Best Countries to expand your Tech Business in 2025
Keep in mind these key considerations while exploring the best countries to expand your tech business in 2025
Information Technology is evolving at a pace that’s hard to keep up with now. More and more businesses are prioritising lean growth models to focus more on smaller teams and higher profitability. But they still require the right talent and infrastructure to sustain their operations.
However, establishing the required large-scale infrastructure, such as servers and networks, can be prohibitively and tiringly expensive in first-world countries like the US.
Fortunately for such companies, several other countries offer better and cost-effective alternatives, with lower labour and legal expenses, access to a larger talent pool, and scalable growth opportunities.
With that in mind, let’s explore the best countries to expand your tech business in 2025.
Why expand to other countries?
Expanding internationally does require a higher initial investment of time and resources to set up legal entities and establish the foundation for future growth of the company.
However, the ongoing operational and scaling costs are more often than not significantly lower than in the US, making international expansion a strategic move for long-term sustainability and profitability.
1. Lower Labour Costs
The cost of hiring tech talent in the US has surged in recent years, with software engineers earning an average salary of over $120,000 per year.
By contrast, countries like Vietnam, India, and the Philippines offer highly skilled developers at a fraction of that cost, allowing companies to stretch their budgets further without compromising quality.
Additionally, the cost of employee benefits, office space, and operational expenses is significantly lower in these regions, further driving down overall business costs.
2. Access to a Diverse Talent Pool
Expanding globally provides access to specialised talent pools. Countries like Poland and Romania have a strong emphasis on STEM education, producing top-tier developers and engineers with expertise in cybersecurity, AI, and software development.
Meanwhile, Singapore and the UAE attract highly skilled international professionals due to their favourable immigration policies and thriving tech ecosystems.
Additionally, Latin America is emerging as a hub for nearshore outsourcing, particularly for US-based companies looking for teams in similar time zones.
3. Tax Incentives and Business-Friendly Regulations
Governments worldwide are offering attractive tax benefits to foreign businesses. Ireland’s 12.5% corporate tax rate, Dubai’s free zones, and Thailand’s Board of Investment (BOI) incentives are just a few examples of policies that significantly reduce operational costs for expanding companies.
Additionally, some governments provide grants, reduced bureaucracy, and fast-tracked business registration processes to encourage foreign investment, making expansion both financially and logistically viable.
4. Market Diversification and Stability
Relying solely on the US market exposes companies to risks associated with economic downturns, inflation, and policy changes. A global footprint allows businesses to tap into multiple revenue streams and mitigate risk.
Additionally, entering new markets can unlock untapped customer bases, provide opportunities for partnerships with local businesses, and help companies stay competitive in an increasingly globalised economy.
Key Factors to Consider Before Expanding
Expanding into a new country isn’t just about lower costs. Every business needs to conduct the necessary strategic evaluation of multiple factors to ensure long-term success.
Before selecting a country for expansion, tech businesses should evaluate the following factors:
1. Ease of Doing Business
The speed and efficiency of setting up a company vary widely across different countries.
Singapore, the UAE, and Estonia offer fast-track incorporation processes, minimal red tape, and digital-friendly governance, allowing businesses to register and start operations in a matter of days.
In contrast, some Latin American nations like Brazil and Mexico require extensive documentation, multiple regulatory approvals, and longer wait times, which can delay expansion plans.
Tax structures, repatriation of profits, and local banking processes should also be assessed to avoid hidden obstacles.
2. Infrastructure and Digital Connectivity
For tech businesses, a country’s IT infrastructure is just as important as its cost advantages. High-speed internet, cloud computing capabilities, and cybersecurity frameworks play a crucial role in business operations.
- Estonia is a leader in e-governance and cybersecurity, making it a hotspot for digital startups.
- South Korea and Japan boast some of the fastest internet speeds globally, ideal for cloud-based and AI-driven businesses.
- India has rapidly improved its data centre infrastructure, supported by investments from Google Cloud, AWS, and Microsoft Azure, making it an emerging hub for IT operations.
3. Use Local Data Centres
Understanding local laws is critical, especially when it comes to employment regulations, tax policies, intellectual property (IP) protections, and data security laws.
- The EU’s GDPR impacts how companies store and manage customer data. Any business operating in or serving European clients must ensure compliance to avoid hefty fines.
- Australia’s Privacy Act (1988) and Brazil’s LGPD have similar frameworks, requiring companies to be proactive about data security.
- Countries like the UAE and Singapore offer robust IP protection laws, ensuring tech firms can safeguard proprietary software and innovations.
