Outsourcing Compliance: The Complete Guide to External Compliance Officers & Services (2026)
February 21, 2026
Updated: February 22, 2026
25 min read
Compliance
Compliance has become one of the fastest-growing cost centres in business. Industry surveys suggest the average mid-size company now spends millions of dollars annually on compliance, with costs rising steadily year over year. Regulatory complexity is the driver: GDPR, NIS2, DORA, the EU AI Act, CSRD, AML directives — the list keeps growing. Meanwhile, experienced compliance professionals are in short supply and commanding premium salaries.
This reality is pushing organisations of every size toward compliance outsourcing — the practice of delegating some or all compliance functions to specialised external providers. The model is no longer a compromise or a budget shortcut. For many organisations, it's the strategically superior choice: faster deployment, broader expertise, lower cost, and — paradoxically — often better outcomes than under-resourced internal teams.
This guide covers the full spectrum of compliance outsourcing: what you can outsource, the benefits and risks, cost benchmarks, how to choose a provider, and why EU-based compliance hubs like Croatia are emerging as the smart choice for companies navigating European regulatory requirements.
Quick Reference
Details
What is compliance outsourcing?
Delegating compliance functions to external specialist firms rather than handling them entirely in-house
40–70% compared to full-time internal compliance team
Key regulations driving demand
GDPR, NIS2, DORA, EU AI Act, CSRD, AML/CFT, ISO 27001
Croatia advantage
EU-based expertise covering all major frameworks at 40–60% lower cost than Western EU providers
Time to value
First compliance assessment within 2–4 weeks; full programme within 60–90 days
Key Takeaways
Compliance outsourcing is a mature, proven model used by organisations from startups to Fortune 500 companies — it's not a shortcut, it's a strategic decision
You can outsource virtually any compliance function: DPO, compliance officer, regulatory monitoring, policy management, training, audits, DSAR processing, breach response, and more
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The cost advantage is significant: 40–70% savings versus building an equivalent internal team, with faster deployment and access to broader expertise
EU-based providers are essential for European regulatory compliance — they understand the regulatory culture, have DPA relationships, and operate in the same legal framework
Croatia has emerged as a leading EU compliance outsourcing hub, offering providers with deep expertise in GDPR, NIS2, DORA, and ISO 27001 at rates 40–60% below Western European equivalents
The co-sourced model — combining internal compliance leadership with external specialist support — is increasingly popular and often delivers the best outcomes
Key evaluation criteria: regulatory expertise, industry experience, responsiveness, independence, and cultural fit — not just price
Start with a clear scope of work and measurable KPIs to ensure the engagement delivers real compliance outcomes, not just a checkbox exercise
Compliance outsourcing is the practice of engaging external specialist firms to perform some or all of an organisation's regulatory compliance functions. Instead of building and maintaining an entirely internal compliance team, you leverage external expertise — either replacing internal functions entirely or supplementing them.
The scope can range from narrow (outsourcing just the DPO function) to comprehensive (a fully managed compliance programme covering multiple regulations across jurisdictions). The common thread: external specialists bring focused expertise, proven processes, and shared infrastructure that most individual organisations couldn't economically replicate in-house.
The evolution of compliance outsourcing
Era
Model
What Changed
Pre-2018
Law firm retainers for regulatory advice
GDPR created demand for ongoing compliance management, not just legal advice
2018-2020
Specialist GDPR compliance firms emerge
DPO-as-a-Service and GDPR advisory become established categories
2020-2023
Multi-regulation compliance platforms
NIS2, DORA, AI Act created demand for integrated compliance covering multiple frameworks
2024-present
EU-based compliance hubs
Cost-effective EU locations like Croatia offer full-spectrum compliance outsourcing with quality parity to Western EU
What Compliance Functions Can You Outsource?
