Onshore US or UK agencies charge $120 to $220 per hour (€105 to €190 per hour, £90 to £165 per hour), nearshore European teams in Greece, Portugal, Poland or Romania charge $45 to $90 per hour (€40 to €80 per hour, £35 to £65 per hour), and offshore teams in South Asia charge $25 to $50 per hour (€20 to €45 per hour, £20 to £35 per hour). Nearshore is the usual answer for enterprise work from London or New York because it combines a 40 to 60 percent saving against onshore with four to eight hours of daily overlap, EU data protection by default, and a management overhead close to onshore. Offshore wins on rate alone and loses it back in overlap and oversight.
Prices are in US dollars. Euro and pound figures in parentheses are approximate, rounded conversions. Quotes are issued in the currency of your contract.
The location question is really three questions wearing one coat: what is the rate, how much of the day can we work together, and how much of my own team's time will this consume. Buyers who answer only the first one are the ones who later write the post titled "why our offshore project failed". This post is for the technology or procurement leader at a US or European company deciding where their external development team should sit. It gives the rates, the overlap, the total cost, the cases where each model works, and the data protection questions that have to be settled before any of it matters.
What do the three terms mean?
- Onshore. The team is in your country. For a New York buyer that is the US, for a London buyer the UK.
- Nearshore. The team is in a nearby region with substantial working-hour overlap and similar legal frameworks. For a London buyer, that is continental Europe, including Greece, Portugal, Poland and Romania. For a New York buyer, nearshore usually means Latin America, though European teams that start early cover most of the US morning and are increasingly chosen for the same reason.
- Offshore. The team is many time zones away, typically South Asia. The rate is the lowest and the overlap is the smallest.
What are the rates in 2026?
| Region | Blended agency rate | Dedicated team of five, per month | Typical saving vs onshore |
|---|---|---|---|
| Onshore (US, UK) | $120 to $220 per hour (€105 to €190 per hour, £90 to £165 per hour) | $90,000 to $150,000 (€80,000 to €130,000, £65,000 to £110,000) | Baseline |
| Nearshore Europe (Greece, Portugal, Poland, Romania) | $45 to $90 per hour (€40 to €80 per hour, £35 to £65 per hour) | $40,000 to $70,000 (€35,000 to €60,000, £30,000 to £50,000) | 40 to 60 percent |
| Offshore (South Asia) | $25 to $50 per hour (€20 to €45 per hour, £20 to £35 per hour) | $20,000 to $40,000 (€17,000 to €35,000, £15,000 to £30,000) | 65 to 80 percent on rate |
The blended rate is what a mixed team of senior, mid-level and junior engineers with project management costs per hour. Rates for a senior architect alone are higher in every region. The number that matters is the cost of a delivered release, which the rate only partly predicts.
How much overlap do you actually get?
Overlap is the hours in a normal working day when both sides are at their desks. It determines whether a question gets answered in ten minutes or tomorrow, and it is the single largest driver of delivery speed in a distributed team.
| Buyer | Team location | Time difference | Daily overlap (standard hours) | Overlap with flexed hours |
|---|---|---|---|---|
| London | Athens, Bucharest, Warsaw (Central and Eastern Europe) | 1 to 2 hours ahead | 6 to 7 hours | 8 hours |
| London | Lisbon, Porto | Same time | 8 hours | 8 hours |
| London | South Asia | 4.5 to 5.5 hours ahead | 3 to 4 hours | 5 hours |
| New York | Athens and Eastern Europe | 6 to 7 hours ahead | 2 to 3 hours | 5 to 6 hours (team works 11:00 to 20:00 local) |
| New York | Latin America | 0 to 2 hours | 6 to 8 hours | 8 hours |
| New York | South Asia | 9.5 to 10.5 hours ahead | 0 to 1 hour | 2 to 3 hours |
Four hours of overlap is the practical minimum for a team that needs daily decisions from you. Below that, every clarification costs a day, and the team compensates by guessing, which is where rework comes from. A European team serving a New York client reaches that threshold by shifting its day, which the better nearshore firms do as standard. An offshore team serving New York cannot reach it without night shifts, which degrade the team you were sold.
What is the total cost once management is counted?
The rate is the vendor's price. The total cost adds what the model consumes on your side and what it loses in rework.
| Cost component | Onshore | Nearshore | Offshore |
|---|---|---|---|
| Vendor fee, 12-month program, five-person team | $1,100,000 to $1,800,000 (€955,000 to €1,565,000, £815,000 to £1,330,000) | $500,000 to $850,000 (€435,000 to €740,000, £370,000 to £630,000) | $250,000 to $500,000 (€220,000 to €435,000, £185,000 to £370,000) |
| Your management overhead | A product owner at a quarter to half time | Similar to onshore when overlap is four hours or more | A product owner at half time plus a technical lead or a bridging manager, often a full extra role |
| Rework and delay from low overlap | Minimal | Low | Commonly 15 to 30 percent of effort on programs needing frequent decisions |
| Travel and onboarding | Low | One or two visits a year, short flights from London | Longer and costlier visits, fewer of them |
| Realistic total vs onshore | 100 percent | 50 to 65 percent | 45 to 70 percent, with higher variance |
The last row is the point. Offshore's rate advantage over nearshore is large, but its total-cost advantage is small and uncertain once overlap and oversight are counted, and the variance is what enterprise programs cannot afford. Nearshore gives up some of the headline saving for predictability.
