Offshore dedicated development team: Cost breakdown

An offshore dedicated development team is increasingly popular among businesses looking to optimize cost. But one question comes up again and again: How much does an offshore dedicated development team actually cost? 

There is not a single fixed number.  A common mistake is to look at hourly rates alone. Hourly rates may be the first number you compare, but shouldn't be the last. In reality, the hourly rate is only one component of the total cost.  

This guide breaks down what actually drives offshore dedicated development team costs, explores the most common pricing models, and provides a practical breakdown of the costs involved in hiring and maintaining an offshore development team, so you can evaluate vendors based on total cost and value, rather than hourly rates alone. 

Key takeaways 

• A common mistake when comparing offshore vendors is to look at hourly rates alone, while it is only one component of the total cost. 

• Three pricing models include Fixed monthly retainer, Per-person pricing, and Seat-based. Retainer stands out for its cost predictability and simplicity.  

• A large team means higher costs, but not necessarily better efficiency, while an overly small team can stretch developers across responsibilities and delay delivery.  

• Vietnam is positioning itself as a new AI hub in the Southeast Asia region, with the aims to cultivate 100,000+ experts. 94% of developers are located in 2 biggest cities: Ha Noi 35% and Ho Chi Minh 59% 

• Even when working with an offshore vendor, clients may still incur recruitment costs, including reviewing profiles, interviewing, onboarding, and knowledge transfer.  

Factors influencing offshore dedicated development team cost  

Team size & composition  

The larger the team, the higher the overall cost. However, a larger team does not always mean better efficiency. An overly small team may require developers to take on multiple responsibilities, which can slow down development, extend the project timeline, and ultimately increase indirect costs. 

Cost also depends on which roles are included in the team. A team consisting mainly of developers will generally cost less than a more comprehensive team that includes QA engineers, Business Analysts (BAs), DevOps engineers, or Project Managers. 

Developer level  

Offshore dedicated development team cost depends not just on how many people you hire, but also on who you hire and how the team is structured. The experience and skill level of each team member directly affect the hourly rate and the overall project cost. 

• Junior developers: Typically have the lowest rates and are suitable for well-defined tasks, maintenance, bug fixing, or supporting senior engineers. 

• Mid-level developers: Come at a moderate cost and can independently handle most day-to-day development tasks.  

• Senior developers: Have higher rates but are better suited for complex projects. Their experience can reduce the need for intensive supervision, minimize rework, and help avoid costly technical mistakes. 

Team location 

Hiring offshore developers in different countries comes with different labor rates, talent pools, and operating costs. Established outsourcing hubs such as India and Vietnam can offer competitive development rates while providing access to large pools of skilled IT professionals. 

However, cost should not be the only factor when choosing an offshore location. Businesses should also considẻ talent availability, time zone difference, tech stack, and data security.  

Tech stack  

Different technologies require different levels of expertise, and developers with specialized skills often come at higher rates. For example, a team working with widely adopted technologies may be easier and more cost-effective to staff, while projects requiring specialized frameworks, emerging technologies, legacy systems, or complex integrations may require developers with niche expertise, increasing the overall team cost. 

Pricing model  

Offshore dedicated development team cost is typically structured around different pricing models, with each model covering different factors, making total cost vary significantly even for a similar project.  

Common pricing models for a dedicated development team  

Understanding these pricing models is particularly important when comparing local development costs with offshore delivery options. The right model should be selected based on project duration, team size, scope flexibility, and budget requirements, rather than simply choosing the lowest quoted rate. 

How much does it cost to hire offshore developers?  

There is no fixed cost for software development outsourcing as it depends in multiple factors. To give you a clearer benchmark, the following sections outline typical offshore development rates by country, with each market broken down by developer level.  

Average hourly rate for software developer by country  

India

According to Nasscom Insights (2025), technology and engineering roles account for the majority share of premium-skill positions, with AI/ML roles attracting the highest pay premiums, followed by Cybersecurity and Cloud Computing. Software engineer salaries in India also vary by city. Developers in tier-1 cities such as Bengaluru, Mumbai, and Delhi NCR earn more than peers in tier-2 cities such as Pune, Jaipur, or Kochi.  

Vietnam  

Viet Nam currently has 74,000 enterprises operating in the information technology sector with more than 1.2 million employees. While 94% of developers are located in 2 biggest cities: Ha Noi 35% and Ho Chi Minh 59%, Da Nang is growing as a new third hub. More than 45% of developers are from fresher to junior level, followed by 30% of middle developers. Senior developers only accounted for nearly 18% of total IT personnel, while that of leader and higher levels are 6% (Viet Nam IT market report 2024 - 2025).  

Notably, Vietnam's AI talent is growing at the fastest rate in the Southeast Asia region, with the move from AI experimentation toward real implementation. This country is implementing a multi-level strategy: reskilling the IT workforce, integrating AI into curricula, and fostering global tech partnerships. This roadmap aims to cultivate 100,000+ experts, securing the position as a competitive player in the global technology landscape. 

