# Nearshoring to Central Europe: Hungarian IT teams

URL: https://casterconsulting.hu/en/nearshoring-central-europe-it-teams/
Published: 2026-10-15
Updated: 2026-10-15
Author: Caster Consulting

> For a Western European company, a Central European IT team, for example in Hungary, works in the same or a neighbouring time zone, under the same EU law and usually in English. It isn't the cheapest option, but for communication and data protection it's often the least risky.

**Short answer: for a Western European company, a Central European IT team, for example in Hungary, works in the same or a neighbouring time zone, under the same EU law and usually in English.** It isn't the cheapest option in the world, but for communication, data protection and day-to-day collaboration it's often the least risky. That's nearshoring: outsourcing work not to the other side of the world, but to the neighbourhood.

Most companies compare outsourcing options on hourly rates. That's understandable, but it hides the costs that decide whether a project succeeds: misunderstandings, delays, late-night calls and compliance questions. This article looks at nearshoring from the buyer's side.

## Onshore, nearshore, offshore

- **Onshore:** the partner is in the same country. Easiest to work with, but usually the most expensive.
- **Nearshore:** the partner works in a nearby country, with a similar time zone, culture and legal framework. For a German, Austrian or Dutch company, for example, Hungary, Poland or the Czech Republic.
- **Offshore:** the partner is in a distant country, with a large time difference. Usually the cheapest, but communication and data protection are harder.

An analysis by CBI, the Dutch foreign ministry's export promotion agency, cites a survey in which 46% of Western European IT and business process outsourcing budgets went to onshore partners, 23% to nearshore and 31% to offshore.

## How big is Hungary's IT and services sector?

According to Hungary's statistics office (KSH), around 48,500 enterprises operated in the country's ICT sector in 2022, producing 8.1% of national gross value added. In 2023 the sector employed 229,400 people, and computer services exports reached HUF 966 billion, growing about 11% a year since 2018. 87% of ICT services exports came from foreign-owned companies.

The Hungarian Investment Promotion Agency (HIPA) reports that business services centres in Hungary employed 118,543 people in 2025, 7% more than a year earlier, across 245 centres. Among IT functions, 48% of centres run infrastructure management, 46% an IT service desk and 43% cybersecurity tasks. English is the working language in 98% of centres; 57% serve regional and 43% global markets.

Across the EU, the ICT sector produced 5.24% of gross value added in 2023 and employed 7.36 million people, according to Eurostat.

## Why companies choose a nearshore partner

**Time zone.** A Central European team works in the same time zone as most of Western Europe, or one hour apart. Meetings happen during working hours, and questions get answered the same day.

**Data protection.** This is the least known and often the most important advantage. Within the EU and the European Economic Area, personal data flows without additional safeguards, because the GDPR applies everywhere. With a partner outside the EU you need either a European Commission adequacy decision or separate safeguards such as standard contractual clauses. Adequacy decisions currently cover only about 16 non-EU countries or territories; India, for example, isn't among them. With an EU nearshore partner, the question simply doesn't arise.

**A shared legal framework.** CBI notes that EU-based providers fall under the same EU law as their customers, which simplifies contracts, liability and compliance.

**Language and culture.** English is the standard working language in Central European IT, and work culture and project methods are close to Western European practice.

**Travel.** When an in-person meeting is needed, it's a short flight or even a drive, not a multi-day trip.

## The downside: it isn't the cheapest

CBI's analysis says talent is scarce in Central and Eastern Europe and prices are rising, with Poland the most expensive in the region. Nearshoring isn't about the lowest hourly rate; it's about the risk and total cost of the project: fewer misunderstandings, fewer late-night calls, fewer data protection questions. A project finished a month earlier with fewer fixes can be cheaper despite a higher rate. Compare on the whole project, not on a single specialist's day rate.

## Three engagement models

- **Staff augmentation:** one or a few specialists join your existing team and work to your processes and management. Good when you have a strong team and need capacity or a missing skill.
- **Dedicated team:** the partner provides a whole team working for you, with its own team lead. Good for longer-term, continuous work when you don't want to build your own team.
- **Project-based delivery:** the partner delivers a defined result using its own methods. Good when the task is well bounded and you care about the outcome, not day-to-day direction.

## How it works in practice

A well-run nearshore collaboration hardly differs from an internal team day to day. Meetings happen in working hours over video, the team uses the same tools (task tracker, version control, chat), and there's a contact on each side who can make decisions.

The first weeks matter most. If possible, hold a short in-person kickoff: collaboration runs far more smoothly when people know each other. After that, short regular check-ins and well-kept documentation hold the work together.

## Security and access

An external team accesses your systems and data, so settle the security rules on day one, not afterwards:

- **a personal account for everyone,** with multi-factor authentication and no shared passwords;
- **only the permissions needed,** reviewed regularly;
- **a data processing agreement** if they work with personal data;
- **immediate removal of access** when someone leaves the project.

With an EU partner the legal framework is simpler, but practical security is still a shared responsibility.

