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Top Countries to Offshore Software Development in Europe

6/09/2023
(13 min)
Helen Petrashchuk
Managing Director
Blog_Top Countries to Offshore Software Development in Europe

When lacking the necessary tech stack and expertise in-house for building platforms or apps, there are two main options: investing in new staff and training or considering offshore software development. 

Eastern Europe stands out as an ideal destination for offshore software development. The region boasts top-tier tech educational institutions, a vast talent pool covering various programming technologies, and a favorable legal and economic environment for such partnerships.

This article provides a detailed overview of European offshoring, particularly focusing on Eastern Europe’s software development market.

Additionally, it offers insights into financial software development, including a comparison of offshore software development rates and a breakdown of software developers by country.

 

Offshore Centers Overview

So, what is an offshore software development company? And what is offshore software development as such? 

As the name suggests, “offshore” means beyond the boundaries of your jurisdiction, though in most cases, it’s not that far from your headquarters. Companies may choose between finding an offshore partner with a team of developers or setting up their own offshore development center and hiring staff locally from scratch.

How offshoring works

The main principle of offshore software application development is to locate a company not far from your head office and set up a close partnership with it on a staff augmentation or dedicated team basis, or build an offshore software development center on your own. 

This way, you get a ready-made team with appropriately qualified staff to do the development work, complete your company’s software needs, and accelerate your business growth. At the same time, you spend less money on the development team’s maintenance, hardware, software, and staffing needs.

 

Overview of Central and Eastern Europe (CEE) Offshore Market 

The Eastern European offshore market has become prominent in recent years, with developed Western countries experiencing unprecedented talent shortages and urged to look for skilled programmers elsewhere. 

Around 40 million software development jobs remain unfulfilled globally because of a lack of tech talent, causing development delays and bottlenecks and urging companies to consider offshoring and nearshoring.

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Amid this intensifying skill shortage, software development companies in Central and Eastern Europe are gaining momentum because:

  • Over 1.3 million highly trained developers with a versatile tech stack are available in the CEE region. 
  • Companies can save up to 40% of development costs on CEE offshoring. 
  • The CEE market context doesn’t differ from the EU or the USA too profoundly, with similar business models, staff mindset, and taxation observed across the region. 
  • The quality of development services is on par with that of the most prestigious and high-cost Western software development hubs.  

So, you can enjoy many benefits of offshore software development when choosing a CEE agency for collaboration. This way, you get access to a broad talent pool with programmers full of smart software ideas and ready to implement your boldest and most innovative projects.

Best Eastern European Locations To Hire Software Developers

 

Central Eastern Europe Offshoring: Software Development Locations to Consider 

So, which are the best countries for offshore software development in CEE worth your attention? Here is a list of the top CEE countries you should take a closer look at. 

  • Poland 
  • Czech Republic 
  • Ukraine 
  • Hungary 
  • Romania
UkrainePolandCzech RepublicHungaryRomania
Hourly rates$19-$60$35-$55$14-$50$57$43-$63
Number of developers200,000+250,000150,000150,000139,000
Core technologiesC++, Python, Java, JS, C#, PHPJava, C#, Python, JSJava, JS, PHP, C#Java, JavaScript, HTML/JSS, Python, PHP, SQL, ReactJava, JavaScript, Python
Market size$5.5 billion$7.5 billion$1.33 billion$20 billion$674+ million

In the following sections, we will consider offshore software development rates by country and offer a list of the best offshore software development companies that can deliver top-quality products.

 

Ukraine – Top Country in CEE for Offshoring 

Market Size & Business Environment. Offshore software development in Ukraine is a thriving industry with many possibilities. Before the start of the Russian invasion, the Ukrainian IT sector was at the peak of its development, with the software development market exceeding $5.5 billion and over 200,000 skilled and experienced programmers available for recruitment.

Ukraine – Top Country in CEE for Offshoring 

Things changed profoundly after February 24, 2022, when Russia invaded Ukraine, with many companies urged to move their offshore software development centers to securer areas in the western regions of the country and thousands of skilled developers relocating to nearby European states. 

