IT Outsourcing in Eastern Europe: 2026 Market Overview

IT outsourcing to Eastern Europe is entering a new era, with the market projected to hit $5.34 billion by 2025. The main drivers? A massive tech talent pool of 1.75 million engineers, up to 50% lower salaries compared to the US, and outstanding development expertise across a well-developed tech landscape in Poland, Ukraine, Romania, and Bulgaria.

But there’s something else that makes top tech companies choose to outsource to Eastern Europe – and it might just become your go-to business strategy.

	Poland	Ukraine	Romania	Bulgaria
Tech expertise in EE	#3	#5	#4	#4
English proficiency in EE	#1	#7	#2	#3
Cost savings compared to the US	38%	50%	40%	50%

I’m Dmytro Ovcharenko, CEO at Alcor, a new-generation provider of software R&D as a service that helps US and Western European tech companies expand to Eastern Europe and Latin America. With our all-in-one solution, our clients receive Silicon Valley-grade tech recruitment, comprehensive EOR support, and vital operational assistance to build development teams from 10 to 100 coders within a year.

In this article, you’ll get key insights into software development outsourcing in Eastern Europe, including its tech landscape, talent pool, average developer rates, and taxes, as well as learn why India and China are falling far behind. You’ll also discover several principal tech hubs in the region and their standout features.

Key Takeaways

• With the growing popularity of outsourcing, new trends are emerging in the tech industry: India and China are gradually losing their positions, while nearshoring to the EE region is on the rise, with BPO services outsourcing as an optimal and cost-effective model.

• Known for its 1.75+ million talent pool, high-tech expertise, salaries that are 44% lower, and a favorable business environment, Eastern Europe is becoming the top choice for American companies.

• Eastern Europe boasts high English proficiency, while LATAM benefits from geographic proximity and minimal time zone differences with the US. Compared to Asia, Eastern Europe offers smoother collaboration, enhanced communication, a stronger work ethic, and fewer time zone challenges, resulting in higher-quality development. Among the leading tech hubs in Eastern Europe, Poland, Romania, Ukraine, and Bulgaria rank among the top 5 countries in terms of the number of tech specialists and the quality of software development.

• The digital transformation and rapid GDP growth of Eastern European countries are fueling the region’s attractiveness as a destination for tech outsourcing.

• To fully leverage Eastern Europe’s booming tech potential, Alcor helps Western tech companies establish their own R&D centers in the region – offering comprehensive EOR support, rapid hiring of top 10% engineers, and end-to-end operational assistance.

4 Latest Worldwide Trends in IT Outsourcing

Eastern European outsourcing is gaining momentum as global tech companies shift away from traditional hubs. India is losing ground due to weak education, low code quality, and cultural communication gaps. China, once a top choice, now raises concerns over IP protection, language barriers, and time zone differences, prompting many US companies reconsider their presence. Meanwhile, Eastern Europe is emerging as a hotspot for fast-growing industries such as AI, fintech, cloud computing, and green technology, with countries like Ukraine, Romania, and Poland leading the charge. On top of that, BPO services are booming, helping tech firms streamline operations, reduce risks, and cut costs. All signs point out: Eastern Europe is a smarter, more efficient alternative to expensive in-house teams and outdated outsourcing destinations.

1. India is losing its ground as a leading tech outsourcing destination

India was considered one of the top tech outsourcing destinations for over a decade. While some countries were taking the first steps in their long outsourcing journey, India could already provide foreign tech companies with a large and cheap tech workforce.

But as we know, low prices often come with their own costs, and in the case of India, it’s the quality of the code. So, what are the prerequisites for that?

Problem #1: Ineffective college education. According to the National Employability Report, only 4.6% of Indian engineering graduates possess good coding skills. Yet, it is only with the help of AI coding tools that 81% of Indian developers noticed any improvement in code quality.

Problem #2: Work attitude. Since most Indian programmers are paid low wages, they often undertake multiple projects simultaneously. That’s why it’s common for them to show low motivation, dedication, and accountability. As a result, there’s a risk that performance will not meet the client’s expectations.

