We build and operate top-tier tech teams in LATAM and Eastern Europe.
Up to 40% savings. 100 people a year. No entity. No buy-out fees.
Tired of looking for a perfect destination for IT nearshoring? Romania’s software revenue continues to grow—from €1.6 billion in 2023 to the projected €2.4 billion by 2028. Should you set up your dedicated software team in Romania? If so, what is the best way?
I’m Maryna Panchuk, Head of IT Recruitment at Alcor. We can build a software development center in Romania, Eastern Europe, and LATAM from 0 to 100 software engineers in a year. The secret is our all-round solution: tech-focused EOR, spot-on tech recruitment, and comprehensive operational support. In action, Alcor supercharges your savings and your product development team.
In this article, you’ll learn about the pros and cons of getting a Romanian dedicated development team, Romania’s business environment perks for your company, and alternatives to a dedicated software development team in Romania.
Key Takeaways
- A dedicated development team works on your product and under your brand but is managed by a recruitment services provider.
- Romania has a thriving ICT market, expert tech talent, and business-friendly taxes for foreign companies. Plus, you can save up to 60% on salaries.
- An IT dedicated team in Romania allows for flexibility and focus on strategic product tasks, but poses risks due to project-oriented specifics, data leakage, indirect team management, pricing and buy-out fees, and potential concerns for investors.
- A software developmant center in Romania is a viable alternative: you get a team to yourself for the long run and with no extra charge incurred.
Dedicated Development Team Model
A dedicated software development team is a collaborative model that allows a client to work with a team of software developers employed by a service provider. It enables technological companies to build software teams with various tech stacks for different projects.
IT companies seek to engage dedicated software development teams globally through offshoring. For example, they turn to Eastern European countries, seeking IT recruitment services in Poland, Romania, Bulgaria, Ukraine, and others, which remain popular choices for Western tech firms. However, while this model offers substantial benefits, it also comes with certain pitfalls. Now, let’s move to a detailed overview of the advantages and disadvantages of a dedicated development team in Romania.
Why Choose Romania to Build a Dedicated Development Team
Flourishing IT market
Here are the stats that prove Romania’s tech market potential:
- ICT market. In 2025, the expected ICT sector turnover in Romania is around €1.2 billion. The software engineering industry will also contribute 10% to the country’s GDP by 2030.
- Tech infrastructure. Romania hosts 7,290 software enterprises and more than 200 IT outsourcing services firms on Clutch that offer applications and software development solutions. It is also home to 1,600+ startups, including the unicorns UiPath and eMAG.
- Top 10 in global rankings. Romania ranks 5th in the Global Talent Competitiveness Index and 8th regionally in the Global Startup Ecosystem Index 2024.
Skilled IT talent pool
Another reason why tech companies choose to work with an extended software development team in Romania and hire Romanian developers is the local talent pool. The country boasts 250,000 tech specialists with strong expertise in PHP, C#, Java, and C++. With 10,000 annual STEM graduates, Romania is also a leader for the number of certified tech specialists in Europe.
Strong English skills
On top of profound tech skills, Romanian software engineers impress with their excellent command of English. According to the EF English Proficiency Index 2024, Romania is ranked 12th among 116 countries. If you plan to team up with a dedicated team in Romania, rest assured about effective communication and execution of tasks.
Moderate costs
Another appealing advantage of nearshoring to Romania is local salary & tax rates. Software engineers from this country earn 2-3 times less than their counterparts from the US or Western Europe. Thus, when making the choice of teaming up with a Romanian software development team, tech companies can optimize their budget while still getting access to top-notch talent. Just compare:
| Average annual salary ($) | Romania | The USA |
| Senior AI developer | $78,000 | $132,000 |
| Senior Python developer | $81,000 | $114,000 |
| Senior Java developer | $81,500 | $146,000 |
| Senior Blockchain developer | $81,500 | $132,000 |
With this difference in salaries, a dedicated software team in Romania with the expertise like above will cost you 62% less than one in the US.
Business-friendly taxes
There are several business tax incentives in Romania for a foreign company planning nearshore software development:
- Reduced corporate tax rates for micro companies. The standard CIT rate in Romania is 16% and applies to companies with an annual revenue exceeding €500,000. If the company’s annual revenues are below €500,000, they can pay a reduced tax rate of 1% if they have at least one full-time employee and 3% if there are none.
- Tax exemptions and deductions. If a company is engaged exclusively in innovations and R&D, then it is exempt from profit tax for the first 10 years. Moreover, it is possible to deduct 50% of the eligible R&D expenses and apply accelerated depreciation for R&D equipment.
Flexibility
A dedicated software team in Romania ensures swift project outcomes by allowing businesses to gauge their staffing needs and adjust the team size for fast project completion. However, while this flexibility is beneficial, successful outstaffing also requires effective project management and clear communication to ensure seamless collaboration with remote developers.
