Going international

Many South African technology businesses do not have an international strategy. However, many of them see South Africa as a good place to develop and test their idea or technology before taking it overseas and scaling it. “Hit the big-time” in other words. Many South African technology businesses only think of an international structure when they get interest from customers located outside South Africa. For various reasons, it really does not make sense for a South African entity to contract with a customer situated in London or New York for example. Often, the customer will also be reluctant to do so.

Hit the big-time

Unfortunately, at this point it is really too late to set up an international structure. The reason being that your intellectual property (IP) is in South Africa and you can’t just take it out. The best time to set up an international structure is right at the beginning when the business starts. The problem with this is that when the business starts there often isn’t very much money and the idea has not been proven.

So what are the benefits of an offshore structure? Why have an international structure?

1. Pay less tax legitimately
2. Escape the risks specific to South Africa
3. Protect assets from risks
4. Comply with South African specific requirements (like BBBEE)
5. Get funding easier

Ok, you’re sold – now what is the best structure to have? Read more about how to structure a technology company with an international strategy.

Tags: business structure, offshore structure, technology company