The offshore software development model is fast-rising today, especially among growth-focused startups: following Mordor Intelligence, by 2027, the global IT outsourcing market will be worth $682.3 billion compared to $526.6 billion in 2021. Such countries as Estonia, Albania, Portugal, India, Vietnam, and Brazil are expected to become game-changers in this sphere.\n\n\nBut before you explore the best countries for outsourcing software development, it’s important to understand why offshoring works. ProCoders has gathered our best experience here, so let’s get started!\n\n\nNearshore and Offshore Outsourcing: What is The Difference?\n\n\nNearshoring is a form of outsourcing that involves sending work to countries that are geographically close to your company’s home country. For example, it is nearshoring if you’re located in North America and want to try software development outsourcing in Mexico.\n\n\n\n\n\nConversely, offshoring involves sending work to a company or professionals from another country located further from yours. The goal of offshoring is to find low-cost labor and reduce your operating costs.\n\n\nLet’s have a look at how nearshoring and offshoring are similar and different compared to each other:\n\n\n\n\n\n\nSimilar\nDifferent\n\n\n\n\nBoth offshoring and nearshoring involve companies assigning work to a contracting company in another country.\nOffshore outsourcing is typically a longer-term commitment because of the distance between the two countries.\n\n\nIn both cases, the company doing the offshoring or nearshoring doesn’t have to train employees.\nNearshoring is when a business sends work to another country that is nearby. Offshoring is when a business outsources its work to an entirely different part of the world, often many time zones away.\n\n\nThe contact company handles all interviewing, hiring, and training of employees.\nCultural differences. Your nearshore colleagues may live within the same culture as you, but if, for example, you’re from the USA and hiring a specialist from Estonia, be ready to expand your cultural borders!\n\n\nBoth have the benefit of allowing companies to focus on their core competencies.\nLanguage. In the case of nearshoring, there’re more chances that a person you hire would speak your native language. However, as for offshoring, you can also hire people who speak your local or project language – that’s not a problem nowadays.\n\n\nThe company and contact company will generally set up a contract with deadlines and deliverables.\nThe number of countries. In the case of nearshoring, you’re limited to a particular number of countries where you can find a specialist.\n\n\nCompanies who do this work tend to have an in-depth knowledge of their client’s businesses.\n\n\n\nBoth offshoring and nearshoring can save money for companies, big and small.\n\n\n\n\n\n\n\nWhy do You Need to Outsource?\n\n\nWhen planning to outsource your project, you need to consider several things. First of all, is it worth outsourcing your project at all?\n\n\nActually, the answer is yes. You can outsource projects of any type and size. However, the decision depends on the resources you possess: financial, timing, etc.\n\n\nAccording to Statista, the reasons why many countries outsource IT services worldwide are the following:\n\n\n\nProvide access to skills not available in-house: 46%\n\n\nSave money: 70%\n\n\nFree up resources to focus on core business: 35%\n\n\nAdd scale to an IT organization: 40%\n\n\nImprove flexibility in the use of resources: 40%\n\n\nImprove the ability to innovate: 10%\n\n\n\nAt the same time, Deloitte Global Outsourcing Survey found the following reasons for companies to adopt micro-segmentation worldwide in 2021:\n\n\n\nReduce the cost of hiring new personnel, facilities, and equipment. This includes fewer tax benefits than you would pay for an employee.\n\n\nThe release of capital to allow to invest in other company activities.\n\n\nFree up resources to focus on core business.\n\n\nIncrease agility with plug-and-play solutions.\n\n\nImprove service quality by bringing unavailable in-house skills to the company, which equals abilities to innovate.\n\n\n\nIn general, companies outsource mainly to gain access to resources they do not possess, which are critical to a project’s success.\n\n\nAfter answering such a question as “What is missing in the company? Human resources, physical infrastructure, new technologies?” you will be able to choose the right work model, which wouldn’t necessarily be outsourcing.\n\n\nFor example, if you see that your team lacks professionals, you can use staff augmentation. Staff augmentation is a flexible staffing solution that allows your business to draw on short-term or long-term resources as needed. With this approach, you can hire personnel with the skills and experience needed for particular projects but without the ongoing financial commitment of a full-time employee.\n\n\n\nHowever, now another question arises: when do you need outsourcing services? Outsourcing is needed when:\n\n\n\nyou do not have the opportunity to manage the project;\n\n\nthere is no team yet;\n\n\nyou don’t have enough experience;\n\n\nyou have other projects that require attention and need to focus all your resources on them without delay.