First of all I want to say this article is created for ones who wants to enlarge theirs mental outlook and (or) make decision are you really need to use offshore development services. If you have no time to read large popular scientific articles and just want to:

• Discuss any business proposition
  
• Make inquiries
  
• Order software or web site development
  
• Get support
  

Offshore corporation is profit-making organization that has no economical activity in contry where it is registered. Primary target of the first offshore corporation creation (it was done in USA in 19th century) was taxes optimization. Actually it was like new legal way of incorporation, offshore firms worked in the same manner as onshore ones, had offices, warehouses, transport, ect, only difference was that they paid taxes to other country than they worked.

Offshore corporations appearence caused a large debates among lawyers. Some ones says that it is not prohibited by laws and hence it is fully normal thing, but other ones said that offshore corporations used mistake of law deliberately to make easy money. These debates were resulted in court examination, and judgement of court were in favour of offshore corporations. From that time offshore corporations became essential world economy segment.

In a 100 years later offshore corporations birthday computers and Internet were born. This event became cause of the second golden age for offshore business. This new type of offshore business is offshore software development. Main feature of software development work is that its result is digital product, and such product can be easily sent to buyer via Internet, tested and paid. Email or FTP usage for product delivery is cheaper and faster than physical delivery even if you have to go to other cabinet in the same building. We have so strange situation when USA buyer can get software from Ukrainian offshore software developer with Internet faster than from USA one without Internet.

So, any Internet offshore software development is economical activity of any software company, freelancer or developers team oriented on export only. As you can see, nothing is said about fraud or "black" technologies. Offshore software development is fully legal line of business, not more fraudulent than any other one. Freelancer is specialist who busies himself with offshore software development, but does it directly from own name, without any employees. Some times freelancers join large teams and become a very similar to traditional corporations. We can say that freelance programming is special case of offshore development.

The largest offshore developers and freelancers community is located in post USSR countries: Ukraine, Russian, Belarus, ect. Now I will tell you why offshore development is usually more profitable for client from North America, Western Europe and any rich country than traditional one:

• Usability. You don't need to went to software company office and get traffic congestion. All is done from you home or office. No paper work.
• Low prices. The most powerfull offshore software development firms are located in post USSR countries like Ukraine. The cause is that USSR had a very powerfull and fully free higher education, so now we have lots of professional engineers who can not find work because of a long economic crisis and will be happy to work 4-5 times cheaper that his western colleague, but with the same or even better quality.
• No taxes. Yes, really, freelancers are not employee, you don't need to pay any taxes for theirs work. They pay taxes themselves. Usually offshore corporations work in privileged tax treatment. For example, in Ukraine sole proprietor pays a very low fixed tax rate (24 USD monthly) independently from his turn-over of capital.
• No insurance, no sick-list, no pension. Can you imagine this?
• Less legal limitations. Yes, computer legistlation in Ukraine is less strict than western one. For example, in Ukraine email spam is only kind of spam prohibited by laws. Search spam (URL submissions to guest books and social bookmarking sites in automatic way) is not prohibited in Ukraine and hence is fully legal, so we can perform some tasks never be even discussed by local USA or Europe Union companies.

• Get task and never perform it. You will lost time.
  
• Get pre-payment and dissappear. You will lost money.
  
• Make low-quality software and provoke you to pay more to repair or update it. You will lost both time and money.