INTechHouse BLOG 20.04.2023 14 min.
Best Countries to Outsource Software Development
INTechHouse BLOG 20.04.2023 14 min.

Best Countries to Outsource Software Development

Krzysztof Pióro Sales Director

In today’s global economy, outsourcing has become an increasingly popular strategy for businesses looking to improve efficiency, reduce costs, and access specialized skills and expertise. Choosing the right outsourcing partner can make a significant impact on the success of your business.

With so many countries to choose from, each offering unique advantages and challenges, it can be challenging to determine which countries are the best fit for your outsourcing needs. In this article, we will explore some of the best outsourcing countries to cooperate with, taking into consideration factors such as cost-effectiveness, quality, availability of skilled labour, time zone compatibility, and cultural fit. Whether you are looking for IT services, customer support, manufacturing, or other outsourced functions, this article will provide valuable insights to help you make an informed decision.

What is Outsourcing? 

Outsourcing is a business strategy that involves hiring external companies or individuals to perform tasks or services typically done in-house. These tasks can include anything from manufacturing, customer support, accounting, marketing, and IT services, to name a few.

Outsourcing can take different forms, including onshore outsourcing (hiring a company within the same country), nearshore outsourcing (hiring a company in a neighbouring country), and offshore outsourcing (hiring a company in a different country). The location of the outsourcing partner will depend on factors such as cost, quality, availability of skilled labour, time zone compatibility, and cultural fit.

Why Companies Should Outsource 

Once upon a time, there was a small start-up company that had just launched its product in the market. The company had limited resources and budget, and the founders were juggling multiple responsibilities. They had a great product, but they struggled with marketing, customer support, and website maintenance.

After some research, the founders decided to outsource some of their non-core functions to a third-party service provider. Here are some reasons why they made this decision:

Cost Savings

The founders realized that outsourcing could help them save money on overhead costs, such as rent, utilities, and salaries. Outsourcing allows companies to access a pool of skilled workers and resources at a lower cost than hiring in-house employees. This can help reduce labour costs, overhead expenses, and capital expenditures.

Focus on Core Competencies

Outsourcing non-core functions allows companies to focus on their core competencies and strategic objectives. They can have more time to find other marketing strategies or fundraising as well. This can help improve efficiency and productivity, leading to increased profits and growth.

Wider Talents Pool

Outsourcing allows companies to access specialized skills and expertise that may not be available in-house. This can help improve quality and innovation, leading to a competitive advantage.

Scalability and Flexibility

Most companies need to be flexible and able to scale their operations up or down quickly. Outsourcing allowed the founders to easily adjust their workforce as needed, without the constraints of long-term employment contracts.

Improved Service Quality

Outsourcing can lead to improved service quality, as outsourcing partners are often highly specialized and experienced in their fields. This can help improve customer satisfaction and retention.

Ready to take your software development to the next level? Discover the top countries for outsourcing today!

What are the top 5 Best Countries to Outsource

China

China is indeed a top outsourcing country, and it has a vast pool of software developers available for outsourcing. The average hourly rates for software development in China vary depending on the level of expertise, technology stack, and project requirements. However, on average, the rates for software development in China range from $20 to $50 per hour.

China has become a significant player in the outsourcing industry, particularly in software development. Here are some interesting insights about outsourcing to China:

  1. Several developers: China has a massive pool of software developers, estimated to be around 5.3 million, according to a report by the China Software Industry Association. This makes it one of the largest developer communities in the world.
  2. Education: China has a strong emphasis on education, and many of its developers have a degree in computer science or a related field. According to the same report by the China Software Industry Association, over 70% of developers in China have a bachelor’s or higher degree.
  3. English proficiency: Although English is not the primary language in China, many developers are proficient in English, particularly those who have received higher education. It’s essential to communicate clearly and check the language skills of potential outsourcing partners to ensure smooth communication.
  4. Cultural differences: As with any outsourcing relationship, cultural differences can be a potential challenge. However, many outsourcing providers in China have experience working with clients from different cultures and have adapted their business practices to be more in line with Western standards.
  5. Competitive pricing: The cost of outsourcing to China can be lower than in many other countries, as the cost of living and salaries in China are generally lower. However, choosing an outsourcing partner is essential to balance cost savings with quality and reliability.

