Production outside your country’s borders is a business aspect in which an enterprise moves or places its production facility in another country where production conditions such as labor and raw materials are cheaper or where production environment is more favorable for export and / or eventual imports.

The main reason for manufacturing abroad is to reduce production costs for producers trying to gain more profit by exploiting the comparative advantages that exist in other countries.

This aspect of production in a free trade environment is generally accepted by the fact that entrepreneurs need to be free to trade freely in the products they least consume for their production.

Production in another country is also useful for the country of origin of the producer and for the host country as it provides employment opportunities, taxes and other benefits to the host country. As far as the country of origin of the company is concerned, the cost of goods and services is reduced because good-produced cheap are also sold at a competitively cheaper price.

In most cases the company is looking for a contract manufacturing because of the benefit it offers. Also, some country do not tax profits on foreign production until gains enter the country. This is another pernicious factor that many companies invest abroad to avoid such taxation.

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