Focus on core operations
By entrusting the web, mobile, and application development tasks to external teams in Romania, in-house team members can allocate their time and energy toward more important projects. This allows for increased efficiency and productivity within the organization. Still, note that managing an IT dedicated team in Romania poses certain challenges, which you’ll read about later in this article.
Alternative to Dedicated Software Team in Romania
..is your own R&D center
If you want a more long-term and scalable solution, consider establishing a dedicated software development center with your own software development team in Romania. It’s an all-in-one model: tech recruitment, EOR services, payroll and accounting assistance, legal advice, and operational support.
Alcor can help you both hire Romanian developers, conduct IT recruitment in Ukraine or Poland, and build your own software R&D center in these or any other Eastern European or LATAM country.
Why us?
- Our 40 dedicated recruiters operate in 8 key locations and conduct full-cycle tech recruitment at a stellar level—they need 8 CVs on average for an accepted offer.
- We focus on tech, and that’s why our talent retention rate is 90%—our hires stay on for 2.5 years on average and account for 99% client retention.
- We don’t charge buy-out or hidden fees. The software development team is yours, so you keep full control over its management and product development.
With Alcor, you’ll get your own offshore dedicated development center in Romania with full back-office support—from 0 to 100 software engineers in a year.
Ready to partner? Contact us for more information!
Pitfalls of Working with a Dedicated Teams from Romania and How to Address Them
Project-oriented approach
If you get an extended team in Romania, keep in mind that output weighs more than long-term outcomes. The IT outstaffing business model makes software engineers adopt a project-oriented mindset as they move from one assignment to another. As a result, Romanian dedicated software teams may not consistently exceed expectations or have the same level of enthusiasm for your product.
Risk of data leakage
A project-oriented approach for software development in Romania can increase the risk of data leakage. When software engineers frequently transition between projects, they might fail to uphold strict data security regulations. More so, when software development is facilitated through an intermediary, like in outsourcing.
Indirect team management
Since communication with the augmented team in Romania is managed through a third party, you won’t directly interact with the team as a client. Overseeing both the team and the software development process becomes a bottleneck. What are the risks? Potential delays, communication gaps, and a lack of accountability.
Alcor hands over full team control to the clients—Dotmatics, Sift, Ledger, and more—from day one.
Cloudy pricing
Cost reduction drives tech companies to consider working with an augmented software team or turn to IT outsourcing in Romania for custom software development. However, unexpected costs come up in both models. Unforeseen changes, adjustments, and fixes often lead to a final bill way beyond your expectations.
Barriers to investment attraction
Seeking investment is your way to expand your business. But would an outstaffed software team in Romania rather than an in-house one convince potential investors? For one, they may doubt your product development competence, making their bet on your company tentative at best.
Buy-out fees
Imagine you notice that a software developer from the extended software team shows potential for your project. You might decide to hire this tech talent as a full-time employee. However, bringing a rising star on board as a full-time dev often involves a buy-out fee. This fee, in turn, can complicate the decision-making process, as it requires extra funding and negotiations to ensure a smooth transition.
How Dedicated Teams Influence Romania’s Software Industry
The Romanian software industry demonstrates steady growth:
- The software market has grown by 14% each year since 2013, according to Report Linker.
- Over the last decade, foreign direct investments grew by 3.3% every year, hitting $6.3 billion in just 12 months.
- As a result, the country ranks in the European top 10 for launching a startup. In 2024 alone, Romanian startups raised $162 million in funding.
The segment of application development software has grown in particular. In 2025, its projected revenue is up $106 million and is expected to rise at a steady rate of 6.44%. By the end of 2029, the market volume will reach $136 million.
As foreign companies often opt for an application development dedicated team in Romania to optimize product development budget and access top talent, this trend indicates the overall contribution of this trend to Romania’s software industry growth.
Real Example of Hiring a Dedicated Development Team in Romania
When ThreadUP, a US resale platform, decided to expand to Eastern Europe, Alcor set them up an R&D office without the need for a legal entity.
We built ThreadUP a team of 47 elite programmers. Our key achievements included:
- Hiring a Senior Full Stack Engineer with rare proficiency in C++, C#, .Net, and TCP/IP in just 2 weeks.
- Finding an ML engineer, Java developer, and a .Net Warehouse developer in our 253,000+ Silicon Valley caliber talent database.
- Consulting the client on the benefit of stock options for the most dedicated employees.
On top of that, we ensured seamless Employer-of-Record services and 100% legal compliance for both American and Eastern European legislations. ThreadUp’s partnership with Alcor was a win—soon after, the company successfully entered the IPO and raised $168 million in funding.
References on Dedicated Teams from Romania
- Report Linker
- Statista
- International Trade Administration
- IBIS World
- StartupBlink
- The Global Talent Competitiveness Index
- The Global Startup Ecosystem Index Report 2024
- EF English Proficiency Index
- Romania Insider
- Vestbee
- The Recursive