John Jonas explains why co-working spaces in the Philippines offer reliable internet, backup power, and air conditioning but come with real limits: they're city-centered, rarely open 24/7, cost around $100 a month per desk, and don't provide employee oversight. He recommends against setting up a legal entity there.
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Episode 269.
April 24, 2023.
About $100 per month per desk.
Chapters
Welcome to the Secret Sauce of Outsourcing podcast that's dedicated to making you better at outsourcing to the Philippines. This is episode 269, let's talk about co working spaces. All right, two things that come up often for me. Number one, is my person an independent contractor or are they an employee? And they are an independent contractor, period. End of story. The Philippines government will not allow you to classify them as a. As a. As an employee. So with what we're going to talk about next, which is setting up shop in the Philippines, you cannot classify this person as an employee unless you have a legal entity in the Philippines, which is my second point for this podcast. So often people ask me, how do I set up shop in the Philippines? They ask me for advice, and my advice is don't. Don't set up shop in the Philippines. Number one, it's really, really hard. Number two, the Philippines government doesn't want you to. And number three, if you do manage to do it now, you kill. Classify them as employees. And now you have all kinds of legal issues to deal with. So my advice is don't. Don't set up shop in the Philippines. However, there is a case for having people working in an office or working together. Now, in the Philippines, you can't get office space unless you have a legal entity. The government will, like, check on what you say and they'll come and visit your office, and there's all kinds of things going on there. So a co working space is a legitimate alternative. So co working space is a shared office space where you can rent a certain amount of space in there, or depending on where they are, you could rent time in there. So in the Philippines, this could let you have office space without having to set up shop in the Philippines. Also, most co working spaces in the Philippines have fiber Internet, so Internet's going to be really big, really fast. They have backups and they have a generator, which means that blackouts and Internet outages and power outages are much less likely if you're using a co working space. Also, most co working spaces have air conditioning. So your OFS is going to be more comfortable working in a co working space than working at home. Most likely OFs even use CO working spaces as an alternative to their home office. Like, they go there if there's a blackout, or if it's a super, super hot day, they might go to work in the air conditioning. And if your OFS team all live in the same place, setting up a co working space might be a really, really good idea. For them. So now that I've given you the advantages of this, let me give you some words of caution. So before you go jumping into co working spaces with your team, number one, co working spaces typically exist in big cities, which means that your people have to be in the same big city. And if they're at all any distance apart, there's going to be a commute to their coworking space, which is a really, really big deal in a lot of cities, including especially Manila and Cebu, where commute times are really, really long. Traffic just does not move in the Philippines. So next, not all co working spaces are open 24 hours a day. So if someone's working the night shift for you, then they probably won't be able to use the co working space. They'll have to work at home, which is probably actually a little bit safer. If they're not leaving their house, especially in, in the edge hours when it's dusk or dawn, they're just at home and that's probably a little bit safer. Next, co working spaces can be a little bit expensive. Now they're not terrible. They start at about $100 per month per desk and they can go down from there. They could be more expensive from there. If you're buying more than one desk, it can go down from there. And then it's also more expensive for your ofs who they're going to have to pay to get there. They're going to have to buy outside food rather than just eating at home. They might have to buy other clothes to work there. There's just more cost involved for your ofs when they start going out of the home. So if you're looking to set up shop in the Philippines, if you, you have a real legitimate reason for doing it, a co working space is a really good alternative to actually setting up a legal entity in the Philippines. Now one thing to take note of a co working space. They're not going to manage your workers for you. They're not going to have a manager there overseeing things. They're not going to see if someone came into the office. They're not going to see if they came in at certain times. That not part of this. This is just a place for someone to work. They're still on their own. They still are an independent contractor from you. They don't have any oversight there. Nobody's looking after them or looking over their shoulder. This is still just you working with them, completely independent of anybody else. And just so you know, I don't have a co working space in the Philippines. We don't offer it. Our team is spread out all over the country, and they all really just want to work from home.
