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How Foreign Companies Can Create an IT Team in Ukraine: 4 Key Steps

Outsourcing is one of the most efficient business management options. Ukrainian companies are listed high among top 100 IT outsourcers in the world. Foreign corporations are choosing Kyiv as an investment marketplace for its simplified taxation system, abundance of experienced developers and relatively low hourly wages.

Smart Solutions has analyzed the key challenges faced by companies focusing on opening an IT department in Ukraine and prepared an algorithm for shifting the IT team into the outsource.


General steps for creating a Ukrainian IT team

The process of IT team outsourcing can be divided into several stages:

  • searching for specialists;
  • establishing the communication;
  • choosing the control approach;
  • arranging the necessary documentation.

Recruitment process

Ukrainian IT professionals are considered to be among the best. They are ranked 5th in the global ranking (4th in Europe), mastering popular programming languages. Despite a decent knowledge of English and high cultural compatibility, recruiting process requires paying attention to the specifics of the national labor market. The best way to handle staffing matters is to seek talent recruitment services from a professional HR agency.


Development of a communication system

Recruiting the right team is only half of the job. The main challenge is ensuring the coordinated operations of the remote IT team. Ukraine is located close to the main European centers, and time difference with the USA is 7 hours only (the gap is much larger with India, for example). This allows organizing online conferences without any issues, as well as conducting regular meetings in Kyiv (visa-free agreement with the EU is a major plus).


Choosing the monitoring approach

Hiring foreign managers and project coordinators can help to establish the smooth operations of the department. These specialists supervise the remote team activities on-site, understanding the culture and general principles applied at the international corporation.

Opening a turnkey IT office via a specialized outsourcer can be another effective solution. Choosing this option, team recruitment and motivation, as well as business operations are delegated to intermediaries. Outsourcers understand the peculiarities of the local job market and all aspects of Ukrainian legislation from within, which saves customer’s time and money. At this stage, it is better to develop a labor protection policy as well.


Registration of a legal entity

Ukraine is really committed to entering the international IT market. Currently the government is actively involved in development of Diia City service. Diia app will simplify launching of an IT business, as well as drive additional foreign investments.

On the other hand, complex tax system and bureaucracy can significantly delay the process and drive away foreign entrepreneurs. HR record management and accounting outsourcing services can help to avoid issues with regulatory bodies.


Cooperation with IT outsourcing service: Key tips

Launching the project in cooperation with an outsourcing company includes several stages:

  • choosing a contractor – IT segment in Ukraine is developing rapidly, with more than 4,000 businesses already offering such services. Thus, plenty of companies specializing in specific tasks are available;
  • conducting an audit – experienced outsourcers always analyze the peculiarities of customer’s business and requirements before getting started;
  • signing the agreement – to avoid any risks in the future, it is important to specify the terms, obligations and responsibilities of the parties, including a clause about non-disclosure of information under the agreement as well;
  • launching a project – delegating the tasks to a trusted outsourcer is a guarantee that your IT infrastructure will be in good hands.


Difficulties that may arise on the way

Oftentimes, foreign investors may face the following issues:

  • Hidden costs. Opening an IT office in Ukraine allows entrepreneurs from the EU and USA to save up to 75%. Nevertheless, it is important to keep in mind not only the potential wages, but also rent of premises and equipment, flights to crucial meetings, tax expenditures, etc. Proper payroll & accounting strategy allows you to minimize costs.
  • Jetlag. It is relatively easy to coordinate operations of a remote team when things go smooth, but solving urgent matters might be challenging. Having a project manager available on site who can make responsible decisions is important.
  • Motivation. Remote team is a vital part of business. These specialists need to be motivated and integrated into the corporate spirit. Outsourced employees should feel themselves as part of an international corporation, getting benefits and participating in corporate activities. This will allow to increase commitment.

Priority: another important factor. IT outsourcers can simultaneously work with several foreign businesses. Negligent contractors don’t care about prioritizing the tasks from different customers, which is affecting projects in a negative way. Always work with trusted companies and specify all details and peculiarities in the agreement.


Smart Solutions BPO: The best solution for opening an IT office in Ukraine

Our agency is an HR and BPO provider with 12 years of experience in the information technology sphere. We offer a full range of services focused on opening an IT department for foreign companies in Ukraine: from recruitment to account management. You will get:

  • assistance from 300+ qualified HRs, accountants and lawyers;
  • analysis of customer’s business specifics before searching for the best solutions;
  • an opportunity to meet in offices in Kyiv, Moscow, Almaty and Tashkent.

24/7 customer support, an individual approach and vast experience in the field – this is what allows us to successfully implement any projects. Choosing SmartSolutions BPO, you can avoid any problems related to launching an IT team in one of the most promising outsourcing countries in Central and Eastern Europe.

22 july 2021