Problem #3: Cultural mentality. Today, this remains one of the primary obstacles to effective cooperation between American tech companies and Indian developers. India is a high-context culture where communication is generally more indirect than in most Western countries. That’s why what is said may have multiple interpretations depending on the context of the interaction, which can lead to misunderstandings and challenges at work.

Result: When it comes to the price-to-quality ratio, India lags behind other locations, such as Eastern Europe or Latin America.

2. China’s tech outsourcing pitfalls scare away more and more companies

Known for its enormous tech talent pool, China has been luring foreign tech companies to leverage the benefits of software outsourcing by getting diverse expertise and technology. However, with the rapid expansion of the outsourcing market, the drawbacks of tech development delegation to China have become more vivid.  Even last year, foreign direct investment dropped by 27.1% –the lowest level since 2016. So why are international companies choosing not to enter the Chinese market?

Problem #1: Copyright issues. As it is known, Intellectual Property Rights (IPR) protection is of great importance when it comes to outsourcing. Since vendors gain access to sensitive data, they could put the exclusivity of the client’s product at risk. Not all service providers in China comply with international IPR rules, which sometimes results in data breaches. Today, this poses a major concern, as the global average cost of data leakage in 2024 has reached $4.88 million. The same principle applies to quality control, as Chinese standards differ from those in the US and Europe. 

Problem #2: The language barrier. China’s #91 ranking may lead to inefficient communication and production, and increase the chances of getting a poor-quality software product.

Problem #3: The 12-13-hour time difference. A significant gap with the main development centers in the US may cause difficulties in scheduling online meetings and providing real-time feedback, potentially resulting in delays in your product development. And this, keep in mind, is arguably the most critical factor in today’s highly competitive market.

Result: Many tech companies are turning to EE and LATAM to establish their tech operations. Continue reading to learn about the key differences between software outsourcing in Eastern Europe and Asia.

3. Eastern Europe is turning into a hotspot forhigh-growth industries

– AI: Artificial intelligence is rapidly gaining momentum across Eastern Europe, with the regional market projected to reach $6.1 billion by 2025 and grow another 26% by 2030. Ukraine ranks second in the region in terms of the number of AI companies, following Poland. The Ukrainian AI market alone reached $419.4M in 2025, with over 30 new companies founded between 2020 and 2024.

– Fintech: Fintech is emerging as the next top-performing tech sector in Eastern Europe – and Romania is at its forefront. In 2023, the country’s fintech revenues reached $64.9 million, marking a 21% year-over-year increase and an impressive 131% growth since 2019. Bucharest alone accounts for 77% of the turnover, serving as a hub for verticals like open banking, embedded finance, crowdfunding, digital wallets, and payment solutions.

– Cloud-based services: Poland is leading the way in cloud adoption, with 80% of enterprises migrating email systems to the cloud, 70% using cloud storage, and 65% relying on cloud-based productivity tools. The government’s investment in 5G and fiber has accelerated digital transformation and the integration of Industry 4.0.

– Green Tech: CEE countries are shifting towards sustainability and green innovation. With support from initiatives like the Green Transition Forum, the region is developing climate tech funds, prioritizing green R&D, and leveraging local tech expertise to build competitive climate solutions.

4. BPO services outsourcing is booming

Amidst the rise of the gig economy and the persistent challenge of finding skilled talent, technology companies are increasingly turning to outsourcing in Eastern Europe and other offshoring regions to fuel their growth. In fact, Business Process Outsourcing (BPO) stands out as a dominant force in the global outsourcing market, with forecasts predicting its market size to reach $603.4 billion by 2032, growing at a 9.1% CAGR. 

