12 Best Countries for Offshore Software Development in The World
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Are you on the lookout for the best offshore software development countries? If so, this article is precisely what you’re seeking.
Finding skilled tech experts and software developers while maintaining a budget is a challenge. This has contributed to the increasing demand for offshoring software development.
The IT Outsourcing Market is projected to increase from USD 585.57 billion in 2023 to USD 701.88 billion by 2028
In the years ahead, when planning your software development budget, the focus shifts from whether to outsource identifying the top countries.
Therefore, it’s important to keep a close eye on the best offshore software development countries. These countries are at the forefront of outsourced software development.
In this post, we have listed the top countries for offshore development for you to choose from.
Furthermore, we’ll help you understand how to choose the best countries for offshore software development on the base of expertise in technologies.
But before we do that, let’s have a quick look at the current state and the future of the global outsourcing industry.
Recent Trends in the Global Outsourcing Industry
In developed countries, the need for IT products is rising, yet local talent is hard to find.
A recent survey reveals that 91% of HR experts have trouble hiring for coding, data, and UX positions.
Post-COVID, the global economic crunch, and uncertainties led to tech layoffs, making the talent gap worse.
During 2023, around 167,430 tech workers in the US were left job losses due to large-scale layoffs.
Furthermore, the ongoing military conflict between Russia and Ukraine is adding to the challenges.
The conflict is affecting Ukraine significantly, given its importance as an IT hub. It is causing uncertainty for businesses reliant on the services. Therefore, companies are turning to offshore software development in other countries.
Back in 2019, the worldwide IT outsourcing market was worth around USD 333.7 billion.
Now, it’s estimated to hit $ 397.6 billion by 2025 and $937.67 billion by 2027
Things have changed – IT outsourcing isn’t just about cost-cutting anymore. With the rise of cloud services and migrations, it’s transformed into something more.
Today, companies use IT outsourcing to expand their businesses, make customers happier, and stay competitive.
How to Choose the Best Countries For Offshore Software Development Services ?
The best offshore software development country vary based on your project’s specific needs and priorities.
It’s a blend of skill availability, cost-effectiveness, and how well their working hours align with your requirements.
Below are three major aspects to look at when choosing the best countries for outsourcing software development. Evaluating these points will help you make an informed decision:
#1 Availability of skills and the size of the talent pool
Look into the country’s tech education system, its track record in producing proficient developers, and the range of technologies it excels in.
The size of the talent pool matters too; a larger pool means more options and potentially faster project execution.
# 2 The rates for hiring developers in the countries
Cost is a significant factor when outsourcing software development. Different countries have varying offshore developers costs due to factors like living standards and currency values.
While lower rates can be attractive, they might not always guarantee quality. Consider a balance between cost and skill level to ensure your project’s success.
#3 The different time zones applicable to the countries
Time zone differences can work in your favor.
Countries in different time zones can provide a near-continuous work cycle, allowing your project to progress even while your primary team is offline.
However, make sure that the time zone difference doesn’t hinder effective communication and collaboration.
Best Countries For Offshore Software Development In 2023
Best Offshore Software Development Countries in Asia Region
Asia has taken the lead in software outsourcing. Numerous businesses now rely on Asian software development companies to fulfill their requirements.
Asian market offers rates up to 20-30% lower than Western IT outsourcing destinations for comparable services.
The region boasts an extensive pool of software developer talent, that is unrivaled globally.
Despite recent economic uncertainty, the region’s business and IT outsourcing sectors have demonstrated great resilience.
Let’s look at the top countries for offshore development in Asia:
Pakistan For Offshore Software Development
The average annual cost of a software engineer in Pakistan is one-fifth of the cost in USA and Europe. It stands out as the 5th most financially appealing destination for offshore software development services.
Around 5,000 IT graduates join the workforce yearly, supplying the local IT industry with essential manpower. The region boasts top-notch software engineers and developers, making it an attractive hub for outsourcing software projects.
With over 300 companies in its fold, Pakistan hosts renowned global enterprises such as Bentley, Ciklum, IBM, Mentor Graphics, S&P Global, Symantec, Teradata, and VMware.
These companies have set up research and development centers, BPO support service centers, and global consulting service centers within the country.
The average hourly rate ranges between $18-$50.
Moreover, cultural integration is seamless due to two main reasons:
Offshore Software Development - India
India is a prominent choice for IT outsourcing due to its vast population of STEM graduates, around 2.6 million, second only to China.
Moreover, its STEM education system churns out about 2.6 million adept software developers annually, effectively mitigating IT talent shortages.
