Your Own Software Development Center

#1 way to expand from 0 to 100+ engineers in a year in Latin America or Eastern Europe. With Alcor, you’ll get:

  • Valley-caliber team of 20+ senior developers in 3 months
  • Up to 40% savings compared to traditional outsourcers
  • Employer of Record service โ€“ no need to set up your legal entity
  • Payroll, benefits, taxes, and other operational support
  • 100% legal compliance
  • Zero buy-out cost

Alcor is Disrupting the Traditional Outsourcing Models to Meet the Evolving Requirements

Valley Talent for 40% less costs
All-In-One single place for your needs
No Buy-Out insource for free

Software Development Center is about

Valley-Caliber Talent

Hire top 10% of local software developers

Zero Launch Cost & Risk

No setup fees, no legal entity needed, liability shield

Full Integration

Your team, your culture, your practices

Zero Buyout Cost

Insource your team to your entity at no cost at any time

Why Alcorโ€™s Software Development Center is Transformational

Same budget, better talent

  • Outsourcing company
  • Alcor
  • $ 70,000
  • $ 60,000
  • $ 50,000
  • $ 40,000
  • $ 30,000
  • $ 20,000
  • $ 10,000
  • 0

Same talent, 40% savings

  • Outsourcing company
  • Alcor
  • $ 70,000
  • $ 60,000
  • $ 50,000
  • $ 40,000
  • $ 30,000
  • $ 20,000
  • $ 10,000
  • 0
  • IT Professional compensation
  • Recruiting cost
  • Providerโ€™s uplift

Key Things about the Software Development Center

What is a software development center?
Advantages of setting up your offshore delivery center
Are there any challenges or risks?
Signs a business is ready to expand with a software development center
How to set up a software development center?
Mistakes in building a software development center
Top destinations to start a software development center: Latin America
Top destinations to start a software development center: Eastern Europe

What is a software development center?

A software development center is your R&D office abroad, built from scratch by Alcor to let you focus on product development and equipped with skilled software engineers at lower costs โ€” an ideal solution for both large tech companies and startups.

Alcorโ€™s unique solution enables you to establish your own software development center in Latin America and Eastern Europe with a team of Silicon Valley-caliber software engineers. The best part? You donโ€™t need to worry about establishing a legal entity in these regions โ€” Alcor takes care of everything for you. From full-cycle tech recruitment to comprehensive EoR support and other back-office services, all offered with flexible a la carte pricing, we make it seamless and straightforward. Plus, there are no buy-out fees or markups โ€” your development team is yours from day one, and you can save 20%-40% compared to traditional IT outsourcing or outstaffing. Isnโ€™t that revolutionary?

Advantages of setting up your offshore delivery center

  • Access to a wider pool of tech talentย ย ย 

The latest ManpowerGroup research reports that around 70% of tech leaders in the US face difficulties filling roles. With such a severe talent scarcity, Western tech companies are turning to different regions to hire skilled tech talent and launch their software development centers. This opens doors to millions of candidates with diverse skills and tech stacks. For example, Latin American and Eastern European regions boast over 2.5 million tech specialists who demonstrate Silicon Valley-level expertise in Java, C++, PHP, Python, JavaScript, Swift, .NET/.NET Core, and other programming languages. Additionally, they are well-versed in database development, mobile development, cloud computing, and data analytics.ย 

  • Opportunity to slash costsย 

Hiring a development team abroad not only unlocks a treasure trove of skilled talent but also lets you enjoy the benefits of more affordable salary rates. For example, senior software developers in Latin America earn about $55,000 per year, while those in Eastern Europe make around $68,000 annually. By comparison, their counterparts in the US charge approximately $117,000 for similar services. On top of that, setting up development centers in these regions means benefiting from business-friendly tax rates and a welcoming environment for growth. ย 

  • Scaling abroadย 

Setting up your software development center in a foreign country allows you to tap into new markets and build global partnerships while scaling your operations efficiently. Many Western tech companies have already leveraged this strategy to achieve significant growth. For example, Sift expanded its team with 30 talented software engineers in Eastern Europe within just a year and later achieved unicorn status after raising $50 million in funding from Insight Partners. Other success stories include Ledger, Dotmatics, Grammarly, and the list doesnโ€™t stop there!ย 

Are there any challenges or risks?

