Best Countries for Offshore Software Development: All the Global Hot Spots to Know in 2022
Statistics show that there will be 28.7 million developers around the world in the next two years. This is good news, and it will definitely mean more great developers are available for hire. However, it doesn’t solve one of the biggest problems in software development: where you can find software developers at prices that won’t completely break the bank and with zero sacrifice in quality.
Offshoring became popular as a result of this problem, since looking offshore gives you access to a much larger pool of talent that can get your projects done faster and for less money. But how do you know which regions are best for your specific needs? Don’t worry, we’ve got your back!
TurnKey helps innovative SaaS-based startups win. We make creating and scaling remote software development teams easy — and spectacularly effective.
Offshore software development can vary widely across regions, countries, and niches, as we’ll demonstrate in this article. (If you’re new to offshoring and would like to learn more about the practice in general, this article can help.) Ready to get started? Let’s go!
List of Content
- Offshore software development by region
- The three best countries to choose in Eastern Europe
- Why Eastern European software developers are the bomb-dot-com
- The three best countries to choose in Latin America
- Why Latin American software developers are world class
- How TurnKey can help you manage teams in any global hot spot
Offshore software development by region
To get a clearer picture of how offshore software development varies around the globe, it’s most helpful to start at the regional level before getting more specific. Below are the top offshore regions:
#1. North America
North America (ie America and Canada) is the biggest and most important technology ecosystem in the world and boasts over 3,000 outsourcing and offshoring companies. Although the quality of deliverables is high when working with offshore software development companies in this region, the rate is far from friendly. Many startups and entrepreneurs with a lean budget or complex projects may struggle to afford such services.
#2. Latin America
Thanks to a close time zone to North America, Latin America is the go-to place for companies and startups in America who are considering a nearshore alternative for their software development without sacrificing the quality of their software project. Latin American offshore services make it easy for clients from neighboring countries to outsource their projects and still be able to maintain communication and supervision of work progress. This is made possible by the advantage of proximity, similarity in culture, and timezone.
#3. Eastern Europe
Looking for a region that provides high-quality offshore software development at a low cost? You can’t miss Eastern Europe (it’s a global sensation). According to research, there are about 1.3 million software developers in this region and nearly 2,900 software development firms to choose from. This large concentration of software engineers and friendly development rates make it a go-to outsourcing choice for most startups, entrepreneurs, and companies with lean development budgets.
In addition to the affordable rates, the region also boasts the largest pool of highly specialized developers in niche technologies such as AI, ML and Blockchain.
#4. Central Europe
This is another region that houses top software developers, many of whom work for the more than 3,000 offshore and outsourcing companies. The Schengen Agreement of 1985 made it an attractive place for developers to relocate to and grow their careers. Although slightly more expensive than Eastern Europe, Central Europe is still much cheaper than standard developer salaries seen in North America.
Asia boasts over 15 million developers that are ready to offer software development services at a comparatively cheap rate. The cost of outsourcing your software development to Asian countries varies based on each country making up the region but are generally less expensive than the other regions listed above.
China and India are the most prominent software development hubs in Asia, with China boasting over 7 million programmers and India recording over 5.8 million programmers. That said, other Asian countries, like Thailand, Malaysia, and Indonesia, are gaining traction and providing software development services of equal quality.
However, some firms – especially those based in North America – often choose a region other than Asia given the significant time zone differences between the two regions. This impacts collaboration and communication and can often negatively impact the quality of deliverables.
African countries like Egypt, Nigeria, Kenya, and Morocco are gradually entering the tech limelight. And with its proximity to Europe and strong pipeline of computer science students, this region is sure to grow fast in the coming years.
Although the cost of outsourcing software development to countries is cheap in comparison to other regions, they currently have a limited pool of highly experienced software developers (though this will change in a few years when the population of developers expands).
Parts of this region also suffer from poor network connections, meaning that this region may not be the best fit for complex projects or mission-critical applications that require 24/7 uptime.