With a vast talent reservoir of 5 million IT experts and 200,000 fresh graduates entering the market each year, the country offers a combination of proficiency and quantity to foster business expansion.
Fact: Software developers in India charge as low as $6 per hour, significantly less than U.S. rates of $33 to $40 per hour.
India’s average hourly rates, $18 to $40, present attractive and budget-friendly outsourcing options.
However, the affordability factor doesn’t guarantee quality, so thorough research is essential before hiring an Indian offshore team.
Offshore Software Development From China
China is another prominent player in software development outsourcing due to its robust focus on science and mathematics education.
The country produces numerous skilled IT experts proficient in languages like functional programming, Python, and Shell.
China’s developers excel in key languages crucial for technologies like AI, Robotics, and Deep Learning, drawing foreign companies for projects.
The government bolsters the IT sector through economic incentives, evident in over 50 science and tech industry parks and emphasis on STEM education.
With an average software developer salary of $35,538, significantly lower than the US average of $108,978, China’s preference is clear.
Its IT companies are sought after for cost-effective labor and developer productivity.
Hourly service costs range from $18 to $40, offering affordability while being slightly higher than other Asian nations due to economic advancement and expertise.
Offshore Software Development To Philippines
The Philippines stands as a prime offshoring outsourcing destination, with over 4 million skilled Filipino workers having foreign work experience, showcasing their high demand.
The country boasts an annual production of 40,000 IT and engineering graduates proficient in languages like Java, .NET, and API development.
With its competitive costs, robust software background, and thriving IT market, the Philippines shines, and key cities like Manila stand out.
Hourly rates range from $15 to $35 on platforms like Upwork, with Clutch estimating $25-40.
The nation’s government support and cultural compatibility with the US further adds to its appeal.
The Philippines’ strengths lie in its pool of young, talented software specialists, advanced IT infrastructure, English proficiency, and an impressive 200 offshore software companies and 95,000 technical experts.
With over 130,000 IT graduates yearly, the country boasts familiarity with languages like Java, PHP, Ruby on Rails, and more.
Taiwan For Outsourcing Offshore Software Development
Taiwan, along with India, stands out as a highly promising offshore development outsourcing destination in 2023.
Recognized as one of the Asian Tigers, Taiwan is positioned among the top 50 cities for digital innovation, enterprise growth, and team outsourcing solutions.
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The cost range is between $25 and $49, as indicated by Clutch and Upwork. Java, PHP, Ruby on Rails, and ASP.NET Core are among the popular programming languages.
Top Offshore Software Development Countries in Latin America
Latin American countries shine on global scales like GSLI, Global Innovation Index, and Ease of Doing Business.
Kearney GSLI positions them within the top 50 and Global Innovation Index within the top 100.
Notably, Colombia, Mexico, Costa Rica, and Chile rank among the Ease of Doing Business top 100.
These nations emphasize digitalization, infrastructure, skills, and foreign investment. This climate fosters resources and backing for tech ventures through accelerators, tech incubators, and tech parks.
With a tech talent pool nearing 2 million professionals, Latin America’s tech sector and workforce present an appealing landscape for software development outsourcing.
Let’s look at the most popular offshore software development countries in Latin America
Argentina For Offshore Software Development Services
Argentina hosts more than 134,000 software developers and over 1000 firms offering software development services.
The country holds the 21st position in the QS Higher Education System Strength Rankings.
Free tech education contributes to Argentina’s status as a highly educated nation in the region, and further boosts local IT talent.
The focus of Argentina’s offshore software development companies lies in web app development, software creation, data migration, and DevOps.
Their tech experts are well-versed in various programming languages, including C, PHP, Java, JavaScript, .NET Framework, Python, and Data Science.
The average offshore development rate typically ranges between $30 and $60.
While these rates might surpass those in Asian nations, they remain competitive when compared to local outsourcing alternatives.
Moreover, Argentina’s strategic proximity, merely 2 hours from the USA, 5 hours from Europe, and a convenient 4-hour flight from Silicon Valley — makes it a preferred choice for software development and startup evaluations.
Offshore Outsourcing To Brazil
Brazil stands out as a prominent player in software outsourcing within Latin and South America.
It has over 500,000 software engineers, securing a strong position in the region, and ranks 54th in the Global Innovation Index 2022.
In 2023, the average hourly rate for a software developer in Brazil ranges between $22-$50. Impressively, Brazilian IT outsourcing captures a substantial 50% share of the Latin American software market.