  • Legal aspectsย ย 

One of the main challenges in setting up yourย software development centerย abroad is understanding the local legislation and ensuring full compliance. On the one hand, you can tackle it all yourself, starting from scratch. In this case, prepare for a marathon of paperwork and months โ€”possibly years of setup, all while learning the ropes and dodging costly pitfalls in the local market. In addition, overlooking critical legal requirements or missing deadlines could result in hefty penalties, fines, or even the risk of legal actions that could severely impact your business operations and reputation. On the other hand, you can skip the red tape and partner with a reliable local vendor. They handle all the legal nuances and setup, letting you jump straight into building your team without the bureaucratic headaches.ย 

  • Quality of hiringย 

Hiring software engineers in an unfamiliar market is no walk in the park. It demands in-depth research into the local labor scene, crafting a smart tech recruitment strategy, and navigating the interviewing process. On top of that, finding that perfect candidate who not only fits your technical needs but also blends seamlessly with your company culture adds an extra layer of complexity. To save time and money while establishing a software development center, tech companies choose to partner with experienced recruitment providers. Typically, these providers offer clear guarantees, such as a 2- to 6-week timeline to fill the vacancy, a specific number of CVs required to secure a job offer, and a large recruitment team with around 40 headhunters on board.ย 

  • Provider choiceย ย 

Yes, choosing a reliable partner abroad is another pitfall tech companies face when opting for software development center services. Your scalingย experience can quickly go south if your provider makes mistakes โ€” like presenting unsuitable candidates, missing deadlines, mismanaging payroll & taxes, or failing to deliver other operational services, which could force you to juggle multiple vendors. Instead, look for a partner who is not only dependable and trustworthy but also brings top-notch tech recruitment and legal expertise to the table.ย ย 

Alcor is an excellent example of such a software development center service provider, having successfully assisted prominent tech companies like ThredUp, People.ai, Gotransverse, and others to set up their software development centers abroad. Our clients have praised our services, with one among others stating on Clutch: โ€œAlcorโ€™s expertise and implementations have enabled us to run our company in the way and at the level we want.โ€ This is thanks to our unique solution, which combines tech recruitment with seamless EoR support, allowing our clients to operate their businesses abroad hassle-free.ย 

Signs a business is ready to expand with a software development center

  • You want to scaleย ย 

Building a software development center is a game-changing opportunity for established tech companies looking to scale and explore new markets. With resources often constrained in a single location, scaling can be a challenge. Thatโ€™s why leading global tech firms like Ledger, People.ai, and Sift have turned to us to build their development centers abroad. Result? Theyโ€™ve turbocharged their tech delivery while also growing big in the foreign market.ย 

  • You aim to save costsย 

Running software development activities can be pricey for American tech companies, as setting up a software development center with an engineering team in the USA often costs from hundreds of thousands to millions of dollars. But if youโ€™re looking to cut operational costs, starting a software development center abroad is a smart move. For instance, Latin America and Eastern Europe offer some of the best price-to-quality ratios for this purpose, with developer salaries there being 2 to 4 times lower than in the US. Not only will you benefit from lower labor costs, but youโ€™ll also save on technical equipment, office lease, and maintenance, thanks to generally lower prices and rental fees. With these savings, you can reinvest in your business according to your current needs.ย 

  • You intend to focus on your productย ย 

Tech companies are drawn to the software development center solution because it enables them to focus on what truly counts โ€” advancing their core product. Imagine: while a professional service provider takes care of tech recruitment, EoR activities, and other operational support, you manage your offshore team and drive your companyโ€™s growth. Itโ€™s a great way to cut stress and boost productivity!ย 

How to set up a software development center?

With Alcor, youโ€™ll avoid drowning in paperwork and back-office tasks when launching your software development center. Weโ€™ve got it all covered, and our software development center as a service process runs like clockwork:

  • We kick things off with full-cycle tech recruitment in your chosen location. Our team of 40 seasoned headhunters can find Valley-grade software engineers in just 2-6 weeks!
  • Accounting and HR payroll are crucial for smoothly running your new software center. And thatโ€™s where our EoR service takes care of everything โ€” from managing salary payments and transferring funds between your R&D unit and headquarters to handling health insurance and leave policies. Plus, we offer comprehensive legal and compliance support, including real estate negotiations, contract drafting (SLAs, NDAs, B2B agreements), and support with labor laws, visas, and M&A.
  • At the same time, if you need your own physical office, our real estate experts are on the hunt for the perfect space for you. We handle everything from location selection and parking to security systems, office layout, seating, and equipment.
  • To complete your software development center setup, weโ€™ll assist in choosing furniture and establishing a robust IT infrastructure โ€” everything from computers and software to security systems and servers.

