The 7 Best Countries to Outsource Software Development

The 7 Best Countries to Outsource Software Development

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In a world where even the most ancient industries rely on the global outsourcing market, leaders in the IT industry know that in order to access the most qualified software developers and benefit from an ideal business environment, they need to consider the outsourcing sector for their software development projects.

Today, if a company wants solid tech competency diversity, a large talent pool, and the overall best software development expertise for their project, offshore development through software services outsourcing companies is the way to go.

Table of Contents

Narrowing the Field

But the challenge many software project decision makers face once they are prepared to adopt the outsourcing model is how to identify the top software outsourcing countries—and the most qualified development firm within each.

With dozens of countries ranking on the global services location index (link) and countless IT sector companies across Western Europe, Eastern Europe, Latin America, Asian countries and other countries passionately touting their software development services, it can be overwhelming and complicated to pinpoint the best countries for a software project.

If that sounds like you then have no fear, because we’ve taken the time to sift through the global IT market and shortlist the top outsourcing countries for all types and levels of software development projects.

If you’re not quite there yet, let’s break down the benefits of software development outsourcing as well as the key criteria we used in our research to analyze and recommend the best offshore development countries on the planet.

The Earth at night alight with glows from bustling cities

Throughout this article we’ll address the following:

  • The key reasons to turn to software development outsourcing
  • How to choose the best country for different software projects
  • Our picks for the best offshore software development countries
  • The evaluation methodology we used to slice through the global outsourcing market and create our final list
  • A potential alternative solution that can offer some unique advantages

Why Look to Software Development Outsourcing?

Software development projects are complex and ever-changing organisms that require hands-on management to keep on-track, in-budget, and true to the original vision. Especially for companies in developed countries, the idea of outsourcing services that are core to a project’s success can be unnerving—and understandably so.

There are a number of challenges and potential pitfalls any software industry professional needs to account for before outsourcing software development to a team of offshore developers. But with an understanding of the outsourcing market and careful planning, the benefits far outweigh the risks.

You stand to gain:

  • Reduced costs from fiercely competitive offshore software development rates
  • Access to an incredibly large talent pool of software engineers
  • Higher-level expertise in today’s most important and popular programming languages
  • An introduction to an entirely new software development market
  • An autonomous, reliable team that’s ready and eager to earn your business and loyalty.

How to Choose the Best Country to Outsource Software Development

Culture gaps across different countries can present challenges to working together

Language and Cultural Differences

The first concern most project leaders jump to when considering outsourcing software development is loss of control. That’s understandable, especially for companies used to working primarily with their own internal software developers.

So how can a company mitigate that risk? Start by accounting for language proficiency and cultural differences.

If an outsourced software development team can barely scrape by in your preferred language (since you’re reading this we’ll assume that’s English), the project will almost certainly struggle. If massive cultural differences create conflict and additional, empathetic distance, securing success will be difficult.

With modern communications tech, however, working with an offshore software development company in practice can be just as fluid and reliable as relying on in-house resources—especially considering what “in-house” can mean in today’s business environment. That is, as long as language and cultural differences don’t stand in the way.

Another strategy to bridge natural chasms in work style and communication is to work with an international company that’s based in your offshore development country of choice. Some of the best countries to outsource software development projects to are home to companies run by industry-seasoned expats.

They take the uncertainty out of these scenarios by personally building their teams of only the best local talent, ensuring communication in English is consistent and fluent, and training their experts around the expectations of Western clients.

Time zones can affect work schedules with a software vendor for better or worse

Time Zones

With distance comes time differences, and that can mean scheduling challenges. When working with other countries, be prepared to accommodate at least a small lapse in synchronicity.

Depending on your company’s processes and your own preferences, a gap between your workday and that of your offshore software development company may not be a problem; it can even be an advantage.

With a significant time difference you can schedule your project kickoffs, progress reports and recap meetings toward the middle of your day in Europe, and catch your Asian software development team at the end of theirs. You proceed onto other things and by the time you start your day tomorrow they’re ready to update you on over half a day’s progress.

But if being able to sync up your outsourced team with an internal one is critical, or if your management style demands instant access to your resources, be strategic about time zones when shortlisting countries to outsource software to.

If you know this will be a big factor for you, nearshore software development could be a good middleground.

Services companies can have vastly different rates for software outsourcing

Cost Efficiency

Different outsourcing countries have vastly different salary ranges for the average software developer. While software “outsourcing” may instantly paint a picture of low-cost talent, the continuous exponential spike in demand for software development has put a premium on these skills worldwide.

