Offshore development center

Establishing a dedicated offshore development center (ODC) has become the go-to strategy for building a stable and long-term engineering presence in talent-rich regions.

In this article, we’ll explain what an offshore development center is, why companies choose this model, and how it compares to other approaches.

What is offshore development center?

An offshore development center, or ODC for short, is a long-term, dedicated engineering unit that a company establishes in a country offering a more favorable cost-to-talent ratio. Typically, it’s done with the support of a local technology partner like On The Spot Development. This unit works exclusively on the customer’s roadmap, follows their engineering processes, and operates under their technical leadership.
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The partner’s role is to provide the operational foundation required to build the team abroad, including recruiting engineers, handling employment and payroll, managing local compliance, and providing office infrastructure or remote work setup. Noteworthy is that product ownership, technical direction, priorities, and day-to-day management remain with the customer’s company.

Key benefits of an offshore development center

While cost efficiency is the initial driver, the offshore development center services model offers much more than lower development costs.

Access to an extensive talent pool

Countries with mature technology ecosystems provide an attractive alternative when competition for developers becomes too intense in local hiring markets. Poland, for example, is home to more than 650,000 IT professionals, making it one of Europe's largest and most established technology talent pools, with expertise spanning virtually every major technology stack.

At On The Spot Development, we strengthen that advantage with our own recruitment ecosystem. Our proprietary talent network includes 60,000+ tech specialists, 200+ community partnerships, and 6,000+ engaged email subscribers, enabling us to identify and engage qualified engineers quickly, even for niche or hard-to-fill positions.
Strategic cost optimization

By establishing an offshore development center in Poland, companies can significantly reduce the cost of building and operating an engineering organization. Savings come from multiple areas, including lower office rent, infrastructure setup, and reduced administrative expenses related to HR, recruitment, and legal compliance.

The most profound financial advantage, however, lies in the primary driver of any R&D budget – engineering talent. See the comparison table below.

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Furthermore, Poland’s highly favorable tax incentives such as the 5% IP Box rate for software development coupled with the dominant B2B contracting model, eliminate the heavy payroll taxes typical of the US, Israel and some other European countries.

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The tax advantages are further reinforced by lower real estate costs.

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Ultimately, these combined factors allow businesses to reduce their overall  spend by 40-50%, all while maintaining full ownership of their product, development processes, and technical direction.

Fast engineering team setup

Building an ODC allows you to launch a fully operational team significantly faster than setting up a subsidiary abroad on your own.

At On The Spot Development, our ODC experts rapidly translate your technical and business requirements into a targeted recruitment strategy, which enables us to identify, screen, and present engineers who are the right fit for your product, technology stack, and team in a shorter time.

Plus, our support doesn’t stop once the initial ODC team is in place. As your engineering needs evolve, we continue to scale your team and maintain a pipeline of qualified candidates, making future expansion faster, more predictable, and minimizing delays in hiring.

Long-term knowledge retention

Compared to project-based outsourcing, an ODC model is built around continuity. Engineers stay focused on the same product, accumulate domain knowledge, and become familiar with the company's architecture, workflows, and technical decisions.

Over time, this creates a stable engineering capability rather than a rotating external resource. The longer the team works together, the more value it creates through accumulated product context.

Our own partnerships reflect this exact stability. Our top five customers by revenue have been with us for an average of over 5 years, allowing their dedicated teams to develop a deep and irreplaceable understanding of their products.

End-to-end operational support

Building an engineering team abroad involves much more than hiring developers. Employment, legal compliance, office management, and local administration all require time, expertise, and ongoing attention.

With an offshore development center, those operational responsibilities stay with the local partner, which allows your team to focus on engineering, product development, and business growth.

At On The Spot Development, we provide the complete operational foundation behind your engineering team. Our experts take care of recruitment, HR, payroll, accounting, and legal support. Plus, we provide a fully equipped office in the center of Warsaw, manage hardware provisioning, employee benefits, immigration assistance, and team events.

We can also support your employer brand in the local market. Through team photoshoots and marketing materials showcasing your product and engineering team, we help increase your company’s visibility among local talent, strengthening both recruitment efforts and overall brand awareness.

What’s more, we organize TechSpot events, where your team members are given a platform to share their technical expertise and where we hand-pick and curate an audience tailored specifically to your active hiring needs.

How an offshore development center works

The structure of an offshore development center is straightforward: the customer owns the engineering function while the local partner provides the operational foundation needed to build and support the team.

The ODC partner manages the operational side of establishing an engineering team in another country. This includes:

• sourcing and recruiting developers
• handling employment contracts, payroll, and benefits
• providing local HR support
• arranging office space, equipment, or remote work infrastructure
• managing legal and compliance requirements

At On The Spot Development, we also support teams with day-to-day operational needs, including accounting support, immigration and relocation assistance, hardware management, and employee experience initiatives. This allows our customers to build a fully functional engineering presence in Poland without having to create their own local infrastructure.

The customer’s company remains responsible for everything related to product and engineering direction.

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Offshore development center vs. other delivery models

An offshore development center is sometimes compared with other ways of accessingengineering talent abroad. Although these models may look similar on the surface, they differsignificantly in terms of structure, ownership, and long-term goals.

Why Poland is a popular ODC location

Poland has become one of Europe’s leading destinations for offshore development centers thanks to the combination of a strong technology talent pool, EU regulatory alignment, convenient time zones, and a competitive cost structure.

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High-caliber engineering ecosystem & talent pool

Poland is recognized as a premier regional technology hub, distinguished by the exceptional technical expertise and strong educational foundation of its workforce. The local ecosystem combines advanced engineering capabilities with a corporate culture that integrates seamlessly with global tech companies.

