Offshore refers to the location of work. It means getting work done by a team or company that is based in a different country, often to leverage cost advantages, specialized talent pools, or time zone coverage. The work can be performed by a foreign branch of your own company (a “captive center”) or by an external vendor. The key focus is on geography.

Outsource refers to the ownership and management of work. It means contracting a specific business function or process to an external third-party provider, which could be located anywhere—down the street or across the globe. The focus is on transferring responsibility for that function to a specialist to improve efficiency, reduce costs, or access expertise.