Global ExpansionInternational PEO

How International PEO Gives Tech Companies the Freedom to Grow on Their Terms

By March 24, 2020June 11th, 2020No Comments

No matter where tech firms expand, they need a flexible global expansion solution that allows them to grow at their own pace. This solution must not come with conditions that tie companies to a long-term commitment in a market—especially markets facing economic and political uncertainty.

Relying on a flexible global expansion solution is especially important for young tech firms with limited funds. Some global expansion methods—like setting up a foreign legal entity—impart significant financial and time restrictions, limiting a business’ ability to choose where and how to spend financial resources. However, firms of all sizes and sectors benefit from a proven, streamlined global expansion alternative.

More Tech Firms are Expanding Globally in 2020

U.S. and UK tech firms understand that they must expand beyond their domestic borders to grow their customer bases, find top talent, and outpace their competition. But to do so, firms need a simplified global expansion solution that enables them to pursue growth opportunities with the most flexibility possible.

83% of tech firms on both sides of the Atlantic plan to expand overseas in 2020. While only 29% of U.S. and UK tech firms currently operate in more than five markets, 70% will have a presence in five-plus markets by 2025. 

However, tech startups, younger firms, and even mature businesses with limited financial and internal resources face barriers to global expansion. Traditional global expansion methods, like entity establishment, come with hidden costs, lingering headaches, and months-long dissolution timelines. However, International PEO (Professional Employer Organization) streamlines both time-to-market and market exit (if necessary), as it does not require the same cumbersome requirements.

Tech Firms Need Experienced Guidance

No matter a business’ age, expanding overseas for the first time comes with many considerations, concerns, and challenges. Selecting an agile global expansion method like International PEO enables the most flexibility to navigate markets, including guidance over complex and ever-changing employment laws and payroll processing.

These challenges apply to tech firms of all ages, but tech startups likely shoulder the most burden, as they have not had the time to grow their funds, gain experience, and brand recognition. Additionally, new international markets present challenges young companies may not consider, and they need the help of an experienced expansion partner.

Partnering with a seasoned International PEO provider gives businesses the support needed to make confident decisions and navigate complex employment laws and other regulatory considerations. 

Tech firms must perform due diligence in finding an experienced partner who can explain and prepare them for a new market’s regulatory landscape and provide continued support throughout the entire global expansion process.

Benefits of Partnering with an International PEO 

Experienced guidance is essential, but not the sole factor in a seamless global expansion process. Firms’ flexibility depends on how they expand overseas. Some global expansion methods tie firms to markets beyond a beneficial period, eliminating the key reason the firm expanded in the first place. Young tech firms and established businesses alike benefit from a global expansion method that affords them a flexible timeframe overseas.

One of International PEO’s primary benefits is that it enables growing tech companies to test markets in the short-term to ensure a proper fit. Conversely, entity establishment ties firms to markets for the long term, costs roughly 60% more than Velocity Global’s International PEO solution, and requires significantly more internal resources to set up and maintain.

Firms often do not know how many employees they will hire in the coming years in a given market. In most cases, firms with fewer than 20 employees per market do not need to establish an entity. International PEO enables firms to hire as quickly or as slowly as needed and can transfer those employees to other international locations if/when needed.

International PEO also enables firms to grow beyond just one international location without the lingering costs and complications that come with tearing down an entity in one market—a huge plus for tech firms pursuing time-sensitive opportunities in multiple international markets.

Expand Globally with International PEO

Expanding overseas comes with a lot of uncertainty, even under the most favorable market conditions. Whether a firm hires a single employee, plans a larger operation in multiple markets, or is testing out potential destinations, they must anticipate risks.

Velocity Global’s International PEO solution mitigates these risks and enables firms to confidently establish a presence overseas without the headaches and hassle of establishing a foreign legal entity. Our experts provide ongoing support so you and your team have the confidence needed to pursue the most promising opportunities.

Ready to take the first steps toward your global expansion? Let’s talk.