How to Set up Offshore Development Center: Best Practices

Published: 25 August 2023

If you are dealing with a complex project, or if you are dealing with highly sensitive software, the most prudent thing to do is to set up an offshore development center. Similarly, an offshore development center comes in handy if you want to spread your tentacles in other countries. Other business owners will seek to set up an ODC in order to diversify risks. 

This article is going to guide you on how to set up offshore development center. 

employees working

How to Set up Offshore Development Center: Best Practices 

Define the scope of your work

There are several best practices which can help you to set up an effective offshore development center. To start with, define the scope of your work, and the mandate of your ODC. These include the product or the service that you will deal with, the features you will build, and the tech stack that you should use. In addition to that, you should determine early enough if the ODC will be a simple or complex process. Making these decisions early will help you have a clear plan in order to accommodate the time and the effort of all the stakeholders.

Choose location

Choose a strategic business location. It is advisable that you should choose a location or a city that has a vibrant tech ecosystem. When it comes to the location of the offshore development center, there are two main options, Asia and Eastern Europe. 

Eastern Europe has a massive talent pool of developers. It is not surprising that established companies such as Samsung and Microsoft have bases here. The countries that you should consider here are Poland, Romania, and Ukraine (in Eastern Europe you can set up offshore development center with Qubit Labs). When it comes to Asia, the countries that you should focus on for your ODC are China and India. China boasts of a high technology capacity and India boasts of a reliable number of software engineers.

Investigate the rules and regulations of a country

When you want to start a business in a foreign country, you should strive to understand the laws and regulations of that particular country, and make sure you follow them. This will help you avoid any problems with the law. In addition to that, should you encounter any problem, you will be in a position to seek assistance or intervention. The rules and the regulations of a country should include business agreements, employment agreements, work permits, and coding standards. Bear in mind that many jurisdictions will require you to have a strong data protection system. 

Organizational culture

When you start your ODC, think about issues of structure, organizational culture, and the best methodology to run the business. At the center of this is to ensure that every member of the team feels respected and appreciated, and that there is no discrimination based on variables such as gender and national origin. In connection to this, choosing the agile development model comes in handy in giving you a consequential and beneficial experience. 


tax documents

Understand and follow the local taxation regime. When you want to do business in another country, you cannot afford to compromise on taxation as this will be detrimental to your future objectives. On matters of taxation, hire the local experts and not the international experts. Much as you will want to do business in an international environment, you will be surprised to learn how local business is and it is the local people who will help you in this. 

Choose outsourcing provider

Starting and running an ODC may overwhelm you. Rather than doing this on your own, you should consider taking a reliable outsourcing provider. Such an agency has the relevant skills and experience that comes in handy in setting up a unique ODC. In addition to that, such an outsourcing provider can help you maneuver around challenges such as red tape. Lastly, you should have a well-thought billing and payment policy that is fair, practical, safe, and reliable. The billing should be based on products and services provided at a particular time, and the client should be at liberty to add or remove products and services. Billing and payment can also be based on a fixed cost or dedicated resources hiring. 


The ODC is a stronghold in expertise in software development. An ODC will help you in meeting your business objectives such as scaling your business and seeking better markets. Overall, the offshore development center is a viable and sustainable solution for the IT needs of a company. 

Nial Setterfield


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