Outsourcing software development to Eastern Europe in 2026: Costs, talent, and risks

Oct 13, 2025 15 min read

So — you’re thinking about outsourcing software development to Eastern Europe in 2026.

Great idea! Let me break down why it is one of the smartest moves for efficient business scaling.

The region strikes a balance between costly hiring in the US/EU and risky offshoring to Asia or Africa. With Eastern Europe software outsourcing, you get strong technical expertise, transparent collaboration workflows, partial timezone overlap, and cost savings of up to 40–50% — without compromising on quality.

Today, American and European companies are under pressure on three major points:

— IT compensation levels continue to show steady growth, with some roles in cloud, AI, and security really pushing the averages to new records.

— Finding a strong team quickly is almost impossible. Even the most attractive employers have trouble securing enough talent without leaning into “poaching wars”.

— The competition is at its fiercest. You can’t afford to delay scaling for six months.

So what can you do about it?

Hiring staff in-house is expensive. Hiring great staff in-house is astronomically expensive.

Moving your product development to regions like China means losing control, transparency, and quality.

Why not go for something closer?

Let’s see how Eastern Europe can be a strategic choice for an outsourcing location, rather than a “cost-cutting” measure.

Why companies outsource to Eastern Europe

While price can be an initial draw, companies don’t pick IT outsourcing in Eastern Europe just for lower rates. Several factors work together here to make the region a sustainable solution for scaling even the most complex development. And you don’t sacrifice manageability, speed, and quality.

First, there is a strong engineering base. Countries in the region — Poland, Romania, Lithuania, and the Czech Republic — consistently rank among the top in terms of the number of STEM graduates. There are over a million highly-qualified developers on the market, and universities, tech hubs, and accelerators provide a steady flow of fresh talent.

Second, there is a high level of English proficiency. As the EF English Proficiency Index puts it, Poland, Romania, and the Baltic countries are as fluent as the Netherlands and Germany. Developers and managers can explain tech intricacies and support the small talk without a hitch.

Third, time zone overlap. With Europe, it’s almost perfect, with a small shift depending on particular locations. With the East Coast of the US, there is a 4-6 hour overlap. This makes it possible to work at the same pace, rather than exchanging updates once a day. You can shift priorities, issue fixes, and be overall much more nimble when outsourcing to Eastern Europe.

Fourth, mental and cultural compatibility. Eastern Europeans share the same work ethic, prefer to communicate directly, and are used to the Western corporate culture. You get people who are on the same page as you at all times. And for a project manager, this is a key factor in ROI.

In terms of cost, Eastern Europe falls between the US and Asia. Ultimately, you will spend more, but you’ll have a fully committed team that provides code that holds up.

And most importantly, there is transparency. This is not an attempt to save money at any cost, but an attempt to maintain control without losing momentum.

So that’s where outsourcing in Eastern Europe is on the value spectrum: a perfect middle-ground. Great tech background, a lot of available talent, competitive rates, and easy to manage.

Key Eastern European outsourcing destinations

It’s decided then – we’re IT outsourcing to Eastern Europe!
But where exactly?

Not all of the regions are equal. Each country has its own specializations and labor costs. Let’s take a look at some frequent destinations that US and EU companies source talent from and their expertise.

Poland

It has a developer pool of over 600,000 specialists, which is the largest in the region. The engineers here have a strong expertise in enterprise projects, financial systems, cloud infrastructure, and cybersecurity. Regularly mentioned in Gartner reports as a mature and reliable outsourcing hub and one of the most stable markets in terms of quality and scalability.

Romania and Bulgaria

Just like Poland, Romania and Bulgaria are also EU members, which is a big plus in terms of legal compatibility for European clients. The engineers have decent expertise in embedded development and telecom solutions and come at lower rates than their counterparts from Poland.

Czech Republic and Slovakia

Engineering quality is on par with the rest of the region, but the talent pool is smaller. Developers here often take on building industrial software, automotive systems, IIoT, and enterprise development. They are a great fit for tasks with high accuracy requirements, but due to the limited pool, the production may be somewhat harder to scale.