India

India is the second most popular destination for outsourcing, and it’s known for its strong IT and engineering talent. On average, the rates for Indian software developers range from $15 to $50 per hour.

The rates for developers with more experience and expertise are generally higher, and the rates for developers with expertise in more specialized areas such as AI, blockchain, or cybersecurity may also be higher.

Here are some interesting insights about outsourcing to India:

  1. Several developers: Indian software market has a vast pool of software developers, estimated to be around 4.5 million, according to a report by the National Association of Software and Service Companies (NASSCOM). This makes it one of the largest developer communities in the world.
  2. Education: India has a strong education system, and many of its developers have a degree in engineering or computer science. According to the same NASSCOM report, around 80% of developers in India have a bachelor’s or higher degree. So, Indian outsourcing companies are in great demand.
  3. English proficiency: English is one of the official languages in India, and many Indians are proficient in English, particularly those who work in the IT and engineering fields. This makes communication with Indian outsourcing partners relatively easy.
  4. Cultural differences: India has a unique culture, and it’s essential to understand and respect these differences when working with Indian outsourcing partners. For example, Indians tend to be more indirect in their communication and may hesitate to say no directly.
  5. Competitive pricing: The cost of outsourcing to India is generally lower than in many other countries, as the cost of living and salaries in India are usually lower. However, choosing an outsourcing partner is essential to balance cost savings with quality and reliability.

Romania

Romania is a growing outsourcing destination, particularly in software development. Here are some interesting insights about outsourcing to Romania:

  1. Several developers: Romania has a growing pool of software developers, estimated to be around 110,000, according to a report by the Romanian Association of Software and Services Industry. While this is smaller than the developer communities in China and India, it’s still a significant number of skilled developers.
  2. Education: Romania has a strong education system, and many of its developers have a degree in computer science or a related field. According to the same report by the Romanian Association of Software and Services Industry, around 75% of developers in Romania have a bachelor’s or higher degree.
  3. English proficiency: Many Romanians are proficient in English, particularly those who work in the IT and engineering fields. This makes communication with Romanian outsourcing partners relatively easy.
  4. Cultural differences: Romania has a unique culture, and it’s essential to understand and respect these differences when working with Romanian outsourcing partners. For example, Romanians tend to value punctuality and direct communication.
  5. Competitive pricing: The cost of outsourcing to Romania is generally lower than many other countries in Western Europe or North America, as the cost of living and salaries in Romania are usually lower.

Regarding hourly rates, Romanian developers’ average hourly rate varies from $35 to $50 per hour, depending on their level of experience and expertise.

Poland

Poland is another popular outsourcing destination, especially for software and hardware development. Here are some interesting insights about outsourcing to Poland:

  1. The number of developers: Poland has a significant number of software developers, estimated to be around 250,000, according to a report by the Polish Investment and Trade Agency. This makes it one of the largest developer communities in Europe.
  2. Education: Poland has a well-established education system, and many of its developers have a degree in computer science or a related field. According to the same report by the Polish Investment and Trade Agency, around 70% of developers in Poland have a bachelor’s or higher degree.
  3. English proficiency: Many Poles are proficient in English, particularly those who work in the IT and engineering fields. This makes communication with Polish outsourcing partners relatively easy.
  4. Cultural differences: Poland has a unique culture, and it’s essential to understand and respect these differences when working with Polish outsourcing partners. For example, Poles tend to be straightforward and value direct communication.
  5. Competitive pricing: The cost of outsourcing to Poland is generally lower than many other countries in Western Europe or North America, as the cost of living and salaries in Poland are usually lower.

Regarding hourly rates, Polish developers’ average hourly rate varies from $35 to $70 per hour, depending on their level of experience and expertise.

