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The Ultimate Guide to Offshore Software Development in Ukraine

offshore software development in ukraine

When it comes to offshore software development, Ukraine is a go-to destination. Thanks to the country’s highly skilled developers and affordable rates, Ukraine has become one of the most popular offshoring destinations for software companies around the world. 

In this guide, we’ll explore everything you need to know about offshore software development in Ukraine. We’ll discuss why Ukraine is a great choice for offshoring, explain the cost savings you can expect, and outline the process of finding and working with Ukrainian developers. So whether you’re just starting out or you’re looking for more information on Ukraine’s software development scene, read on!

Short on time?  Here’s the executive summary on how to choose the best offshore development company in Ukraine:

  • Decide on your specific offshoring needs.
  • Search for partners that offer those services.
  • Narrow down your list to a few finalists and reach out to them for quotes.
  • Compare quotes and select the company that best fits your needs and budget.

An Overview of the Offshore Software Development in Ukraine

Already a darling of the offshore development world, the Ukrainian offshore software development market is expected to grow even faster in the next few years. This is due to a number of factors, including the country’s highly skilled workforce, its lower costs compared to other offshoring destinations, and its close proximity to Europe.

The Ukrainian software development market was worth an estimated $3.6 billion in 2020 and is expected to grow to $5.7 billion by 2022. This represents a compound annual growth rate (CAGR) of 16.2%.

Most of the demand for offshoring software development services in Ukraine comes from Western Europe and the United States. The top industries driving growth in the Ukrainian software development market include banking and financial services, healthcare, telecommunication, energy and e-commerce.

Importantly, the Ukrainian government is highly supportive of the country’s software development industry and has taken a number of measures to sustain and promote its growth. For instance, it has set up special economic zones that offer tax incentives and other benefits to companies that establish operations there. Additionally, the government has also launched a number of initiatives to improve the quality of the country’s technical education system.

The country also has a large pool of highly skilled and talented developers, as well as a favorable regulatory environment and competitive costs. As a result, more and more software companies are choosing to set up offshore development centers in Ukraine. 

With its strong growth prospects and supportive environment, Ukraine is well-positioned to continue being a leading destination for offshore software development in the years to come. 

But don’t just take our word for it.  Here are some key stats to prove it!

Ukrainian Software Development Market Overview

Why Companies Offshore Software Development to Ukraine

Startups and high growth companies get many benefits from offshoring software development to Ukraine, including these five big ones:

#1. Awesome price to quality ratio

Offshoring software development to Ukraine is a great way to get high-quality development services at a fraction of the cost of working with local programmers in Western Europe or America.   

One of the reasons for the cost savings experienced with Eastern European developers, namely Ukrainian ones, is that the cost of living in Ukraine is much lower than in most Western countries, which helps keep wages in check.  Moreover, taxes, benefits and the overall cost of doing business (office space, equipment, etc.) is lower too.

But it’s not just about being cheaper; Ukrainian development teams are also amongst the most highly skilled and technically experienced in the world, and have a proven track record of delivering high-quality work.  Additionally, Ukrainian developers typically use the latest technologies and tools, which ensures that your project will be built using the most modern architecture possible.

So in short, working with an offshore development team in Ukraine gives you all the productivity and quality you expect from Western-based peers but at significantly less cost.

#2. Large pool of highly talented software developers

The Ukrainian software development landscape is impressive. In terms of the number of developers, Ukraine ranks 4th in Europe and 14th globally, according to the recent study by DOU.ua.

But it’s not just the sheer number of developers that makes Ukraine stand out – it’s also the quality of its developers. Many Ukrainian software developers have excellent technical backgrounds and can deliver high-quality code.

One of the reasons for this is the robust education system in Ukraine. Students receive a solid grounding in computer science and mathematics from an early age, which gives them a good foundation for a career in software development. 

Fueling this technical expertise is that the education system in Ukraine focuses heavily on STEM subjects. This means that students are exposed to a lot of theoretical and practical knowledge in these fields from a young age.

Additionally, many Ukrainian universities have strong partnerships with tech companies. These companies often provide internship and job opportunities for students. As a result, many software developers in Ukraine have had comprehensive experience and exposure to the latest technologies before they even enter the workforce.

Finally, the software development industry is booming in Ukraine, which means that many more technically-inclined students have chosen to go into the industry. It also means that software developers have plenty of job opportunities, thus incentivizing them to stay up-to-date on the latest offshoring trends and technologies. 

To this end, here is a summary of the top technologies that Ukrainian developers have particular expertise in:

Ukrainian developers expertise

#3. Business-friendly regulatory environment

Business-friendly regulations is another key reason why Ukraine is an attractive destination for offshore software development.

