--- title: "What Is an Offshore Development Center (ODC)? | Azendo" description: "An offshore development center is a dedicated engineering team abroad for one company. How ODC software development works, what it costs and who runs it." url: "https://azendo.co/blog/engagement-models/what-is-an-offshore-development-center/" --- 1. [Home](https://azendo.co/) 2. [Newsroom](https://azendo.co/newsroom/) 3. [Engagement models](https://azendo.co/blog/engagement-models/) 4. What is an offshore development center (ODC)? # What is an offshore development center, and who runs it? An offshore development center, usually shortened to ODC, is a dedicated engineering team set up in another country to work only for one company. ODCs differ in size, cost and setup time, and most of all in who manages the team day to day. An ODC fits large, long-running programmes with a site lead ready to run them. For smaller teams, a managed offshore team gives the same dedicated capacity without an entity or an office of your own. By [Mikkel Schmidt](https://azendo.co/about/mikkel-schmidt/) Published 18 September 2026 · Updated 11 November 2026 An offshore development center is a structure. What it delivers depends on who runs it. In short: an offshore development center is a team abroad that works only for you, usually managed by your own leads. It pays off for large teams, because a site lead, an office and an entity cost the same for ten engineers as for forty. A captive centre takes months to set up; an [offshore dedicated development team](https://azendo.co/hire-a-dedicated-development-team-in-thailand/) at Azendo is hired in four weeks from signing. ## How an offshore development center works The ODC model splits the work between two sides. In ODC software development, the provider handles everything local: recruitment, employment, office space, equipment and compliance. The client gets a team that works only on its products, usually under its own direction and processes. You get an engineering office abroad that works only for you, without having to register a company there first. The team is permanent. It keeps the same people, builds up knowledge of your product and grows with it. ## Two kinds of offshore development center, and a third route A **captive centre** is owned outright by the client. It offers full control, the highest setup cost and a multi-year commitment before it pays back. A **provider-run ODC** is operated by a third party for the client. It’s faster to set up and comes with a standing fee. **Build-operate-transfer** sits between the two. A provider sets the centre up and runs it for an agreed period, then hands the team and the legal entity over to the client. The start is faster than a captive centre and it ends in ownership. It needs a clear agreement from the first day on when the transfer happens and what it costs. All three usually leave day-to-day management with the client. A managed team is the alternative: you hire remote software developers through a provider that also manages them. ## How an ODC is set up 1. **Decide who will run it.** Your own engineering leadership, a site lead you hire locally or the provider. Everything else follows from this. 2. **Choose the location.** Look at the size of the engineering talent pool, the overlap with your working day and English in the workplace. Check how straightforward it is for a foreign company to operate there. 3. **Choose the structure.** Captive, provider-run or build-operate-transfer. 4. **Recruit the first team.** Leads first, so they can help select the engineers who follow. 5. **Set up the workplace.** Office, equipment, network and the access rules your security team expects. 6. **Connect it to head office.** The same tools, the same sprint rhythm and clear reporting lines. A captive centre adds a legal entity, local employment contracts and local compliance before the first hire, and most of the months go there. A provider that already has the entity, the office and the recruiters removes those steps. ## What an offshore development center costs An ODC has more cost lines than a salary list. These are the ones to budget for: * salaries and the local employment costs on top of them * recruitment for every hire and every replacement * the office, equipment, licences and network * local management: a site lead, HR and IT support * the legal entity, accounting and compliance, for a captive centre * the provider’s fee, for a provider-run ODC * your own managers’ time, and the travel that comes with running a site abroad Several of these are fixed. A site lead, an office and an entity cost the same for ten engineers as for forty. That’s why ODCs are usually planned for larger teams. A managed offshore team spreads those fixed costs across the provider’s whole operation. You pay one fixed monthly fee for an agreed capacity. At Azendo, full stack, backend and frontend developers start from USD 2,200 per developer per month, at junior level, full time and fully managed. Day-to-day management, recruitment, the office and equipment, training, HR and payroll are all inside that figure. See [how the monthly fee is built](https://azendo.co/pricing/) for each role on our pricing page. ## Benefits and drawbacks of an offshore development center An ODC brings real advantages to the companies it suits: * a team that works only on your products and builds up knowledge of them year after year * control over hiring, tools, processes and culture, close to what you have at head office * lower salaries than at home, and a talent pool your local market can’t supply * a permanent engineering base abroad that grows with the product and, in a captive or build-operate-transfer setup, ends in ownership It also comes with drawbacks to plan for: * high fixed costs: a site lead, an office