Countries for Offshore Software Development (2023-2024 Guide)

Software Development
Countries for Offshore Software Development (2023-2024 Guide)
Article by Sumana Ganguly
Last Updated: December 02, 2023

Outsourcing software development is a growing trend, with the global market expected to reach $937.67 billion in revenue by 2027. 

Most industries and businesses can benefit from software development, but not all have the necessary expertise or internal resources to do it themselves. This is where offshore software development companies come in.  

The best offshore software development countries are excellent places to start looking for a suitable partner. This article lists the ten best offshore software development countries whose experts will bring your ideas to life. 

Why Should You Consider Outsourcing Software Development Projects?

Although outsourcing software development projects can save time and money and get great expertise, many still wonder, why outsource software development? 

Let’s look at the pros and cons of outsourcing software development, starting with a few reasons why you should look for offshore software development: 

  • Better exposure to well-educated and highly trained global talent 
  • Lower costs (software development outsourcing can save you up to 30%) 
  • Better risk management due to the ability to partition software development operations 
  • Hire talent as needed rather than have them on your pay list for 12 months 

On the other hand, the downsides of outsourcing software development projects are:  

  • Political and economic volatility. In some of these best offshore software development countries, political power can change in one night and completely alter business prospects. You just have to hope for the best and that the current government does not bring any laws that will affect your business. 
  • Language barriers. Most offshore software development countries are not English-speaking, with the notable exception of Australia. 
  • Time differences. Software development projects often rely on collaboration which can suffer if the other side is in a completely different time zone 

Partnering with the right technology service companies can mitigate many of these cons, offering a balanced approach to quality and risk management.

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Ten Best Offshore Software Development Countries

  1. China
  2. Hungary
  3. India
  4. The Philippines
  5. Poland
  6. Russia
  7. South Korea
  8. Taiwan
  9. Ukraine
  10. Vietnam

We rounded up the ten best countries to outsource software development, listed in alphabetical order: 

1. China

When a country places such a high value on science and mathematics in academics, how can you expect anything less than hundreds of IT experts to emerge each year? Add the fact that Chinese programmers and developers generally excel at functional programming, Python, Shell and other languages.  

It is also important to note that the average pay for a software developer in China is $35.538 compared to his U.S. colleague's annual salary of $108.978. You can see why China ranks so high in software development outsourcing. 

2. Hungary

Research shows that Hungary is the fifth best country to outsource to find the best software developers. This means that leaning towards Hungary for your custom software needs increases your odds of finding a reliable and qualified development firm. 

Some of Hungary’s top software development projects include building databases and writing code in Shell, C++ and JAVA. 

3. India

India is the second country in the world in terms of population. The number of STEM (science, technology, engineering and mathematics) graduates at 2.6 million (the only country ahead of it is China with 4.7 million). 

What makes India also a prime location for IT outsourcing is the fact that an average software developer in India charges approximately $6 per hour, making them much cheaper than the U.S. software development experts who charge between $33 and $40. 

4. The Philippines

According to some estimates, more than 4 million trained Filipino workers have some experience working for a foreign company. That just shows how sought-after they are for outsourcing. 

Each year, The Philippines produces over 40.000 IT and engineering graduates, well-versed in Java, API development, .NET and more. 

5. Poland

Poland is, in many ways, an ideal country for software development outsourcing.  

Not only does it have a solid pool of talent, but the country is also a member of the WTO, EU, NATO, UN, Patent Cooperation Treaty, Berne Convention, the Paris Convention, the Madrid Protocol and a whole other host of organizations. 

This means their companies can quickly transfer data and information safely, which is not always the case with offshore software development companies from Asia, for instance. 

6. Russia

Russia may not be the favorite country in the U.S. politically, but one can’t deny they have many IT experts. Each year, the Russian Federation has 454.436 engineering graduates. 

In addition, Russia’s top software projects include algorithms and writing software in software programming languages such as JAVA, C++ and SQL. 

7. South Korea

We cannot talk about South Korea without mentioning its tech companies.  South Korean software companies dominate the world in their respective industries, from Samsung to LG and Hyundai. South Korea couldn't have become one of the world’s leaders in software development without a pool of highly trained software engineers.  

Fortunately, not every good developer in South Korea is hired, and software development projects account for more than half of the country's outsourcing market. 

8. Taiwan

Taiwan is another country that almost instantly appears when discussing outsourcing. The reason is apparent. They have a great tradition of outsourcing across all industries and is one of the first countries to outsource from North America in the 1960s. 

If you are considering hiring offshore software development firms from Taiwan, pay close attention to the ones versed in data structures, functional programming and algorithms and you won’t be disappointed. 