\n\n\n\nFor example, if your project is a small start-up, your budget is limited, and it is not clear whether you will be able to attract investors regularly to support an entire department. In this case, outsourcing would be the best option.\n\n\nBenefits of Offshore Outstaffing\n\n\nAs discussed in the previous section, it is not enough to know the best countries for offshore software development. It is more important first to determine how offshoring can help your project. And this is what we at ProCoders discovered:\n\n\nClose skills gap\n\n\nThough there is a global shortage of software developers, there are still some countries that offer high-qualified talent at competitive pricing. If you need to find specialists for a project, it may make sense to consider outsourcing the project to one of these countries.\n\n\nFor example, such best offshore software development countries as Estonia, India, Mexico, Brazil, China, etc., give you access to affordable professional talents with which you can close skills gaps in your project. More so, finding talent in any of these best countries to outsource software development is a great way to overcome hiring hassles and speed up your development.\n\n\nInnovation and Perspective\n\n\nWhen a company is globally-minded, offshoring worldwide can help it achieve its goals. Just imagine: you can get fresh ideas just because an IT professional grew up in another country and thus thinks differently.\n\n\nBesides, offshoring will also help you:\n\n\n\nTest your product and see how an international community would perceive it.\n\n\nGain more creative input and insights in developing your software products.\n\n\n\nProCoders have developers all over Central Europe: Estonia, Croatia, Albania… So don’t miss your chance to get a fresh look at your project!\n\n\n\nRound-the-clock development\n\n\nFrom the ProCoders’ experience, the differences in time zones present an excellent opportunity to accelerate the development process.\n\n\nImagine you are already in the offshoring. At the same time, you have your own in-house team. In that case, both parties can ensure round-the-clock development such that the work hours of one side would fall to the rest hours of the other and vice versa. This means the development process is not entirely paused almost every hour during workdays.\n\n\nCost Optimization \n\n\nIf your company operates in a country with a high cost of living and, thus, high costs for professional developers, it would probably be a better choice to hire a development team located abroad with lower costs.\n\n\nFor instance, Estonia, and countries in Central Europe in general, is one of the most affordable options for offshore software development, mainly because the cost of living is low. Because of that, Estonian developers would not charge as high as developers in countries like the US, Germany, France, etc.\n\n\nIn addition, by using outstaffing services and hiring professionals abroad through the vendor, you can avoid hidden costs such as hiring expenses, insurance, taxes prescribed by your country, etc.\n\n\n\nThe Most Important Challenges You Will Face\n\n\nDuring our work, ProCoders have faced all imaginable problems, and we already have experience dealing with them. So let’s have a look at the challenges you may face!\n\n\nManagement\n\n\nAs a business owner or manager, you want to ensure that all employees within your company are working towards the same goals and objectives. However, this can be difficult when working with outside contractors on your IT project.\n\n\nIn this case, you should take care of the Discovery Phase. Discovery Phase is a project implementation plan (a roadmap) of how your project will be created. Usually, such a plan helps to estimate your project development as accurately as possible. With the Discovery Phase, it would be easier for you to manage your outsourcing team, as you will understand milestones and times when particular goals should be achieved.\n\n\nLanguage and Communication\n\n\nUsually, remote developers require different communication than you might be used to. Communication is no longer just about sending an email or making a phone call — it’s about using tools like video calling, instant messaging, and project management software to keep everyone in sync.\n\n\nHere are some tips and tricks for communicating with remote developers:\n\n\n\nUse video calls and instant messaging whenever possible. Video calls allow you to see the person you’re talking with and manage visual cues more easily than text does.\n\n\nChoose your tools wisely. Find tools that are easy for everyone on your team to use and won’t require training time before getting started (if possible). For example, Google Hangouts allows you to start a group video call with up to 10 people at once, while Slack lets you create channels so that certain conversations include certain employees that need to be up-to-date considering particular issues.\n\n\nUse a project management tool. Most project management tools have chat features built in, allowing users to post statuses and comments about their work outside of scheduled meetings. You can also use it to set up regular check-ins with each person so that there’s always someone who can answer questions or provide feedback if needed.