When considering offshore development, the first question that usually comes up is cost — "how much will it cost?" However, offshore development costs vary widely by country, role, contract type, and project scope, so no single figure fits every case.
This article organizes the per-person-month rates by country and role, the cost breakdown, how to plan a budget, and what to watch for when comparing quotes — based on the Offshore Development White Paper (2025 edition) and industry surveys.
What determines offshore development cost
Offshore development cost is driven mainly by the following five factors.
1. The country you outsource to
Engineer salary levels, cost of living, and exchange rates differ by country, so the per-person-month rate varies even for the same role. In recent years China's rates have risen sharply, India and the Philippines have been flat to slightly down, and Vietnam has edged slightly upward.
2. Engineer role and skill level
Rates differ across programmers, senior engineers, bridge SEs (BrSE), and project managers (PM). Bridge SEs in particular command higher rates than programmers because they need both Japanese-language ability and technical skill.
For the role of the bridge SE and how to choose one, see What is a Bridge SE (BrSE)? Role, Required Skills, and How to Choose.
3. Contract type
Offshore contracts fall broadly into fixed-scope (contract) type (you pay for deliverables) and lab (quasi-delegation) type (you pay by headcount × duration). Fixed-scope costs are more stable the more firmly the spec is fixed at quoting time; lab type suits securing a team over the long term.
For how cost differs by contract type, see Lab vs. Fixed-Scope Development: Differences, Cost, and How to Choose.
4. Project size and duration
For small projects (1–3 people, within 3 months), the per-person management-cost ratio is higher, so they tend to be relatively expensive. By contrast, a team of 5 or more on a contract of 6 months or longer can expect efficiency gains as the team matures.
5. Level of Japanese-language support
If you require communication in Japanese, you will need a bridge SE or a Japanese-capable PM, which adds cost. However, since communication quality governs the efficiency of the whole project, cutting this cost can sometimes increase total cost.
For how to design communication, see Designing Communication for Offshore Development.
Per-person-month rates by country and role (2025 White Paper)
Below are the monthly rates by country and role published in the Offshore Development White Paper (2025 edition). This white paper surveys Japanese companies' use of offshore development every year and is widely referenced as a guide close to actual transaction prices.
Vietnam per-person-month rates
| Role | Monthly rate (excl. tax) |
|---|---|
| Programmer (PG) | approx. ¥400,000 |
| Senior Engineer (SE) | approx. ¥500,000 |
| Bridge SE (BrSE) | approx. ¥590,000 |
| Project Manager (PM) | approx. ¥710,000 |
In the 2025 white paper, Vietnam ranks No. 1 in share of Japanese companies' outsourcing destinations (43%). Programmer rates rose slightly year on year, while bridge SE rates were flat.
Comparison with major countries
| Country | PG rate | YoY | Characteristics |
|---|---|---|---|
| Vietnam | approx. ¥400,000 | slight rise | No. 1 share. Many Japanese-capable staff; stable BrSE supply |
| India | approx. ¥350,000 | slight decline | Centered on English-language projects. Suits large scale but limited Japanese support |
| Philippines | approx. ¥300,000 | slight decline | High English ability. Few Japanese-capable staff |
| China | approx. ¥550,000 | +31% | Surging. Driven by rising domestic demand and labor costs |
| Myanmar | approx. ¥250,000 | flat | Low rates but a small talent pool |
Note: The above are average rates published in the white paper; actual costs differ by company and project. Even within the same country, rates vary by urban vs. regional location, large vs. small vendor, and whether Japanese support is provided.
Offshore development cost breakdown
Quote line items differ by company, but a quote is generally made up of the following.
1. Development labor (per-person-month rate × headcount × duration)
This makes up the bulk of the cost. Use the rate table above to estimate from the required roles, headcount, and duration.
2. Bridge SE / PM cost
The cost of the BrSE or PM who handles spec confirmation with the Japan side, progress reporting, and issue management. Depending on team size, it is common for one BrSE to cover 3–5 programmers.
3. Infrastructure and environment cost
Costs for development servers, CI/CD, test environments, security tools, and so on. When cloud use is assumed, actual AWS/GCP charges are billed separately.
4. Communication and management cost
Costs for running regular meetings, translation, document management, chat tools, and the like. Some companies include this in the per-person-month rate; others bill it separately.
5. Test and quality-management cost
QA engineer labor, test-automation tool licenses, and so on. The cost structure changes depending on whether testing is done in-house or outsourced as third-party verification.
Rough budget scale
According to the Offshore Development White Paper (2025 edition), Japanese companies' annual offshore development budget bands are as follows.
| Annual budget | Share |
|---|---|
| Under ¥10M | approx. 15% |
| ¥10M–20M | approx. 17% (most common) |
| ¥20M–50M | approx. 16% |
| ¥50M–100M | approx. 14% |
| ¥100M or more | approx. 12% |
The most common band is ¥10M–20M, roughly equivalent to securing a team of about 5 for 6–12 months.