Ukraine

Ukraine is a popular outsourcing destination, particularly in software development. Here are some interesting insights about outsourcing to Ukraine:

  1. The number of developers: Ukraine has a growing pool of software developers, estimated to be around 200,000, according to a report by DOU.ua. This makes it one of the largest developer communities in Eastern Europe.
  2. Education: Ukraine has a strong education system, and many of its developers have a degree in computer science or a related field. According to the same report by DOU.ua, around 70% of developers in Ukraine have a bachelor’s or higher degree.
  3. English proficiency: Many Ukrainians are proficient in English, particularly those who work in the IT and engineering fields. This can destroy any communication barriers with Ukrainian outsourcing partners.
  4. Cultural differences: Ukraine has a unique culture, and it’s essential to understand and respect these differences when working with Ukrainian outsourcing partners. For example, Ukrainians tend to be very hospitable and value personal relationships.
  5. Competitive pricing: The cost of outsourcing to Ukraine is generally lower than many other countries in Western Europe or North America, as the cost of living and salaries in Ukraine are usually lower.

Regarding hourly rates, Ukrainian developers’ average hourly rate varies from $30 to $60 per hour, depending on their level of experience and expertise.

In summary, outsourcing to Ukraine can provide access to a growing pool of skilled developers, competitive pricing, and proficiency in English. However, it’s essential to understand and respect cultural differences and evaluate potential partners carefully to ensure high-quality work and reliable communication.

Looking for a reliable outsourcing partner? Consider Poland, one of the top countries for software development outsourcing.

What Factors Indicate a Country’s Suitability for Software Development Outsourcing?

There are several factors to consider when determining a country’s suitability for software development outsourcing. Here are some of the most important factors to consider:

    1. Availability of Skilled Workforce: A country with a large pool of highly skilled software developers and engineers can offer a competitive advantage in terms of quality and speed of work.
    2. Cost of Labor: The cost of labour in a country is an important factor in outsourcing decisions. A country with a lower cost of living and wages may be more attractive to companies looking to outsource software development.
    3. Infrastructure and Technology: Countries with good IT infrastructure and access to the latest technology can offer a better outsourcing experience.

Political Stability: A stable political climate and favourable business environment are important for long-term outsourcing partnerships.

  1. Language and Cultural Compatibility: Language barriers and cultural differences can affect the quality of communication and collaboration between outsourcing partners. A country with a strong English-speaking population and cultural compatibility with the client company can lead to a better outsourcing experience.
  2. Intellectual Property and Data Security: A country’s legal framework and data protection policies are important considerations when outsourcing software development. The protection of intellectual property and sensitive data is critical to the success of outsourcing partnerships.
  3. Time Zone Compatibility: A country with a time zone that is close to the client’s location can facilitate communication and collaboration between outsourcing partners.
  4. Government Support: Government policies and incentives that promote the development of the IT industry can make a country more attractive for outsourcing.

Overall, companies looking to outsource software development should carefully consider all of these factors before choosing a country for outsourcing.

What Factors Indicate a Country’s Suitability for Software Development Outsourcing?

There are several factors to consider when determining a country’s suitability for software development outsourcing. Here are some of the most important factors to consider:

    1. Availability of Skilled Workforce: A country with a large pool of highly skilled software developers and engineers can offer a competitive advantage in terms of quality and speed of work.
    2. Cost of Labor: The cost of labour in a country is an important factor in outsourcing decisions. A country with a lower cost of living and wages may be more attractive to companies looking to outsource software development.

    1. Infrastructure and Technology: Countries with good IT infrastructure and access to the latest technology can offer a better outsourcing experience.
    2. Political Stability: A stable political climate and favourable business environment are important for long-term outsourcing partnerships.
    3. Language and Cultural Compatibility: Language barriers and cultural differences can affect the quality of communication and collaboration between outsourcing partners. A country with a strong English-speaking population and cultural compatibility with the client company can lead to a better outsourcing experience.

  1. Intellectual Property and Data Security: A country’s legal framework and data protection policies are important considerations when outsourcing software development. The protection of intellectual property and sensitive data is critical to the success of outsourcing partnerships.
  2. Time Zone Compatibility: A country with a time zone that is close to the client’s location can facilitate communication and collaboration between outsourcing partners.
  3. Government Support: Government policies and incentives that promote the development of the IT industry can make a country more attractive for outsourcing.

Overall, companies looking to outsource software development should carefully consider all of these factors before choosing a country for outsourcing.

Maximize your development potential with outsourcing. If you don't have any ideas how - we are ready to help as usual!

