The same is true for Russia or Belarus or Ukraine, AFAIK. Wages are even higher there.
And I'm talking about building software for internal clients. Outsourcing or remote work allows for even higher salaries.
I'm not entirely sure why the market works this way. It's not like any random software developer can go remote and compete with the rest of the world. But it works.
I'd really be interested to learn whether Indonesian situation is similar or not.
This is actually becoming more and more of an option. At my last (small) company, we hired several individual remote developers from various parts of the world that most would consider "third world".
We were introduced to them via referrals from contract work done elsewhere, and we did a paid trial period at first.
Not all of them worked out, but the ones that did were quite good, and we were paying them an excellent wage for their cost of living.
> This is actually becoming more and more of an option.
To do this though, you generally have to know how to market yourself, put together proposals, gather requirements, design and project manage, on top of coding. Not every coder is good at this or wants to be.
You have to be able to interview well of course, but do design and project management? I'm not talking about a freelancer who delivers an end-to-end project here, I'm talking about hiring a remote developer to join an existing team and deliver features.
In my home town called Rostov-on-Don (10th largest city in Russia) I have friends who make $2500-3000 after tax for their software engineer and devops positions. Some of these people are far from being a rockstar developers, just have well-paid positions at large companies. Average salary is somewhat lower, but it's still good money here since living costs are low.
PS: Family of 3 can basically live there for $1500 / month with rent, food and entertainment and if you single even $600 is quite sufficient.
And there is even lower tax rate options available if you work alone and earn between $10,000-80,000 / year. You just pay fixed amount of taxes every year for special "patent" which cost e.g $400 / year in my home city. Then efficient tax rate gonna be like 1-5% depend on how much you earn. Though unlike when paying 7% of income this might require more detailed accounting since tax department can always ask you to show some documents. Officially "patent" allow you to pay $400 just once for income up to $600,000 / year but obviously in real life you gonna get some tough questions from tax department.
In any case tax rates for freelance software developers in Russia are very very low. Also unlike what western person might expect all government services are available online and accounting is no-brainer because Russia have some of the best fintech in the world.
TLDR: Russia's IRS/HRMC equivalent digitized VAT collection (similar to sales tax). Basically every 90 seconds all tills/cash registers across the country report back the sale to the taxman, so you don't even have to manually submit any VAT returns.
Russia started with 20% tax gap between revenue due and revenue collected (while e.g. UK is at 9.1%), and now after this they are on 1%.
My understanding it's almost real-time tax reporting with millions of tills acting as IoT devices sending data up.
For fintech there is Tinkoff bank which is more advanced than Monzo / Revolut / N26 / etc as well as two "virtual" B2B fintech banks that even do accounting for entrepreneurs on their own. And to be honest even Russian largest state-owned Sberbank is far more advances than most of institutions in US and EU.
So as long as your business can't be forcefully taken away and there are no political risks it's quite comfortable to be freelancer when it's come to taxes.
A developer making even a small salary working remotely from a "third-world" country is still making much more money than the average person. Just as an example, on my first remote position I was making as much money as each of my parents who were on 10+ years careers in corporate sales. It's nuts.
Of course the quality of life outside work made it worth moving to Europe, but to this day I still wonder if I should move back to stay closer to family while keeping a great salary.