 

The Ukrainian government has created a number of special economic zones that offer significant tax breaks and other benefits to businesses that locate there. These zones are designed to encourage investment and create jobs, and they have helped to make Ukraine one of the most attractive locations for offshore software development in Eastern Europe.

 

In addition, the Ukrainian government has implemented a number of reforms to make doing business in the country easier and more efficient. These reforms have made it simpler to start and operate a business in Ukraine, and they have helped to attract foreign investment.

 

All of these factors combine to make Ukraine an ideal location for offshore software development. If you are looking for a destination that can offer you a skilled and talented workforce, a business-friendly environment, and a low cost of doing business, then Ukraine should be at the top of your list.

#4. Thriving startup community

There are a number of well-established tech companies in Ukraine that serve as role models for startups and help foster a strong developer ecosystem.  These companies have been successful in raising investment and scaling their businesses.

 

As a result, Ukraine has become a hotbed for tech innovation, with a number of successful companies having been founded in recent years.  Some of the most famous venture-backed startups from Ukraine include Grammarly, Petcube, and People.ai. All of these startups have received millions of dollars in funding from well-known venture capital firms such as General Catalyst, AVentures Capital, and Accel.

 

Grammarly is a grammar checking and proofreading tool that has been used by millions of people around the world. The company was founded in 2009 by two Ukrainian entrepreneurs, and it has since raised over $200 million in funding.

 

Petcube is a pet camera company that allows pet owners to interact with their pets remotely. The company was founded in 2013, and it has raised over $30 million in funding.

 

People.ai is a startup that uses artificial intelligence to help sales teams sell more effectively. The company was founded in 2016, and it has raised over $50 million in funding.

 

These are just a few of the many successful startups that are based in Ukraine. The net result is that success in tech breeds interest in working in tech, creating a steady stream of students who want to become top tier developers and further fueling the population of high quality programmers in Ukraine.

Ukrainian startups wall of fame

#5. High productivity

Another key benefit of offshoring software development to Ukraine is a strong work ethic. In general, Ukrainians are known for their hard work and dedication. This can be a huge asset to any company that has an aggressive product roadmap and needs keep their software development efforts on time and on budget.

 

Moreover, when you offshore software development to Ukraine, you can expect your team to be highly motivated and to always be looking for ways to improve their skills. They will also be very responsive to your feedback and suggestions. This can make a big difference in the quality of the final product.

 

In addition, a strong work ethic usually means that your team will be more likely to stick with you for the long haul. Having such dramatically lower churn can save you a ton of money and headaches in the future, and ensure that your product development stays on track.

Ready to build an amazing offshore development team in Ukraine?

Call TurnKey today!

Challenges of Software Development in Ukraine

Even the casual newsreader can probably guess that a key challenge of software development offshoring in Ukraine today (at least in 2022) is the geopolitical situation. Lots of foreign software companies worry about the stability of their team and the resources at their disposal (such as power and water) when offshoring to Ukraine during wartime.

 

But despite the war in Ukraine, the software development industry remains one of the most stable in the country. This is due to the fact that most of the fighting areas have been concentrated far away from the major cities where most of the country’s software developers are located.

 

In addition, most of the software development companies were ready for the military conflict and developed Business Continuity Plans long before the war started. This has helped to relocate people to safe areas and let them work remotely without any interruption.

 

Moreover, the Ukrainian government has been working hard to attract foreign investment into the country’s software development sector, in an effort to offset some of the damage caused by the Russian invasion. This has helped offshore software development companies to weather the storm and continue operating normally.

How to Build an Offshore Development Team in Ukraine

Building offshore development team

Step #1: Clearly define your offshoring goals and vision

Offshoring in Ukraine can be a great way to get access to high-quality talent and save on labor costs. But before you even start looking for an offshore software development team in Ukraine, it’s important that you have a clear understanding of your project goals, expectations, budget, and product development KPIs. This will help ensure that the team you ultimately choose is the right fit for your needs and that everyone is on the same page from the start.

 

Here are a few tips on how to get started:

  • Define your project goals and objectives. What are you trying to achieve with this development team? Be as specific as possible.
  • Set expectations for the project deliverables. What do you need the offshore team to deliver?
  • Determine your budget for the project. How much are you willing to spend on this project and/or this development team over time?
  • Define your product development KPIs. What metrics will you use to measure the success of the project?

Once you have all of this information mapped out, you can start looking for an offshore development team that can help you over-deliver against these goals.

Look for a reliable offshoring partner? We're the experts you need.

Call TurnKey today!

Step #2: Identify and evaluate top offshore software development partners

When you’re done with your goal-setting, the next step is to compile a list of the best and most reputable partners to help you build your Ukrainian team.   (You of course could also build this team out on your own in Ukraine as well, but then you’d need access to recruiters, lawyers, administrators and more –all of which is usually more expensive than using a trusted partner.)

