Offshore development location selection is vital for your business growth. An offshore development center (ODC) helps you extend your development potential by entering new regions. This way, you can access a wider talent pool and reach new audiences.
However, selecting an ideal place to set up your offshore software development center is tricky. You need to consider multiple factors, such as labor costs, infrastructure, legal systems, and more.
Today, STS Software GmbH will discuss each factor to help you make an informed decision. So, let’s read on to discover!
Understanding Your Business Needs
How to set up offshore development center? The very first step is to understand your needs. Then, you can choose the best location for your team.
Business Needs
First, determine what you want to achieve through your ODC. Relevant factors include cost, talent pool, and technologies. They can act as a guide for your selection process.
Project Requirements
What does your project require regarding technical skills, experience, and expertise? Its complexity and scope affect the location for setting up offshore development center.
Importance of Proximity to Stakeholders And Clients
You may need to reach your stakeholders and clients quickly. In this case, you should choose a location with time zone overlaps. Then, proximity can enhance client satisfaction and improve teamwork.
There are various factors to consider when selecting the best location for your offshore development team. Let’s see what can help you settle on the ideal choice.
Economic Considerations
The first thing to put in your offshore development center checklist is the economic condition. The best destination should come with affordable labor costs. It would be nice to pick ones with friendly tax policies, too.
Labor Costs
Many businesses want to reduce operational expenses. One of the most popular solutions to this concern is to set up an ODC in a country with lower labor costs. Countries like Vietnam, India, and the Philippines are the most outstanding options.
Labor Availability
The availability of skilled developers is critical, too. Some countries, like Switzerland, have a high density of tech universities, which are ideal for your projects. You can easily find talents for your dedicated offshore development center there.
Tax Implications and Incentives
Many areas offer attractive tax incentives to foreign companies to encourage investment. Thus, remember to consider the tax benefits when choosing the location for your ODC.
Talent Pool and Skill Availability
Ensure that the chosen country offers a vast talent pool. Then, you will have multiple choices and quickly settle on the best offshore software development center.
Quality is even more important than quantity. Many countries give you access to qualified professionals. Then, a proficient ODC offshore development center can drive project success because they are experienced and know clearly which technologies work best for your project.
For example, more than half of companies in the DACH region utilized or were going to utilize machine learning in 2021. This technology is a secret weapon for upgrading your software development project.
Besides, don’t forget to consider language and cultural factors when working with your talented developers to facilitate smooth communication. Then, you can take full advantage of their expertise.
Infrastructure and Connectivity
These two factors affect the efficiency and ease of running your offshore development center. Here are some things you need to examine:
- Communication networks and transportation: Access the quality of local infrastructure to ensure efficient business operations.
- Internet connectivity and power supply: You need a robust internet and power supply to maintain the productivity of your offshore software development center.
- Proximity to ports, airports, and other essential facilities: The exact location of the center affects ease of access.
Legal and Regulatory Environment
When setting up your offshore development center, you must follow certain regulations and policies. For example:
Legal Framework
Ensure to study regulatory compliance requirements and legal frameworks of the ODC’s location. If you follow local laws strictly, you can avoid the risks of legal disputes and penalties. After all, you will have a stable foundation for long-term success. An offshore software development center in Switzerland can help you deal with this.
Intellectual Property
Protecting intellectual property (IP) is essential. Compared to traditional outsourcing, an ODC offers enhanced IP prediction because the center works as part of your company. Even so, you still need to assess the IP laws in potential locations to secure your IP.
Security Concerns
Security is a real challenge to any offshore software development center. When choosing a location to set up your team, check the country’s data protection laws and security measures. This way, you can protect your sensitive data and digital assets.
Time Zone and Geographic Factors
The next thing in your offshore development center checklist is its time zone and geographic location.
Time Zone
It would be best to choose locations in the same time zone to promote effective communication. You can then easily set up meetings with your dedicated offshore development center. This factor is critical to maintaining a cohesive workflow.
Geography
You can run your software development project online. However, issues like climate or natural disasters can cause disruptions. Plus, you may want to visit your ODC sometimes. If you choose a distant country, traveling back and forth will take a lot of time.
Cultural Compatibility and Work Environment
The last things to check when selecting a location for your offshore software development center are cultural compatibility and work environment.
Work Culture
Your business has its own values and work culture. So, when setting up an ODC offshore development center, check the location’s cultural norms to ensure they align with those of your company. Then, cultural compatibility can foster a collaborative work environment.
Local Customs
The host country may have its own social norms and business etiquette. When you enter a new place, you must adhere to local customs to build a strong relationship with the local team.
Switzerland – The Best Offshore Development Center
Choosing a Switzerland offshore software development center is a strategic move to thrive in your project. There are several reasons for this decision.
Favorable Tax Systems
In 2023, the average tax rate of an average worker in Switzerland was 18.6%, while the OECD average was 24.9%. Aside from the low personal and business income taxes, Switzerland is also known for its mixed tax system. Individuals are taxed according to their global wage, while businesses pay taxes on Swiss sources. This policy helps avoid double taxation.
Strong Infrastructure and Economy
This country is famous for its modern infrastructure and strong economy. These factors are crucial for setting up an offshore development center.
Skilled Developers
Swiss software developers are highly skilled. The prestigious education system contributes to the exceptional workforce. Thus, this country is a popular destination for offshore development centers.
IP Protection
Switzerland offers robust IP regulations. Swiss laws can protect your company’s trademarks and innovations. Hence, when working in this country, you can experience a secure and reliable environment.
Case Studies and Success Stories
Merit Logistics partnered with STS Software GmbH to modernize its outdated ERP system through an offshore development center. STS Software handled the project using a three-phase approach. Based in a tech hub like Switzerland, we used advanced technologies like React JS, .NET Core, and Kotlin to offer our clients innovative solutions. We also focused on collaboration to improve work efficiency.
Merit Logistics experienced success by partnering with STS Software. We provided a highly qualified workforce to deliver top-notch services. Our client also appreciated Switzerland’s advanced infrastructure because it supported operational needs effectively.
As you can see, it is important to go through the offshore development center checklist above to ensure your chosen location meets all the criteria. Then, the dedicated offshore development center will take care of the rest.
Conclusion
While wondering how to set up offshore development center, you first need to choose the best location. Factors like talent pool, economy, infrastructure, legal system, tax policies, and cultural compatibility affect your decision.
It is essential to prioritize long-term goals when setting up offshore development center. So, consider all the factors highlighted in this post, and you can maximize your opportunities for success.
