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IT outsourcing refers to hiring a third-party vendor to assist with any software development project rather than doing them in-house. Third-party contractors may work on the entire project or only a portion of it. Software outsourcing development is popular around the world because it can save money, bring in extra expertise, and get products finished faster.

When looking to outsource software work, finding the top IT outsourcing countries for it is important. The top choices are based on their tech skills, good business settings, how innovative they are, and if they speak English well. This article will show you the best countries for outsourcing software projects and why they stand out.

1. Top IT Outsourcing Countries Summary Table

CountryAverage Monthly Salary (USD)
Vietnam$2,000-$3,000
India$1,500-$2,500
Philippines$1,000-$2,000
China$2,500-$4,000
Malaysia$2,000-$3,500
Ukraine$2,500-$4,000
Poland$3,000-$4,500
Romania$2,500-$3,500
Bulgaria$2,000-$3,000
Hungary$3,000-$4,000
Czech Republic$3,500-$5,000
Mexico$2,000-$3,500
Brazil$3,000-$4,500
Colombia$1,500-$2,500
Costa Rica$2,000-$3,000
Argentina$2,500-$3,500

Source: Glassdoor, Payscale, Quora, Upwork

Note: These figures are estimates, and actual salaries can vary significantly. It’s crucial to research specific companies and locations to get a more accurate picture of IT outsourcing costs.

Now that you’ve had quite an overview of these top IT outsourcing countries, let’s dive into each one of them.

2. Best IT outsourcing countries in Asia

The Asian area contains some of the most significant software development countries globally, with certain countries placing among the top ten in the globe. Over 200 software companies employ over one million people in the region.

Vietnam

top it outsourcing countries Vietnam

Key Facts about Vietnam Outsourcing

Vietnam is one of the best IT outsourcing countries in the Asia-Pacific region. The country’s transformation from low-tech manufacturing to a service-oriented economy changed it from one of the poorest countries in the world to a vibrant destination with a friendly business climate.

With an average economic growth rate of 5.5 percent, Vietnam is one of just a few Asian countries capable of outpacing larger competitors such as China and India. Vietnam’s economic growth rate for 2023 was at 5.05%, according to Reuters. Gradually, Vietnam is establishing itself as one of the top IT outsourcing countries.

The Vietnamese software market is poised for significant growth, with revenue projected to reach US$594.4 million in 2024. Leading the charge is the enterprise software segment, expected to capture a market volume of US$247.3 million this year. This positive trend is expected to continue, with an annual growth rate (CAGR) of 10.31% projected from 2024 to 2028, pushing the market volume to a staggering US$880 million by 2028.

Top IT outsourcing countries - Vietnam growth stats

 

This rapid ascension can be attributed to several factors. The presence of major corporations like IBM, Intel, Samsung, Microsoft, and Nokia has injected valuable expertise and resources. Cities like Ho Chi Minh City, Hanoi, and Da Nang stand out as hubs for innovation, with established infrastructure, renowned universities, and a flourishing startup scene. Every year, thousands of well-educated IT professionals graduate, further enriching the talent pool.

Furthermore, Vietnam’s commitment to fostering the IT sector is evident through government-backed legal and financial incentives for the workforce. This, coupled with significant investments in the education system, has propelled Vietnam to the top 50 digital nations globally. Recognition beyond its borders includes ranking 25th in the Tholons Global Innovation Country Index, while Hanoi and Ho Chi Minh City are positioned among the top 100 “Super Cities” at 50th and 58th place respectively.

Read more: Why hire a Software Outsourcing Company from Vietnam?

India

it outsourcing countries india

India has long been a powerhouse among top IT outsourcing countries, and for good reason. With a vast talent pool of around 5.5 million strong (as of 2023), the country produces a significant number of IT graduates each year. Roughly one million graduates each year, according to statistics from the Indian Ministry of Education. Additionally, growing English proficiency in major cities and the IT sector facilitates smooth communication with international clients.

This, combined with a generally lower cost structure compared to Western nations, makes India a cost-effective option for companies seeking to outsource development work. The hourly rate of software developers in India is between $18 and $39 per hour according to Upwork, but a developer in the United States will charge between $50 and $60 per hour. India stands out in scale and skill availability at low prices compared to other top IT outsourcing nations.

Philippines

top it outsourcing countries

With over 47,000 graduates (as of 2020/2021) in the IT and technical disciplines from top technical colleges around the Philippines, the country is now ready to satisfy the expectations of emerging businesses.

