A Nearshore Software Development Guide from Clutch’s Top B2B Provider

*as recognized by the Clutch Global Awards.

Every growing business needs the right IT power to keep moving.

Maybe you’re just starting out and need a reliable tech partner. Or you’re scaling globally and looking to expand your team. Perhaps your next project requires expertise you don’t have in-house.

What are your choices? Build an in-house team, hire freelancers, or outsource to another location — near or far. Nearshore software development is just one of the outsourcing options, balancing cost, culture, and speed.

Not sure if nearshoring is right for you? Let’s break it down.

With over 15+ years of experience in nearshore software outsourcing — and insights from Katherine Lazarevich, Digiteum’s co-founder and senior tech expert — we’ve created a practical guide. No fluff. Just proven advice and real-world insights to help you make smart decisions.

Let’s start with the nearshore software development definition. It’s a model where companies work with development teams in nearby countries, often within a similar time zone and cultural context.

This approach captures the benefits of outsourcing — lower costs and diverse expertise — without the usual headaches. You avoid things like major time zone gaps, cultural differences, and long distances that make collaboration harder.

What is nearby? In Europe, any country within the EU (plus the UK) is typically considered nearshore, making it easier for teams to stay aligned and collaborate seamlessly.

Learn more about nearshore custom software development in Europe on our blog.

Nearshore outsourcing software development works for companies in any industry, regardless of project complexity. Even government or security-focused projects that require strict due diligence can outsource their development tasks to a partner who meets all requirements.

Nearshore software development is especially useful when:

• You have a project outside your team’s expertise. It lets you quickly bring in skilled experts, saving you time on hiring, training, or skill-building.
• You have a temporary task to fulfill. Why hire full-time for something short-term?
• You have a smaller or non-core project. It’s often easier and faster to outsource than to hire new specialists for less critical tasks while your in-house team focuses on the main priorities.

However, there are a few situations where nearshoring might not be the best option:

• If you’re a startup with no clear roadmap. In this case, nearshore software outsourcing might struggle to keep up with PoCs, experiments, and decisions made in the morning and changed by the afternoon.
• If your project is closely tied to equipment, hardware, or the production of physical goods. Regular access to the assets might be challenging for a nearshore company.

When is it not a challenge? When your in-house team manages the devices, and you need specialists for software-focused tasks like dashboard UX/UI or data integration.

That’s what we did for Rollomatic. Their in-house team in Switzerland was working on the software backend for machine monitoring. Digiteum handled the mobile and web apps, focusing on data integration and UX/UI — tasks that didn’t require constant machine access.

Think that nearshore is not for you? Check out the alternatives to nearshore software development.

It might seem like companies choose nearshore software development just for the lower cost. Yet, focusing solely on hourly rates isn’t the best approach.

The total cost of development involves many factors, all of which affect the final price. Plus, there are extra perks that make a nearshore software development strategy increasingly attractive to companies. Let’s break it down.

One big win with nearshore development teams is the breadth of technology expertise — plenty of options to pick from, not just one stack or service. This allows them to tailor their approach to your needs.

If a native app is the best fit, they’ll build it. If a web app makes more sense, they’ll steer you that way. Their flexibility means your project isn’t limited by a specific set of skills and tools — it’s guided by what saves time, cuts costs, and gets the best results.

This is what sets nearshore teams apart from in-house ones. While in-house teams might stick with what they already know, even if it’s not the best fit, nearshore partners adapt, suggest the right tools, and give you a serious edge in quality and efficiency.

Along with cross-technology expertise, there’s another key benefit — experience across different sectors. Nearshore software development companies can bring fresh, out-of-the-box ideas to your project from another industry — and this uncovers opportunities for growth and improvement you might not have even thought of.

Sure, instead of outsourcing, you can hire people with experience in other technologies and industries to get the same results.

But at what cost? Recruitment takes ages, employee retention costs are rising, and if you decide to lay off a specialist, in Europe it’s not always simple.

With nearshore product development, you can bring skilled developers into your project quickly and work with them as long as needed. For example, Diaceutics, our client from the UK, was building a precision medicine platform. They needed senior software engineers, DevOps, and QAs on short notice — and we delivered. In the UK, that would’ve taken much longer.

Offshore web development can be a good option, but here’s the main difference: with nearshoring software outsourcing, you work within the same or a very similar legal framework.

And this is a huge advantage. It makes everything clearer, from contract terms to IP transfer. Even navigating insurance is easier. The result is stronger trust and more open collaboration.

For example, Digiteum is based in Poland, and our clients are in the UK, Germany, Finland, and Switzerland. We all share a common understanding of European business laws and data protection rules, like GDPR, consumer protection regulations, and intellectual property laws. This minimizes the risk of legal hurdles and makes operations smoother.

The idea of business culture might feel a bit abstract, but the differences are real. In Europe, we often follow unspoken rules that feel universal — like open feedback, work-life balance, and making sure everyone has an equal voice in discussions.

But are these practices the same everywhere?

Companies that choose a nearshore software development strategy benefit from working in a shared business culture. Small things — like a familiar tone in emails, quick responses, open and transparent communication, and a similar time management approach — make a big difference. These everyday habits create less stressful and more predictable collaborations.

Does physical location still matter in the age of remote work, Zoom calls, and Slack messages?

Yes, it does. Being close to your tech partner means quicker meetings, faster problem-solving, and smoother collaboration all around.

