Romania as an IT Outsourcing Destination in 2025

Should you outsource software development to Romania? Ranked in the top 20 software development markets in Europe, Romania will surge in IT outsourcing at a 9.72% annual rate. Is this a suitable country for your product development?

I’m Dmytro Ovcharenko, СEO of Alcor, a tech R&D accelerator. We help US tech companies scale by building software engineering teams from 0 to 100 in Latin America and Eastern Europe. Silicon Valley-caliber talent, 40% less expensive than outsourcing, one month for a top team of five devs.

In this article, you’ll learn the key benefits and drawbacks of outsourcing to Romania, debunk its tech market myths, and see how this location stands out in Eastern Europe. Bonus: I’ll share how to make IT outsourcing to Romania easier and safer. Let’s get started!

Advantages of IT Outsourcing to Romania

Attractive Price-to-Quality Ratio

Outsourcing to Romania has a balanced price-to-quality ratio. Although low cost does not always equal high-quality services, it’s not the case with Romania—this country combines qualified IT specialists with cost-effective rates. 

For instance, the average salary of an American middle Blockchain developer equals $108,000 a year, while in Romania, it comes to $54,000. Similarly, a team of five middle AI engineers of the same rate would cost $540,000 in the US and $270,000 in Romanian annual salaries.

Thus, If you run a US-based tech product company, selecting Romania as an outsourcing destination could lead to a 50% cost reduction.

Outstanding Tech Expertise

According to the ITA, Romania comes 1st in Europe and 6th globally for the number of certified IT specialists per 1,000 inhabitants—greater than in the USA. If you hire developers in Romania, you’ll get well-versed coders. Their programming expertise ranges from popular languages like Java, JavaScript, C#, and Python to more specialized tools such as React, Angular, HTML, and CSS.

These deep tech qualifications are provided by 5 technical universities and 59 domain-specific educational institutions that annually bring up almost 7,000 new ICT professionals.

Blossoming Startup & Business Ecosystem

One of the youngest Eastern European countries in terms of IT sector development, Romania has a dynamic market with a thriving business landscape. The country is home to over 7,290 software development businesses. Most of these firms operate in business services, healthcare, financial services, and e-commerce. They deliver custom software development, IT strategic consulting, web development, technical support, information security, and mobile app development.

As for the startup scene, Romania boasts more than 1,662 startup companies, scale-ups, VCs, and PEs, as well as about 100 incubators & accelerators and €19B in enterprise value. The top-performing sectors are IoT, fintech, marketing, and gaming, while local unicorns include UiPath, FintechOS, eMAG, and MultiversX. No wonder why Romania ranks 44th worldwide.

Ripe IT Hubs

Bucharest

Holding 63% of software development revenues, Bucharest is a shining star in Romania’s IT market. This dynamic city has etched its name as the 8th tech hub across Eastern Europe, amassing about 58% of the country’s startups. 

Its robust technological infrastructure, flourishing business landscape, and strategic location explain why Google, Microsoft, Amazon, Oracle, Dell, and Adobe outsourced software development to Bucharest.

Cluj-Napoca

Often dubbed the “Silicon Valley of Eastern Europe,” Cluj-Napoca is another thriving tech hub in Romania. With a developed IT infrastructure and startup ecosystem, Cluj-Napoca holds 15% of the country’s startups. Cluj-Napoca is home to the R&D offices of leading tech enterprises such as Microsoft, Accenture, Siemens, Endava, and Emerson.

Iași

Romania’s second-largest city, Iași, has undergone an impressive technological transformation. From a post-industrial center, it’s now a booming tech hub with modern offices, tech parks, and infrastructure. Even though it’s not as huge as Bucharest, Iași excels in fintech and has exceeded $2.59M in total startup funding. All these benefits have attracted leading tech giants like Amazon, Oracle, and Accenture to the local market.

Business-Friendly Climate

What else makes Romania one of the most popular outsourcing locations is its favorable business conditions. The Romanian government offers tax incentives for companies exclusively engaged in innovation and R&D. They include:

• Profit tax exemption for the first 10 years;
• 50% deduction of the eligible R&D expenses;
• Accelerated depreciation for R&D equipment.

Convenient Location

Another advantage of opting for software outsourcing to Romania is its strategic location. It borders Ukraine, Hungary, and Bulgaria, which allows foreign tech companies to tap into the potential of neighboring markets easily. It takes only 2-4 hours by plane to get to the largest tech centers in Europe, which makes nearshoring to Romania a perfect choice for product businesses.

Debunking Myths about Outsourcing to Romania

• Stumbling IT Sector

Rumor has it the Romanian tech sector is growing too slowly. But look at the stats:

• Romanian IT services export should reach €44.8B by 2028.  
• Romanian software development services contribute to 6.2% of the national GDP.
• The Romanian outsourcing industry accounted for €3.1B of revenue in 2024. 
• 13% of VC investment in CEE is attributed to Romania.

From my perspective, Romania’s recent growth numbers undermine any bias and underline its strong potential for US tech companies.

