8 Reasons to Set Up an Offshore Development Center in Azerbaijan

There are a lot of destinations to set up your offshore development center but not all of them are equally promising. Let’s take a look at Azerbaijan as a promising destination to establish an ODC.

Why Establish a Dedicated Offshore Development Center in Azerbaijan

Choosing the right destination to run your software project remotely is already half the battle for its future success. The choice of the perfectly-fitting country becomes even more important when you plan to set up an offshore development center since this tactic comes with some additional challenges and benefits. 

In this article, we are going to consider the main factors you should pay attention to when choosing the location for an ODC setup, plus take a critical look at the opportunity to run your development center in Azerbaijan.

What Pay Attention to When Choosing a Destination for ODC Set Up

The benefits of setting up your own offshore development center are mostly clear. This business strategy allows you to have a separate tech unit at an affordable cost while keeping your dedicated team flexible and engaged in one or several projects you need to create. Setting up an ODC also allows for gathering top local talents under its roof, and leveraging their expertise for your business goals.

However, to make this approach work, you have to be very careful when choosing the destination to establish a development center in. Below are the essential factors to consider in advance. 

• Political, economical, and social environment. A perfect software outsourcing destination should have a stable political situation, calm social environment, and step-by-step economic growth. As for the latter, choosing the destination from the “developing countries” list makes the most sense since the difference between the economic development levels makes software outsourcing cost-effective. 

• Average salaries. Logically continuing the previous point, pay attention to the average development salaries in the suggested countries. Then, try to align the monthly figure with your development budget expectation to ensure a cost-effective match. 

• Education. The level of tech education in a chosen country is especially important for the businesses considering setting up an ODC. The matter is that offshore development centers are usually created for the long run and solving complex business tasks. Most often, there is a need for specific tech expertise the well-educated software developers can offer. 

• Talent pool. Next, research the talent pool of a chosen country. Pay attention to the popular technologies most local developers are skilled with. If you need specific or pretty deep expertise, consider getting in touch with a dedicated development vendor. 

• Cultural match. A cultural match between your business, your customers, and the dedicated team that will be based in an ODC is also important. At this point, it is essential to find the balance between cultural diversity and cultural alignment to get the best from both worlds.

8 Reasons to Set Up a Development Center in Azerbaijan

1. Realistic Projections for Social and Economic Development
2. Good Engineering Education
3. No Language Barrier.
4. Less Competition for the Best Talents
5. Affordable Development Cost
6. Strict Data Protection Practices
7. Transparent Taxation
8. The Ease of Getting Started with ODC Set Up

Azerbaijan isn’t a popular software development outsourcing destination but given the value-driving opportunities this country can promise to both startups and mature businesses, it will win the place under the sun in the nearest future. Let’s find out what’s special about Azerbaijan when it comes to setting up an offshore development center in this country.

• Realistic Projections for Social and Economic Development

According to the National Priorities for Socio-Economic Development 2030, the government of Azerbaijan is focused on building a stable, competitive, and green economy. It welcomes innovation and competitive human capital but at the same time, strives for building the society on the principles of social justice. The country also welcomes foreign investment by creating opportunities for both foreign companies and local organizations. Azerbaijan also aims at creating a stable and calm political situation, along with developing the ability of the country to resist possible external influences.

• Good Engineering Education

The government of Azerbaijan promotes building a well-educated society so the trend for receiving higher education in the most relevant disciplines is growing in this country. To date, there are 21 universities in this country, and 11 of them have engineering faculties with strong and diversified learning programs.

• No Language Barrier.

Most developers from Azerbaijan are pretty fluent in English. The reason is simple - in this country, there is an opportunity to get higher education in English and master this language from both technical and casual perspectives. Most of the future tech specialists choose this option to kill two birds with one stone and have no language issues after graduation.

Our practice also shows that a lot of the developers from this country are self-learners. They master English on their own while solving everyday work tasks, communicating with foreign colleagues and customers. The general level of knowing English in Azerbaijan is also growing.

• Less Competition for the Best Talents

Software development outsourcing isn’t a new approach. What’s more, this business model is here to stay. In response to the recent pandemic, the IT outsourcing market has grown significantly. Experts also agree that the value of offshore development teams is growing. For example, Forbes calls them “a strategic asset in the post-pandemic landscape”.

However, the competition for the best talents also becomes tighter since companies need more and more specific expertise to handle post-pandemic business challenges and adapt to the changing preferences of their customers. That’s why the software development costs in popular outsourcing destinations are rising, especially when it comes to top talents. 

From this perspective, Azerbaijan becomes a more winning destination. To date, this is not the most popular country to outsource the project to, which means that there are fewer foreign companies hunting for the best talents. To put it simply, setting up an ODC in Azerbaijan allows you to hire tech-savvy professionals at a lower competition level and at a better price. 

• Affordable Development Cost

The affordable cost to hire the developers according to an offshore development center business model is another reason why more and more aspiring startups consider this destination as their tech hub. The average software developer salary in Azerbaijan is $6000 per month.

For comparison: 

• In the US, the developers earn nearly $12500 per month
• The average developer salary in Ukraine is $7500 per month

Despite establishing an offshore development center being the most expensive business model to run the software project remotely, Azerbaijan opens up an opportunity to perfectly match the cost to hire a team and maintain it with the high-end quality of the final product. Choosing this destination as an offshore development center base promises a pretty high ROI along with the opportunity to stay flexible with your team, twisting the talents between projects according to the current business needs. 

• Strict Data Protection Practices

Azerbaijan also has strict, transparent, and well-regulated data protection guidelines. There is a whole set of legal documents regulating personal and business data transfer. There is also the system of fines and penalties for the data collectors and processors in the case of failure to protect personal data and its illegal transfer, collection, and usage. 

• Transparent Taxation

Compared to some other communities, the taxation system in Azerbaijan is pretty simple. Being driven by the goal to build a stable economy and become a full-fledged layer of the European economical landscape, Azerbaijan welcomes foreign citizens to set up and run business units. According to the legal regulations, they pay taxes from their gross income and the fixed tax rate is 20%. 

• The Ease of Getting Started with ODC Set Up

The last benefit of setting up an offshore development center in Azerbaijan is the simplicity of getting started and the low entry cost. Most companies in need of remote software development and ODC setup prefer partnering with a tech vendor whose experience and expertise can be cost-saving for both the development process and resolving all organizational issues.

• For example, we, at SpaceBus, would be glad to help you with setting up an offshore development center in Azerbaijan. We already have several collaborative teams ready to get started with your project. Our experts would also be happy to guide you along the path of ODC establishment, ensuring legal compliance and cost-effective approaches at every step.

Conclusion

Establishing an offshore development center is a strategic step to ensure seamless software development aligned with your business goals. Choosing the right destination is essential for driving the highest ROI from this opportunity. Consider Azerbaijan as a promising and cost-effective country to outsource your software development to, and we, at SpaceBus, are right here to help you get started!