What is captive offshore?

Answer 1

An offshore captive is a facility that is owned by a company that uses it for IT support, back-office data processing, software development, call center operations, or business process outsourcing; all performed offshore, but not outsourced to another company. India is a very popular country for offshore captive operations. In the last decade some companies have achieved savings between 20 to 70 percent compared to what their costs would be in their "native" countries through having offshore captive facilities. In spite of this, however, there is a 50 percent failure ratio after 3 years of operation for many offshore captive facilities, not only in India, but in other "offshore destinations" such as China and those in Central Europe as well. Setting up an offshore captive is a difficult endeavor with a one year to 18 month business "lag time" built in because of the necessities involved. real estate must be found, purchased, developed. All telecom components must be contracted. And the appropriate work force must be found and/or trained.