It is very common to run an offshore company over the internet. This is very easy for both ends and managing such a company is very easy. No taxes, no EPF/ETF... simply nothing unless you form a company. Until then you are called self-employed. That's the easiest way to run such a company. As long as you don't develop products to local market, you can run this tax free. Have a look at
Myhome_myoffice.com. Lots of money is waiting online. Only thing is you need to have the required talent.
As I said before, if you form a company, then you'll have to follow the conventional procedures of the government. You need to start from company registration in Company House (Registrar of Companies) (Costs nearly LKR 40,000). Then you have about 2 years to ruin your company without registering under income tax. Later on you will have to submit all your annual returns to both Company House and Income Tax. My question is why are you going to pay those things when you don't earn from local clients. Check with Income Tax on this.
I'm not discouraging you on this. But just list down all the pros and cons in forming up a company. If your clients are happy to work with you directly (mostly the case in freelance projects), I don't see any requirement in added complications.
May be I'm not clear on the vision of your business. But according to my knowledge, if you guys are directly dealing with foreign clients, it is less complicated to handle.
marketing,
Do you need a marketing team to spend time of grabbing freelance business from internet instead of you? How if they learn the subject and taken the contracts away form you guys. In Sri Lanka, this is very common. Marketing guys are non professional trained for this purpose. It is very rare to find good guys for this.
tax preparation,
As long as you have only overseas cleints on freelance basis, this is not required (according to my knowledge). If you register a company, yes, you will have to follow the government procedures.
accounting,
This is also not required if you don't form a company. I'm not sure you will have to think about complicated accounting as long as you don't have to submit annual tax returns.
project management,
This is a huge subject. If you are getting large scale projects which require 10 or more developers, then you will have to plan it from design to delivery. Missing one step might affect your reputation. However, if it is small scale projects which needs one or two developers, it's easy to handle. Software development techniques like water fall model, DFDs, Flow Charts, Use Cases can be used to help the design phase.
Since you are working with a client who knows what he needs, requirement analysis which is one of the most problematic parts in software development isn't required.
human resources
For 2, not needed. For 5+, this must be taken in to consideration. If you are going to pay salaries, then you can consider a company registration under provincial counsel (LKR 500) and register the employees for EPF and ETF. If you are getting the service from them on contract basis (they can leave you at any time) you can avoid this as well.
So in conclusion, if you go for a registration, you will have to start paying taxes and follow other government procedures. After some time, if you find a good client who needs to form a company in Sri Lanka under BIO (Board of Investment), you have to go for a company registration. Until then, it is advisable to run your business as now.
If you have any question, please ask
But to practice my ideas on business.I love to do marketing in practice! 