3 Ways to Establish Your Own Offshore Office

Establishing an offshore development or support office creates a number of advantages for your business.

At the operational level, having an office in a low-cost location will reduce expenses, create more capacity and allow you to acquire skills that are difficult to source in your home location.

At the strategic level, an offshore team gives you the edge in bidding for (and winning) cost-sensitive projects. You can deliver a successful proposal that utilises a blended team of local senior people supported by lower-cost offshore resources.

At the executive level, an international footprint increases your company's reputation and valuation. This makes you a more attractive M&A target.

So how do you establish your offshore office?

Here are 3 ways.

1. DIY (Do it Yourself)

The plan is simple. Relocate one of your senior people to the offshore location for two years. Have them register a company, rent office space, purchase equipment and hire a team of local employees. Your expatriate manager will need to understand local labour laws, local contracts and ensure the newly hired staff are paid and their benefits provided. You will also need to ensure all statutory reporting and corporate obligations are met. Well, maybe that's not so simple but you'll learn a lot and, with patience, ultimately achieve your goal.

2. Acquisition

Acquisition takes a little more management time. Find a local company that is attractive to you ... and acquire it. You'll need to identify a company that has owners and staff that share your values, work ethic and commitment to quality. You'll need to negotiate a realistic price and put in place a mechanism to keep your newly-acquired asset intact. The risk here is paying too much or acquiring a group of people that ultimately don't deliver or integrate well with your organisation. Yikes.

3. Build-Operate-Transfer

The third approach is to work with an experienced local partner like Velocity Solutions and focus on building your team incrementally. Using Velocity's technical recruiters, hire one or two experienced staff first and then have them help with the hiring of the junior staff. This way, the senior people will take more ownership of the less-experienced staff. This instills a sense of pride and conhesiveness within the team.

Your team members will be employed by your local partner but with an agreement that you can transfer them to your own company at a future point in time (when you are ready). This team assembly phase is called the Build Phase.

With Velocity providing office accommodation, HR, payroll and technical support, you can concentrate on getting your team up to speed and productive, working under the direction and oversight of your home office managers and local team leaders. This is the Operate Phase.

Use the Operate Phase to refine your team, adding and promoting staff as appropriate. You can also prune any staff that don't work out, although good hiring practices make this a rare occurrence. Once the team has proven their value, Velocity will help you set up your own company entity and transition the team to be your employees. This is the Transfer Phase.

Transferring your team is an optional step and can be done incrementally over time. Velocity can also continue to provide office accommodation and HR support as needed.

You've now safely arrived at your destination of having your own offshore office ... and at a pace that aligns with your business needs and goals. Risk has been managed. Substantial value has been created. That's Build-Operate-Transfer.

Our clients think this approach provides tremendous value at low risk. To learn more about Build-Operate-Transfer, check out the FAQ.

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