How to plan a budget
- Lay out the requirements: Organize the feature list, number of screens, whether API integration is needed, target devices (Web/iOS/Android), connections to existing systems, and so on.
- Assume a team structure: Tentatively set the required roles (PG, SE, BrSE, PM, QA) and headcount.
- Estimate the duration: Include not just the development phase but also requirements definition, design, testing, and release-prep periods.
- Multiply by the per-person-month rate: Produce a rough estimate based on the country/role rate table.
- Add a buffer: Allow 10–20% contingency for spec changes, extra testing, and bug fixes.
What to watch for when comparing quotes
When getting quotes from several offshore companies, comparing rates alone leads to wrong decisions. Check the following points.
1. What is included in the rate
Some companies include BrSE cost, management cost, infrastructure cost, and test cost in the per-person-month rate; others bill them separately. A rate that looks cheap on the surface can be more expensive in total. Compare quotes on a total-cost basis.
2. Is the team structure appropriate
Between a quote for 5 PGs and a quote for 3 PGs + 1 SE + 1 QA, the latter has a higher rate but may be the more appropriate quality-management setup.
For thinking about quality-management structure, see Quality Management and QA Process in Offshore Development.
3. Communication language
Whether there is a BrSE you can deal with directly in Japanese greatly changes how efficiently the project runs. If a quote is cheap because support is English-only, you need to account for in-house interpretation/translation cost and communication loss.
4. Contract-type assumptions
You cannot compare a fixed-scope quote and a lab-type quote on the same footing. Fixed-scope is weak against spec changes; lab type's results depend on how the team is run. Decide which fits your project before requesting quotes.
5. Track record and structure
Beyond rates, check whether they have a track record on projects of the same industry and scale, what their team retention is like, and how they respond when trouble arises.
For how to choose a vendor, see How to Choose an Offshore Development Vendor: Comparison Points.
Not "cost cutting" but "more output for the same budget"
If you see offshore development as "a way to outsource cheaply," you end up chasing only low rates, and quality and communication problems become more likely.
The Offshore Development White Paper (2025 edition) reports that the No. 1 reason Japanese companies use offshore development is "securing development resources," with cost cutting ranking second or lower. It further reports that "the bridge SE's communication ability" is the most valued criterion when selecting a vendor.
In other words, many companies already use offshore development not for "cheapness" but to secure the development resources they need within a limited budget and deliver more products and features.
When evaluating a quote, comparing from the angle of "how many person-months of development power do I get for this amount?" and "how many more features can I deliver versus spending the same budget domestically?" raises the probability of project success.
FAQ
Q1: What is the minimum budget for offshore development?
A: Generally, a minimum setup of 1 BrSE + 2–3 PGs runs roughly ¥1.2M–2M per month as a guide. Note that in small projects the BrSE management-cost ratio is higher, so efficiency per person-month improves as team size grows.
Q2: Will Vietnam's rates rise going forward?
A: Vietnamese engineer rates have edged up about 1–3% per year over the past several years. There is no sharp surge like China's, but a gradual rise is expected to continue over the long term. We recommend setting rate-revision terms at contract time.
Q3: What is the "management cost" included in a quote?
A: It is the cost of the offshore company's project management — handling the point of contact with the Japan side, progress management, quality management, report creation, and so on. Some companies include it in the per-person-month rate; others book it separately as roughly a 5–15% management fee.
Q4: Which keeps cost down — fixed-scope or lab type?
A: It cannot be said in general. For projects where the spec is fixed and changes are few, fixed-scope makes the total easier to control; for projects where spec changes occur frequently, lab type tends to keep extra costs down. For details, see Lab vs. Fixed-Scope Development.
Q5: Should test cost be quoted separately?
A: We recommend quoting the test process explicitly. With a quote that does not include test cost, developers end up testing their own work, raising quality risk. For thinking about outsourcing testing to a specialist team, see Third-Party Verification Outsourcing Guide.
Summary
To understand offshore development cost correctly, it is important to compare on total cost and structure — not just the rate, but the scope included, team structure, contract type, and communication setup.
Key points of this article:
- Vietnam's per-person-month rates run from approx. ¥400,000 (PG) to approx. ¥710,000 (PM) (2025 white paper)
- The most common annual budget band for Japanese companies is ¥10M–20M
- Compare quotes on a total-cost basis and check whether BrSE, management, and test costs are included
- Evaluate on "how much output for the same budget," not "cheapness"
- In vendor selection, prioritize track record, communication structure, and quality management
If you have grasped the cost picture and want to discuss specifics, get in touch via our free consultation form. We will hear your project requirements and then propose a team structure and rough cost.
Reference: Offshore Development White Paper (2025 edition). Per-country rates cite the average values published in the white paper. Actual costs vary by vendor and project scope.
