Top 10 Countries for Outsourcing Software Development in 2024

Outsourcing has become a vital strategy for businesses around the globe.

This practice helps companies helping them reduce development costs, access specialized skills, and improve efficiency. 

Deloitte’s Global Outsourcing Survey points out that over 50% of businesses use outsourcing to cut costs, and 57% use it to focus on core functions. 

In fact, the global outsourcing market was valued at $92.5 billion in 2019 and continues to grow steadily. Grand View Research highlights that the IT outsourcing segment alone is expected to reach $410.2 billion by 2027.

Are you thinking about outsourcing? Then, this guide is your go-to destination. Here, we explore what countries offer the best outsourcing services. We will focus on the skills and benefits they deliver as well as on the pricing and quality of their offerings.  

Let’s dive into the best countries for outsourcing software development.

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10 Best Outsourcing Countries Worldwide

If you haven’t used outsourcing services before, the first step is choosing the country you will 

outsource from. 

There are multiple options that offer skilled IT professionals, low costs, great communication levels, and much more. 

To help you narrow down your choice, we have selected 10 best countries to outsource software development. 

These countries are popular outsourcing destinations due to their unique strengths. They are attractive for various business functions like IT services, customer support, and more.

Rank	Country	Key Strengths
1	Ukraine	Large talent pool, cost efficiency, English proficiency Strong tech talent, growing IT sector, English close mentality, comfortable time zone
2	Poland	Highly skilled workforce, strong IT sector, EU regulations
3	Czech Republic	Skilled workforce, strategic location, strong IT sector
4	Romania	Skilled workforce, cost efficiency, EU regulations
5	India	Large talent pool, cost efficiency
6	Taiwan	Technological expertise, skilled workforce, infrastructure
7	Philippines	Skilled workforce, cultural compatibility, cost efficiency
8	Argentina	Growing tech sector, cultural compatibility, cost efficiency
9	Brazil	Large talent pool, cost efficiency, growing tech sector
10	Mexico	Proximity to the US, bilingual talent, cost efficiency

These destinations usually have good technology infrastructure, meaning your projects run smoothly.

Now, let’s explore these countries in more detail. 

Best Offshore Software Development Countries in Eastern and Central Europe

Eastern and Central Europe has become one of the top IT outsourcing service providers. There are a few reasons why this region is highly attractive to international businesses. 

1. Highly Skilled Workforce

Eastern European countries prioritize education, particularly in STEM (Science, Technology, Engineering, and Mathematics) fields. 

Universities in Ukraine, Poland, the Czech Republic, and Romania produce a significant number of skilled IT graduates each year.

There is a strong culture of continuous learning and professional development in the IT sector, with many professionals holding certifications and advanced degrees.

2. Cost Efficiency

The cost of IT services in Eastern Europe is significantly lower than in Western Europe and North America. 

This allows companies to reduce costs without compromising on quality.

3. Quality of Work

Eastern European IT professionals are known for their high level of technical expertise and ability to handle complex projects.

With its innovative approach and creative problem-solving skills, the region is a good fit for a wide range of IT projects.

4. Cultural Compatibility

The work ethic and professionalism in Eastern Europe are closely aligned with Western standards, facilitating smoother collaboration.

High proficiency in English among IT professionals ensures effective communication with international clients.

5. Robust IT Infrastructure

Eastern Europe boasts modern IT infrastructure, including high-speed internet and state-of-the-art technology parks.

Many governments in the region actively support the IT sector through incentives, grants, and the establishment of tech hubs.

If you are thinking about hiring dedicated specialists from Eastern Europe, here are the best options you can choose from: Ukraine, Poland, the Czech Republic, and Romania.

Ukraine

Ukraine is a great destination for software development outsourcing due to several key factors. 

The country has a strong talent pool, with over 363,000 IT professionals, and it ranks high in global skill assessments. 

Ukrainian developers are skilled in many programming languages, such as Java, Python, and JavaScript, and the country consistently ranks among the top in international coding competitions like Google Code Jam and TopCoder.

One of the main attractions of outsourcing to Ukraine is a huge talent pool, great work ethic, fast and frictionless recruiting process, and cost efficiency. 

The average hourly rate for software developers in Ukraine varies based on their level of experience. The rate ranges from $20 to $50 per hour.

Despite the lower cost, the quality of work is high, as Ukrainian developers adhere to international standards and best practices. For example, many Ukrainian companies have achieved ISO and CMMI certification benchmarks for quality and process improvement.

