Romania has established itself as a prominent hub for software development outsourcing. With more than 200,000 developers in Romania as of 2023, the country has many experienced tech experts who can solve the most complicated technical problems. Bucharest, Cluj-Napoca, Iaşi, and other Romanian IT centers are home to companies that provide quality software development services to businesses from the US and EU.
When considering software development in Romania, it's crucial to examine the Romanian ICT market, the tech talent pool, key tech hubs, and the engineering capabilities of local IT vendors. Understanding these aspects will help you determine if this location aligns with your tech needs.
A look at Romania's IT sector
The technology sector in Romania has been experiencing steady growth, primarily fueled by a highly qualified workforce. Notably, the ICT sector in Romania contributes around 6.2% of the country's GDP. By 2026, Romania's ICT exports are predicted to reach $9.3B, a significant increase from $7.4B in 2021. The country's exports have grown by 14.6% since 1999, on average at 3.7% yearly.
Romania houses 433 software development companies, each equipped with diverse technical and domain expertise, including IT, business and financial services, and healthcare.
Some notable hubs in Romania mainly focused on IT and outsourcing, have contributed to the growth of software development in Romania. The country's EU membership in 2007 played a significant role in catalyzing its IT branch, attracting global giants such as Huawei, Hewlett-Packard, Ericsson, and Adobe to set up their operations here. Furthermore, Microsoft's regional department operates two global business support centers in Bucharest and Timișoara.
Romania's strong position as an outsourcing destination is evident from its ranking of 30th in the Kearney Global Services Location Index 2023. The GSLI assesses the attractiveness of countries as offshore locations for business services, taking into account factors like labor and infrastructure costs, available skills, quality of services provided, infrastructure, business environment, and political and social risks. Romania scored higher than many European countries, including Ireland and Netherlands, further solidifying its reputation as an attractive destination for software development in Romania. This recognition has led companies from various industries, such as telecom, manufacturing, and e-commerce, to establish R&D centers and offices in Romania.
Among the major players making their mark in the country, Oracle stands out as the largest employer, boasting a workforce of 4,000 employees. Furthermore, Adobe Romania shines as Adobe's most prominent R&D Center in the EMEA region, showcasing the company's commitment to innovation in Romania. Meanwhile, Amazon's Development Center in Iași holds significant importance as the company's first-ever R&D center in Eastern Europe, solidifying Romania's position as an attractive destination for global tech giants seeking to harness the country's talent and expertise. The presence of multinationals further reinforces the country's reputation as a reliable outsourcing hub, which continues to offer abundant resources and skilled professionals for various software development projects.
These major tech players' presence in Romania showcases the country's strong tech ecosystem and its ability to nurture cutting-edge research and development. It also underscores the availability of skilled tech professionals and the conducive environment for innovation and technological advancement. As these global tech giants invest in Romania, it further solidifies the country's position as an attractive destination for software development and technology investments. This enhances Romania's reputation as a reliable and competitive player in the global tech industry.
To support the continuous growth of the IT industry, the Romanian government actively supports software development in Romania. It implements measures such as exempting software developers from the 16% income tax and introducing various incentives to bolster local IT companies. This has fostered the growth of a digital economy and created a business-friendly environment. As a result of these positive changes, foreign direct investments in Romania rose to €10.7B ($11.64B) in 2022.
Software development companies in Romania
Although small-sized vendors currently constitute approximately 67% of all IT companies in the Romanian tech market, these companies tend to grow both in number and size. In 2023, the number of large vendors employing 250+ professionals in Romania has reached 41. Among these, 14 companies stand out with a workforce exceeding 1,000 employees; two companies have surpassed the 10,000-employee mark.
This steady expansion in the number and size of IT companies demonstrates the potential for further growth and development in the Romanian tech industry. There is also an increase in the variety of services offered by software development companies. Romanian companies' most common software development services are web development, mobile app development, e-commerce development, user interface design, and IT strategy consulting.
Keep reading: 15 best software development vendors in Eastern Europe
Software developers in Romania
The number of certified IT specialists in Romania is the highest in Europe and the sixth highest in the world, with more tech specialists per 1,000 residents than in the United States. Romania's IT industry employs a substantial workforce of approximately 198,440 ICT specialists.
The country has gained recognition for its high-quality IT services, securing 23rd place in SkillValue and 12th place in the TopCoder rankings. Additionally, Romania has shown significant progress in English proficiency, reaching the 17th position in the EF EPI ranking, resulting in a pool of highly skilled English-speaking professionals.
The ICT sector in Romania has seen significant growth in recent years, with average gross salaries increasing by 54,5% in 2023. The average salary of an employee in the ICT sector is double that of the average wage in the economy. At the same time, developer salaries in Romania are 20% to 50% lower than in the European or American markets, making outsourcing custom software development to Romania an attractive and cost-effective option for businesses seeking high-quality expertise at a more competitive rate.
