What is offshore software development? It is the practice of outsourcing software development tasks or projects to a company or team located in a different country. There are many reasons to choose offshore software development, ranging from cost-effectiveness and accessing specialized skills and resources to speeding up the time to market of a product.

Wondering how much it costs to choose software development abroad? Where can you find a reliable destination for your business? What factors do we need to consider before making a decision? In this article, we’ll analyze offshore software development rates by region and share tips on hiring developers reasonably well.

4 Factors that affect the offshore software development cost

1.Rates in each region

Countries worldwide differ in economic and labor development, resulting in varying labor costs and professional qualifications. Consequently, each region has its unique standard of living, which influences software development rates. Therefore, selecting a location becomes crucial, requiring careful consideration to ensure a balanced budget.

2.The Complexity and Size of project

Wanting to develop complex and advanced software applications? Finding an offshore software development team with exceptional technical and professional skills is necessary. This team needs to be able to work proficiently with many different programming languages, frameworks and software architectures. Due to their expertise, experience and ability to deliver quickly and with high quality, hiring such teams may incur higher costs. In particular, large and complex projects require advanced technical skills and complex software architectures, which can also increase development costs.

3. Expertise

Each programmer has his own level of expertise and experience. Hiring experienced programmers often results in quality work and saves time and money. They also have a deep understanding of programming languages and tools, creating reliable solutions. However, the cost of hiring this development team is often higher.

4. Technology Stacks and Tools 

The choice of technology for your software project directly influences development costs. Based on the demand for new technologies and market trends, the rates of developers specializing in these technologies tend to be higher.

Surveys have indicated that several popular technologies are widely employed in software development. However, if you select a less commonly used technology, you may need to pay a premium for developers with expertise in that specific technology.

Software Development Rates by Region in 2024

North America

North America is known as the epicenter of technological development, with the United States a destination that attracts outstanding developers from around the world. Companies here always need to recruit new technical staff, and it’s not surprising that the salary of software engineers in North America is considered the highest in the world.

Here, the cost of offshore software development usually ranges from $60 to $210 per hour. This is not just a number, but also a challenge for businesses, especially for large projects requiring thousands of hours of work. With this amount of money, continuing a project can become difficult and financially unpredictable.

Western Europe

Similar to North America, Western Europe is an ideal destination for IT developers from around the world. The introduction of the Schengen Agreement has facilitated the movement and settlement of developers from neighboring countries. With this advantage, Western Europe is currently home to more than 3,000 IT companies. These companies offer offshore software development services at rates ranging from $60 to $200 per hour. This reflects the competition and diversity in the market, as well as the quality and experience of developers in this region.

The Central and Eastern Europe

The Central and Eastern Europe region, which includes countries in central and eastern Europe, is considered an ideal option for offshore software development. The information technology industry here is growing strongly, with a significant increase in the number of software development businesses every year. According to data from Clutch, there are about 2,230 information technology companies in Northern, Central and Eastern Europe. Software development costs here range from $30 to $60 per hour on average.

Latin America

Latin America is an appealing choice for those seeking to hire a remote development team. Here, skilled professionals offer services at competitive rates. Additionally, the region’s advantageous geographical location facilitates convenient project execution through outsourcing.

The price range for offshore software development services in Latin America typically falls between $30 to $90 per hour. This price range highlights the competitive nature and diverse talent pool in the region, as well as the high level of expertise and experience among developers.

Asia

Offshore software development is becoming popular in Asia, especially in Southeast Asia and South Asia. Both regions are known as emerging tech hubs, with software development rates ranging from $18 to $70 per hour. This equates to an average monthly cost of $3,100 to $11,760 for a software engineer. 

With abundant human resources and competitive prices, these regions facilitate offshore software development, providing cost-effective solutions to businesses globally.

Asia offshore software development : Pros and Cons

As analyzed, we can easily see that Asia is a promising destination to save your budget but still provide quality products with talented human resources. Now, let’s explore some standout countries known for their excellent offshore software development services in the region.

Hire an Offshore Dedicated Development Team at LARION

By hiring an Offshore Dedicated Development team at LARION, you can save costs while ensuring the quality of the product. This is achieved by accessing a diverse range of skills and expertise, with a project manager overseeing the work to ensure timely and on-budget completion.

Don’t take our word for it; let our clients talk about our work

In this project, Larion had the opportunity to assist GHX in building Nuvia – a cloud-based VIM (virtual item master) healthcare supply chain data management solution, which greatly helped them save up to 87% in development costs after 12 months

Read more in the case study: How LARION’s NuVia solution helped GHX cut costs significantly and boost revenue? 

So if you need a dedicated offshore team to optimize your project ROI and strengthen your development project. We are more than happy to help.

Build your Dedicated Team now!

FaQ

How to optimize cost while Outsourcing Offshore Development?

To optimize costs while outsourcing offshore development, consider the following strategies:

1. Detailed Project Planning: Clearly define project requirements, objectives, and timelines to avoid scope creep and unnecessary expenses.
2. Selecting the Right Partner: Choose an offshore development partner with a proven track record, relevant expertise, and transparent pricing models.
3. Effective Communication: Establish clear communication channels and schedules to minimize misunderstandings and rework, reducing associated costs.
4. Agile Methodologies: Adopt agile development methodologies to adapt to changing requirements efficiently, thus avoiding costly delays.
5. Continuous Monitoring and Reporting: Regularly monitor project progress and financial metrics to identify potential cost overruns early and take corrective actions.
6. Negotiate Contracts Wisely: Review contracts carefully, negotiate terms, and consider factors such as pricing structures, payment schedules, and service-level agreements to ensure cost-effectiveness.

What services are suitble for outsourcing?

A wide array of IT tasks can be effectively outsourced to offshore software vendors. Among the most commonly delegated processes are:

• Mobile app development
• Web app development
• Software maintenance
• Software quality assurance (QA) and testing
• Data analysis and data management

How to build a team with an offshore software development provider? How to optimize cost while Outsourcing Offshore Development?

Getting started with a software company offshore corporation involves several steps to ensure a smooth and successful collaboration:

• Define your project requirements and objectives clearly.
• Research and select a reputable offshore software company with a proven track record and expertise in your industry.
• Initiate communication and establish a clear line of contact with the offshore team.
• Collaborate closely with the offshore team to outline project timelines, milestones, and deliverables.
• Ensure effective project management and communication throughout the development process.
• Regularly review progress, provide feedback, and address any issues to ensure project success.

By following these steps and working with a trusted offshore partner, you can streamline the process and achieve your project goals efficiently.