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Startups in the Philippines find new home in co-working spaces

Adrian M. Reodique | Sept. 13, 2017
The notion of workplaces for startups and nomad freelancers has expanded since 2011 when the concept of co-working space was first introduced.

"He needed a photo editor so he was thinking of outsourcing. He compared outsourcing in India, Hong Kong and the Philippines, and found that outsourcing in the Philippines was the cheapest option," said Gabrielle Pratte, managing partner at Penbrothers.

When Faria found the perfect person for the post, the talent enquired about employee benefits. Since Uncloset was not registered in the Philippines then, Faria was unable to provide the statutory benefits to the talent.

The event turned to be a business opportunity for Faria and his friend Nicolas Bivero. The two co-founders opened the first Penbrothers office in December 2014 to help startups, especially foreign ones, manage their human resource and payroll besides providing a workspace.


More time for innovation and growth

PANA, an international startup that provides mobile-based travel planner, is among Penbrothers' tenants.

The company was founded in 2014 in the United States and started its operations in the Philippines a year after. When PANA's management decided to expand its team in the Philippines, employing a payroll and tax professional is among the top-of-mind concerns, besides finding a bigger office with stable internet connection to support its operations.

Managing taxes and payroll, while keeping focus on business growth, can be a grueling task especially for startups with limited resources. In the Philippines, employees are provided with 19 statutory monetary benefits. These include mandatory, monthly contributions to government social services, such as:

1.       Social Security System (SSS) - a programme that aims to replace lost income to the beneficiaries in the event of death, disability, sickness, maternity, and old age.

2.       Home Development Mutual Fund (HDMF) - a mutual provident savings system for both private and public employees and other earning groups. HDMF provides members with short-term loans and housing loans. 

3.       National Health Insurance Programme (NHIP)

Both employees and employers are required to contribute to these services. For employees, their contributions to these services and taxes are deducted from their salary.

"When we were starting, I was the person who was doing [the taxes for the company] while trying to prepare the training for employees who will be coming in," said Sierra Trance, operations manager of PANA in the Philippines. "We'd rather have someone else to solely work on this [as this would enable us to focus on our core work] instead of doing admin stuff."

As such, PANA tapped on Penbrothers to manage its payroll and taxes on its behalf. Penbrothers also helped the foreign startup to shortlist job applicants.

"Instead of wasting 100 hours just sifting through applications, you have them to do that for you. What comes to me now is a set of applicants that are already tailor-fit," said Trance. As such, startup managers are only left with the task of interviewing the shortlisted applicants.


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