For many companies, outsourcing to a third party provider may not be the best solution. There can be a number of reasons for this:
Our Virtual Captive service delivery model helps a great deal in solving problem #1 by enabling our clients to customize their offshore operation and enabling them to clearly set the modus operandi and control day-to-day operations. To solve problem #2, our client will actually need to own a corporate entity in the Philippines so that they can have their own employees and own assets and resources. They can do this by establishing their own wholly owned subsidiary or captive, but doing so requires a great deal of due diligence and large, long-term investments.
A joint venture with MicroSourcing is the perfect way to effectively address the challenges described above. The concept is simple: your company and MicroSourcing will start a joint venture in the Philippines which effectively creates a corporate entity in the Philippines that services your company exclusively and is largely in your ownership. Within the joint venture, your company can leverage all the local resources and expertise that MicroSourcing has built up to start operations swiftly and effectively, without any of the growing pains captives typically face. Joint ventures can be complicated deal structures and your company needs to decide that it wants to operate in the Philippines indefinitely. If your company wants to test the waters, you can still use our Project Outsourcing, Staff Leasing or Virtual Captive services first before you make a long-term commitment to a joint venture.
You will own the majority of a Philippine corporate entity, enabling you to add this offshore operation as an asset in your books and assuring that you have the control and ownership required to satisfy your clients and be compliant with their demands.
Starting a corporation in an unfamiliar geography such as the Philippines can be a very risky endeavor. By partnering up with a strong local player like MicroSourcing, you can reduce your risk and leverage our years of local presence and expertise in the Philippines.
Running your own wholly owned subsidiary will require great investments and it will not be cost-effective at least for the first few years. Within the joint venture, MicroSourcing can leverage its scale and assets to run at a much lower cost level.
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Setting up your own wholly owned subsidiary will require a lot of due diligence and it takes a company an average of 6-9 months to establish a captive. By leveraging MicroSourcing's local presence and expertise, you can reduce this by 60% or more.
The deal structures of a joint venture are by far the most complicated when compared to our other service delivery models, especially since it entails the establishment of a new corporate entity in the Philippines and there are a lot of legal terms that need to be worked out between the joint venture partners. The setup process will consist of the following main steps:
Our Joint Venture service delivery model is very similar to our Virtual Captive service delivery model. The only big difference is that we will need to establish and operate a separate corporate entity to house the offshore organization in the Philippines. The pricing structure will still be transparent and consist of the following components:
Direct Personnel Costs - These are the total costs of the base salaries, taxes, and benefits of your staff. These costs will be openly shared with you and you can directly budget and control them.
Infrastructure Fees - These are the fees we charge for providing all necessary infrastructure and tools including office space, workstation hardware and software, servers and networking equipment, telecommunications, and other facilities.
Administration Fees - These are the costs for managing the joint venture corporate entity. Typically, MicroSourcing will manage the joint venture together with a third party legal and accounting firm in the Philippines.
Services Fees - These are the fees we charge for providing management and support services. These typically include operations management, IT and technical support, talent acquisition, human resources management, finance and accounting, legal support, facility management, security, and client services.
All these costs will depend on your exact requirements and the resources we will provide to the joint venture. In general, you can expect to save at least 70% on talent and service/overhead costs. Infrastructure fees will generally be 40% lower except for telecommunications, which is typically more expensive in the Philippines than in most Western countries.