Complete list of outsourceable functions
Function
Description
Outsourceability
Data Protection Officer (DPO)
GDPR-mandated role overseeing data protection compliance
Fully outsourceable (Article 37(6))
Chief Compliance Officer
Senior compliance leadership and strategy
Fully outsourceable or co-sourced
GDPR Representative (Article 27)
EU contact point for non-EU companies
Fully outsourceable
Regulatory monitoring
Tracking regulatory changes across jurisdictions
Highly suitable for outsourcing
Policy development and management
Creating, reviewing, and maintaining compliance policies
Commonly outsourced
Compliance training
Employee awareness and training programmes
Commonly outsourced
DSAR management
Processing Data Subject Access Requests
Commonly outsourced
DPIA/risk assessment
Data Protection Impact Assessments and risk analysis
Commonly outsourced
Compliance audit
Internal compliance audits and gap assessments
Commonly outsourced
Breach notification
Incident response and regulatory notification
Co-sourced (requires internal coordination)
Vendor risk management
Third-party compliance assessments
Commonly outsourced
AML/KYC compliance
Anti-money laundering and know-your-customer
Commonly outsourced in financial services
ISO 27001 implementation
Information security management system setup and maintenance
Commonly outsourced
NIS2 compliance
Cybersecurity directive implementation
Growing outsourcing demand
DORA compliance
Digital operational resilience for financial entities
Growing outsourcing demand
ESG/CSRD reporting
Sustainability reporting compliance
Growing outsourcing demand
Compliance Outsourcing Models
Model 1: Fully outsourced compliance
What it is: An external provider manages your entire compliance programme — strategy, operations, reporting, and regulatory interaction.
Best for: Small to mid-size companies entering regulated markets, companies with minimal internal compliance resources, PE portfolio companies needing standardised compliance across entities.
Pros: Fastest deployment, comprehensive coverage, single point of accountability
Cons: Less institutional knowledge, dependency on provider, requires strong governance
Model 2: Co-sourced compliance
What it is: You maintain internal compliance leadership (even if part-time), while external providers handle specific functions or provide surge capacity.
Best for: Growing organisations building internal compliance capability, companies with complex multi-regulation requirements, organisations wanting the best of both worlds.
Pros: Internal ownership with external expertise, flexible scaling, knowledge retention
Cons: Requires clear role delineation, coordination overhead
Model 3: Outsourced compliance officer
What it is: An external professional serves as your designated compliance officer or Chief Compliance Officer, providing strategic leadership on a part-time or retainer basis.
Best for: Mid-market companies that need senior compliance leadership but not full-time, regulated entities meeting supervisory requirements.
Pros: Executive-level expertise at fraction of cost, regulatory credibility, independence
Cons: Not full-time presence, requires good internal liaison
Model 4: Project-based outsourcing
What it is: External providers handle specific compliance projects — implementation of a new regulation, audit preparation, certification readiness, incident response.
Best for: Organisations with a competent internal team that needs specialist help for specific initiatives.
Pros: Defined scope and cost, specialised expertise for specific challenges
Cons: No ongoing relationship, less context for recurring needs
Choosing the right model
Factor
Fully Outsourced
Co-Sourced
Outsourced CCO
Project-Based
Internal compliance maturity
Low
Medium
Medium-High
High
Budget
$$
$$$
$$
$
Regulatory complexity
Any
High
Medium-High
Specific
Speed needed
Fast
Moderate
Fast
Varies
Long-term strategy
May build internal later
Building internal capability
Supplementing internal
Already internal
Control level
Provider-led
Shared
Strategy-led
Client-led
Benefits of Outsourcing Compliance
1. Cost efficiency (40-70% savings)
The math is straightforward. Building an internal compliance team for a mid-size company facing GDPR, NIS2, and ISO 27001 requirements might look like:
Internal Team
Salary + Benefits
Annual Cost
Compliance Manager
€90,000–€140,000
€90,000–€140,000
DPO / Privacy Specialist
€80,000–€120,000
€80,000–€120,000
Compliance Analyst
€50,000–€80,000
€50,000–€80,000
Training and tools
—
€20,000–€50,000
Total
€240,000–€390,000
An equivalent outsourced compliance programme from an EU-based provider in Croatia:
Outsourced Service
Annual Cost
Outsourced CCO + DPO (bundled)
€24,000–€60,000
Compliance programme management
€12,000–€36,000
Training, audits, regulatory monitoring
€6,000–€18,000
Total
€42,000–€114,000
Savings: 55–75% — and you get a team of specialists rather than three generalists.
2. Faster deployment
Recruiting an internal compliance team takes 3-6 months per hire. An outsourced engagement can be operational within 2-4 weeks, with full programme delivery within 60-90 days.
