If your company processes personal data in the EU, you may be legally required to appoint a Data Protection Officer (DPO). But here’s where it gets tricky: not every company is obliged to have one… and even fewer truly need a full-time internal DPO.
That’s where an external DPO comes in.
For many startups, scaleups and even established companies, outsourcing the DPO role provides the ideal balance of expertise, flexibility and cost efficiency. But how do you know if you really need one?
Let’s break it down.
When is appointing a DPO mandatory?
Under Article 37 of the GDPR, appointing a DPO is mandatory if your organisation meets certain criteria. For example:
- The processing is carried out by a public authority or body, except courts acting in their judicial capacity.
- The core activities of the controller or processor consist of processing operations which, by their nature, scope or purposes, require regular and systematic monitoring of data subjects on a large scale.
- The core activities consist of large-scale processing of special categories of personal data under Article 9, or data relating to criminal convictions and offences under Article 10.
In these cases, having a DPO is not optional.
But even if you are not legally required to appoint one, many companies do so voluntarily to strengthen privacy governance, increase trust and prepare for future regulatory obligations.
“The question isn’t just ‘Do we have to appoint a DPO?’; it’s ‘Can we afford not to?’”
Why an external DPO makes sense
For companies without a large legal or compliance team, hiring a full-time internal DPO can be excessive. The role requires:
- Deep knowledge of data protection law
- Technical understanding of your systems
- Independence from day-to-day operations
Finding all of this in one person is difficult… and expensive.
An external DPO brings specialised expertise without the fixed cost. They maintain independence, avoid internal conflicts of interest and provide an external perspective gained from working across industries and real-world cases.
And importantly, the GDPR explicitly allows for the DPO role to be outsourced, so it is fully compliant.
Startups and scaleups: the advantage of being proactive
Early-stage companies often assume they can wait to take privacy seriously. But the truth is many process personal data from day one, especially in sectors like healthtech, fintech or SaaS.
Having an external DPO from the start helps you:
- Avoid mistakes in product design
- Build compliant data flows from the beginning
- Earn trust from clients and partners
- Respond quickly to breaches or audits
Instead of fixing problems later, you embed privacy into the business from the start.
Established companies: when complexity demands support
For more mature organisations, the need for an external DPO often arises from increasing complexity: new markets, acquisitions, international data transfers or customer pressure to demonstrate compliance.
An external DPO can bring structure, audit readiness and accountability, especially when the internal team is overloaded or lacks deep GDPR expertise.
“An external DPO isn’t just a temporary fix, it’s a strategic partner when privacy risk starts to scale.”
Who should seriously consider it?
You should strongly consider an external DPO if:
- You meet the GDPR’s legal criteria for appointing one
- You process high-risk or large volumes of personal data
- Your clients (especially in B2B) ask about your privacy governance
- Your internal team lacks the time or knowledge
- You want to reduce risk and demonstrate proactive compliance
If this sounds familiar, it’s time to think beyond the checklist and strengthen your privacy leadership.
Conclusion
The DPO role is evolving, from a regulatory requirement to a competitive advantage. Whether you’re just starting out or scaling fast, an external DPO helps you stay compliant, build trust and manage risk confidently.
At PrivaLex Partners, we act as external DPOs for startups and established companies, combining legal expertise, technical knowledge and practical guidance.
If you’re ready to strengthen your data protection without slowing down your business, we’re here to help.