• Few Tech Specialists 

Supposedly, Romania doesn’t have enough tech talent. In reality, it abounds with 250,000 software developers—one of the biggest tech powerhouses in the CEE. 

Are all programmers concentrated in tech hubs? Bucharest, Cluj-Napoca, and Iași act as the leading tech hubs, and Timișoara and Sibiu are the emerging ones. Yes, I must admit that the point of hub-dependent distribution of software developers in Romanian is valid.

The local tech talent market and labor law considered, building a team of remote software developers in Romania might be challenging. For example, Ledger, a French hardware wallet company, faced a lack of local market knowledge when establishing a development hub in Eastern Europe. Alcor guided them in tax management, labor law, IP rights protection, and employment contracts, helping ensure 100% compliance within both legislations.

• Poor English Knowledge

What else can make Romania software outsourcing seem risky is its presumably low level of the English language. Stats disprove it once again: this destination is ranked 12th globally and 11th in Europe in the EF English Proficiency Index. 

Moreover, English is not the only language Romanian developers know. It’s common for these IT professionals to have a good command of German, French, or Italian. Easy and effective communication with foreign tech companies serves as another reason for choosing software development in Romania.

• Significant Cultural Gap

The final myth about Romania’s outsourcing is cultural dissimilarity. In fact, all Eastern European countries have a close affinity with Western culture and business ethics, and Romania is no exception. 

Let’s assume you decide to scale up your tech business in this destination. In that case, you will get a top-notch software development team in Romania where each member demonstrates exceptional cultural adaptability, open-mindedness, dedication, and a desire to take your product to the next level.

Romania vs other Eastern European IT Outsourcing Destinations

As you now know the pros and cons of outsourcing in Romania, it’s time to assess its performance in the Eastern European arena. Let’s do a location comparison.

From the data above we can see that Poland has the largest talent pool in Eastern Europe–650,000 tech gems. For its part, Romania secures the 3rd position following Ukraine. 

When it comes to coding skills, Romania gives way to all of the countries presented, being ranked 7th by Coursera Global Skills Report 2024. The spotlight on Romania doesn’t dim regarding location and doing business rankings either, as it shows good results both among Eastern European destinations and on a global scale.

Senior Positions	Romania	Poland	Ukraine
Data Science Engineer	$54,000	$66,000	$42,000
Embedded Developer	$74,400	$78,000	$67,200
AI Engineer	$78,000	$80,400	$75,600
Python Developer	$81,000	$81,600	$72,000
DevOps Engineer	$81,600	$87,600	$72,000
Mobile App Developer	$81,600	$84,000	$72,000
Blockchain Developer	$81,600	$78,000	$60,000
Node.JS	$81,600	$84,000	$72,000
Cloud Engineer	$84,000	$72,000	$50,400
Developer salaries were converted to US dollars at a relevant exchange rate for February 2025.

With the annual senior developer costs compared, the price tag for Romanian developers is lower than the Polish software developer’s salary and higher than the Ukrainian one. To illustrate, consider the median salary of DevOps Engineers, Blockchain, Node.JS, and Mobile App Developers. In Poland, it varies from $78,000 to $87,600 a year, while in Romania, it totals about $81,600 per year, surpassing Ukraine’s range of $60,000-$72,000.

In conclusion, Romania emerges as a competitive IT destination that has limitless potential—affordable and with top-notch expertise in the tech domain. Therefore, opting for Romanian outsourcing is a winning option for your tech business.

What Can be Better than Outsourcing to Romania

Choosing IT outsourcing services in Romania is not your only way to scale. 

We at Alcor revolutionize staffing by launching R&D teams. This solution outruns outsourcing because:

• You recruit senior talent instead of paying more for mid-level expertise.
• Your team is fully integrated and loyal to your product, unlike the outsourced developers who see you as one more client on the list. 
• You save up to 40% on salaries and setup and administrative fees compared to outsourcing.
• You get an in-house team instead of buying out programmers. 

Our team works like a clock, so you can establish an R&D hub in Romania within a year with full HR, legal, and operational support.

Real Challenges When Outsourcing Software Development to Romania

Employment Contracts & Taxes 

For foreign tech companies, selecting the appropriate method of collaboration with Romanian developers can be a complex decision. In essence, there are two main approaches: employment contract and B2B contract.

The employment contract operates under Romanian Labor Law and the employer’s share and the employee’s share:

• Employer’s share: Mandatory pre-hire checks, Health & Safety training, Social Security Contributions (SSC)—2.25% on top of the gross annual remuneration of $60,000.
• Employee’s share: A 10% personal income tax (PIT) and SSC with an annual gross salary of $60,000—42% of their gross income (including PIT and SSC obligations)

Programmers can also get a 10% tax exemption if fitting the criteria outlined in Romanian law No 1168/2017.

Cooperation on B2B terms presupposes Romanian developers registering as sole proprietors and providing IT services to the company. The B2B contract requires the following payments on the employee’s behalf:

• A 10% personal income tax (PIT).

• Social Security contributions:

• A 10% health insurance contribution for income exceeding 60 minimum salaries.
• 25% pension insurance contribution for income exceeding 24 minimum salaries.

