Nearshoring in IT has quickly turned into a practical choice for many businesses. Instead of sending projects halfway across the world, companies prefer to work with teams in nearby countries. This way, they cut costs, keep a closer eye on progress, and avoid the hassle of time zone differences.
Europe is now one of the top spots for nearshore software development. The region offers solid infrastructure, skilled engineers, and a strong talent pool shaped by years of technical education.
For businesses, that means reliable quality, straightforward communication, and the flexibility that offshore outsourcing often fails to deliver.
Common Types of Outsourcing Models
There are three main forms of software development outsourcing:
- Onshoring — working with vendors within your own country. It offers maximum convenience in communication but comes with higher costs.
- Offshoring — delegating development to distant regions (for example, Asia or Latin America). It is cheaper, but often creates challenges with time zones, cultural differences, and management.
- Nearshoring — partnering with companies in neighboring countries. This model provides an optimal balance of cost, quality, and convenience.
What is Nearshore Software Development?
As we stated above, nearshore software development is a type of outsourcing where the software project is outsourced to teams in neighboring countries or neighboring nations.
It combines the advantages of offshoring and onshoring: it is less expensive than relying on local providers, yet considerably more convenient than dealing with teams that are thousands of miles away.
Nearshoring keeps teams close by in terms of location and culture, so communication remains pretty easy. At the same time, it offers the advantages of onshoring, but without limiting you to just local talent.
Benefits of Nearshore Software Development in Europe
European nearshore software development provides the best combination of all three types of outsourcing, making it by far the most appealing option for international businesses.
The table below highlights the key benefits of nearshore development and explains why this model has become a preferred choice for companies seeking reliable and cost-efficient IT partnerships.
| Benefit | Description |
| Cost Reduction | Lower nearshore software development rates compared to onshoring, while maintaining quality and ease of collaboration. |
| Skilled Talent Pool | Access to highly qualified software developers in Eastern and Western Europe, experienced in working with international standards. |
| Faster Development | Acceleration of the development process thanks to minimal time zone differences and flexible team management. |
| Easy Communication & Legal Clarity | Shared cultural context, overlapping working hours, and clear legal frameworks that simplify cooperation. |
| Quality & Risk Mitigation | Successful nearshore software development helps reduce operational and technical risks, ensuring high-quality results. |
Benefits of Nearshore Software Development in Europe
Nearshore Software Development Rates in Europe
The cost of nearshore software development in Europe varies by region, and the choice of destination largely depends on business priorities — whether that is budget optimization, ease of collaboration, or strategic proximity.
Eastern Europe
Eastern Europe is one of the most popular regions for nearshore software development. The area offers a large pool of qualified specialists with strong technical education and experience working on international projects.
The key advantages of the region include a balanced ratio of cost and quality, team flexibility, and fast hiring. Eastern Europe is the right choice for companies aiming to reduce expenses while maintaining a high level of expertise.
According to industry forecasts, the IT outsourcing market in Eastern Europe will reach $5.34 billion by 2025 and grow to $7.43 billion by 2030, with a compound annual growth rate (CAGR) of 6.82%.
The average spending per employee in the IT outsourcing segment is projected to be around $45.44 per year in 2025, reflecting significant investments by businesses into nearshore development.
Central Europe
Central Europe offers maximum proximity to key EU business hubs and a high degree of cultural and organizational compatibility. Communication is easy to establish, and projects can be managed within a unified legal framework. This region is ideal for companies that value transparency, predictable processes, and long-term strategic partnerships.
Forecasts show that the IT outsourcing market in Central and Western Europe will reach $191.25 billion by 2030, with an average annual growth rate of 6.3%.
The average spending per employee is expected to be about $805.89 in 2025, underlining the region’s strong focus on technological advancement and process efficiency. Poland stands out in this segment as a particularly attractive destination due to its strong talent pool and competitive rates.
Western Europe
Western Europe has one of the most mature IT markets with well-established quality standards. Companies turn to this region when cultural fit, legal security, and close management are a priority.
It’s a great choice for projects where cost comes second to reliability and smooth collaboration. IT outsourcing here requires significant investment. In 2025, the average IT outsourcing spend per employee in Central and Western Europe is over $800 per year.
Nearshoring Software Development in Europe: Best Destinations
Nearshore software development in Europe helps companies reduce costs, work with skilled professionals, and maintain clear communication thanks to minimal time zone differences. The most attractive destinations are located in Central and Eastern Europe.
Poland
Poland is the largest IT market in the region, with hundreds of thousands of specialists and a high level of English proficiency. The country attracts clients with its stability, competitive rates, and expertise in enterprise development, cloud, and DevOps. For businesses from Germany and the UK, Poland is often the first choice.
