#Entrepreneurship #Tech | 15 min read | Updated: 8/16/2022

Top 10 Countries To Outsource Software Development in 2022 [Based on Data and Rates]

Updated: 8/16/2022
, Project Lead

Companies worldwide need highly competent specialists that are ready to apply innovative technologies. Finding talents is challenging, so the demand for outsourcing has considerably increased. That’s why in 2022, the best countries to outsource software development are the ones to keep a close eye on.

By 2025, the IT outsourcing market will reach $397.6 Billion worldwide.

Spending on IT global services has grown up to $1.2 Trillion in 2021, with a growth of 9.8% from the previous year.

When aiming to optimize the development budget in 2022 and beyond, it is not even a question to outsource or not.

The right question is, which countries can help outsource your project development with profit?

Below you will find the answer to all questions about software development outsourcing.

What Does It Mean To Outsource Software Development?

Software Outsourcing is the practice of cooperating with a third-party company, i.e. outsourcing development agency, that manages the whole product software development process or specific tasks involved in software product development.

Why Choose Outsourcing Software Development?

In the outsourcing cooperation model, each entrepreneur can find something attractive. A.T Kearney’s surveys analyzed client engagements using outsourcing business partners over the past five years. The results show that outsourcing is beneficial for:

  • Cost-effectiveness (35%)
  • Skills and talents availability (25%)
  • Business environment (25%)
  • Digital resonance and speed (15%)
outsource attractiveness

Source: Statista

From 2020 software development cost rates have been growing since the COVID-19 pandemic and great developers’ competition on the market.

Software development companies that previously denied using outsourcing in the future have changed their minds.

Cost-Effectiveness

The cost of offshore software development is the first motivation to choose outsourcing software development.

Over 70% of companies save their development cost using outsourcing. 

Software development isn’t a cheap process. So every entrepreneur wants to spend less money and effort on their future product. Outsourcing allows entrepreneurs to choose the most favorable software rates category without reducing the value of tech expertise.

The price diversity of outsourcing depends on:

  • standard of living in the country
  • education
  • expertise of specialists

In Eastern and Central Europe, software development is a fast-growing industry with an intensely competitive environment.

Worldwide, companies have a lot of chances to find talent and rare experts at an affordable price cheaper than in the USA or Canada, where the devs cost rates are much higher. 

Business Skills and Talents Availability

The second reason to externalize your software project is flexibility in finding the best outsourcing talents with advanced business skills. 

46% of companies say outsourcing lets them access skill sets that aren’t available in-house. 

It’s not that remote developers guarantee the company better expertise. But offshore development provides a much bigger pool of talents for companies. 

When a company is looking for in-house devs, it is restricted by knowledge and expertise and by location. And the circle of developers narrows down even more.

For example, many tech universities and quality courses with an extensive talent pool are in Eastern Europe. Devs with a high level of English want to reach professional heights. So, the dream of finding a qualified developers team is not a mystery anymore.

When outsourcing your software development project, the company has the whole world to choose from:

  • any technology
  • any industry expertise
  • almost any business skills

Business Environment

The software business environment consists of:

  • individuals
  • entities
  • other factors that the outsourcing development agency may control.

The business environment can affect a company’s quality, speed, and scale.

Companies claim that the 15% effectiveness of their product was influenced by a favorable business environment and agility matter. 

In Europe, for example, there is an active and modern business environment with the best education that can improve, solve complex problems and follow the trends of the 21st century. No wonder such a location is ahead of the best countries to outsource software development worldwide.

Digital Resonance and Speed

Digital resonance is a new factor influencing outsourcing activities around the globe. Worldwide businesses want to offshore because of automation solutions that provide the digital resonance and rapid development of their projects.

Because of the outsourcing digital resonance, no need to recruit saves good money and a great deal of time.

Fast software development speed and the ability to go out in the market, bypassing competitors were helpful for over 20% of companies.

In most cases, offshore agencies have all the recruiting done and only need to form a developers’ team according to the project requirements and quality of devs. All software companies need is to represent the idea, discuss the tech stack and develop a scope of work. 

As it may, outsourcing project speed in the modern software world is a critical factor.

Top 10 Outsourcing Countries Worldwide

The most popular locations among different countries for offshore software development worldwide are Central and Eastern Europe, India, China, and South America.

