Outsource to offshore farshore to later reshore it to nearshore
To start from the same page let’s clarify the definitions.
At first was the
light outsourcing. It has to deal with specialization of labour and is described as «contracting-out of business processes to domestic providers» . It’s you who decided not to deal with bookkeeping in the company and outsourced it to an independent entity Bookkeeper LLC.
Then goes the offshoring. It has to deal with the location of a service provider. It’s a situation when certain business process is spun off and outsourced to foreign locations of your company. So when you decide that you don’t want to do tech support inside the company and find an independent provider in the Philippines you’re doing offshore outsourcing. But people commonly call this offshoring.
Then there are other *shorings depending on the distance between client and vendor. Farshoring is untrusting software development (or some other process) to a supplier ‘half of the world away’. And it’s usually synonymous with offshoring itself, because India, a back-office of the world, and China are a go-to destination for outsourcing for decades. And those countries are literally half of the world away from main ‘client’ destinations — North America and Western Europe.
If you think you’ve gone too far, you try nearshoring. To simplify, the term depends on the time difference. For «shoring» to be near the time difference should be roughly two hours or less. So for Norway it would be hiring a software development team in Europe: from the Netherlands to Ukraine.
If you’ve gone that far there is also onshoring. It’s outsourcing to some other company in home country.
Now let’s focus on the main pros and cons in offshoring vs nearshoring.
Offshoring vs nearshoring: the distance arguments
A conflict between those two concepts came in sight over time. 30 years ago the outsourcing market was not that saturated and aware of risks — businesses just saw a possibility in huge cost reduction.
«Services delivered with nearshoring practices have been around for more than two decades, although not directly named as nearshoring since the importance that customers (demand) gave to distance was very limited. We can affirm that it has matured; this was since the involved parties pinpointed some high-impacting risks (which became major issues overtime) with practices related to traditional offshoring in locations far from the demand. With this lessons learned as a valuable component of the manager’s toolbox, offshoring initiatives started to be moved to sites closer to the demand, often with increased costs but also reduced risks». 
So the nearshoring was regarded “as a reaction to the main offshore destination, India, which was viewed as ’farshore,’ a very distant destination, many hours to travel, many time zones away, and a very different culture» .
That leads us to the differences. Most of them are describe by one word — ‘distance’. Scientist Rostislav Markov, Martin Wiener and Michael Amberg from University of Erlangen-Nuremberg, have assembled  the most comprehensive differentiators in terms of distance:
- Physical distance — geographic proximity between client and supplier.
- Temporal distance — time zone overlaps.
- Linguistic distance — language similarities or the ability to adopt English as the language of business.
- Cultural distance — similarity of characteristics of national or organizational cultures.
- Resource-based — infrastructure and people skills.
- Political/economic distance — political and economic stability, favorable policy, and investment friendliness.
Pro: The closer client to a vendor the easier is to organize face to face meetings, which might be critical for communications and team morale. Both parties spent less money on tickets and less time on the flights. It also can often mean less paperwork for visa processing.
Contra: The counterargument is that current telepresence technologies reduce the need for face to face communications. Plus, the task standardization and high labor cost differences mitigate advantages of physical proximity.