Expanding the business globally and making it a multinational company is the dream of every business owner. Setting up an offshore business is one of the most popular methods they follow. But there are many pros and cons in offshore company set up. Here is a brief discussion on the pros and cons.
The difference in the cost
When it comes to Dubai offshore company formation biggest pro that ties with it is the cost factor. Every company goes through the process of cutting costs every year. Starting offshore business may seem like a good option. This applies to low cost in labor, low cost in rent and materials. For example if you set up a business in China the labor is much cheaper than in Australia so the labor cost is much less for the company. Also the rent and the space is also cheaper so companies can have bigger and more facilitated warehouses and factories. However sometimes this could go sideways. You have no control over the government rules and regulations; if they put a cap on the number of local employees you can hire or if they put a minimum wage regulation then the cost would be much higher. There is always that risk.
The company reputation
When you open businesses overseas and provide job facilities in more rural countries, you provide those jobs and infrastructure. Offshore company formation can be a good way to increase that company’s reputation. Nevertheless the biggest problem is that you can’t control census reports and if you are an Australian company and the unemployment rate in Australia increases and you provide jobs outside the country this could also ruin your company reputation. But the pro here is that you can use this to build an image for the business. But for example let’s say you have factories in China and there are many rumors how Chinese labors get treated and these could be attached with your business name and that could be bad for business.
Expansion of capabilities
Most of the time when you start the business in a different country you get to use their skill set to the fullest. When you hire local employees you get to expand the capabilities of the company. For example if you are a computer parts manufacturing firm and you start an offshore company in India, they are reputed for the software programming and now you not only have engineers to build the parts but also people to do apps and various other software related products.