3. Broader expertise
An outsourced provider brings experience from dozens of client engagements across multiple industries and jurisdictions. Your internal hire brings the experience of their previous employer. The knowledge delta is substantial.
4. Scalability
Outsourced compliance scales with your needs. Entering a new EU market? Add NIS2 support. Launching a health tech product? Add GDPR special category expertise. Downsizing? Reduce scope without layoffs.
5. Regulatory currency
Compliance regulations change constantly. Outsourced providers track regulatory developments as their core business — it's how they stay competitive. Internal teams often struggle to stay current while managing day-to-day operations.
6. Independence
External compliance providers bring objectivity. They're less susceptible to internal politics, cultural pressure to "just approve it," or conflicts of interest that can compromise internal compliance functions.
Risks and How to Mitigate Them
Risk
Mitigation
Loss of institutional knowledge
Require knowledge documentation, maintain internal compliance liaison, include knowledge transfer provisions in contracts
Provider dependency
Maintain internal oversight capability, ensure documentation is yours, include transition assistance clauses
Cultural misalignment
Choose providers who invest in understanding your organisation, require dedicated account managers, cultural fit assessment during selection
Data security concerns
Vet provider's own security posture, include data processing agreements, audit rights, certifications (ISO 27001)
Communication gaps
Define communication protocols, regular reporting cadence, SLAs for response times, dedicated contact points
Quality inconsistency
Service level agreements with measurable KPIs, regular performance reviews, escalation procedures
Regulatory accountability
You remain legally responsible — outsourcing the function doesn't outsource liability; ensure clear accountability frameworks
Compliance Outsourcing Costs: Complete Breakdown
By service type
Service
Monthly Cost Range
Annual Range
Outsourced CCO (part-time)
€2,000–€8,000
€24,000–€96,000
DPO as a Service
€500–€5,000
€6,000–€60,000
GDPR compliance programme
€1,500–€6,000
€18,000–€72,000
NIS2 compliance programme
€1,500–€5,000
€18,000–€60,000
ISO 27001 implementation
Project: €15,000–€60,000
One-time + maintenance
Regulatory monitoring
€500–€2,000
€6,000–€24,000
Compliance training
€200–€1,000
€2,400–€12,000
DSAR management
€50–€200/request
Varies by volume
Compliance audit
€5,000–€25,000/audit
Project-based
Vendor risk assessment
€500–€2,500/vendor
Varies by volume
By provider location
Location
Cost Index (Western EU = 100)
Quality Rating
English Proficiency
Ireland
110-130
Excellent
Native
UK
100-120
Excellent
Native
Germany
100-110
Excellent
Good-Excellent
Netherlands
90-110
Excellent
Excellent
France
90-110
Excellent
Moderate-Good
Spain
70-90
Good-Excellent
Moderate-Good
Croatia
40-60
Good-Excellent
Good-Excellent
Poland
45-65
Good
Moderate-Good
Estonia
55-75
Good-Excellent
Good-Excellent
India/Philippines
20-40
Varies
Good (but timezone/cultural issues for EU compliance)
Why not offshore to India/Philippines? While dramatically cheaper, EU compliance requires deep understanding of the European regulatory culture, DPA relationships, and the ability to operate within EU timezones. Offshore providers struggle with the nuances that make compliance effective. EU-based providers in cost-effective markets like Croatia offer the sweet spot: EU credentials at rates approaching offshore prices.