When does each model work?
- Onshore works when the work requires physical presence, security clearance, deep regulatory familiarity in your jurisdiction, or daily contact with executives who will not join video calls. It is also the right answer for a small, short engagement where the saving is not worth setting up a cross-border relationship.
- Nearshore works for almost every enterprise build, modernization or dedicated team that needs real collaboration: shared language, overlapping hours, comparable engineering culture, and a legal framework your counsel recognizes. It is the default for London buyers and increasingly for New York buyers who value overlap over the last ten percent of saving.
- Offshore works for well-specified, decision-light work: maintenance of a stable system, test automation, defined migrations, or a second shift that extends a strong internal team. It fails when the scope is still being discovered, because discovery needs conversation and conversation needs overlap.
Whichever you choose, the engagement model matters as much as the geography. Dedicated team vs project-based vs staff augmentation covers that decision.
What about GDPR and data residency?
If your systems hold personal data of EU or UK residents, where the team sits and where the data is processed are legal questions before they are commercial ones.
- A team inside the EU processes personal data under the same regulation you already operate under. No transfer mechanism is needed, and a data processing agreement with the vendor covers the relationship.
- A team in the UK serving EU clients, or the reverse, works under adequacy decisions that currently make transfers straightforward, with a DPA in place.
- A team outside the EU and UK requires a lawful transfer mechanism, usually standard contractual clauses plus a transfer risk assessment, and some sectors restrict it outright. Many enterprises handle this by keeping production data in-region and giving the offshore team anonymized or synthetic data, which works but adds setup.
- Regulated sectors add their own rules. Healthcare and finance clients often require named-person access, in-region environments and audit logs regardless of vendor location. Building software for regulated industries covers what that changes in the build.
Ask every vendor these questions before you compare rates. Security and compliance questions to ask a software vendor has the full list.
The short version
- Onshore: $120 to $220 per hour (€105 to €190 per hour, £90 to £165 per hour), full overlap, pay for presence and jurisdiction.
- Nearshore Europe: $45 to $90 per hour (€40 to €80 per hour, £35 to £65 per hour), four to eight hours of overlap, EU data protection by default. The enterprise default from London and a strong option from New York.
- Offshore: $25 to $50 per hour (€20 to €45 per hour, £20 to £35 per hour), little overlap, best for defined and decision-light work. Budget for the oversight.
- Never compare rates before you have compared overlap and data residency.
Where 7L sits
7L International is a custom software development and digital transformation firm with business hubs in New York, London and Athens. Our engineering is based in Athens, which places the team one or two hours from London and in the same regulatory framework as our EU clients, and our New York hub exists so that US clients have overlapping hours and a local point of contact rather than an inbox. The company was founded during the Greek financial crisis, and the discipline that came with that is still how we work. We have delivered for more than one hundred organizations, in regulated industries, in IoT and in hospitality, with the same model: a nearshore team, a named lead, daily overlap, and your data staying where your counsel wants it. If you are comparing locations for an enterprise software program, talk to us and we will give you a straight answer on overlap, rates and data handling.
Frequently asked questions
Is nearshore cheaper than offshore once everything is counted?
On the vendor's rate, no: offshore is 25 to 50 percent cheaper than nearshore. On total cost, the gap narrows sharply because offshore programs need more management on your side and lose 15 to 30 percent of effort to rework and delay when overlap is under four hours. For decision-heavy work such as discovery, modernization and product development, nearshore usually costs the same or less in total and with far less variance.
Which countries count as nearshore for a UK company?
Continental Europe within two time zones: Portugal, Spain, Greece, Poland, Romania, the Czech Republic and the Baltic states are the common choices. They share working hours, English as the working language of engineering, EU data protection law and short flights. Rates run $45 to $90 per hour (€40 to €80 per hour, £35 to £65 per hour) blended, against $120 to $220 per hour (€105 to €190 per hour, £90 to £165 per hour) onshore.
Can a European team work with a New York client?
Yes, when the team shifts its day. Athens is seven hours ahead of New York, so a team working 11:00 to 20:00 local time gives five to six hours of overlap with the US morning and early afternoon, which is above the four-hour threshold for daily collaboration. Firms that serve US clients regularly do this as standard rather than as a favor.
Does GDPR stop us from using an offshore team?
No, but it adds obligations. Transfers of EU personal data outside the EU and UK need a lawful mechanism such as standard contractual clauses and a transfer risk assessment, and some sectors restrict them. Many organizations keep production data in-region and give offshore teams anonymized or synthetic data instead. A team inside the EU avoids the question entirely with a standard data processing agreement.
What is the minimum daily overlap for a distributed software team?
Four hours. That is enough for a daily stand-up, a design discussion and the same-day resolution of most questions. Below four hours, every clarification costs a day, teams start guessing and rework rises. Two hours is workable only for maintenance and well-specified tasks.