# Business development

12 Top IT Outsourcing Countries in Europe 2024

Red Rocket teamAug 21, 20246 min read

The software development industry continues to grow rapidly as companies from all over the world need to create new programs or improve old ones. However, it can be very expensive for small to medium sized businesses to set up an in-house development department. Such a move is very effective, but it requires a lot of time, investment, and effort. That is why the ideal option for companies that need software development is IT outsourcing.

Let us remind you what outsourcing is in the programming sector. This is the transfer of tasks of creating programs and maintaining or updating them to other companies that specialize in this field. This approach frees businesses from creating their own development department, hiring employees, paying salaries, and more. The benefits of outsourcing software development include independence from the location of the customer's company and developers. You can be located in one point of our planet, while an IT outsourcing company can be based on the other side of the world and such distance will not be a hindrance to cooperation.

12 Top IT Outsourcing Countries in Europe 2024

If you look at the list of leading software development companies, you will most likely have a question how to choose an IT outsourcing company in Europe. Among such a large variety it can be difficult to make a final choice of the company you trust to create your website, application or other software. We have prepared for you a list of the best IT outsourcing countries in Europe today so that you can make your choice easier.

List of Top IT Outsourcing Countries in 2024

At the end of 2024, spending on IT services among companies from all over the world will reach about 5 trillion dollars. Impressive amount, isn't it? Business owners are looking for ways to reduce software development costs by choosing outsourcing companies. A huge number of software outsourcing companies are gathered on the European continent, especially in its eastern part. What is the reason for this trend? As a rule, electricity and hourly rates are cheaper for a developer in Eastern European countries. We have prepared for you a list of 12 countries where IT outsourcing companies continue to grow in 2024.

1. Poland

Let us start with Poland, whose IT services market has exceeded the 14 billion dollars. Fresh statistics tell us that Poland has the most software development companies in Eastern Europe. Today, there are about 1352 of them, which puts Poland at the top of our list.

The most popular cities where a large number of IT companies in this country are gathered are Warsaw, Krakow, Wrocław and Łódź. This country is characterized by a sufficient number of professionals from the field of programming, having more than 500 thousand employees. Surprisingly, for the last few years Polish authorities have done their best to attract more than 150 thousand IT experts from other countries.

2. Ukraine

When we talk about software development and Europe, many of you might think about Ukraine. That's right; despite the current hostilities in this state's territory, Ukraine is a leader in the IT outsourcing sector. A large number of specialists from programming are concentrated here, whose hourly rate can reach about 30 dollars. It is this factor that makes IT outsourcing companies from Ukraine so popular among various companies from Europe and other continents. The most technologically advanced cities in Ukraine include Kyiv, Dnipro, Kharkiv, Odesa, and Lviv.

Major reputable publications include Ukraine in their rankings of the best IT countries, and local companies cooperate with such giants as Microsoft, Apple, Samsung and others. Many of you may have already heard about such software development companies as ELEKS, Ciklum and Red Rocket Software. They offer a wide range of services including website development, mobile app development, web design and more.

3. Romania

Cluj-Napoca, Bucharest, Iasi, Brasov and Timisoara are home to about 90% of all IT professionals in Romania. According to TopCoder, Romania ranks 12th among other countries. Recent statistics show that there are 458 outsourcing companies operating in Romania today, which are in demand all over the world, including America and Asia.

Depending on the type of service, it is possible to achieve the cost savings of 50-60% towards outsourcing the IT services to Romania as against Western Europe. On the other hand, Romanian IT firms are known for adhering to high quality, excellent intellectual property rights, short delivery times and good English speaking.

4. Bulgaria

Bulgaria has been on the map of European IT outsourcing providers for the last two decades and has earned a good deal of the credit. Bulgaria has a sophisticated IT industry comprising of more than 100,000 IT specialists and hence, the cost rates offered for IT services are very competitive.

