Top 5 countries for IT outsourcing in Eastern Europe in 2025

We all know that the US, Switzerland, and China come across as worldwide leaders in software development. In general. But if we take a closer look, we’ll find out that Eastern Europe set the foundation of the modern approach to software development outsourcing. Eastern Europe’s market will likely reach USD 5.34 billion in revenue this year, and is expected to hit USD 7.4 billion by 2030.

There are several reasons for this:

Strong tech and engineering education (including radio electronics and integrated circuit design)
Locals are adaptive and flexible in terms of problem-solving
Rates are more affordable compared to Western Europe and the US
Central/Eastern European time zones sync easily with European work hours and still work for parts of the US
Cultural and business norms feel familiar to Western clients

This article ranks the top five countries for IT outsourcing in Eastern Europe. We break down the complex comparison system into edible, small parameters: education, talent, value, innovation, rates.

1. Ukraine

When foreigners hear “Ukraine” in the tech context, they usually imagine a skillful yet affordable workforce. There is a common bias in IT outsourcing. Eastern Europe is usually cheaper in terms of costs, but there are more risks. Yet, your company can even learn from some countries how to work under real pressure. But let’s eat this elephant bite by bite.

Tech talent and education

Strong CS/math lineage dating back to the Soviet era.

Yet, Kyiv Polytechnic Institute (KPI), Taras Shevchenko National University, Lviv Polytechnic, Kharkiv National University of Radioelectronics, and other universities that appear in the QS World University Rankings 2025 didn’t freeze in Soviet educational programs.

Despite some old-fashioned approaches, these institutions invite Senior practitioners from the Ukrainian tech industry to give lectures and teach the youth what matters.

This is not to mention private schools like Mate Academy, GoIT, EPAM University Programs, and SoftServe IT Academy, which keep mid-level talent current in cloud, data, and product engineering.

Developers and STEM pipeline

As of 2024, Ukraine has 250K+ tech specialists living and working exactly in their homeland; some studies put the figure above 300,000 even after wartime relocations (varies by source and counting method: payroll vs. tax residency, etc.).

Line chart showing Ukraine’s export of computer services from June 2010 to December 2022. The graph displays steady growth from 2010 through early 2020, followed by a sharper rise during the COVID-19 period and the war. Two trend lines are shown: a solid line for long-term growth between 2010–2014 and 2014–2020, and a dashed line reflecting accelerated growth during COVID-19 and wartime. The export values increase from near zero in 2010 to peaks above 800 by 2022.

Also, it’s worth mentioning the Ukrainian government's reservation program: companies critical to Ukraine’s economy can “reserve” their workers from mobilization. That’s why some technical specialists (not only technical though) came back home and got reserved.

Annual tech/STEM graduates are commonly reported in the ~15,000+ range from technology universities (baseline pre-war cadence sustained via hybrid formats).

Notable universities and regional hubs

KPI (Kyiv): Strong in systems engineering, embedded systems, and enterprise SW research. Influential within the Ukrainian tech community. Regarding worldwide recognition, QS and THE list KPI among Ukraine’s top technical schools.
Taras Shevchenko (Kyiv): Usually comes across as a humanitarian entity, yet still has potential in tech: algorithms, applied math, and data science.
Ukrainian Catholic University (Lviv): A leading institution for IT education in Ukraine (according to the UA’s largest IT community, DOU). It also ranks highly in other university assessments, such as the Forbes Ukraine rating, and has the highest average entrance score among all Ukrainian universities
Lviv Polytechnic and Lviv hub: The nearest university of appropriate level to Europe. Has many boutique product teams, micro-R&D studios, and cross-border delivery centers.
Kharkiv and Dnipro: Kharkiv has a legacy in telecom, embedded, and firmware engineering. Dnipro mixes industrial engineering with fintech shops focused on payments and banking integrations. Note that the cities suffer from Russian attacks more than Western Ukraine regions.

Rates and cost efficiency

We compiled Ukraine developer rates by matching the average at Upwork, Arc.dev, and PayScale. Total is around USD 25 to USD 55/hr for common stacks, but senior/specialized roles push above.

Comparison to Western Europe/the US and outsourcing maturity

Delivery speed and quality: Usually match Western delivery standards in code hygiene, CI/CD discipline, and test automation when they are staffed with senior engineers and organized into product-oriented squads. Internationally recognized vendors (like EPAM and GlobalLogic) use the same SDLC, SRE, and telemetry practices as Western delivery centers.
Collaboration nuances: Typically have a serious game in asynchronous work with detailed docs, automated pipelines, plus a propensity for synchronous touchpoints during overlapping CET windows. If you are from the US, here’s a trick for you: implement “follow-the-sun” handoffs or partial-shift coverage to secure a larger overlap.
Cost delta: Another specific feature is that you’d rather encounter higher rates than sketching stuffing practices when juniors are billed as seniors. But still, Western EU/US effective hourly costs are commonly 2-4x higher when fully loaded (including benefits and contractor premiums).

IT services are now the country’s #1 service export (USD 9.3B+ in 2024). Notably, the first half of 2025 showed a slight decrease in IT service exports, but the share of telecommunications, computer, and information services in total exports grew from 38.5% (USD 3.2 billion) to 43% (USD 3.3 billion).

The top buyers were the US, UK, and Malta. Also, we should take into account the defense tech export that might be launched soon, which also implies specific services, like intelligence and similar ones.

