chapter  4
17 Pages

Countries: Deciding on an Offshore Location

WithJohann Rost

Partners from at least two countries contribute to the offshore scenario. The responsible managers should have some basic knowledge about these countries. This information has to come from reliable sources; otherwise, it is useless or even harmful. The governments of the developing country or institutions closely related to the government are not necessarily the best sources in this instance because they are likely to make biased statements; most governments throughout the world are vying for foreign investors because such investors are highly attractive for their countries’ economy. For obvious reasons, a government might be tempted to paint its country’s image in exaggeratedly bright colors. Thus it might be better to enlist the help and common-sense expertise of independent sources. Foreigners who have worked in the country’s software industry could be reliable advisers. Organizations that provide ratings of the investment climate in various countries are another source of information.

This chapter provides a checklist of what should be known about the countries and companies involved. Some items might not be answered, and others might have limited relevance for the offshore scenario at hand. Some of the questions could have an obvious answer for some managers but not for other members of the offshore relationship. The questions offer some guidance for further investigation and may help prospective participants in an offshore relationship avoid potentially costly information deficiencies. The checklist identifies items that may qualify as truisms in industrialized countries but are not to be taken for granted when it comes to developing nations — e.g., continuous supply of electricity, telecommunication, and Internet access.