Can You Hire Software Developers Overseas? 10 Best Tips

Can You Hire Software Developers Overseas? 10 Top Tips

Can You Hire Software Developers Overseas? 10 Top Tips

August 14, 2023


INS Global



INS Global



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Key Takeaways

  • Software development contains many subclasses of skills and competencies, and not all are available at the same level worldwide
  • The cost savings of hiring software developers overseas can vary significantly depending on several factors
  • When outsourcing software development work specifically, you need to know how to transfer and store data across borders safely
  • Summary



    In 2023, Silicon Valley no longer has a monopoly on tech and software expertise. Today, it’s possible for US companies to hire software developers overseas and benefit in many ways. Possible benefits include the savings, diversity, and expertise that international specialists bring.

    However, with enhanced opportunity comes enhanced risk. Like with any other part of international expansion, hiring software developers overseas means knowing how to get around in a new world of legal interactions.

    That’s why we’ve made this guide on recruitment practices and issues for US companies hiring software developers overseas. With the right expertise and knowledge, you can hire quickly and fearlessly for every opportunity.


    What are the Challenges of Hiring Software Developers in Another Country?


    Any overseas recruitment comes with a particular set of challenges, and hiring software developers is no exception. Here are just some of the challenges you might face when exploring your options:


    Language and Communication Barriers


    Working with software developers overseas may involve language differences and communication challenges. The B2 level many software firms require may be too much for some overseas developers. Poor communication can occur, leading to project delays, so proficiency checks during recruitment are necessary.


    Time Zone Differences


    Dealing with time zone variations can make scheduling meetings and coordinating work difficult. Teams may have limited overlapping working hours, slowing down collaboration and decision-making. To compensate, try new strategies such as async work.


    Legal and Visa Issues


    Hiring foreign employees often involves navigating complex legal and visa processes. Ensuring compliance with immigration laws and securing work visas can be time-consuming and costly.

    Overseas transfers for existing employees are typically around 2-3 times more expensive than hiring in your own country. This means you will have to adapt your budget to compensate. However, you can cut some costs by directly hiring software developers overseas with lower labor rates.


    Cultural Differences


    Culture can impact team dynamics, communication styles, and work habits. That’s why understanding and respecting cultural differences is so essential to fostering a positive work environment. However, with careful planning, these differences can lead to positive changes, according to some studies.


    License and Education Differences


    Software development contains many subclasses of skills and competencies, and not all are available at the same level worldwide. In addition to basic differences in the level of education available, you might have to put extra thought into where you are looking for recruits. Skills like programming languages or AI ability may differ greatly depending on location.


    Local Recruitment and Selection Challenges


    Identifying and attracting qualified software developers overseas can be daunting because of the differences in best practices and benchmarks in your target market. That’s why understanding local job expectations, cultural norms, and the availability of talent is crucial for successful overseas recruitment.


    Data Security and Privacy Concerns


    Working with remote developers may raise concerns about data security and privacy. Data protection is a particular concern for US companies, which had the highest costs globally due to data breaches in 2020. Ensuring the protection of sensitive information becomes essential when collaborating across borders. Being aware of what you can do as an employer to guarantee safe data privacy practices should be an immediate priority.


    Payroll, Taxation, and Regulatory Complexity


    Managing international payrolls and taxation is complicated due to differing laws and regulations. Companies may need to seek professional advice to ensure compliance and consider using specific tools such as multi-country payroll platforms.

    Due to legal and administrative factors, offering competitive benefits and perks to international employees may also be more complex and expensive.



    10 Top Tips and Hiring Strategies for Software Developers Overseas: How You Can Attract and Recruit Skilled Software Developers Abroad


    Define your job requirements with the necessary skillsets in mind


    Start by defining clear and specific job requirements. Clearly outline the skills, experience, and licenses you seek in a software developer. This will help you attract candidates who best fit your organization and projects.


    Offer compensation that will be competitive at home and abroad


    Talented developers are in high demand globally, so offering competitive compensation is crucial to attracting top talent. Research salary benchmarks in the target country to ensure your offer is attractive and in line with industry standards.


    Balance priorities on soft skills and hard skills


    While it might be tempting to simply hire someone proficient in the coding languages you need or has experience with the online tools you are looking for, any new hire is going to join your team of humans and needs to be able to work effectively with other people. Ensure you keep all soft and hard skills in mind when mapping out needs or screening candidates.


    Showcase your EVP (Employer Value Proposition) through positive company culture


    Highlight your company’s values, mission, and culture in your job postings and website. Developers often look for companies with a positive work environment, opportunities for growth, and exciting projects.