That’s not to say there are no savings to be had on work from junior developers all the way up through the most advanced software engineers; but some of the top outsourcing countries can sometimes command much higher rates than others.

This is often attributable to a variety of factors including:

  • The maturity of their software development industry
  • The tech competency diversity of the average software developer
  • Proficiency in popular programming languages
  • Population size and access to tech-focused education
  • The quality of the country’s technical education programs
  • Government tax and labor incentives that make outsourcing by foriegn countries easy and attractive
  • Developer talent rankings on global market research scales

We’ve surfaced average salary rates for software developers in all our picks of the best countries to outsource to, below. While not what you should expect to pay directly, they can offer some insight into their earnings and therefore, the cost basis of their employers.

Are your developers fluent in multiple programming languages, machine learning, mobile development, .net framework, and functional programming?

Full-Stack Abilities and Programming Language Competency

While many outsourcing companies around the world offer software development services that often seem to match each other closely, quality is of course what counts. So how do we ensure we outsource software development to one of the best countries for the job?

One way is to size up their education systems.

Sure, even in countries with sub-par technical schooling there are sure to be more than a few enterprising software developers who take it upon themselves to master their trade. And finding them can certainly pay off, assuming they haven’t already been swept up by large companies.

But for our immediate purposes it might be more beneficial to assess the best countries to outsource software around how they prioritize the trade within their schools and therefore, their economies.

After all, the best outsourcing companies rely on teams of the best software developers, consisting of subject-matter experts collectively covering full-stack development.

With the explosive growth of machine learning and its subsequent dominance in the digital marketing industry, web development and even mobile development expertise alone are often no longer adequate to support the full lifespan of modern software development projects.

When looking for an international home for your next software development project, scrutinizing a nation’s focus on technology in its workforce and the competency levels of its talent should play a key role in narrowing down a list of the best countries.

Hint: While this factor often goes hand-in-hand with cost, there are some surprising exceptions that equate to valuable opportunities if you know where to look. Which brings us to...

The Best Countries For Outsourced Software Development

From Eastern European countries to Asian countries and those in Latin America, the list of nations that are home to excellent offshore software development companies is only growing.

In recent years that list has featured plenty of newcomers, including some surprising entrants, as a result of their fast-developing economies built around digital services outsourcing.

To help you break through the clutter and catch the hidden gems we’ve compiled this list of the best countries to outsource your next software development project to.

Ukraine (Eastern Europe)

Countries like Ukraine in Central and Eastern Europe are excellent options for outsourcing software development projects

To the surprise of no one, Ukraine is exemplary in something it’s passionate about. Their developers are an excellent representation of the larger population’s competency and dedication.

Case in point: Ukrainian development studio Sengi Games’ new title, The Serpent Rogue, releasing on schedule in the face of all-out war. (Check it out here)

But more relevantly, in the last decade Central and Eastern Europe have taken up the mantle as the European hub for software development projects, and Ukraine has been at the forefront of that economic revolution.

Why Choose Ukraine for Offshore Software Development

The highlights:

  • Ukraine is the #1 country in Eastern Europe for offshore software development.
  • There are few if any significant cultural differences to Western countries
  • Ukraine’s experts are particularly seasoned in security.
  • The country’s IT sector has firmly stated its intention and ability to continue business activities despite the Russian invasion.
  • Avg. software developer’s salary: USD 20,448.15*

India (Asia)

India is one of the most popular choices in offshore software development countries

When it comes to project complexity experience, India is way ahead of the curve. With a population of roughly 1.4 billion people (17.7% of all humans on Earth), the sheer amount of human capital in India is a force to be reckoned with.

Couple those numbers with a national commitment to growing its outsource software development sector through government programs like its special economic zones and India’s Software Technology Parks (STPIs), and India easily ranks as one of the best countries to outsource software development.

Why India is a Strong Choice for Offshore Software Developers

The highlights:

  • It is the number 1 English-speaking country in the World
  • Its single official time zone is UTC +5:30, a very manageable 3.5 hrs later than most of Western Europe. Even companies on the East Coast of the United States could catch their Indian counterparts during normal working hours.
  • Has the most software development professionals out of any country on the planet.
  • Derives upwards of 8% of its GDP from software outsourcing by other countries.
  • Avg. software developer’s salary: USD 18,436.00*

Poland (Eastern Europe)

Poland is an underrated hub for outsource software development in Eastern Europe

Another hotspot for development services in Eastern Europe, Poland has a lot to offer. A widely available labor force and earnings potential for developers that drastically beats the national average salary level mean a huge proportion of the country’s working population are entering the software development services sector.