When all is said and done, your turnkey software development center is up and running within just 2-3 months!

Mistakes in building a software development center

  • Working with multiple service providers in parallelย 

Some companies opt for outsourcing the software development center setup to multiple service providers for different tasks: tech recruitment, employer of record, legal compliance, office lease, procurements, and so on. While this might seem efficient, this approach often backfires, leading to miscoordination, delays, and, ultimately, higher costs and disappointing results.ย ย 

Solution? Consider teaming up with a local software development center provider that can manage all back-office functions that you need in one place, ensuring your development center runs smoothly and saving a lot of your time and costs.ย 

  • Overlooking employer brandingย 

When business leaders overlook promoting their company in a new job market, they often find themselves facing rejected offers from prime candidates. In fact, 60% of job seekers decide against accepting a position due to a company’s poor employer brand. This typically occurs when candidates are unfamiliar with the companyโ€™s values, culture, and growth opportunities, leading them to choose other options instead.ย 

To turn this around and boost your tech recruitment, Alcos kicks off an engaging employer branding campaign by crafting a compelling employee value proposition (EVP), building your company’s strong presence in local developer communities and tech media, and running impactful social media and PR campaigns. For example, we created a video featuring Sift’s Hiring Manager that highlighted the companyโ€™s values and team culture. Promoted across social media, the video had a significant impact โ€” leading to a 15% increase in response and offer acceptance rates.ย 

Top destinations to start a software development center: Latin America

Latin America is a thriving tech hotspot for starting a software development center, with developed IT hubs in Mexico, Colombia, Argentina, and Chile. The region houses over 1 million software developers, skilled in Java, PHP, Python, JavaScript, Swift, .NET/.NET Core, and other technologies. Latin American tech specialists with over 5 years of experience earn around $55,000 a year, which is 60% less than their counterparts from the US. Plus, the region stands out for its cultural proximity to the US and has only 1-2 hours time difference, making the cooperation between the teams seamless and efficient.ย 

  • Mexico ย 

One of the most popular destinations to set up a software development center, Mexico, boasts a rich talent pool of over 700,000 software developers skilled in technologies like JavaScript, Python, SQL, C#, React.js, and Angular. Mexican software developers earn, on average, $40K a year, which is 58% lower than in the US. Mexico also has established offices of such tech companies as Google, Uber, Paypal, and many more. The action is centered around three major tech hubs: Mexico City, Monterrey, and Guadalajaraโ€”often dubbed the Silicon Valley of Latin America.ย ย 

  • Colombiaย ย 

Colombia’s tech ecosystem displays a rich talent pool of over 150,000 software developers. Each year, around 13,000 new tech graduates join the ranks, bringing fresh skills and ideas. Colombian software engineers are adept at programming, excelling in Java, Python, C#, SQL, and Ruby. Local tech wizards earn, on average, $38K, which is 60% lower than in the US. The country’s ICT market hosts software development centers of such prominent tech giants as Google, Amazon, IBM, and others, with local tech hotspots Bogotรก and Medellรญn at the heart of this innovation.ย 

  • Argentinaย ย 

Argentina’s tech scene is bustling with over 115,000 talented professionals who are known for having the strongest English proficiency in the region. They excel in Python, Cloud APIs, TensorFlow, SQL, and are recognized as some of South America’s finest mobile developers and data analysts. Argentinian software engineers earn around $35,000 per year, which is 64% lower compared to their counterparts in the United States. The countryโ€™s most dynamic tech hubs are Buenos Aires, Cรณrdoba, and Mendoza, hosting such well-known tech companies as Microsoft, Google, IBM, and others.ย 

  • Chileย ย 

The Chilean talent pool amounts to 61,000 software developers, complemented by 5,000 new ICT graduates joining the field each year. Chilean IT experts are top-ranked in Latin America for their digital skills, excelling in Java, Python, and PHP, as well as data analytics, mobile development, and statistical programming. Software developers from Chile earn, on average, $37K yearly, which is 62% lower than in the US. The vibrant tech scene pulses through two active hubs: Santiago and Valparaรญso, complemented by the presence of tech enterprises such as Intel, Microsoft, and Amazon, among others.ย 

Top destinations to start a software development center: Eastern Europe

Eastern Europe is a popular region for Western tech companies to launch their R&D centers. This powerhouse is home to around 1.5 million tech professionals who showcase Silicon Valley-grade expertise in JavaScript, Python, C++, TypeScript, PHP, HTML, and other programming languages and technologies. Eastern European software engineers with over 5 years of experience earn, on average, $68,000, which is about half of what their counterparts in the US make. Additionally, developers from Poland, Ukraine, Romania, and Bulgaria demonstrate a high level of English proficiency and adhere to Western-oriented work culture.ย 

