A virtual office is a working space created virtually with the aid of computers and other digital equipment, i.e. without using physical premises. The functionality of a virtual office can range from a simple call forwarding to a full virtual working space for many employees, equal to a real physical office.
Virtual offices allow companies to save on renting and maintaining physical offices, which is especially relevant to business with a large number of employees. Besides that, businesses use virtual offices to mark their presence in prestigious areas without actually buying or renting premises there. Usually such prestigious areas are also more expensive. A virtual office can also act like a point of contact with local customers and partners in a foreign market, e.g. ensuring call forwarding from phone numbers of that region to the domestic numbers of a company.
Benefits of a virtual office
A virtual office has a number of benefits and advantages over a traditional, physical office. These are as follows:
- Lower costs;
- Local presence;
- Employee convenience;
- Better information management.
In general, the benefits of a virtual office are mostly the same as that of other forms of working space and representation, but are significantly cheaper because of the digital basis of a virtual office. In other words, a virtual office provides the same benefits as a regular one, but for considerably less investment, especially in the long-term and for big businesses.
The lower cost of a virtual office is one of the main benefits of this type of working space. A virtual office relies on computers and other digital devices to function, which makes the renting or buying of physical premises unnecessary. The equipment still needs to be bought, maintained and located somewhere, but its cost is significantly lower. Regarding this, setting up a virtual office is a one-time investment, whereas maintaining an office requires constant spending. As for locating the equipment, Confidus Solutions takes care of this and all the other issues, which means that an investment is all that is needed to set up a virtual office for your business. Such a simple virtual office registration procedure makes it an advantageous option both for experienced and new businesses.
While not only virtual offices provide local presence on a foreign market, they are especially beneficial to businesses that are aimed to providing contacts for local clients and partners. Phone call, mail and document forwarding are the main services that allow business to stay in contact with foreign customers and partners. By having a local e-mail and phone number, business enables customers of a foreign market to contact the company in a familiar manner ensured by local providers, while not maintaining a local office. This allows having a tangible presence without additional investments.
Having an official office registered in a prestigious business area adds to the credibility and image of a company, which is an important factor when trying to impress potential partners. The more prestigious the area is, the more expensive is the property located there. Because of this, many businesses would consider opening an office there. The outcome may result in unjustified investment, if a business will be open for the sake of prestige. A virtual office, on the other hand, allows achieving this effect without additional investments.
Advanced virtual office is a cloud-based working space that allows producing and storing information digitally, minimizing the need for internal paperwork and potentially eliminates it at all. Firstly, this makes the work more convenient for the employees, and allows attracting non-local workers that would not be able to work productively otherwise. Secondly, the advantage becomes even more important for companies with a large number of employees, which would otherwise need a large office or a number of them, requiring additional investments.
Better information management
As virtual offices rely on digital devices, they provide better information management possibilities than a traditional office. A virtual office removes or minimizes the need for internal paperwork, and makes information management faster, as all the documents are created and stored electronically. Therefore, they can be accessed from any place at any time. Of course, digital information management is now used by many companies, but in combinations with other features of a virtual office set-up, it becomes the main form of the working process.
Virtual office services
Although virtual office services may differ depending on the specific needs of each customer, they usually include the following aspects:
Legal address is a place where a virtual office is registered. Most of the jurisdictions require companies to register a legal address when incorporating, so it is the most basic form of a virtual office set-up required for any business activity;
Call and e-mail forwarding
Call and e-mail forwarding services are another essential virtual office services - a business is given a local number and an e-mail from which calls and mails are forwarded to another location, e.g. the headquarters of the company;
Mail and document forwarding
Virtual office also provides the ability to forward physical documents, such mail, contracts and invoices from the local legal address to any other office of the company. Depending on the needs of a customer, physical documents can be forwarded physically, or they can be scanned, their digital version can be sent to a specific digital storage orthe originals might be stored or disposed of;
Virtual working space
Virtual working space is a group of software applications that allow creating and storing various types of documents (text, spreadsheets, presentations) digitally, removing the need for internal paperwork;
Conference calls are a special type of virtual office services that allow holding meetings featuring a number of people via phones or specialized software. As this service is situational, it usually needs to be arranged separately.
Virtual office and economic substance
The economic substance of a company is a physical presence in a certain jurisdiction for the purpose of tax benefits. (Read more here) In other words - a government must see that a company is physically represented and/or is conducting some form of its business in order to provide tax benefits and incentives.
When setting up a virtual office, it is important to remember that it might not be enough to provide a sufficient economic substance to your business, which is why it is important to maintain a balance between going fully virtual and leaving some economic activities in the real space. As the actual amount of economic substance required is very different between jurisdictions, please contact Confidus Solutions to discover what kind of physical presence is required in your chosen jurisdiction.