Bulgarian IT services offer software development and testing, DevOps, cybersecurity, machine learning, and other extensive IT solutions for large-scale clients, primarily in Europe and North America. The present taxes are low, and investment subsidies that the Bulgarian government offers are making more and more IT outsourcing companies establish a base in Sofia, Plovdiv, Varna, and several other cities of Bulgaria. IT skills are also at a high level, and Bulgarians are known to have a strong command of the English language. Therefore, Bulgaria is slowly becoming an ideal location for outsourcing companies.

5. Hungary

According to data, Hungary has more than 100 thousand qualified IT specialists, and the number is growing; thus, the country provides the best economic terms for outsourcing IT services to companies.

Some of the multinational companies, such as Morgan Stanley, British Telecom, Ericsson, and IBM, have set up in-house IT operation centers in some of the principal cities in Hungary, such as Budapest and Debrecen. The key businesses include business intelligence, cloud computing, machine learning, network security solutions, and other innovative IT solutions that meet clients’ needs. Since the number of multilingual people and one of the highest rates of engineer graduation in Central Europe, Hungary is targeting to become the leading IT outsourcing destination by 2024.

6. Slovakia

As a result of its educated population and effective policies, Slovakia is among the most successful outsourcing nations in Europe for IT industry. At present, more than 130,000 IT specialists work in the Slovak outsourcing market, which will maintain the growth at the level of 8-10% for the next 5 years.

The main distinctive factors of the Slovakian IT outsourcing industry are the availability of highly qualified software developers and IT engineers, a favorable environment for IT and Research & Development, and relatively low labor costs. The largest IT employers in Slovakia are international companies with crucial operational units in Bratislava and Kosice.

Domestic Slovakian IT companies also share high versatility in the sectors covering anything from bespoke software to large-scale enterprise solutions. Holding 6 universities with specialized IT degree programs, the talent pipeline is predicted to remain solid.

7. Moldova

Despite the fact that Moldova is a small country with a low level of economy in Europe, it has a large concentration of real estate development companies. Their services are used both by local businesses and large corporations from all over the world. Well-known companies such as Endava, Soft Lider and BTS Pro operate on a B2B model and focus on creating security systems and digital solutions to improve the efficiency of companies.

Moldova currently has the highest density of IT specialists in the CEE region, which makes the country dubbed the Silicon Valley of software engineering. More than 30,000 professionals work in the Moldovan BPO (business process outsourcing solutions) sector, which has grown at an average of 10 percent per annum over the past five years.

Some of the important strengths of the region are a relatively large number of IT graduates, people’s familiarity with English and other European languages, and comparatively lower labor rates compared to other EU countries. Yet, Moldova’s high internet speed and the convenient time zone for the region also indicate that it is suitable for cooperation with partners in Western Europe.

8. Estonia

This Baltic state is known as a global leader with regard to the digitalization of society and is, therefore, often referred to as «e-Estonia». After the strong protection of cyberspace and e-governance, Estonia has the potential to give the structure for developing new solutions in FinTech, e-commerce, online services, and so on.

Currently, over 35 000 IT specialists work in Estonia’s outsourcing industry that is expected to grow by nearly 4% each year through 2024. The best providers offer high-level services, including enterprise-level interface design and system integration services. Estonia has over thousand startups.

Being in the middle of the western European and the Nordic countries Estonia provides partners worldwide with highest level of expertise at a competitive price for the region.

9. Latvia

Latvia has evolved into one of the top preferred IT outsourcing destinations in Europe within the last decade. It is well-endowed with excellent IT professionals and business environment policies, hence being one of the cheapest and best IT solution service providers in Europe. It is pertinent to note that by 2025, there will be more than 45000 IT specialists in Latvia. The total number of IT outsourcing companies in this country in 2024 is around 50 firms.

The Latvian IT sector focuses on software and IT services, IT infrastructure services, cyber security, telecommunication solutions, and so on. Latvia is conveniently located in Europe and has a young, educated population and outsourcing-friendly government policies such as special economic zones. To understand how IT services are really developed here, you just need to look at the share of GDP. Revenue from IT services accounts for 6% of the country's total GDP.