ICT education in Romania
There are 49 public and 8 private universities in Romania, with the Babes-Bolyai University, the University of Bucharest, and Alexandru Ioan Cuza University being the top three universities in the country, according to the QS World Universities Ranking 2023. They provide IT professionals for Romanian tech hubs, such as Cluj-Napoca, Bucharest, Iași, and others.
Recently, Romania has seen an uptick in the number of students and graduates in the ICT sector. In 2021, there were 40,063 students and 9,308 graduates, an almost 20% and 65% growth, respectively, compared to 2015. Moreover, Romania boasts one of the highest proportions of graduates in ICT and STEM in the EU. With such an impressive number of ambitious young tech professionals and an environment that fosters innovation, it is no surprise that Romania’s start-up scene is thriving.
Romanian tech entrepreneurs have founded hundreds of startups, with over 200 fintech companies alone. Additionally, software, data, foodtech, and sales and marketing are highly competitive among Romanian startups. Romania ranks 42nd worldwide in the Global Startup Ecosystem Report 2023. Despite losing its position in the top 40, it is still in the top 20 in the EU and among the top 10 in Eastern Europe. Moreover, investments in software development in Romania are increasing. The amount of funding raised by tech companies in Romania in 2022 was a record $270M, according to Dealroom–three times as much as the previous year. With a €93.6M ($101.79M) raised in February, Tokhit became the largest social network in the country in 2023.
In 2022, the amount of funding reached a record-breaking $270M, indicating increased interest and investments in software development in Romania.
Connectivity and IT infrastructure
Romania boasts fast Internet connectivity and robust telecom networks, which have proven essential during the pandemic-induced surge in demand for online services. The country's introduction of 5G services has further bolstered its tech infrastructure, securing second place for download speed and first place for upload speed.
Romania's IT infrastructure is capable of supporting projects of any magnitude. With access to the fourth-best fixed broadband speed worldwide (214.3Mbps), developers can swiftly build, test, and refine software products, resulting in accelerated time-to-market for their solutions.
Romania's Labour Code recognizes only eight official holidays throughout the year. Aside from public holidays, Romania recognizes religious observances as well. It is not a public holiday, and time off is granted based on the terms of a contract of employment or an informal agreement within the company.
The fact that software development in Romania is largely unaffected by religious traditions means that the availability of developers and the timelines of projects will not be significantly impacted.
Key hubs for software development in Romania
IT and outsourcing firms in Bucharest, Cluj-Napoca, Timișoara, Iaşi, and other cities engage over 220,000 people, mainly employees, freelancers, and remote workers for foreign companies. Romanian IT hubs are dispersed across the country, offering a convenient and accessible network of tech centers.
Apart from Bucharest, Cluj-Napoca has built a reputation as a hub for ecosystem developers with an international mindset. According to StartupBlink, Cluj-Napoca has positioned itself both as a Smart City in the making and as an IT cluster. Let’s take a more detailed look at Romanian tech hubs.
In Bucharest, the capital of Romania and a thriving center for software development in Romania, 149 custom software development vendors reside, including one impressive tech company with over 10,000 employees. Most of these vendors are small and medium-sized, with up to 250 engineers. A total of 20 companies operate on a large scale, with up to 10,000 professionals on their payroll.
In Bucharest, IT companies offer a diverse range of services to cater to various business needs. Among these services, e-commerce development and IT staff augmentation stand out, accounting for 18.7% and 18.1% of the services provided, respectively. IT strategy consulting and UX/UI design follow closely, each contributing 16.1% to the service portfolio. Additionally, web design and application testing make up 15.4% and 13.4% of the services offered, respectively.
Regarding the industries serviced by IT companies in Bucharest, the sector exhibits remarkable versatility. Business services and financial services account for 31.5% and 30.8% of the industries catered to, respectively. E-commerce and healthcare sectors are also significant recipients of IT services, representing 26.8% and 26.1% of the industries served, respectively. Moreover, IT companies in Bucharest also extend their expertise to the automotive and telecom sectors, covering 14.7% and 14% of the industries, respectively. Lastly, education benefits from Romanian IT services, constituting 12.7% of the industries serviced by IT companies in Bucharest. The diverse portfolio of services and industries showcases Bucharest's role as a vibrant IT hub capable of meeting the diverse needs of businesses across various sectors.
Not to be outdone by Bucharest, Cluj-Napoca has its own 10,000+ employees software development company and 17 other large companies. Almost 200 vendors set up offices in this location, including 68 midsize ones.
