IT Offshoring: Where to Offshore in 2025

Tsiala Jobava

Last updated on October 13, 2025 | 17 min read

Eastern EuropeEntertainmentKrakowPoland

Introduction

IT offshoring is projected to surpass $500 billion by 2025, fueled by cost savings, global talent access, and advancements in AI, automation, and cloud computing. As businesses expand, they face a critical question: Should they look beyond borders for skilled professionals? Offshore outsourcing has become a strategic solution, enabling companies to scale efficiently while remaining competitive. However, like any major business move, it comes with both opportunities and risks.

While offshoring offers significant advantages, lower labor costs, specialized expertise, and operational flexibility, it also presents challenges such as cultural differences, time zone gaps, and potential security concerns.

Understanding these factors is crucial for making an informed decision that aligns with a company’s long-term objectives.

This article explores the top IT offshoring destinations, including India, Latin America, Central & Eastern Europe, and Western Asia. By comparing their strengths, risks, and industry fit, we aim to provide decision-makers with a clear roadmap for navigating the complexities of offshore IT outsourcing.

What is IT offshore outsourcing?

In an era of talent shortages and rising operational costs, many business leaders ask: Is offshoring the right move for my company? Offshore outsourcing offers an answer by providing access to cost-effective, highly skilled talent in regions far from headquarters. Beyond lowering expenses, it enables companies to maintain quality while scaling faster, tapping into global expertise that may be scarce or too expensive in local markets.

For example, DevsData LLC, a top-ranked recruitment agency in Poland, Eastern Europe, Portugal, the UK, and Latin America, specializes in offshore IT staffing across these regions. These destinations have gained popularity due to their robust education systems, abundant tech talent, and growing reputations as global hubs for software development.

Offshore outsourcing is particularly appealing for businesses in North America and Western Europe that seek to reduce costs while gaining access to specialized expertise. Compared to nearshoring (outsourcing to nearby countries) and onshoring (outsourcing within the same country), offshoring often provides greater cost advantages and access to a broader talent pool, albeit with more time zones and cultural differences to manage.

This growing model continues to dominate the global IT services market as more companies recognize the strategic value of hiring talent abroad. According to Statista, the IT outsourcing market is projected to exceed $541 billion by 2024, with offshore destinations playing a major role in that growth.

Let’s examine the advantages and disadvantages of this approach in more detail.

Benefits of offshore IT services

As businesses weigh their global hiring strategies in 2025, the advantages of offshoring go beyond traditional cost savings. Emerging trends in AI, automation, and hybrid work models are reshaping how companies leverage offshore talent. Here are the key benefits driving decisions today:

Cost efficiency

With inflation and rising developer salaries in the US and Western Europe, 2025 makes cost arbitrage more critical than ever. Offshore hubs like India and the Caucasus deliver 40-70% savings compared to local hiring, allowing companies to reinvest in innovation.

Access to next-gen skills

As AI adoption accelerates (global AI market projected to hit $190B by 2025), offshoring isn’t just about saving money – it’s about tapping into regions with deep pools of AI/ML, cybersecurity, and blockchain developers. Central & Eastern Europe and India have become hotspots for these specialties.

Faster scaling amid talent shortages

According to Statista and Deloitte, with 2025’s global tech talent shortage at an all-time high, offshore providers can assemble teams in weeks. LatAm’s time zone alignment makes it easier for North American companies to expand quickly without long hiring cycles.

Round-the-clock productivity in a hybrid era

Distributed teams are now mainstream. In 2025, offshore developers enable 24/7 development cycles – especially relevant for startups racing competitors or enterprises undergoing digital transformations.

These advantages restate why offshore IT staffing is a growing trend, providing companies with the resources and flexibility they need to thrive in any tech industry.

Drawbacks of offshore IT staffing

Offshoring remains a powerful tool in 2025, but it also comes with new challenges shaped by stricter data regulations, accelerated delivery cycles, and complex hybrid structures. Understanding these risks is essential for making balanced, long-term decisions. Below are the major considerations to keep in mind:

Intellectual property risks

With AI models and data-intensive projects dominating 2025, IP risks are higher. The EU’s AI Act and stricter GDPR enforcement provide clearer frameworks, but outsourcing to less-regulated regions can pose challenges. Companies must demand compliance certifications (ISO, SOC2, HIPAA) before sharing sensitive data.