Workforce managers can leverage BPO services to efficiently manage a full spectrum of operational tasks:

• Front-office functions: marketing, customer support, and tech assistance
• Back-office operations: payroll, HR, compliance, office logistics, and hardware procurement

For tech companies looking to scale, back-office BPO services are a smart add-on to their offshore development centers. This setup not only cuts costs and boosts flexibility but also keeps teams focused on core priorities – all while reducing the risks often tied to traditional tech outsourcing.

As we can see, building development teams in Eastern Europe and offshoring tech operations to this region is becoming a new trend. So, the question is: how can you do it efficiently without wasting time, energy, or money? That’s exactly what we’ll explore below, so stay tuned.

9 Benefits of Outsourcing in Eastern Europe

The benefits of outsourcing to Eastern Europe make it a top choice for tech companies seeking quality, speed, and savings. This region offers the perfect mix of affordability and high-level expertise. Here’s what sets it apart:

• Well-developed tech ecosystem
• Large pool of skilled software developers
• Advanced tech expertise across various domains
• High English proficiency among IT professionals
• Competitive labor costs
• Favorable tax regulations
• Business-friendly environment and strong R&D incentives
• Cultural compatibility with Western partners
• Convenient geographic location and time zone overlap

All these advantages make Eastern Europe a strategic region for building dedicated development teams and scaling your tech business efficiently.

Well-developed tech ecosystem

It might come as a surprise, but today Central and Eastern European countries actually outperform Western Europe in terms of the number of companies in the digital sector (3.9 ICT firms per 1,000 inhabitants vs 2.1 in Western Europe) and the share of ICT employment (4.8% vs. 4.1%).

The region is also home to over 3,800 startups, 57 unicorns, and 275 scale-ups – representing approximately 41% of Europe’s total. Its startup ecosystem is valued at over $273 billion, with Poland ($65B), Estonia ($44B), and Ukraine ($33.7B) leading the charge. Most funding goes to transportation, fintech, and energy tech startups, while AI, climate tech, and robotics are gaining traction – creating the perfect environment to launch your business here.

Large tech talent pool 

Eastern Europe boasts 1.75 million software developers, with Poland, Romania, and Ukraine leading the pack. This pool broadens year by year as local higher educational institutions produce approximately 80,000 STEM specialists annually. 133 of these universities are featured in the QS World University Rankings 2025, indicating that Eastern European programmers receive the best tech qualifications.

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Unparalleled tech expertise

The second key driver behind the growing demand to outsource IT to Eastern Europe is that it has some of the most well-versed tech experts in the world. Taking leading positions in renowned skill rankings, such as SkillVue, TopCoder, and HackerRank, they demonstrate exceptional excellence in JavaScript, Python, C++, TypeScript, PHP, and HTML. In fact, the Coursera Global Skills Report 2025 placed Polish software developers, along with specialists from Bulgaria, among the top 45 countries globally for technology skills.

Outstanding English proficiency

Another strong reason to choose IT outsourcing in Eastern Europe is the advanced level of English among local developers. According to the 2024 English Proficiency Index, Poland, Romania, and Bulgaria all rank in the global top 20. What does this mean for you? Seamless communication, mutual understanding, and smooth collaboration with Eastern European software developers – ultimately resulting in a high-quality and competitive product.

Slashed labor expenses

Another benefit of software development outsourcing to Eastern Europe is its cost-effectiveness. The table below shows that the annual salaries of programmers in popular Eastern European tech hubs are approximately 1.5 times lower than those in the US. For instance, the average salary for a senior specialist in the US reaches $122,000, whereas for an Eastern European coder, the salary is $68,800. That’s about 44% of saved labor costs, can you imagine? My accounting team has prepared a cost overview of Eastern European specialists, allowing you to clearly see the potential benefits to your business.