## What goes in the contract

A nearshore contract within the EU is simpler than one with a distant partner, but a few points still need writing down:

- **Who owns the result:** source code, documentation and any other work product should belong to you, explicitly, not by assumption.
- **Where the data is and who can see it:** server locations, subcontractors, and the data processing agreement if personal data is involved.
- **Team stability:** who the key people are, how much notice you get if someone is replaced, and how the handover works.
- **Exit:** what the partner hands over at the end or if you part ways early, and in what format.
- **Pricing and changes:** time and materials or fixed price, and how changes in scope are agreed.

None of this is specific to nearshoring, but distance, even a small one, makes unclear points more expensive to sort out later.

## What to check as a buyer

- **Who works on the project?** Does the same team stay throughout, or do people rotate?
- **In what language do they document,** and in how much detail?
- **Do they have experience** in your industry and with projects of your size?
- **How do they handle data:** where are the servers, who has access, is there a data processing agreement?
- **How does communication work:** daily or weekly check-ins, shared tools, one contact person?
- **How do they handle changes** and delays?

## Common mistakes

**Choosing on hourly rate alone.** The cheapest offer often means the least experienced team or the most hidden costs.

**No owner on the buyer's side.** If nobody is responsible for the partner's work, the team works on its own assumptions, and the result isn't what you expected.

**Starting without written requirements.** Distance, even a small one, magnifies misunderstandings. User stories and acceptance criteria matter even more here.

**Knowledge doesn't stay with you.** Without documentation and handover, you depend on the partner, and switching becomes very expensive.

## How to measure success

Measure a nearshore collaboration like an internal team: deadlines met, quality delivered, number of defects, and how much of your own time goes into coordination. If the last one keeps growing, that's a signal: either requirements aren't clear enough or communication isn't working. Hold a short, honest quarterly review with both sides: what works, what doesn't, what needs to change.

## What we've seen

Several earlier projects of our team were international, and show how much shared time zones and language matter.

- **CRM in 27 countries:** an international animal health company with more than 7,000 employees rolled out a single Salesforce CRM across 27 countries, with our team running project management and leading the implementation. On a project like that, a shared working language and overlapping hours are the basis of daily work.
- **A veterinary app for China:** at the same company, we ran business analysis and project management from Europe for an app built for the Chinese subsidiary, across time zones. It was the opposite of nearshoring, and showed how much extra work it takes when working hours barely overlap: every question gets an answer a day later, so precisely written requirements and asynchronous documentation become even more important.

## When nearshoring isn't the answer

- **When the work is very well defined, stable and price is decisive:** a distant partner may be cheaper.
- **When daily in-person presence is needed:** then onshore, a local partner.
- **When a rare skill only exists in one place:** then look where it is.

## What to do now

1. **Decide what matters more:** the lowest hourly rate or the lowest risk.
2. **If the partner handles personal data,** check where the data will be and whether extra safeguards are needed.
3. **Ask for a reference** from a similar international project.
4. **Agree on communication:** language, meeting rhythm, contact person, documentation.
5. **Start with a smaller, well-defined project,** and only then expand.

If you're looking for a Central European, English-speaking IT team or specialist for an international project, have a look at our [IT outsourcing](/en/it-staff-outsourcing/) service.

## FAQ

### What is nearshoring?

Outsourcing IT work to a nearby country with a similar time zone, culture and legal framework. For a Western European company, for example, a Central European partner in Hungary, Poland or the Czech Republic.

### Why is it better for data protection?

Within the EU, personal data flows without additional safeguards, because the GDPR applies everywhere. With a partner outside the EU you need an adequacy decision or separate contractual safeguards.

### Is nearshoring cheaper than offshoring?

Usually not. Hourly rates may be higher, but because of communication, time zones and data protection, the total project risk and hidden costs are often lower.

### How big is Hungary's IT services sector?

According to KSH, it employed 229,400 people in 2023, and computer services exports reached HUF 966 billion. HIPA reports that business services centres employed 118,543 people in 2025.

### What language do Hungarian IT teams work in?

On international projects, usually English. HIPA's survey found English is the working language in 98% of business services centres in Hungary.

## Sources

- [HIPA – Business Services Hungary 2025](https://a00.hipa.hu/uploads/insight/6/9/1/5/6915ed04480df404988816.pdf)
- [KSH – The state of the ICT sector, 2023 (in Hungarian)](https://www.ksh.hu/s/kiadvanyok/az-infokommunikacios-szektor-helyzete/az-infokommunikacios-szektor-helyzete.pdf)
- [Eurostat – ICT sector: value added, employment and R&D](https://ec.europa.eu/eurostat/statistics-explained/SEPDF/cache/64771.pdf)
- [European Commission – Adequacy decisions](https://commission.europa.eu/law/law-topic/data-protection/international-dimension-data-protection/adequacy-decisions_et)
- [CBI – What is the demand for IT Outsourcing Services on the European market?](https://www.cbi.eu/market-information/outsourcing/competition/)