Offshoring can be defined as relocation of business processes (including production/manufacturing) to a lower cost location, usually overseas.

Offshoring can be seen in the context of either production offshoring or services offshoring. China has emerged as the preferred destination for production offshoring while India has emerged as the dominant player in the services offshoring domain.

Frequently used terms:

Offshoring can be contrasted with outsourcing and offshore outsourcing which implies that a third party service provider takes over the business process and runs them based on service level agreements.

Other related terms are are:

• Nearshoring which also implies relocation of business processes to (typically) lower cost locations, but in close geographical proximity (e.g. shifting UK-based business processes to Malta, Ireland etc);
• Inshoring, which means picking services within the UK;
• Bestshoring, picking the "best shore" based on various criteria. Business Process Outsourcing (BPO) refers to outsourcing arrangements when entire business functions (such as IT, Customer Service, etc) are outsourced.