Top 5 Countries to Setup Offshore Development Center in 2023

Top 5 Countries to Setup Offshore Development Center in 2023

Quick Summary: In this article, we will explore the top 5 countries to setup offshore development centers in 2023. We'll analyze each country's advantages, challenges, and other factors that businesses should consider before making a decision.

The growing popularity of remote operations in western countries has made offshore development centers a popular choice amongst companies in the US, Canada, UK, Japan, Australia, Newzealand, the Middle East, and Europe. As more and more businesses plan to set up an offshore unit for their IT development, they face the same question ‘Where to set up an Offshore Development Center?”

This comprehensive guide will educate you on various factors to consider while assessing a location and the top 5 nations for setting up an ODC.

Recommended Read: Setup Your Own Offshore Development Center(ODC)

But before we move further, let us understand a few offshore development terminologies.

  • An offshore development company refers to a company that provides the service of setting up offshore development centers and teams.
  • An Offshore Team refers to the resources deployed in an ODC (Offshore Development Center) to work on your software development projects.
  • An ODC (Offshore Development Center) project refers to a software development project the offshore team is working on
Key Takeaways
  • India, Ukraine, China, Mexico, and the Philippines are the top 5 countries to consider for offshore development centers due to their skilled labor, favorable business environment, and cost-effectiveness.
  • When choosing a country, businesses should consider factors such as political stability, language proficiency, cultural compatibility, and time zone differences.
  • Setting up an offshore development center can bring many benefits, such as reduced labor costs, access to new talent pools, and increased flexibility in project management.
  • To maximize the success of an offshore development center, businesses should focus on effective communication, cultural integration, and building a strong team with the right skills and expertise.

Top 5 countries to setup offshore development centers

  1. India
  2. China 
  3. Poland
  4. Philippines
  5. Ukraine

1. India

India is one of the top 5 countries to setup offshore development center

When businesses consider offshoring, India is one of the first destinations that pop into one’s mind.  Over the last two decades, India’s IT sector has accelerated, giving neck-to-neck competition to the US.

    • English Proficiency
      • India has the second-largest English-speaking population in the world.
      • Ranks #48 in the world for English proficiency
    • Talent pool
      • 5 million software developers
      • Adds 200,000 IT graduates in a year to this population
      • 2.6 million stem graduates in a year
    • Technology
      • The forefront of tech innovation in AI, ML, Blockchain
      • 75% of global digital talent resides in India
    • Cost of Hiring Developers
      • $20 - $40 per hour
    • Government Policies and Political Stability
      • India is the world’s largest democracy
      • Politically stable environment and the
      • Favorable government policies towards FDI and the IT sector

Learn why hiring Indian developers is the key to successful offshoring.

2. China

China Developer Rates

China is another nation that has built a strong name in the offshoring industry. Today, China owns many of the fastest-growing IT companies.

    • English proficiency
      • Only 10 million of the 1.3 billion population speak English.
      • Ranks #49 in the world for English proficiency.
    • Talent Pool
      • Adds 4.7 million tech graduates every year
      • Technology
      • China ranked first in a “programming Olympics” by HackerRank
    • Cost of Hiring Developers
      • $35 - $40 per hour
    • Government policies
      • Government with communist ideologies
      • Lax enforcement on Intellectual Property (IP) laws

3. Poland

Poland Developers Rate

Despite being a small nation, Poland has the third most skilled programmers globally. Poland is the Research and development hub for global companies across industries.

    • English proficiency
      • 30% of the Polish population speaks English as their 2nd language.
      • Ranks #16 in the world for English proficiency
    • Talent Pool
      • 2,95,300 software developers
      • Adds 80,000 graduates every year
    • Technology
      • Ranks in top 5 nation for Java assessments other mainstream programming languages like Python, Shell, and Ruby
      • Tholons Globalization Index ranks Warsaw and Krakow in the top 50 cities for accelerated digital transformation.
    • Cost of Hiring Developers
      • $40 - $56 per hour
    • Government policies
      • Poland ranks 40th in the world in ease of doing business
      • Politically stable economy and government
      • Ranked 37 on WE Forum Global Competitiveness Report

4. Philippines

Philippines Developers

Apart from good command of the English language, Filipinos are known for their hard work and good work ethics. But the country faces turbulent weather conditions and tropical storms that can disrupt operations during summer.