Czech Republic
The Czech Republic is valued for its stability and proximity to Western markets. The country has well-developed expertise in enterprise development, fintech, and automotive software. It is an attractive option for clients looking for reliability and a European level of process organization.
Romania
Romania combines EU membership, strong language skills, and competitive pricing. Key areas include embedded software, fintech, and cloud solutions. With many IT hubs across the country, Romania has become a convenient destination for long-term partnerships.
Hungary
Hungary offers a good balance of cost and quality, with strong talent in web and mobile development as well as projects in automotive and R&D. Its geographic proximity makes it a practical alternative for European clients.
How to Choose a Nearshore Software Development Company
Picking the right partner for nearshore software development can make or break your project. With so many vendors on the market, it’s not just about finding the lowest rate — it’s about choosing a company that has the skills, experience, and tech to deliver real results.
Start with experience and portfolio. A company that has been around for years and has delivered successful projects for international clients is usually a safer bet. Looking through case studies helps you see if they’ve worked in your industry before — whether it’s fintech, e-commerce, healthcare, or blockchain — and whether their expertise matches your needs.
Next, take a close look at the development team. Who exactly will be working on your project? What’s their background? How well do they complement each other as a team? Reliable nearshore vendors are transparent about their engineers’ skills, how they build teams, and how quickly they can scale when your project grows.
Don’t forget about processes. Strong agile and DevOps practices, clear QA procedures, and well-structured communication make a huge difference. Checking how a company handles testing, releases, and feedback can save you from delays, budget overruns, and unpleasant surprises.
Finally, consider whether the company can act as a true partner, not just a contractor. The best nearshore providers bring ideas to the table, help optimize your product, and support long-term growth — not just write code.
In the end, a successful partnership comes down to four things: experience, expertise, solid processes, and a professional team. Get those right, and you’ll have more than just good software — you’ll have a partner who helps your business grow.
Top Nearshore Software Development Companies in Europe
The nearshore software development market in Europe is growing rapidly as companies look for partners that can combine strong expertise, flexibility, and competitive rates. Eastern and Central Europe have become top destinations thanks to their large pool of skilled specialists and convenient location.
This overview highlights the leading nearshore software development companies that have proven themselves as reliable partners for businesses worldwide.
1. SCAND (Poland)
SCAND is a leading IT outsourcing company with more than 25 years of experience. Founded in Central Europe, the company has built a strong reputation as a reliable partner for clients in the USA, Singapore, UAE, South Korea, and Europe.
- Team: 250+ engineers skilled in modern technologies and with deep expertise in software development of various scales.
- Expertise: Web and mobile applications, SaaS platforms, AI and Big Data solutions, DevOps practices, IoT, and blockchain.
- Geography: SCAND works with clients worldwide, successfully delivering projects in the USA and across Europe.
- Key strength: SCAND takes a flexible approach to every project, builds long-term partnerships, and actively develops innovative products, including AI-based solutions and crypto bots available in early access.
Thanks to its combination of quality, speed, and competitive rates, SCAND rightfully holds the top spot among the best nearshore software development companies in Europe. The company brings together technological expertise, decades of experience, and a personalized approach, making it the optimal choice for clients seeking a reliable partner for long-term collaboration.
2. Intellias (Ukraine, Poland)
Intellias is one of the largest nearshore software development providers in Eastern Europe. The company focuses on digital transformation and actively collaborates with clients from high-tech industries.
- Team: Over 2,500 specialists ready to take on large-scale projects.
- Focus: Digital transformation, automotive industry solutions, and fintech.
- Clients: Major international corporations, including Fortune 500 companies.
With scalable teams and deep industry expertise, Intellias has established itself as a reliable partner for large and technologically complex projects.
3. Luxoft (Switzerland)
Luxoft is an international software development company and part of DXC Technology. The company operates development centers across Eastern Europe and serves clients worldwide.
- Team: Thousands of specialists across multiple countries, enabling the formation of large-scale distributed teams.
- Expertise: Projects for the financial sector, telecommunications, and retail.
- Global presence: Offices and development centers in Europe, both Americas, and Asia, giving the company the status of a true global player.
Luxoft is recognized as one of the largest IT outsourcing providers, delivering comprehensive solutions for major corporations and multinational enterprises.
4. Ciklum (London)
Ciklum is one of the biggest nearshore software development providers in Europe, providing services to companies in a range of industries. Ciklum is recognized for its flexibility, capability, and experience in building agile processes.
- Team: More than 3,000 engineers located in development centers in London and Europe.
- Specialization: E-commerce, fintech, and healthcare.
- Methodology: Deeply immersed in agile development, allowing the team to quickly ramp up and adapt to client requirements.