For companies facing European regulatory requirements, using an EU-based compliance provider isn't just convenient — it's often practically necessary:
Regulatory familiarity: EU regulations are interpreted differently across member states. EU-based providers understand these nuances through direct experience
DPA relationships: Effective compliance requires understanding how supervisory authorities operate. EU-based providers interact with DPAs regularly
Legal framework alignment: Your provider operates under the same legal framework they're helping you comply with
Timezone and accessibility: EU regulators and business partners operate in European timezones
No transfer complications: Sharing compliance-related data with an EU-based provider doesn't trigger international transfer provisions
Credibility signal: EU-based compliance support demonstrates commitment to EU stakeholders
Croatia: The emerging compliance hub
Croatia has established itself as a compelling location for compliance outsourcing in the EU. Here's why:
Regulatory standing
Full EU member since 2013, eurozone member since 2023, Schengen Area member
Active DPA (AZOP) that participates in EDPB coordination
Full adoption of GDPR, NIS2, DORA, and all major EU frameworks
No regulatory disadvantage compared to any other EU member state
Professional ecosystem
Growing community of certified compliance professionals (CIPP/E, CIPM, ISO 27001 Lead Auditors)
Universities producing EU law and regulatory specialists
International experience — many Croatian compliance professionals have worked across multiple EU jurisdictions
Active professional associations and knowledge-sharing networks
Cost advantage
Professional service rates 40-60% lower than Ireland, Germany, Netherlands, or France
No compromise on expertise or quality — driven by lower operating costs
EUR-denominated (no currency risk for EU clients)
Competitive even for non-EU clients managing EUR-budgeted compliance programmes
Practical advantages
Central European Time — optimal for EU operations, comfortable overlap with US East Coast
Direct flights from Zagreb to all major EU capitals
Strong English proficiency (and often German and Italian)
Modern digital infrastructure
Client base
Croatian compliance providers serve clients across the EU and globally, including:
US SaaS companies entering the EU market
UK companies navigating post-Brexit compliance
EU companies seeking cost-effective compliance support
International organisations with multi-jurisdictional compliance needs
How to Choose a Compliance Outsourcing Provider
Essential criteria
Criterion
What to Look For
Weight
Regulatory expertise
Certified professionals, proven track record with relevant regulations, DPA interaction experience
25%
Industry experience
Client references in your sector, understanding of industry-specific requirements
20%
Service model fit
Flexibility to match your preferred model (fully outsourced, co-sourced, etc.)
15%
Responsiveness
Clear SLAs, 24/7 availability for incidents, dedicated account management
15%
Cost
Transparent pricing, no hidden fees, value for money relative to outcomes
10%
Location
EU-based for European compliance, timezone alignment, language capability
10%
Cultural fit
Communication style, values alignment, willingness to understand your business
5%
Questions to ask potential providers
About their expertise:
How many DPA inquiries have you handled in the past 12 months?
Which EU regulations do your team members specialise in?
What certifications do your compliance professionals hold?
Can you provide references from clients in our industry?
About their service model:
How do you onboard new clients?
What's included in your base service vs. what's extra?
How do you handle surge requirements (e.g., breach response)?
What tools and platforms do you use?
About accountability:
How do you measure compliance programme effectiveness?
What reporting do you provide?
What happens when you identify a compliance gap?
How do you handle disagreements about compliance recommendations?
About continuity:
Who will be our day-to-day contact?
What happens if our account manager leaves your firm?
How do you ensure knowledge transfer and documentation?
What are the terms for transitioning to another provider?
Structuring an Effective Outsourcing Engagement
Phase 1: Discovery and assessment (Weeks 1-4)
Activity
Deliverable
Review current compliance posture
Gap assessment report
Map regulatory obligations
Regulatory applicability matrix
Assess existing policies and processes
Policy review findings
Identify key risks
Risk register (prioritised)
Define scope of outsourced services
Scope of Work document
Phase 2: Design and implementation (Weeks 4-12)
Activity
Deliverable
Develop/update compliance policies
Complete policy library
Implement monitoring processes
Regulatory monitoring framework
Set up reporting structures
Reporting templates and cadence
Establish DPA communication channels
DPA interaction procedures
Deploy training programme
Training plan and materials
Create incident response procedures
Breach response playbook
Phase 3: Steady state operations (Ongoing)
Activity
Frequency
Compliance monitoring and reporting
Monthly
Regulatory update briefings
Monthly
Policy reviews and updates
Quarterly
Compliance training sessions
Quarterly
DSAR processing
Ongoing
DPIA support
As needed
Internal audit support
Semi-annually or annually
Annual compliance assessment
Annually
Compliance Outsourcing by Industry
Financial services
Key regulations: GDPR, DORA, MiFID II, PSD2/PSD3, AML/CFT, EMIR