10. Czech Republic

Czech technology sector can be referred to as one of the most innovative and rapidly developing in Europe. IT spend has recently been estimated to be $20 billion in the country, depicting a growth trend. Benefiting from over 220,000 sector employees, the Czech Republic has the right talent for any IT outsourcing requirement.

The Czech Republic has two technology centers that include Prague and Brno, and has strengths in the fields of software programming, business processes outsourcing, and analytical skills, among others. The Czech Republic’s multinational corporations invested heavily in R&D facilities. Global companies like Google and Skype are turning to local software development firms for help.

11. Lithuania

Lithuania can also be included in the list of the most popular European countries for IT outsourcing because of the availability of high-quality specialists and good infrastructure. Thus, in 2024, Lithuania had more than 36 thousand IT specialists and over 120 IT companies. Software development and information technologies remain the country's third-largest export earners.

Lithuania offers many possibilities to outsource, particularly owing to low costs and rich technical skills. Particular attention should be paid to the fact that Lithuanian programmers have demonstrated good results in various programming languages, including Java, Python, and .NET, and mobile app development. The IT talent pool is sustained. Why is it so? In Lithuania, graduates with IT skills entering the job market are over 1500 per year from Universities based in Vilnius and Kaunas.

12. Austria

Austria has emerged as a preferred IT outsourcing nation in the European region due to factors such as the availability of skilled employees and adequate infrastructure. This country has a large concentration of specialists and outsourcing companies that are open to cooperation. Austria has the advantage of having close proximity to western European markets, the country has a strong IPR protection and its political environment is stable. All this makes Vienna, Graz, Salzburg and other cities excellent destinations for IT outsourcing services.

Steps to Start Outsourcing

As you may have already realized, there are many countries in Europe that are famous for their market and IT services. However, such a large number of offers makes the final choice even more complicated. We have prepared for you a guide on how to choose an IT outsourcing company in Europe.

Set goals and plan your budget. The first step is to decide on which exact IT functions you want to outsource and the rationale for doing so. Then, create an attainable estimate for the outsourcing budget which should reasonably reflect the worth that an external provider will deliver.
Find a few suggestions. Today, it's not hard to find a list of IT outsourcing companies that offer their services for companies like yours. Choose a few offers and find out key information about them. Narrow down to 3-5 options that are the best suited for your business.
Analyze and start cooperation. Once you have selected a couple of service providers, start analyzing them. Check the reviews of real clients, the cost of services and also pay attention to their location. Preferably, choose a company that is located in the same region as you so that you don't have a big time difference.

It is recommended that you keep in regular contact with the development team and hold weekly video calls to get the latest information on how the future software for your business is being built.

Frequently asked questions

Why is outsourcing better than hiring an in-house development team?

Outsourcing offers several advantages over maintaining an in-house development team. Firstly, it reduces costs significantly, as companies don't have to bear the expenses of hiring, training, and maintaining full-time employees. Secondly, outsourcing provides access to a vast talent pool with specialized skills and expertise that might not be available locally.

What IT outsourcing countries in Europe are considered the cheapest?

Several European countries are known for offering cost-effective IT outsourcing services. Poland, Ukraine, and Romania are often highlighted for their competitive pricing. These countries combine low labor costs with a high level of technical expertise, making them attractive destinations for companies looking to outsource IT projects. Additionally, countries like Bulgaria and Hungary also provide affordable outsourcing options with a strong emphasis on quality.

What are the most common IT outsourcing services?

The most common IT outsourcing services include software development, web development, and mobile app development. Other frequently outsourced services are IT support and maintenance, cloud computing solutions, and cybersecurity services. Companies also often outsource tasks like data analysis, IT consulting, and system integration to benefit from specialized skills and advanced technologies available through outsourcing providers.