As we approach 2026, every ambitious tech company wants to have its own R&D center — where breakthroughs are born, not just backlog tasks completed. Innovation cycles have already shrunk to months, and sometimes even weeks.
And here’s the question: how do you stay ahead when everyone around you is moving at warp speed? The answer is simple — control innovation yourself. That’s why companies are increasingly deciding to set up an R&D center beyond their home market, looking not just for cheap labor, but for real talent hubs and creativity.
What an R&D Center Is and How It Works
An R&D center (Research & Development Center) isn’t just an office with developers. It’s a place where a company consciously invests in research, experiments, and creating technologies that don’t exist in the market yet. If your production team is the engine producing power here and now, then an R&D center is the lab where that engine is designed, tested to its limits, and refined for the future.
Key functions of such a center:
- Researching new technologies — from AI and machine learning to blockchain and quantum computing
- Developing innovative products — MVPs, prototypes, proof-of-concepts that later scale
- Optimizing existing solutions — how to make systems faster, safer, more efficient
- Experimenting without deadline pressure — this is where you can actually say “what if we try it differently?”
Look at Google DeepMind — that’s where the AlphaGo technology was born, beating the world Go champion. Or Amazon Lab126 — the team that created Kindle and Alexa. These are classic examples of R&D centers that changed the rules of the game in their industries. But it’s not just giants playing this game. Even startups from Eastern Europe or Asia are creating small R&D teams to develop unique features or technologies that become their competitive advantage.
When you decide on your R&D center setup, you’re essentially building a workshop for the future of your ideas — a place where mistakes aren’t punished but explored, where experiments aren’t considered budget waste but investment in tomorrow.
Benefits of Creating an R&D Center
1. Access to Global Talent
One of the biggest paradoxes of the modern tech world: the best developers, data scientists, and engineers don’t necessarily live in Silicon Valley or London. They might be in Krakow, Bucharest, Bangalore, or Buenos Aires. By creating an R&D center in such locations, you get access to world-class talent who often have high motivation to work on complex problems but don’t demand San Francisco-level salaries.
2. Lower R&D Costs
Let’s be honest: maintaining a research team of 20 engineers in the US or Western Europe will cost $3–5 million annually (or more). The same team in Poland or Romania will run you $1–1.5 million, with quality at the same level or sometimes higher due to the high motivation and education of local specialists. The savings are obvious, especially for startups or mid-size companies with limited budgets.
3. Faster Time-to-Market
Imagine: your main team works in New York (EST), while your R&D center is in Kyiv or Warsaw (EET). This means your company essentially operates almost 24/7. While one team sleeps, the other pushes code, runs experiments, tests hypotheses. This approach can cut the time from idea to prototype by 30–40%, which in today’s reality can mean the difference between success and failure.
4. Employer Brand
Companies with their own R&D centers automatically look more serious and tech-forward in the eyes of both clients and potential employees. It’s a signal: “We’re not just building a product, we’re researching the future.” This image attracts better talent who want to work on something that could change the industry, not another CRUD app.
Example: A fintech startup from Amsterdam opened an R&D center in Warsaw. Within a year, the team developed an ML model for fraud detection that reduced losses by 60%. This isn’t just economic benefit — it’s a success story that attracted new investors and partners.
How to Set Up an R&D Center: Main Steps
So you’ve decided you need your own research center. Where do you start? Let’s break it down step by step so you don’t step on all the rakes lying on this path.
Step 1: Define Your Goals
First, ask yourself: why do you need an R&D center? This isn’t a rhetorical question. Some companies create one because “everyone’s doing it,” and end up with an expensive office without a clear mission. Formulate your goal as specifically as possible:
- Develop a new AI product in 12 months?
- Optimize an existing platform, reducing infrastructure costs by 30%?
- Research blockchain possibilities for your industry?
- Create your own data science team to analyze user behavior?
Clear goals = clear KPIs = understanding how to measure success.
Step 2: Choose a Location
This is one of the most critical decisions. You could choose Poland (stability, EU membership, large talent pool), Romania (one of the lowest taxes in Europe, strong tech education), Ukraine (talented engineers, experience with global projects, competitive pricing), or other countries in Eastern Europe, Latin America, or Asia.
What to look at:
- Access to talent: How many relevant specialists in the region? Are there strong universities?
- Cost: Salaries, office rent, operational expenses
- Stability: Political situation, economic risks
- Taxes and regulations: How easy is it to register a company? What are the taxes?
- Time zone: How convenient is it to communicate with your main team?
Step 3: Partnership or DIY
Two paths here. First — do everything yourself: find a lawyer, rent an office, hire HR, start looking for people. It’s long, expensive, and requires deep knowledge of the local market. Second path — work with a partner who already has the infrastructure, experience, and team.
Many companies turn to partners who help create a software R&D center to optimize innovation processes and accelerate new product development. This lets you start faster — sometimes in 4–6 weeks instead of 6–9 months. Plus, you don’t waste time on legal nuances and operations.
