10 Best Locations & Companies for Offshore Software Development

The software development industry is booming. It's no secret that companies are looking for the best locations and providers for offshore software development as there are many benefits to software developers from offshore locations. 

For one thing, you gain access to a much larger talent pool, which allows you to find the best and most qualified individuals for your project. Additionally, offshore developers typically have more experience and expertise with specific programming languages and technologies. 

But the question is, what makes a good offshore software development location? And more importantly, how do you find the right provider who will work well with your existing team? 

An important consideration for many businesses is the cost; if you are located in a country with high labor costs, hiring offshore can often be more affordable than finding candidates locally.

There are numerous locations around the world where you can find great offshore software developers. 

Some of the best countries for this include India, Taiwan, Poland, Brazil, and Argentina. Each of these regions has its own strengths in terms of programming skills and technological expertise. 

Additionally, they offer various price points depending on what type of developer you need and what level of experience you require. Ultimately, when done correctly, hiring offshore software developers can open up a world of possibilities for your business or organization!

In this article, we'll cover the difference between offshore and nearshore development, things to consider when hiring offshore developers, as well as top 10 countries and top 10 companies that provide offshore development services.

Nearshore vs Offshore

Before we dive into the details of how to hire and where to find offshore software development teams, let's talk about how offshore development is different from nearshore development services, another common form of software development outsourcing.

As the name suggests, the most obvious distinction is where the outsourced development service is provided. Offshore software development outsourcing is the practice of hiring a company or individuals in a faraway country to handle all or part of the software development process. 

Nearshore software development services, on the other hand, are provided by companies or individuals who are based in a neighboring country. 

Let's look at the pros and cons of both.

🎯 Offshore software development

✅ Pros:

Offshore development breaks down the geographic barriers of hiring software development talent, which means you get to tap into a global talent pool and find talent in countries with a lower cost of living. 

If you want to save on development costs without sacrificing quality, offshore development can be a cost-effective way to get the job done.

❌ Cons:

The main downside of offshore development is the time difference. If you're working with a team in a country that is far away, it can be difficult to coordinate schedules and stay on the same page. 

Additionally, language barriers can make communication more difficult, leading to potential misunderstandings or miscommunications.

🎯 Nearshore software development

✅ Pros:

Since nearshore software development services are provided in a country close to where you are located, there is typically less of a time difference to contend with. 

It would make frequent physical visits possible, which can be beneficial for building trust and maintaining transparency between you and the team. You'll also likely have a smoother and more efficient communication during the software development process.

❌ Cons:

The main downside of nearshore development is that it may be more expensive than offshore development due to the convenience factor, depending on the country you're working with. Additionally, if you're looking for developers with specific expertise or experience, you may have a limited pool to choose from, compared to offshore development.

What to Consider When Hiring Offshore Development Companies

To find out whether offshore software development is the right outsourcing model for your company, you must carefully consider the following 5 factors.

✅ Location

Depending on your company's needs, you'll want to consider which country or region offers the best talent for your project. You'll also want to take into account the time difference, language barriers, local laws, and cultural differences that may impact your software development project.

✅ Cost

Aside from the hourly rates, you might also want to consider the cost of living in the country you're outsourcing to. 

In general, countries with a lower cost of living will also have lower hourly rates for developers, which means that if two developers from different countries have the same hourly rates, it is likely that the one from the country with the lower cost of living will be able to provide more value for your money.

✅ Skills and Expertise

Before hiring offshore software developers, consider what skills and expertise are required for your project.

You might also want to design a thorough interview process to test for the required skills and expertise. Since you won't be able to manage offshore developers as closely, soft skills such as good communication, problem-solving, and time management skills are essential.

✅ Security Issues

When dealing with sensitive data, you'll want to make sure that your chosen offshore development team has strict security protocols in place. 

You should also consider signing a Non-Disclosure Agreement (NDA) to protect your company's intellectual property.

✅ Management and Communication Issues

One of the challenges of working with an offshore team is managing and communicating effectively. Make sure to set clear expectations from the start and establish a good communication channel. 

You might also want to consider hiring a project manager who is familiar with offshore development processes and local laws to act as a liaison between you and your team.

Best Software Outsourcing Destinations

📍 Taiwan

✅ Pros: 

Well known for its democracy and political stability, Taiwan is an excellent destination for companies looking for reliable and high-quality offshore software development teams. With affordable higher education, 

Taiwan has a large pool of skilled developers to choose from. There are also several science and technology parks in Taiwan that are home to many tech companies, providing a good environment for software development.

❌ Cons: 

The main downside of outsourcing software development to Taiwan is the language barrier and time zone difference. While most developers in Taiwan achieve professional proficiency in English, they might not speak English as fluently as native speakers. 

Additionally, the time difference between Taiwan and most Western countries is 12 hours, which can make communication and coordination a challenge.

📍 India

✅ Pros: 

India is one of the most popular destinations for offshore software development due to its large pool of skilled and English-speaking developers. Apart from that, according to Numbeo, India has an average cost of living that is 64% lower than in the US, which means that companies can get more value for their money when outsourcing to India.

❌ Cons: 

One of the challenges of outsourcing to India is the time difference. With an average time difference of nine hours between India and the US, coordination and communication can be a challenge. 

Additionally, developers in India may not be familiar with Western business culture, which can lead to misunderstandings.

📍 Indonesia

✅ Pros: 

Indonesia is another good destination for companies looking for affordable offshore software developers. According to Payscale, the average salary for developers in Indonesia is $8400, which is about 10% of the US average. This means that with the same amount of money, you can get almost 10 times as much work done in Indonesia.