Senior Developer Gross Annual Income, USD
Positions	USA	Poland	Romania	Ukraine	Bulgaria
PHP Developer	102,000	70,800	72,000	55,200	54,000
Java Developer	110,400	81,000	81,600	69,000	72,000
AI Engineer	171,600	81,000	78,000	69,600	75,600
Mobile Developer	165,000	78,000	81,600	72,000	72,000
DevOps Developer	145,200	87,000	81,600	72,000	72,000
Blockchain Developer	156,600	84,000	81,000	60,000	60,000
Data Science Engineer	126,000	82,800	57,000	51,600	51,600
Cloud Engineer	146,400	81,000	84,000	69,600	69,600

Additionally, you can save on employment and benefits costs:

• Recruitment fee: In Eastern Europe, it typically ranges from 15% to 25%, depending on the position and tech stack. In the US, the fee is slightly higher, ranging from 25% to 35% of the developer’s annual salary.
• Basic benefits package: In the US, the cost of a basic benefits package is approximately $15,400 per year per developer. Meanwhile, in Eastern Europe, the budget for a basic benefits package is more than twice as low – about $6,350 per year per tech professional.

Senior Developer Employment Cost, USD
Positions	USA	Poland	Romania	Ukraine	Bulgaria
PHP Developer	102,000	91,310	92,750	72,690	71,150
Java Developer	110,400	103,550	104,270	89,150	92,750
AI Engineer	171,600	103,550	99,950	89,150	97,070
Mobile Developer	165,000	99,950	104,270	92,750	92,750
DevOps Developer	145,200	110,750	104,270	92,750	92,750
Blockchain Developer	156,600	107,150	103,550	78,350	78,350
Data Science Engineer	126,000	105,710	74,750	68,270	68,270
Cloud Engineer	146,400	103,550	107,750	89,870	89,870

Favorable taxation

Did you know that outsourcing Eastern European developers can save you money on taxes? Generally, taxes in this region are significantly lower than in the United States and many Western European countries. For instance, Bulgaria and Romania offer the lowest corporate income tax (CIT) among the EE countries, ranging from 10% to 19%, while in the US, it can reach 33%. Want the full picture? Our legal pros at Alcor have compiled a clear tax overview of Eastern Europe – check it out:

	USA	Poland	Romania	Ukraine	Bulgaria
Corporate Income Tax	21-33% (including both federal and state taxes)	19%	16%	18%	10%
Personal Income Tax	10-37% (including both federal and state taxes)	12%	10%	18% or 5% (under the Diia.City regime)	15%

Moreover, programmers from this region can be employed on B2B terms, which will liberate you as an employer from costly social contributions and taxes. Consider partnering with a local Employer of Record company to free yourself from tax and SSC withholding.

Business-friendly environment

Governments in the tech hubs in Eastern Europe pay special attention to enhancing their tech infrastructure and business friendliness. Thanks to these efforts, countries such as Poland, Bulgaria, and Romania have achieved A2–A3-level business climates. Cities like Warsaw, Łódź, Sofia, Cluj-Napoca, and Bucharest range among the top 10 business-friendly cities in CEE, offering high financial affordability, a favorable business environment, and strong talent availability. All of this continues to lure more foreign tech companies to outsource to Eastern Europe.

Speaking more specifically about the conditions for software development in Eastern Europe, the majority of these locations offer attractive incentives for tech companies engaged in research and development (R&D) activities. For instance,

• Poland allows businesses that conduct R&D to deduct of 200% of R&D costs,
• Romania offers a 0% income tax rate for R&D companies for a period of 10 years.

Learn more about Eastern European technology recruitment!

Cultural affinity

Another key element in opting for Eastern European software outsourcing is a Western-like mindset and business ethics. Programmers from this region:

• Stand out for their adaptability, flexibility, and dedication, with strong traits in problem-solving, self-development, and creativity,
• Are able to act independently and don’t hesitate to offer best practices to improve the quality of your product,
• Demonstrate excellent communication and teamwork skills.

Smart geographic location

Case 1: If you’re a tech executive of a Western European tech company, the optimal geographic location and average time difference of just 1–2 hours allow your nearshore developers from EE to follow the same schedule as your headquarters. This enables real-time collaboration and streamlines communication between your teams.

