Offshore Development Centers in Europe

Learn about the benefits of hiring programmers from Eastern Europe
Europe has become an increasingly popular destination for companies looking to set up offshore technology and software development centers. With its strong European talent pool, business-friendly policies, infrastructure, and geographic proximity to key markets, Europe offers significant advantages as an offshore hub.

Cost and Talent Advantages

Eastern European countries like Poland, Ukraine, Romania, and Bulgaria have fast-growing pools of skilled software engineers and developers available at very competitive salary levels compared to Western Europe and North America. Average IT salaries in these European countries can be 3-4 times lower, enabling substantial cost savings for potential European offshore delivery.

At the same time, software developers often have similar or higher skill levels compared to their Western counterparts, with many having degrees from top universities. Strong technical universities and IT vocational schools also feed talent pipelines. This enables access to sophisticated software development capabilities at favorable price points.

Business Environment and Infrastructure

Eastern European countries have made great strides in improving the ease of doing Europe's offshore business. Streamlined administrative procedures, favorable tax policies, and initiatives to attract foreign Europe's offshore investment make setting up development centers straightforward.

The infrastructure across Eastern Europe is advanced too - cities like Krakow, Warsaw, Bucharest and Sofia offer grade-A offices spaces for technology companies, excellent connectivity, and an abundance of offshore business services providers to meet operation requirements. This facilitates running large-scale offshore development centers hosting hundreds or thousands of engineers.

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Geographic and Cultural Proximity to Key Markets

Eastern Europe lies near major European technology hotspots like London, Berlin, and Paris. Being in overlapping or close by time zones is advantageous over more remote offshore regions from a collaboration perspective.

Culturally, there is greater alignment with Western ways of working as compared to Asian offshore locations. From a communication standpoint, most European tech professionals also tend to be fluent in English. These factors lead to more effective collaboration with offshore talent.
Offshore Development Center in Europe

Access to Emerging Technologies

Countries in Central and Eastern Europe have invested heavily in emerging technologies like artificial intelligence, big data analytics, cloud computing and more. As an example, Poland has over 150 R&D centers focused on areas like cybersecurity, autonomous vehicles, and game development.

Setting up an offshore development center in Europe allows technology companies to leverage these specialized resources to augment innovation initiatives and build products for the future. Governments also offer offshore grants and incentives for hiring and R&D in these technology areas.

Top Eastern European Countries to Offshore Software Development

Some of the major CEE countries have their relative strengths as offshore hubs.

Poland
Poland has one of the largest talent pools of software developers in the CEE region, with over 265,000 professionals as of 2022. Over 36,000 students graduate in IT-related disciplines each year. The country has seen 22% CAGR growth in the number of IT specialists since 2015.

Leading companies for offshore development in Poland:
  • Comarch. Provides a wide range of IT outsourcing services including software development, testing, business analytics, and IoT solutions. Over 6,500 engineers globally.
  • Transition technologies. Specialized IT services and outsourcing provider for sectors like finance, utilities, industry, media and IoT. Over 2,200 experts.
  • Future processing. End-to-end software development services with dedicated engineering centers. Expertise in cloud migration, data engineering, QA automation. Employs 1,500+ developers.
Offshore Development Center in Europe
Romania
Romania has seen rapid growth in its tech sector, with IT services exports expanding at a CAGR of over 19% from 2015-2021 to reach $6.3 billion. Over 256,000 specialists work in the software industry as of 2022. Romania is strong in areas like cybersecurity.

Romania's offshoring leaders:
  • Softvision. Award-winning digital engineering and consulting firm offering full-cycle development of custom software solutions, QA and big data consulting from their Romanian centers.
  • Fortech. Top Romanian software outsourcing provider with core expertise in mobile, web, UI/UX and custom enterprise app development. 1,000+ engineers.
  • Catalyst solutions. Romanian software development outsourcing provider focused on delivering services to the Italian market. Core capabilities in ERP, eCommerce, cloud and web development.
Offshore Development Center in Europe
Ukraine
Ukraine has the largest and one of the most highly skilled pools of IT talent in Europe, with over 285,000 tech professionals by estimates. The country has seen rapid growth at 26% CAGR since 2015. Ukraine is renowned for engineering excellence.

