Ready to reap the benefits of software development outsourcing?
Not so fast. Before you kick off your next project, you must pin down your outsourcing destination. By choosing a partner in your ideal location, you’ll be able to maximize results for your project.
Every country has a unique IT ecosystem with potential advantages for your business. To help you out, we've ranked the best countries to outsource software development.
Let’s go in-depth into these top countries, so that you know your options. From here, you can narrow down the perfect outsourcing destination. Ultimately, choosing the right location will result in top quality and cost-efficient software.
Selecting an outsourcing destination involves a wide range of factors. Here are some tips for analyzing the best countries to outsource software development.
The best country for software outsourcing is the one that meets your requirements. Hone in on your specific needs, especially your required tech stack and expertise. Focus on countries with experience in your industry as well.
For example, Eastern Europe has a strong finance/banking track record. In fact, finance accounts for 25% of software projects in this region. By knowing your technical parameters, you can discover countries with the right specializations.
Saving costs is always a plus when outsourcing software development. As you weigh your options, consider cost carefully. Typically, the U.S. and Western Europe have the highest rates. In comparison, Eastern Europe and Latin America have much more cost-effective prices. Some regions of Asia may have even lower pricing.
Bear in mind that cost is only one factor. Today, companies tend to prioritize expertise over cost. After all, the right talent is crucial to product success. Don’t just go for the cheapest option. Otherwise, your chosen region may not have the specialists you need.
Every region has unique IT characteristics. Yet, you can tell which countries stand out due to their technology ecosystems. Look for countries with:
These are clear signs of top STEM education and a developed IT market. In turn, these characteristics tend to churn out skilled developers.
Aligning cultural differences is essential to building collaborative teams. Sometimes cultural barriers can arise, leading to miscommunication and conflict.
Don’t shrug off possible cultural differences. Look for countries that share certain values with your business. This may include transparency, communication, deadlines, etc.
The agile development method requires real-time communication for successful iteration cycles and feedback.
For this reason, your business may be keen on a country with overlapping workday hours. In this case, you should focus on nearshore locations, as they will share at least some time zones.
Of course, your business may also opt for offshoring to countries beyond your time zones. Typically this is done to access a location’s top software expertise. Be aware that time-related inconveniences may be minimized today. With robust management solutions and platforms, you can achieve seamless communication.
(Source: 2022 EF EPI English Proficiency Index)
You should also evaluate developers on their ability to communicate well with you. (For most global companies, this means English proficiency.) Take a look at different regions’ English ranking and overall communication styles.
Miscommunication is the #1 reason why outsourcing relationships fail. That’s why you should look at regions where English is strong and your communication will be smooth. For example, Europe and South America tend to have excellent English proficiency scores.
(Source: 2021 Kearney Global Services Location Index)
Fortunately, there are plenty of top destinations to choose from. We’ve ranked the best countries to outsource software development to help guide you. Our hope is that you can achieve results-driven software – no matter your location.
Eastern Europe is one of the most exciting regions to outsource software development. Here you’ll get EU-level quality and time zones, but at more affordable prices than Western Europe.
Plus, Eastern European developers rank at the very top of the IT industry. Just consider Kearney’s top 20 IT outsourcing locations. Five countries from this region are included: Estonia, Poland, Bulgaria, Georgia and Latvia. Other indexes, such as Pentalog’s World Ranking, include Romania, Ukraine and Poland.
What’s more, IT professionals in this region are well-educated and have top English. Most importantly, software development outsourcing companies in Eastern Europe have a track record of building world-class products.
Pentalog’s World Ranking: #7
Number of Developers: 295,300
Programming Languages: JavaScript, Java, C++, SQL, PHP, etc.
Average Pricing: $40-$60/hour
Ease of Doing Business Index: 40/190
EF EPI English Proficiency: 13 (Very High)
Top Tech Cities: Warsaw, Wroclaw and Krakow
Time Zone: GMT+1
Poland is a first-rate outsourcing destination that offers both great quality and cost-efficiency. It’s even listed 14th on Kearney’s top IT destinations.
To start, Polish developers have high-caliber skills, often leading global IT skills rankings. There’s also a large talent pool to draw from, with nearly 300,000 IT professionals in Poland.
In addition, Poland provides EU-level security and the best English levels regionally. While costs aren't as cheap as Asia, Poland offers a top price-performance ratio.
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Pentalog’s World Ranking: #4
Number of Developers: 192,100
Programming Languages: JavaScript, Java, C#, Python, C++, TypeScript, React, etc.