❌ Cons: 

Indonesia is one of the most culturally diverse countries in the world, with over 700 languages spoken. While Indonesia software developers are certainly familiar with technical terms of their expertise and have no problem communicating in a professional setting in English, English is not the language primarily used in academia/most industries. This can make communications somewhat difficult for companies looking to outsource software development.

📍 Vietnam

✅ Pros: 

Vietnam is also a good country for companies looking for offshore software development teams. Vietnam has a growing IT infrastructure and education system that grows IT talent and professionals.

Additionally, the average salary for developers in Vietnam is around USD $2000 per year, according to data from Glassdoor.

❌ Cons: 

One downside of outsourcing to Vietnam is that the country is going through a period of political and economic instability. 

In 2016, Vietnam experienced its worst economic downturn since the global financial crisis, and the country is still recovering.

📍 Philippines

✅ Pros: 

The Philippines is a good location for companies looking for offshore software developers who are familiar with Western culture. Historically, the Philippines has a strong tie with the US so it comes as no surprise that English is one of the official languages in the Philippines, making communication much easier.

❌ Cons: 

Even today, the internet in the Philippines can be unstable and slow. According to this article titled "Why Internet Speeds in the Philippines Are So Slow" , the Philippines ranks 100th globally with its internet speed, far behind most other countries on the list. 

This can be a risk factor when outsourcing software development to the Philippines as a slow internet connection can have a huge impact on the productivity of the software development process.

📍 Bangladesh

✅ Pros: 

Bengali developers are readily accessible on some of the most popular outsourcing platforms such as Upwork and Fiverr. The rates are quite affordable and  the quality of work is generally good, thanks to the popularity of software development outsourcing and the expanding IT industry in the country.

❌ Cons: 

Language may be a barrier as not all Bengali developers are fluent in English. In addition, the time difference between Bangladesh and some Western countries can be as much as 12 hours, which can make coordination and communication difficult.

📍 Poland

✅ Pros: 

A long-time top destination of IT outsourcing in Central Europe, Poland boasts a large and experienced software development workforce. 

Additionally, the average cost of living in Poland is significantly lower than in Western European countries, making it an attractive location for companies looking to get more value for their money in the European Union.

❌ Cons: 

Due to its popularity, hourly rates for software developers may be higher than that of India, Vietnam and other Asian countries.

📍 Czech Republic

✅ Pros: 

With one of the lowest costs of living in Europe, the Czech Republic is an excellent destination for companies looking for affordable offshore software developers. 

Many Czech developers are also multilingual and speak Russian, German, or Polish, which can be helpful for international teams or countries looking to expand into other European markets.

❌ Cons: 

The Czech Republic has a smaller pool of developers to choose from than other outsourcing destinations, primarily because of its small population.

📍 Argentina

✅ Pros: 

Located in South America, Argentina is a good location for companies looking for Spanish-speaking or Italian-speaking offshore software developers. 

If you’re located in the US or Canada, the time difference is not as significant as it is with other outsourcing destinations, such as India, which makes co-working and communication much easier.

❌ Cons: 

English is not as widely spoken in Argentina as it is in other outsourcing destinations. Research shows that only around 15% of people can speak English fluently in Argentina. This can make communication difficult for companies that don't speak Spanish or Italian, the country's second most spoken language.

📍 Brazil

✅ Pros: 

Brazil is another country to consider for companies looking for offshore software or nearshore developers. The country has a large and experienced workforce, with over two million people employed in the IT industry. Time zone difference is not a big issue if you're hiring from the US or Canada, as Brazil is only an hour ahead of the US.

❌ Cons: 

The cost of living in Brazil can be expensive, especially in big cities such as Sao Paulo. In addition, the Brazilian government has been known to impose strict regulations on IT companies, which can impact the way they operate.

Top 10 Offshore Development Companies

1. Cake

Since its launch as a resume builder, Cake has developed a talent pool of nearly 3 million tech specialists and provided recruitment solutions to thousands of corporations. Clients include leading companies in various industries, such as Google, IBM, MediaTek, TSMC, L’Oréal, McKinsey, etc.

2. Eleks

Based in Tallinn, Estonia, Eleks provides software development and consultancy services that help businesses increase efficiency.

3. Developex

Developex is an offshore software outsourcing company that provides dedicated development teams & IT staff augmentation and has worked with big companies such as Logitech, Intel and Dell.

4. Euvic

Euvic provides services throughout the entire software development lifecycle, including custom software development and implementation services. It is based in Poland. If you’re looking for an offshore software outsourcing company in central Europe, this may be a good option.

5. Experion

Experion Technologies is a 14-year-old IT solutions & services company with offices/direct presence in the United States, the United Kingdom, Germany, Switzerland, Netherlands, Middle East, India, Australia, and New Zealand.

6. PixelCrayons

PixelCrayons is an award-winning digital consulting and offshore software outsourcing company offering end-to-end software solutions to Enterprises, ISVs, digital agencies and startups based in India.

7. Saigon Technology

Saigon Technology is a Vietnam-based agile software outsourcing company in Ho Chi Minh and Da Nang Cities, Vietnam.

8. Arcanys

Arcanys is an offshore software development company based in the Philippines and has worked with clients such as General Electric, Novartis and the Bühler Group.

9. Glorium Technologies

Glorium Technologies is a full-cycle app & offshore software development company based in Ukraine with 11 years of experience in the healthcare and real estate niche.

10. Intetics

Intectics is an award-winning offshore software development company providing services ranging from custom software development, product quality assessment and remote in-sourcing.

Cake has developed a large tech talent pool and been trusted by more than 5,000 corporations. We can help you hire the right offshore or remote development team, offering you better flexibility and efficiency in recruitment.

--- Originally written by Candy Ho ---

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