Nearshoring

Nearshoring is the practice of relocating certain business operations or teams to a country that is geographically close to a company's home market, typically sharing a similar time zone or requiring only a short flight for travel, as opposed to a more distant offshore location. This approach is often chosen as a middle ground between the cost savings of far-offshore outsourcing and the ease of collaboration that comes with working in the same or a very similar time zone. Companies pursuing nearshoring frequently seek to balance meaningful cost advantages with practical operational benefits, such as the ability to hold real-time meetings during standard working hours, easier coordination on time-sensitive projects, and often greater cultural similarity compared to more distant offshore locations. A common example involves a U.S. company nearshoring software development work to countries in Latin America, where overlapping working hours make daily collaboration significantly more practical than working with a team on the opposite side of the globe. Executing a nearshoring strategy still requires navigating the target country's local employment laws, which companies typically manage either by establishing their own legal entity or by partnering with an Employer of Record, allowing them to hire compliantly without the time and cost of setting up a foreign subsidiary.