.

Redundancy / Severance Pay

  • Filipino laws recognize two categories of ”cause” for terminating employment contracts: “just cause” and “authorized cause.” An employee who is dismissed for a “just cause” is not entitled to severance or termination pay. But staff members dismissed for an “authorized cause” receive severance pay that is equivalent to at least a half or full month’s pay for every year of service, depending on the reason for their termination.
  • In cases of retrenchment to prevent losses, illness, closure or cessation of operations not due to serious business losses, the minimum separation pay is one-half a month’s pay for every year of service. Separation due to redundancy or the installation of labor-saving devices entitles the employee to a minimum separation pay of one month’s pay for every year of service.
  • Retirement benefits: In the absence of a retirement plan or agreement providing for retirement benefits of employees, an employee upon reaching the age of 60 years (optional) or more, but not beyond 65 years (mandatory) which is the compulsory retirement age, who has served at least five years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half month salary for every year of service, a fraction of at least six months being considered as one whole year. Under the Labor Code of the Philippines, unless the parties provide for broader inclusions, the term one half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. Thus, the minimum retirement pay is one-half (1/2) month salary for every year of service, a fraction of six (6) months being considered as one (1) whole year. “1/2 month salary” shall include all of the following: 15 days salary based on the latest salary rate, cash equivalent of 5 days service incentive leave, and 1/12 of the thirteenth month pay (1/12 x 365/12 = 2.53). If the establishment has a CBA or employment contract providing for a retirement plan or benefits to employees, the employee shall be entitled to receive the benefits as provided in the said CBA or contract. However, such benefits must not be less than that provided under the Labor Code. “

Other Standard Items

  • Taxable: Basic pay, holiday pay; premium pay, overtime pay, night-shift differential, bonus and commissions (in excess of PHP 90,000), other benefits and allowances.
  • Non-taxable: De minimis benefits (approximately 3,000), relatively small value such as clothing allowance, etc., bonus threshold (first 90,000) – bonuses, commissions, Christmas gifts, etc.

Typical Non-Statutory Benefits for MNCs

  • No equivalent of a 401k. Very large corporations may have their own private pension plans. Not a common practice generally.
  • PhilHealth is not sufficient to cover the basics. Nowadays, it’s very common to provide supplementary insurance from a private Health Maintenance Organization (HMO). Employers will normally cover the additional cost but sometimes some shared schemes. Recent taxability issue whereby employee is made to pay the additional tax has raised objection against it. Rough additional cost would be 230 USD per month.
  • It is common to provide housing allowance, school tuition allowance, cars, club memberships (Golf Clubs, especially for Japanese) for expats.

Tax and Social Security

Income Tax (National Tax)

Income tax rates in Philippines range from 5-32% depending on gross income (see table below).

Monthly BIR Form No. 1601-C

  • Manual: On or before the tenth day of the month following the month the withholding was made, except for taxes withheld for the month of December which shall be filed and paid on or before January 15th of the succeeding year.
  • eFPS: On or before the fifteenth day of the month following the month withholding was made, except for taxes withheld for the month of December which shall be paid on or before January 20th of the succeeding year.
Annual Taxable Income (PHP) Tax Rate
0 – 250,000 0%
250,000 – 400,000 20% of the excess over PHP 250,000
400,000 – 800,000 PHP 30,000 + 25% of the excess over PHP 400,000
800,000 – 2,000,000 PHP 130,000 + 30% of the excess over PHP 800,000
2,000,000 – 8,000,000 PHP 490,000 + 32% of the excess over PHP 2,000,000
>8,000,000 PHP 2,410,000 + 35% of the excess over PHP 8,000,000

The Annual Tax Table is expected to increase again by January 1, 2023 based from the taxation laws enacted.

Local (Resident Tax)

Local community tax certificate (like a resident tax). However, no one pays it.

Social Security

Social Security System (SSS)

It is the policy of the State to establish a tax-exempt SSS and provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, and other contingencies resulting in loss of income or financial burden.

