Selling or otherwise disposing of a Captive can be a difficult and time consuming process. Without professional assistance, finding a suitably qualified, technically capable, commercially viable acquirer with the right business domain expertise can be an arduous and long-drawn-out process; thorny negotiations can ensue related to both the legal implications and the true value of the business - not to mention any regulatory guidelines, governance and Transfer Pricing or other tax issues which may need to be taken into consideration. 

Offshore captives can become a huge drain on management time, personnel, resources and investment. Companies almost always end up investing far more in their Captives than they had originally planned or expected. 

One of the chief problems for Captive owners has been finding and then retaining experienced local managers to run them efficiently. Frequently, there are also far too many offshore staff that exaggerate their management experience and subsequently fail in their jobs; this is equally as likely in Eastern Europe, Asia or Africa. eCODE’s advice to firms looking to move work offshore is to leave this to experienced Outsourcers who have the expertise to run offshore operations as their own core business. Of course, many clients will prefer to keep IPR or sensitive processes in-house; however, those moving sensitive information offshore are often exposing themselves to the same risks, irrespective of whether they use a 3^rd party Outsourcer or a Captive. 

Forrester Research says that it is now 25% more expensive for companies to operate their own offshore Captive centers than it is to have an Outsourcer do the work and "as a result of the lack of management support, spiraling costs, skyrocketing attrition and a lack of integration, more than 60% of the captive centers in India are struggling".

The Wall Street Journal reports: 

"The fundamental business model behind the captive India-based IT centers has changed significantly in a short period of time. The original idea of tapping into a workforce at a dramatically lower labor cost is no longer valid in many cases, and in fact has become counterproductive." 

"Some [corporations] have received hundreds of millions of dollars for their centers, while others have sold their sites for the cost of the equipment inside. Almost always, the buyer gets a multiyear contract to provide the same services back to the seller." 

Peter Harrison, CEO of GlobalLogic Inc., confirms this by saying "For Outsourcers, taking on facilities is a way to bring in experience and lock-in a customer".