Quality control and monitoring

The push for faster MVPs and product releases in 2025 means quality risks rise. Offshore teams may deliver quickly, but risk cutting corners without strong KPIs, agile tools, and continuous integration practices in place.

Management overhead

Today’s offshore teams aren’t just coding; they’re integrated into hybrid organizations across multiple geographies. This makes coordination more complex, requiring advanced collaboration platforms (Asana, Jira, Miro) and often dedicated offshore delivery managers.

Time zone and communication barriers

While async tools are better than ever, projects involving AI/ML model training and real-time data processing often need tighter collaboration. LatAm offers near-synchronous schedules with the US, while CEE aligns with the UK/EU – but India still presents hurdles unless overlap windows are carefully managed.

2025 trends in IT offshoring: What to expect

As IT offshoring continues to evolve, businesses must stay ahead of emerging trends that shape the industry.

In 2025, technological advancements, workforce dynamics, and strategic shifts in outsourcing models will redefine how companies approach IT offshoring.

Here are the key trends that will impact the landscape.

The shift toward in-house offshoring

Traditionally, companies relied on third-party vendors for offshore IT services. However, shifting to an in-house offshoring model, where you establish and manage your own offshore teams, is gaining traction. According to industry reports, by the early 2020s, more than 1,450 captive (in-house) centers were created between 2020 and 2023. These trends indicate that companies are increasingly favoring captive offshore teams for greater control, integration with core operations, and enhanced collaboration, often supported by tools such as Microsoft Teams and Asana.

Key benefits:

• Greater control over operations and team performance
• Improved cybersecurity measures, ensuring compliance with international regulations
• Up to 40% cost savings compared to traditional outsourcing

For companies exploring this path, DevsData LLC can provide strategic support by sourcing and rigorously vetting top-tier talent, enabling clients to build their own dedicated offshore centers while reducing risk and time-to-hire.

AI, automation, and blockchain are reshaping offshoring

Integrating artificial intelligence (AI) and automation revolutionizes offshore IT operations by enabling businesses to streamline workflows through intelligent task allocation, predictive analytics, and automated testing. For example, AI-driven tools can detect bugs in code before deployment, automate repetitive development tasks, and optimize resource allocation across distributed teams, significantly reducing manual workloads and accelerating delivery cycles. Reflecting this shift, the global AI outsourcing market is projected to reach $190 billion by 2025, as more companies leverage outsourced AI capabilities to boost productivity and drive innovation at scale.

Robotic Process Automation (RPA) enhances operational efficiency by automating repetitive, rule-based tasks such as data entry, invoice processing, and report generation. This enables offshore teams to shift their focus to more strategic, high-value activities, such as software development, system architecture, or product innovation. By reducing manual effort and minimizing human error, RPA streamlines workflows and accelerates project timelines across distributed teams.

Blockchain adoption ensures transparency and trust in offshore collaborations by creating immutable digital records for contracts, payments, and project milestones. All stakeholders can access a single, tamper-proof ledger, making it easier to verify deliverables, monitor progress, and handle payments securely. This significantly reduces the risk of disputes, improves accountability, and builds confidence in long-term outsourcing partnerships.

IBM’s blockchain-based supply chain solutions demonstrate how major firms use the technology to enhance trust and transparency in global operations. These systems create a secure, shared ledger that tracks every step of the supply chain, enabling real-time visibility for all stakeholders. By enhancing traceability, mitigating fraud, and expediting dispute resolution, IBM helps companies establish more reliable and efficient offshore operations.

Workforce dynamics: Addressing the talent shortage

Companies increasingly turn to offshore hubs with large pools of skilled professionals, such as India, the Philippines, and Eastern Europe.

Why offshore talent matters:

• India produces over one million engineers annually, providing a steady stream of tech talent.
• Millennials and Gen Z dominate the workforce, emphasizing flexibility, work-life balance, and cultural alignment.
• Upskilling and continuous training programs are essential to retaining offshore talent and maintaining competitiveness.