Yet, despite mass violence taking place in the Ukrainian territories, the IT sector has survived the turmoil and, what’s more, has grown more resilient. 

Disruptions in Web connectivity were resolved with the emergence of Starlink terminals across the country, and the COVID experience of remote work did a favor to many companies, ensuring a quick adjustment to the new wartime work reality. 

Developer rates. The rich talent pool combines perfectly with the reasonable pricing of development work. Programmers specializing in the most common languages, such as C++, Python, and Java, were available at $25-35 per hour.

According to Uvik, junior programmers currently charge from $19 to $25 per hour, the average rate of mid-level developers is $26-$38, and senior-level software development specialists can be hired for $40-$60 per hour. 

Top programming languages. The most popular development technologies in Ukraine are Java, JavaScript, C#, PHP, C++, and Python. 

Software hubs & education system. The best-known IT hubs in Ukraine are Kyiv, Odesa, Dnipro, Lviv, and Kharkiv, among others. They have the highest concentration of IT specialists because of the availability of best-in-class tech education – Lviv’s Ivan Franko National University, Kyiv’s National Technical University of Ukraine named after Igor Sikorsky, Sumy State University, Kharkiv National University of Radio Electronics, etc. – and high standards of living and welfare in these large, developed cities.

Top Companies for Offshoring in Ukraine

The top offshore software development companies in Ukraine are as follows: 

  • RNDpoint. A technology leader specializing in FinTech and AI. The company’s core solutions include digital wallets, loan management software, AI solutions, and backend low-code tools. It boasts 250+ qualified experts and has a portfolio of successfully finalized projects exceeding 120 cases, so it can become your reliable partner in outsourcing financial software development
  • 4IRE. A Swedish-Ukrainian blockchain software development outsourcing provider, harnessing 12+ years of experience in DeFi and Fintech. Pioneering blockchain solutions, their team accelerates projects, including White Label NFT and Carbon Credit Marketplaces. 
  • Ciklum. Ukraine’s leading provider of innovative custom software engineering services, one of the top 18 companies of this expertise level globally. With a team of 3,500+ developers, this offshore software development firm can cover projects of any scale and complexity. 
  • SoftServe. A software development and consulting company headquartered in Austen, TX, and Lviv, Ukraine, with numerous local branches across Europe. It employs over 11,000 staff and provides top-tier service coverage in cybersecurity, UX/UI, Big Data analytics, and IoT niches.
  • Intellias. A Ukrainian technology provider with 20+ years of tech expertise and global service coverage. It unifies developers, engineers, and designers with a creative vision to offer clients innovative, superior software of any complexity.
Avoid the complexities of building an in-house team, partnering with RNDpoint for professional offshore software development services.
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Poland – The Biggest Outsourcing Market 

In terms of offshore software development, Poland takes the lead in the CEE region in terms of the market size and number of available programmers. 

Market size & Business environment. The overall IT services market in Poland was evaluated at $7.5 billion in 2023, with outsourcing occupying $2.7 billion from that overall market size, which makes it the 7th largest software development industry across Europe.

Poland – The Biggest Outsourcing Market 

Developer Rates. The average hourly rate of Polish developers is $35-55, which is much more affordable than in Western Europe or North America. 

Talent pool and major software hubs. There are over 250,000 programmers in Poland, mostly concentrated in the largest software development hubs – Warsaw, Krakow, Wroclaw, Katowice, and Poznan. 

Education system. The country also has a broad tech education infrastructure, including the Warsaw Polytechnic, AGH University of Science and Technology in Cracow, and the Wroclaw University of Technology. 

Top programming languages. Java, C#, Python, and JavaScript are the most popular programming languages.

