International outsourcing
Produced in partnership with Paul O’Hare, Partner, Mike Cashman, Partner and Kathryn Dooks, Partner of Kemp Little
International outsourcing

The following Commercial guidance note Produced in partnership with Paul O’Hare, Partner, Mike Cashman, Partner and Kathryn Dooks, Partner of Kemp Little provides comprehensive and up to date legal information covering:

  • International outsourcing
  • Initial considerations
  • Deal structures
  • Payment and invoicing
  • Benchmarking
  • Governing law and jurisdiction
  • Operational issues
  • Data protection
  • Personnel
  • Tax considerations
  • more

This Practice Note considers the following key issues specific to multinational or offshore outsourcing arrangements:

  1. initial considerations

  2. deal structures

  3. payment and invoicing

  4. benchmarking

  5. governing law and jurisdiction

  6. operational issues

  7. data protection

  8. personnel

  9. tax

  10. competition law

  11. corruption, slavery and ethical issues

  12. termination

For an outsourcing agreement suitable for use in international transactions, see Precedent: Outsourcing agreement—long form. See also Offshore IT outsourcing—training materials.

Initial considerations

The growth in international outsourcing has been facilitated in recent years by suppliers having developed credible regional delivery centres that can deliver the outsourced services on a cross-border basis so as to meet local requirements. An international outsourcing transaction might comprise, at its simplest, a UK-based business contracting with a supplier in, say, India for the provision of back office services. At the other end of the scale, a global corporation may outsource certain functions to a supplier, or multiple suppliers, with delivery centres located in each jurisdiction in which the customer has a presence. There are many possible structural permutations but the underlying issues, including the potential risks and benefit, are largely the same.

This Practice Note explores the issues that are common to most forms of international outsourcing, with a particular focus on contractual offshoring.

Risks and benefits

The key risks and benefits of an offshore outsourcing transaction, from the perspective of the customer, are summarised below.