Rates are typically higher for specialized technologies or roles such as DevOps, Blockchain, and AI, as these skills are in higher demand and require greater expertise. For a more comprehensive understanding of hiring offshore developers in Vietnam in reality, take a look at our practical guide.  

Philippines  

The Philippines has a well-established IT-BPM (Information Technology and Business Process Management) industry. A significant portion of Filipino developers also work directly with overseas companies as freelancers or remote employees, allowing them to earn rates closer to international market levels. 

China  

For IT and digital salaries in China, first-tier cities offer 30 - 40% higher salaries than tier-2 cities. Chinese developers increasingly work for international companies remotely, with competitive USD-denominated salaries bridging the gap with Silicon Valley rates. 

Why hiring offshore developers makes sense for Singapore companies  

Hiring IT talent in Singapore is becoming more challenging over the years. In 2026, 71% of employers in Singapore report difficulty hiring skilled talent, with AI Model & Application Development (26%) and AI Literacy (25%) topping the list of hardest-to-find skills in Singapore (Global Talent Shortage, Singapore Findings 2026).  

More importantly, the cost of hiring onshore developers in Singapore is significantly higher than offshore development hubs, making offshore hiring an attractive option for businesses looking to optimize costs without compromising access to skilled talent. 

Hidden cost of hiring offshore developers 

Recruitment cost  

Even when working with an offshore vendor, clients may still incur recruitment costs. After the vendor provides candidate profiles, the client typically needs to review and interview to evaluate technical and cultural fit. Once candidates are approved, the client may also need to invest time and resources in project onboarding, knowledge transfer, and introducing them to internal processes and tools.  

Rework and quality issues  

If requirements are not clearly understood or the delivered work does not meet expectations, clients may incur additional costs for bug fixing, testing, code review, and rework. These issues can extend the development timeline and require additional effort from both the offshore team and the client team. 

Developer turnover  

When a developer leaves, the vendor needs time to find and assign a replacement, which can disrupt project continuity and delay delivery. The client may also need to review the profile, conduct interviews, and support onboarding and knowledge transfer. This ramp-up period can result in additional management effort and productivity loss before the new developer becomes fully productive. 

Currency fees  

The quoted rate may be agreed in one currency, while the client pays from another, meaning changes in exchange rates can increase or decrease the final amount paid. As the difference is usually relatively small, it is often overlooked when calculating the total offshore development cost. Businesses should therefore consider exchange-rate fluctuations and any international payment or conversion fees when estimating their overall budget. 

Final thoughts  

There is no fixed number for the cost of a dedicated development team. Before hiring offshore vendors, businesses should first define their requirements clearly and identify the most suitable location for their development team with different rate cards. Since you have a general understanding of the market's average rates, you can approach potential vendors and request an accurate quote based on your specific requirements. 

Hourly rate should not be the only factor when evaluating an offshore development partner. Look beyond the quoted rate to understand what is included and consider whether there are any hidden costs that could increase your total cost of ownership. The goal is not simply to find the lowest rate, but to find the right balance between cost, team quality, delivery capability, and long-term value. 

Where Adamo APAC fits  

Adamo APAC is the Singapore office of Adamo Software, backed by a development centre in Vietnam. We assemble dedicated teams of Vietnamese engineers based on your project scope, technical requirements, and team structure. With a pool of 170+ engineers across different seniority levels, including more than 40% senior engineers, Adamo APAC can help businesses build experienced teams without lengthy ramp-up periods. Teams can typically be onboarded within 1–2 weeks and scaled up or down as project requirements evolve. 

Our experience working with international clients, particularly businesses in Singapore, gives us a strong understanding of cross-border collaboration. Combined with strong English communication, technical expertise, and a minimal time-zone gap between Singapore and Vietnam, our teams can work closely with your in-house team while maintaining efficient day-to-day collaboration. Security and quality are also built into our delivery approach. Adamo APAC has ISO 27001 and ISO 9001:2015 certifications. Also, every engagement includes PDPA-aligned data handling and NDAs signed within 24 hours.  

Rather than simply offering lower development rates, Adamo APAC focuses on delivering the right team, skills, and engagement model for your project, helping businesses control costs while maintaining development quality and delivery speed. 

FAQs  

01. What is the most common dedicated development team pricing model?  

Per-person pricing is one of the most common pricing models for dedicated development teams. It provides clear cost visibility by allowing businesses to pay based on the number of resources they hire and each team member's role and seniority. This model also makes it easier to scale the team up or down as project requirements change. 

02. How experienced are the engineers? 

Most engineers we assign to dedicated teams are at the Middle level with a minimum 3 years of experience. For complex projects or specific leadership roles, we provide Senior-level engineers with 5-6+ years of experience. Senior engineers cost approximately 20-25% more than Middle level. 

03. What if I'm not satisfied with an engineer?  

Notify us as soon as possible. We first work with the engineer to identify and address the issue. If after 1-2 weeks you're still not satisfied, we arrange a replacement. The handover period typically lasts 1-2 weeks for knowledge transfer without additional costs.