In order to save labor cost and overall operations cost, developed countries prefer outsourcing some of their daily business functions to outsourcing companies. Some of the most common functions can include manufacturing, design and even customer-related services. In this light, many countries are establishing outsourcing companies and offers their services among developed nations.

For those who are interested in setting up an outsourcing company, here are some essentials that should be kept in mind and in practice:

Specialization - Decide on which type of services should your company should focus on. Inmost cases, manufacturing proves to be a popular choice since it involves low wage payments for even an intensed labor requirement. Developed countries usually have very limited resources in terms of paying services such as engineering design that can be assumed in a very economical rate.

Create a Corporation within your Locality - Establish a corporation that would represent your outsourcing company with an adequate capital to boot. It is not recommendable to establish a Limited Liability Company (LLC) since other countries aren't familiar with such business trend.

Establish Representations in Other Countries - It is necessary to have a representation or office in most countries that you wish to offer your outsourcing services. In some countries, it would be better to create a representative office compared to a subsidiary one since there are some legal issues that may prohibit foreign companies from engaging in direct profit-making activities. However, a company may be allowed to simply create a list of local listing which would be introduced to the main office. Further negotiations would then be possible and would be agreed upon within the local grounds of the main office.

Workforce Composition - Choose people from your home country to work as your representative to other countries. Make sure that they would be effective in delivering the message of your company, overcoming any language barriers. It would also prove to be a great method to perform the necessary research of labor regulations prior to signing foreign employees for an office staff.

Creating Local Contacts - Establish an efficient list of contacts among local manufacturers and have a ballpark estimate of their production costs. This would play an important factor in negotiating with such company.

Dealing with Brokers - Definitely you need to have an effective broker among countries where your representative offices are situated. You can either decide on paying a standard fee or agree on a certain percentage among deals that has transpired through your broker.