Neven Mimica under the Lisbon Agenda, would definitely ease social and political hardships that the transfer of production would bring to a certain country or region. INTRODUCTION AND BACKGROUND The notion of relocation as such is a very wide one that generally describes the practice of firms to subcontract business functions to outside suppliers. In practice, this can take many forms, and research papers and media publications refer to different types in their arguments. The UNCTAD World Investment Report 2004 provides a helpful structure for classifying different outsourcing and offshoring activities. There are two main distinctions to make in order to define outsourcing: whether a good or service is produced inside or outside a company; or whether it is produced inside or outside a country. Outsourcing takes place if the production of a good or service is contracted out to another company, regardless as to whether this company is domestic or foreign. Looking at the international dimension, outsourcing is often used synonymously with offshoring and refers to the practice of importing goods or services for the production process from outside the home country. This can take two forms. For“intra-firm offshoring” or“captive offshoring”, firms establish affiliates abroad but are essentially still performing the function in-house. A prominent example is DHL's decision to relocate its data centre from the United Kingdom to Prague to track shipments, customer queries and billing activities (You're Speaking to Prague, 2003). The term offshore outsourcing or international outsourcing, to the contrary, is used when stages of the production process are performed abroad and by third parties. The vehicle for captive offshoring is mainly foreign direct investment(FDI), which is defined as“an investment involving a long-term relationship and reflecting a lasting interest and control by a resident entity in one economy (foreign direct investor or parent enterprise) in an enterprise resident in an economy other than that of the foreign direct investor(FDI enterprise or affiliate enterprise or foreign affiliate)”(UNCTAD, 2004). AN UPWARD RELOCATION TREND IN THE SERVICES SECTOR Whereas the phenomenon of international outsourcing in the manufacturing sector is not new, it recently also arose in the services sector and for service 150