Nowadays, the face of developing software has changed dramatically. Earlier, the companies used to invest to build their in-house development team and infrastructure. But now the trend of offshoring is at its peak as it is not one of the best software development practices but also the factor that optimizes the costs.
And this Corona Pandemic has also soared the culture of working due to which now the companies are very open to recruiting remote team players. In the past few years, Offshore Development India has evolved more than ever which has helped the companies. to increase their efficiency and performance as well.
WHAT IS ODC?
ODC stands for Offshore Development Center. And it refers to the team of talented people coming together to provide software development services. To different companies but is located in a foreign country. Usually, the cost of living is very low in the region where the ODC is located. So, ODC has the proper infrastructure, manpower, administrative and support staff. And every other element which require to sustain in the competition.
In other words, it can be called an extended office of any organization built in accordance with the client’s requirements.
Advantages of ODC:
1)It costs comparatively lower than setting up everything from scratch
2)It provides access to a large pool of talents from the IT industry.
3)It assures the on-time delivery of the projects.
4)It provides continuous technical support during the whole project cycle.
Disadvantages of ODC:
1)Fostering open communication gets challenging sometimes.
2)The companies should adhere to the legal entities of the region or else it creates regional issues.
3)The cultural differences may lead to a decrease in the efficiency of the overall work.
4)The security risks are higher when it is located at a distance.
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COST FACTORS TO CONSIDER FOR OFFSHORE DEVELOPMENT CENTER SETUP:
1) Suitable Infrastructure
The most important part is to assess the requirements in detail. And then plan for ODC infrastructure accordingly which suits the needs. The dedicated infrastructure is actually an integrated and extended offshore facility. That manages the operations of the companies exclusively. Also, the correct infrastructure enables it to handle the scalability of the project and cost. The aim is to create such an infrastructure that it caters to the dynamic needs of the growing organizations.
2) Tax Advantage
Usually classic offshore offers zero tax rates to the entrepreneurs. These centers are registered under legal jurisdiction. Where the business has preferential terms like they do not fall for taxes. So ultimately the location optimizes the tax burden, and it eventually helps the company.
3) Innovation in business process
Earlier when the ODCs create, then it was like an organic extension of the parent company. Only due to which it also copy the exact processes of the main company. But now the ODCs put a lot of effort to innovate the processes and work towards their betterment. The innovative process leads to better results.
4) Updated Technology
The ODC should be equipe with the latest technologies so that it can match the latest needs of the business. Correct investment in the technology makes the ODC strong enough to take on the versatility of the business. And when the world is so digitalizing the technology helps to enhance the experience in the mortgage industry.
As the development center situate off-shore so the confidentiality of the data can be easily maintained. So, if the offshore business is use to conduct business with the residence country. Then it suggests using the shareholder’s services and nominee directors.
6) Consistent Training
The new-gen ODCs employs a highly skilled and talented team with good qualifications. This of course increases the efficiency of ODC in terms of providing quality service to the clients. The regular training and upskilling of the ODC team help their team to deliver the best. And the high-quality deliverables ensure the success of the client.
7) Auditing and Reporting
In general, the companies have to keep a record of all the documents and account statements. But in the case of offshore companies, accounting and reporting can be absent. But they should maintain financial statements to showcase the financial condition of the company.
8) Company’s Stature
The contractual companies are more willing to co-ordinate with the companies. which are registered from aborad. And also, they prefer the regions like Europe and Asia as these are areas with low-tax jurisdictions. In this way, local companies are also well accepted in the market.
9) Easiness to open foreign currency account in any country
Nowadays, when the E-payment system has emerged to that level that usually. There is no need for any company to open a foreign currency account in any country but of course the provision should be there. Here, the entrepreneur has the flexibility to keep money in any of the conventional currencies. Also, one of the advantages of having an off-shore account is to manage the financial services and instruments remotely.
10) Free from political and economic instability
One of the advantages of registering an off-shore company. That they can be easily protected from the local political and economic matters. These can be any matter like financial crisis, change of government, undue changes in legislation. The off-shore territories can remain stable despite any cheap and political changes. Like war-like situations, seldom crises, and others.
11) Easy access to global markets
Due to heavy legislation, many foreign companies do not like to co-operate in work with the Russian entities. But, that would not be an issue with the off-shore companies. In fact, the Russian market can use off-shore companies to enter into the global market. To make strong connections with the markets all across the world. It helps them to tie up connections and develop mutual relations with economies of different countries. Thus, off-shore companies work as a catalyst or the liasioning factor to strengthen the economy.
12) Company can be open by correspondence procedures
In today’s age, offshore companies can be open by Hire Full Time Developers rather than being physically available there. It happens that the owner does not actually have to move out of their office to establish a company. As everything happens virtually over the Internet itself.
And if one talks about signing important and confidential documents. Then even that is possible by using the digital signature concept. The require meeting with the officials is conducted with software. Like Zoom, Microsoft Team, and many more such applications. And if at all required the presence of any official then the owner. Always has the provision to issue the notarized power of attorney to the concerned person. who can be called as an authorized representative?
The above points show how easy it has become in today’s world. In order to open offshore companies without being available physically at the location.
The above mentioned are the factors that one should definitely consider before opening the ODCs. Understanding of these factors will lead to a successful implementation of the required business processes. In the respective ODCs in the given regions. Hence, forming an ODC is a wise decision if it is taken considering all the important factors in mind.