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The Philippines is ranked 20th out of 113 countries in the 2023 EF English Proficiency Index, with a score of 578, positioning it second in Asia regarding English proficiency. English is the mother tongue of about 37K individuals, and 92% of the population speak English as a second language. As a result, the Philippines is one of the world’s largest English-speaking countries, making it perfect for outsourcing.

The country already has approximately 190,000 developers based in BPO hubs such as Manila, Cebu, Davao, and Bacolod. These cities have earned a reputation for being one of the top IT outsourcing countries in healthcare and fintech. Engineers in the Philippines have skills in robotic process automation and artificial intelligence solutions. However, the country lags in big data, data analytics, blockchain, and digital commerce.

China

China is another top IT outsourcing country in Asia. With an education system that promotes Math and Science, China provides some of the world’s best technology and IT services. Many firms are establishing themselves in China to capitalize on its user interface, full-stack, mobile, enterprise, and game software.

China has taken the initiative to create, educate, assist, and teach its population to be specialists in information technology. As of 2022, 3.8 million people were employed by the information technology (IT) service industry in China. In total, over seven million people were working in Chinese software and IT companies according to Statista.

The average software developer’s gross salary in China is $54,800 or an equivalent hourly rate of $27. In addition, they earn an average bonus of $2400. Salary estimates are based on salary survey data collected directly from employers and anonymous employees in China.

Best-country-to-outsource-software-development

Key facts about outsourcing to China

Malaysia

According to the World Bank, Malaysia’s tertiary enrollment rate reached 57% in 2021, significantly higher than the global average of 38%. This translates to a readily available pool of qualified graduates, many from renowned universities like Universiti Malaya and Universiti Teknologi Malaysia, offering a strong foundation in computer science and related fields.

Furthermore, Malaysia’s tech workforce is not only well-educated but also diverse and adaptable. English proficiency is high, with over 60% of the population speaking English, according to EF Education First’s English Proficiency Index 2023. This facilitates seamless communication with international clients, a crucial aspect of successful outsourcing partnerships.

Malaysia offers cost-effectiveness for outsourcing companies. The average salary in the tech industry in Malaysia is approximately USD 3,500 per month, significantly lower compared to established markets like the United States or Western Europe, where salaries can typically reach double that amount.

3. Top IT outsourcing countries in Eastern Europe

Eastern European countries provide high-quality work at low prices, excellent communication skills, and accessible time zones. This region has a large talent pool, with most developers in the software development sector holding a university technical degree.

Ukraine

Before the February 2022 war, Ukraine boasted a sizable talent pool of approximately 200,000 qualified programmers. The size of the Ukrainian tech community was expected to grow significantly, with nearly 23,000 aspiring IT specialists entering the workforce each year. However, the ongoing conflict has undoubtedly impacted the industry, making it difficult to provide accurate and up-to-date information about its current size and growth projections.

Despite the challenges, it’s important to acknowledge the resilience and adaptability demonstrated by the Ukrainian IT sector. Many companies have successfully adapted their operations, transitioning to remote work and collaborating with international partners to continue providing services. The presence of over 3,000 IT service companies specializing in various sectors like e-commerce, finance, and telecom showcases the diverse capabilities of this industry.  87% of them provide high-quality software solutions, 7% sell hardware, and the other 6 percent provide customer support.

Best-country-to-outsource-software-development

Best country to outsource software development

Poland

The country is reported to have between 63,000 and 78,000 students enrolled in IT and ICT degree programs recently, producing approximately 10,500 to 13,500 graduates annually. This robust pipeline of talent has been growing, with over 44,000 students starting their studies in Computer Science in 2022 alone, highlighting Poland’s rapid development and attractiveness as a destination for IT companies and professionals.

Poland has also been among the top IT outsourcing countries for over 100 businesses, with over 255 software professionals ready to provide offshore software development services. Poland’s talent pool consists mainly of Java, Python, and Ruby experts.

As a result, it is among the top Eastern European countries in inexpensive programming experts who are experts in software development technology. In general, you may hire a software professional for roughly $2,430 per month (average gross salary).

top it outsourcing countries poland

Romania

Romania is another top IT outsourcing country in the Eastern Europe region. According to the Ministry of Education and Research of Romania, there are 47 accredited public and private universities in Romania offering programs in computer science and information technology. There are around 9,000 to 12,000 IT graduates per year in Romania.

Read More:   How Much Software Outsourcing Costs (+ Examples)

Romania accounts for over 20% of the Central and Eastern European outsourced software development business. This country’s developers are proficient in various software processes and languages, including C, C++,.NET, Java, PHP, and Mobile. Their work may be found in some of the biggest companies in IT, including Microsoft, Dell, and IBM.