    • English Proficiency
      • 92% of Filipinos speak English
      • Ranks #18 in the world for English proficiency
    • Talent Pool
      • 95000 technical experts
      • Adds 1,30,000 IT graduates every year
    • Technology
      • Manila is ranked as the second-best city for outsourcing in the world by the Tholons Globalization Index
      • The IT workers are all well-versed in Java, API development, .NET
      • Lacks expertise in complex projects
    • Cost of Hiring Developers
      • $4 - $10 per hour
    • Government policies
      • Ranks #95 in 190 economies in the ease of doing business
      • Favorable government policies
      • Ranks low in government stability
      • Numerous public holidays can cause delays in deliveries.

5. Ukraine

Ukraine Developers

Ukraine is a hotbed for IT outsourcing and ranks amongst the top 15 countries for offshore development. A strong focus on education has helped their tech industry to grow and flourish. 

    • English Proficiency
      • 80% of the IT employees within the country speak
      • Ranks #44 in the world for English proficiency
    • Talent Pool
      • 200000 technical experts
      • Adds 40,000 IT graduates every year
    • Technology
      • Ranked 11th by HackerRank for countries with best developers
      • Ranked 38th among the top 50 digital nations- 2020 Tholons Services Globalization Index.
      • Gartner’s list of top 30 countries for offshore services
      • Experts in Big Data & AI, mobile development, blockchain, and cryptocurrency projects.
    • Cost of Hiring Developers
      • $25 - $50 per hour
    • Government policies
      • Low taxation system
      • Active cooperation from the main IT industry development organization
      • Politically unstable

Now that you have clarity on the top 5 locations for offshore development centers, it brings us to our next crucial step- Choosing the right offshore development company/partner.

Here is a checklist that will help you choose the right Offshore Development partner.

How Your Team in India (YTII) can help you set up an Offshore Development Center in India

Since 2008, Your Team in India has helped companies globally scale up their business by setting -up Offshore development centers in India. Your Team in India offers three models of ODCs:

  • Product Engineering
  • Build-To-Scale
  • Build-Operate-Transfer (BOT)

To help start-ups, SMEs, and large enterprises successfully hire offshore teams to speed up their software development projects and reduce time-to-market.

With YTII’s ODC models, you gain:

  • A dedicated team
  • Quick and transparent hiring
  • On-demand scaling
  • Quick resource replacement
  • Tech support on ad-hoc demand
  • Extensive NDAs and complete KT
  • Support even after project completion
  • Full visibility of ongoing work
  • Well-defined SOPs and operation hierarchy

Ready to set up an offshore development center in India?  We are here to help! Book a one-on-one session with our expert here. You can also drop us an email at

Frequently Asked Questions (FAQs)

Why are these countries considered the top 5 for setting up offshore development centers in 2023?
These countries offer a combination of skilled talent pools, cost-effective services, strong IT infrastructures, and business-friendly policies, which make them ideal locations for setting up offshore development centers.
How do offshore development centers help businesses?
Offshore development centers enable businesses to access global talent, reduce operational and labor costs, and maintain a 24/7 work cycle, which can increase productivity and enhance product or service quality.
Are there any challenges associated with setting up an offshore development center?
Some challenges include managing cultural differences, navigating legal and regulatory requirements, maintaining effective communication, and ensuring data security. However, with proper planning and execution, businesses can overcome these challenges and reap the benefits of offshore development centers.
How can a business choose the right country for their offshore development center?
Businesses should consider factors such as the availability of skilled talent, cost of living, infrastructure, political stability, time zone differences, and ease of doing business when selecting a country for their offshore development center.

Manik Sharma

Manik Sharma

Dynamic and results-oriented business head at Signity Solutions with a proven track record of driving growth and profitability. Strategic thinker, adept at leading teams, developing new opportunities, and delivering exceptional business outcomes.