Over the past two decades, Eastern Europe has become one of the largest regions for software development services, with Romania, Ukraine, Poland, and Belarus accounting for 5% of the global IT outsourcing market. More than a million developers live in the region. About a third of them (30.8%) are in Poland, another 15.4% live in Ukraine, and 10.7% in Romania.
In our article, we want to discuss Romania as a promising IT market for hiring developers in 2023. We will analyze the IT industry’s state in Romania, major IT companies, Romania’s B2B IT services market, government support for the IT industry in Romania, and more.
State of the IT Industry in Romania
Romania owns the most navigable 1/3 of the Danube River. The Romanian port of Constanta is the largest and deepest port on the Black Sea. Romania has access to the markets of the Middle East and the EU.
Natural resources include black soils for growing cereals and mineral deposits (iron ore, oil, natural gas, coal, gold, salt). In addition to its favorable geographical position, Romania has about 100 industrial parks (both privately and state-owned).
Romania is a popular country for the migration of IT companies. The cities with the most significant number of IT company offices are Bucharest, Cluj-Napoca, Iasi, and Timisoara. English is spoken as a second language in the country, and many Romanians speak French, German, and other languages.
Codecool has conducted a study showing the top IT salaries in Romania and 28 other European countries. The study analyzed the annual salaries in euros of junior, middle, and senior developers using websites such as Salary Explorer, Glassdoor, PayScale, and Pay Lab:
- An inexperienced programmer earns an estimated net annual salary of €11,300, putting Romania in 25th place out of 29.
- If to look at salaries adjusted to the standard of living in the countries analyzed, Romania takes 16th place, surpassing the incomes of countries like Ireland, the Czech Republic, and Greece.
- The salary of an entry-level programmer in Romania is 25% higher than that of a programmer in Poland or Croatia and more than 15% higher than salaries in Bulgaria and Greece.
- The highest salaries in the IT industry in Europe are in Switzerland, the UK, and Belgium. In the case of Switzerland, a junior programmer’s salary can start at €62,000 a year, an average experienced programmer earns €119,000 a year, and a senior programmer with more than 5 years of experience can have a salary of €195,000 a year.
SOFTWARE AND ITC SERVICES IN ROMANIA report by ANIS on the IT industry`s impact on Romania’s economy shows that more than 135,000 people work in this sector. The IT software and services industry has seen the highest growth rate in the number of employees in recent years (11%) compared to other industries in Romania, placing it among the top employing industries.
Every 10 IT employees support another 10.5 jobs in the national economy through direct and indirect impact. And every €10 of gross value added created directly by the IT industry contributes another €5 to the Romanian economy. But simultaneously, the Romanian IT market lacked over 15,000 specialists in 2022.
The IT industry has already established itself as a major national growth engine in Romania, recognized in the job market for its attractive salaries and many positions available to candidates.
Major IT Companies in Romania
International IT giants like Microsoft, HP, Amazon, and IBM are expanding in Romania. They are becoming some of the country’s largest tenants of office real estate: only the offices of these five companies occupy more than 150,000 square meters.
To show you major IT companies in Romania, we focused on small-size companies with no more than 50 employees. We chose only Romanian IT companies with high review scores and 5+ years of experience in IT services. Major IT companies in Romania:
- Webamboos. This Romanian IT company delivers web development, data analytics, automation of processes, MVP, and mobile development services in MedTech, Fintech, Enterprise, and EdTech domains. CodeMonk, Blackwood Seven, and FairArt are among its customers.
- UPDIVISION. This IT company in Romania delivers web and mobile development, UX design, graphic design, and QA services focusing on health, e-commerce, transportation, entertainment, human resources, and tourism domains. AppSeed, TPA Romania, and TestU Labs are among the customers of this development company.
- Neo Vision. It delivers IoT development, ethical AI, web development, custom software, BPA, DevOps, and mobile development services to clients worldwide. This team has extended experience in the media domain. Among their clients are Forbes Romania, Mingo, and Klarwin.
- Neurony. This Romanian IT company offers digital diagnosis and auditing, value-driven development, product discovery & idea mapping, and team extension services. Information technology and hospitality & leisure are the main domains they work with. NodeVPN, YArooms, and btProvider enjoyed cooperation with Neurony.
- EchoGlobal. It offers staff augmentation, managed Dev teams, tech recruitment, and custom IT staffing services to companies from online retail, IoT, travel, MarTech, and telecom domains. PowWowNow, Low6, and Kunai are among the customers of this development company from Romania.
Outsourcing is prevalent in Romania. Companies like Intel and Oracle are opening offices here, investing in call centers, software development, and technical support. Romania’s IT sector will develop and remain attractive to businesses for a long time.