TOP companies for offshore development in Ukraine:
  • N-iX. Leading software engineering outsourcing provider in EMEA offering expert capabilities in cloud engineering, data analytics, embedded software, VR/AR and other offerings. Over 1,800 engineers.
  • ELEKS. Award-winning global outsourcing consultancy recognized for advanced skills in UI/UX design, data science, DevOps and high-load system development. Employs over 1,500 tech experts.
  • Daxx. Prominent Ukrainian tech talent agency providing dedicated development team services and engineers on demand across technology skill areas. Employs over 700 engineers.
Offshore Development Center in Europe
Bulgaria
Bulgaria has an emerging IT outsourcing industry comprised of over 113,000 software specialists as of 2022, having achieved impressive CAGR growth of 15% from 2015-2021. The government has enacted various policy initiatives and incentives to continue boosting the technology sector.

Top-Tier companies for offshore development in Bulgaria:
  • Scale focus. Leading Bulgarian software outsourcing provider offering core competencies in software product development, QA automation, DevOps, data analytics and cloud migration across a 300+ engineer talent pool.
  • Dreamix. Highly rated Bulgarian software development outsourcing company with offshore delivery excellence in custom web and mobile application engineering, UI and UX design.
  • Integri. Bulgarian outsourcing consultancy providing seasoned teams covering a range of technology outsourcing needs from software product design to cloud deployment and DevOps implementation.

Key Considerations

There are also some common factors companies should consider with setting up Eastern European development centers:
  • Managing distributed teams across multiple time zones requires effort, especially interacting in real-time. Overlapping hours help.
  • Seasonal variances like summer vacations can impact staff availability periodically. Robust staffing models help maintain continuity.
  • Data protection regulations are still maturing in some countries. Assessing information security protocols is prudent.
  • There can be higher attrition rates driven by salary growth opportunities as markets expand. Retention initiatives and workforce planning help account for ongoing hiring needs.

Conclusion

Eastern Europe provides a very compelling option for any technology company looking to set up offshore operations, offering a rare mix of high-quality software talent, operational cost advantages and business-friendly conditions. While no location is perfect and each has some tradeoffs, the overall value proposition for the region as an offshore destination keeps strengthening each year. More and more global innovators are taking note and ramping up investment - a trend likely to accelerate in the years ahead.

Offshore Development Center has a wide base of developerss, including those in Eastern Europe. If you want to expand your team with European programmers, please contact us. We will help you to form a team for your project.

FAQ

  • Question:
    What technology capabilities can we expect from European talent?
    Answer:
    European IT talent is highly educated, with advanced skills in complex software development, emerging technologies like artificial intelligence, big data analytics, cybersecurity, game development, autonomous vehicle technologies and more. Many multinationals have R&D centers in the region focused on such innovations.
  • Question:
    How easy is it to set up a new entity and operations?
    Answer:
    Many Eastern European countries have made significant improvements in ease of doing business rankings recently by removing administrative hurdles. They offer streamlined setup processes, favorable tax policies, and initiatives to attract foreign investment. Grade-A infrastructure also available.
  • Question:
    Can European subsidiaries access EU and other Western markets?
    Answer:
    Yes, subsidiaries set up in EU member countries like Bulgaria and Romania enjoy access to the full EU common market. Non-EU countries also have trade agreements and access. Proximity to major EU hubs reduces barriers and logistical issues accessing Western markets.
  • Question:
    What retention rates can we expect? Will there be high attrition?
    Answer:
    Markets like Poland and Romania are still emerging with high growth, so attrition rates can be elevated compared to mature markets. However, the quality of life remains good in most countries and turnover is reasonably stable. Implement workforce planning models and retention initiatives focusing on key talent.
  • Question:
    Which European regions offer good language skills for offshoring?
    Answer:
    Central European regions provide Polish and Ukrainian language capabilities. Bulgaria and Romania offer multilingual teams spanning Western European and Baltic languages, Japanese, Arabic and more. 95% of Central and Eastern European tech professionals have functional – fluent English skills, better than many Asian regions.

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