what is offshoring

Offshoring is a business practice in which a company moves different operational and service-related functions to other countries. It involves the relocation of a business process from one country to another, typically an operational process such as manufacturing or supporting processes such as accounting. Offshoring is primarily done to access a lower cost labor market, but it may also be done to access additional skilled labor or establish a business presence in a foreign country. Companies offshore either through an outsourcing arrangement with a third-party or by establishing their own Global In-house Center (GIC) presence in the offshore location, among other business structures. Offshoring and outsourcing are not mutually inclusive, and they can be intertwined (offshore outsourcing) . The motivation behind offshoring is lower cost and increased corporate profits.