Definition:
Offshore refers to locations and operations in "overseas" locations. Offshoring can take place in any location; India, China, and the Philippines are examples of popular outsourcing locations. A specific offshore location may be chosen because of local advantages (exceptional quality of schools, stability of weather, etc.), but all offshore locations are assumed to be lower cost than domestic counterparts.
Offshore also has a meaning in banking, that is slightly different than in outsourcing. Here "offshore" means outside of US (or UK or European) banking regulations. Moving money to an offshore bank is a way of avoiding domestic banking laws and taxation. While the US government is generally neutral about the offshoring of work processes, it is increasingly turning negative about offshore banking processes undertaken expressly to avoid taxes.
During the 2012 Presidential Elections, during and following the debates, there was discussion about limiting the tax benefits of outsourcing. However, this applies not to all outsourcing, or all offshoring, but only to in-house offshoring. The development of a new facility, even if it is in another country, can have costs that can be counted as business expenses. However, these business expenses are more likely to apply to taxes in the outsourced location. Furthermore, the discussion about applying costs against taxes does not apply to operations that are run by outsourcing vendors.
These expenses are merely services, that are dealt with the same way as any other service charge.
Offshore refers to locations and operations in "overseas" locations. Offshoring can take place in any location; India, China, and the Philippines are examples of popular outsourcing locations. A specific offshore location may be chosen because of local advantages (exceptional quality of schools, stability of weather, etc.), but all offshore locations are assumed to be lower cost than domestic counterparts.
Offshore also has a meaning in banking, that is slightly different than in outsourcing. Here "offshore" means outside of US (or UK or European) banking regulations. Moving money to an offshore bank is a way of avoiding domestic banking laws and taxation. While the US government is generally neutral about the offshoring of work processes, it is increasingly turning negative about offshore banking processes undertaken expressly to avoid taxes.
During the 2012 Presidential Elections, during and following the debates, there was discussion about limiting the tax benefits of outsourcing. However, this applies not to all outsourcing, or all offshoring, but only to in-house offshoring. The development of a new facility, even if it is in another country, can have costs that can be counted as business expenses. However, these business expenses are more likely to apply to taxes in the outsourced location. Furthermore, the discussion about applying costs against taxes does not apply to operations that are run by outsourcing vendors.
These expenses are merely services, that are dealt with the same way as any other service charge.
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