Nearshore Development
Outsourcing of software development to teams in geographically close countries with similar time zones and cultural proximity.
Nearshore development is the strategic middle ground between expensive in-house development and riskier offshore outsourcing. Companies work with developer teams in nearby countries that offer similar time zones, cultural proximity and often EU-compliant data protection. For DACH companies, Poland, Czech Republic, Romania and Portugal are among the most popular nearshore locations.
What is Nearshore Development?
Nearshore development means outsourcing software development to partners or teams in countries that are geographically close. For DACH this typically includes Eastern Europe (Poland, Czech Republic, Romania, Bulgaria, Ukraine), Southern Europe (Portugal, Spain) and the Baltics (Estonia, Latvia, Lithuania). The main advantage over offshore (India, Vietnam, Philippines) is the small time difference (0–2 hours), enabling synchronous collaboration. Nearshore teams work as an extended development department alongside the in-house team.
How does Nearshore Development work?
Nearshore models range from individual developers (staff augmentation) to dedicated teams and fully autonomous development units. Collaboration uses agile methods with daily video stand-ups, joint sprint planning and retrospectives. Modern tools (Jira, Slack, Confluence, Git) bridge the distance. Regular on-site visits strengthen the relationship and team spirit.
Practical Examples
German fintech outsources backend development to Poland: five senior developers in Krakow work in the same time zone and speak English at C1 level.
Mid-size company builds dedicated team in Portugal: eight developers in Lisbon build the customer app while the core team in Munich owns the architecture.
E-commerce company uses Romania: QA team in Bucharest handles test automation and quality assurance for the full product catalogue.
Startup uses staff augmentation from Czech Republic: two React developers from Prague support the Berlin team on a time-critical project.
Typical Use Cases
Bridging skills shortage: Access to qualified developers who are hard to find in DACH
Cost optimisation: 30–50% lower hourly rates than in Germany with comparable quality
Scaling: Quick team scaling up or down without long-term hiring commitments
Specialisation: Access to niche expertise (e.g. ML, blockchain) missing in-house
24/7 coverage: Combined with local teams, nearshore enables extended working hours
Advantages and Disadvantages
Advantages
- Small time difference: Synchronous communication and overlapping working hours enable agile collaboration
- Cultural proximity: Similar work culture, business etiquette and communication style
- EU data protection: Many nearshore countries are EU members and subject to GDPR
- Cost savings: 30–50% lower hourly rates than in DACH
- Easy to visit: Short flights allow regular in-person meetings
Disadvantages
- Higher cost than offshore: Nearshore is more expensive than India or Vietnam but offers better collaboration
- Language: German is rarely spoken; English is the working language, which can be an adjustment
- Turnover: In hot markets like Poland or Romania, developers change employers more often
- Coordination: Distributed teams need more process, documentation and communication
Frequently Asked Questions about Nearshore Development
Which nearshore locations suit German companies?
How do you ensure quality with nearshore teams?
Nearshore or offshore – which is better?
Related Terms
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