Here’s an example from our experience. We worked with Champion Data, an Australia-based company, for years on sports data intelligence solutions. While we had strong processes in place, the time difference was still a challenge when real-time communication was necessary.

Then, Champion Data opened a UK office. Suddenly, it was just a 2-hour flight from Gdańsk to London. Now, face-to-face meetings are easier, feedback is faster, and working together feels more seamless.

When you share common values, draft and sign contracts quickly, and set up processes smoothly, the result is clear: the nearshore team integrates fast, starts working right away, and quickly adds value to your business.

Take Lodgify, for example. As a fast-growing traveltech company, they needed to scale their Spain-based team quickly — and we helped them do that. Our engineers blended seamlessly with their team, working closely and efficiently.

How did we succeed so fast? We share the same work ethic and vision of what successful teamwork looks like. This made onboarding and integration fast and smooth. The outcome? Over 5 years of successful collaboration — and still going strong.

Some projects need quick reactions and fast decisions. In these cases, real-time communication is crucial.

That’s where nearshore software outsourcing comes in. It typically means working in the same or a similar timezone — usually just a 1-2 hour difference. Need to meet in person? In Europe, quick and affordable flights can get you to any capital in 2 to 3 hours.

This allows for real-time collaboration and avoids communication delays you can get with offshoring software development.

Of course, nearshore software development has its ups and downs. Let’s check some of the challenges that might be holding you back from hiring nearshore developers.

We also spoke with Katherine to get her take on how to overcome these hurdles. This way, nearshoring can become a well-thought-out choice with the best possible outcome.

Finding the right balance of control can be tricky. On the one hand, leaders want to stay informed, make smart decisions, and ensure the team is on track. On the other hand, they don’t want to micromanage every small detail.

The key? Clear communication and transparency — knowing what’s going on without chasing constant updates.

A reliable nearshoring partner makes this easy by providing a clear framework with tasks, milestones, and status updates. That way, you stay informed and in control, without the need for constant oversight.

Budgeting is another source of anxiety. No one likes unexpected costs or budget overruns that stall their project. To avoid this, it’s key to set a clear plan from the start.

Whether you go with a fixed-price model, time and materials agreement, or a dedicated team setup, make sure to discuss all options. Choose the one that best fits your project’s scope and flexibility needs. Once you’ve decided, clearly outline these terms in your contract. And don’t forget to set up tools to track your budget and keep the project moving forward without surprises.

Sure, it’s tempting to go for a company with a big portfolio in your industry. If they’ve delivered dozens of projects in, let’s say, education, they must be a great fit for your next eLearning platform project, right?

Well, it’s not always that simple.

Solid industry expertise is a must when working with ready-made solutions that just need some tweaking. For example, if you’re customizing a pre-built eCommerce platform, you’ll want a team that’s worked with out-of-the-box solutions before and knows how to adapt them quickly and efficiently to match your needs.

But when it comes to custom products, it’s a whole different story. Here, you need a tech expert who truly understands your needs and can choose the best solution from a wide range of options they’ve mastered.

How can you tell if a tech company will understand your unique problem? First of all, see how a nearshore software development company approaches your business. If they ask the right questions and show genuine interest, they could be a good fit. If they don’t make an effort to understand your needs, that’s a red flag.

While there may not be as many nearshore options as offshoring, there are still plenty to choose from. Here’s how to find one you can trust.

When you reach out to a company for the first time, it is always hard to gauge their expertise. Tools like portfolios on their website or reviews on platforms like Clutch can give you a good sense of their work. Word-of-mouth recommendations and referrals also often lead to great finds.

Even the best developers can’t save a project without solid processes in place.

So, what makes good processes in nearshore development? First, clear workflows that give you full visibility into task progress — what’s done and what’s next. This way, you’ll also have financial accountability and safeguards to protect you if things go off track.

Second, a solid communication plan: how often you’ll meet, which tools you’ll use, and who the main points of contact are. Of course, a good nearshore company will be flexible and adapt to your needs and processes.

It’s worth discussing these issues from the start and deciding if the company looks well-organized and aligned with your project’s needs.

Let’s talk about responsibility and what it means at Digiteum.

If a company already has solid processes that work, the best thing for a tech partner is to follow them. Just make sure their project manager or team lead is strong and keeps communication smooth throughout.

But what if something needs tweaking? Or maybe your processes feel outdated but you’re not sure how to fix them. A responsible partner will raise these issues and suggest improvements. At Digiteum, we flag any challenges and recommend ways to make everything run more efficiently. This is how we add extra value to your business.

Want to know how to set up a nearshore software team and keep things running smoothly? Check out our step-by-step guide written by an expert with 15+ of experience in setting up nearshore software development projects.

Since 2010, Digiteum has been providing nearshore software development services to companies in the UK, Germany, Spain — and other European countries. We’ve successfully delivered projects of all sizes across various industries.

So, what’s our secret?

• We’re not just a service provider — we’re your partner. Instead of simply checking off requirements, we learn your industry, find the root of the problem, and deliver the best solution. It’s how we work — and you can see the results in our client feedback on platforms like Clutch.
• We work with certified developers who have been with us for years. This guarantees consistency and expertise in every project. Frequent turnover is never an issue here because we take care of our team, from a great work culture to ongoing training.
• Looking for more talent? We’ve got that covered too. We have access to professional networks that allow us to find, interview, and hire developers quickly — so you get the right people when you need them.