New growth opportunities in foreign markets emerge quickly, and tech firms take advantage of these opportunities—and increase their chances of outpacing their competition—by relying on a Global Employer of Record solution, also known as an International Professional Employer Organization (PEO) solution.
Whether your tech company seeks revenue growth, premier talent, greater scale and efficiencies, or all of the above, a Global Employer of Record presents a flexible, scalable global expansion method to reach these goals—no matter where international business leads.
Reason #1: Accelerated Time-to-Market
Traditionally, expanding internationally meant setting up an entity, which can take months for companies to begin operating in their target markets. Global Employers of Record help businesses reduce their time-to-market, ensuring minimal interruption to their day-to-day activities. No other global expansion method enables organizations to break into new international markets compliantly at this speed, creating a greater chance of outpacing their competition.
While all Global Employer of Records accelerate time-to-market, Velocity Global’s Global Employer of Record solution reduces time-to-market by up to 90% when compared to establishing an entity. However, not all Global Employers of Record offer this same expedited experience.
Speed-to-market gives tech companies a leg up on their competition by allowing earlier access to new customers. For those concerned about product-market fit (that is, how well does their product or service for their target market’s needs), a Global Employer of Record enables firms to test markets before committing to a long-term presence.
Reason #2: Significant Cost Savings
The costs of exploring, planning, and establishing a presence in new markets quickly compound, stretching budgets long before organizations can start doing business. A Global Employer of Record makes global expansion more financially attainable in a number of ways.
Tech companies save up to 60% with select Global of Record providers when compared to traditional entity establishment. While each market and project varies, those setting up an entity in a new market expect to pay $15,000 – $20,000 for initial setup costs, and around $40,000 on annual maintenance costs. If organizations plan to hire dozens of employees or more, they must plan for much higher costs.
Tech firms must also factor in soft costs (costs that are not easily quantifiable). Executives spend 160 hours on average researching and completing all required documentation before setting up an entity. This time away from managing day-to-day priorities compounds and creates unforeseen complications for executives and their teams. Additionally, what opportunities do companies lose due to executive distraction and time spent reviewing and signing contracts? In that time, businesses may lose out on any time-sensitive opportunities in that market.
If a company leaves a market for any reason, they become saddled with entity dissolution costs—and headaches. With a Global Employer of Record, organizations exit markets without the steep costs and lingering complications associated with entity dissolution.
Reason #3: Streamlined Path to Global Growth
Global expansion is an arduous undertaking with many moving parts. However, a Global Employer of Record simplifies the entire process. A Global Employer of Record handles all risk mitigation, compliance, payroll, and benefits considerations. Companies with entities must contend with numerous monthly responsibilities, including payroll administration, currency exchange, federal reporting, and many other requirements. Firms rely on Global Employers of Record to handle these considerations.
Businesses take advantage of multi-market mobility, too; a Global Employer of Record enables companies to expand into additional markets as seamlessly as their initial international market. However, not all Global Employers of Record offer the same global coverage; some organizations have limited reach, while Velocity Global offers support in more than 185 markets.
Go Global Faster and Smarter with an Experienced Expansion Partner
Pursuing and capitalizing on international growth opportunities is all about timing and commitment. But if businesses do not have the time, resources, and expert support needed to pursue these opportunities confidently, they likely spend tens to hundreds of thousands of dollars with little to show for their effort.
A Global Employer of Record mitigates global expansion’s risks, and gives firms the flexibility, confidence, and support they need to capitalize on overseas opportunities.
Want to learn more about how Velocity Global’s Employer of Record solution elevates your global expansion experience? Reach out to us today.