and, for a captive centre, a legal entity, whatever the team size * a slow start, since a captive centre takes months before the first engineer writes code * the management load, because an ODC usually leaves day-to-day management with you, across a time difference * commitment, since fixed costs often bring a minimum term and a minimum team size, which make it harder to scale down The balance tips toward an ODC as the team grows and the horizon lengthens. For smaller teams, the fixed costs and the management load usually weigh more than the control. Small teams tend to start with a [staff augmentation agency](https://azendo.co/services/it-staff-augmentation-services/) or a managed offshore team instead. ## Where companies set up an ODC India is the largest and longest-established ODC market. Eastern Europe is a common choice for companies that want to stay close to the European working day, and Latin America for companies on US time. The Philippines has built its strength in customer service and back-office work. Southeast Asia has grown into an engineering location in its own right, and Thailand is where Azendo has worked since 2010\. Our offices are in Chiang Mai and Bangkok, and we’re registered with Thailand’s Board of Investment. People stay, too: 3.3 years with us on average. For a company in Europe, your morning is the team’s afternoon. For a company in Sydney, a large part of the working day overlaps. You can read more about [why we deliver from Thailand](https://azendo.co/why-thailand/). ## An offshore development center compared with outsourcing and a managed team Scroll the table sideways to see every column. | Compared | Offshore development center | Project outsourcing | Managed offshore team | | ----------------------------- | ------------------------------ | ------------------------------- | -------------------------------------- | | Who manages day to day | Usually the client | The provider, inside the scope | The provider | | Who follows up on performance | The client | The provider, inside the scope | The provider | | Typical size | Usually a larger team | Whatever the project needs | From one specialist upward | | How long the people stay | As long as the centre runs | Until the project ships | As long as you keep building | | Setup time | Several months | Weeks, once the scope is agreed | Four weeks to hire | | Fixed costs | Carried by one client | Inside the project price | Shared across the provider's operation | | Best fit | Large, long-running programmes | A build with a clear end | Product work of any size | Project outsourcing sits furthest from an ODC. You buy a defined deliverable, and the provider manages the work inside that scope. After handover the people leave for the next client. It suits companies that [outsource software developers](https://azendo.co/blog/engagement-models/software-development-outsourcing/) for one build with a clear end. ## Who runs your ODC decides how it performs An ODC is a structure: an office, contracts and a team. What it delivers depends on who plans the work, who checks the quality and who deals with it when an engineer resigns. In a client-run centre, that’s your engineering leadership, working across a time difference. It works when you have a site lead you trust and managers with hours to spare for a second location. In a provider-run ODC, read the agreement closely. Some providers supply the people and the building and leave delivery to you. That’s the same split as [staff augmentation](https://azendo.co/blog/engagement-models/staff-augmentation/), at a larger scale. In a managed team, the provider manages the people and names a service delivery manager as your contact. That person follows how delivery is going and checks in with you regularly, and the provider handles a replacement when one is needed. The priorities and the code stay yours. ## Who the ODC model suits An ODC suits organisations large enough to justify a permanent engineering function abroad and ready to manage it. If you’re planning a team of thirty and have an engineering director prepared to run a site in another country, it’s a sound structure. A managed offshore team suits companies that want the capacity with the management included, or that need eight people instead of eighty. Companies use it to hire remote developers without opening a site of their own. A provider-run ODC and [offshore staffing](https://azendo.co/blog/engagement-models/offshore-staffing/) can look alike on a rate card and differ completely on who is responsible for the work. When what you need is a team, a [dedicated development team](https://azendo.co/services/dedicated-software-development-team/) gives you the same capacity without the fixed overhead of an entity abroad. If you only need a few engineers, see [offshore IT staffing](https://azendo.co/services/offshore-it-staffing/). ## Questions to ask an ODC provider **Who manages the team day to day, and who answers for the output?** This is the question the rest depend on. **Is there a minimum team size or a minimum term?** Fixed costs often bring both. **Who employs the engineers, and can the team transfer to us later?** If ownership is the goal, agree the transfer terms at the start. **What happens when an engineer leaves?** Ask who recruits the replacement, who pays for it and how the handover is planned. **Where does the team work, and who employs them?** The provider’s own office gives you more control over security and continuity. **What’s in the fee, and what’s invoiced on top?** Setup, equipment, management and recruitment are the usual extras. **How long from signing to a hired team?