Legal Structures Of Outsourcing
If you are a company in the US and want to outsource to India, China, the Philippines or any other Asian locations, what are the different options that are available? What are the different legal structures that make offshore outsourcing possible? To get into outsourcing, there are three possible legal structures that the outsourcing company can choose from;
- Sign a contract with a third party for getting the services
- Start your own subsidiary in that country and contract for services with it
- Third party contracting with the intention of acquiring it in the future
Starting a subsidiary and acquisition etc must be done later.
The initial advantages of letting a third party do all the work will mean lower risk and freedom from all the hassles of startup costs and infrastructure development.
However some US based corporate do choose to open their own offshore subsidiary straight away so that they can enjoy the advantage of better control and get a better level of security for all sensitive data and intellectual property.
However today most of the outsourcing service providers located in the US has realized that the need of the day is to give clients the assurance of a high level of security.
It is equally important to consistently maintain a good level of interaction and communication with the clients irrespective of their global locations.