CountryAverage Cost Rates by Hour
India$25-50
Ukraine$30-55
China$35-55
Poland$50-100
Philippines$20-49
Brazil$15-50
Romania$25-49
Taiwan$30-50
Czech Republic$25-55
Argentina$30-55

Source: CleverRoad, Daxx, Sloboda Studio, Upwork, IT Work, Clutch

Eastern European Countries

What does Eastern Europe mean for outsourcing? According to A.T. Kearney’s report, the software development industry in East Europe stands for high-quality and better education, reasonable prices, great communication culture, a high level of spoken English, and convenient time zones.

At Sloboda Studio, we believe that the best offshore software development region is East Europe. What’s more – Ukraine is one of the best countries to outsource software development. This is not just a matter of words. The following facts are clear and point to the appropriateness of Ukraine.

Pros:

  • Affordable outsourcing prices. According to UpWork.com, Eastern European rates vary from $25 to $50/hour.
  • Large talent pool. At the same time, local software developers often have a university technical education: for example, in Ukraine alone, there are 16,000 technical graduates per annum.

Cons:

  • Different time zones with a few hours of overlap between Europe and America. Though this isn’t always a pitfall: with a head office somewhere in North America, you can wake up by the end of European day so your team can present you with the completed work.
  • Lack of company communication. Yes, it is much easier to communicate (if English is ok) with the your-time-zone software team. However, with all those calls, video chats, and daily checks, your outsourcing collaboration can remain clear and up-to-date.

Poland

Same as Ukraine, Poland is located in Central Europe, but historically has been considered a part of “Eastern Europe”.

According to a recent report, Poland is a Ukraine competitor with more than 100 companies with 255 thousand software team specialists with great education.

Last year’s Kearney Global Services Location Index research rated Poland as the twelfth most attractive outsourcing location. Poland offers a large pool of software developers and is budget-friendly at the same time.

  • Prices: According to Clutch and Upwork, offshore software development rates in Poland vary between $25 and $100 per hour. The lowest quality cost like $25-50 can be found in smaller cities like Katowice. The highest ones are located in large tech outsourcing centers in Poland such as Warsaw and Krakow.
  • Popular programming languages: Java, SQL, Python, C++
  • Top Tech Cities: Warsaw, Kraków, Wroclaw, Lodz
Poland like the best outsourcing choice

Ukraine

Ukraine is the largest all-European country and the 44th largest country in the world. Nearly 200,000 specialists in Ukraine serve thousands of companies as the demand for an information software technologies workforce is constantly growing on the global market.

Software development outsourcing in Ukraine is something that can benefit your company project.

In 2020, Ukraine demonstrated a 20% information technology growth, and the country is planning to triple the result by 2025.

  • The information technology industry is growing by up to 30,000 specialists in Ukraine per year.
  • The USSR historically gave Ukraine a strong engineering, physics, and maths base.
  • After the fall of the USSR, these specialists started the first software development companies in Ukraine.

All these facts make Ukraine a great solution when you need to get great expertise at budget costs.

  • Prices: According to Clutch, you can find budget hourly rates in Ukraine, where the rates are $25-100 per hour depending on your developers’ seniority. As for Upwork, the hourly rates for the agencies’ developers in Ukraine are generally $20-40.
  • Popular programming languages: Ruby, Java, Python
  • Top Tech Cities: Kyiv, Kharkiv, Dnipro, Lviv, Odessa
the best countries to outsource software development: Ukraine

Many companies that try to offshore in Ukraine say that the country has a mix of three aspects for worldwide companies:

  • World-class developers with over 200,000 people in Ukraine on board
  • Reasonably quality priced labor in comparison with the USA and Western Europe
  • Great end software products such as Grammarly and Jooble in Ukraine
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Czech Republic

The Czech Republic in 2022 is one of the most exciting outsourcing locations in the world. Taxes are relatively low, about 19%, allowing worldwide companies to invest in the information technology sector safely. Many courses and highter education institutions support their student to find better jobs after graduation. Annually, there are about 150 thousand specialists in software technologies in the country, with the top location in Brno. 

This European country is the creator of the Google analog – Seznam.cz and popular anti-virus software system Avast, which has strong cooperation with Microsoft Windows, Android, and iOS. Czech developers are also working on Hidden & Dangerous, Euro Truck Simulator, ARMA: Armed Assault. 