Baltic States

Estonia is one of the global leaders in digitalization, including in the field of e-government and digital ID. Lithuania is a hub for fintech and crypto solutions. Latvia cornered a narrow niche in blockchain and the startup ecosystem. So, if you need talent for those specific verticals — these markets, albeit smaller, will be able to offer a strong service.

Comparative table by country:

Country	Average hourly rate for Senior position (USD)	Talent pool	Key expertise domains
Poland	50–65	~600,000	Enterprise, cloud, fintech, cybersecurity
Romania	40–55	~150,000	Embedded, telecom, ERP
Bulgaria	35–50	~70,000	Enterprise support, QA, .NET
Czech Republic	55–70	~90,000	Automotive, IIoT, Java
Slovakia	50–65	~40,000	Manufacturing software, C/C++, DevOps
Estonia	60–75	~35,000	e-Gov, digital ID, cybersecurity
Lithuania	45–60	~40,000	Fintech, blockchain, React
Latvia	40–55	~25,000	Startups, niche tech

Talent and skills availability

That is the main thing that sets Eastern Europe apart as one of the best outsourcing locations for Western businesses: they don’t just have a lot of developers, they have a lot of qualified ones.
Are you an enterprise with complex workflow logic? They’ve been there.

Are you a start-up taking your crack at the AI goldmine? They’ve done that as well.

Global rankings consistently place Eastern Europe outsourcing software development specialists among the best-trained engineers in the world.

Backend

Eastern European engineers have strong skills in Java, .NET, Python, and Node.js development, all of which are in high demand in corporate software, financial systems, high-load products, and automation.

Frontend

React, Angular, and Vue are the go-to interface picks for product companies. Frontend developers in Eastern Europe are used to working in international teams and are also well-acquainted with SCRUM and SAFe workflows.

AI/ML and Data Science

Mix together a strong academic base with a growing startup ecosystem, and you get one of the most competitive regions in AI. Poland, Lithuania, and Estonia have a ton of engineers with experience in AI tools and adjacent technologies.

Blockchain

IF you need help with your blockchain project, Lithuania and Estonia are your best bets. Here, you’ll find skilled engineers well-versed in Solidity, Rust, smart contracts, L2 solutions, and tokenized system architecture.

Cybersecurity

That’s where you find companies that adhere to the EU’s information security standards. Outsourcing companies from Poland and the Baltic states hone expertise in DevSecOps practices and cloud security systems. They’re not shying away from compliance management as well.

DevOps and Cloud-Native

You can easily find Eastern European engineers skilled in Kubernetes, Docker, and Terraform for your projects. Cloud platforms such as AWS, Azure, and GCP are widely used here as well. These are not just “newbies” here; we’re talking about seasoned professionals who can be trusted with critical production environments.

It’s not just me saying all that: the technological prowess of Eastern Europe is recognized globally.

According to metrics from LinkedIn and TIOBE, Poland, Romania, and Lithuania rank among the leaders worldwide for the number of Java, .NET, and Python developers.

In AI, they are growing at a faster pace than many Western European markets.

Cost of outsourcing in Eastern Europe

In 2025, development outsourcing for Eastern Europe offers senior engineers at $30–$65/hr. That’s about 2x-3x times more affordable than what you’d pay in the US or the UK, where similar talent can cost anywhere from $80 to $150 per hour. But don’t let the lower rates fool you: the Eastern European developers bring in the code, the workflows, and communication on par with those in Western markets.

Now, you might be thinking, “Asia offers rates as low as $20 per hour.”

But as we mentioned above, rates alone don’t tell the whole story.

Time zone differences, high turnover, and frequent rework caused by misaligned expectations can make what looks like a bargain turn into a costly headache. In the long run, you might end up spending even more than you’d expected.