And no matter where you may choose to go from an offshore perspective, there are some common pitfalls to avoid.
The three best countries to choose in Eastern Europe
Outsourcing your project to software development companies in Eastern Europe is a smart choice, especially if your project or software is highly technical. This region is well-known for staying up to date on the latest advances and technology in software development.
A few of the most popular categories where Eastern Europe has developed outsized expertise include the Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), Augmented and Virtual Reality (AR/VR), Cybersecurity and Big Data analysis.
Most importantly, their services are budget friendly without having to sacrifice quality. Check out our top three Eastern European countries for offshoring:
Poland’s economy is one of the fastest developing in Eastern Europe. It is home to a broad talent pool of software development expertise, with about 8 developers for every 1,000 residents. Its tech market is predicted to surpass $13 billion by 2023, with annual growth of 50 to 60%. As a result, outsourcing software development to Poland is expanding rapidly.
Take a look at the numbers:
- Number of software developers: 295,300+
- Number of software development companies: 1,300+
- Most used programming languages: Java, SQL, Python, C++
- Top development areas: algorithms, tutorials, Shell
- Tech cities: Krakow, Wroclaw, Warsaw, Lodz
Poland is also a great nearshore choice for companies in Western Europe as their developers are quite proficient in English, German, French, and Spanish languages.
Ukraine is one of the Eastern European countries that frequently ranks among the top worldwide software development outsourcing destinations. Its government actively advances the information technology sector by creating a healthy legal system and financial policy, making them more accessible to foreign firms.
Aside from their raw skills, the vast majority of Ukrainian engineers have university degrees and are proficient in the use of English. Clutch data shows that most Ukrainian outsourcing companies work in the eCommerce, Enterprise, and FinTech sectors.
And the Ukrainian software development market is growing by about 25% per year. Here are more of the eye-popping numbers:
- Number of software developers: 245,000+
- Number of software development companies: 5,000
- Top development areas: distributed systems and security development, FinTech, eCommerce, Enterprise development
Tech cities: Kyiv, Kharkiv, Dnipro, Lviv, Odessa
Romania’s software development sector is one of the country’s fastest developing areas. The sector is predicted to witness a 12% GDP growth by 2025. As an EU member, Romania is one of Europe’s largest offshore markets, primarily focused on outsourcing services to the United States, Canada, and Europe. In 2019, A.T. Kearney ranked it 28th in the 2019 Global Services Location Indel, and its foreign partners referred to it as an “outsourcing valley.”
- Number of software developers: 119,100
- Number of software development companies: 430+
- Top development areas: web development, enterprise software and FinTech
- Tech cities: Bucharest, Cluj Napoca, Timișoara, Brasov, Iasi, Sibiu
Why Eastern European software developers are the bomb-dot-com
- Large pool of talent: With about 1.3 million highly skilled developers, Eastern European software outsourcing firms have a large pool of skilled specialists in the most popular software development fields. This ensures you can find individuals with the right skills and access to modern technology to meet your specific needs.
- Budget-friendly development rate: Most countries in Eastern Europe are still developing economically, which explains the affordable rate of software development and other services compared to North America and Central Europe countries. In addition, countries in eastern Europe have very high education standards. As a result, clients benefit from a compelling combination of knowledge, quality, and pricing.
- Cultural similarity: The culture gap between Eastern Europe and the Western world is almost negligible. Eastern Europe’s modern culture is geared toward European values, and it’s worldview is similar to that seen in the West. As a result, communications between clients and software development companies are not hampered by cultural differences such as timeliness, dispute resolution, team management, and other concerns.
The three best countries to choose in Latin America
For software companies in North America, Latin America is the most preferred nearshore software development region due to its close time zone, affordable rates, high quality and cultural similarity.
Below are three of the most popular offshore software development countries in Latin America (note: Colombia is a close fourth!).