4. Government Support and Incentives
Many governments actively encourage foreign tech investments by offering tax benefits, R&D grants, and startup-friendly policies.
- Canada’s SR&ED program provides R&D tax credits, making it attractive for AI and software innovation firms. (However, as of early 2025, trade relations between the U.S. and Canada have experienced high tensions. Businesses should monitor these developments, as they may impact operational costs and market dynamics.)
- Thailand’s Board of Investment (BOI) incentives include corporate tax holidays and duty exemptions, ideal for companies setting up regional tech hubs.
- Dubai’s free zones allow 100% foreign ownership and provide tax exemptions for up to 50 years, reducing overhead costs significantly.
5. Labour Availability and Education
A strong, skilled workforce is essential for sustaining tech operations. Countries with a high focus on STEM education and vocational training produce a steady talent pipeline for software engineering, AI, and data science roles.
- Germany has a strong foundation in engineering and IT, with top-ranked universities producing highly skilled graduates.
- Vietnam and the Philippines are emerging as strong alternatives for cost-effective software development talent.
- India is also known for its vast pool of IT professionals and engineers, with numerous institutions producing skilled graduates annually.
- South Africa is investing in tech education and has a growing base of skilled English-speaking IT professionals, making it an attractive nearshore outsourcing option for European companies.
Best Countries for Tech Expansion in 2025
Asia:
India:
India has a massive, cost-effective English-speaking workforce, robust software development ecosystem, and a thriving startup culture.
India’s IT sector is projected to reach $350 billion by 2025, with major tech hubs in Bangalore, Hyderabad, and Pune driving AI, cloud computing, and fintech innovation.
Incentives for businesses:
- 100% foreign ownership in IT and BPO sectors.
- Corporate tax rate of 15% for new manufacturing companies (one of the lowest globally).
- Special Economic Zones (SEZs) with tax benefits and infrastructure support.
India is also emerging as a semiconductor and AI development hub, with the government investing $10 billion in semiconductor fabrication plants.
Vietnam:
Vietnam has highly skilled engineering talent, lower labor costs than China and India, and strong government support for tech startups.
Vietnam’s IT exports reached $110 billion in 2024, with major players like Samsung, Intel, and Microsoft investing heavily in R&D centers.
Incentives for businesses:
- Up to 15 years of tax holidays for IT firms.
- R&D grants for software development, AI, and blockchain.
- Free trade agreements (FTAs) with the US, EU, and Japan, easing software and IT services exports.
Singapore:
Singapore has very strong IP protections, one of the easiest business setups globally, and access to ASEAN’s $3 trillion economy.
Ranked #2 globally in the World Bank’s Ease of Doing Business Index, Singapore is home to Amazon, Google, and Microsoft’s regional headquarters.
Incentives for businesses:
- Tax exemptions for startups for up to three years.
- Government funding for AI, fintech, and cybersecurity startups.
- Global Investor Program (GIP) offers permanent residency for entrepreneurs investing in the country.
Indonesia:
Indonesia is Southeast Asia’s largest digital market, a growing e-commerce sector, and a rising number of unicorn startups like Gojek and Tokopedia.
Indonesia’s digital economy is projected to reach $146 billion by 2025 end, making it the region’s largest tech market.
Incentives for businesses:
- Special tax holidays for software and fintech firms.
- Investment-friendly policies through the Omnibus Law, reducing bureaucracy for foreign companies.
- Access to ASEAN’s 600 million+ consumer base.
Middle East:
United Arab Emirates (UAE):
The UAE has very Business-friendly policies, zero corporate tax in free zones, and a booming fintech and AI sector.
Dubai’s Smart City initiative and Abu Dhabi’s Hub71 tech ecosystem are attracting major international investments.
Incentives for businesses:
- 100% foreign ownership in free zones like Dubai Internet City.
- Easy business licensing with approvals in less than 48 hours.
- Government-backed venture capital and grants for AI, blockchain, and digital finance startups.
Saudi Arabia:
Saudi Arabia is executing a heavy government investment in digital transformation, ambitious Vision 2030 plan, and strong funding support for startups.
Their $1.2 trillion Vision 2030 strategy aims to make Saudi Arabia a global tech hub, with major investments in AI, cloud computing, and fintech.
Incentives for businesses:
- Neom city project: A high-tech smart city with massive investment opportunities.
- Zero income tax for businesses operating in special economic zones.
- $1 billion+ in startup funding through the Public Investment Fund (PIF).
Europe:
Germany:
Germany has, over the years, developed very strong R&D infrastructure, €30 billion in tech funding, and a large venture capital market.
Germany also has Europe’s largest tech workforce and is home to SAP, Siemens, and a thriving AI sector.