Here’s what you need to factor into the final cost of ownership besides the hourly rates:

Onboarding time: Eastern Europeans have an easier time integrating into international teams
Quality of the first prototype: fewer iterations = lower costs
Communication efficiency: fewer misunderstandings = higher speed
Risks: more control — fewer rollbacks and penalties

Let’s put that logic to the numbers:

An American healthcare company is choosing between three markets for the development of a HIPAA-compliant mobile application:

Region	Hourly rate (Senior Developer)	Project timeline	6-month TCO	Key considerations
USA	$130/hr	6 dev × 960 hrs	~$750,000	Expensive, long time-to-hire
Eastern Europe	$60/hr	6 dev × 960 hrs	~$345,000	Vendor due diligence required
Asia	$25/hr	6 dev × 960 hrs	~$150,000	Rework, timezone, quality

In the end, the project outsourced to Poland cost 45% less than in the US and was completed faster due to better communication and compliance. The project outsourced to India saved money, but failed to meet the SLA and went through three reworks.

Looking for a team in Eastern Europe?

We will select developers for your tech, tasks, and deadlines through our Warsaw office.

Risks and Challenges

Outsourcing to Eastern Europe brings plenty of advantages, but it wouldn’t be fair not to address the associated risks.

So let’s do just that. And also discuss the ways of managing those risks effectively — to make sure outsourcing saves you money.

Political stability

Most countries in the region, like Poland, Romania, Bulgaria, and the Baltic states, are part of the EU and NATO, which provides a solid foundation of legal and infrastructure stability.

Ukraine, even though it’s not part of the EU, still has top-tier talent to offer, though the political landscape carries a geopolitical risk.

Even during tough times, Ukrainian teams still remain reliable and committed. But, it’s prudent to account for the associated risks.

Competition for senior talent

Top developers, especially those skilled in DevOps and AI, are in high demand. Companies that come to the market just to poach some brains are often skipped over by real talent in favor of employers that offer real career growth.

Not a lot of interest in short-term contracts there.

But you can take advantage. All you have to do is partner with a trusted provider who has access to a solid pool of nurtured talent, not just a freelance marketplace. That’s how you get the most motivated and efficient contractors.

Vendor lock-in and contractor reliability

Choosing the right partner is just as important as choosing the right country. Without proper technical due diligence, process verification, and security checks, outsourcing can feel like a gamble.

Always request ISO 27001, SOC 2, and internal GDPR policies, and make sure you look at portfolios and references. A reliable provider isn’t just about developers — it’s about having a well-managed package.

Cultural compatibility and communication

Generally, Eastern Europe has a high degree of cultural compatibility with the West.

But that doesn’t mean you can skip SLAs, documentation, and regular check-ins. Just because you both speak the same language doesn’t always mean you share the same expectations. The solution here is transparency: clear communication and regular priority alignment between teams.
There are risks, sure. But with the right approach, you have as good a chance to strike a great partnership as when hiring in the US or the EU.

The key is to remain diligent with the service provider. Often, the real issues arise not from the region itself, but from mistakes in choosing the right partner and the right collaboration model.

Eastern Europe vs Other Outsourcing Destinations

Choosing where to outsource is all about finding the right mix of cost, quality, talent, and how easy it is to manage. So, let’s see how Eastern Europe stacks up against some other popular options.

Eastern Europe vs Asia

Asia’s low rates are tempting — developers can start at just $20 an hour. Sounds great, right?

But it’s not always smooth sailing. Time zones, language barriers, and communication issues can drag the work down quite a bit. Plus, high turnover means you might be constantly training new people, and the cost of that adds up. What seems like a big saving could actually end up costing you more in the long run.

In Eastern Europe, you pay a bit more, but you get better quality and fewer problems with communication or turnover.

Eastern Europe vs Latin America

Latin America is a good option for U.S. companies because of similar time zones and easy communication. But for more complex projects, Eastern Europe stands out. The region has strong technical skills, especially in fintech and high-security systems.

Their processes are also more mature and reliable. So, if your project needs top-notch expertise in areas like security, compliance, or complex system architecture, Eastern Europe is where you’ll want to look.

Eastern Europe vs local hiring in the US/EU

Hiring local in the US can cost you around $150–200K/year per senior developer — and that’s not including taxes, insurance, bonuses, or the usual HR overhead.

In Eastern Europe, that same budget goes much further: you can get a whole team of specialists, plus a technical manager to boot. And with the growing shortage of local talent, it’s not just about price anymore. You’re essentially region-locking yourself out of skilled talent.

