Best Offshore Software Development Countries – A Guide

Last Updated
February 22, 2024
Best Offshore Software Development Countries – A  Guide

Today, IT outsourcing or offshoring is a huge trend. The global market stood at $639.59 billion in 2022 and is expected to grow at a CAGR of 8% from 2023 to 2030. Most industries today have realized the potential of software development for their business.

As most businesses have gone online, no one can exist in a highly competitive market, without applications and websites of their own. However, all businesses do not have the necessary resources and infrastructure to develop software on their own. 

This is where offshore software development enters the scene. If you are keen on making your software development dream a reality, you can also give it a thought. There are quite a few excellent places, where you can lay your hands on the best resources and infrastructure. 

Read about the best offshore software development countries here, and learn about the advantages of each place. But before that, you should read the reasons for outsourcing. 

Why Should You Outsource Software Development Projects?

  • You will get ready resources, who are experts in different IT/software technologies. So, you get to save costs on hiring and training new staff internally. 
  • You get domain knowledge that drives innovation and success for your company. 
  • The cost of development is lower than what it would have been if you developed in-house. 
  • You do not have to follow compliances and local regulations, as all the tasks are handled by the vendor. 
  • It increases the flexibility of the project and increases its scalability. 
  • You will get access to a managed team, at your vendor’s place. 
  • Thus, you can focus on the core functionalities and strategic tasks in your business.

Top Best Offshore Software Development Countries 

  • India 
  • Mexico
  • Malaysia
  • Philippines
  • Ukraine
  • Poland
  • Hungary 

India 

India has the highest market share in the global services outsourcing industry, which stands somewhere around 50% or above. It is the highest in the world. India also leads as a base for software developers. Thus, India is the preferred country for offshoring IT and software projects, from across the globe. Learn in detail why India is the No.1 offshore software development country today. 

Huge IT Human Resources 

There are more than 1.5 million engineers in India. Almost, 0.5 million software engineers are employed in India, at present. This is a huge pool of candidates for foreign companies. The number of STEM (science, technology, engineering and mathematics) graduates in India is around 2.6 million. You can get managed teams in India, so that is a huge boon again. 

Cost factor 

Software development cost in India is very cheap, as compared to other countries. However, quality is the best in India. So, that is what attracts most foreign companies. Hourly rates for software development in India starts around $12 per hour. Distribution of costs for any project is easier, as the currency rate difference is quite high, when compared to western countries. This puts the outsourcing company on a profitable platform, as well. In the long run, both the parent company and the outsourcing company are in a win-win situation. 

Strong Communication Skills 

A huge chunk of the Indian population speaks English, which is the universal language of communication. Thus, it is very easy for western countries to communicate with Indian staff. India was also ranked 2nd on the EF English Proficiency Index, which makes it the preferred choice again. The kind of expertise Indians have over the language is truly commendable and desirable in the competitive business world. 

Compatible Time Difference 

India is again in a competitive position, as the time zone difference with other countries is quite low, as compared to others. Thus, Indian companies can provide 24x7 support to the western countries. Meetings and collaborations also happen unhindered, as the time zone difference is low. 

Scalability 

India’s huge talent pool allows easy scalability. You can easily add up or cut down on team size, according to business needs, if you outsource to India. 

Mexico 

Many Silicon Valley companies have started focussing on Latin America, especially Mexico, as it is quite close to the US. It is also one of the first countries to regulate FinTech software development. It is slowly emerging as an offshore software development country of repute. 

Geographical Location 

The reason why many US firms are focussing on Mexico, is due to its physical proximity to the US. Many outsourcing companies in Mexico often call themselves ‘nearshore assistants’ for this very reason. Moreover, the client company representatives can travel to Mexico easily, which facilitates development. 

Great Language Skills 

Most Mexicans working in the IT and software sector have B2 English language skills. This is much higher than many other outsourcing destinations. 