Pricing for web development hovers around $25 to $50 per hour, as per Clutch data. Platforms like Upwork reflect an average range of $25 to $60 for an hour of web software development. Java, Python, and SQL are popular programming languages in the country.
Colombia For Offshore Software Development
In 2021, Colombia secured the third spot in the region’s IT market size, totaling $10.2 billion, following Mexico and Brazil.
The Colombian Federation of IT and Software Industries envisions software contributing 5% to the country’s GDP by 2025.
Java, Python, Perl, Kotlin, and HTML/CSS are the most popular programming languages in the country.
Cities like Bogotá, Medellin, and Cali serve as vibrant hubs for startups. These cities benefit from government support, easy access to funding, and a thriving community of tech experts.
All these factors make Colombia an emerging outsourcing country.
Best Offshore Software Development Countries in Eastern Europe
Eastern Europe is renowned for its tech expertise and entrepreneurial drive.
Developers here excel in languages like C/C++, Java, Javascript, .NET, and Python, making them highly sought-after globally. Hourly rates for software engineering range from $13 to $18.
Belarus, the Czech Republic, Hungary, and Ukraine are standout tech countries per Coursera’s Global Skills Index.
Ukrainian developers are known for their favorable hourly rates and high quality, driving the country’s growing IT industry.
Ukraine for Offshore Software Development
With an annual influx of 50,000 IT graduates, Ukraine presents a vibrant pool of talent poised to transform startup dreams into tangible innovations.
This talent comes at rates notably more affordable than those in the West, enabling startups to make the most of their resources while tapping into high-quality expertise.
This blend of robust education and advanced skills has led to a thriving innovative ecosystem.
Programming languages like C++, Java, Ruby, PHP, and Python are prevalent, and sectors such as Mobile development, Big Data, AI, blockchain, and cryptocurrency projects thrive in this region.
Offshore software development rates in Ukraine range from $25 to $46 per hour
Notable companies like Grammarly, Petcube, MacPaw, Headway, and GitLab have all set out on their journeys from Ukraine.
Offshore Software Development To Romania
Over the past decade, Romania has experienced remarkable growth in its IT sector, positioning itself as a highly favorable destination for outsourcing.
With over 100,000 skilled software developers, Romania has become a sought-after offshore/nearshore choice for Western European nations.
The 2021 Global Services Location Index ranked Romania 32nd for prime outsourcing locations. The country’s GDP expanded by nearly 5.88% in 2021 and an impressive 6.4% in 2022.
Romania’s software industry is on an upward trajectory, expected to achieve a turnover of 9 billion euros by 2025.
With an extensive talent pool exceeding 139,000 developers and a robust education system continuously producing fresh talent, it offers a wealth of technical expertise.
The country’s tech prowess spans a range of technologies, such as Java, JavaScript, and Python, with a significant emphasis on web development.
Distinguished companies like Gameloft, Ubisoft, Oracle, Microsoft, Ericsson, and Adobe have benefited from the established software developers within Romania’s tech ecosystem
Offshoring Software Development To Bulgaria
Bulgaria actively promotes economic growth through enticing tax incentives for local and foreign entrepreneurs.
Despite its smaller size compared to neighboring Ukraine and Poland, Bulgaria’s IT sector houses 55,000 skilled tech professionals.
The country produces over 5,000 tech graduates each year due to its modern education system and reputable tech universities.
The strengths that make Bulgaria a sought-after outsourcing destination include:
Poland For Offshore Software Development
Poland stands out as a thriving hub for software development in Eastern Europe, with a rapidly growing economy and a substantial talent pool.
The tech market shows consistent annual growth between 50% and 60%. It’s expected to surpass $3 billion by the end of 2023.
The country’s favorable tax policies and conducive economic environment further enhance its attractiveness for software offshoring.
The cost of offshore software development in Poland ranges from $60 to $90 per hour.
With over 250,000 software developers, 1,128 software development companies, and proficiency in widely used languages such as Java, SQL, Python, and C++, Poland stands as an optimal choice for offshoring.
The country’s English, German, French, and Spanish language proficiency makes it a prime nearshore option for Western European businesses.
Offshore Software Development - Codeninja
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Conclusion
offshore software development services do more than just help companies create amazing products.
They also allow businesses to grow and beat their rivals in a competitive market. This adds to the business’ growth and profitability.
Therefore, it is crucial for businesses to keep an eye out for the top offshore software development countries to stay ahead of the competition.
Our list of the best countries for offshore software development is a starting point in your journey.