9. Ukraine

Eastern Europe is taking the lead in offshore software development and Ukraine is at the forefront of this. Ukraine has over 15,000 registered software outsourcing companies, most of which are assimilated into the western business world. 

Some of Ukraine’s top software projects include mathematics, security and distributed systems, although they have experts across all areas of software development. 

10. Vietnam

Yet another country with a powerful tech industry, Vietnamese companies can boast that giants such as IBM, Microsoft and Intel invest in software development there. 

Vietnam-based software developers particularly excel in artificial software development projects.

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Best Offshore Software Development Countries Prices 

The best software development prices by country range between $18 in Asia and Africa to $50 in Central, South America & Eastern Europe. 

The price range will depend on several factors. These include:

  • When you need the project to be finished 
  • How complex the project is 
  • If the project is completely custom or based on a template 
  • How many people will be working on your project? 
  • The average pay in that country 
  • Is the country itself a member of some world organization like the EU, WTO, etc 
  • However, there are some general guidelines that you can keep in mind as you search for the best offshore software development countries. On average, you can expect agencies to charge the following amounts per person per hour of work: 
  • Central America and South America: $30-$50 
  • Eastern Europe: $25-$50 
  • Asia and Africa: $18-$40 
  • North America: $38 - $63 

Considering that 44% of CEOs and CTOs outsource programming jobs to cut costs, hiring a top-rated software developer elsewhere in the world may be the best way to meet your objectives while staying within your budget. 

The Best Area for IT Outsourcing Projects

By now, you must be eagerly waiting for the final answer about which region has the best offshore software development countries. The answer is Eastern Europe! 

We have listed the best Eastern Europe Software Development Companies, so you can choose the right partner for your software development project. 

Every year, over 1 million software developers are educated and trained in Eastern Europe, with 42% based in Ukraine and Poland. And those are just two of the countries mentioned. We haven't even mentioned Romanian, Bulgarian, Serbian, Croatian or Greek software developers. 

For instance, Romania has 40+ tech universities, producing around 5,000 computer experts and engineers yearly; in Bulgaria, that number is about 3,500.  

What makes Eastern Europeans such a good choice for IT outsourcing? 

  • Convenient time zones: The time difference between China and the United States (Washington D.C. in particular) is 12 hours. On the other hand, between the U.S. and Poland, it is just 6 hours. That six hours can be a huge difference-maker, especially in the high-paced software development industry. 
  • Favorable prices on an excellent skill: An average software developer in the U.S. earn about $60/h. At the same time, the one in Eastern Europe will be quite satisfied with half that and the quality of work will not suffer an inch. 
  • A large talent pool: Eastern Europeans have embraced information technology as the way forward. That means, more and more people there are graduating in IT subjects or finishing courses. Once they are done, they often decide not to stick around but seek more opportunities abroad. 
  • Location and culture: Software development projects are much easier when you can communicate with your development team. This is a matter of speaking the same language and having similar or at least compatible cultures.  

For instance, Chinese or Indian cultures are very different from the U.S., which can reflect how they do business. Eastern European countries are much closer to America and, therefore, easier to work with. 

Best Offshore Software Development Countries Conclusion

On average, the best countries for offshore software development areEastern European countries, which have the highest level of software development expertise and offer a strong return on investment through their low costs. 

Also, Eastern European countries demonstrate the closest mentality to Western brands, which means collaboration could be easier and productivity better, despite the time difference. 

But all in all, the best place for outsourcing software development projects is to the firm that understands your brand and can suit your specific business needs — wherever they might be located! 

Most importantly, you select a software development agency that can help you achieve your objectives and continue to grow as a brand. 

Of course, you won't go wrong if you hire from another region or country. As we mentioned, China, Russia, India, South Korea, Vietnam or even countries we didn't cover in this article, such as Brazil or Argentina, but has a large talent pool of professional software developers, 

Best Countries for Offshore Software Development FAQ 

How to choose a country to outsource? 

When choosing a country to outsource your software development, pay attention to the following factors, which will decide the success of your project: 

  • Technical education and qualification level of available resources 
  • Experience in your area of interest 
  • Time-zone difference 
  • English language communication skills 
  • Cultural differences 

Is outsourcing software development a good idea? 

Yes, outsourcing software development is a smart idea, of course, assuming you can find a partner who understands your vision and business requirements. If this is the case, there are numerous advantages to outsourcing software development, including increased flexibility, expert assistance, and cost and risk reduction. 

Is outsourcing cheaper than hiring? 

Outsourcing, especially offshore, is significantly more affordable than hiring an in-house team for a software development project. While software developers in the U.S. charge on average $38 to $63 hourly, eastern European experts are far more modest, with a $25 to $50 hourly rate. 

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