Monthly contributions are based on the compensation of SSS members and payable under two programs:

  • Social Security (SS): 13% of the monthly salary credit (MSC) not exceeding PHP 25,000 and paid by both employer (8.5%) and employee (4.5%), effective January 1st, 2021.
  • Employees’ Compensation (EC): Starting January 1st, 2007, PHP 10 for employees with an MSC of PHP 14,750 and below, and PHP 30 for employees with an MSC of PHP 14,750 and up; paid by the employer only.

All premium contributions are withheld at source. Remittance schedules depend on the employer registration number, usually on a monthly basis in arrears.

Effectivity of Coverage as an SSS employer-member starts on the first day the employer hires its first employees. The employer is given 30 days from the date of employment of employee to report the person for coverage to the SSS.

Philippine Health Insurance Corporation (PhilHealth)

  • The National Health Insurance Program (NHIP) is a compulsory health program for employees who are included in the SSS. The NHIP basically provides health insurance coverage for employees. The State shall provide comprehensive health care services to Filipinos through a socialized health insurance program.
  • All government and private sector employers are required to register with PhilHealth to enable them to provide social health insurance coverage to their employees.
  • 4% of the MSC not exceeding PHP 80,000 is paid by both employer (2.0%) and employee (2.0%), effective January 1st, 2022. Based from the law enacted by the government, this contribution will increase at an increment of 0.05% until year 2025.
  • PhilHealth benefits cover maternity plans, while health insurances do not. The main coverage of PhilHealth’s maternity plan is the prenatal check-ups, delivery, post-natal check ups and newborn screening, to be conducted at their accredited hospitals and clinics.

Home Development Mutual Fund (HDMF)

  • The HDMF or the PagIBIG Fund is a nationwide tax-exempt mutual provident savings system for private and government employees supported by matching mandatory contributions of their employers with housing as the primary investment.
  • Mandatory coverage of the employer shall take effect on the first day of business operation and that of the employee on the date of his/her employment. Coverage shall not be mandatory for Filipinos employed by foreign-based employers whether deployed locally or abroad but whose respective employers are exclusively based outside of the Philippines. If the employer maintains an office or agent in the Philippines that effectively acts as an employer of the Filipino, then such office or agent shall be deemed an employer, subject to mandatory coverage.
  • 4% of the MSC not exceeding PHP 5,000 is paid by both employer (2%) and employee (2%).
Social Security Monthly Salary Cap (PHP) Employer Contribution (%) Employee Contribution (%)
Social Security (SS) 25,000 8.5 4.5
Employees’ Compensation 14,750 0.2 0.0
Health Insurance (PhilHealth)* 80,000 2.0 2.0
Home Development Mutual Fund (HDMF) 5,000 2.0 2.0

*PhilHealth contribution rates are expected to increase annually till 2025.

**The above rates serve as a broad guideline. Actual rates charged will differ.


Salary Payment

  • Wages shall be paid at least once every two weeks or twice a month at intervals not exceeding sixteen days. In practice, there is a legal and technical work-around for monthly pay frequency: Single payment representing two pay periods/intervals: (a) two weeks pay for service already rendered, and (b) two weeks advance pay in order to comply with the requirement of interval not exceeding sixteen days.
  • Usually on the 15th of the month or the last day of the month.


Online or paper.

Timesheets & Record Keeping

Employers are required to retain employment records for at least 3 years, in hard copies, from the date of the last entry in the records. This includes payroll records, timesheet records, medical examinations / activities and a logbook that records employees’ sickness, injury or death in chronological order. Entries in the logbook must be made within 5 days from notice of the occurrence.

Accounting records (which may include payroll records) must be retained for 10 years. For the first 5 years, hard copies have to be retained and thereafter, electronic copies are acceptable.

Holiday Allowance

In the Philippines, holidays are classified as regular or special holidays each year. There are currently 12 regular holidays and 8 special non-working holidays.