As a result, the effective tax rate for an IT specialist with an annual remuneration of $60,000 under the B2B contract would amount to approximately 25% of their gross income (including PIT and SSC obligations).

Check out our article on taxes for the IT industry in Romania to get a clearer understanding of the system.

Time Zone Difference

Despite Romania’s strategic European location, where it shares only a 1–2-hour time difference with neighboring countries, the scenario changes significantly when it comes to the US. For instance, the average time difference between Bucharest and New York is 7 hours, while with San Jose, CA, it reaches 10 hours. This can sometimes lead to irregular and abrupt cooperation between the in-house team in the US and offshore developers in Romania. 

Nevertheless, with a well-organized workflow, proper management tools, and regular meetings, it’s possible to reach productive cooperation between these two teams. Many international tech companies have been benefiting from outsourcing IT to Romania by enjoying round-the-clock business functioning.

IT Services to Outsource in Romania

If you have already decided to opt for Romania, consider the following 3 outsourcing services:

1. Business Process Outsourcing (BPO)

Outsourcing business-related processes is a widely used practice among tech companies that embark on offshoring. It allows them to hand over secondary activities to a local third-party vendor while focusing on product development.

You can choose from a wide variety of back-office services, including tech recruitment, HR management, employer branding, payroll & accounting outsourcing, legal compliance, and procurement of equipment. It’s not rare to also see front-office operations (marketing, software development, customer support, etc.) among the BPO services. However, if you are an owner of a product company, it’s better to refrain from delegation since it’s the core of your business.

2. Software Development Outsourcing

With more than 300 IT outsourcing providers in Romania, foreign companies have a range of services at their fingertips. While IT outsourcing is a popular strategy, it’s important to recognize its potential risks and drawbacks. When partnering with an IT outsourcing provider, product tech companies may encounter issues like cloudy pricing, potential data leaks, reduced control over software development, and even difficulties in securing additional investor funding. Therefore, to keep your essential activities in-house, consider setting up your own engineering team in Romania.

3. Tech Recruitment Outsourcing

This option comes in handy for tech companies seeking the advantages of offshoring software development in Romania. Cooperation with a competent tech recruitment company will enable you to get only seasoned engineers, set competitive annual remunerations and an attractive EVP, receive full coverage of the hiring processes, and get in-depth consultations on the local tech market. 

A US-based IT company Dotmatics chose this path when expanding into Eastern Europe. Cooperating with Alcor, Dotmatics not only saved on costs but also got a top-tier team of 30+ software developers within a year! Notably, several critical positions, including Product Manager and QA Engineer, were promptly filled with qualified candidates.

Tips to Make Outsourcing to Romania Easier

• Identify Tasks for Delegation

Before you consider outsourcing, it’s important to know which tasks or projects you want an IT outsourcing provider to handle. If your business isn’t in the tech industry and you have one-time tasks, you can easily pass it to an outsourcing provider. They’ll take care of everything from start to finish, liberating you from the hassles associated with tech recruitment and project management. 

If you run a tech product company and need help with software development, traditional outsourcing might be risky. In this case, think about using Recruitment Process Outsourcing (RPO) to get your own team of developers.

• Choose a Cooperation Model

The next step is to learn about engagement models. There are 4 of them:

1. Fixed Price: You set the project’s requirements, budget, and timelines in advance. This reduces the chances of unexpected costs, but it’s not very flexible, which can hinder project progress.
2. Time & Material: You pay for the actual hours spent on the project. Beware: without clear planning and timeframes, you might end up spending more than expected.
3. Dedicated Team: This flexible model allows changes throughout the project. However, you won’t get your own team of developers with this model, which could impact product quality.
4. Offshore Development Center: This is great for tech companies. You can build a loyal team of developers in a more cost-effective location. It’s safer than traditional outsourcing, but your provider is key. Consider leaning on a reliable partner to set up an offshore development center.

• Find a Reliable Provider 

When choosing an IT outsourcing provider in Romania, make sure they possess local market expertise, a strong track record, outlined guarantees, and positive reviews on independent resources. It’s vital to remember that a good vendor should be interested in your business success, providing the most efficient methods of smoothing out your outsourcing journey.

Expand to Romania with Ease

If you want to feel all the benefits of the Romanian outsourcing destination, consider partnering with Alcor. We launch software R&D accelerators and provide IT recruitment services in Romania, Poland, and Ukraine. With our support, Gotransverse, Chartbeat, and Dotmatics have successfully expanded to Eastern Europe. 

Our all-in-one solution covers: 

• Employer of Record. You don’t need a legal entity in Romania, we manage HR, payroll, and tax remittance. 
• Tech recruitment. We provide you with the top 10% of local devs with the help of a 253,000+ network of vetted candidates. We pride ourselves on a 98.6% probation period pass rate and 2.5 years of average candidate retention. 
• Operational support. Our team handles office lease and equipment procurement and delivery for your software development team: in touch 24/7, ready to solve arising queries. 

Why should you trust Alcor? We are transparent with pricing, incur no buy-out fees, and the tech team will be yours from day one—no intermediaries.