Top Latin American Destinations for Software Outsourcing

Software development drives innovation and progress in today's digital world. With tech talent in shortage, there is a permanently growing need for skilled developers across industries. Companies worldwide are constantly searching for top development teams to create solutions that meet today's digital needs, from mobile apps to enterprise tools. Many businesses already know the big benefits of outsourcing, starting from access to a global talent pool and ending with cost-effectiveness. If you are still in doubt, check our blog post: Is It Worth Outsourcing Your Software Development?

Traditionally, offshore software hubs like India and Eastern Europe have led the way, thanks to their talent pools and strong tech ecosystems. But now, Latin America is stepping up as a major player, becoming a logical nearshore drift away from pricey hubs like San Francisco to more affordable locations, often across borders. Latin America is home to a young and talented workforce. Many LatAm countries produce a steady flow of computer science and engineering graduates, bringing fresh ideas and strong skills to the table. The region's time zone alignment with North America makes real-time collaboration easy, avoiding the communication gaps often seen in global outsourcing. On top of that, Latin America offers great value. While not as inexpensive as some Asian countries, it's more affordable than many Western nations, striking a perfect balance between quality and cost. No wonder it's becoming a top choice for outsourcing! Check one of our recent blogs on why Latin America has become the new main hub for US tech outsourcing. 

So now that you know that LatAm should be your perfect outsourcing destination, which specific countries stand out as the best for hiring software developers? Each country in Latin America offers advantages and disadvantages, so US and Canadian companies should consider the following key factors:

• Talent Pool: Look at the number of software engineers available for offshore projects. Larger pools often mean more options and specialties.

• Prestigious Universities: Latin America boasts a number of prestigious universities offering engineering and technology degrees. More esteemed universities means increasing quantity and better quality graduates produced each year.

• Tech Proficiency: Latin American developers are experienced in advanced technologies like AI, blockchain, and cloud computing. Coursera reports can help assess tech efficiency by country. Coursera tracks millions of learners' data to rank countries by proficiency in technology, data science, and business skills.

• Language Proficiency: Many developers in the region have sufficient English skills, but proficiency can vary. EF English Proficiency Index (EPI) is a widely recognized resource for measuring English proficiency across countries and regions, including Latin America. 

• Time Zone Compatibility: Most Latin American countries share time zones similar to those of the US. Still, a slight time difference can vary by country, and you should consider it.

• Cost-Effectiveness: Compared to the US or Western Europe, hiring developers in Latin America is much more affordable without compromising quality. Still, the rates can vary slightly.

• Economic Stability: A stable economy often translates to reliable partnerships and a consistent workforce, an important consideration when choosing a country.

Number of software developers in Latin American countries in 2023

While many Latin American countries deserve attention, we will focus on the ones with the largest talent pools: Brazil, Mexico, Argentina, and Colombia. Other countries like Chile, Uruguay, and Costa Rica do have experienced developers and often higher English proficiency. But their talent pools are still relatively small compared to our top picks. Let's dive into these leading countries and take a closer look at their talent and rates!

Brazil: A Powerhouse of Talent

Brazil has become the most promising technology epicenter in South America. As the largest country in Latin America by population, it boasts the biggest number of professionals. This workforce is well-educated and experienced as Brazil has some of the region's top universities offering engineering and technology careers. University of São Paulo,  ranking among the top 100 in the world and known for its strong engineering programs such as Applied Computing, Computer Science and Computational Mathematics, Statistics, and Information Systems. Below is our breakdown of the key factors:

Talent Pool: Brazil has the largest tech pool in Latin America. According to the latest report by Statista, in November 2023 Brazil had 500,000 software developers. While newer official data isn't available, with about 50,000 people graduating in tech courses annually, we suppose the correct figures for 2024 can be about 550,0000 software developers or more.

IT Tech Hubs: São Paulo and Campinas stand out as the primary hubs, with Campinas often referred to as the "Silicon Valley of Brazil" due to its high-tech infrastructure, research centers, and the presence of numerous global IT companies like IBM, Dell, and Motorola. Rio de Janeiro and Belo Horizonte also have significant tech communities and a growing number of startups​.

Prestigious Universities: University of Sao Paulo (QS No. 92), Universidade Estadual de Campinas (QS No. 232), Universidade Federal do Rio de Janeiro (QS No. 304).

Tech Expertise:  According to Cousera's Global Skills Report 2023, Brazil ranks 28th globally and 3rd in Latin America for overall skills. According to the report, Brazilian learners excel in data science, particularly in data visualization, where they hold the top spot globally. They also have high scores in data science skills like data management, data analysis, and statistical programming. Regarding technology skills, Brazil excels in databases and ranks highly in computer programming and mobile development.

English Level Proficiency: English proficiency is relatively low in Brazil. Based on the EF English Proficiency Index, the country ranks 81th with 466 scores. It is 21 scores lower than the previous year, marking an alarming trend.

Time Zone: Like the US, Brazil has four standard time zones. They range from UTC -2 to UTC -5,  but UTC -3 is the standard time zone for most of Brazil, including major cities like São Paulo, Rio de Janeiro, and Campinas.

