The IT outsourcing industry in Ukraine


The IT outsourcing industry in Ukraine has shown considerable growth during the last decade. Recent studies indicate that currently Ukraine holds its position among the most attractive outsourcing destinations and is surely moving towards the top of the list.

UKRAINE IN 11TH PLACE IN THE TOP 20 LIST OF LARGEST GLOBAL DELIVERY CENTERS
Thus, according to Annual Global Outsourcing Industry analysis GS100, Ukraine is on 11th place in the Top 20 list of the largest global delivery centers in terms of number of people deployed. Ukraine is the first among Central and Eastern European countries ahead of Russia, Belarus and Poland in this list.

Similar result are shown in the catalogue of IT outsourcing providers from Central and Eastern Europe – www.ITOlist.eu (the project of Central and Eastern European Outsourcing Association – www.ceeoa.org). According to the 2007 and 2008 CEE IT Outsourcing Review, Ukraine holds the first position among CEE countries in terms of market value, number of IT outsourcing companies and number of professionals involved in IT outsourcing services.



  Top 20 Locations

Country Total
1 India 514157
2 Philippines 97740
3 United States 42808
4 China 34672
5 Canada 32690
6 England / United Kingdom 23494
7 Brazil 10213
8 Germany 9269
9 Australia 8544
10 Mexico 8412
11 Ukraine 5816
12 Russia 5113
13 Belarus 4534
14 Chile 3572
15 Sri Lanka 3317
16 Argentina 3241
17 Malaysia 2868
18 South Africa 2855
19 Singapore 2833
20 Poland 1963
Note: Figures are based on data from over 150 companies

IT OUTSOURCING SERVICES IN UKRAINE SHOWS CONSTANT GROWTH
For the last decade the market value of IT outsourcing services in Ukraine showed constant growth, except for the last couple years, where due to the global uncertainties of the economy IT outsourcing activities remain sluggish.

Besides the global uncertainties of the economy, the Ukrainian IT outsourcing industry is greatly affected by the economic and political situation in the country.
Many other countries who are competitors of Ukraine in IT outsourcing have established special tax policies for outsourcing providers thus placing them in more favorable position and promoting industry growth.

For example, India, China, Brazil, Russian Federation, and Romania have several times lower tax rates for software vendors than Ukraine. Belarus has a special Government program for the stimulation of the software development industry.
The Belarus Hi-Tech Park in Minsk provides a comfortable business environment for the IT business with its special taxation conditions which are unprecedented for European countries.