Case 2: If you’re a CTO of a US-based tech business, you can fully leverage the 6–7-hour (East Coast) to 10-hour (West Coast) time difference to create a round-the-clock development process. When your day ends, your remote developers are just getting started – implementing your feedback, refining your product, and continuing development while you rest.

Software Development Outsourcing to Eastern Europe Can Be Easier with Alcor

Outsourcing software development to Eastern Europe becomes simple with Alcor’s all-in-one R&D center solution. We combine EOR, tech recruitment, and full operational support in countries like Poland, Romania, Bulgaria, and Ukraine. Our EOR services cover compliance, onboarding, payroll, and benefits – no legal entity required. Alcor has already helped companies like Franki, ThredUp, and Sift set up dedicated tech teams, hire top engineers fast, and streamline payroll and admin operations. With access over253,000+ pre-vetted candidates, we build strong teams quickly – first 5 hires in just one month. We also provide office setup, equipment sourcing, and 24/7 local support.

To make a good pick before starting IT offshoring/IT nearshoring to Poland, Romania, Bulgaria, Ukraine, or other EE countries, you can partner with the local R&D center services provider like Alcor, who knows all the specifics of these Eastern European locations and offers services like:

• Comprehensive EOR: A comprehensive service package that covers 100% legal and compliance support, developer onboarding and offboarding, payroll processing, and tax and employee benefits management –all without the need to establish your own legal entity.

Real-life case: For Franki, a US-based experience app that was entering a new market for the first time, Alcor provided a legal entity, along with deep expertise and knowledge of local employment laws, benefits, bonus salaries, and PTO. Additionally, we assisted with onboarding new iOS and Android engineers and took over tax and payroll management –eliminating the need to build an internal team of accounting specialists and helping them avoid unnecessary expenses.

• Silicon Valley-grade recruitment: 253,000+ highly skilled, pre-vetted candidates, the first 5 hires within the first month of cooperation, and team expansion to 30 people over the following 3 months.

Real-life case: During our cooperation with the world’s largest consignment company, ThredUp, we scaled their Eastern European team to 47 skilled developers and hired a Senior Full Stack Engineer in just 2 weeks – an expert with exceptional proficiency in C++, C#, .NET, and TCP/IP, and one of the few specialists of this kind in the Eastern European market.

• 360-degree operational support: Assistance with office search and leasing, hardware procurement, and providing comprehensive tech services with 24/7 in-country support, ensuring smooth operations from day one.

Real-life case: One of the businesses that has benefited from our R&D solution in Eastern Europe is Sift. Not only did they set up an offshore center in Europe, but they also got 30 top-tier engineers in the first year and ultimately reached a total of 51 throughout our partnership. Additionally, we provided our Employer of Record in Eastern Europe package, which included full compliance with EU and US regulations, tax support for offshore developers, labor and contract matters, and strong employer branding. This package increased their offer acceptance rate by 15%. We also handled equipment procurement and management for Sift’s team.

Is It Safe to Outsource Software Development to Eastern Europe?

Eastern European outsourcing remains a secure and resilient choice for international tech companies. Despite geopolitical challenges, Central and Eastern Europe (CEE) offers political stability, NATO/EU backing, and strong economic performance. In 2024, CEE capitals outperformed the EU average with 3.7% GDP growth, led by Lithuania, Poland, and Croatia. The rise of “friendshoring” also strengthens the region, as Ukrainian developers and businesses continue to relocate to Poland, Germany, and other EU hubs. As for Ukraine itself, its IT sector generated solid export revenues in 2024, with 90% of startups projecting future growth. Even amid war, nearly half report that the ecosystem is operating at an average level –confirming that Eastern Europe remains a dependable tech outsourcing hub.

Despite the geopolitical instability facing the world today, Central and Eastern European countries remain safe havens for global investors, offering a resilient and stable economic environment strengthened by their membership in NATO and the EU.