Industry-specific IT offshoring trends

Offshoring is no longer a one-size-fits-all solution. In 2025, industry-specific outsourcing models are gaining traction, catering to businesses that require specialized solutions.

• Healthcare & finance – Offshore IT teams are helping businesses comply with regulations like HIPAA and GDPR.
• Cloud computing – By 2025, 70% of outsourced IT services are expected to be cloud-based, allowing companies to scale operations seamlessly.
• Manufacturing nearshoring – Companies like Toyota are shifting production closer to key markets to mitigate supply chain risks, a trend that may influence IT outsourcing decisions as well.

Top locations for offshore IT outsourcing

Offshore IT outsourcing offers a wide range of location choices, each with its own strengths, risks, and strategic fit. From well-established hubs like India and Poland to emerging regions in Latin America and the Caucasus, companies today have more options than ever to tailor their outsourcing strategy. However, selecting the right destination requires careful evaluation, not just of technical skills and language proficiency but also of factors like political stability, legal frameworks, time zone alignment, and data security.

Here is a comparative overview of global IT outsourcing locations in 2025, highlighting hourly rates, educational pipelines, English proficiency, and common tech stacks that matter most for decision-making.

Latin America

Latin America has emerged as a leading destination for IT outsourcing, especially for North American companies seeking geographical proximity and cultural alignment. The region boasts a growing tech ecosystem, strong educational foundations, and government-backed initiatives that make it increasingly attractive for offshore software development.

Brazil stands out for its rapidly expanding technology sector, which is growing at a rate of over 10% annually, according to the Brazilian Association of Information Technology and Communication Companies. The country is home to several tech clusters, including São Paulo and Florianópolis, and has invested heavily in infrastructure and digital education to support its developer base.

Mexico offers one of the most substantial advantages in the region: close timezone alignment with the United States, enabling real-time collaboration for agile development and project coordination. The Mexican government also supports the IT sector through tax incentives and innovation programs, while universities such as the National Autonomous University of Mexico (UNAM) and Monterrey Institute of Technology (ITESM) produce thousands of engineering graduates each year.

Argentina consistently ranks high in global tech skill indexes, thanks in part to its strong academic tradition in science and technology. Public institutions, such as the University of Buenos Aires, are known for producing highly skilled software engineers. Additionally, Argentina’s freelancer-friendly policies have helped nurture a robust remote work culture, making it a natural fit for outsourcing partnerships.

Key 2025 data points:

• Average hourly rates – $25–$65, depending on country (Mexico and Brazil on the higher end, Argentina lower).
• Tech universities – UNAM, ITESM (Mexico), USP (Brazil), UBA (Argentina).
• English proficiency – Moderate to high in Mexico/Argentina; Brazil lags slightly behind (EF Index 2024).
• Familiar tech stacks – JavaScript/Node.js, Python, Java, with growing demand in AI/ML.

Beyond talent, Latin America’s key strengths include cost competitiveness, improving digital infrastructure, and increasing regional collaboration. These factors, combined with cultural affinity and English proficiency in urban centers, position Latin America as a dynamic and strategic hub for offshore IT services.

Central and Eastern Europe (CEE)

Central and Eastern Europe is one of the most important IT offshoring regions. CEE has emerged as a competitive and high-quality yet low-cost IT service provider destination over the last decade. The area has been recognized for its talent pool of developers and its capacity to address niche markets, including healthcare, gaming, and finance. According to Dealroom, Central and Eastern European companies have experienced significant growth over the last five years, with a combined value of €190 billion expected in 2021. Although global startup funding fell to approximately USD 66 billion in early 2024, a decrease of around 20% from the previous year, Central and Eastern European (CEE) startups bucked this trend by raising around USD 11.8 billion in Q1‑2024 alone. This resilience highlights CEE’s growing appeal to venture capitalists despite broader market slowdowns.

There are over 1.3 million software developers in Eastern Europe, varying in technologies and competencies.

The Emerging Europe Future of IT 2023 report shows that Poland has the most significant number of professionals, hitting 525,000. Ukraine ranks closest to this figure with 363,000 IT specialists, seconded by the Czech Republic and Romania with 221,000 and 202,000 specialists. At the same time, Hungary boasts about 181,000 IT specialists, and Bulgaria – 108,000.