Comparison table:

Criteria	Eastern Europe	Asia	Latin America	USA/EU
Rate (Sr Dev)	$30–65 / hour	$20–40 / hour	$35–70 / hour	$80–150 / hour
Quality	High	Inconsistent	Varies	High
Timezone	EU/US overlap	No overlap	In proximity to the US	The same timezone
Risks	Manageable	High	Moderate	Minimal
Education	Solid engineering degrees	Mixed	Mostly hands-on training	Solid engineering degrees
Regulation	EC, GDPR	Not as mature	Mixed	Full coverage
Specialization	Fintech, AI, DevOps	Outsourcing + support	Web, mobile, support	Full coverage

Comparing Eastern Europe with other regions?

Tell us about your case — we’ll show you how much you can really save without compromising on quality and speed.

Case studies & success stories

Outsourcing to Eastern Europe isn’t only about cost — it’s about getting the right talent right where you need them. Here are some real-life examples of how businesses have benefited from partnering with teams (like ours) in Eastern Europe.

Case 1: a US fintech company scales development through Warsaw

Task: Strengthen the backend team to launch new payment modules and optimize infrastructure for high load.

Solution: We brought in six senior Java and DevOps engineers from Poland through our Warsaw office. The team worked directly with the client’s crew, all within the same time zone, making communication and collaboration seamless.

Result: Features were delivered 30% faster. The infrastructure SLA exceeded 99.95%. And the client didn’t have to worry about hiring, legal stuff, or onboarding — our team took care of all the operational details.

Case 2: European holding company transfers ERP support to Warsaw

Task: Cut corporate system support costs and ensure compliance with GDPR and internal standards.

Solution: Our dedicated team in Warsaw took on second-line SAP support and regular updates. They fully integrated into the client’s processes and handled security maintenance.

Result: The company saved 35% on costs and gained more stable processes. This freed up internal resources, allowing them to focus on developing new digital products.

Case 3: a Northern European startup launches a blockchain product with a team in Warsaw

Task: Create a working MVP on Ethereum to present to investors, with a focus on scalability and technical stability.

Solution: We assembled an agile team in Warsaw, packed with experts in Solidity and L2 architecture along with smart contracts. They covered everything from CI/CD to code auditing and documentation.

Result: The MVP was ready in just 9 weeks, impressing investors. The guys were so stoked by the pitch that we continued with our partnership and became the core unit for the project.

How to choose the right partner in Eastern Europe

Let me repeat my point — picking the right software outsourcing company in Eastern Europe matters way more than picking the right country. The same market can either help you steadily scale or completely drain your budget. It all comes down to the technical maturity, reputation, and management quality of the vendor you choose. If your goal is to build a reliable and scalable partnership — not just hire a few developers — here’s what to pay attention to:

1. Technical expertise that matches your needs

If you need Java and DevOps, don’t settle for a company where those skills are just bullet points on a sales deck. Make sure they’re highly proficient in them. Ask what projects they’ve delivered, and in which domains — fintech, medtech, eCommerce — because industry-specific experience makes a huge difference.

2. Compliance and security from the get-go

This isn’t the place to compromise. Minimum expectations should be ISO 27001, GDPR compliance, strong access control, and vulnerability management processes. If a vendor can’t provide proof of these — don’t waste your time. Security risks here aren’t just a technicality; they’re full-blown business risks.

3. The right collaboration model for your case

You’ve got three main options:

Staff augmentation → you manage developers directly.
Dedicated team → a cross-functional squad that sticks with you long-term.
Full outsourcing → you hand over the entire task and focus on deliverables, not day-to-day management.

Pick the model that fits your project and internal resources best.

4. Communication that keeps projects moving

This isn’t only about English fluency. It’s about how structured the vendor’s delivery process is: meetings, documentation, response times, and status updates. If everything runs on “verbal agreements,” you’ll end up micromanaging and redoing work. Ask to see how they actually handle delivery.

5. Local presence makes life easier

Having a real office in your target region is a serious advantage. For example, at Innowise, we have an office in Warsaw. That means we can:

Quickly connect you with developers and team leads from the local talent pool.
Ensure legal and tax transparency, so there are no surprises.
Oversee quality more effectively than just sending tasks over Zoom across time zones.

