How to Start R&D Center in Ukraine

May 3, 2023

9 min read

You have probably heard about enterprises like Amazon, Google, Facebook, and others that have opened their R&D centers worldwide. This is a fantastic chance for businesses to expand and access new markets, as well as gain financial profit. Why not try it too? 

Did you know that the industry giants mentioned above have their research and development centers in Ukraine as well? That’s because opening an R&D center in this country comes with a bunch of benefits for both big companies and small ones. Let’s find out why everyone chooses Ukraine for their offshore development and how to establish your R&D center there.

When is it best to open an R&D center?

Here’s a quick recap of what is an R&D center. Research & Development Center (R&D) or Offshore Development Center (ODC) is a software development office, often in nearshoring or offshoring countries, which is focused on creating new IT solutions for their company’s IT products. Opening such centers is a hot topic for both enterprises and small companies. R&D requires significant investments, but overall global spending on this area steadily increases because it gives good results. The US and China spent about $600 billion on research and development centers in 2021. Among companies, Amazon invests the most in this area. In 2021 only, the corporation increased investments in R&D by 31.15% to $56.052 billion. One of the main objectives of establishing R&D is to scale up and represent in various countries. Still, it has a variety of other benefits that can assist businesses in achieving great outcomes.

So, when is it best to open an R&D center?

You want to expand your client base.

There is no better approach to reach a new market than to start a region-specific business that can service it. You may provide tailored services to different clients by taking advantage of the time zone differences and cultural distinctions. What’s more, sending a representative abroad allows you to save more time learning about foreign markets and use it to your advantage. 

You strive to have a flexible working environment with a high level of productivity.

Working remotely has become increasingly popular thanks to COVID-19. Thus, technological development took place, and constant innovations in communication methods. An employee can now work from a home office or a laptop connected to the Internet. It has been proven that telecommuting employees are more productive, have better work-life balance, and are happier at their workplace. 

You want to reduce development costs.

Moving development overseas may save you money because of decreased developer fees as well as the cost of office support. All cost savings strategies are contingent on the correct placement of your offshore development center (ODC). For instance, Ukraine has a business-friendly tax system with government assistance that helps with cost savings.

You are looking for new talents.

You may tap into a new market of engineers and other IT specialists when you establish a research & development center. Unlike the outsourcing approach, where you only work with the developers that the vendor limits, the R&D center approach brings a steady stream of diverse talent to your business. 

Our recruiters from StaffingPartner can help you get the best of the best from the Ukrainian IT talent pool. Based on your requirements, we cherry-pick A-list candidates and have them work for you with no extra hassle from your end. Contact us now to assemble your top-tier development team within a just few weeks!

You need high-quality and secure services.

For many successful companies, it’s crucial to guarantee the highest quality of their products. This is where the offshore development center comes in: you can always expect high-quality software development when working with a team of experienced developers and engineers located in an IT hub such as Ukraine. 

Three things to consider before opening an R&D center

To make sure that everything will go smoothly, here’s what you need to consider before establishing a research development center.

  1. Cultural Barriers. The world is diverse, so it is not news that different countries have different cultures and work approaches. To avoid any miscommunication and cultural barriers, provide equal treatment to your offshore and in-house teams, but keep in mind that what is appropriate in your country may be considered rude in another. In addition, you must have a general set of values ​​and principles that will be apparent to both employees and clients.

    It’s easier in Ukraine, though. Ukrainians are flexible, hardworking, and open-minded people. They are a perfect choice for your offshore development team as you won’t have any communication problems with them, no doubt. Ukrainian IT specialists have B2+ English level on average, and some know other languages as well.
  2. Placement. Choosing a city for starting your research development center is very important. Every city has its potential for each industry. Let’s continue with Ukraine as an example. The cities with the highest IT potential are Kyiv (40% of developers), Lviv (12%), Kharkiv (15%), Odesa (6%), and Dnipro (8%). The cost of living, the office location, and even cultural aspects vary from city to city. As a result, select one based on your abilities and objectives.
  3. Performance tracking. Quality control of work tasks is a significant challenge when working with an offshore team. Each firm has its standards, and each supervisor wants to be sure that their staff is spending their paid time productively. As a result, make use of employee productivity software to see what the ODC team accomplishes every day. Establish a standard reporting procedure so that your team is always aware of what they need to finish and when.

Why choose Ukraine for your research and development?

So what exactly makes Ukraine one of the best offshore outsourcing locations? Here are some reasons why companies choose it as their R&D center: 

  • Beneficial location of the country. Ukraine is situated in the very center of Europe. It has a convenient transportation system, so it won’t be a problem to visit your ODC when needed without spending a fortune on tickets.
  • Large IT talent pool. Ukraine is home to many famous global companies, such as Grammarly, Preply, and Petcube. Ukraine has a pool of approximately 200,000 competent software engineers, many well-known for their professional skills. Ukrainian software developers are smart, open-minded, flexible, and inventive.
  • IT-friendly tax system. Ukraine’s government supports the growth of the IT sector. Therefore, IT firms are entitled to certain tax advantages. Ukrainian banks provide great rates for IT representatives, making funds transfer extremely easy.
  • Optimal cost spending. Eastern European software development services are less expensive than Western Europe, but the quality is unaffected. Ukraine’s IT market is still young; therefore, salaries for engineers are not as high as they are in other countries. So, hiring a development team in Ukraine will lower your spendings tremendously.

    If you need a more detailed look at costs for hiring a team in Ukraine, our experts will send you a thorough report of relevant salary forks of IT professionals you are looking for. Drop us a message, and we’ll get right to it!

Ukrainian developers have a reputation for being knowledgeable and trustworthy, completing tasks on time, and providing high-end technology to their customers. Working with Ukrainians is a worthwhile investment that will benefit your business greatly.

Many foreign businesses seek skilled IT professionals in Ukraine, so many have not resisted establishing offices in Kyiv and other big cities. Google, Oracle, Snap (Snapchat), Cisco, Facebook (Meta), Ubisoft, Opera, Huawei, Samsung, Reddit, Wix, Rakuten, and many others are among the fortunate ones who have taken the risk. Now they’re harvesting all the perks of this choice.

When you start considering launching an R&D center in Ukraine, it’s good to have a local partner by your side.

Why is it important to have a local partner for opening an offshore development center?

Having a local partner is always beneficial when going offshore, be it a research development center, new restaurant, or clothing store. If you’ve never had any business interactions with Ukraine before, it’ll take considerably longer to learn how everything works and begin dealing with government officials. You’ll need to set up your business and gather all the necessary paperwork to operate. For that, you’ll presumably work with local attorneys, accountants, and other experts, paying each of them separately. 

However, there is a much better option. You can meet with some IT companies or IT recruiting agencies in Ukraine that will assist you in establishing your ODC. As a result, you’ll not only outsource this work but also gain the country’s first local partners. What’s more, you won’t be caught in the middle of the recruiting hassle as your partner will take care of it all for you.

StaffingPartner as your trusted R&D center partner

StaffingPartner IT recruiting agency has been providing staffing services for over 5 years, and we know how to deal with R&D centers. Our experience helps us understand the needs of our customers, which allows us to approach every case most efficiently. Having deep knowledge of the Ukrainian IT market, our recruiters deal with talent search and staffing at a minimum amount of time. We can also help you with creating a concept for your ODC and define the proper KPIs (Key Performance Indicators).

To establish a successful R&D center in Ukraine, get in touch with our experienced recruiters right away!

Read also: Most Wanted Programming Languages in 2021-2022 in Ukraine

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