\n\n\n\nHowever, it can be disappointing when you hire a developer remotely, and they appear unable to communicate with you properly. To prevent miscommunication, choose those proficient in the same language as you. At the same time, remember that even if a developer’s English level is not C2, they still may provide you with professional work with their B1 level.\n\n\n\n\n\nLegal Challenges\n\n\nBe prepared to face legal challenges when outsourcing your software development project. For example, there is a possibility that the legal landscape of a country you outsource to would be pretty different from yours, especially regarding registration, fees, taxes, benefits, and other compliance issues. Besides, there might be some legal obligations applicable to the client’s country as well if receiving labor from abroad.\n\n\nAll legal issues, regardless of whether they pertain to the offshore development company or the client company, must be resolved when working internationally. If they aren’t solved on time, it can result in heavy sanctions. However, cooperation with ProCoders removes the worry about these things while fulfilling legal requirements because we have already taken care of them!\n\n\nIn every contract, we prescribe everything in detail from our and the client’s sides. Besides, ProCoders have experience working with different countries, so we know how to behave in most cases!\n\n\n\n\n\nHow to Choose The Best Countries for Outsourcing: Main Criteria\n\n\nThis section compares top offshore software development countries from various world regions, ranked according to quantifiable metrics. The criteria used to determine the rankings include:\n\n\n\nAvailability of skills and the size of the talent pool\n\n\nThe rates for hiring developers in the countries\n\n\nThe different time zones applicable for the countries\n\n\n\nSkills and Talent Pool\n\n\nAccess to a global pool of talented developers is one of the advantages for companies that use software development outsourcing services in top offshore software development countries. In addition, these countries are home to many developers and different agencies, making them stand out in the rankings.\n\n\nConsidering quantity vs quality, Central Europe has more than one million specialists in its countries. Central European specialists are even displacing engineers from Germany or Great Britain!\n\n\nRates\n\n\nThere are significant financial benefits when it comes to outsourcing, that’s why companies usually outsource to a country where developers charge less.\n\n\n\nAlthough the rates for coders are lower in Estonia than in other countries, this doesn’t mean that Estonian developers are of low quality, since they are usually highly qualified and experienced. The lower rates just reflect the low cost of living in Estonia.\n\n\nTime Zone\n\n\nIf you’re outsourcing work to a company in another country, then time zone differences will come into play. However, it can also depend on which work model you would like to choose: offshoring or nearshoring.\n\n\nFor your team to be online during business hours, nearshoring can help. Nearshoring means that the development company will be located near your local time zone, so there are no time differences between you and them.\n\n\nHowever, if you want your project to be developed continuously, you can consider offshoring (even to other continents). For example, you can organize a round-clock development if you have more than a 6-hour difference between you and your offshore team. When your in-house team works during their business hours, your remote development team will have some rest. And vice versa: when your in-house team has some rest (as it’s nighttime by your side), your offshore team will take care of the further development during these hours.\n\n\nList of The Best Offshore Software Development Region and Countries\n\n\nThe table overviews the details of assessing the best countries to outsource web development.\n\n\n\n\n\n\nTop offshore software development countries\nDevelopers\nFirms\nBase Rates\nTime Zone (GMT)\n\n\n\n\nPortugal\n10 000+\n128\n$21 500\n+1\n\n\nCroatia \n9 000+\n3 101\n$18 800\n+2\n\n\nEstonia \n30 000+ \n66\n$16 000\n+3\n\n\nAlbania \n35 000+ \n120\n$14 000\n+2\n\n\nIndia\n>5 million\n1.9 million\n$6,725\n+5:30\n\n\nPoland\n>300,000\n1300\n$20,060\n+2\n\n\nMexico\n>225,000\n>600\n$18,368\n-5\n\n\nBrazil\n>500,000\n>7000\n$19,330\n-3\n\n\nArgentina\n115 000+\n3 800\n$12,379\n-3\n\n\n\n\n\n\nHow to Find The Best Software Development Vendor for Your Project: 5 Key Points of Hiring \n\n\nSet actionable goals \n\n\nSetting goals that align with your company’s overall mission is important. A good rule of thumb for setting goals is the SMART principle: Specific, Measurable, Achievable\/Attainable, Relevant\/Realistic, and Time-Based.\n\n\n\n\n\nBesides, when choosing a vendor to help you achieve your goals, assess the vendor’s values and skills during the consultation phase.\n\n\nOne of the most prominent examples is ProCoder’s collaboration with Roth River to develop a web application for their IoT sensors. It was easy to hit the ground running because the goal was clear: create a cross-platform interface that allows Roth River to layer on a mobile app alongside its web application.