• GDP growth: In 2024, CEE capitals demonstrated remarkable GDP growth of 3.7%, compared to the EU average of just 1.4%. Lithuania, Poland, and Croatia led the way. Attracted by the high potential, appealing cost-effectiveness, abundant talent availability, and strategic location, many international enterprises and companies continue to outsource software development to Central and Eastern Europe.
• “Friendshoring”: The phenomenon that today significantly contributes to the resilience of the CEE market. At the beginning of 2022, about 17% of Ukrainian businesses had relocated abroad, with EU countries such as Poland (63%) and Germany (25%) being favored destinations, along with Belgium, Bulgaria, and Estonia. Moreover, about 10% of Ukrainian developers have migrated abroad due to the war, with Poland, Spain, Germany, and Portugal being the primary destinations, as reported by the Ukrainian IT community, DOU.
• What about Ukraine? The situation concerning the market landscape for tech offshoring or IT nearshoring to Ukraine, while facing challenges, shows promise. In 2024, the country’s tech industry generated over $6.4 billion in export revenue. Around 90% of all startups anticipate strong growth in the future, and despite the ongoing war, 46% of them still believe the ecosystem is functioning at an average level.

2 Major Insights about the Eastern European IT Market

Eastern Europe is rapidly emerging asa powerhouse for digital innovation and IT outsourcing. Businesses across the region are embracing digital transformation by adopting technologies such as AI, cloud computing, and IoT, while investing in automation and upskilling to enhance their global competitiveness. These strategic moves are reshaping industries from finance to healthcare and attracting more foreign tech players. At the same time, the IT outsourcing and outstaffing sector in Eastern Europe is gaining momentum. Thousands of vendors now deliver a broad range of services –from software engineering and cybersecurity to cloud consulting and staff augmentation. Thanks to its tech expertise, cost-effectiveness, and strong work ethic, the region offers a reliable alternative to more expensive in-house teams or underperforming offshore vendors.

Digital transformation 

Central and Eastern Europe has enthusiastically embraced digital transformation driven by the pandemic’s impact. According to PwC’s Global Survey, 52% of CEOs in the CEE region believe that without transforming their businesses, their companies will not be economically viable within the nextdecade.

To bolster the region’s attractiveness for foreign investment and ensure business sustainability, CEE entrepreneurs have prioritized investments in automation and talent upskilling. Moreover, the adoption of modern technologies, such as AI, IoT, blockchain, 5G, and cloud computing, across various sectors, including finance, healthcare, manufacturing, and transportation–has fueled innovation and enhanced competitiveness on a global scale.

These efforts yield significant results. For instance, Poland’s digital economy is projected to surge to $148.6 billion by 2030, already topping the ranking of the largest digital markets in the CEE.

IT outsourcing & outstaffing

The Eastern European tech industry has been growing by leaps and bounds, transforming into a mature market. Its revenue is projected to show an annual growth rate (CAGR 2025-2030) of 3.94%, resulting in a market volume of $18.3 billion by 2030.

The most prominent sector of the EE tech industry is tech outsourcing, which is expected to reach nearly $7.4 billion by 2030, according to Statista. About 4,800 Eastern European IT outsourcing and outstaffing companies specialize in a wide variety of services, including custom software development, web development, cloud consulting, app development, tech-managed services, tech staff augmentation, and cybersecurity. 

Clearly, the region is thriving. But does it truly outperform other outsourcing destinations?

Eastern Europe vs LATAM vs Asia

Eastern European outsourcing stands out for its balance of high-quality tech talent, strong English proficiency, and proximity to Western business culture. Latin America competes closely, offering a comparable talent pool and strong technical skills, especially in Mexico and Argentina. Its biggest edge? Time zone alignment with the US, which enables real-time collaboration. However, English fluency can be a challenge in some LATAM countries. Asia leads in talent volume and low-cost offerings, with millions of developers in India and China. Yet, issues such as language barriers, time zone differences, and varying work ethics often impact quality and communication. As a result, many companies find Eastern Europe and LATAM more reliable for seamless software development outsourcing.

