The Benefits of Opening an Offshore Development Center

More and more companies are moving away from software outsourcing in favor of the offshore development center (ODC) model. Today it is considered the most advanced solution for IT business, as it provides more benefits than traditional outsourcing. In this article, we will consider the offshore development center advantages.

What is an offshore development center (ODC)?

An offshore development center, also known as an ODC, is an office with a team of developers. In fact, this is a branch of the company, but it is located in another country, where there are more talented IT specialists and it is more profitable to develop a product. The ODC model is suitable for both large IT companies and startups because it can be used to enter new markets, get unlimited access to IT experts and at the same time save money.

How does an offshoring development center work?

The ODC is the representative arm of a technology company. This means that the offshore development team operates under the same brand as the main office and must comply with all corporate policy rules. An offshore team of IT specialists is not inferior to an internal team, as it performs the same tasks and brings significant benefits to the business. As a rule, the team of such a center consists of various specialists, including developers, QA engineers, back-end and front-end developers, designers, copywriters, and managers. Decisions regarding the structure and functions of the offshore team are taken by the head office.

It is important to note that the ODC does not require administrative staff, as all operational functions such as bookkeeping, payroll, legal support, and recruitment can be outsourced to a local service company. This service provider can also provide advice on offshore business issues and help with compliance with all necessary local legal requirements.

Benefits of opening an offshore development center

If you’re interested in starting a dedicated offshoring software development center, you’ll probably want to know all the advantages it offers. In addition to the opportunity to save on IT development and get access to a large number of experienced programmers, there are a number of other privileges, including:

  • working under your own brand;
  • protection of intellectual property rights;
  • dedicated development team.

It is incredibly important for technology companies to enter new markets under their own brand because it will be easier for them to promote their product and hire new employees. Working under your own brand implies that companies can expand the staff with new IT specialists, thereby implementing the corporate policy of their company. Thus, the ODC model allows you to manage your own development team, for example, in Ukraine without intermediaries.

With this model, you will also keep your independence. Working under your own brand, you will be able to keep both the IT team and all engineering processes under constant control. Only you will have access to product development, which will greatly reduce the risk of intellectual property infringement.

Direct management of the team will contribute to better interaction and the development of a sense of belonging to a common cause. Creating an offshore team of, for example, Ukrainian developers can have a positive impact on the development of your company. Thanks to their interest in entrepreneurship, they actively contribute to the development of business, becoming an integral part of the company.

Errors when Opening ODC

We have compiled a list of the most common mistakes when opening an offshore center to warn you against possible problems.

  •  Involve several recruitment agencies in the recruiting process at once

To speed up the recruitment process, technology companies often resort to cooperation with several recruiting agencies at once. But in practice, this strategy is not successful, as candidates are bombarded with spam with the same invitation to an interview. In the end, this will not give a positive result and will only spoil your image as an employer.

  •  Ignore the employer brand

To really improve your recruiting process, you need to focus on promoting your employer’s brand. In order to successfully conduct an advertising campaign, it should be adapted to the needs of the target IT community.

  •  Lose the details of the office space

A huge working area or a mesmerizing view from the window should not cloud your mind when choosing an office space. Before signing a property lease, check the soundproofing, and ventilation system, and make sure that the office is accessible 24/7. To take into account all the necessary nuances, consult with a real estate agent.

  •  Unadapted corporate policy

Your corporate policy may work well for in-house employees, but at the same time be irrelevant to your offshore development team. Their country has different labor laws and has its own national holidays. To provide ODC workers with better working conditions, be flexible by making some adjustments to the corporate policy for the offshore team (define days off and vacations).

  •  No agreement on the protection of intellectual property rights

Even though you are hiring a reliable development team, signing a non-disclosure agreement is mandatory. To prepare a meaningful contract, consult with a private lawyer.

  •  Direct income

The type of employment contract affects the solution of various legal issues, for example, the opening of a work visa. If your offshoring firm employs foreign employees who are directly paid by the main office, they are unlikely to be able to obtain a work or tourist visa to the USA due to the strict rules of the local embassy.


An offshore development center is a great solution for companies that want to move away from traditional outsourcing. The ODC will provide you with freedom of action and reliability. Create your own office with Newxel to experience all the benefits of offshore business in other countries.

The Newxel team will help you open a dedicated development center in accordance with international laws. The team of recruiters will hire the best software developers to join your team, and accountants will take care of staff payroll issues. Thanks to our experienced team, you can get real results in the first month of cooperation.