The Ukrainian software industry has a proven track record of success in a range of industries. For example, Grammarly, a widely used writing assistant tool, was developed by Ukrainian engineers. 

Viewdle was a Ukrainian company that developed facial recognition and computer vision technology. Founded in 2006, it specialized in software for mobile devices that could recognize faces and objects, useful for apps in gaming, social networking, and augmented reality.

In 2012, Google bought Viewdle through its Motorola Mobility unit to boost Android’s augmented reality and facial recognition features. 

Viewdle’s technology has significantly influenced mobile devices’ visual search and recognition. This technology is at the core of the YouTube search mechanism. 

Ring Labs, which specializes in video surveillance systems, was acquired by Amazon to enhance its home security products.

Another success story is GitLab, a leading DevOps platform, which was initially co-founded by a Ukrainian developer.

In fact, many successful tech companies employ talented Ukrainian engineers. They are highly valued for their skills and professionalism.

Poland

Poland is another top outsourcing destination in Europe.

Poland boasts over 400,000, IT professionals, with a large number of graduates from prestigious universities each year.

The country has a well-developed infrastructure and numerous tech parks, especially in cities like Warsaw, Kraków, and Wrocław.

The average hourly rate for IT services in Poland ranges from $50 to $99 per hour, depending on the industry and the complexity of the services provided. 

Popular outsourced services include software development, business process outsourcing (BPO), IT support, and fintech solutions.

One of the biggest issues to be aware of when considering Poland as an outsourcing provider is higher costs compared to other Eastern European countries. You can hire even more skilled specialist at a lower price is you choose to outsource from Ukraine, for example.

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Czech Republic

The Czech Republic is renowned for its stable economy, high-quality technical education, and advanced IT services. 

There are over 150,000 IT professionals, with a steady influx of graduates from technical universities.

Its central European location makes it an ideal hub for serving European clients.

IT services from Czech Repulic cost between $35 and $60 per hour.

Western companies can benefit from their software development, R&D, quality assurance, and IT consulting services.

Despite that, there is a smaller talent pool and higher costs compared to other Eastern European countries. So, finding a developer with the required expertise can take a lot of time and effort.

Romania

Romania offers a diverse talent pool with strong skills in software development, engineering, and digital marketing.

There are approximately 120,000 IT professionals in Romania, with many new graduates entering the market each year.

The average hourly rate for IT services in Romania ranges from $30 to $55.

Bucharest, Cluj-Napoca, and Iași are major IT hubs.

Popular services they provide include software development, mobile app development, digital marketing, and engineering services.

Additionally, Romania’s membership in the European Union ensures regulatory alignment with Western Europe, providing a level of trust and security for clients.

However, there might be communication barriers due to varying levels of English proficiency and potential risks for higher cultural differences. 

Best Countries for Offshore Software Development in Asia

The Global Services Location Index (GSLI) ranks countries’ performance in outsourcing business services. It considers costs, skills, business conditions, and digital readiness. In 2021, India ranked the highest. 

Seven of the top ten countries were in Asia-Pacific: India, China, Malaysia, Indonesia, Vietnam, the Philippines, and Thailand.

So, let’s explore what services these countries offer and how you can benefit from them. 

India 

India is particularly known for its IT services and software development. 

Many global companies, such as Microsoft and IBM, have significant operations in India. 

The country graduates many engineers every year, providing a steady supply of skilled workers.

Additionally, the cost of labor in India is much lower than in Western countries, which helps businesses save money while maintaining high quality.

India has over 4 million IT professionals, with thousands of new graduates entering the workforce annually.

The average hourly rate for IT services in India ranges from $15 to $45, making it highly cost-effective.

Popular outsourced services: software development, IT support, business process outsourcing (BPO), and customer service.

However, there are some drawbacks to outsourcing to India. 

One potential issue is communication barriers. While many Indian professionals speak English, differences in accents, cultural nuances, and communication styles can sometimes lead to misunderstandings. 

Another challenge is time zone differences, which, while beneficial for continuous work, can also make real-time collaboration and meetings more difficult. 

Quality control can also be a concern; the level of expertise and quality of work can vary widely between providers, requiring careful selection and management of outsourced teams.

Taiwan

Taiwan is also a strong destination for outsourcing, especially in technology, manufacturing, and semiconductor production. 

The country has a highly skilled workforce with a strong emphasis on education, especially in engineering and technology. This makes Taiwan a hub for high-tech industries and advanced manufacturing.

The average hourly rate for IT services in Taiwan in 2024 ranges between $25 to $40.