Regular Holidays

  • Employers are required to pay their employees regular daily wage for every unworked regular holiday. If employees are required to work on these holidays, they are entitled to be paid at twice the rate of their regular wage or salary.
  • The rate for work on a regular holiday will vary if the regular holiday work is rendered during the period between 12 midnight till 6 a.m., and 10 p.m. till 12 midnight of the regular holiday.

Special Non-working Holiday

  • Additional holidays can be promulgated from time to time. Some public holidays are promulgated only for certain regions or provinces.
  • Employees who are not required to work on these special days are not, by law, entitled to compensation.
  • Work performed on these days by non-exempt employees, however, merits compensation equivalent to the applicable wage rate plus at least 30% thereof. If the special day also happens to be the non-exempt employee’s scheduled rest day, the premium rate is increased to at least 50% of the applicable wage rate. The rate for work on a special holiday will vary if the special holiday work is rendered during the period between 12 midnight till 6 a.m., and 10 p.m. till 12 midnight of the special holiday.

Annual Leave

Employees are entitled to five days of paid vacation leave after 12 months of service, referred to as service incentive leave (SIL) by the Labor Code.

Generally, this SIL is only for low income or blue-collar workers who may not receive annual leave as part of their contracts.

The service incentive leave should be converted to its money equivalent and paid to the nonexempt employee by the employer if not used or exhausted by the said employee at the end of the year. As a rule, an employer can regulate the schedule of the service incentive leave of its employees.

Sick Leave

  • Staff members are not legally entitled to statutory sick leave. But in practice, employees tend to be granted it through voluntary employer policies or collective bargaining agreements.
  • An employee who has paid at least three monthly SSS contributions in the 12-month period immediately preceding the period of sickness or injury and is confined for more than three days in a hospital or elsewhere with the approval of the SSS will be paid by his/her employer a daily sickness benefit equivalent to 90% of his/her average daily salary credit for each day of confinement. However, this allowance will only begin to be paid after all sick leave with full pay due from the employer has been exhausted.
  • A female employee, who has rendered a continuous aggregate service of at least six months for the last twelve months, is entitled to a special leave benefit of two months with full pay based on her gross monthly compensation, following surgery caused by gynaecological disorders.

The SSS will reimburse the employer 100% of the daily sickness benefits, provided that the SSS receives satisfactory proof and the legality of that payment, and the employer has notified the SSS of the confinement within five calendar days after receipt of the notification of sickness or injury from the employee.

Employees who become ill or experience work-related injuries can make a claim to the Employees’ Compensation Program (ECP). The ECP is designed to provide assistance (in the form of medical services, rehabilitation services, and/or income cash benefit) to employees for work-related injury, sickness, disability or death. Only the employer is required to pay monthly contributions, no contribution is due from the employee. The employer’s contributions for the ECP make up the State Insurance Fund, from which compensation for approved claims is sourced.

Maternity & Parental Leave

The Filipino Labor Code grants up to 105 days of paid maternity leave for female employees, and additional 15 days if the mother is a solo parent.

A female member of the SSS, who has paid at least three monthly contributions in the 12-month period immediately preceding her childbirth or miscarriage, will be paid a daily maternity leave benefit equivalent to 100% of the average daily salary credit. The maximum benefit paid by SSS is PHP 70,000, and the balance will be shouldered by the Employer.

This is subject to the conditions prescribed by the SSS which include notification requirements (Republic Act No. 8282 (SSS Law of 1997), section 14-A).

Full payment of the maternity leave benefit will be advanced by the employer within 30 days from the filing of the maternity leave application. The SSS will immediately reimburse the employer 100% of the amount of maternity leave benefits advanced to the employee upon receipt of satisfactory proof of that payment.

In addition to the maternity leave benefit, the Republic Act No. 9710, also known as the “Magna Carta for Women,” guarantees access for women to services, such as:

  • Maternal care including pre- and post-natal services to address pregnancy and infant health and nutrition,
  • Promotion of breastfeeding, and
  • Responsible, ethical, legal, safe and effective methods of family planning.

Seven days of paid paternity leave for male employees.