Depending on the requirements and experience of the engineer, it may cost your company from $39 per hour (as of October, 2023).

top it outsourcing countries

Bulgaria

Bulgaria boasts a large and well-educated IT talent pool with over 200,000 IT professionals, according to a 2023 report by InvestBulgaria. Additionally, average IT salaries in Bulgaria are approximately 35% lower compared to Western Europe, making it a cost-effective option. This information can be found in reports by reputable research firms like SalaryExpert or Glassdoor.

According to the EF Education First’s English Proficiency Index 2023, Bulgaria ranks 16th globally in English proficiency, placing it above the worldwide average. Being a member of the European Union offers numerous benefits for IT companies, including streamlined regulatory processes, free movement of labor within the EU, and access to the wider €18.5 trillion European market, according to Eurostat data from 2023.

However, with the growing demand for skilled professionals, some highly skilled Bulgarians might work abroad due to potentially higher salaries. You can find out more about this in a 2022 report by World Bank called Migration and Brain Drain.

Hungary

While not necessarily “topping” all IT outsourcing countries, Hungary offers a compelling proposition for companies seeking skilled developers at a competitive cost. For software development outsourcing, the general range is approximately $40 to $55 per hour. This rate can differ based on the complexity of the projects and the level of expertise required.

Strengths and Advantages:

  • Skilled workforce: Hungary boasts a well-educated population, with a strong foundation in IT education and a growing pool of talented developers.
  • Diverse skillset: While traditionally known for expertise in database development, Shell, C++, and Java, Hungarian developers increasingly possess skills in various programming languages and frameworks, adapting to evolving technology trends.
  • Cost-effectiveness: Compared to Western Europe and North America, Hungary offers competitive labor costs for IT professionals, making it a budget-friendly option for outsourcing projects. However, it’s crucial to note that rates have been rising in recent years, making it important to conduct current market research for accurate estimations.
Top IT outsourcing countries Hungary

Key facts about Hungary outsourcing

Czech Republic

The Czech Republic is also ranked among the top IT outsourcing countries because it offers affordable software solutions and skilled development services globally. With a large pool of over 200,000 IT experts, supported by a high number of STEM graduates each year, the country is well-equipped to handle various tech needs.

Google and other leading companies such as Microsoft, Oracle, IBM, and RedHat, have a significant presence in the Czech Republic. This country is recognized as one of the top destinations for software development, partly due to its strong educational focus on technology, with a history of successful startups like Avast and JetBrains. The Czech Republic is home to around 7,700 IT firms, particularly located in major IT hubs like Prague, Olomouc, Brno, and Saarbrücken. The country benefits from its EU membership, stable legal system, and favorable corporate taxes, making it an attractive location for IT sector growth.

Cities like Prague, Brno, Ostrava, Pilsen, and Olomouc are key IT hubs, each offering a unique blend of skilled professionals and cost advantages. For example, in Prague, the average salary for a software developer is around $3,200 per month. Brno, the country’s second-largest IT market, offers developers at an average salary of $2,600 per month. Other cities like Ostrava, Pilsen, and Olomouc have average salaries ranging from $2,000 to $2,400 per month, reflecting the country’s ability to offer cost-effective solutions for IT services.

Top IT outsourcing countries Czech Republic

Key facts about outsourcing to the Czech Republic

4. Top IT outsourcing countries in Latin America

Latin American countries emerged as a popular alternative for organizations wanting to outsource software development. Because of the low cost, minor cultural differences, and tiny time zone changes, nations in this region are a popular alternative for most North American countries.

Mexico

Mexico boasts a significant IT talent pool, with estimates exceeding 4.5 million IT professionals according to NASSCOM (National Association of Software and Service Companies). Mexican universities graduate over 110,000 engineers each year.

Compared to North America and Western Europe, labor costs in Mexico are generally lower, making it a budget-friendly option for outsourcing projects. The average hourly pay of a developer here can range from $20 to $40. 

Mexico’s location offers convenient time zone alignment for collaboration with North American companies. However, the language barrier could be an issue since around 10% of the population speaks English at different levels of proficiency.

Brazil

The Brazilian IT market was valued at US$45.2 billion in 2022, with software accounting for 25.8% of this market. The software segment is expected to grow by 15.1% in 2023, with a notable focus on SaaS. The IT sector’s major user segments include services, telecom, financial services, and government. An average software engineer salary in Brazil can earn around $12000 a year.