Tips for Choosing the Best Country to Outsource Software Development

Choosing the best country to outsource software development can be a challenging task, but here are some tips that can help you make an informed decision:

  1. Define Your Requirements: Clearly define your project requirements, including the technology stack, scope of work, and timeline. This will help you identify countries with the required expertise and resources.
  2. Conduct Market Research: Research different countries and evaluate their software development industry, infrastructure, and market trends. You can also seek recommendations from industry experts or consult with outsourcing advisory firms.
  3. Assess the Talent Pool: Evaluate the quality and availability of the talent pool in the countries you are considering. Look for a country that has a large pool of skilled software developers and engineers with relevant experience in your industry.
  4. Consider the Cost: Compare the cost of outsourcing software development services in different countries. Keep in mind that the cost of labour may vary depending on factors like the country’s cost of living and economic conditions.
  5. Evaluate Communication and Language Skills: Communication is essential for the success of any outsourcing partnership. Look for a country with a good command of the English language and cultural compatibility.
  6. Analyze the Legal and Regulatory Environment: Review the legal and regulatory environment in the countries you are considering. This includes intellectual property laws, data protection policies, and government regulations related to outsourcing.
  7. Consider Time Zone Differences: Time zone differences can impact communication and collaboration between outsourcing partners. Look for a country with a time zone that is compatible with your team’s working hours.
  8. Assess the Political and Economic Stability: Political and economic stability is crucial for the long-term success of any outsourcing partnership. Look for a country with a stable political climate, a favourable business environment, and a strong economy.

By considering these factors, you can make an informed decision and choose the best country for outsourcing software development that meets your project requirements and business needs.

Ready to outsource overseas? Try INTechHouse

INTechHouse was a software development company that was making waves in the industry. They were experts in providing top-quality software development services to their clients, and their reputation for excellence was growing by the day. They had worked with clients all over the world, but some of their best experiences were with clients from the USA, France, the Netherlands, and the UK.

Our collaboration with clients from these countries had been nothing short of exceptional. We helped our clients achieve their goals by providing them with software solutions that were tailored to their specific needs. We had expertise in delivering high-quality software development services and this fact makes us a trusted partner to their clients.

Conclusion

In conclusion, what are the best countries to outsource software development – we can say China, India, Romania, Poland, and Ukraine are the top. These countries have established themselves as leaders in the industry due to their large talent pool, competitive pricing, and favourable business environment.

China is a great destination for outsourcing due to its large pool of talented developers, favourable government policies, and affordable dev rates. India is known for its vast pool of skilled and experienced software developers, competitive pricing, and robust IT infrastructure. Romania is known for its highly skilled developers, proficiency in cutting-edge technologies, and affordable pricing.

Poland is known for its high-quality software development services, skilled and experienced developers, and favourable business environment. Ukraine has a large pool of talented developers, competitive pricing through European countries, and a competitive business environment.

Overall, these countries are worth cooperating with because they offer a combination of affordability, high-quality services, and a skilled workforce. When outsourcing software development, it’s essential to choose a country that meets your project requirements and business needs. By considering the factors mentioned above, you can make an informed decision and choose the best outsourcing destination for your software development needs.

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FAQ


The best top software outsourcing countries are China, India, Romania, Poland, and Ukraine.


Offshore development means outsourcing the software project to software development companies that are based in another country. For instance, if web development your company is based in the US, any company that is a part of the United States is considered onshore.


INTechHouse started to participate in outsourcing software development in 2003. At that time people didn’t know much about the best countries to outsource software development and chose partners using word of mouth around central and eastern Europe and nice communication with international companies. We worked hard and people brought to us their ideas, projects, and stuff. Up to now, we have over 100+ outsourcing software development projects done.


Polish offshore software development rates are $ 30-75% per hour.


As of 2023, the best countries for outsourcing (with offshore destination opportunities) are

1) India – the leading country among offshore software development countries because of low rates for Indian developers.

2) Vietnam – an emerging IT outsourcing country with good outsourcing services.

3) The Philippines – a budget-friendly IT outsourcing country in the software development market.

4) Poland – a favoured country for IT outsourcing thanks to the high quality of its services and experienced software engineers.

5) Romania – a preferred offshoring destination thanks to qualified software developers.


There are two most popular development types: web development and mobile development.