Why Outsourcing to Ukraine Makes Sense During the War

IT Outsourcing Ukraine: Powerhouse in Times of War

Despite the wartime in Ukraine, it has shown its resilience as an international hub for IT outsourcing. It offers cost-effective and high-quality solutions. Companies worldwide are discovering that Ukrainian IT professionals deliver exceptional results. Ukraine’s IT outsourcing industry has become a preferred destination for businesses worldwide. Over 100 famous Fortune 500 companies—such as Amazon, Adobe, SAP, Nasdaq, and Microsoft as reported by the official investment Ukraine.ua website.

In this article, we’ll explore why outsourcing to Ukraine makes sense even during these challenging times and what the benefits are. Also, we’ll showcase blockers like power supply to workplaces and uninterrupted workflow that was successfully resolved. We’ll dive deeper to dispel myths and analyze reality.

IT Outsourcing Ukraine Market during the war: Statistics

With a skilled workforce, industry continues to increase the number of technology companies. The market has not only recovered but also overcome pre-war levels. Ukraine’s IT sector remains one of the largest in Eastern Europe. It has a strong skilled workforce and the number of tech companies is growing. The sector has exceeded pre-war levels.

As of 2024:

• Tech Association Lviv IT Cluster announced that Ukraine has approximately 302,000 IT professionals, with 238,000 actively working within the country.
• There are 2,118 verified tech companies.
• In the Global Startup Ecosystem Index 2024, Ukraine has ascended to the 46th position globally. Notably, Ukraine has re-entered the top 10 in Eastern Europe.

Why Ukraine Remains an IT Outsourcing Destination?

The cultural alignment with clients from Western countries opens the door for prospective collaboration. A powerful education in STEM directions ensures a large number of qualified talents. One of the most attractive reasons for IT software development outsourcing to Ukraine is competitive service rates. And the most beneficial reason is offering high-quality solutions at attractive prices. Those factors are making Ukraine a leading hub even through wartime.

Government Support and Tax Incentives

The Ukrainian government actively supports the IT sector. At the moment there are various support programs and tax incentives. One of the most famous programs is Diia City. It is a special legal statement designed to foster innovation and attract foreign investments. This program offers favorable tax conditions and opportunities for startup development and growth.

Under Diia City, IT companies can choose between two tax options:

• Corporate Income Tax: A rate of 18% on net income.
• Withholding Tax: A flat rate of 9% on gross income.

Employees benefit has a reduced personal income tax rate of 5%. Starting December 1, 2024, the war tax for residents increased from 1.5% to 5% on personal income. Moreover, companies intellectual property is under protection and they access simplified regulations for hiring specialists from abroad. Under specific conditions, employees of IT companies in Ukraine are not subject to mobilization. These benefits help to create an attractive environment for IT businesses.

For significant investments, Ukraine offers incentives through the "Investment Nannies" program. This program officially known as the Law on State Support for Investment Projects with Significant Investments in Ukraine, was started in February 2021. It aims to attract substantial investments across various industries, including IT. The minimum investment threshold is supposed to be €12 million and the required number of new jobs to 50, making it more accessible to IT companies. This program helps investors to benefit from state support, such as tax exemptions and significant support with infrastructure development.

Remote work adoption

The war in Ukraine has greatly changed the usual workflow and processes. The IT industry was supposed to adapt operations to existing reality. All problems related to workplace adaptation were resolved extremely quickly. Companies started to use generators and uninterruptible power supplies (UPS), allowing seamless work processes. So, blackouts haven’t affected the industry significantly. Portable power stations, such as Bluetti or EcoFlow, supply energy for Wi-Fi routers.

Satellite internet services like Starlink enabled strong connectivity. It helped to provide reliable internet access, even to the areas with unstable infrastructure. Such technological adaptation had a strong impact on productivity. Relocation to safer regions allowed software developers to continue working without interruption.

Ukraine is one of the European largest countries, encompassing 603,550 square kilometers. Despite the war and occupation, which affected nearly 20% of territories including the territory of Crimea, the majority of Ukraine is operational. People in the rest of the country support defenders and continue to work as usual. This resilience is showing the strength of this country in all aspects. Lightning-fast adaptation to new conditions allowed to retain existing customers and to build capacity over time, even in wartime.

Tech talents and education

A few years ago, before the invasion, in our article about IT outsourcing Ukraine, we showcased that certified specialists and a strong educational system make it a talent hub. In 2021 approximately 307 thousand professionals were working in the IT industry. In comparison with the previous year this number has increased for almost 50 thousands and 6,2 thousands of entrepreneurs and employees, respectively. These statistics were presented by Statista in their recent research.

Statistics show that 59,8% of the IT specialists were studying to gain a technical specialty. There are a variety of programs related to computer sciences and software engineering. Universities in Ukraine have a strong educational level in these fields. This is one of the reasons why Ukrainian IT professionals are so competitive.

Competitive rates

Ukrainian software development services always had competitive rates and were attractive for worldwide businesses. Moreover, the price for higher-skilled engineers with good speaking English was lower. It stands out when it comes to cutting-edge expertise. If you compare software development prices in the United States of America, it can start from $100 and sometimes gain over 250$ per hour (due to the expertise). Software engineers in Ukraine provide expert solutions for $30–$55 per hour, ensuring high quality of the code.

We analyzed Clutch’s 2025 Custom Software Development Pricing Research, which shows rates by location. Ukraine remains an attractive outsourcing hub with a high level of expertise in creating custom software and integrating AI, cloud computing, cybersecurity, and financial technology services. Unlike other regions with low prices, Ukraine combines best practices and reliability.

* Countries ranked by Clutch traffic

Cost-efficiency without compromising quality helped Ukrainian outsourcing companies to grow even in wartime. Moreover, developers from Ukraine are easily recognized in worldwide rankings for their problem-solving skills and innovative approaches.

Conclusion

There are thousands of companies, who continue hiring dedicated teams as a service and outsourcing software developers from Ukraine. Even in times of war, this country showed her strength. It has unbreakable people ready to defend their homes and transform digital landscapes.

It may be a surprise for many readers, but the research mentioned in this article showed a huge resilience and growth of IT outsourcing in Ukraine compared to previous years. The country continues to attract international companies seeking partners. Moreover, with world-class expertise and skilled software engineers, the influence in this market will stabilize.

The provision of generators and powerful WiFi ensured an uninterrupted work process. The investments in the tech industry continue to increase. The quantity of startups is growing because international venture funds and giants invest. Strong Government Support creates a favorable microclimate to strengthen the IT Sector.