Top Companies for Offshoring in Poland

The most reliable and well-known software development offshore companies in Poland are: 

  • Future Processing. Tech consultancy and software development company with over 20 years of expertise and a staff of 1,000+ qualified experts. 
  • Sii Poland. A software, engineering, and BPO service vendor enabling digital transformation and automation, with 8,000+ specialists on board. 
  • Cognifide. A WPP technology consultancy that boosts business performance with digital marketing solutions. 
  • Objectivity. Custom software development company with a focus on outsourcing projects. It has operated since 1991 to deliver stellar cloud software products. 
  • JCommerce. A nearshore software development company with over 16 years of market presence, specializing in Java, .NET, PHP, and BI solutions.

 

Czech Republic  – Favorable Tax Haven 

Market size & Business environment. The Czech Republic is another favorable offshoring location with a $1.33 billion market size and a 4% annual growth observed in the aftermath of COVID-19. The business environment for IT offshoring is highly business-friendly here, with a 19% income tax, much lower than that in most European countries.

Czech Republic  - Favorable Tax Haven 

Talent pool. There are around 150,000 tech specialists in the country, making the Czech Republic the 4th largest tech talent pool in Eastern Europe. 

Top programming languages. The top programming languages in this country are Java, JavaScript, PHP, and C#. 

Developer rates. According to Salary Explorer, the cost of development services starts at $14-$15 (330-340 CZK) and can reach up to $50 per hour. The average annual salary equals around $53,000. 

Education system. The country has a wide selection of tech universities, such as Charles University and Czech Technical University in Prague, J. E. Purkyne University, Liberec University of Technology, and Masaryk University, among others. 

Major software hubs. Most developers are concentrated in the country’s major IT hubs, such as Prague, Olomouc, Brno, and Saarbrücken.

Top Companies for Offshoring in the Czech Republic

If you’ve decided to work with a Czech offshore software development outsourcing company, our top recommendations are as follows: 

  • Unicorn Systems. An IT solutions provider for banks, insurance businesses, energy, and manufacturing businesses, headquartered in Prague. 
  • Inmite. A software provider with a focus on antivirus and malware protection products for Windows and Mac operating systems. 
  • Ackee. A mobile and web app development company helping businesses digitize their operations and achieve greater automation. 
  • GoodRequest. A regional leader in web design, mobile and web app development, and web solution creation for iOS and Android apps. 
  • X-Coding IT Studio. An agile software development company focusing on e-commerce, B2B, and B2C solutions.

 

Romania – Affordability and Service Quality  

Market size & Business environment. When it comes to offshore software development, Romania has much to offer. It’s also one of the leaders in Eastern Europe software outsourcing, with a market size of $674+ million

The offshoring environment is highly favorable for Western businesses. Romania is close to most European countries and has only one hour of time difference with West European companies. It boasts a secure and stable business environment as an EU member.

Romania – Affordability and Service Quality

Talent pool. There are over 139,000 developers currently located in Romania, letting the country occupy the 10th place in Europe and 30th globally. 

Top programming languages. Popular programming languages here are Java, JavaScript, and Python. 

Developer rates. According to data from StaffingPartner, the offshore software development rates of Romanian developers range from $43 to $63 on average, with an annual average salary reaching $40,000. 

Education system. Another benefit is the outstanding education system with heavy prioritization of technology, computer science, and STEM subjects. 49 public and 8 private universities produce 7,000+ IT graduates every year. The most notable educational establishments are Valahia University of Târgoviște‎, Technical University of Civil Engineering of Bucharest, Technical University of Cluj-Napoca, Politehnica University of Timișoara, and many others.

Top Companies for Offshoring in Romania 

Besides, Romania hosts some of the top software companies in Europe, including: 

  • Endava. A public-listed British software development company with 6,000+ employees and one of the largest regional offices in Bucharest. 
  • Fortech. An end-to-end software development company operating in Romania as a subsidiary of GlobalLogic. 
  • Pentalog. A delivery center in Bucharest handling IT projects, team augmentation, managed teams, and consulting for clients across Western Europe and the United States. 
  • Evozon. An e-commerce service provider with 16+ years of presence in the Romanian market, serving clients internationally.
  • RINF TECH. Customer software provider for enterprise-level clients specializing in automotive software products.