Latin America

• Tech talent: The Latin American tech market boasts almost the same number of software developers as Eastern Europe, 2 million tech professionals. Mexico leads the pack with over 800,000 tech experts, followed by Colombia with 165,000 programmers and Argentina with 150,000 coders.
• Technical prowess: Latin American developers are on par with their Eastern European counterparts, with many countries ranking in the top 85 in the Coursera Global Skills Report 2024. Developers from Mexico, Brazil, Chile, and Argentina excel in data science skills, ranking high in the overall score. The skill stack of LATAM software engineers typically includes .NET, Java, Ruby, Python, C++, C#, React, and Node.js.
• Possible challenge: When it comes to English proficiency, Latin American tech experts generally lag behind their Eastern European counterparts, with Argentina being the notable exception, ranking high in the English proficiency index, while other countries are positioned somewhat lower. However, it’s essential to note that developers typically possess strong foreign language skills, and LATAM developers bring over 20 years of experience working with US tech companies.

• Distinctive feature: What makes software outsourcing to Latin America more attractive than outsourcing to Eastern Europe is its geographical proximity to the US. Most of these countries have no or little time difference with most American states. For instance, Mexico shares the same time zone (UTC-5) with California. At the same time, Colombia has time alignment with New York and Washington, D.C., which minimizes delays, facilitates real-time communication, and enhances the overall efficiency of product development.

Asia

• Tech talent: Today, Asia boasts a talent pool four times larger than that of Eastern Europe and Latin America combined, with approximately 13 million tech experts. Most of these specialists are concentrated in China, with 7 million developers, and India, with around 5.8 million programmers. Renowned for their cost-effective outsourcing services, these destinations offer potential savings on software development projects. Thanks to good higher education, most developers in this region possess decent tech and data science skills, with Japan, Indonesia, and Singapore leading the list.
• Technical prowess: Despite supposedly high-tech competence in Python, Java, JavaScript, C/C++, and TypeScript, the quality of the tech outsourcing services in Asia is less clear-cut than in Eastern Europe.
• Possible challenges: For instance, low English proficiency in leading locations such as India (ranked 60th) and China (ranked 82nd), significant time differences with the US (ranging from 10 to 15 hours), and differences in work ethic and mentality that can significantly disrupt the development process. To avoid potential miscommunications, production delays, and the delivery of poor-quality products, some tech companies prefer IT outsourcing to Eastern Europe or Latin America.

Top 5 IT Outsourcing Destinations in Eastern Europe

Eastern Europe is a go-to region for tech outsourcing, thanks to its strong engineering education, skilled developers, and cultural compatibility with Western clients. Countries like Poland, Ukraine, Romania, the Czech Republic, and Bulgaria are leading the way, offering large tech talent pools, thriving tech ecosystems, and solid English proficiency. Each of these destinations features well-established tech hubs, vibrant startup scenes, and expertise in popular programming languages. Whether you’re scaling your product, building a custom solution, or seeking cost-effective IT talent, Eastern Europe offers a reliable and competitive outsourcing environment.

Poland

The largest techservices market in Central and Eastern Europe, known for its mature tech ecosystem and global R&D centers.

Tech talent pool: 650,000+

ICT graduates: 20,000

Tech businesses: 60,000+

Tech hubs: Warsaw, Krakow, Wroclaw, Poznan, Lodz, and Tri-city (Gdansk, Gdynia, Sopot)

Tech industry ranking in Europe: #13 with $30.4 billion in revenue

Technology skills: JavaScript, Java, Python, Ruby, Shell, TypeScript, PHP, C#

Coursera Global Skills Report 2024: #3 in EE

Global English proficiency ranking: 15th out of 116

Ukraine

The second-largest tech market in Eastern Europe, recognized for its resilient IT sector and highly skilled engineers who keep delivering.