Brazil is ideal for outsourcing software development, particularly for North American IT firms. Because of the close travel proximity, minor time zone differences, and cultural similarities, many firms from the United States and Canada chose it as their outsourcing partner in specialist information technology services.

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outsourcing-to-brazil

Best country to outsource software development

Colombia

Colombia has a large tech workforce, with 150,000 IT experts and 13,000 new tech graduates yearly. Prices for their work range from $20 to $50 an hour, depending on experience and job complexity. Bogota, the main tech city, aligns well with US time zones, making communication with remote teams straightforward.
However, English levels aren’t as high as in other Latin American countries, and Colombian work laws include specifics like a 48-hour workweek, extra pay for overtime, 15 days paid leave, and 18 public holidays.

Costa Rica

The World Bank says Costa Rica is stable politically and follows the law closely, making s it a great place for companies from other countries to invest in, especially for IT jobs. Costa Rica’s time matches well with North American work hours, so companies in the US and Canada can work with tech teams in Costa Rica without any hassle.

Costa Rica is also good at teaching its tech workers advanced skills like robot software, data analysis, cloud computing, and protecting against cyber attacks, helping solve big tech challenges and the need for more skilled workers.

IT outsourcing countries - Costa Rica

However, Costa Rica has some challenges too, like expensive electricity and the need to make its buildings and roads better, which could make doing business there more costly. Also, there’s a lot of red tape that can make it complicated to start and run a business there.

While Costa Rica is well-suited for high-value-added manufacturing and IT services, its relatively small size may pose limitations for companies looking to scale up their operations significantly.

Argentina

Argentina provides free education to its residents, making it one of the most educated countries in Latin America. They are also the country with the most significant level of English in Latin America. Hiring a web developer in Argentina might cost around ARS 3,279.89 per hour, depending on the engineer’s experience.

Brazil has approximately 750,000 tech professionals and is considered the 5th best IT outsourcing destination worldwide. The country’s software development market was estimated at $9.3 million, expected to grow to $13.3 million by 2025, indicating a robust and rapidly expanding IT sector.

According to the Brazilian Association of Information and Communication Technology Companies (Brasscom), around 46,000 students graduated with ICT degrees in 2019, including fields such as computer science, information systems, and software engineering.

outsourcing-to-argentina

Key facts about outsourcing to Argentina

5. How to choose the best IT outsourcing countries

Selecting the best it outsourcing countries requires solid professional management. First, you must establish a detailed project overview including all necessary infrastructure needs, tech stack specs, team composition, and your expected timescale. Only when you’ve determined what you’re seeking can you begin researching outsourcing locations to find the one that best meets your company’s requirements.

Choosing the best country for IT outsourcing comes down to what you need. Think about how much you want to spend, if you need people who speak your language well, how stable the country is, and if they have the tech know-how you’re looking for. It’s all about finding a place where the companies have smart developers who don’t ask for too much money and are good at keeping in touch.

Depending on where your projects lie, you may choose onshore, nearshore or offshore outsourcing countries. Onshore outsourcing means hiring a company in your own country. It’s easy to talk to them and work together because there’s no big time difference or language barrier. But, it might cost more than the other options. Nearshore, on the other hand, is when you choose a company in a country close to yours. This way, you still get to save some money, and talking to them is easier because they’re not too far away.

Finally, Offshore Software Outsourcing means going with a company in a far-off country. This can save you the most money, but talking and working together might be a bit harder because of the distance, time difference, and maybe language differences. For more details, explore Compare Onshore vs Nearshore vs Offshore Outsourcing Models (+Case studies). 

Read more:

6. Hire developers with InApps Technology

Finding the ideal team to create your product is a complex undertaking no matter where you are on the globe. You may, however, speed up the process by collaborating with a reputable software development firm.

InApps is in the Top 15 IT outsourcing companies ranked by Designrush. We assist companies worldwide in combating talent shortages by recruiting and retaining talented software engineers in Vietnam who work as an integral part of the client’s product development team.

We focus on the niche market related to mobility solutions and a high-productivity dedicated team to expand the business model for our clients. Our skilled and experienced teams can work on any software development project that you might need, as proven by their high customer retention rate.

Learn more about our offshore software development services, or click on free proposal to let us know what skills you’re looking for.

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I am a dynamic Tech Explorer and Writer for InApps Technology. With a background in software engineering and a knack for writing, my content brings a fresh and insightful perspective to the tech scene. I love making their content not just informative but also incredibly engaging for both tech novices and aficionados. Join me on a journey through the ever-evolving digital landscape, where I decode complex concepts into captivating stories.

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