Conducive Business Environment 

Mexico has a very good infrastructure, which makes it desirable. Moreover, the government policies are also quite favourable for the tech industry. This leads to more jobs in the tech education sector. The country also has an impressive legislation in place which offers protection for IP rights. 

Sufficiently Large Tech Pool 

You can also get access to a huge candidate pool of software developers. The teams are multi-talented with expertise in different domains such as software, quality, interface designing, and project management. 

Affordability 

The hourly rate of software engineers in Mexico is twice lower than the US rate. Moreover, the taxes are low, and so is the cost of living. 

Malaysia

Malaysia has also emerged as one of the hubs for technology, logistics, and energy outsourcing. It is making its mark in the Asia-Pacific region. You should know about the reasons why businesses are outsourcing their projects to Malaysia. 

Higher Cost Savings 

Most Malaysian cities have a relatively lower cost of living. Thus, the salaries which one has to pay are lower than most European and US cities. The average salary in Malaysia is $19,004, compared to $94,700 in the US. Thus, the US or European businesses can save huge costs when they outsource work to Malaysia. 

Skilled Talent Pool 

Malaysia boasts of a highly talented professional pool of candidates in domains like IT, finance, and electronics. Malaysia experienced this surge in talent, when big companies like AMD and Intel set shop there. It created a huge demand for a skilled workforce. Governmental reforms in the technological field and upskilling opportunities has further boosted the standards in Malaysia. 

English Proficiency 

The Malaysian government has taken steps to improve the English-speaking skills of the locals. It launched an English Language Education Reform which is a 10-year plan that aims to improve English learning and teaching. Thus, Malaysia ranks at No.3, on the English Proficiency Index. 

Government Support and Friendly Policies 

The Malaysian government has pro-business policies, which has been playing a vital role in the upliftment of the country, on the global platform. 

Digital Resources 

Malaysia has over the years, improved reasonably on its digital and technological prowess. It has come up with special zones like cyber centres, cyber parks, tech parks, and more, which create the path for further growth in the sphere of business. Cyberjaya is a hitech city, which is located near Kuala Lumpur, and is now hailed as the tech hub of Malaysia. 

Philippines

The Philippines is one of the most promising locations for software outsourcing development today. Recently, the country has made it to the top 50 digital nations. You will be bewildered to hear that almost 1 million people work in the IT sector in the country. You should learn about the reasons why the country has turned out to be one of the top hobs for offshore software project development. 

Low Cost Of Labour 

You can find cheap labour, in the technical and software field in the country. Moreover, the cost of living is also low like a few other Southeast Asian nations. 

English Proficiency 

You will be stunned to know that almost 80% of Filipino developers know English well. This makes communication extremely easy. 

Good Understanding Of Western Culture 

Filipino developers are well-conversant with the culture of the west. Thus, you can expect greater cooperation while working with them. 

Good Governmental Support 

The government also supports the western companies in terms of relaxed rules and regulations. This attitude of the government has led to the advancement of the Filipino technological sector and outsourcing industry. 

Ukraine

Eastern Europe is slowly emerging as a preferred place for offshore software development. There are over 15,000 registered software outsourcing companies which are mostly well-acquainted with western culture. Some of the top projects handled by the outsourcing companies in Ukraine are mathematics, distributed systems, and security. Let us delve into the reasons specifically, which makes it one of the best destinations for offshore software development. 

Large Pool Of Specialists 

There are over 250,000 IT specialists in Ukraine which is a huge jump from last year. Thus, you can very well understand that the local IT industry is developing at breakneck speed. 

Good Level Of Expertise 

The developers in the country have good technical background and skills. It is primarily due to the detailed and comprehensive education offered by the tech schools and colleges in the country. Moreover, those individuals working in the IT sector always go for upgrades and advanced training, to stay up-to-date with international market requirements. 

Affordability 

The salaries are quite reasonable, as compared to companies in the US, Canada, and UK. The average hourly rate for developers is around $15 with taxes, which is quite competitive. 