With the largest population in Latin America, Brazil is the 800-lb. gorilla in the offshore industry. In a study conducted by Agile Engine, it was found that Brazil has the most software developers in the region with over 400,000 developers. And according to the Tholons Services Globalization Index 2019, Brazil ranks as the #1 digital hub in all of Latin America (based on a wide range of variables).
- Number of software developers: 475,272
- Most used programming languages: Java, Python, and SQL.
- Top development areas:infrastructure and information security, mobile application development, enterprise software, eCommerce, FinTech.
- Tech cities: São Paulo, Rio de Janeiro, Recife, Curitiba, Campinas and Belo Horizonte.
For companies in North America looking for nearshore software development companies, Mexico is the first place to consider. Mexico is the United States’ nearest geographical neighbor and its primary economic trading partner. There is essentially no time difference (at least with Central Standard Time), and many Americans of Mexican heritage work in the tech sector.
It is also close enough geographically for companies to travel back and forth for meetings with their development team. As a result of this geographic advantage, many U.S-based companies look to outsource software development to Mexico.
- Number of software developers: 223,398
- Most used programming languages: NET and MySQL Java, LAMP
- Top development areas: infrastructure and information security, mobile application development, enterprise software.
- Tech cities: Mexico City, Guadalajara, and Monterrey.
Argentine developers have the highest literacy rate and the best English proficiency in Latin America. As a result, Argentina tends to command slightly higher prices than other countries in Central and South America, though many customers feel the greater collaboration created through shared language makes the added price tag well worth it.
- Number of software developers: 114,576
- Top development areas: web application development, enterprise software, data migration, and DevOps.
- Tech cities: Buenos Aires, Cordoba, Mendoza, and Rosario.
Why Latin American software developers are world class
- Time zone: Latin America is far more efficient for nearshoring given it’s time zone compatibility with North America. Latin American time zones enable you to have your team nearby, interact effectively with them, and receive a speedier response from your software engineers during normal business hours. Moreover, it makes it much easier and faster to fix any concerns that arise without delay.
- Language and cultural similarity: Software developers in Latin America are well-educated and usually fluent in English. Their in-depth understanding of American business processes and culture also allows a favourable collaboration between both parties.
- Cost-Effective: The cost of outsourcing to countries in Latin America may not be as low as what may be obtainable in Asia and Africa, but it’s focus on quality means it provides a huge amount of value.
How TurnKey can help you manage teams in any global hot spot
Are you having trouble keeping up with the complexity of hiring offshore software developers, particularly across multiple geographies? TurnKey’s got you covered with our unique model called Yourshoring!
Youshoring gives you the juicy bits of offshoring without the stress of squeezing the grape. TurnKey’s Yourshore model provides four key benefits that keep your software development efforts humming:
- This is Yourteam: developers are 100% dedicated to you and are specifically handpicked in order to meet your unique business needs.
- This is Yourculture: each custom team of developers are 100% integrated into your culture, resulting in happier employees and a much lower churn rate.
- This is Yourvision: your custom recruited team is 100% committed to the fulfillment of your mission and vision.
- This is YourLocation: you choose the location and we build your team exactly where you want them.
In other words, we help you create remote software development teams that are completely tailored to your requirements, regardless of which region is best for you. Put Yourshoring to work for you!
Want to learn more about Yourshoring and how we can help supercharge your product development efforts?
There is no straightforward answer to this question. A developer’s pay rate depends the level of expertise, the amount of technical skill desired and often fluency in English. But in general the countries with the most budget-friendly rates are Ukraine, Romania, China, Vietnam, Mexico, Brazil and Colombia.
It is difficult to accurately judge which country has the biggest software market. But anecdotally it would be a race between China, America, Ukraine, and India.
This is a subjective question that may vary based on the person responding. But many experts pick Ukraine given its affordable rates for developers and its large and highly skilled talent pool.