 

With the list in hand, then narrow down your partner options based on your specific needs. Next, carefully analyze each one to ensure that the partner firm is a good fit for your project or product development needs.

 

Here are a few tips to help you gather and analyze your list of offshore software development partners in Ukraine:

  • Define your requirements in a partner: before you start your search, it's important to have a clear understanding of what you are looking for. This will help you narrow down your options and find the best vendor for your needs.
  • Once you know what you're looking for, it's time to start researching potential partners. There are a number of ways to do this, including online research, personal recommendations and referrals, and industry directories.
  • Make sure that the offshore partner has experience in the type of project or team you're looking to build. It's important to choose a team that is familiar with your industry and has a track record of successful product development.
  • Consider the size of the team you want to build and the offshore firm’s capacity. Make sure that they have enough resources to handle your recruiting needs without becoming overwhelmed.
  • Take a look at the prospective partner’s portfolio and see if their client base is similar to what you are looking for. You’ll definitely want to be sure that you're getting a firm that is well versed in the issues that matter most to you.
  • Don't forget to evaluate the potential partner’s communication skills. It's important to be able to communicate effectively with your offshore software development team in order to ensure a successful project.

Step #3: Ask for more detailed information specific to your needs

After you’ve whittled down your list of potential partners, the next step is to get more detailed information from them. The best way to do this is to ask them to reply to a specific request for proposal (RFP) or by sending them detailed information to respond to.

 

Asking for an RFP or detailed written response is also a good way to gauge a prospective partner’s communication skills and professionalism. Once you have received proposals from your top potential partners, take some time to compare and contrast them. Consider things like price, timeline, skills and expertise, and collaboration and delivery models.

Step #4: Understand the legal protections

When it comes to any type of offshore software development cooperation, it’s important to discuss the legal aspects of the relationship before signing any contract. This helps to ensure that everyone is on the same page in terms of their rights and responsibilities, and can help avoid any potential conflict down the road.

 

There are a few key points that should be covered in any discussion of legal aspects before signing an offshore software development contract:

  • What laws will govern the contract? This is important to know upfront so that everyone is aware of which laws will apply in case of any dispute.
  • Who will own the intellectual property rights to the software developed? This is arguably the most important point to clarify so that there are no surprises later on.
  • What are the liability limits of each party? It's important to know what each party's liability is in case something goes wrong with the development process.

Ukraine is a signatory to the Berne Convention, which means that copyright protection is automatically extended to works from Ukraine. However, it’s still a good idea to include a copyright clause in your contract just to be safe.

 

Moreover, confidential information should be protected by both sides. Be sure to include a clause in your contract that requires the team in Ukraine to keep any confidential information safe and secure.

Step #5: Sign the contract

The final step is to review and approve the partner contract.

 

The specific documentation will vary depending on the company you are contracting with, but may include items such as a non-disclosure agreement (NDA) and a master services agreement. These documents usually outline the scope of work to be completed, as well as the terms and conditions of the agreement. 

 

Make sure you have legal counsel that is experienced in reviewing contracts related to offshore development.

Or you can just skip all the above and head straight to TurnKey!

We know how daunting it can be to find the right development team for your specific product development needs. And we also know that even finding the right programmers doesn’t mean they will stay with you for the long run.

 

That’s why TurnKey focuses exclusively on helping startups and high growth companies hire –and retain! – the perfect offshore software development teams in Ukraine. We offer more than just offshoring services; we give you an upgraded version of offshoring we call Yourshoring.  

 

With Yourshoring from TurnKey, you get:

  • Custom recruited development teams that exactly match your key requirements
  • Complete transparency about our pricing policy and what you pay for
  • Total control over your fully-dedicated development team
  • A talent management program that dramatically reduces the churn rate of your team
TurnKey testimonials

Where to Find Potential Offshore Software Development Partners in Ukraine

There are a number of places to find offshore talent, whether it be individual developers or a full service firm.

Freelance portals

If looking for independent developers, you can search for them using freelance portals such as Upwork, Freelancer, or Toptal. 

 

On the plus side, using a freelance portal can be a great way to find few potential team members quickly and easily. You can post your project on the portal and then receive proposals from developers who are interested in working on your project. This can save you a lot of time and energy that you would otherwise spend searching.

 

Another advantage of using a freelance portal is that you can often get a sense of the developer’s work style and skills by reading their proposals and looking at their previous projects. This can give you a good idea of whether or not they would be a good fit for your team.

 

However, there are also some disadvantages to using freelance portals too. One downside is that you may have to wade through a lot of proposals from developers who are not a good fit for your project. This can be time-consuming and frustrating.

 

Another potential drawback is that you don’t have much control over when and how the developer works (indeed, they likely have other clients too) or the quality of work that you receive. Because you are working with a team that is loosely sewn together, it can be difficult to ensure that they will meet your standards.