Average Pricing: $30-$50/hour
Ease of Doing Business Index: 64/190
EF EPI English Proficiency: 35 (Moderate)
Top Tech Cities: Kyiv, Odesa and Dnipro
Time Zone: GMT+2
Traditionally, Ukraine has emphasized technical and computer science education. Plus, it has the second largest talent pool in Eastern Europe. For this reason, Ukraine has become a trusted IT destination in recent years.
Unfortunately, the war in Ukraine has complicated its once-thriving tech scene. Yet, it’s still a viable IT outsourcing destination. A whopping 70% of IT professionals have returned to work in safe regions of Ukraine. In addition, some Ukrainians have been able to set up shop elsewhere in Europe.
Most importantly, Ukrainian developers have top-tier IT skills, ranking #4 in the world. You can stand with Ukraine by choosing talent here for your next software project.
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Pentalog’s World Ranking: N/A
Number of Developers: 104,300
Programming Languages: JavaScript, PHP, Java, SQL, Python, etc.
Average Pricing: $30-$60/hour
Ease of Doing Business Index: 41/190
EF EPI English Proficiency: 23 (High)
Top Tech Cities: Prague, Brno and Ostrava
Time Zone: GMT+1
The Czech Republic is a solid choice for outsourcing software development. Specifically, this location is ideal for cybersecurity and big data needs. In Coursera’s 2023 Global Skills Report, it received a 74% score in data science.
This country also has a top business environment with low taxes. While the talent pool is smaller than others, IT professionals here are worth hiring. Overall, they have both excellent IT skills and English.
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Pentalog’s World Ranking: #3
Number of Developers: 119,100
Programming Languages: PHP, Microsoft ASP.NET, Python, etc.
Average Pricing: $30-$60/hour
Ease of Doing Business Index: 55/190
EF EPI English Proficiency: 17 (High)
Top Tech Cities: Bucharest, Cluj-Napoca and Timisoara
Time Zone: GMT+2
Romania is a business-friendly destination with the third largest talent pool regionally. Romanian IT professionals are known for their high caliber. In recent rankings, they scored #3 in the world for best developer skills.
Overall, Romania is a superb choice for outsourcing software development. It’s got an up-and-coming startup scene, government-sponsored STEM and excellent English skills.
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Asia is home to some of the best countries to outsource software development. This region has a massive pool of qualified tech graduates. What's more, here you'll find some of the lowest market rates in the world.
This region also has a golden reputation for doing business, making it easier to ramp up projects. For example, Kearney’s index includes several IT outsourcing giants. The most promising include India, China, Malaysia, Indonesia, Vietnam, Philippines and Thailand.
However, while Asian countries have the manpower, communication may lag compared to others. English proficiency here is fairly low here and the time zone differences may be extreme.
Kearney’s Global IT Outsourcing Score: #1
Number of Developers: 5.8 million
Programming Languages: Java, C++, Python, PHP, etc.
Average Pricing: $15-$50/hour
Ease of Doing Business Index: 62/190
EF EPI English Proficiency: 52 (Moderate)
Top Tech Cities: Bengaluru, Hyderabad, Chennai and Mumbai
Time Zone: GMT+5:30
India is a tried-and-true IT outsourcing destination, ranked #1 by Kearney’s index. It reached a whopping $144 billion in ICT exports last year. It also has the second largest talent pool in the world, with 5.8 developers to choose from. Rates here are also some of the most affordable in the world.
India is talent-rich in other ways, too. As a mature IT destination, it offers experienced and senior IT professionals. Many of these developers are industry veterans, offering a high quality of work.
On the whole, India’s business environment is strong. One downside is that this country’s work-from-home infrastructure isn’t very developed. This gap may put stress on remote partnerships.
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Kearney’s Global IT Outsourcing Score: #2
Number of Developers: 7 million
Programming Languages: Python, Java, JavaScript, etc.
Average Pricing: $40-$60/hour
Ease of Doing Business Index: 32/190
EF EPI English Proficiency: 62 (Low)
Top Tech Cities: Shenzhen, Shanghai and Beijing
Time Zone: GMT+8
China is a powerful IT outsourcing destination. Not only is it ranked #2 by Kearney, but this country is the largest producer of IT talent. Here you’ll find world-renowned research centers and a $55.69 billion ICT market.
Yet, China’s excellent ease of business score and low-cost salaries may not be enough. Since China is so large, the quality level can vary widely, leading to lower standards than you need.
China has some other downsides as well, such as low English proficiency and a wider cultural gap. It also has a poor reputation for IP rights, which may scare away businesses.