• Dominant regional economy: Poland’s digital economy is expected to reach $87 billion in 2025, and $133 billion by 2030, establishing it as the largest digital economy in the CEE region.
• Vast and versatile talent pool: The total tech talent pool consists of approximately 650,000 active professionals, providing coverage across core stacks (Java, .NET, Python, C++) and specialized fields such as AI/ML, data science, and cloud engineering.
• High-volume academic pipeline: National universities produce over 300,000 higher education graduates annually, with one in five (19%) of students earning degrees in STEM fields. The steady influx of highly skilled talent is driven by world-class technical universities across Poland that are known for rigorous mathematical and software engineering standards.
• Thriving tech community: Poland hosts over 100 major tech conferences and 1,500 local developer meetups annually and boasts hundreds of active technical communities.
• Presence of global tech leaders: Google, Amazon, Microsoft and many other world-renowned companies maintain large-scale R&D centers and technology operations in Poland.
• Multiple tech hubs: Tech talent, infrastructure, and commercial operations are primarily concentrated in three internationally recognized hubs – Warsaw, Krakow, and Wroclaw.
• Advanced English proficiency: Polish engineers consistently rank in the top 15 globally on the EF English Proficiency Index.

EU regulatory alignment & legal safety

As an EU member state, Poland operates under European legal standards governing intellectual property (IP) protection, copyright laws, and contract enforcement. The country also fully adheres to European data protection standards, including GDPR compliance, utilizing the standard EU regulatory and privacy framework for data processing.

What’s more, Poland’s long-standing membership in the EU provides economic stability, driving growth through access to the European single market and a secure environment for foreign investment.

Seamless operational integration & infrastructure

Poland delivers a turnkey operational environment for frictionless international expansion and immediate team alignment. The country combines perfect timezone alignment with modern enterprise infrastructure and proven legal pathways, minimizing operational risk and accelerating time-to-market for foreign R&D centers.

• Strategic timezone advantage: Poland is located in the Central European Time (CET) zone, which provides a standard working-hour overlap with Western Europe and a designated collaboration window with the US East Coast.
• Enterprise-grade infrastructure: The operational infrastructure includes high-speed broadband connectivity, modern commercial real estate in major hubs, and international airports with direct flights connecting to global tech centers.
• Streamlined global talent mobility: For international talent relocation, Poland utilizes standard EU immigration mechanisms, including the EU Blue Card and national work visas, allowing companies to relocate non-EU engineers into the local market.
• Currency stability: While operational funding is typically managed in USD, EUR, or ILS, local transactions, payroll mechanisms, and B2B contracts are denominated in the Polish Zloty (PLN). The currency is liquid and historically stable, though financial planning must account for standard localized forex conversion frameworks.

Adaptable hiring models & regulatory agility

Poland's labor market operates under two distinct engagement models, each with different regulatory structures, allowing foreign entities to balance compliance with operational agility:

• Standard employment: Governed by the Polish Labor Code, this model features rigid structures, including mandatory employee benefits, statutory payroll taxes, and fixed notice periods ranging from 2 weeks to 3 months depending on tenure, which limits termination flexibility.
• B2B contracting: The dominant model in the IT sector, where engineers register as independent contractors. It eliminates standard corporate payroll taxes and shifts the benefit burden to the contractor, which allows companies to negotiate flexible contract terms, custom notice periods, and streamlined termination clauses.

Mature ecosystem & ease of launch

Setting up operations in Poland is highly streamlined due to its mature ecosystem of local partners.

Foreign companies can leverage a wide network of specialized tech recruitment companies, legal advisors, and established Employer of Record (EOR/PEO) providers. This allows businesses to source talent and launch compliance-ready teams quickly without the immediate bureaucratic burden of registering a local legal entity or navigating unfamiliar labor laws from scratch.

Plus, for long-term expansion, the government offers attractive incentives, including direct R&D grants and employment subsidies. Additionally, through the nationwide (Polish Investment Zone) framework, companies can unlock significant corporate income tax exemptions based on their investment scale. 

Our ODC success story

In 2019, Orca Security partnered with On The Spot Development to build a dedicated engineering team that would support the development of its cloud security solution and prepare it for launch.

What started as a team of just two engineers evolved into a long-term engineering hub supporting Orca’s product development and infrastructure initiatives. Over time, the team grew to more than 55 specialists and became a natural extension of Orca’s internal engineering organization.

Beyond scaling the engineering team, we have taken responsibility for the operational foundation behind the ODC, including office management, HR, payroll, legal support, and day-to-day operations.

We have also helped strengthen Orca Security’s employer brand in Poland through our TechSpot events devoted to cloud security and CI/CD security, as well as media coverage and community engagement initiatives, thus increasing the company’s visibility among engineering talent.

By building a strong ODC hub in Poland, we helped Orca Security launch its product, scale engineering capacity, and create a local team that has been growing alongside the business.

Key outcomes of Orca Security and OTS collaboration

• 40% increase in development efficiency
• Growth from 2 to 55+ specialists
• A strong engineering presence and employer brand in Poland
• Full operational support, including HR, payroll, legal, and office management

Build your ODC hub in Poland with us

An offshore development center allows companies to build a dedicated engineering capability in another country while keeping ownership of their product, technical decisions, and team direction.

By combining access to a broader talent pool, a more efficient cost structure, and operational support from a local partner, an ODC gives companies the flexibility to scale engineering teams without the complexity of building an overseas operation from scratch.

If you are looking to build a dedicated engineering team or hire developers in Poland, get in touch with us. Our team will help you establish, operate, and scale your offshore development center, taking care of recruitment, local operations, and the infrastructure your business needs to perform at its best.