5. Netguru (Poland)
Netguru is a Poland-based software development company recognized for supporting startups and rapidly growing businesses. It partners with clients to design, develop, and scale digital products in Poland and throughout Europe.
- Team: More than 900 professionals, including product specialists, designers, and developers.
- Area: Mobile and web application design and development with a very strong focus on usability and user experience.
- Chief strength: Netguru is good at getting products to market fast and growing them economically as customers’ needs evolve.
Nearshore Software Development Services
The rapid increase in demand for nearshore software development work in Europe suggests that more companies are actively seeking partners who can provide flexible service offerings at competitive rates.
Eastern and Central Europe have become more desirable geographic areas in the minds of many organizations, as they have a talented workforce and subject-matter expertise in many sophisticated software development disciplines.
One of the most popular services is still web and mobile app development. Many businesses outsource apps for e-commerce, banking, healthcare, and logistics. The go-to technologies here include React, Angular, Vue.js, as well as mobile frameworks like Flutter, React Native, and native languages such as Swift and Kotlin.
Enterprise solutions are another big area. Growing companies, especially those in retail, manufacturing, finance, and logistics, need robust CRM and ERP systems to manage customer relationships, optimize resources, and streamline internal processes. Developers from Eastern and Central Europe often work with technologies, such as Java, .NET, Python, and can ensure these systems stay scalable and reliable.
Cloud and infrastructure support is also in high demand, and Eastern Europe has become a strong hub for these services. Local teams have deep expertise in CI/CD automation, containerization, and cloud optimization, working with platforms like AWS, Microsoft Azure, Google Cloud, Kubernetes, and Docker.
The demand for AI & Big Data solutions is also accelerating, and Eastern European developers bring strong skills in building automation, personalization, and large-scale data processing systems. They rely on technologies such as Python, TensorFlow, PyTorch, Apache Spark, Hadoop, and Elasticsearch to deliver scalable, enterprise-grade solutions.
Put simply, nearshore providers in Europe cover the full spectrum of services — from mobile apps and enterprise systems to cloud infrastructure and AI projects. For many companies, Eastern European partners have become the go-to choice to speed up digital transformation and bring new products to market faster.
Possible Challenges of Nearshore Development
Despite its many advantages, nearshore software development can also come with certain challenges that businesses should keep in mind when choosing a partner.
First, cultural differences and variations in business communication may sometimes lead to misunderstandings. Even within Europe, levels of formality, approaches to planning, and work processes can differ significantly from country to country.
Second, legal aspects play a critical role. Issues such as intellectual property protection, data processing regulations, and tax conditions may vary and require careful review.
In addition, there is always the risk of selecting the wrong nearshore software development partner. A company with insufficient expertise, weak reputation, or unstable processes can cause delays, budget overruns, and a drop in product quality.
To minimize these challenges when working with nearshore outsourcing companies, it is important to conduct a thorough vendor assessment: review portfolios and client feedback, verify technical expertise, and agree in advance on legal and organizational terms. This approach helps build effective collaboration and reduce potential risks.
The Future of Nearshoring in Europe
Nearshore software development in Europe is moving into a new phase: from cost-cutting outsourcing to long-term strategic partnerships. Companies now expect nearshore teams not only to deliver code but also to contribute to product growth and business outcomes.
The biggest driver is the global shortage of IT talent. Nearshore partners in Eastern and Central Europe fill this gap by offering skilled engineers who can quickly integrate into client teams. As a result, collaboration is shifting toward dedicated nearshore centers with full responsibility for delivery.
Technology is a key differentiator once again. The implementation of artificial intelligence (AI), machine learning, DevOps automation, and cloud services is no longer optional but an integral part of today’s projects.
Nearshore vendors are clearly getting a competitive advantage when investing in opportunities such as these — and with cybersecurity, blockchain, and fintech solutions.
For geographical location, Eastern Europe will still be the main hub, because of its balance of cost and capability, with Poland, Romania, and the Czech Republic leading. At the same time, Western Europe will focus on more expensive, high-value complex projects where legal clarity and alignment to culture matter.
SCAND as Your Nearshore Development Company in Europe
SCAND is a trusted nearshore software development company with over 25 years of experience in the European and international markets. We provide a full range of software development services, helping businesses accelerate digital transformation, reduce costs, and bring products to market faster.
Our Nearshore Software Development Services
We cover the entire lifecycle of software products:
- Custom software development — web, mobile, and enterprise solutions fully tailored to your business needs.
- Application support & modernization — optimization of existing products, performance improvements, and functional enhancements.
- Dedicated developers & teams — flexible team models that scale with your project and ensure fast, reliable delivery.
Ready to scale your business with a reliable nearshore partner? Get in touch with SCAND today!
