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Where the outsourcing of business functions is performed in neighbouring countries or countries that are physically nearby to the organisations country, this is called nearshoring. An organisation based in the United States who outsources a business function to Canada will be classed as nearshoring. The term nearshore outsourcing is also widely used. Benefits of nearshoring are principally to take advantage of lower wage costs in the neighbouring country. However the benefits and desirability of nearshoring includes cultural or language similarities, communication and travel cost reduction due to physical proximity, the opening up or improvement of trade between the two countries as well as employment and other fiscal benefits in the neighbouring country.

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