Supportive Local Laws 

This is one of the main factors that has led to the huge growth in the sector. The companies that register themselves in Ukraine, have good tax privileges. 

Flexible Working Culture 

This is another driver for growth in the offshoring market in Ukraine. Work flow is extremely streamlined in the country, which is a great attraction for firms in the US, UK, and Canada. 

Compatible Time Zone 

Its time zone is also quite optimal. Thus, the teams from the outsourcing and outsourced destinations can collaborate and have meetings often. 

Poland

If you are looking to outsource your software development project, then Poland is certainly a good option. It is an Eastern European country, which is a sphere that is fast gaining recognition in the IT and software development field. If you are a small or medium-sized enterprise, looking for software development, you can give Polish companies a chance. 

Strong Development Knowledge 

Polish developers worldwide are known for their technical knowledge and skills. Moreover, they rank at No. 5 in the Top Coders ranking. The developers also rank high on problem solving, abstract thinking, and teamwork parameters. These are areas that can lead to successful results in the software development realm. 

Strong Educational Background 

A recent study has revealed that almost 40% of Polish people have university degrees, in the age group of 25-34 years. The government also lays strong emphasis on STEM education. This translates into competency and makes it easy for companies to source excellent developers for their projects. 

Cutting-Edge Technology 

The country uses the latest technology in the domain. Moreover, the companies are open to experimentation with new and updated tools. Additionally, quality checks are conducted at every stage of development, which helps to achieve great success. 

End-to-End Development Services 

The software developers in Poland are experts in most areas of software development. They can help you in product development, design, and web app development. From brainstorming to UX/UI design, they are thorough professionals. Many software services companies can also provide you with strategy consulting, digital services, and AI-related services, too. 

Smart and Effective Workforce 

The teams are extremely agile, and closely align their goals with those of the client’s. This leads to successful results. The developers have the expertise to work on multiple projects as well. 

Compatible Time Difference 

The time zone difference is approximately 9 hours. Thus, you can have regular meetings, and discuss important things, without wreaking havoc in the work-life balance area. 

Hungary 

Hungary is famous worldwide due to its EU/NATO membership. Moreover, it offers the best software offshore development services. You should read about some of the top reasons here. 

Low Costs 

Most companies choose outsourcing to reduce costs. Hungary offers that advantage. The rate of hiring competitive staff is almost 30-50% lower than in the US, UK, and Western Europe. 

Development Skills 

The country has a deep-rooted history in maths and science, with legacies of people like John von Neumann, who was a pioneer in the early development of computers, and Henri Coandă, who was the inventor of the jet engine. Many students choose renowned institutes in Budapest in Hungary, for technical education. 

Cultural Fit 

The culture, values, lifestyle and traditions in Central Europe is similar to the US and Western Europe. Moreover, over 60% of the population speak English. This facilitates work and communication. The population also speaks German, French, and Italian, as well. 

Easy Access 

If you want to have a meeting, you can travel at cost-effective rates in a few hours. 

Compatible Time Zones 

The time zone difference is around three hours or less, considering you are from the US or Europe. So, that is a huge boon, as it leads to less stress on the employees. 

Thus, you have a fair idea of which ones are the best countries for offshore software development. 

Finally – Which Country Should You Choose For Outsourcing?

So, if you were to choose one from the above seven top destinations, which one would you choose? Our guess is India. You must choose India for your software development projects, due to the below mentioned factors.

  • Trained Workforce 
  • Low Costs
  • Friendly Government Policies
  • Superior Technology
  • English Proficiency
  • Great Customer Support
  • Compatibility in Time Zones

Conclusion 

The main aim for companies which outsource, is to save on costs and still get great quality. With India’s cheap labour market, but learned and intelligent workforce, you are definitely on the favourable side. You can outsource software development projects, from design stage to deployment stage with complete ease, and also get satisfaction. So, go for it today!