Software Developers in Moldova in 2021: Where They Fit into the Eastern European Outsourcing Market?

Wine, Java, Web & PHP Software Developers in Moldova: contribution to the global economy

Many tech companies in the United States, the United Kingdom, and Western Europe more often prefer outsourcing software development to Eastern Europe over India or Asia. Eastern European countries, such as Ukraine, Poland, Czech Republic, Bulgaria, Belarus, Hungary, and Moldova are now the new offshore software development paradise with affordable hourly rates, IT specialists with diverse tech stacks, convenient location, and time zones, and well-developed business environment. This article focuses on Moldova as a possible alternative outsourcing location in Eastern Europe.

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What to know about Moldova

  • Capital: Chisinau
  • Official Languages: Moldovian (Romanian); Russian (not official, but commonly known)
  • Currency: Moldovan leu, MDL (1 USD = 18 MLD)
  • Population: 3 550 900
  • Timezone: UTC+2(+3)
  • Number of developers: 13,000
  • Political Stability (scale -2.5 to 2.5): -0.4
  • Ease of doing business: 74.4/100
  • Human Capital/Skills: 61.5/100

Overview of Moldova as an outsourcing destination in 2021

Moldova is a small country in South-Eastern Europe with 3.6 million inhabitants and an area of almost 34k square kilometers. Chisinau is the capital of Moldova and the biggest city in the country. Most of the business activities including the IT sector happen in Chisinau.

Moldovans speak Romanian, Russian and Moldovan languages. This fantastic mix compares this country favorably with other Eastern European countries which are usually fluent only in one or two languages. What does it mean for companies who are thinking about extending their team with Eastern European programmers? Specialists from Moldova will be able to freely communicate with almost any of their colleagues.

Furthermore, according to the official statistics, more than 60% of students study English as their primary foreign language, followed by French. The English language is practically a prerequisite of working in IT projects, developers in Moldova, on average, have a good grasp of English.

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The economic situation in Moldova is a little unstable. By the end of 2019 such Worldwide Governance Indicators as Political stability and absence of violence reached -0.4 which is lower than the median value. This index remains low because of the unresolved situation with the Transnistria region that claimed its independence. Nevertheless, the situation in the rest of the country is stable.

Moldova’s GDP per capita is $4,638, which is one of the lowest in Europe. Moldova is still a country with a high level of corruption and bureaucracy, the infrastructure is not well developed yet. In 2014, Moldova entered into the European Union Association Agreement, which potentially will lead to the harmonization of its policies with European standards.

The IT sector is growing steadily in Moldova as the government implements incentives to create a favorable business climate. For instance, during the pandemic, the Government introduced a reduced tax rate for IT companies for four years.

A Minister of Economics and Infrastructure called IT a strategic niche for Moldova and shared a forecast of its growth up to 262,26 million USD by 2024.

Culturally Moldova is influenced by Europe and Russia at the same time, although the mentality of the younger generation, who constitute the majority of the software developers in Moldova, tend to be more open-minded and proactive. Currently, brain drain is a huge challenge for the IT outsourcing industry in Moldova as many developers prefer to work in neighboring Romania, where the salaries are far higher.

Moldova’s IT market 2021

The IT industry in Moldova employs around 12,500 people. Most of them are involved in the export of services meaning that they are employed with outsourcing and outstaffing companies that write code for foreign companies. Again, if you’re thinking about working with Moldavian developers, you should think of it as a good sign because the majority of them are experienced in doing business with western companies.

The internal software development market is not that developed and undersized, so the developers in Moldova are mostly focused on working for international clients. The turnover of the IT sector is projected to quadruple between 2017-2021, with the number of companies and employees tripling within this same time span.

Moldova IT Park is the biggest IT cluster in the country. It produces up to 98% of outsourcing export services. This cluster unites around 400 companies, while 300 of them work specifically with international clients.

The main business partners that hire developers from Moldova are the main global startup players: the USA, the UK, and Germany, but also neighboring countries like Romania and Italy whose languages are similar, so it makes communication of clients with local developers easier. This fact ensures Moldova 75% of general IT income.

Second-tier IT companies such as Pentalog, Endava, and RedSky have been outsourcing software development to Moldova for over a decade. There are a number of Moldovan software outsourcing companies that employ up to 250 PHP, Java, and web developers.

In terms of the cost of software development services, Moldova offers the lowest prices in Eastern Europe. The average price for IT services provided by web developers in Moldova is in the order of 20-24 USD/ hour for a Mid Level Developer. According to our own data, developers with more years of experience earn 42-50 USD/hour in 2021.

The turnover of the IT sector in Moldova is projected to quadruple between 2017-2021.

Programming languages and social skills of software developers in Moldova 2021

Developers in Moldova are well suited to web development and basic coding. The most in-demand developers in Moldova are those who know PHP, Java, Python. Companies outsourcing web development to Moldova, market their software engineers as having strong technical skills, combined with a good work ethic, as can be seen from clients’ reviews on Clutch. This is in spite of university education not providing an adequate level of expertise in computer science or programming languages in comparison with European institutions. Students who want to work as PHP, Java developers have to look for additional training or self-educate online.

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It’s also worth mentioning that in 2017 Tekwill ICT Excellence Centre was officially launched in Chisinau, which offers a variety of educational programs focused on a broad range of skills–from basic to advanced cutting-edge technologies and business practices.

Software development companies working with developers in Moldova report that they are mostly disciplined, persistent, and ambitious.

Wrap Up

The improvements in the education system, tax incentives, infrastructure development are required to make Moldova a favorable business environment for software development companies and to help it with establishing itself as a competitive IT market in Eastern Europe.

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Written by
Tristan Senycia

Tristan Senycia is an ex-Product Manager at YouTeam.

He is also the founder of LeverPoint Advisory, which consults in the areas of commercialisation management, go-to-market strategy, High-Tech marketing strategy and customer development. 

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