  • Polandย 

With a talent pool of 525,000 software developers and 20,000 new ICT graduates every year, Poland is a perfect spot to start your software development center. You’ll find top-notch skills in JavaScript, Java, Python, Ruby, Shell, TypeScript, PHP, and C#. On average, Polish software developers earn $51K yearly, 47% below that of US developers. The IT scene here is buzzing, with over 60,000 tech companies thriving across the country, including Microsoft, Google, Netflix, and others. The heart of this vibrant industry beats in major hubs like Warsaw, Krakow, Wroclaw, Poznan, Lodz, and the Tri-city area (Gdansk, Gdynia, Sopot).ย 

  • Romaniaย ย 

Romania is a magnet for tech companies, hosting 202,000 tech professionals and an annual influx of 10,000 new ICT graduates. The country’s tech talent shines in JavaScript, Java, PHP, C#, Python, React, Angular, HTML, and CSS, offering a diverse range of expertise. Local tech specialists earn around $48K a year, 50% less than those in the US. The Romanian IT scene shines with 7,930 IT businesses making waves across the nation, including software development centers of Microsoft, Dell, and IBM, among others. The heartbeat of this innovation pulses through three bustling tech hubs: Bucharest, Cluj-Napoca, and Iasi.ย 

  • Ukraineย ย 

Ukraine’s IT landscape boasts 363,000 software engineers who are making their mark. Each year, another 27,000 ICT graduates join the scene, adding fresh energy and skills. Ukrainian developers excel in JavaScript, Java, C#, Python, and PHP. Ukrainian software engineers earn about $40K yearly, 59% lower than in the US. The country’s tech market is vibrant, with 5,600 IT businesses, including Google, Samsung, Oracle, and more. The action is centered in key hubs like Kyiv, Lviv, Odesa, Dnipro, and Kharkiv.ย 

  • Bulgariaย ย 

Bulgaria is one more destination in Eastern Europe for launching a software development center, which has a booming tech scene with a talent pool of 108,000 and an annual addition of 6,100 ICT graduates. Bulgarian developers are experts in C#, JavaScript, Java, Python, SQL, PHP, and .NET. Tech wizards from Bulgaria get around $43K a year, which is 56% less than in the US. The country is home to 10,000 IT businesses, including Hewlett Packard, IBM, and CISCO, and is buzzing with activity, especially in the tech hubs of Sofia, Burgas, and Plovdiv.ย 

Software Development Center is an All-in-One Place for Tech Expansion

Software R&D Center

Read More

IT Recruitment

  • 40 in-house recruiters who focus on hi-tech talent
  • 80% of delivered resumes result in interview
  • Pre-screening checks
  • HR interviews & culture matching
  • Local recruiters to guide and advice
  • Guaranteed hiring period

Operational Support

  • Procurement & office rent
  • Insurance provision
  • IT support
  • Employer branding
  • HR services
  • Competitive a la carte pricing

EOR Services

  • Legal framework
  • Onboarding/offboarding according to local legislation
  • Monthly payroll & accounting
  • Remitting remuneration
  • Benefits management (if needed)

IT Outsourcing vs R&D Center

IT Outsourcing

  1. Cloudy pricing Gear up to pay way more than you initially expected: providers will only let you in on the total costs in the end.
  2. Frequent team changes Skilled software engineers are scarce and allocated between many other projects, and thereโ€™s no guarantee your best players wonโ€™t be snatched away the next day. Thus, here we go again with onboarding.
  3. No place for your culture & employer branding Your offshore developers work under the brand of your outsourcing provider at their premises, where no room for your corporate culture and policies is left.
  4. Shared intellectual property You share your IP with developers that come and go to other projects because of the IP rights agreement with the provider. As a result, the source code is never between you & team only.
  5. Not investment material Itโ€™s tough to get investors onboard when outsourcing your core competencies and not owning the code. Sounds untrustworthy, doesnโ€™t it?