Incentives for businesses:
- 25% R&D tax credits for companies investing in innovation.
- Government grants for AI and cybersecurity startups.
- Easy access to the EU market, the world’s second-largest economy.
Ireland:
Ireland has one of the lowest corporate taxes (12.5%), a highly skilled workforce, and the presence of Google, Apple, Facebook, and Microsoft.
Dublin’s Silicon Docks is a major tech hub, attracting global investments.
Incentives for businesses:
- R&D tax credits covering 25% of eligible costs.
- Fast-track company incorporation in less than a week.
- Easy access to the EU market with minimal trade barriers.
Poland:
Poland offers high-quality developers, competitive labor costs, and a pro-business environment.
Poland’s IT industry is growing at 10% annually, with major hubs in Warsaw, Kraków, and Wrocław.
Incentives for businesses:
- Special Economic Zones (SEZs) with tax reductions.
- Government co-funding for R&D projects in software and AI.
- One of the largest pools of skilled programmers in Europe, ranked #3 globally in coding skills.
Portugal:
Portugal has a fast-growing startup scene, affordable costs, and a welcoming immigration policy for tech entrepreneurs.
Lisbon’s Web Summit is one of the world’s largest tech conferences, attracting major VC investments.
Incentives for businesses:
- Golden Visa program for entrepreneurs and investors.
- Tax benefits for startups under the Portugal Tech Visa program.
- Government grants for AI, fintech, and software development firms.
Strategic Steps for a Successful Expansion
Expanding into international markets is a rewarding move, if done carefully and strategically. A well-structured global expansion strategy can help you mitigate risks while maximising your growth potential.
Here are some key steps that Beyond Borders HR would advise you upon to ensure a smooth and successful expansion for your tech business:
1. Conduct Thorough Market Research
Before entering a new market, companies need to assess:
- Demand for your products or services – Is there a local customer base that justifies expansion?
- Competitive landscape – Who are the key players in that market, and how does their pricing, marketing, and service model compare?
- Legal and regulatory barriers – Are there industry-specific restrictions, tax obligations, or foreign ownership limitations?
For example, while India offers a massive talent pool and cost advantages, regulatory compliance and tax structures require thorough planning. Similarly, Singapore provides easy market entry but comes with high operational costs.
2. Build Local Partnerships and Network
Establish relationships with:
- Local distributors and service providers can help you with logistics and operations.
- Industry accelerators and trade organisations provide networking and market insights.
- Universities and talent hubs will strengthen recruitment pipelines for specialised skills.
For instance, many US-based tech firms entering Germany collaborate with Fraunhofer Institutes for R&D partnerships, while in the UAE, forming alliances with free zone authorities can streamline operations.
3. Consider Remote and Hybrid Work Models
Companies must decide whether to:
- Set up a full-scale office – Best suited for markets with long-term strategic importance (e.g., Ireland for European HQs).
- Use a hybrid model – Employing a mix of on-site and remote teams (common in Vietnam, Poland, and India).
- Go fully remote – Beneficial for software development and IT services firms aiming for cost savings.
For example, many startups establish legal entities in Singapore but operate teams remotely in the Philippines or Indonesia to balance efficiency and cost.
4. Leverage Government Incentives
Governments offer financial and operational incentives to attract foreign businesses, such as:
- Corporate tax reductions – Ireland (12.5%), Poland’s Special Economic Zones (SEZs).
- R&D grants and innovation funds – Canada’s SR&ED program, Singapore’s AI development grants.
- Tax holidays and free zones – Dubai’s zero-tax free zones, Vietnam’s incentives for IT firms.
It is up to the decision-makers to assess which incentives align with their industry and growth objectives while ensuring compliance with local requirements.
5. Compliance, Legal, and Tax Considerations
While expanding, ensure adherence to:
- Local employment laws – Some countries have strict labor protections (e.g., Germany’s worker councils).
- Intellectual property (IP) laws – They are strong in Singapore and Ireland but weaker in some emerging markets.
- Data protection regulations – GDPR in Europe, India’s evolving data laws, Brazil’s LGPD.
Failing to address compliance issues early can lead to costly penalties, operational setbacks, and reputational damage.
How Beyond Borders HR can help you expand into international markets
Global expansion in 2025 is an attractive prospect for tech companies looking to scale while optimising costs and accessing new talent pools. By selecting the right destination and planning strategically, businesses can position themselves for sustained global growth.
Thinking about expanding?
Start by researching the legal and financial requirements in your target country to ensure a smooth transition. Or reach out to us and we’ll do the heavy lifting for you.