** A captive centre takes months. A managed team provider with offices and recruiters already in place should be able to name a number of weeks. An ODC is one of several arrangements sold under the same heading. Our guide to [IT outsourcing](https://azendo.co/blog/engagement-models/it-outsourcing/) compares them side by side. Send us a message Tell us what you want to build. We come back with the team we would assign and what it costs. ## A client-managed ODC compared with a managed team. An ODC and a managed team can look the same on an org chart. These are the places they differ. What stands behind the person doing the work Both models put an engineer on your product. A managed team also puts a development programme behind them, which is what keeps them with you, and improving, in year three. Client-managed ODC Your teamdirects the work Assigned specialist Behind the specialist Employment and payroll. Development, coaching, reviews and retention are usually left to you. Your side carries * Priorities * Scope * Technical decisions * Acceptance * Sprint planning * Quality gates * Performance reviews * Training * Retention * Continuity Azendo managed service Your teamsets the roadmap, reviews output Azendo service delivery manageroversees operations and delivery Assigned specialist Talent Success programme, around every specialist * Talent Success and Workplace Experience managers Two per specialist * Well-being check-in Every 2 weeks * Coaching and development Tailored to each plan * Development plan Built every quarter * Client delivery score Every Friday * 360° performance review Quarterly * Growth track and promotion readiness Live skill profile * AI training Every specialist 3.3 years Average time a specialist stays with Azendo, which keeps your product knowledge in the team Your side carries * Priorities * Scope * Technical decisions * Acceptance * Sprint planning * Quality gates __What stands behind an assigned specialist in each model__ | Element | Client-managed ODC | Azendo managed service | | ------------------------------------------------ | --------------------------- | ----------------------------------------------------------- | | Who manages the specialist day to day | Your team | Azendo, with a service delivery manager overseeing delivery | | Talent Success and Workplace Experience managers | Not part of the arrangement | Two per specialist | | Well-being check-in | Not part of the arrangement | Every 2 weeks | | Coaching and development | Not part of the arrangement | Tailored to each plan | | Development plan | Not part of the arrangement | Built every quarter | | Client delivery score | Not part of the arrangement | Every Friday | | 360° performance review | Not part of the arrangement | Quarterly | | Growth track and promotion readiness | Not part of the arrangement | Live skill profile | | AI training | Not part of the arrangement | Every specialist | | Average specialist retention | Not published | 3.3 years | What the monthly fee covers Both models handle employment. A managed team also handles delivery, and that is what the fuller fee pays for. | Covered by the provider | Client-managed ODC | Azendo managed service | | ----------------------------------------- | ------------------ | ---------------------- | | Recruitment and selection | Yes | Yes | | Employment, payroll and local compliance | Yes | Yes | | Office, equipment and network | Yes | Yes | | Day-to-day management of the people | No, stays with you | Yes | | Check-ins on delivery every two weeks | No, stays with you | Yes | | Training and development | No, stays with you | Yes | | Performance management | No, stays with you | Yes | | Knowledge retained if a specialist leaves | No, stays with you | Yes | | Accountability for the service | No, stays with you | Yes | | Total covered | 3 of 9 | 9 of 9 | ## Questions about offshore development centers. What does ODC stand for? It stands for offshore development center, also spelled centre. Both describe the same model: a team of engineers in another country that works only for one company. In software, the phrase ODC software development is used for the arrangement as a whole, from the office and contracts to the team itself. Is an ODC the same as outsourcing? Not quite. In most ODC arrangements the client still manages the team, so accountability for the work stays with the client. The provider supplies the infrastructure around it: recruitment, employment, the office and compliance. It becomes outsourcing only when the provider also runs delivery and takes responsibility for the output. How large does an ODC need to be? There's no fixed minimum. But a site lead, an office and a legal entity cost the same for a small team as for a large one, so the model favours larger teams. For smaller teams, a managed offshore team usually costs less and starts sooner, because those fixed costs are shared across the provider's operation. What is build-operate-transfer? A provider sets up the offshore development center and runs it for an agreed period, then hands the team and the legal entity over to the client. It starts faster than a captive centre and ends in ownership. Agree the transfer date, the price and what happens to the people before you sign. Does Azendo run ODCs? We run a managed model: we manage the people day to day, and a service delivery manager is your contact on delivery. You get a dedicated engineering team abroad without setting up or running a site yourself. The offices in Chiang Mai and Bangkok are ours, and the engineers are assigned full time to you. You pay one fixed monthly fee for an agreed capacity. ## Tell us what you want to build and we will tell you what it takes. A service delivery manager replies with the roles we would assign, the monthly capacity and what the first month looks like. [Get in touch](https://azendo.co/get-in-touch/) [How it works](https://azendo.co/how-it-works/) ## Not sure which engagement model fits your business.