Other Statutory Leaves

Parental Leave

In addition to leave privileges under existing laws, parental leave of not more than seven working days every year shall be granted to any solo parent employee as defined in the law who has rendered service of at least one year. A change in the status or circumstance of the parent claiming parental leave benefit, such that he/she is no longer left alone with the responsibility of parenthood, shall terminate his/her eligibility for this benefit. Unused parental leave benefits are not convertible to cash and cannot be accumulated.

Domestic Violence Leave

A victim of violence against women and their children who is employed is entitled to paid leaves of up to 10 days in addition to paid leaves under other laws, extendible when the necessity arises as specified in a protection order issued by an appropriate authority. The availability of the 10-day leave is at the option of the female employee, and such leave shall cover the days that the employee has to attend to medical and legal concerns. Unused leaves are not cumulative and not convertible to cash.

Other Non-statutory Leaves

Leaves such as marriage or death of a relative are not statutory but commonly given to employees per company’s policy.

Special Leave for Women

Employees who have served at least six months of continuous service with the employer for is entitled to special leave benefit of 2 months with full pay (based on gross monthly compensation), for treatment/surgery of gynecological disorders. A medical certification is required.

Medical Checks

Pre-employment physical examinations should be conducted to determine the physical condition of the prospective employee at the time of hiring and to prevent the placement of an individual on a job where, through some physical or mental defects, he/she may be dangerous to his/her fellow workers or to property.

The Occupational Safety and Health Standards also requires annual physical examinations. All examinations should be completed thoroughly and be rendered free of charge for the employees. Examinations should include x-ray or special laboratory examinations when necessary due to the particular nature of the employment. Records of physical examinations and all information obtained by health personnel should be held strictly confidential.

Trade Unions

Labour unions are usually for factory workers and manufacturing industry. However, banks may have unions. Supervisor upwards are not usually members of the union.



Some expat employees for MNCs may use a flat tax regime of 15%.

There are several classifications of expat workers in Philippines, depending on the length of stay. For aggregate stays of less than 180 days in a calendar year, a 25% tax withholding will apply, and for longer stays the regular tax rates of 5-32% will apply. The special 15% tax rate only applies to managerial and technical employees of MNCs, offshore banking units and petroleum services.

Visas and Foreign Workers

General Information

Work permits take time. The application and approval processes vary when hiring in the Philippines. There are two government agencies that handle visas including The Department of Labor and Employment and the Bureau of Immigration.

Foreign nationals and expats need to apply for an Alien Employment Permit (AEP), issued by the Department of Labor and Employment, and a 9G Employment Visa, issued by the Bureau of Immigration. The 9G grants foreign nationals permission to live and work in the Philippines. To be issued a 9G visa, there must be a Philippines corporate employer to sponsor and validate the type of employment. A provisional work visa is available while the 9G visa is being approved.


3-4 months to apply for an Employment Visa.

Public Holidays in 2022

S.No Occasion Date
1. New Year’s Day (Regular) January 1st
2. Lunar New Year (Special) February 1st
3. EDSA Revolution Anniversary (Special) February 25th
4. Day of Valour (Regular) April 9th
5. Maundy Thursday (Regular) April 14th
6. Good Friday (Regular) April 15th
7. Black Saturday (Special) April 16th
8. Labour Day (Regular) May 1st
9. Independence Day (Regular) June 12th
10. Ninoy Aquino Day (Special) August 21st
11. National Heroes Day (Regular) August 29th
12. All Saints’ Day (Special) November 1st
13. Bonifacio Day (Regular) November 30th
14. Feast of the Immaculate Conception of Mary (Special) December 8th
15. Christmas Day (Regular) December 25th
16. Rizal Day (Regular) December 30th
Note: Confirmation of public holidays for Eid Al Fitr and Eid al-Adha will be announced separately.

*Regular and special public holidays vary in the rates of premium pay if an employee were to work on that day, with 100% premium on basic pay for regular holidays and 30% premium on basic pay for special holidays.


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