Cost may be one of the weaker incentives for business to outsource to Poland, however, as an average developer salary of USD 36,351.51* puts it decently above the low-end of the scale in terms of offshore software development rates.

Why Turn to Poland for Software Development Outsourcing

The highlights:

  • Poland has one of the fastest-growing economies in the EU.
  • As an EU member, Poland offers high levels of security and data transferability.
  • It’s in the same timezone as most major European cities.
  • #3 on HackerRank’s list of countries with the best developers.
  • The Harvard Business Review places Poland at number 5 in its list of the most IT-skilled labor markets worldwide.
  • The country’s IT education reputation draws students from all across Europe.

Thailand (Southeast Asia)

Thailand is emerging as one of the best offshore software development countries in the world

Central to Southeast Asia and home to bustling, booming Bangkok, Thailand is a modern day melting pot and a marvel to behold. Featuring an expansive population of diverse expats working side by side with their local peers and a warm culture rooted in community, Thailand has rapidly become one of the best countries to outsource software development.

The past few COVID-battered years notwithstanding, Thailand’s economy is ballooning onto the global stage with no signs of slowing down. It currently stands as the 2nd largest economy of the ASEAN region.

With an abundance of physical space and an entrepreneurial population that has also so far declined to fall into a relentless pursuit of excess, Thailand exists at an elusive intersection where high technological advancement meets low cost of living.

Why Outsource Software Development to Thailand

Here’s why Thailand stands as one of the best countries to outsource to:

  • Hard-working, self-motivated culture that values quality and reputation.
  • Software development companies built and run by European industry veterans.
  • Positioned as the ideal hub to Southeast Asia’s vast, fast-growing cities.
  • Government-backed Thailand 4.0 initiative puts full economic force behind Thailand’s transition from industrial to digital powerhouse.
  • Avg. software developer’s salary: USD 25,623* — an enticing cost-basis facilitated by the country’s low cost of living.
  • A flourishing tech-focused expat community contributes to one of the most diverse and highly talented resource pools of all potential countries to outsource software.

Vietnam (Southeast Asia)

Vietnam is a strong contender amongst the best countries to outsource software

Outsource software development to Vietnam and you’ll be in good company, with major global players such as Intel, IBM, Samsung and Microsoft investing in its software services.

In addition, a reputation for high-quality labor at low costs brings a growing number of foreign companies to the country every year. In fact the majority of Vietnam’s technology sector is attributable to foreign direct investment from multinational companies.

Vietnam proudly leads in artificial intelligence applications, fintech and ecommerce, amongst others.

Connecting with an established local development company that knows the business environment and has already built a team of the best developers the country has to offer can easily make Vietnam the top choice out of the best countries to outsource software to.

 

Why Vietnam May be the Best Country to Outsource Software Development

The highlights:

  • Proven capabilities with the backing of major global IT corporations.
  • Reliable English fluency.
  • A booming tech industry that saw a sharp 10% growth rate in 2020.
  • As of 2019, Vietnam achieved standing as the eighth-largest IT services providing country in the world.
  • The government pushes for growth in its IT industry with numerous financial incentives.
  • Avg. software developer’s salary: USD 23,622.65*

 

China (Asia)

China continues to hold its place on the list of top offshore software development countries

A country synonymous with outsourcing, software development is no exception to its expansive list of competencies. IBISWorld measures China’s software development industry in 2022 at USD 1.3 trillion—a number that is further expected to grow by 7% this year alone. With a population even larger than India’s, the country has no shortage of motivated, capable developer resources.

While still below average income for a developer in the United States, China’s reported average software developer’s salary is USD 51,992.00*, sharply above the others on our list.

What Makes China Great for Software Development Outsourcing

The highlights:

  • According to HackerRank’s scoring system, China has the best developers in the world.
  • China’s national education systems fiercely prioritize math, science and technology, leading to ingrained aptitudes in a variety of programming languages.
  • China leads in functional programming, AI and machine learning.
  • The government strongly encourages growth in the tech sector, offering economic incentives that translate to low costs for the market and high motivation for experts and development companies.

Argentina (Latin America)

Argentina is a strong draw for companies looking to outsource software development

The 3rd-largest economy in Latin America, Argentina stands as the country with the best education in the region. This includes programs specifically focused on technology and several of its universities ranked amongst the best global universities by US News.

