As more Australian businesses expand internationally, choosing the right operational model becomes a critical strategic decision. Both popular approaches—setting up a satellite office and using traditional offshoring— offer access to global talent and cost efficiency. But the price difference between the two can be dramatic.
If you’re weighing your options, understanding the full cost breakdown is essential. This article explores lease expenses, HR obligations, IT infrastructure, and compliance requirements to help you compare the true cost of a satellite office versus a traditional offshoring model.
What Is a Satellite Office?
A satellite office is a physical extension of your organisation in another country. It operates under your brand, your management, and your internal systems. You retain full control of hiring, compliance, and day-to-day operations. It’s essentially your own office—just located offshore.
This differs significantly from traditional offshoring, where you partner with an outsourcing provider that supplies the team, infrastructure, HR services, and compliance framework.
Both models can expand capability, but the cost structures are worlds apart.
Lease and Facilities Costs
Satellite Office
Establishing a satellite office means taking on a long-term commercial lease. In offshore markets with high demand—such as Manila, Cebu or Ho Chi Minh—modern office space can still be expensive. Costs typically include:
- Monthly rent for dedicated office space
- Fit-out and furniture
- Utilities and building maintenance
- Security and reception services
These expenses can quickly exceed expectations, especially when businesses underestimate the full cost of setting up an operational office environment.
Traditional Offshoring
With traditional offshoring, the provider supplies the workspace. There is no lease, no fit-out expense, and no commitment to long-term commercial contracts.
This alone often reduces costs by 40–60% compared to establishing a satellite office.
HR and Staffing Costs
Satellite Office
Running your own satellite office means you become the employer of record. You must manage:
- Local recruitment
- Employment contracts
- Mandatory benefits
- Payroll administration
- Staff retention and cultural management
Each of these functions requires local expertise—either through a dedicated internal team or by hiring consultants.
Traditional Offshoring
Outsourcing providers manage HR end-to-end. They handle recruitment, onboarding, contracts, payroll, benefits, and performance management.
Your costs are packaged into a predictable monthly service fee, reducing administrative and legal overhead.
IT Infrastructure and Support
Satellite Office
From day one, you must invest in:
- Hardware procurement
- Software licensing
- Cyber-security systems
- Network equipment
- Onsite IT support
IT failure becomes your problem to solve—regardless of time zone.
Traditional Offshoring
The provider supplies enterprise-grade IT infrastructure, security protocols, and support staff. Technology is maintained, updated, and monitored without any additional effort from your internal team.
For most businesses, this removes one of the most expensive and complex aspects of running an offshore team.
Compliance and Legal Requirements
Satellite Office
Compliance risk is often the most underestimated cost. Establishing a foreign entity or representative office requires:
- Registration with local authorities
- Tax filings
- Labour law compliance
- Statutory benefits administration
- Legal representation
Mistakes can result in costly penalties or disputes. Maintaining compliance adds to ongoing operational expenses.
Traditional Offshoring
The outsourcing provider operates as the legal employer and assumes responsibility for compliance, labour law obligations, and statutory filings.
Your business avoids entity registration, legal exposure, and regulatory risk.
Which Model Delivers Better ROI?
A satellite office offers full control, but at a significantly higher cost. It suits businesses building large, permanent offshore teams and willing to absorb the overheads of running their own international entity.
Traditional offshoring delivers faster ROI, minimal setup requirements, and access to experienced talent and established infrastructure. It is ideal for organisations seeking efficiency, flexibility, and reduced risk—without sacrificing quality.
Flat Planet has helped Australian companies compare these models and build offshore operations that deliver strong, sustainable cost advantages.
Considering a Satellite Office? Contact Flat Planet for a Detailed Cost Assessment
If your organisation is evaluating whether a satellite office or traditional offshoring is the right strategic fit, we can provide a detailed cost assessment tailored to your business needs.
To explore your options or request a customised breakdown, contact Flat Planet and speak with our team of offshore workforce specialists today.