“Mistakes in choosing a location are costly, but mistakes in choosing a partner can be fatal. Eastern Europe gives you potential. Whether that potential turns into results depends on who you work with.”

Dmitry Nazarevich

Head of Delivery, Innowise

Conclusion

Outsourcing to Eastern Europe isn’t just about chasing the lowest price tag. It’s about finding the right balance between quality, reliable delivery, and cultural fit. When hiring locally isn’t enough and offshore options feel too risky, Eastern Europe offers a great middle ground.

Take Poland, for instance. Warsaw is becoming one of the top tech hubs in the region. The city has a thriving talent pool, a clear legal structure, and a work culture that aligns well with U.S. and EU businesses. It’s the perfect place to build long-term, scalable partnerships.

And here’s the kicker: when your partner has a real office on the ground — not just a sales rep — you get an entirely new level of reliability. With boots on the ground, it’s easier to manage talent, oversee projects, and keep everything running smoothly.

FAQs

Absolutely. The region is tech-savvy, mature, and rate-competitive. Universities produce a steady flow of highly qualified engineers, English proficiency is strong, and you get time zone overlap with both the U.S. and Europe.

On average, a senior developer costs $30–$65 per hour. That’s roughly 2–2.5x cheaper than hiring in the U.S. — but the real value is in the expertise. You’re not just paying less, you’re getting seasoned engineers who can actually drive projects forward.

Poland is the heavyweight on this one. It has the biggest talent pool and great engineering schools. The legal and business framework is also pretty solid. Warsaw, in particular, is the go-to hub for international clients.

Because they want to scale fast without sacrificing quality or control. Eastern Europe strikes the perfect balance: more affordable than local hiring, more mature than most offshore destinations.

You’ll find deep expertise in Java, .NET, Python, React, Angular, Node.js, DevOps, AI/ML, cybersecurity, and blockchain. The region is especially strong in fintech, enterprise systems, and high-load projects.

Asia is cheaper, but quality and communication can be inconsistent. Latin America is closer in time zones for U.S. clients, but often weaker in training and compliance. Eastern Europe is the sweet spot: competitive rates, strong skills, cultural fit, and reliable delivery.

Very few — if you pick the right partner. The main risks are running into inexperienced vendors or high competition for senior staff. Both can be managed with proper due diligence.

Yes. With 600,000+ developers, global R&D centers, and a reputation for excellence, Poland leads the region hands down. Many big Western companies like IBM and Microsoft regularly work with Polish developers.

Yes. Countries like Poland, Romania, Lithuania, Estonia, and the Czech Republic consistently rank among the best in the world for English proficiency among IT professionals. Communication won’t be a roadblock.

Don’t just shop by hourly rate. Look at local presence (having an office in Warsaw is a big plus), technical leadership and delivery processes, compliance practices, and real case studies and proven track records.

Dmitry Nazarevich

CTO

Dmitry leads the tech strategy behind custom solutions that actually work for clients — now and as they grow. He bridges big-picture vision with hands-on execution, making sure every build is smart, scalable, and aligned with the business.

Contact us

Book a call or fill out the form below and we’ll get back to you once we’ve processed your request.

Name

Company

Phone

Message

Send us a voice message

Attach documents

Upload file

You can attach 1 file up to 2MB. Valid file formats: pdf, jpg, jpeg, png.

By clicking Send, you consent to Innowise processing your personal data per our Privacy Policy to provide you with relevant information. By submitting your phone number, you agree that we may contact you via voice calls, SMS, and messaging apps. Calling, message, and data rates may apply.

You can also send us your request
to contact@innowise.com

What happens next?

Once we’ve received and processed your request, we’ll get back to you to detail your project needs and sign an NDA to ensure confidentiality.

After examining your wants, needs, and expectations, our team will devise a project proposal with the scope of work, team size, time, and cost estimates.

We’ll arrange a meeting with you to discuss the offer and nail down the details.

Finally, we’ll sign a contract and start working on your project right away.