Romania’s B2B IT Services Market
The country, with a population of 19 million people, employs almost 130 000 specialists in the IT sector. It is now the leader in Europe and 6th in the world in the number of certified IT specialists per 1,000 inhabitants (it is even higher than the United States in the list). According to ANIS 2022 report:
- IT sector growth rate is 15-17% per year
- IT market in Romania has grown from €4.6 billion in 2015 to €9 billion.
- Telecommunications market volume rose from €4.5bn in 2015 to €5.1bn in 2020.
- IT services export value has increased from €2.5bn to €6bn.
- R&D services export value has increased from €200 million to €600 million.
- IT companies with over 250 employees account for 47% of the total volume of business generated by the industry (€4bn).
- Almost 2/3 of the total market volume is concentrated in Bucharest (60%), followed by the North-West region (18%), West (7%), North-East (6%), Centre (5%), and South (4%) regions.
- 64% of IT companies have foreign capital.
- 36% of IT companies have Romanian capital.
Outsourcing is still the backbone of the Romanian IT market, with 85% of revenues from exports.
The advantages of working with Romanian IT companies
The 2021 Global Services Location Index ranked Romania in the 32nd position regarding best locations for outsourcing. Here are the advantages of working with IT companies from Romania:
- Affordable rates. The middle hourly rate for software development is around $50.
- Communication skills. Romania promotes a multilingual culture resulting in developers that speak English, Germany, French, and Italiano well.
- Suitable time zone. Romania is 1 hour ahead of Eastern EU countries and 2 hours ahead of Western EU countries.
- Economic growth. Romania belongs to the top 5 countries with the most rapid economic growth in the EU.
- Education system. With 49 public and 8 private universities, Romania delivers more than 7,000 IT graduates yearly.
- Government-backed economic stability. The Romanian government admiringly invests in the local IT market, opening new IT hubs and supporting innovative initiatives.
If you want to partner with a Romanian IT company, you can turn to us as we have developed a network of reliable partners of more than 700 companies.
Government Support for the IT Industry in Romania
Taxes in Romania are low, and there are benefits for IT startups: programmers working for hire are exempt from income tax, which is 16% here. All companies also have tax benefits in the first two years of operation: they pay only 1-3%. Other tax advantages of Romania for IT companies:
- Tax incentives for R&D expenses (research and development). Companies can take advantage of a 50% tax depreciation for R&D expenses and apply accelerated depreciation for these expenses.
- Reinvested profits tax exemption. This means corporate tax exemption for profits reinvested in certain types of assets.
- Investors setting up manufacturing space or offices in an industrial, science, or technology park (depending on the region) may receive an exemption from land tax and building tax or tax for changes in the intended use of land plots in industrial parks.
It is mandatory to have an in-country company bank account to make employee salary payments and third-party authority payments. Advantages of registering an IT company in Romania:
- Romania has been an EU member since 2007
- Free access to European markets with over 700 million consumers
- One of the most affordable workforces in the EU
- No residency requirements for the principals
- Low taxes for small businesses
- It is not on the offshore lists of different countries and international organizations
- The directors and founders of the company in Romania can be residents and non-residents, citizens, and legal entities
- Optimal conditions for the registration of IT companies and legal entities conducting activities in the field of innovative technologies, developments, and scientific research
- Geographical proximity (relevant for the citizens of Ukraine, Georgia, and the CIS countries)
According to ANIS estimates, software development brings the country about 6.2% of GDP (about $15 billion).
How can Red Jumpers help clients achieve IT goals?
Red Jumpers is an experienced team of HR professionals that can help you hire developers in Romania. We have distinctive experience hiring Romanian developers to close your positions quickly. Cooperation with Red Jumpers is suitable for the following:
- Small companies that have up to 200 employees and have been operating in the market for about 3 years
- Companies with a small number of different technologies in-house that would like to expand their expertise and be able to provide services to more customers with the help of partners
- Companies that occasionally face an excessive number of leads
- Companies that want to help their employees avoid benching
- Companies that are open to cooperation on outsourcing and IT staff augmentation models
Feel free to contact Red Jumpers to discuss your need to hire Romanian developers in 2023!
Conclusion
Hiring proficient and competent front-end and back-end developers is critical for an IT outsourcing company to maintain growth. Unfortunately, there is a global shortage of development experts; even the top outsourcing destinations are no exception. There was a global labor shortage of 40 million professionals worldwide in 2020, and it will reach 85.2 million by 2030.
Nevertheless, you can turn to our team anytime, and we will help you hire the necessary developers in the shortest possible time!