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Kearney’s Global IT Outsourcing Score: #9
Number of Developers: 190,000
Programming Languages: Java, JavaScript, C#, PHP, etc.
Average Pricing: $20-$60/hour
Ease of Doing Business Index: 95/190
EF EPI English Proficiency: 22 (High)
Top Tech Cities: Manila, Cebu and Davao City
Time Zone: GMT+8
The Philippines is an excellent IT outsourcing destination. Developers here have top English skills and adapt well to Western-style company culture.
While the Philippines has a smaller talent pool, IT professionals offer solid skills. Average rates also tend to be lower than other regions. It’s no wonder that this country is listed 9th on Kearney’s ranking.
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Latin America is a region with huge software development outsourcing opportunities. Specifically, South America offers relatively low rates, cultural alignment and elite tech skills. Just consider that Latin America ranked #1 in Technology and Data Science by Coursera.
If you’re a U.S.-based company, you also get the added perk of overlapping time zones. Depending on the country, you’ll also get access to some of the best English speakers in the world.
Coursera Global Skills Ranking: 93% technology & 96% data science
Number of Developers: 115,000
Programming Languages: Python, SQL, Java, etc.
Average Pricing: $20-$50/hour
Ease of Doing Business Index: 126/190
EF EPI English Proficiency: 30 (High)
Top Tech Cities: Buenos Aires, Cordoba and Mendoza
Time Zone: GMT-3
Argentina is one of the most popular outsourcing destinations in this region. It has a large, skilled talent pool with the highest ranked English skills in LatAm.
Argentina also has a rapidly growing startup scene and lots of educational investment. That said, the country has suffered a rocky economy in recent years. Its relative instability and heavy bureaucracy may put off some companies.
On the plus side, salaries in Argentina are low-cost, which can result in savings.
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Coursera Global Skills Ranking: 87% technology & 99% data science
Number of Developers: 500,000
Programming Languages: JavaScript, SQL, Java, HTML, Python, etc.
Average Pricing: $20-$50/hour
Ease of Doing Business Index: 124/190
EF EPI English Proficiency: 58 (Moderate)
Top Tech Cities: São Paulo, Campinas and Recife
Time Zone: GMT-3
Ranked 5th on Kearney’s ranking, Brazil has the largest and most exciting talent pool in the region. This country also has a reputation for young, up-and-coming talent. Here you can get access to a wide range of skills, though typically from more junior developers.
Low-cost salaries and a booming startup scene are some of the major appeals of Brazil. That said, Brazil hasn’t quite reached the English levels of other countries. Its business environment is also ranked low, likely due to the bureaucracy here.
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Curious about other IT outsourcing destinations? Get essential market statistics about key regions in our guide here.
Choosing the best countries to outsource software development doesn’t guarantee success. As you kick off a partnership in your ideal country, be sure to factor in these key outsourcing processes.
At the end of the day, your outsourcing success will depend on clearly defining your project. Do your due diligence to analyze the product and set expectations from day 1.
Get 360° vision into the best countries to outsource software development. Our experts have curated this ranking, so that you can select the right place for your needs.
Keen on outsourcing to Eastern Europe? Our industry-best specialists at Netcorp are conveniently based in Estonia and Poland. We’re ready to build high-caliber, scalable software at affordable rates. Contact us to kick off a long-term technical partnership – no matter where in the world you do business.
There’s no one “best place” for your next IT outsourcing project. Overall, Eastern Europe, Asia and Latin America have strong reputations. These locations provide high-quality and cost-effective software development. That said, you should closely consider your needs to determine the right destination.
Outsourcing your IT needs can enable significant cost savings for your business. That’s because hiring your own in-house team is a hefty investment. (Expenses may include job packages, training, equipment, turnover and more.) Recruitment is especially competitive, which can lead to lengthy gaps on your teams. Outsourcing removes these costs, so you can rapidly access expert talent on-demand.
Paavo Pauklin is a renowned consultant and thought leader in software development outsourcing with a decade of experience. Authoring dozens of insightful blog posts and the guidebook "How to Succeed with Software Development Outsourcing," he is a frequent speaker at industry conferences. Paavo hosts two influential video podcasts: “Everybody needs developers” and “Tech explained to managers in 3 minutes.” Through his extensive training sessions with organizations such as the Finnish Association of Software Companies and Estonian IT Companies Association, he's helped numerous businesses strategize, train internal teams, and find dependable outsourcing partners. His expertise offers a reliable compass for anyone navigating the world of software outsourcing.
Download the free copy of our "Software Development Outsourcing" e-book now to learn the best strategies for succeeding in outsourcing!
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