Businesses seeking to expand internationally—whether they’re beginning with their first overseas entity or adding to their international presence—must seek efficient legal entity management to manage the operational complexities that global growth presents. For any business, regardless of size or industry, effective legal entity management is critical to both compliance and the proper governance that drives long-term success.
In this blog, we will explore what entity management is and some of the benefits and challenges you’ll face if you outsource entity management. With the insights you learn from this blog, you’ll be able to make informed decisions about entity management that align with your business goals and objectives.
What is entity management?
Entity management refers to the strategic management of a business’s legal entities, including corporations, limited liability companies (LLCs), partnerships, and subsidiaries, and oversees the lifecycle of those entities. Essentially, business entity management aims to ensure that a business stays compliant with local laws and regulations while maintaining accurate records.
What is the value of global entity management?
Advantages of Outsourcing Entity Management: Expertise, Cost, Compliance and Efficiency
Outsourcing business entity management offers significant advantages for businesses expanding globally, one of the most important of which is access to specialized expertise. A trusted global entity management service provider will bring a deep understanding of local laws, regulations, and compliance requirements across the specific countries and jurisdictions into which your company will expand. This helps your organization stay in compliance with local and country-specific laws, reducing your risk of costly penalties and legal issues. Outsourcing entity management eliminates the need for in-house expertise (and the pressure to stay updated with country-specific legislative and regulatory changes).
Using a third-party entity management provider can also deliver greater operational efficiency for your organization. As you likely already know, managing legal entities across multiple countries is high-stakes and resource-intensive work, from understanding and handling documentation and filings to following communication protocols with local authorities. By outsourcing to an entity management provider, you can streamline this process and reduce the pressures that this places on your internal teams, thus allowing them to focus on their core activities.
Key Considerations for Outsourcing Entity Management
While outsourcing solutions for global entity management can bring you efficiency and peace of mind, it is nonetheless a high-stakes decision for your company’s overall wellbeing. Because a third-party entity management provider will require you to share sensitive financial and operational data, make sure that you fully vet your provider to ensure that they are proven and trusted. You’ll also be entrusting this provider to conduct critical compliance and governance functions on your behalf. The benefits of this approach are significant. Done right, they’ll help you ensure that your entities stay compliant and in good standing across every jurisdiction. Again, make sure that you use a vetted, proven global entity management provider with demonstrated experience to handle these important functions on behalf of your company.
Why is business management important for entities?
While business management and entity management overlap in some ways, it’s important to understand the distinction. Entity management is an important subset of business management and ensures that each subsidiary operates legally and efficiently within its country or jurisdiction.
Business management, on the other hand, is broader. It involves overseeing the entire spectrum of corporate operations (from strategic planning and governance to finances and HR)—to ensure that the company makes informed decisions that allow it to succeed and meet its growth objectives.
An important part of this oversight includes ensuring that all entities are compliant and operating legally across jurisdictions. Thus, entity management is a core foundational element of the overall health of your company’s business operations. In short, you can’t operate effectively as a business if the management of your entities is leaving you vulnerable to legal, financial and reputational risks.
Partner with a trusted expert to better understand entity management
Is your company struggling with entity management? HSP offers solutions to streamline and optimize these processes. Whether you decide to handle entity management internally or outsource to an entity management provider, understanding the importance of efficient business entity management is critical to your company’s global expansion efforts. Consider partnering with a trusted global expansion service provider to help you make informed decisions about using entity management to continue your company’s successful expansion journey.
HSP is an end-to-end global expansion solutions provider focused on helping companies scale their operations overseas effectively and efficiently. We are the only global expansion expert to offer growing companies a full suite of end-to-end solutions designed to help them scale to any size and country.
Our in-country experts have delivered the full spectrum of global expansion solutions—from EoR to entity set-up and management—across more than 100 countries (and counting). HSP brings full payroll, accounting, tax, legal, compliance, and HR services to corporate teams, integrating with in-house staff to both guide and execute across every domain.
Our experts will help you successfully define your global HR strategy to help you seamlessly navigate the complexities of international expansion. Talk to an expert today.