Outsourcing focus: Regulatory reporting, AML compliance, data protection, operational resilience
Croatia advantage: Growing fintech ecosystem in Zagreb, DORA expertise
Healthcare and life sciences
Key regulations: GDPR (special categories), EU Medical Device Regulation, Clinical Trials Regulation, EHDS
Outsourcing focus: Health data governance, clinical trial compliance, DPO services
Croatia advantage: Biotech sector growth, university partnerships
Technology and SaaS
Key regulations: GDPR, EU AI Act, NIS2, Digital Services Act, ePrivacy
Outsourcing focus: Privacy by design consulting, DPO, AI compliance, international transfers
Croatia advantage: Strong tech talent, understanding of SaaS business models
The co-sourced model — combining internal compliance leadership with external specialist support — is increasingly the preferred approach. Here's how it typically works:
Policy management, DSAR processing, audits, training
IT security liaison
Internal
Technical implementation, security controls
Why co-sourcing works
Institutional knowledge stays internal via the coordinator
Deep expertise comes from the external provider's specialised team
Independence is maintained through the external DPO/CCO
Cost is controlled — you employ one coordinator, not a team
Scalability — the external component flexes with your needs
Measuring Outsourced Compliance Performance
Key Performance Indicators
KPI
Target
Measurement
Regulatory response time
DPA inquiries acknowledged within 24 hours
Time tracking
DSAR completion rate
100% within statutory deadline (30 days GDPR)
Completion records
Policy review cadence
All policies reviewed at least annually
Review dates
Training completion
95%+ employee completion rate
LMS data
Incident response time
Breach assessment initiated within 4 hours
Incident logs
Compliance gap closure
90%+ of identified gaps closed within agreed timeline
Gap register
Regulatory update turnaround
New regulation impact assessed within 30 days
Briefing dates
Audit findings
Declining trend in compliance findings year-over-year
Audit reports
Frequently Asked Questions
Does outsourcing compliance reduce our legal liability?
No. You remain legally responsible for compliance with applicable regulations. Outsourcing transfers the execution of compliance functions, not the legal accountability. However, demonstrating that you've engaged qualified external expertise can be a mitigating factor if regulators assess penalties.
Can we outsource compliance for multiple regulations to one provider?
Yes, and it's often preferable. A single provider covering GDPR, NIS2, ISO 27001, and other frameworks can identify synergies, avoid duplication, and provide a holistic view of your compliance posture. Croatian providers commonly offer multi-regulation compliance programmes.
What's the minimum engagement period?
Most providers require 12-month minimum commitments for ongoing services, which is reasonable — effective compliance requires continuity. Project-based engagements (ISO 27001 implementation, compliance audit) may be shorter.
How do we ensure the outsourced team understands our business?
Invest in a thorough onboarding process. Good providers will spend weeks understanding your business before making recommendations. Maintain a regular meeting cadence (at least monthly), and assign an internal liaison who can provide business context.
Is outsourcing compliance appropriate for large enterprises?
Absolutely. Many large enterprises outsource specific compliance functions while maintaining internal compliance leadership. The co-sourced model is particularly popular with larger organisations. Even Fortune 500 companies outsource DPO services, regulatory monitoring, and compliance training.
How do we handle confidential information with an external provider?
Standard practice includes: NDAs, data processing agreements, access controls, information barriers between clients, and the provider's own security certifications (ISO 27001). Any reputable compliance provider handles confidential information for multiple clients and has robust safeguards.
What happens during a regulatory audit or investigation?
Your outsourced compliance team should support you throughout the process: preparing documentation, advising on responses, attending meetings with regulators (if authorised), and implementing any remediation measures. This is actually where outsourced providers often outperform internal teams — they've likely been through more audits across their client base.
Why choose a Croatia-based provider specifically?
Croatia offers the unique combination of full EU membership (including eurozone and Schengen), a competent supervisory authority (AZOP), strong professional talent, excellent English proficiency, and 40-60% lower costs than Western EU equivalents. There's no regulatory or quality trade-off — it's a strategic cost advantage within the same legal framework.
Ready to outsource your compliance programme? Vision Compliance provides comprehensive compliance outsourcing services from Croatia — covering GDPR, NIS2, DORA, ISO 27001, and more — at rates 40-60% below Western EU providers without compromising quality. Schedule a consultation to discuss your requirements.
Robert Lozo·Partner·mag. iur.
Robert Lozo, mag. iur., is a Partner at Vision Compliance specializing in EU regulatory compliance. He advises organizations on GDPR, NIS2, AI Act, and financial regulation, delivering audit-ready documentation and compliance roadmaps across regulated industries.
