Offshore Development: Recommended Countries

July 9, 2025

With offshore development, overseeing the engineers is key, and it’s essential to manage progress and communication. This article explains what to manage in offshore development and key points to keep in mind. If you’re considering outsourcing development, this guide is for you.

Offshore development refers to outsourcing software, app, and IT infrastructure development to overseas companies. By partnering with companies in countries where labor costs are lower, you can reduce costs while still working with highly skilled IT professionals. Offshore development is also an effective means of securing talent in a tight labor market.

2-1. Nearshore

Nearshore development refers to outsourcing work to companies located in other regions within the same country. For example in Japan, companies in Tokyo may outsource to firms in regional Japan. The main advantages are lower costs and fewer communication barriers, since there are limited cultural or language differences.

2-2. Onshore

Onshore development means handling development internally within your own organization. While this allows for smooth communication and confidentiality, the costs of hiring and retaining in-house talent can be higher compared to offshore or nearshore alternatives.

3-1. Project Progress

It’s crucial to regularly check progress and schedules. Progress management tools can help provide real-time visibility into the overall project and reduce delays. Setting clear deadlines also helps teams stay focused and on track.

3-2. Communication

Cultural and language differences often make communication challenging in offshore development. Setting clear communication rules — like meeting frequency, reporting timing, and tools used — can prevent misunderstandings and help projects run smoothly.

3-3. Costs

Managing costs, such as labor and software tool fees, is essential. Regularly monitor expenses to ensure you stay within budget. Make adjustments as needed to avoid overspending.

3-4. Staffing

Proper allocation of human resources is key to successful offshore development. Assign roles based on each team member’s skills and experience. Be flexible and ready to reassign roles depending on the project’s needs and progress.

The biggest advantage of offshore development is access to skilled talent. You can tap into highly capable IT engineers overseas, alleviating the local talent shortage. Choosing regions with strong tech expertise can lead to high-quality development at a lower cost.

The biggest drawback of offshore development is the difficulty in communication due to language and cultural differences. Misunderstandings and miscommunications can occur easily. Real-time monitoring is also harder, which increases the risk of unexpected issues and potential impact on quality.

6-1. Defining Objectives

Start by clearly defining the development objectives. Knowing what you want to build will help guide the project direction. Then define the necessary system requirements and specifications.

6-2. Choosing a Partner and Signing a Contract

After setting requirements, choose the country and partner company. Shortlist candidates based on alignment with your goals, and evaluate them in terms of cost, expertise, and track record. Once a partner is selected, proceed with the contract process.

6-3. Development Execution

After signing the contract, begin the development phase. Hold regular meetings to track progress and implement corrections as needed. Good communication with local engineers is key to a successful project.

7-1. Understand the Partner Country

Understanding your partner country’s culture and work values can help minimize misunderstandings and allow the project to run more smoothly. Respectful and informed management is essential.

7-2. Establish Clear Rules

Set detailed rules for workflows, communication, and expectations. Different cultures will make different assumptions about things, so it’s important to explicitly define procedures and guidelines.

7-3. Maintain Strong Communication

Communication is often the biggest challenge in offshore projects. Use project management and communication tools effectively, and stick to regular check-ins. Encourage open communication among team members.

8-1. Vietnam

For Japanese firms, Vietnam is a popular offshore destination due to its strong ties with Japan and cultural affinity. Low labor costs and high-quality talent make it a great option.

8-2. Philippines

The Philippines is ideal for English projects. For Japanese companies, minimal time-zone differences allow for real-time collaboration and easier scheduling.

8-3. India

India offers a large pool of top-tier IT professionals, making it ideal for complex, high-tech projects. However, differences in work culture may require management adjustments.

8-4. China

China has advanced technological capabilities, making it suitable for cutting-edge development. However, costs tend to be higher than other countries.

8-5. Bangladesh

Bangladesh also offers cost advantages. Many professionals there have strong English skills, and government investment in IT education is increasing the number of skilled engineers.

8-6. Myanmar

Myanmar has many professionals fluent in Japanese, enabling smoother communication. The workforce also has a reputation for being hardworking. However, political instability in the region is something to consider.

Check if the vendor can communicate effectively in your required language or facilitate smooth interactions despite language barriers. This helps prevent misunderstandings and keeps the project on track.

Also, make sure the company has a proven track record in similar projects. Research their past work to ensure reliability.

Since offshore development involves working with partners abroad, more detailed management is required than for domestic projects. Be thorough in your preparations and maintain regular oversight and communication.

If you’re looking to upgrade your IT infrastructure through offshore outsourcing, consider consulting ISF NET.

ISF NET is one of Japan’s largest providers of IT infrastructure engineer dispatch services (haken). Our head office is in Tokyo, and we have branches throughout the country. We employ our engineers as full-time staff and offer flexible support tailored to your situation.

Contact ISF NET for IT Engineer Services

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