Top 5 Countries to Setup Offshore Development Center in 2026

As global businesses continue to accelerate their digital transformation, Offshore Development Centers (ODCs) are a strategic choice for scaling software teams while helping manage costs. The global offshore software development market is projected to reach nearly $198 billion in 2026, up from about $178 billion in 2025, reflecting strong demand for engineering talent.

In fact, more than 70 % of enterprises now rely on remote or offshore teams for software engineering, driven not just by cost savings but also by the need for specialized tech skills and faster time‑to‑market.

With this backdrop, companies in the US, UK, Canada, Australia, and Europe increasingly ask: “Which country is the best location for setting up an offshore development center?” The answer has significant implications for talent access, cost efficiency, and project success.

This guide walks you through the top 5 countries to set up Offshore Development Centers in 2026, along with key considerations to help you choose the ideal location and partner for your IT initiatives.

Top 5 countries to setup offshore development centers

1. India
2. China 
3. Poland
4. Philippines
5. Ukraine

1. India

When businesses consider offshoring, India is one of the first destinations that pop into one’s mind.  Over the last two decades, India’s IT sector has accelerated, giving neck-to-neck competition to the US.

• • English Proficiency
    • India has the second-largest English-speaking population in the world.
    • Ranks #48 in the world for English proficiency
  • Talent pool
    • 5 million software developers
    • Adds 200,000 IT graduates in a year to this population
    • 2.6 million STEM graduates in a year
  • Technology
    • The forefront of tech innovation in AI, ML, Blockchain
    • 75% of global digital talent resides in India
  • Cost of Hiring Developers
    • $20 - $40 per hour
  • Government Policies and Political Stability
    • India is the world’s largest democracy
    • Politically stable environment and the
    • Favorable government policies towards FDI and the IT sector

Learn why hiring Indian developers is the key to successful offshoring.

2. China

China is another nation that has built a strong name in the offshoring industry. Today, China owns many of the fastest-growing IT companies.

• • English proficiency
    • English proficiency is relatively limited compared to other offshore destinations.
    • Ranks #49 in the world for English proficiency.
  • Talent Pool
    • Adds 4.7 million tech graduates every year
    • Technology
      
    • China ranked first in a “programming Olympics” by HackerRank
  • Cost of Hiring Developers
    • $35 - $40 per hour
  • Government policies
    • Government with communist ideologies
    • Lax enforcement on Intellectual Property (IP) laws

3. Poland

Despite being a small nation, Poland has consistently ranked among the top countries for developer skills. Poland is the Research and development hub for global companies across industries.

• • English proficiency
    • 30% of the Polish population speaks English as their 2nd language.
    • Ranks #16 in the world for English proficiency
  • Talent Pool
    • 2,95,300 software developers
    • Adds 80,000 graduates every year
  • Technology
    • Ranks in top 5 nation for Java assessments other mainstream programming languages like Python, Shell, and Ruby
    • Tholons Globalization Index ranks Warsaw and Krakow in the top 50 cities for accelerated digital transformation.
  • Cost of Hiring Developers
    • $40 - $56 per hour
  • Government policies
    • Poland ranks 40th in the world in ease of doing business
    • Politically stable economy and government
    • Ranked 37 on WE Forum Global Competitiveness Report

4. Philippines

Apart from good command of the English language, Filipinos are known for their hard work and good work ethics. But the country faces turbulent weather conditions and tropical storms that can disrupt operations during summer.

• • English Proficiency
    • 92% of Filipinos speak English
    • Ranks #18 in the world for English proficiency
  • Talent Pool
    • 95000 technical experts
    • Adds 1,30,000 IT graduates every year
  • Technology
    • Manila is ranked as the second-best city for outsourcing in the world by the Tholons Globalization Index
    • The IT workers are all well-versed in Java, API development, .NET
    • Strong in support, web, and mid-complexity projects; advanced engineering may require niche teams.
  • Cost of Hiring Developers
    • $4 - $10 per hour
  • Government policies
    • Ranks #95 in 190 economies in the ease of doing business
    • Favorable government policies
    • Ranks low in government stability
    • Numerous public holidays can cause delays in deliveries.

5. Ukraine

Ukraine is a hotbed for IT outsourcing and ranks amongst the top 15 countries for offshore development. A strong focus on education has helped their tech industry to grow and flourish. 

• • English Proficiency
    • 80% of the IT employees within the country speak
    • Ranks #44 in the world for English proficiency
  • Talent Pool
    • 200000 technical experts
    • Adds 40,000 IT graduates every year
  • Technology
    • Ranked 11th by HackerRank for countries with best developers
    • Ranked 38th among the top 50 digital nations- Tholons Services Globalization Index.
    • Gartner’s list of top 30 countries for offshore services
    • Experts in Big Data & AI, mobile development, blockchain, and cryptocurrency projects.
  • Cost of Hiring Developers
    • $25 - $50 per hour
  • Government policies
    • Low taxation system
    • Active cooperation from the main IT industry development organization
    • Geopolitical conditions require businesses to plan for risk mitigation, though the IT sector continues to operate resiliently.
      

Now that you have clarity on the top 5 locations for offshore development centers, we move to our next crucial step: choosing the right offshore development partner.

Here is a checklist that will help you choose the right Offshore Development partner

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How "Your Team in India" can help you set up an Offshore Development Center in India

Since 2008, Your Team in India has helped companies globally scale up their business by setting up Offshore development centers in India. Your Team in India offers three models of ODCs:

• Product Engineering
• Build-To-Scale
• Build-Operate-Transfer (BOT)

To help start-ups, SMEs, and large enterprises successfully hire offshore teams to speed up their software development projects and reduce time-to-market.

With our ODC models, you gain:

• A dedicated team
• Quick and transparent hiring
• On-demand scaling
• Quick resource replacement
• Tech support on ad-hoc demand
• Extensive NDAs and complete KT
• Support even after project completion
• Full visibility of ongoing work
• Well-defined SOPs and operation hierarchy

Ready to set up an offshore development center in India?  We are here to help! Book a one-on-one session with our expert here. You can also drop us an email at info@yourteaminindia.com.

Frequently Asked Questions (FAQs)

Why are these countries considered the top 5 for setting up offshore development centers in 2026?

These countries offer a combination of skilled talent pools, cost-effective services, strong IT infrastructures, and business-friendly policies, which make them ideal locations for setting up offshore development centers.

Can offshore teams work in the same time zone as my business?

Yes. Many offshore development centers offer overlapping or fully aligned work hours, especially when serving clients in North America and Europe. This enables real-time collaboration, faster feedback cycles, and smoother sprint execution.

Are there any challenges associated with setting up an offshore development center?

Some challenges include managing cultural differences, navigating legal and regulatory requirements, maintaining effective communication, and ensuring data security. However, with proper planning and execution, businesses can overcome these challenges and reap the benefits of offshore development centers.

How can a business choose the right country for its offshore development center?

Businesses should consider factors such as the availability of skilled talent, cost of living, infrastructure, political stability, time zone differences, and ease of doing business when selecting a country for their offshore development center.

How do offshore teams ensure data security and IP protection?

Reputable offshore development partners implement:

• Strict NDAs and IP ownership agreements
• Role-based access controls
• Secure development environments
• Compliance with global standards such as ISO 27001 and GDPR
• Always verify legal safeguards before engagement.