Average Salary: The average salary for a Senior Software Engineer is R$15,000 per month in the Sao Paulo, Brazil area, which is equivalent to $2600 and just about $31K per year.  On Upwork, the hourly rates of software developers in Brazil range from $25 to $70 per hour, depending on skill set, experience, and project complexity. The $40-$50 per hour range aligns with mid-level freelancers. Entry-level freelancers may charge closer to $25-$35/hour, while highly specialized professionals or senior developers can demand $60/hour or more.

Economic Stability: Brazil's government provides a wide range of support for technology innovation and initiatives, which helps the tech industry thrive. However, high taxes and a complex regulatory environment can make it difficult for companies to set up local offices. Finding a reliable outsourcing partner that handles all local compliance and legal support can be a way to tap into the country's rich talent pool. Additionally, Brazil's inflation rate, although moderate, should be factored into salary discussions to ensure competitive and fair compensation.

Conclusions: Brazil has the largest talent pool in Latin America, offering competitive salaries. While English proficiency might present some challenges, the country's vast developer base and strong infrastructure make it a attractive choice for nearshore software development.

Argentina: The Future of Latin American Tech

Argentina is one the most popular countries when you look for nearshore software developers and other IT talent. It has a strong and growing technology industry, one of the most developed in Latin America. With a focus on technology education, its several prestigious universities, with Universidad de Buenos Aires being among the world's top 100, produce a steady stream of skilled software engineers. The country scores the highest in English proficiency in LATAM thanks to a strong emphasis on bilingual education.  Here's an in-depth look at the most important factors:

Talent Pool: According to the latest report by Statista, Argentina had 115,000 software developers by the end of 2023. While newer official data isn't available, with a steady stream of STEM graduates, this number likely grew over the last year, possibly reaching 135,000 or more.

IT Hubs: Buenos Aires leads Argentina's tech scene, which is known for its vibrant startup culture, coworking spaces, and tech events. In its Global Innovation Index Report 2023, WIPO defined Buenos Aires as one of the world's biggest middle-income economy science and technology clusters. Córdoba and Mendoza are quickly growing, too, with Córdoba offering great software development programs and Mendoza attracting more tech startups. Cities like Rosario are also starting to build their tech presence.

Prestigious Universities: Universidad de Buenos Aires (QS No. 71), Universidad Tecnológica Nacional (QS No. 1001-1200), Universidad Nacional de La Plata (QS No.534), Universidad Nacional de Córdoba (QS No.901-950).

Tech Skills: According to Cousera's Global Skills Report 2023, Argentina ranks 30th globally and 4th in Latin America for overall skills. Argentinian developers are especially skilled in mobile development, computer programming, databases, and data analytics. They commonly use technologies like Python, TensorFlow, SQL, R, Cloud APIs, and Natural Language Processing (NLP), showing strong expertise in modern software and data-driven solutions.

English Proficiency: Argentina ranks in the top 30 countries globally for English proficiency, holding the only "High Proficiency" level in Latin America. It's 28th on the EF English Proficiency Index with a score of 562, showing strong English skills nationwide.

Time Zone: Argentina's longitude corresponds to the UTC-04:00 or UTC-05:00 time zone. However, it actually uses the UTC-03:00 time zone.

Average Salary: The average salary of a Senior Software Engineer in the Buenos Aires area is ARS 2,827,452 per month, which is equivalent to about $3,000 and just $36K per year.  On Upwork, the hourly rates of software developers in Argentina range from $15 to $80 per hour, depending on skill set, experience, and project complexity. The $20-$40 per hour range aligns with mid-level freelancers. Entry-level freelancers may charge closer to $15-$20/hour, while highly specialized professionals or senior developers can demand $70/hour or more.

Economic Stability: Argentina's high inflation rate can lead to fluctuating salary demands and economic instability. Companies may need to adapt to this challenge by offering flexible contracts or adjusting salaries more often to keep up with the changing economy. It is worth mentioning that security concerns are a common issue across many Latin American countries, but Argentina is generally considered safer than others in the region.

Conclusions: Argentina's talent pool is highly attractive, which makes it a robust nearshoring hub. While some economic challenges exist, many companies still choose Argentina as their preferred nearshoring region because of the skilled talent combined with English proficiency and all this available at competitive rates.

Mexico: A Key Player in Nearshore Outsourcing

Mexico is one of the leading countries in Latin America for hiring nearshore software developers. Technical education is one of the country's key strengths. The country has placed a big emphasis on training people with engineering degrees because of the high demand and several partnerships with US institutions. Mexico's tech ecosystem is rapidly expanding thanks to significant government investments in technology and innovation. The combination of a steady talent influx and practical technical education makes Mexico a strong player in the global tech talent pool. Its proximity to the US, similar time zone, skilled workforce, and trade agreements make it a reliable source for nearshore software developers, especially for US-based companies. Here's a detailed analysis based on the key factors:

Talent Pool: According to the latest report by Statista, Mexico ranks number two in Latin America regarding available talent pool. By the end of 2023, the country had 220,000 software developers.  While newer official data isn't available, regional insights suggest that Mexico's software development talent pool grows by approximately 25,000 to 30,000 software engineers annually, so currently, it is supposed to be at least 245,000+ software developers.