Tech talent pool: 302,00+

ICT graduates: 27,000

Tech businesses: 7,977

Tech hubs: Kyiv, Lviv, Odesa, Dnipro, Kharkiv

Tech services exports: reached $6.4 billion in 2024

Technology skills: JavaScript, Java, Python, C#, C++, PHP

Coursera Global Skills Report 2024: #6 in EE

Global English proficiency ranking: 40th out of 116

Romania

A rapidly expanding IT hub with multilingual talent and high English proficiency – ideal for global-facing tech operations.

Tech talent pool: 250,000+

ICT graduates: 10,000

Tech businesses: 7,290

Tech hubs: Bucharest, Cluj-Napoca, Iasi

Tech industry ranking in Europe: #17 with $3.6 billion in revenue

Technology skills: JavaScript, Java, PHP, C#, Python, React, Angular, HTML, and CSS

Coursera Global Skills Report 2024: #5 in EE

Global English proficiency ranking: 12th out of 116

Discover how an IT recruitment agency in Romania can accelerate your team expansion!

Czech Republic

An established tech hub with a strong educational base and one of the highest digital skills rankings in Eastern Europe, making it a top choice for software development.

Tech talent pool: 221,000

ICT graduates: 16,000

Tech businesses: 7,700

Tech hubs: Prague, Brno, Ostrava

Tech industry ranking in Europe: #14 with $11.1 billion in revenue

Technology skills: Python, Java, JavaScript, C#, HTML, Swift

Coursera Global Skills Report 2024: #2 in EE

Global English proficiency ranking: 25th out of 116

Bulgaria

A cost-effective techdestination in the EU, Bulgaria combines high technical expertise, excellent English proficiency, and a growing number of tech companies.  

Tech talent pool: 110116,000+

ICT graduates: 6,100

Tech businesses: 10,000

Tech hubs: Sofia, Burgas, Plovdiv

Tech industry ranking in Europe: #30 with $3.8 billion in revenue

Technology skills: C#, JavaScript, Java, Python, SQL, PHP, .NET

Coursera Global Skills Report 2024: #4 in EE

Global English proficiency ranking: 16th out of 116

Choosing an Outsourcing Partner in Eastern Europe

To benefit from Eastern European outsourcing without the risks, pick a vendor with domain expertise and access to skilled, senior-level devs. Ensure they can quickly scale your team up or down and add rare tech roles when needed. Look for clear communication, aligned time zones, and strong English skills. Prioritize IP protection and legal compliance. And finally, avoid hidden fees – opt for partners who offer full pricing transparency, including gross developer salaries and flat service fees.

If you want to avoid the high cost of building an in-house team and make the most of Eastern European outsourcing, I’ve prepared a short checklist to help you choose a trusted vendor:

• Project needs & tech expertise

Choose a partner with hands-on experience in your domain and a track record of delivering similar products. Whether it’s AI, fintech, or cloud-based platforms, your vendor should offer access to developers with the right hard skills, frameworks, and seniority level – not just generic CVs.

• Team size & flexibility

Can they build a team of 3 or 30? Your provider should adapt to your growth pace –whether you’re launching a pilot project or scaling up to 100+ engineers. Fast ramp-up, smooth downscaling, and the ability to add rare specialists on demand are key.

• Communication & time zone alignment

Look for overlapping working hours, fluent English, and a proactive approach to collaboration. The right outsourcing team should feel like an extension of your HQ, not a remote black box.

• IP protection & legal compliance

Ensure your intellectual property remains secure.A reliable vendor will offer robust legal contracts, NDAs, and ensure compliance with local labor laws, GDPR, and international standards.

• Transparent pricing with no hidden markups

Avoid unpleasant surprises. Your outsourcing partner should provide clear and itemized pricing, with no double margins, hidden fees, or unclear commission structures. Look for a flat service fee model and full visibility into engineers’ gross salaries.

If you answered “yes” to all the points – congratulations, you’ve found your ideal vendor! But if not, Alcor is here to offer something beyond traditional outsourcing – an R&D center with your own corporate culture and top-tier developers on board.

Ready to build your dream R&D team? Let Alcor make it real.

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