The country’s developers are known for their technical skills and innovative approaches. Taiwan also benefits from strong intellectual property laws and a stable business environment, which are crucial for companies looking to protect their innovations and investments.

It’s strategic location in East Asia also provides easy access to other major markets in the region, including China, Japan, and South Korea.

Companies like Apple and Nvidia have significant operations in Taiwan, taking advantage of the country’s advanced technological capabilities and skilled workforce. 

However, you may face issues like limited availability of developers with specific niche skills and potentially higher costs compared to other Asian countries.

Philippines

The IT Outsourcing market in the Philippines is projected to reach US$715.50 million in revenue by 2024. 

This growth is expected to continue with an annual growth rate (CAGR 2024-2029) of 12.39%, resulting in a market volume of US$1,283.00 million by 2029. 

The Philippines excels in customer support and back-office services. 

Filipinos are known for their excellent English skills and friendly attitude, making them ideal for roles in customer service. 

The Philippines continues to be a strategic destination for IT outsourcing, offering a winning combination of talent, cost-effectiveness, and cultural compatibility. 

The average hourly rate for IT services in the Philippines in 2024 ranges from $25 to $40. 

Major companies like American Express and JPMorgan Chase have outsourced their customer support operations to the Philippines because of the high quality of service at a lower cost.

Despite obvious benefits, there are hidden risks to collaborating with developers in the Philippines. 

These are time zone differences that can hinder real-time collaboration and potential quality variability in work due to different educational and training standards.

Latin America

There are over 2000 software development companies in the region, according to Clutch.

Most of them specialize in mobile and web development, as well as consulting and management services. 

Countries like Argentina, Brazil, and Mexico are also excellent choices for outsourcing. 

They offer skilled workforces, cost advantages, and cultural compatibility with North America and Europe. 

Let’s dive in. 

Argentina

Argentina is known for its strong tech talent and innovative approach to software development. 

The country has a growing number of IT professionals who are well-versed in modern programming languages and technologies. 

Argentina has a growing number of IT professionals with strong technical skills.

The average hourly rate for IT services in Argentina ranges from $25 to $50.

Argentina also benefits from a time zone that is close to North America’s, making real-time collaboration easier. 

Companies like Globant and MercadoLibre are examples of successful tech companies that have their roots in Argentina.

However, businesses should be aware of currency fluctuations and economic instability that can affect the cost and reliability of long-term projects.

Brazil

Brazil is one of the largest economies in Latin America, and it has a rapidly growing IT sector. 

Brazil has a substantial pool of IT professionals with diverse technical expertise.

The average hourly rate for IT services in Brazil ranges from $25 to $55.

Popular outsourced services include software development, IT support, digital marketing, and business process outsourcing.

While Portuguese is the primary language, many IT professionals are proficient in English.

Despite that, keep in mind that time zone differences and potential political and economic instability can negatively affect collaboration.

Mexico

The country has a growing IT sector with many skilled developers and engineers. 

Mexico is a major tech market in Latin America, focusing on software development, fintech, and e-commerce. It ranks 12th in the world for innovation and 3rd in Latin America and the Caribbean. 

The average hourly rate for IT services in Mexico in 2024 ranges between $25 to $50. This rate can vary based on the specific type of IT service and the level of expertise of the professionals involved. 

The country supports its tech industry with government programs, tech parks, and startup investments. From 2020 to 2021, Mexico had over 700,000 developers and 3 million STEM professionals, showcasing its large pool of tech talent.

Additionally, the cultural and business practices in Mexico are quite similar to those in the United States, making integration smoother. The cost of labor is also lower, offering economic advantages. 

Companies such as Softtek and Kio Networks showcase Mexico’s strength in IT services and solutions.

Even though it might be tempting to hire developers from Mexico, be aware of potential security concerns and legal issues regarding intellectual property protection.  

How To Choose a Country to Outsource?

Now that we’ve covered some of the best countries for offshore software development let’s see how to choose the best one.

1. Understand Your Needs

First, identify what tasks or projects you want to outsource. 

Different countries excel in different areas.

For example, if you need to build a SaaS solution, countries like Ukraine or Taiwan might be ideal due to their strong tech talent. 

For customer service, the Philippines is a popular choice.

1. Check Time Zones

Consider the time difference between your country and the potential outsourcing destination. 

Closer time zones allow for better real-time communication and collaboration. 

For instance, if you’re in North America, outsourcing to Latin America might be beneficial because of the minimal time difference.

But if you want your business to work round the clock or you are targeting new markets, collaboration with specialists in different time zones is a great choice. 