Key 2025 data points:

• Average hourly rates – $40–$80 (Poland, Czech Republic higher; Bulgaria, Romania lower).
• Major tech universities – Warsaw University of Technology, Charles University (Prague), Kyiv Polytechnic Institute.
• English proficiency – Among the highest globally (Poland, Romania, and Hungary rank well in EF Index 2024).
• Common tech stacks – Java, C++, Python, FinTech, enterprise solutions, and cybersecurity.

CEE also excels in coordinating collaboration across time zones. With the working hours of Western Europe and the UK only an hour apart, it’s a nearshore country that qualifies for virtually real-time business communication during working hours. In financial management, companies can choose between countries with high and low living standards, allowing them to have a flexible schedule without sacrificing quality.

Caucasus region (emerging destination)

Countries like Armenia, Azerbaijan, and Georgia are gaining increasing recognition as promising destinations for IT offshoring. These nations rapidly develop their tech sectors, supported by government initiatives, foreign investments, and growing educational programs emphasizing STEM disciplines.

One of the most significant advantages of offshoring to the Caucasian region is its expanding talent pool. The area boasts a growing number of highly skilled software engineers, data scientists, and IT professionals, many of whom have experience working with international clients. Local universities are playing a crucial role in this growth. For instance, Kutaisi International University (KIU) in Georgia collaborates with the Technical University of Munich, while the Armenian National Polytechnic University and Baku Higher Oil School in Azerbaijan are strengthening their focus on computer science and engineering. These institutions are contributing to a steady pipeline of well-trained specialists, making the region an attractive destination for IT offshoring.

Key 2025 data points:

• Average hourly rates – $20–$40 (cost-effective compared to CEE and LatAm).
• Major tech universities – Kutaisi International University, Armenian National Polytechnic, and Baku Higher Oil School.
• English proficiency – Moderate but improving rapidly among younger engineers.
• Common tech stacks – PHP, .NET, Python, with emerging blockchain and AI communities.

Cost efficiency is another decisive factor driving companies to consider the Caucasus region. The lower operational costs in these countries make them a highly attractive alternative to Central and Eastern Europe (CEE) and Latin America (LatAm). Businesses can access top-tier IT talent at competitive rates while benefiting from high-quality service and reliable infrastructure.

Additionally, time zone advantages offer seamless collaboration with companies in Europe and the Middle East. Many businesses find it easier to coordinate projects with teams in Armenia, Azerbaijan, and Georgia compared to more distant outsourcing locations. This time zone alignment facilitates real-time communication, agile workflows, and faster project turnarounds, making the Caucasus area an emerging hotspot for offshore IT services.

India: The IT powerhouse

Thanks to its large, highly skilled workforce, strong English proficiency, and cost efficiency, India remains one of the most dominant players in IT offshoring. With over 1 million engineers graduating annually, the country remains a top choice for companies seeking expertise in AI, software development, and cloud computing.

One of India’s key advantages is cost-effectiveness, as salaries for skilled IT professionals are significantly lower than in Western markets. Additionally, the country boasts a massive talent pool, with over 5 million software developers specializing in AI, cloud solutions, and full stack development. Strong governmental support further strengthens India’s IT sector, with various tax incentives and business-friendly policies favoring IT exports. Moreover, well-established IT hubs in cities like Bangalore, Hyderabad, Pune, and Chennai ensure access to major tech firms and service providers.

Key 2025 data points:

• Average hourly rates – $18–$60 depending on seniority (entry- to mid-level at the lower end, senior AI/cloud specialists higher).
• Major tech universities – Indian Institutes of Technology (IITs), National Institutes of Technology (NITs), BITS Pilani, Anna University.
• English proficiency – Very high within the IT workforce; India ranks at the top in EF Index among Asian regions.
• Common tech stacks – Java, Python, full-stack JavaScript, cloud platforms (AWS, Azure, GCP), AI/ML at scale.

However, companies outsourcing to India also face particular challenges. High competition for top talent makes it difficult to retain highly skilled professionals, as many global firms actively recruit from the region. Additionally, time zone differences necessitate that US and European businesses implement effective scheduling strategies to ensure seamless collaboration across different time zones.

