Wholly Owned Subsidiary
Offshore Outsourcing Models: Introduction | Outsourcing Road Map | Relationship Management | Staff Augmentation | Project-Based Deployment | Dedicated Offshore Staffing | Build Operate Transfer (BOT) | Managed Subsidiary | Captive Offshore Subsidiary | Joint Venture
A fully-owned, independent offshore subsidiary company, with its own management structure and supporting infrastructure.
This is a rare first step for foreign investors, with most opting for the BOT or Managed Subsidiary route.
This is suited to organisations with clear vision and objectives. They will need to source dedicated assistance on the ground, and will generally start operations with the recruitment of the senior staff required to set up and manage the subsidiary.
Advantages
- Most of the advantages of BOT and Managed Subsidiaries
- Complete control of the entire process
- Complete control of costs and overheads.
Disadvantages
- Initial set-up and recruitment
- Set-up lead times
- Management involvement
- Up-front Capital investment
- Legal responsibilities.
Criteria For Using A Captive Offshore Subsidiary
Consider establishing a captive offshore subsidiary when:
- There are guaranteed long-term requirements
- Continuity of resources is required
- On-going support and maintenance are required
- The Company is prepared for the capital investment
- The set up lead times are acceptable
- The company's clear objective is to establish a subsidiary.
Points To Consider
- Logistics of selecting and hiring the 'seed' management team
- Finding and fitting out premises
- Capital outlay
- Set-up lead times.
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