\n\n\nEvaluate vendors\n\n\nIt’s really important to understand the level of professionalism of the vendor you choose. The main points for evaluation are:\n\n\n\nindustry experience;\n\n\ninfrastructure;\n\n\ntalent pools (as they can give insights into how a vendor would perform on your project).\n\n\n\nFor example, Frontegg chose ProCoders because they knew that we had access to high-quality full-stack developers and could help them overcome the registration and regulatory challenges they would otherwise have faced in Israel.\n\n\nCheck who your vendor is \n\n\nReputation is everything in business, and your choice of an offshore development vendor can have a huge impact on your success.\n\n\nHere are some tips on how to check your vendor’s reliability:\n\n\n\nCheck the company’s reputation online. You can search for reviews on social media sites like Facebook and LinkedIn or at independent review sites like Clutch.co or g2.com.\n\n\nCheck the company’s portfolio. You should also look at the sample projects on the vendor’s website and see if they are similar to what you need to do in terms of size and complexity level.\n\n\nTalk to the vendor’s past clients directly. You can call or email them and ask about their experience working with the vendor.\n\n\n\n\n\n\nInterview the developers \n\n\nWhen choosing a software development company, it is not enough to speak with the management team of the remote agency. It would be best to interview the developers and engineers and check their skills directly because one of them (or even all of them, depending on how many specialists you need) will work with YOU.\n\n\nInterviewing the coders and giving them live coding tasks enable you to adjudicate their skills, experience, cultural fit, and mentality. ProCoders know how important this stage is. Because of that, we always allow potential clients to get in touch with our developers in person or virtually. This helps us to convince clients that their work is going into the hands of highly competent professionals.\n\n\n\n\n\nCommunicate with your vendor\n\n\nLast but not least is to pay attention to how well your vendor communicates with you. For these, pay attention to the next factors:\n\n\n\nHow often do you get replies from your vendor? If your vendor is always in touch with you, you shouldn’t worry about anything (at least at the initial stage). However, if you get replies twice daily (when you always write to them and need to remind them that they need to reply to you), you risk facing the same irresponsible workers with whom it would be hard to communicate.\n\n\nHow does your vendor reply to you? It’s also very important to pay attention to the tone of voice your vendor uses to reply to you. ProCoders is sure that you would like to collaborate only with specialists who can keep communication on a professional level even in the most stressful situation).\n\n\nDoes the contract suit you? Before signing an outsourcing contract, look for the scope of work. The scope defines what needs to be done and how much time it will take for your team to complete it. It also specifies any deadlines for delivering a product or service. Also, ensure that your vendors can deliver on time and within budgeted costs. If they don’t have enough resources, they might ask for more money later on, which will result in extra costs and delays in delivery time.\n\n\nDo you have the same values? When choosing a vendor for a project, it’s important to find one that shares your values. If you can check this by looking at the company’s previous work and comparing it with the type of work you need them to do for your business, it will help ensure that the two of you are on the same page.\n\n\n\n\nConclusion \n\n\nIn this article, ProCoders looked at what offshore software development is, why it is important to delegate your tasks to other professionals, and especially why it’s important to outsource your projects to the best countries for outsourcing software development. \n\n\nThe main advantages of the latter are:\n\n\n\nThis way, you will find a talent you need. It’s much easier to look for a specialist worldwide than to look for a bunch of skills in local developers;\n\n\nInnovation and perspective. By outsourcing the development project to international specialists, you will gain creative insights and fresh analysis from abroad;\n\n\nRound-the-clock development. While your in-house team sleeps at night, your offshore team can work during the day.\n\n\nCost optimization. By outsourcing your projects, you avoid hidden costs such as hiring costs, insurance, employee country taxes, etc. Besides, it’s much cheaper to outsource your projects to Eastern European countries than to look for a developer in the USA or Western Europe.\n\n\n\nNowadays, the best countries for offshore software development are considered to be Estonia (having 66 development firms and more than 30,000 developers), Albania (having 120 IT companies with 35,000+ developers in total), and Poland (having more than 50,000 developers in 800 companies).\n\n\nIf you’re looking for a place where you can outsource your project, ProCoders is the best choice for it. With developers worldwide and all possible IT skills, we’ll offer you exactly what you need. Laravel, React, Swift, Angular – which technology do you need your project to be written on?