Comparison of top offshore IT destinations in 2025

Your trusted IT offshoring partner: DevsData LLC

Website: www.devsdata.com
Company size: ~60 employees
Founding year: 2016
Headquarters: Brooklyn, NY, and Warsaw, Poland

With a strong global presence, DevsData LLC is a leading provider of high-quality offshore IT services. Renowned for its expertise in software development, IT recruitment, and outsourcing, the company delivers flexible, high-performance solutions backed by deep industry knowledge and over eight years of experience. DevsData LLC serves high-growth companies in the US, Israel, and beyond, offering tailored services in backend and frontend development, mobile applications, big data and analytics, AI, and custom technology consulting.

A key differentiator of DevsData LLC is its elite engineering team, which includes Google-level developers and senior experts with experience at top tech firms. To ensure every candidate meets the highest global standards, DevsData applies a rigorous vetting process that includes multistage technical interviews designed and conducted by former senior engineers from FAANG companies.

The company collaborates with both local and international professionals, including US-based specialists, for projects that require close collaboration, domain expertise, or native-market insight. With offices strategically located in top offshoring hubs across the Caucasus region, Latin America, Europe, India, DevsData LLC is positioned to tap into diverse talent pools and meet a wide range of technical needs.

DevsData LLC offers dedicated development teams and project-based outsourcing models, enabling companies to reduce overhead while ensuring seamless integration with their internal operations.

In addition to outsourcing, the firm offers specialized IT recruitment services, maintaining a curated database of over 65000 pre-vetted candidates. Clients benefit from a success-fee model, paying only upon successful placements, with a guarantee period for added assurance. Candidates undergo a rigorous, multistage 90-minute interview process, which includes both technical and soft skill assessments. The company also holds a government-approved recruitment license.

A notable example of DevsData LLC’s excellence in offshoring is its partnership with an international fashion corporation undergoing a radical digital transformation. Facing declining revenue due to increasing competition from major online players like Zalando, the company invested $9 million into launching an innovation lab focused on eCommerce, marketing, logistics, and operations. This initiative resulted in the launch of several critical IT systems, exceeding year-one transformation goals and significantly improving the client’s operational efficiency.

The company’s agile methodologies and lean operational structure allow it to offer competitive pricing without compromising quality. This customer-centric approach has led to top ratings on independent review platforms such as Clutch and GoodFirms, reflecting its dedication to client satisfaction.

For more information, contact DevsData LLC at general@devsdata.com or visit their website at www.devsdata.com.

Conclusion

The future of IT offshoring in 2025 is no longer just about cost savings. It is about aligning with the right regions for your industry, navigating new regulations around AI and data security, and building teams that can scale with speed and precision. Latin America offers nearshore agility, CEE excels in advanced AI and cybersecurity talent, the Caucasus provides cost-efficient emerging specialists, and India continues to dominate at scale – each region with its own advantages and risks that demand careful evaluation.

Amid shifting trends, from in-house offshore centers and AI-driven workflows to the global talent shortage, the companies that thrive will be those that view offshoring as a strategic partnership, not a transactional fix. Selecting a partner who understands regional nuances, enforces world-class vetting standards, and provides access to both local and international experts can turn offshore teams into a powerful driver of growth.

So the key question is: will your offshore strategy be a short-term cost lever, or will it become the engine that powers your company’s long-term innovation and competitiveness? For businesses ready to take the strategic route, DevsData LLC brings the expertise, global reach, and rigorous vetting process needed to transform offshore teams into a true competitive advantage.

For more information, contact DevsData LLC at general@devsdata.com or visit their website at www.devsdata.com.

Discover how IT recruitment and staffing can address your talent needs. Explore trending regions like Poland, Portugal, Mexico, Brazil and more.

🗓️ Schedule a consultation

Read full bio

Tsiala Jobava Copywriter and Marketer

Tsiala Jobava is a talented marketing specialist from Georgia. Tsiala holds a bachelor’s degree in International Relations from Georgian American University and a master’s in Marketing and Communication from Barcelona Business School. She has built a diverse career, working as a copywriter and in marketing and PR, before returning to her first passion – writing. Along the way, she has gained valuable experience in social media management, content creation, and brand development.

Read more about our IT staffing services

Eastern EuropeEntertainmentKrakowPoland