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Hire Offshore Developers for Canadian Businesses: A Guide

A practical guide to hiring offshore developers for a Canadian business: what it costs in CAD, which rules apply, and how to set up contracts, overlap hours and code ownership.

Before you ask

Hire Offshore Developers for Canadian Businesses: questions, answered.

How much does it cost to hire offshore developers for a Canadian business?

Vendor guides put offshore developers at roughly CAD 25–75 an hour, against CAD 60–120+ for Canadian developers. These are vendor claims, so use them to test quotes. In our worked example a mid-range rate saves about a fifth to a third once management time is included.

Is it legal for a Canadian company to hire developers overseas?

Yes, with care. The risks lie in worker status, personal data handling and tax treatment of payments. Have a Canadian lawyer and accountant review your structure before you sign.

Do I pay CPP or EI for offshore developers?

Employer CPP and EI apply to your own Canadian employees. If a vendor or Employer of Record employs the developer, they are generally not on your payroll, but confirm this with your accountant.

How do PIPEDA and Quebec Law 25 apply to offshore development?

You stay accountable under PIPEDA for personal information a foreign processor handles. Under Quebec Law 25 you need a privacy impact assessment and a written agreement before personal information leaves Quebec. Using masked test data avoids much of this.

Who owns the intellectual property of code written offshore?

You should, but only if the contract assigns all work product to you on creation. Keep repositories and credentials in your own accounts from day one so that exit is a procedure, not a negotiation.

Can I claim SR&ED for work done by offshore developers?

Usually not for ordinary software work. Expenditures outside Canada are restricted to work that supports SR&ED carried on in Canada and could not reasonably have been done there. Get your tax adviser to agree before you budget for it.

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