Software Development Center

  1. Maximized savings Time to unfreeze hiring: your own development team plus office results 2-3 times cheaper. How does that work? You hire and get neither buy-out fees, nor unexpected markups.
  2. Simplified recruiting Who wouldnโ€™t want to be involved in actually creating a product, rather than writing the code here and there? Product creation and the feeling of ownership draw developers like moths to a flame.
  3. Own branded office & rules You get your own physical office for ideation, innovation, and growth โ€” everything to manage your team independently and help you scale.
  4. Intellectual property under control With direct agreements, you fully own your product and its source code, keeping unique expertise in-house.
  5. Easy investment attraction After establishing your own R&D center, you will not only boost your software development capabilities but also become more attractive to investors.

Companies Scaling with Alcor

Alcor is a reliable partner that meets our hiring needs. We finally hired experienced software engineers in Eastern Europe with strong tech skills and business acumen. Account Managers are awesome!

Andrii Akselrod CTO People.ai

With Alcor’s all-in-one solution, we got a software R&D office with 15 senior PHP devs and a compliant operational coverage. I really appreciated their transparent pricing structure and deep expertise.

Boris Glants CTO Tonic Health

We interviewed a lot of EoR platforms and companies, but Alcor was the only one that provides a combo package of EoR and Recruting offerings. Alcor helped us build a full stack team in 1.5 month.

Dmitrii Iermiichuk Head of Engineering Gotransverse

We wanted to switch from our outsourcing provider, and Alcor has become really game-changing for us. Within a mere 6 months, we got a fully-fledged team of 30 engineers in our own R&D office.

Elena Leonova Director of Product Management Bigะกommerce

Alcorโ€™s R&D solution eclipses full-cycle recruitment, EOR service, and operational support for our offshore team. Their ‘all-in-one place’ approach is far more cost-effective than I could’ve imagined.

Farhad Shamshirzan
Farhad Shamshirzan Director of Software Engineering Certent

I value their commitment to going the extra mile. We evolved from an outstaff project into an independent company, and Alcor’s support was crucial. They hired and ondoarded 15+ professionals for us.

Grigoriy Didorenko Research and Development Director BIScience

Thanks to Alcor, we hired four engineers and a designer that strengthened our team. Beside stellar recruitment, Alcor flawlessly handled our payroll. Their approach was seamless and swift.

Kirill Latish Head of Engineering & Communications Velory

Alcor closed our 4 QA positions in a month and more than doubled the team in a year! We chose Alcor because of their communication style, cost, scope of services, and ideas to help us be successful.

Vitalii Belelia Production Management & App Support Manager Ledger

FAQ

1) What services does a software development center include?

Alcorโ€™s software development center is an all-in-one solution. It comprises tech recruitment from start to finishโ€”crafting the ideal candidate profile and EVP, sourcing and pre-screening candidates, conducting HR interviews, and working with offers/counteroffers. We also handle all the EoR essentials: compliant developer employment, monthly payroll, accounting, legal issues, and benefits. But we donโ€™t stop there and offer additional support like office leasing, hardware procurement, and visa management to keep your offshore software development center running like clockwork.

2) How fast can you set up a software development center?

It takes us 2 months to set up a fully compliant and running software development cente with 10 tech talents on board. Apart from EoR and tech recruitment services, we can also assist you with operational functions like office leasing and hardware procurement to help you set a physical and fully-backed R&D center in Latin America and Eastern Europe.ย 

3) Can you hire C-level management for a software development center?

Yes, our team of 40 tech recruiters possesses hands-on experience in headhunting lead and C-level specialists in the tech field. On average, it takes us 2-6 weeks to headhunt an IT manager who perfectly matches our clientโ€™s needs and requirements.

4) Is there the best country to build a software development center in?

Latin America and Eastern Europe are top choices for Western tech companies looking to launch a software development center. These regions boast over 2.5 million tech professionals with Valley-caliber expertise in technologies like Java, C++, PHP, Python, JavaScript, Swift, and .NET/.NET Core. Additionally, with local salary rates 2 to 4 times lower than in the US or Western Europe, companies can significantly reduce labor costs. Mexico, Colombia, Argentina, and Chile are standout destinations in LATAM, while Poland, Romania, Ukraine, and Bulgaria are the leading choices in Eastern Europe.

5) What do I need to start a software development center with Alcor?

First, choose the IT hub where you want to set up your software development center. Next, define the type and number of developers you need for your software product. The Alcor team can prepare availability and salary reports for you to have a better understanding of the local market. Then you should decide if you require a physical office and additional operational support. If so, Alcor can easily cover all those for your software development center to run smoothly. If you donโ€™t have a legal entity abroad, no worriesโ€”Alcorโ€™s Employer of Record handles compliant onboarding and offboarding of your developers as well as payroll, accounting, and benefits management.