Outsourcing agencies

Another option is an outsourcing agency, which typically has a “bench” of developers ready to work on your project for a short period of time. There are some pros and cons to this option that you should be aware of before making your decision.

 

The advantage in working with an outsourcing agency is that it gives you the benefit of working with a development team that’s already familiar with each other and has established working relationships.

 

But the big disadvantage with outsourcing agencies is that they are usually more expensive than other alternatives and you don’t have as much control over the project as you would if you were working directly with your own team of developers.

Local recruiters

Local recruiters have extensive networks and can often connect you with the right people quickly. They also generally have a good understanding of the local market and can help you navigate the often-complex process of finding and hiring a team.

 

However, working with local recruiters can be expensive. They also may not have as much experience working with international clients, which can make communication and coordination difficult.

 

And perhaps most importantly, hiring a recruiter only solves one piece of the puzzle.  You’ll still need to coordinate legal, payroll, taxes, HR, benefits and much more on your own.

Offshoring partners (like TurnKey!)

Partnering with offshoring companies like TurnKey is often the best option for successful software development offshoring to Ukraine since it offers all the advantages of offshore development (low cost, speed to market, dedicated teams and more) without any of the disadvantages (legal complexity, lack of control, etc.) that can sometimes be common when working with software development partners. 

 

And as mentioned above, TurnKey even offers a new and improved version of offshoring called Yourshoring. Our Yourshoring methodology creates software development teams that are based entirely around your needs and goals.  Here is a quick overview of the key differences:

TurnKey Yourshoring

Why Choose TurnKey as Your Go-To Offshore Software Development Partner for Ukraine?

Put simply, we’ve been in your shoes and we know your pain. Prior to founding TurnKey, our co-founders built multiple SaaS-based companies and had a host of problems with offshore vendors, such as hidden costs, poor industry expertise, long recruitment times, high churn, and low productivity.

 

Thus, they came to the common conclusion that if you want something done right, you have to do it yourself! Our founders managed to organize and optimize remote product teams in Ukraine and overcome all of these headaches. 


And as mentioned earlier, we don’t do offshoring – we do YOURshoring. This means:

  • We help startups quickly create top-notch development teams according to their needs
  • We create teams where you are in full control
  • We have access to a huge talent pool of Ukrainian developers with awesome tech expertise across all types of roles and positions
  • We get you developers that seamlessly integrate with your team, your processes, and your rules
  • We manage all administrative processes like taxes, benefits, payroll, and legal so you have zero hassle
  • We have an annual developer retention rate of 87% versus the industry average of 60%
  • And the icing on the cake…we have a Silicon Valley-based account team so you always have someone local to call.

Final Thoughts

As we’ve hopefully made abundantly clear throughout this article, there are many benefits to working with an offshore software development team in Ukraine. Not only do you get access to high-quality talent at a fraction of the cost of hiring domestically, but you also get the peace of mind that comes with knowing your project is being handled by a team of professionals who are committed to your success.

If you’re looking for a partner to help you build the very best offshore development team in Ukraine, just drop us a line and we’ll make it easy!

FAQ

Is Ukraine a good country for offshore software development?

Yes, Ukraine is a great place for software development. There are many reasons why Ukraine is such a popular destination for offshore software development teams.

 

The first reason is the talent pool. Ukraine has a large number of highly-skilled and experienced software developers, and it is growing each year thanks to a broad range of top universities that offer computer science programs.  This means that you can find a team that has the right skill set for your project. The second reason is cost-effectiveness. Ukraine is one of the most affordable countries for offshore software development. This means that you can get a high-quality product for a fraction of the price you would pay in another country (especially a Western one). The third reason is the well-developed infrastructure, which includes a large number of co-working spaces and reliable wifi. 

 

Overall, Ukraine is an excellent choice for offshore software development. If you are looking for a talented, experienced, and cost-effective team, then Ukraine is the place to go.

How many software developers are there in Ukraine?

There is no definitive answer to this question as the Ukrainian software development industry is constantly expanding and evolving. However, according to recent estimates, there are approximately 300,000 software developers working in Ukraine. This number is expected to grow in the coming years given the high enrollment in top computer science programs at leading Ukrainian universities.

How can I find an offshore software development partner in Ukraine?

There are a number of ways to find offshore software development teams in Ukraine. One way is to use online directories (like Clutch) that list development firms from around the world, including Ukraine. Another way is to use online freelancing platforms, such as Upwork or Freelancer, which allow you to post your project and receive bids from developers in Ukraine (and other countries). You can also contact outsourcing agencies directly and inquire about their services, though they specialize in short term, project-based engagements. Or you can reach out directly to offshoring companies like TurnKey that are designed to build long-term, dedicated development teams for you.

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Stacy Diachenko

Technology and software development expert and author

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