With impressively wide-spectrum government attention given to fostering business innovation, IT-fluency, women in tech and a consistent pool of software developers, Argentina stands out amongst its peers in the region and offers stiff competition to countries in Asia and Eastern Europe.

What Puts Argentina on The Top Outsourcing Countries List

The highlights:

  • Exceptional English language proficiency.
  • Only very minor differences in culture to most Western nations.
  • Manageable time differences, with near-perfect alignment for North America and a familiar jump for most European countries.
  • Ranked #1 in Latin America on Coursera’s Global Skills Index Report (2020).
  • Avg. software developer’s salary: USD 17,256.04* — the lowest on our list.

Looking For More on How to Outsource Software Development?

Take a look at this quick and insightful video guide to working with outsourced software development resources.

Wrap-Up: Finding Your Home for Software Outsourcing

The decision to rely on software outsourcing, while strategic and often immensely beneficial, can be a scary one. But the ability to narrow your field to a country that’s well-matched to your company, customs and needs can eliminate an enormous amount of risk—and stress—from the process.

While the world is flatter than ever especially for digital products and services, there are huge differences amongst countries in terms of ease of communication, reliability, software developer pay rates and expertise.

Business Environment Factors

When embarking on your search for an ideal partner, start by determining the best countries to outsource software development to in general. Look at basic factors first, like language skills, time difference and possible cultural incompatibilities. Do they present a favorable business environment?

If you have a shortlist for which all those check out, look into the IT industry of each and assess whether it’s prepared to offer software development services at the level you expect.

Skilled Software Developers

Does the country have an abundance of high-level software engineers, vast tech competency diversity, and top-ranked outsourcing companies?

Do they prioritize the software industry through education? Is it common for talent to be fluent in the multiple programming languages that a modern project will inevitably demand? The best offshore software development countries thrive on foreign companies trusting them to get the job done and reinvest in their IT market accordingly.

Cost Efficiency

Cost is a major driver for businesses to outsource software development, and in most cases saving money is the primary benefit they seek in doing so. With such an expansive, ever-growing offshore development market, in this industry you can have your cake and eat it too.

In fact, thanks to sustainably low costs of living, several of the best overall offshore software development countries are also able to significantly undercut their Western competition.

Capable Services Companies

The best countries to outsource software development projects to will feature companies that have attracted not only the best local talent, but experts from around the world. If experienced, skilled software developers from other countries choose to relocate to a foreign city to live and work, that country is probably doing several things right.

Vietnam and Thailand in particular are two rapidly evolving tech economies laser-focused on offshore software development revenue that uniquely also see desirable Western talent choosing to base themselves in their major cities. They join remote work companies like Iglu that staffs a blend of expats and locals to form dynamic teams that bring the best of all corners of the world to their work.

The Reverse Approach

If you’re envisioning a globe full of software development companies and feeling dizzy (and it’s not because it’s one of those spinny ones), we have another option for you:

While some countries are undoubtedly superior for their development services, and most businesses will inevitably be forced to choose one to outsource software development for their unique project, we’ve found unbeatable advantages in having access to several at once.

Iglu’s Outsourcing Services

In response, we’ve built teams of the best software developers in the world and based them throughout Europe and Asia.

They’re made up of the best local software developers and talented expats from dozens of countries who are able to choose to work where they want. We bring them together so businesses can experience the best of multiple leading outsourcing countries with none of the drawbacks of choosing just one.

If you’ve come this far, we’d love to learn about your upcoming software projects and discuss how Iglu may be suited to be your ideal partner for offshore development.

Iglu has teams of the world's best software talent based in Thailand, Vietnam, Europe and Hong Kong

Ready to Get Started? Use Iglu.

Our team is ready to help.

Iglu is a multinational network that employs leading tech talent from around the world. We make it easy for skilled professionals to work where they want, either for us, themselves, or both.

The result is a network of experts that represents the best of dozens of countries, able and eager to take on any kind of project our clients may have in their plans.

Outsource Software Development

Full projects and project phases are our specialty, allowing us to put together a tailored team of our best resources to ideally fit your needs. For end-clients we handle full-stack development, including needs assessment, feature set design and development strategy.

For the larger development companies in need of a subcontractor we’re here to be your go-to partner for critical pieces of any project.

Team Extensions

For clients in need of one or more specialists to round out their existing teams, we offer subject matter experts in every field with experience in an enormous range of programming languages and development stages.

Iglu has offices in 5 major cities with teams committed to providing the best offshore software development in the world

Cut out the research and get started. Hire Iglu for your next project today.

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