diff --git a/README.md b/README.md
index 35f2c98..d7beb1f 100644
--- a/README.md
+++ b/README.md
@@ -215,6 +215,13 @@ The following environment variables are supported:
    public key authentication.  Note that if SSH is not enabled this will take
    effect when SSH becomes enabled.
 
+ * `SETFCAP` (Default: unset)
+
+   * Setting to `1` will prevent pi-gen from dropping the "capabilities"
+   feature. Generating the root filesystem with capabilities enabled and running
+   it from a filesystem that does not support capabilities (like NFS) can cause
+   issues. Only enable this if you understand what it is.
+
  * `STAGE_LIST` (Default: `stage*`)
 
     If set, then instead of working through the numeric stages in order, this list will be followed. For example setting to `"stage0 stage1 mystage stage2"` will run the contents of `mystage` before stage2. Note that quotes are needed around the list. An absolute or relative path can be given for stages outside the pi-gen directory.
diff --git a/build.sh b/build.sh
index 8966bc7..986f81c 100755
--- a/build.sh
+++ b/build.sh
@@ -283,6 +283,10 @@ fi
 
 export NO_PRERUN_QCOW2="${NO_PRERUN_QCOW2:-1}"
 
+if [ "$SETFCAP" != "1" ]; then
+	export CAPSH_ARG="--drop=cap_setfcap"
+fi
+
 dependencies_check "${BASE_DIR}/depends"
 
 #check username is valid
diff --git a/scripts/common b/scripts/common
index e476f0f..14be1c2 100644
--- a/scripts/common
+++ b/scripts/common
@@ -17,7 +17,7 @@ bootstrap(){
 	BOOTSTRAP_ARGS+=("$@")
 	printf -v BOOTSTRAP_STR '%q ' "${BOOTSTRAP_ARGS[@]}"
 
-	setarch linux32 capsh --drop=cap_setfcap -- -c "'${BOOTSTRAP_CMD}' $BOOTSTRAP_STR" || true
+	setarch linux32 capsh $CAPSH_ARG -- -c "'${BOOTSTRAP_CMD}' $BOOTSTRAP_STR" || true
 
 	if [ -d "$2/debootstrap" ] && ! rmdir "$2/debootstrap"; then
 		cp "$2/debootstrap/debootstrap.log" "${STAGE_WORK_DIR}"
@@ -90,7 +90,7 @@ on_chroot() {
 		mount --bind /sys "${ROOTFS_DIR}/sys"
 	fi
 
-	setarch linux32 capsh --drop=cap_setfcap "--chroot=${ROOTFS_DIR}/" -- -e "$@"
+	setarch linux32 capsh $CAPSH_ARG "--chroot=${ROOTFS_DIR}/" -- -e "$@"
 }
 export -f on_chroot