Why are captives offshore?

Driven by aggressive digital trends, MNCs started looking towards developing countries like India, Malaysia, Thailand, Philippines to outsource their business function processes with sustainable global growth and cost savings in mind. But soon after, MNCs recognized the need for further control over the quality, so they moved from outsourcing to offshoring and started GICs, which were first known as “captives.” These organizations set up offshore centers (in-house centers) in developing countries to execute assigned tasks for the parent organization with a direct hold over work productivity, quality, and efficiency.