  • Prices: $25-50 hourly cost rates for web development according to Clutch and SalaryExplorer
  • Popular programming languages: Java, PHP, C, C++, C#, Python, Ruby on Rails, and Swift
  • Cities: Praga, Brno

Romania

Along with Ukraine, Romania became an attractive outsourcing place in 2022. Romania has an active information technology industry growth of 14.3%, which is expected to double by 2025. This quality growth is supported by a well-coordinated education system. This year we can see 7,500 new software developers graduate.

In Romania, there is the first high-tech software unicorn UiPath and lots of offices of global software companies such as Microsoft, IBM, HP, Oracle, Intel, as well as Luxoft, and Amazon. 

  • Prices: $25-49 cost rate according to Clutch and Upwork.
  • Popular programming languages: JavaScript, NodeJS, .NET, C#, ReactJS, PHP
  • Top Tech Cities: Cluj-Napoca, Iasi, Bucharest, Sibiu
best countries to outsource software development: Romania

Asian Countries

According to A.T. Kearney’s 2017 Global Services Location Index report, Asian countries are among the top 10 outsourcing countries in the world that have completed work including India, China, and Taiwan.

With up to 200 software companies and around one million employees, the Asian region is great for outsourcing software projects.

Pros:

  • A huge pool of software developers (India is on top) and the lowest market prices.
  • Currency exchange rate. The Indian rupee has devalued the American dollar over the past few years. Such a tendency is great for company vendors who make it easy to sign team contracts for several years.

Cons:

  • Lack of security. India lacks state breach notification work and team requirements, data protection, and privacy legislation, such as health insurance.
  • Lack of education. There are lots of self-taught people who study independently without having funds for education.

India 

Nowadays, India is considered one of the best countries to outsource software development in the world. India’s population is equivalent to 17.7% of the total world population. No wonder, it is one of the biggest outsourcing software development locations for many companies. According to the latest research, the software industry in India is growing by 60% every year.

The software development market in India has grown by more than 30% over the last thirty years. Now it is exporting its software services to up to 100 countries. According to the Software Sector Analysis Report, developers from India are technical graduates of high quality. The software market in India is 5 times cheaper than, for example, North American countries.

  • Prices: Hourly rates are about $25 according to Clutch in India. On Upwork, the hourly rates for web development companies in India are generally $10-15 cost rate per hour.
  • Popular programming languages: Java, C++, Python
  • Top Tech Cities: Bangalore, Chennai, Mumbai, Kolkata
the best countries to outsource software development: India

China

Along with India, China is the top-ranked offshoring companies destination. It has budget-friendly prices and qualified software developers with good English.

the best countries to outsource: China

Taiwan

Together with India, Taiwan is among Asia’s most promising outsourcing countries in 2022. Considered one of the four Asian Tigers, Taiwan is also positioned as one of the top 50 super cities for digital innovation, enterprise success, and team outsourcing solutions.

  • Prices: $25-49 according to Clutch and Upwork.
  • Popular programming languages: Java, PHP, Ruby on Rails, ASP.NET Core
  • Top Tech Cities: Taipei
best countries to outsource software development: taiwan

Philippines

The Philippines is great because of its costs, market competitiveness, and good software background. According to the Philippines IT Market report, software development in the Philippines has become one of the more established sub-sectors of the country’s information technologies industry.

  • Prices: $25-49 according to Clutch. On Upwork, average hourly rates vary from $15 to $35 cost per hour.
  • Popular programming languages: PHP, ASP.NET, Ruby on Rails, ASP.NET Core
  • Top Tech Cities: Manila
the best countries to outsource software development: The Philippines

Latin America

As an A.T. Kearney Global Services Location Index study, Latin America is top 5 of the best countries to outsource software development due to its destination. In general, Latin destinations are often chosen by North American countries because of

  • relatively low developers’ rates
  • minor cultural differences (good English, too)
  • convenient working team schedules

Pros:

  • For US vendors, Latin America means small time zone differences, so it is possible for team companies to work in real-time;
  • Lower rates than in most developed countries, including Germany, Norway, Sweden, the UK, and North America: according to UpWork, Latin America’s agencies rate hourly from $25 to $100.
  • Lower cultural gap between North America and Europe compared to Asia.

Cons:

  • Great workday mismatches with European Countries.
  • Higher prices compared to usual outsourcing software development rates

Argentina

Argentina often ranks as one of the most educated countries in Latin America. The country takes 21st place in the