by Ax Sharma

5 ways a global presence can benefit your tech company

Jan 07, 2019
IT LeadershipIT StrategyRegulation

Now is the best time to go global with your tech company. The advantages come in form of multifaceted choices at every level for your business. Moreover, given the unpredictability of the U.S. immigration laws, a global tech presence can help you retain exceptional talent with minimal hurdles.

Globe with orbiting speech bubbles containing world flags, sitting on the edge of a laptop.
Credit: onurdongel / Getty Images

If you run a successful tech startup or an established business, primarily offering digital products and services, chances are you have a significant customer presence worldwide. There also lies a high probability that you leverage a remote workforce ‘round-the-globe enabling increased collaboration over time zones. While staying local never hurt anybody, there might be some good reasons of maintaining a global presence which you may not be aware of. One of them is the multifaceted choices at every level impacting your technology company directly. And, I mean the liberty to choose between the regulatory laws of different countries, the tax structure, and to take advantage of the unique position you hold when it comes to top talent acquisition – and retention.

There are different reasons businesses choose to incorporate worldwide. For example, it is not uncommon for a software development company to maintain its engineering headquarters in the U.S., sales teams on five-six continents, and outsource technical support staff to countries where manpower is cheaper – such as India and China. Technology businesses are in an especially advantageous position because unlike manufacturers of physical products, the import & export laws, duties, and the obvious pains of manufacturing a physical product may not apply so much in tech.

Here are the top five reasons your digital technology company should at least consider expanding past the border.

1. Elevated branding and credibility

An obvious symptom of developing a global corporate presence is increased brand recognition and apparent credibility from customers, competitors and the public alike. Even if you are not yet at a stage to fully scale your operations in another country, merely maintaining a “registered agent office” by proxy may be a decent start. For example, in developed countries like the U.K., the entire incorporation process takes under 3 hours and can be completed remotely either through the user-friendly Companies House website or via a “companies formation agent”. For a small incorporation fee and miniscule registered agent fees, you now have a legitimate U.K.-based company, with an office address and mail forwarding. Although for any of this to happen, you need not set foot on the British soil, it is advisable to have a visa (if you need one) in advance if you would ever need to, someday soon.

2. Regulation, or lack thereof

We all know how regulation and compliance requirements can hamper tech businesses, especially young startups. For example, if your tech business deals with storing biometric data for some of the users, U.K. law mandates appointment of a Data Protection Officer – one significant expense for someone just starting out their tech company. We all know how much GDPR has changed the web as well; just look at the ugly “cookie banners” popping up everywhere. If you are strategic here, you may be able to legally evade some of these barriers while remaining fully compliant. During early stages of business, you may choose a country with lax data protection laws for data storage – this may not exempt you altogether from GDPR or data protection laws, but it offers some leeway.

3. Tax incentives

If you primarily host a remote workforce this can be a rewarding arrangement. For example, Ireland offers a huge tax reliefs for qualifying R&D businesses. How about having an R&D arm in Ireland, and a remote workforce employed there, or even contractors? You would not need to shed out office space costs, for a “registered agent” address would likely suffice. The corporate presence itself would enable you to hire talent there and save on R&D costs.

4. Talent acquisition

An obvious one is access to top worldwide talent without having to navigate the dreadful American immigration system. Congress severely restricts legal immigration pathways for skillful workers – regardless of the party in power. The system is designed at every level to discourage legal immigration. If you have the slightest experience with the process of sponsoring an employee’s H1B, you know it. The restrictions are even more stringent for international students working on a permit, such as on an F1: CPT/OPT/STEM-OPT. By contrast, developed countries like Canada, Australia and the U.K. have a comprehensive, sensible point-based immigration systems which reward the top talent purely based on their skills. This is great news for employers because, in addition to not having to worry about losing talent in the near future, the cost savings associated with sponsoring visas and hiring legal counsel are significant. Moreover, because salaries in tech tend to be directly proportional to the cost of living in a country, paid time off (PTO) and other factors, American businesses could have the deal sweetened further by maintaining payroll-employee presence in Canada and the U.K. To give you an example, average software engineer salary in the U.S. is about $104,300. Surprisingly, the salary figures are much lower for U.K., even on the higher end of spectrum.

5. True diversity

Personally, speaking as someone who is pretty diverse himself, diversity is a neutral preference – it isn’t good or bad per se. Mind you, diversity comes with advantages and disadvantages alike which as an executive you need to be aware of. The key is to carefully leverage diversity; make its positives outweigh the negatives. An exceptional product, unless being consumed by diverse users, need only excel in its objective functionality provided to its immediate users. In that case, however, if your customer base is in fact spread worldwide – from a healthcare brand in San Diego to a bank in Shanghai, your tech products can truly benefit from diversity. Having a global tech presence is probably one of the best ways to ensure “true diversity” by your company, for you have employees based in different countries, of different cultural backgrounds, collaborating on developing digital products for consumption by diverse masses around the globe. This is far superior to merely checking boxes for legal compliance purposes or meeting HR quotas.

In conclusion, as with anything there will always be advantages and disadvantages, however it is wise to be aware of the choices that a global corporate presence can open up for your tech brand and critically evaluate them. With the right strategy and mindset, you may just surprise yourself with the possibilities and promising returns of going global.