Chart listing the top 10 countries by volume of computer services exports from Ukraine in the first half of 2025. The USA leads with $1,135M (-6.41%), followed by the UK ($283M, +0.65%), Malta ($281M, +10.82%), Cyprus ($231M, +31.09%), Israel ($133M, -13.09%), Switzerland ($127M, -7.4%), Germany ($118M, -7.93%), Estonia ($100M, +23.79%), Poland ($89M, +16.97%), and the UAE ($75M, +6.41%). Notes indicate that data for April–June 2025 are preliminary.

Language and communication patterns

Not the highest proficiency even in Europe, but improving. #40 worldwide in 2024 and #29 in Europe, per EF EPI.

This is usually considered a moderate proficiency, but in practice, client-facing delivery teams and PMs typically operate in English. The most common and routine matters are discussed in text, and this way, you can definitely expect clear comms patterns and strong async artifacts (Confluence, RFCs).

Ukrainian engineers are autonomous, regularly review the code, and practice engineering-led decision-making. Approaches: Agile/Scrum or Kanban, with mature usage of CI/CD, code-quality gates, and cloud-native patterns.

Cultural compatibility

Cultural fit may not be the first thing clients investigate when outsourcing software development to Eastern Europe. That’s where many projects break down.

Ukrainian teams are schedule-aware and great at documentation (if we are talking about mature ones). Overall cultural fit with Western teams is high for companies that standardize rituals and align on SLAs.

Global R&D presence

In the early 2010s, Ukraine became a Mecca for global software behemoths. And many of them are still running operations here: EPAM, GlobalLogic, Luxoft, SoftServe, and notable R&D labs (Samsung R&D, Deloitte team in the capital). These centers support enterprise SLAs and staff complex platform work.

Unique advantages

Business continuity and advanced resilience: All forward-thinking companies in Ukraine invested in multi-tier BCP — redundant offices, generators, Starlink, regional relocation benches, etc. National Bank and industry data show exports remained resilient in 2023-2024 despite infrastructure strikes.
Diia.City legal regime offers favorable IP, contract, and tax structures for IT service companies and product ones. More than 800 new residents in 2024.
Defense.City also launches soon — a special legal space for companies developing advanced technologies and hardware to protect the country’s sovereignty and freedom.

Niche expertise

FinTech and payments: Many mid-market banks use Ukrainian teams for ledger services and sometimes take consultations on launching humanized neobanks.
Machine learning/NLP: Product companies (like Grammarly, Respeecher, and others) and boutique ML shops deliver production-grade NLP.
Cybersecurity: Despite doubts about government services, private companies and service providers apply advanced security approaches and even adapt them to their wartime needs. Hardened SOC, threat intel, and secure-by-design application services — this kind of things.
Embedded and telecom stack: Telecom, in general, is becoming a Ukrainian signature move. This and computer and information services are the only three that showed a notable rise in exports in 2025. UA’s teams have deep firmware, real-time OS, and telecom protocol experience used in IoT and automotive subsystems.

Political (in)stability and energy resilience

Eastern Europe outsourcing brings probably the boldest challenges in the world. War risk persists. Attacks on energy infrastructure remain a systemic risk, but industry and utilities have invested in redundancy and rapid restoration.

ACAPS investigated targeted strikes in 2024-2025 and notes significant recovery efforts and decentralized power solutions used by providers to keep services available.

Bar chart showing energy infrastructure damage in Ukrainian oblasts from October 2024 to January 2025. Dnipropetrovska has the highest damage (~260 incidents), followed by Donetska (~165), Khersonska (~90), Kharkivska (~60), Sumska (~30), Kyivska (~25), and Zaporizka (~15).

Buyers should expect regionally targeted contingencies. Vendors typically maintain BCP (regional benches, backup power, cloud failover) to guarantee SLAs.

Challenges and ongoing risks

Mobilization: A lot of men in Ukraine encounter unfair treatment from the military institutions. This adds staffing planning complexity. How they mitigate: Hire lawyers, relocate those whom they can, hire abroad, and “reserve” from mobilization more people with lawyers’ support.
Talent churn and migration: Selective relocations to EU hubs and remote-work mobility increase hiring competition for senior ICs. How they mitigate: Simply use nearshore hubs, longer-term retention packages, and build bench capacity.
Operational planning under risk: Many urban centers saw improved grid stability in the last year. So, the practical playbook is geo-redundant teams + cloud-first infra + developer pods in multiple cities or EU nodes.

2. Poland

While more stable compared to Ukraine, Poland is becoming not only a significant powerhouse for outsourcing software development to Eastern Europe but also a pricey one. More than half a million IT professionals and a rising market (expected to hit USD 2.44 billion in revenue by the end of 2025), strong English proficiency, and GDPR compliance balance higher wages than in Ukraine and talent competition in hubs like Warsaw and Krakow.

Table ranking Central and Eastern European countries by digital competitiveness in 2023. Estonia ranks first (65.59), Lithuania second (64.03), and Poland third (60.90). Poland’s row is highlighted, showing scores: Talent 25.92, IT Infrastructure 11.89, Economic Impact 9.00, and Business Environment 14.10. Other countries listed include Latvia, Hungary, Romania, Czechia, Slovakia, Slovenia, and Bulgaria with lower total scores.