 

Hungary – Optimal Location and Fast Economic Growth

Market size & Business environment. The IT sector is evaluated at $20 billion to date, with much support from the government (financial aid for the R&D sector). The country is 2 hours flight from major European cities, making it an optimal location for setting up an offshore development center.

Hungary – Optimal Location and Fast Economic Growth

Top Programming Languages. The most popular programming languages among Hungarian developers are JavaScript, HTML/CSS, Python, Java, PHP, SQL, and React. 

Talent Pool & Education. As of 2022, Hungary hosted over 80,000 skilled software development professionals. The business climate for software businesses is favorable here, with 12,000+ IT businesses operating in its territory, over 2,700 ICT and 12,000 STEM graduates joining the workforce every year. 

Major software hubs. The major IT hubs here are Debrecen and Miscolc, though they are not as large-scale as those of Ukraine or Poland.

Developer rates. Besides, the programmer salaries are 3x lower than in the United States and comparably humbler than those of Western European developers. According to Salary Explorer, the offshore software development cost in Hungary is $57 per hour on average.

Top Companies for Offshoring in Hungary

The top companies offering offshore custom software development in Hungary are: 

  • TATA Consultancy Services Hungary. An IT service provider delivering consulting, cloud services, cognitive business operations, IoT, digital engineering, and cybersecurity solutions to businesses. 
  • Blackthorn Vision. Software development company with 100+ experts on board, delivering top-tier custom software solutions since 2009.  
  • LogMeln. A successful Hungarian startup that began operations in 2003 and has been serving clients with remote control, file sharing, systems management, and data backup solutions for two decades. 
  • NI Hungary. A manufacturer of electronic circuit boards to help businesses achieve greater levels of productivity and innovation.
  • Prezi. The presentation, video, and visual communication software provider headquartered in Budapest has been operating since 2009.

 

Offshoring Case Studies

The RNDpoint serves as an offshore hub, managing offshoring projects and boasting a portfolio of successful case studies. Here is an illustration of how we handle offshoring for clients from different locations. 

Case #1. Partnership with a Leading European Bank

RNDpoint provided staff augmentation services for a large European bank. 

We handled the Client’s banking software development and contributed our FICO Blaze Advisor expertise to the bank’s in-house team’s tech stack to help it launch the Lithuanian branch. 

Our partnership has lasted over 3 years by now, with many RNDpoint programmers currently operating as the Client’s augmented team.  

Here, learn the full success story.

Case #2. Dedicated Development Teams for a KYC Organization 

We partnered with an international KYC organization by compiling three dedicated teams on two continents to work on the Client’s FinTech projects. 

We contributed Java developers, QA experts, and QA automation professionals to the Client’s Austrian team, further expanding the scale of collaboration to the Austrian PoC department, which needed qualified Angular programmers.

Later, we provided a dedicated team of Drools and Java programmers and QA experts for the Indian office.  

Follow the link to learn the full success story.

 

Exploring Offshoring Excellence 

Offshoring to Eastern Europe is an optimal solution that many technological companies pursue. It offers the best combination of programming talent, expertise, and affordable rates that any company targeting top-notch software services can handle. 

Leverage our data-driven insights to determine the top offshore software development countries and unlock potential cost savings and time efficiency. 

RNDpoint is at your service, ready to provide professional software offshore development services and a dedicated development team for a project of any type and complexity. 

FAQ

Why is Eastern Europe becoming a popular destination for offshoring?
What are the benefits of offshoring to Central and Eastern Europe (CEE)?
How does offshoring to CEE help in reducing development costs?
What is the size of the talent pool available in CEE countries?
Why are developers from CEE considered among the top in the world?
Are there any challenges or risks associated with offshoring to CEE?

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Helen Petrashchuk
Helen Petraschuk
Managing Director
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