1. Consider Сultural Differences

Cultural compatibility can impact how smoothly your project runs. 

Look for countries that have similar work ethics and business practices. 

For example, Western businesses often find cultural similarities with Eastern European countries like Poland and Ukraine, which can ease collaboration.

1. Ensure English Level

Effective communication is crucial for outsourcing success.

You want to make sure that the professionals in the country you choose have a good command of English. 

Countries like Ukraine and Poland have high English proficiency. Working with specialists from these countries can reduce misunderstandings and improve project outcomes.

1. Review Similar Business Values

Look for countries that share similar business values and standards. 

This includes work quality, punctuality, and professionalism. 

Countries with a strong emphasis on education and innovation, such as Taiwan, Argentina, or Ukraine, can align well with businesses prioritizing high-quality output.

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Outsourcing Risks and How to Mitigate Them

Outsourcing can offer many benefits, such as cost savings, access to specialized skills, and increased efficiency. 

However, it also comes with several risks that need to be managed. 

Upcity’s 2022 poll of 600 small businesses in the US and Canada found that 23% see high costs as the biggest challenge when working with outsourced teams. 

Other problems include communication difficulties (21%), missed deadlines (14%), and teams not following instructions (12%).

Here are some common outsourcing risks to be aware of and strategies to mitigate them. 

Risk: The quality of work may not meet the required standards.

Mitigation stategies:

• Set clear quality standards and expectations.
• Establish detailed Service Level Agreements (SLAs).
• Conduct regular performance reviews and audits.
• Choose vendors with a proven track record of quality.

Risk: Exposure of sensitive data and intellectual property.

Mitigation strategies:

• Implement robust security protocols and data encryption.
• Conduct thorough vendor background checks.
• Use non-disclosure agreements (NDAs).
• Regularly review and update security policies.

Risk: Miscommunication can lead to misunderstandings and project delays.

Mitigation strategies:

• Establish clear communication channels and protocols.
• Track progress and updates using project management tools.
• Schedule regular meetings and status updates.
• Ensure cultural and language compatibility where possible.

Risk: Unexpected costs can arise, negating financial benefits.

Mitigation strategies:

• Create a detailed contract with all costs outlined.
• Include clauses for additional work and changes in scope.
• Monitor the project budget closely.
• Maintain a contingency fund for unforeseen expenses.

Risk: Differences in business culture and practices can cause friction.

Mitigation strategies:

• Provide cultural training for both in-house and vendor teams.
• Choose vendors with similar cultural and business values where possible.

Risk: Non-compliance with local and international laws can lead to legal issues.

Mitigation strategies:

• Verify the vendor’s compliance with relevant regulations.
• Include compliance requirements in the contract.
• Regularly review and update compliance policies.
• Consult legal experts to understand and mitigate legal risks.

Risk: Vendor actions can impact your company’s reputation.

Mitigation strategies:

• Choose reputable vendors with strong ethical standards.
• Monitor vendor activities and public perception.
• Include reputational risk clauses in contracts.
• Communicate openly with stakeholders about outsourcing practices.

By being aware of these risks and implementing strategies to mitigate them, companies can maximize the benefits of outsourcing while minimizing potential downsides.

Looking for a Reliable Tech Partner? 

Outsourcing has become essential for businesses worldwide, helping them reduce costs, access specialized skills, and improve efficiency.

This guide explores the best countries for outsourcing software development in 2024, focusing on their unique strengths, such as skilled talent, cost efficiency, and strong infrastructure. 

Key destinations include Ukraine, Poland, the Czech Republic, Romania, India, Taiwan, the Philippines, Argentina, Brazil, and Mexico. 

In Eastern and Central Europe, countries like Ukraine and Poland offer highly skilled workforces, cost-efficient services, and high-quality work. For example, with its large pool of IT professionals, Ukraine is known for cost-efficient and high-quality software development.

In Asia, India leads in IT services with a vast number of engineering graduates, ensuring a steady supply of skilled workers at lower costs. The Philippines excels in customer support and back-office services, with strong English proficiency and a cost-effective labor market.

Latin America also presents viable options, with countries like Argentina and Mexico offering skilled tech professionals, cultural compatibility, and cost benefits. 

Choosing the best country to outsource software development can be intimidating. 

But don’t worry, we’ve got you covered! At SpdLoad, we specialize in software development outsourcing. 

Our clients appreciate the expertise, quality, and transparency of our services. Feel free to check out our reviews on Clutch.

Ready to collaborate? Contact us today to explore how we can drive your tech projects forward!