Offshoring

What is offshoring?

Offshoring means relocating business operations‌ — ‌like manufacturing, customer service, or software development‌ — ‌to another country. Companies do this to reduce costs, access specialized talent, or expand into new markets.

When a company offshores, it moves tasks to regions with lower labor costs, favorable regulations, or high-skilled talent pools. 

Why do companies offshore?

Companies choose offshoring to achieve several strategic goals:

• Cut costs on labor, infrastructure, and overhead.
• Hire skilled professionals who may be scarce or expensive locally.
• Scale quickly without overloading local teams.
• Reach new markets by establishing a presence closer to international customers.
  
  

Examples of offshoring

• A US software company builds a development team in Poland to speed up product delivery and reduce engineering costs.
• A UK fashion brand moves production to Bangladesh to lower manufacturing expenses.
• A Canadian startup hires a customer support team in Colombia to offer round-the-clock service.
  
  

Offshoring vs. outsourcing: What’s the difference?

Many people confuse offshoring with outsourcing. Offshoring specifically refers to moving work to another country, while outsourcing refers to hiring an external provider, regardless of location.

• Offshoring moves your internal operations to another country.
• Outsourcing hires an external company to handle tasks, whether local or overseas.
  
  

Some companies do both: offshoring work and outsourcing it to third-party vendors in that offshore location.

What to watch out for when offshoring 

Offshoring offers major benefits, but it comes with challenges:

• Time zones and language barriers can slow down communication.
• Companies risk compliance when overlooking local labor laws or tax obligations.
• Reputation concerns may surface if offshoring replaces local jobs without clear business justification.
  
  

To stay compliant and avoid missteps, companies can work with experienced global partners.

How Remote helps with offshoring

Remote makes offshoring easy and compliant. You can hire full-time employees or contractors in other countries‌ ‌without opening a local entity. We handle onboarding, payroll, benefits, taxes, and compliance, so you can focus on growth.

Whether you want to cut costs, find global talent, or build a distributed team, Remote gives you the tools and support to do it right. Learn more about Remote’s global HR solutions.