    Tap into local developer communities and platforms


    Participate in online developer communities, forums, and social media groups specific to the target country. Engaging with local developers and attending tech conferences can help you establish connections and find potential candidates.


    Consider remote work options and work-life balance


    Be open to hiring software developers overseas as remote team members without a local company structure through outsourcing services. Remote work allows you to tap into a global talent pool and gives developers the flexibility to work from their preferred location.


    Offer opportunities for long-term growth and potential


    Emphasize the opportunities for professional growth and skill development within your company. Skilled software developers overseas or at home look for organizations that support continuous learning and skill improvement.


    Integrate engaging challenges into the interview or hiring process


    Conduct thorough interviews to assess candidates’ technical skills, problem-solving abilities, and cultural fit. Consider using technical assessments and coding challenges to evaluate their proficiency.


    Be mindful of cultural differences


    Respect and understand cultural differences when dealing with candidates from other countries. Be aware of language barriers and adapt your communication to be inclusive and clear.


    Offer relocation funding or extra support for overseas staff


    If your company is open to sponsoring work visas or relocation, clearly communicate this in your job postings. Assist successful candidates in navigating the visa and relocation process if they need to move.



    The Rise of Offshore Software Development: A Comparison of the Pros and Cons


    The biggest advantage of offshore software development is the ability to save money on labor. According to some sources, hourly rates for software developers overseas may be as much as half or even a quarter of the cost of the same professional skills in the US.

    The downsides generally revolve around problems with management and team dynamics, including the fact that it can be difficult to oversee progress. You also need to think about cultural differences, as the wrong idea about your company’s values or vision can cause problems down the line.

    Software development requires a wide set of competencies which can be hard to find in a single person, so spreading the net as wide as possible can help to give you options.




    1. Lower costs thanks to reduced wage expectations (but be careful about the higher potential costs of employee benefits!)

    2. Diversity of experience, skills, and perspectives

    3. Easy scaling ability and opportunities for developing as you need





    1. Different mindsets or work styles

    2. Data security rules may differ from your own

    3. Language barriers



    Understanding Employment Laws and Regulations for Hiring Software Developers Overseas


    When hiring overseas, you need to be intimately aware of your target country’s employment laws and regulations. Here are some key areas companies need to consider when hiring overseas:


    Employment Contracts


    Understand the requirements and provisions for employment contracts in the target country. Some countries may mandate written contracts, specify minimum contract lengths, or outline specific terms that must be in the agreement.

    Labor standards in your target country may include a minimum wage, restricted working hours, overtime pay, rest breaks, and leave entitlements. Ensuring compliance with local laws helps you to avoid legal issues that could threaten your expansion.


    Work Permits and Visas


    If you are considering transferring or sending employees overseas, familiarize yourself with the visa and work permit requirements for foreign employees. You might need to sponsor work visas (with some countries requiring sponsorship through a local company structure), and employees may need to meet specific points or job roles to obtain these permits.


    Employee Benefits


    Understand the mandatory employee benefits, such as health insurance, retirement plans, and paid leave, that companies must provide to their employees in the target country.

    Countries also have different employment protection rules and access to termination benefits. That’s why you need to know the rules and procedures for terminating employment contracts and providing severance pay, if applicable, in case of dismissal. You’ll also need to know the guidelines for resolving employment-related disputes, including mediation, arbitration, or legal proceedings.


    Data Protection and Privacy


    Be aware of data protection and privacy laws in your target country, especially when handling employee data and sensitive information. When outsourcing software development work specifically, you need to know how to transfer and store data across borders safely.


    Taxation and Payroll Requirements


    Understand the tax implications for both the company and the employee, including income tax, social security contributions, and any other applicable taxes. As the employer, you will still be responsible for managing payroll effectively for your overseas software developers. This includes making payments to their tax and social security files.

    You must do this unless you are working with a global EOR who can take care of these functions through a ready-made local structure.


    To navigate these complexities effectively, companies should seek legal counsel or consult with HR experts familiar with local laws. Additionally, establishing clear policies and practices that align with local regulations can help ensure compliance and foster a positive working relationship with overseas employees.


    Analyzing the Cost Savings and Return on Investment for Hiring Software Developers Overseas


    The cost savings of hiring software developers overseas can vary significantly depending on several factors. These include: local employee benefits, the job roles, the level of expertise you need, and the hiring company’s overall business strategy.


    Generally, hiring software developers overseas allows you to save on the following:


    ·      Labor Costs

    ·      Employee Benefits

    ·      Taxes and Social Security Contributions

    ·      Office Space and Infrastructure

    ·      Administrative Costs

    ·      Exchange Rates

    ·      Project-Specific Savings like hiring contractors for short-term needs