Your EOR Doesn't Come With Four Walls: Setting Up a Manila Office the Right Way

Most Australian founders who come to us have the same mental model. They think an Employer of Record is a single product that covers everything — hiring, payroll, compliance, and somewhere for the team to actually sit.

It doesn’t. And the moment you want a physical office in Manila, you discover that employment and real estate are two entirely different animals, governed by two entirely different sets of rules, with two entirely different risk profiles.

We went through exactly this a few weeks ago with a client — an NDIS provider building out a Philippine support team. I’ll walk through what we did, what nearly went wrong, and what I’d tell any founder standing at the same fork in the road.

The setup

She’d already interviewed and was close to employing a handful of people in Manila. Good hires, ready to start. We were engaged as the EOR — meaning Team Up Now becomes the legal employer in the Philippines, holds the employment contracts, runs payroll, handles SSS, PhilHealth, Pag-IBIG and BIR withholding, and carries the Labour Code compliance risk. She directs the work. We carry the employment.

Standard EOR. Clean.

Then came the question that always comes: “Where do they actually work?”

Three ways to answer that, and they’re not equal

Work from home. Cheapest, fastest, no lease. Genuinely fine for a lot of roles — but it’s not free. You’re now responsible for internet stipends, equipment shipping, and a set of Philippine data privacy obligations that get more awkward when your team is handling participant records from a kitchen table. For an NDIS provider dealing with sensitive client data, that mattered.

Seat lease inside an existing BPO. You rent chairs in someone else’s operation. Fast, and the infrastructure is already there. But you’re a tenant of a competitor for talent, your people absorb another company’s culture, and pulling out later is messy.

Your own serviced office. A small managed suite — desks, aircon, internet, reception, security, someone who deals with the building. You get a front door with your team behind it. It costs more and it commits you.

She wanted the third. Fair enough — she was building a team she intended to keep, and she wanted them together in a room with her brand on the wall, not scattered across Metro Manila.

The bit nobody warns you about: who signs the lease

This is the part I want founders to actually take away.

If your Australian company signs a Philippine office lease directly, you’ve just done something with consequences well beyond the rent. You’ve established a physical presence in a foreign jurisdiction. Depending on how it’s structured and what happens in that office, you may have created questions around permanent establishment, local registration, and — most relevantly for anyone using an EOR — you’ve muddied the exact line the EOR structure depends on.

The whole logic of an EOR is that the Philippine entity is the employer. It holds the contracts, exercises the employer’s prerogative, and bears the obligations. That’s not a technicality; under Philippine labour law, the question of who the true employer is gets decided on substance, not paperwork. Control tests. Who directs, who disciplines, who pays, who provides the workplace.

The more of those boxes the Australian company ticks directly, the weaker the structure gets — and the exposure lands on the client, not the EOR.

So we leased it. Team Up Now signed the office agreement in Makati and we placed her team in it. She gets the space, the desks, the front door. We hold the lease, the employment contracts, and the compliance obligations in the same set of hands, which is exactly where they belong.

What was in that office agreement

I read it properly, twice, and I’d encourage anyone doing this to do the same rather than skimming the rate and signing. A few things in ours that are common across Manila serviced offices and worth knowing about:

No pre-termination. Walk away early and you owe the balance of the term. Not a break fee — the whole remaining amount, plus interest. Whatever term you sign is money you have committed, full stop.

Automatic renewal. Ours rolls monthly at prevailing rates unless notice is given two months before expiry. Miss that date and you’re renewed at whatever they’re charging that quarter. I’ve got the notice date diarised. Most people don’t, which is precisely the point of the clause.

Punitive late payment. Five per cent per month after a short grace period. Compounded, that’s an interest rate you’d expect from a payday lender. We set the invoice to auto-pay.

A headcount cap. People physically on site cannot exceed the number of workstations. Sounds obvious until you want to bring in a trainer, a visiting manager, or hire a fifth person into a four-desk suite.

Non-solicitation of the provider’s own staff. With serious liquidated damages attached, extending past expiry. We’re a recruitment business operating out of a serviced office full of employable people. I briefed our recruiters directly: the building’s staff are off-limits.

Rate confidentiality. Disclose what you’re paying and the rate reverts to list price. Which has a direct commercial consequence — it means you cannot honestly quote a client a straight pass-through number. You quote a bundled office fee instead.

And, my favourite: the registered address in the draft listed a town in Cebu as being in Metro Manila. Contract notices go to your registered address. A wrong address means a notice you never receive is still a notice validly served. We had it corrected before countersignature.

None of this is exotic. It’s just what’s in the document if you read it.

The trip

She flew over. We toured the space in person before committing, met the team, walked the floor, checked the aircon and the lifts and whether the internet actually worked at 9am when the whole building logs on.

I’d recommend this to anyone spending real money on a Manila office. Photos are generous. Floor plans are generous. Twenty minutes in the actual room tells you more than a week of emails, and being in the country while your team starts sends a signal to those people that no welcome pack ever will.

How it all fits together

Here’s the clean version of the model:

• Employment sits with the EOR. Contracts, payroll, statutory contributions, tax, leave, termination risk.
• Direction of work sits with you. What gets done, to what standard, by when.
• The office sits with the EOR as leaseholder, provided to your team as part of the arrangement.
• The cost flows to you as a bundled monthly figure alongside the employment costs — not a pile of separate liabilities you’ve personally signed for in a jurisdiction you don’t operate in.

You get a team, in a room, with your name on the door, and none of the four-year commercial lease commitments or foreign-entity questions attached to your Australian company.

What I’d tell you if we were on a call

Start with whether you need an office at all. A lot of teams genuinely don’t, and a serviced office in Makati or BGC is not cheap. If the honest answer is that you want one because it feels more real, that’s not a good enough reason to sign a six-month non-terminable commitment.

But if the work needs supervision in a room, or the data needs to sit somewhere controlled, or you’re building a team of eight rather than two — get the office. Just make sure the entity signing the lease is the same entity holding the employment contracts. That single decision is the difference between a structure that holds up and one that quietly falls apart the first time someone tests it.

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Team Up Now is an Australian Employer of Record placing Filipino professionals with Australian businesses. If you’re weighing up a Manila setup and want a straight answer about what it costs and what it commits you to, get in touch.