What Is the Difference Between Onshore and Offshore Company?

If you are looking for a software development company, you might be wondering what is the difference between onshore and offshore company? Both onshore and offshore companies could offer the same services but the difference is where they complete the work. This article will describe the differences between onshore and offshore companies, including the pros and cons.

Onshore vs Offshore Company

The main difference between onshore and offshore is that offshoring involves getting work completed in a different country. For US companies looking to outsource software development, this typically means going to countries like India, China, Eastern Europe or Latin America. Onshore refers to giving work to an organization in the same country you reside in.

What Does it Mean to Outsource?

Outsourcing refers to giving work to an organization outside of yours. Projects can be outsourced to Onshore or Offshore companies. Outsourcing is typically done for many reasons. For onshore it may be because a company lacks the skills or can’t find the talent. For offshore, it is because the cost of labor is much cheaper in other countries or there is a lack of talent available in the country where the organization is based.

How is Tiempo Development Involved?

Tiempo Development is an offshore company that offers software and application development services to companies that want to outsource. Before, it would be common for companies to outsource to India or similar countries. Tiempo Development has opened a new and more streamlined solution for those needing software development outsourcing services. This solution is offshoring to nearby countries. Being closer, some key components of why companies choose Tiempo is timing of communication, quality of work, and cost. With corporate offices in the United States and development centers in Mexico, Tiempo bridges the gap in the differences between an onshore and offshore company to some extent.

Onshore and Offshore Company Difference

What is the Difference Between Onshore and Offshore Company?

What is an Offshore Company?

An offshore company refers to an entity that engages in offshoring activities. Many businesses in the United States looked into the difference between offshore and onshore companies and have started outsourcing their services to offshore companies because of the low cost involved. In case it is expensive to hire domestic professionals, it makes perfect sense to outsource the same services to an offshore company. You can find knowledgeable, skilled, and English speaking workers throughout the world in countries like India, the Philippines, Eastern European countries, or even Mexico that you can outsource tasks such as software development.

Pros

Low labor cost: The main advantage of outsourcing to an offshore company is that the labor cost is low compared to hiring domestic workers.
Quality: Offshore companies have skilled workers that offer quality services which can meet all your specific requirements.
Communication: Offshore companies always remain in touch with their customers either via phone or email.

Cons

Different time zones: Working with an offshore company often means that you have to deal with different time zones. As a result, you may experience delays in communication.
Cultural differences: You may experience cultural differences while dealing with an offshore company. Even if they speak English, it may not be their first language. Therefore, be careful while passing out instructions to avoid coming out as offensive.
Resolution issues: While it may be easy to solve a problem with a domestic company, the same cannot be said about offshore companies. You will have to deal with a foreign court if you have an issue with a foreign worker, which can be an expensive and tedious process.

What is an Onshore Company?

An onshore company is an entity that is incorporated in a home country with the sole purpose of doing business within that specific jurisdiction. In case offshoring is not an option, you can choose to outsource your services to companies located in your local country. You may have to spend more money in terms of labor cost, but the benefit of this is that you are working with local workers. That means there is no language barrier or cultural differences to deal with.

Pros

Proximity: The first advantage of hiring an onshore company is that they are close to your business. That means it can be easier for you to monitor the projects you have outsourced to them.
Communication is easy: The best thing about working with an onshore company is that you communicate in the same language. Therefore, you can understand each other very well, and there is no time zone complications.
Regulations: Dealing with an onshore company means that you are both governed by the same regulations. Therefore, it is easy to tell if the onshore company does not comply with your country’s regulation and raise an alarm.

Cons

High labor cost: Domestic workers usually command a high rate for the same services offered by offshore companies. That means you have to spend more money while working with an onshore company.

Limited labor market: When hiring domestically, you are limiting yourself to just one geographic region when searching for talent. By using an offshore company, you are pulling from multiple geographic regions and can ensure that you are getting the best talent available.

Conclusion

Other than the tax rate which is the key difference between onshore and offshore company, there are other differences you should know. Most of the time, offshore companies cannot operate in the same country they were incorporated. The same cannot be said about onshore companies which operate and are governed in the same jurisdiction they were incorporated. Another difference is that offshore companies are quite simple to form compared to onshore companies. Here at Tiempo Development, we hope you now understand the difference between onshore and offshore companies.

3 Reasons to Choose Tiempo as Your Offshore Company

Tiempo Development offers offshore advantages while minimizing the cons by being a Nearshore Software Development company. Meeting with your Tiempo team is only a short flight from every major US city. This offers unparalleled connectivity and accountability compared to many of our competitors.
Additionally, Tiempo Development teams are often in the same time zone as many major US cities, reducing communication concerns and ensuring that more time is spent on development and software. Even when time zones are different, they are far closer than the 13.5-hour time zone difference between Los Angeles and India, reducing the amount of time lost due to delays in communication.
For Tiempo Development, finding and hiring great developers is just the beginning. Companies that develop or rely heavily on software turn to Tiempo Development for:

  • Cost-Effective Software Development Resources
  • Dedicated High-Performing Agile Teams that are located closer to you than other offshore companies.
  • Commitment to Ultimate Client Outcomes
  • Fast Ramp Up and Seamless Integration
  • Expert Resources Available in Almost Every Technology; Java, Python, .NET, React, Angular, PHP, etc.
  • Headquartered in the United States

Headquartered in the United States, Tiempo Development has a distinct advantage over many other offshore companies because it minimizes many of the disadvantages of offshore companies that are based halfway around the world.
We have a team of professionals who are fully equipped to tackle all of your company’s software needs. At Tiempo Development it’s the best of both worlds; you get a team of global software experts without the headache of working with an offshore company based halfway around the world. We offer you unparalleled high-quality products without the hassle so you can focus on your business, not the software behind it. To see how Tiempo Development can improve the way your company does business, contact us today!

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