Step 4: Legal Setup, Taxes, IP Protection
This is the part everyone hates but can’t avoid. You need to:
- Register a legal entity (or branch) in your chosen country
- Figure out taxes: corporate tax, payroll taxes, VAT
- Protect intellectual property: all developments must belong to your company, so employee contracts must clearly state this
- Account for GDPR and other regulations if working with European user data
If this sounds like a headache — yes, it is. That’s exactly why many companies choose partners who take the operational part off their hands.
Step 5: Hire the Team
This is where the magic begins. You’re not just looking for executors, but people who can think, experiment, propose unconventional solutions. An R&D center needs:
- Software engineers (senior+): with experience in complex systems
- Data scientists / ML engineers: if working with AI
- Research engineers: people who love diving deep into technologies
- Tech lead / R&D manager: someone who can manage processes and balance between research and business goals
Don’t forget: culture matters as much as skills. Look for people who aren’t afraid to fail and are ready to learn.
Step 6: Establish Culture, Processes, KPIs
R&D center setup isn’t just about hiring people. It’s about creating an environment where innovation thrives. What this means practically:
- Processes: Agile, Scrum, Kanban — choose what works for you, but leave room for experiments
- KPIs: For R&D teams, metrics differ. Instead of “how many features completed,” look at “how many hypotheses tested,” “what conclusions drawn,” “was a prototype created”
- Culture: Encourage risks, create a safe space for mistakes, invest in learning
- Integration: Your R&D center shouldn’t work in a vacuum. Set up communication with product, engineering, business teams
When all this works together, you get not just a team of developers, but a real innovation engine.
The Role of Partners and Real Cases
Creating an R&D center from scratch is ambitious but complex. Especially if you’ve never done it before and don’t know all the pitfalls of the local market. That’s why many companies choose partnerships with providers specializing in building research teams.
For example, a SaaS company from California wanted to deploy an AI lab in Eastern Europe. Instead of spending a year on legal procedures and finding an office, they turned to a partner who assembled a team of 15 ML engineers and data scientists in Kyiv in two months. Result: a prototype of a new recommendation system was ready in six months, and costs turned out 60% lower than if the team were in the US.
Another case: an e-commerce platform from the UK opened an R&D center in Poland to develop personalized algorithms. The partner provided not just people, but infrastructure, accounting, HR support. This allowed the company to focus on the product, not operations.
Some companies work with different providers depending on the region. In Latin America, partners helping build teams in Argentina or Brazil are popular. In Asia — Vietnam and India remain R&D hubs. In Europe, companies often choose Newxel, N-iX, EPAM, and others specializing in creating tech teams for global clients.
The key advantage of partnership — speed and risk reduction. You don’t spend months figuring out how the local market works. Instead, you get ready-to-go infrastructure and a team that can start tomorrow.
Best Practices: How to Make Your R&D Center Effective
So your R&D center is launched. People are hired, the office is running, first projects have started. But how do you ensure it doesn’t turn into just another team executing tasks and remains a true source of innovation?
Knowledge Management
R&D is about experiments, and experiments always generate insights. The problem is these insights often get lost. Create a system where every experiment is documented: what was tested, what were the results, what conclusions were drawn. Confluence, Notion, or even GitHub Wiki — doesn’t matter, as long as knowledge doesn’t disappear with the engineer who went on vacation.
Balance Between R&D and Production
One of the biggest traps: your R&D center gradually transforms into a regular dev team closing bugs and building features. To avoid this, set clear rules: for example, 70% of time on research and experiments, 30% on support or production integration. And monitor that the balance doesn’t shift.
Culture of Experimentation
In an R&D center, it should be okay to fail hypotheses. If an engineer spent a week testing a new architecture and it turned out it doesn’t work — that’s not failure, that’s a result. Create a culture where mistakes are part of the process, not a reason for punishment.
Integration into Global Processes
Your R&D center shouldn’t be an isolated island. Regular syncs with the product team, joint retrospectives, demos of new developments for the whole company — all this helps keep the R&D team in the context of business goals and prevents it from diving into pure science without practical application.
When you properly set up an R&D center and follow these principles, the results exceed expectations. The team doesn’t just execute tasks — it generates ideas that can change the company’s direction.
Conclusion
Creating an R&D center is a strategic investment in innovation that gives you control over your company’s technological future. In a world where AI changes the rules of the game every month, where startups appear and disappear faster than you can update LinkedIn, having your own R&D center is becoming a necessity.
Yes, the path isn’t easy. You need to define goals, choose a location, assemble a team, establish processes. But when everything works — you get something money can’t buy: innovation independence, access to global talent, and the ability to create technologies that change your industry.So if you’re a CTO, founder, or product lead thinking about how to make your company a tech leader — R&D center setup might be the decision that takes you to the next level. Because the future doesn’t wait — it’s being created here and now.