The Cluj-Napoca IT industry offers various services to satisfy diverse business needs. Web development is the primary service, constituting 41.5% of the offerings, followed by mobile app development at 28.2%. IT-managed services and UX/UI design also play significant roles, accounting for 24.6% and 13.8% of the services provided, respectively. Additionally, IT staff augmentation and AI development contribute 10.7% and 7.6% to the service portfolio. Application testing and application management & support are also offered, each making up 5.6% of the services provided by IT companies in Cluj-Napoca.
In terms of the industries served by IT companies in Cluj-Napoca, the sector demonstrates its versatility and capability to cater to various domains. Information technology takes the lead, with 67.1% of IT companies providing services to this industry. Financial services and e-commerce are also prominent industries, constituting 21.5% and 17.9% of the sectors served, respectively. Moreover, IT companies in Cluj-Napoca extend their expertise to the medical and business services industries, each representing 16.4% of the industries serviced. Additionally, education, automotive, consumer products and services, manufacturing, retail, telecommunications, supply chain, logistics, and transport are among the domains that benefit from IT services in Cluj-Napoca. This diversity of services and industries served highlights Cluj-Napoca's position as a flourishing technology hub, capable of serving a wide range of sectors and driving digital innovation in the region.
Iași is home to seven midsize and seven large IT companies, including two vendors with over 1,000 employees. IT companies in Iași, Romania, cater to diverse industries. The medical sector is the primary beneficiary, with 47.2% of IT services directed towards this field. Information technology and financial services are 41.6% and 33.3%, respectively.
What makes companies opt for software development outsourcing in Romania? A summary
Romania is a reliable and cost-effective outsourcing destination for companies worldwide. The country has a large, skilled tech talent pool, versatile technical and industry expertise, and a convenient location.
The primary factors driving this choice include:
- Competitive rates: the cost of living in Romania is significantly lower than in Western Europe or the United States, which means that companies can save money by outsourcing their software development to this region. A lower cost of living translates to lower labor costs for companies hiring local talent or outsourcing to Romanian software development companies. This cost advantage allows businesses to access a highly skilled workforce at a more budget-friendly price compared to Western European or American markets. Additionally, other operating expenses, such as office space, utilities, and administrative costs, are also comparatively lower in Romania, contributing to overall cost savings.
- Exceptional qualifications: Romanian engineers involved in software development in Romania are highly skilled and well-educated. Many of them have degrees from top universities in the region, and they are proficient in various programming languages and technologies.
- Well-established infrastructure: This includes a reliable telecommunications network, a skilled workforce, and a favorable business environment that support software development outsourcing.
Why choose N-iX as a software development company in Romania?
- N-iX boasts an extensive talent pool of over 2,000 tech experts, and our dedicated recruitment team of 60+ specialists is equipped to help you find and hire the best developers in Romania and Ukraine.
- With nearly two decades of experience in the industry, we have cultivated long-term, strategic partnerships with businesses across the USA, UK, Germany, Nordic countries, and other regions. N-iX has earned the trust and recognition of reputable institutions such as Zinnov, IAOP, GSA, Inc. 5000, Software 500, Clutch.co, and more, establishing us as a trusted vendor.
- Our consistent recognition by CRN among the leading solution providers in North America, including Solution Provider 500 and CRN Fast Growth 150, underscores our commitment to excellence.
- N-iX holds prestigious certifications, such as Advanced AWS partner, Microsoft gold certified partner, Google Cloud Platform Partner, OpenText Services silver partner, and SAP partner, ensuring that we offer top-notch expertise and solutions to our clients.
References on software development in Romania:
- IMD World Digital Competitivness Ranking 2022
- ABSL Annual Report 2022. Summary
- Future of IT Report 2023
- ROMANIA’S BUSINESS SERVICE SECTOR IT&C, SSC & BPO
- The economic context of Romania - International Trade Portal
- Romania - Information & Communications Technology (ICT)
- Resources – ANIS
- Romania Public Holidays
- The European Cybersecurity Competence Centre (ECCC) opens its doors in Bucharest.
- Global Startup Ecosystem Index 2023
- Regenerative talent pools - Kearney 2023
- IT outsourcing destinations in Eastern Europe: 2023 market report - N-iX
- HackerRank Developer Skills Report
- Which Country Would Win the Programming Olympics? - HackerRank
- Starting up Romania. Entrepreneurship Ecosystem Diagnostic.
- Education and Training Monitor 2022
- Software development in Ukraine, Poland, Belarus and Romania
- Evolutions in Romanian IT
- Romania sees increase in foreign investments – EURACTIV.com
- Overview of the software development market in Romania
- Romania ICT Industry Outlook 2022 - 2026.
- The Digital Nomad Index | Circleloop
- Startup Ecosystem of Romania | Startupblink