IT Tech Hubs: Mexico City and Guadalajara are the main tech hubs, with Guadalajara being referred to as Mexico's Silicon Valley. In its Global Innovation Index Report 2023, WIPO defined Mexico City as one of the world's biggest middle-income economy science and technology clusters. Monterrey is also emerging as a significant tech center. 

Prestigious Universities: Universidad Nacional Autónoma de México (QS No.94), Mexican University Tecnológico de Monterrey  (QS No.185), Instituto Politécnico Nacional (QS No.801-850), Universidad de Guadalajara (QS No.1000-1200).

Tech Expertise: In Cousera's Global Skills Report 2023, Mexico ranks 2nd in overall skill proficiency in LATAM and closes the list of top 25 countries worldwide. Mexican learners rank 4th globally for technology skills, with impressive scores in theoretical computer science, computer networking, databases, and operating systems. Data science is another strength, though areas like mathematics and machine learning leave room for improvement.

English Level Proficiency: Despite being a US neighborhood, English proficiency in Mexico is ranked at the same level as in Brazil, i.e., low proficiency level. Based on the EF English Proficiency Index, the country ranks 87th with 459 crores. At the same time, in contrast to Brazil, this rate has increased by 8 points compared to the previous year, although not a sufficient figure, but a positive trend.

Time Zone: Mexico uses four time zones, from UTC -5 to UTC -8. Most of the country, including main cities like Mexico City, Guadalajara, and Monterrey, use the Central Standard, corresponding to UTC -6. It is the closest correlation with the US working hours. In addition to the closest time correlation, physical proximity to the US also allows for easier travel.

Average Salary: The estimated average salary for a Senior Software Engineer in the Mexico City, Mexico, area is MX$75,000 per month, equivalent to $3700 and just about $44,5K annually. On Upwork, the hourly rates of software developers in Mexico range from $20 to $80 per hour, depending on skill set, experience, and project complexity. The $30-$40 per hour range aligns with mid-level freelancers, often with 3-5 years of experience and niche skills like mobile app development or advanced backend engineering. Entry-level freelancers may charge closer to $20-$30/hour, while highly specialized professionals or senior developers can demand $60/hour or more.

Economic Stability: Despite some existing tensions between Mexico and the US due to issues like illegal immigration and the trade of weapons, Mexico remains one of the US's closest and most important partners, with strong ties in diplomacy, trade, and people-to-people connections. For US companies, Mexico has an advantage thanks to its proximity and trade agreements. Like many countries in Latin America, Mexico does face some security challenges in certain areas. However, major cities like Monterrey, Guadalajara, and Mexico City are generally safer and more stable for business operations.

Conclusions: Mexico is a preferred outsourcing destination due to its proximity to the United States and favorable trade agreements. Although the average salary is higher than in some other LatAm countries and English language proficiency leaves more to be desired, the country's substantial professional workforce, mutually beneficial trade agreements, and manageable inflation make Mexico an attractive choice for hiring remote talent.  

Colombia: A Rising Star

Colombia is rapidly emerging as a significant player in the tech industry, with a growing talent pool that focuses on innovation and problem-solving. The country's government is actively promoting the software industry through tax incentives and infrastructure investments, and it has some competitive universities, not only renowned for their computer science and engineering programs but also ranking among the best in Latin America. It may be less developed than other countries on the list, but it makes hiring university graduates more affordable than other Latin American countries. An overview of the essential factors follows:

Talent Pool: Colombia closes the ranking of four countries with the biggest talent pool in Latin America. According to Statista, at the end of 2023, the country had 63,000 software developers. The Colombian Ministry of Education estimates that over 13,000 students graduate each year with engineering and IT degrees, ensuring a steady supply of skilled professionals. So, we can expect that today, the country may have 75,000+ software developers. 

IT Tech Hubs: Bogotá and Medellín are the top tech hubs in Colombia. Bogotá, the capital, has a growing tech scene with many startups and established companies. Medellín is known for its innovation and tech-friendly policies, often called "The Silicon Valley of Latin America." Cali is also becoming an emerging tech center, with more investments and a focus on creating a tech-friendly environment.

Prestigious Universities: Universidad Nacional de Colombia (QS No.219), Universidad de los Andes (QS No. 179), Universidad de Antioquia (QS No.791-800).

Tech Expertise: Cousera's Global Skills Report 2023 surprisingly positions Colombia as the highest-ranking country in LATAM for overall skills and secures it with 19th position globally. Colombian learners score exceptionally well in operating systems, computer networking, and computer programming. While their overall data science scores are lower, they still excel in mathematics, data analysis, and statistical programming.

English Level Proficiency: Just like Brazil and Mexico, Colombia scores low English proficiency. Based on the EF English Proficiency Index, the country ranks 74th with 485 scores. Similarly to Mexico, its score has slightly risen in recent years. Still, it leaves much space for improvement. 

Time Zone: Colombia has one time zone, which is located in the UTC−05:00.

Average Salary: The estimated average salary for a Senior Software Engineer in the Bogota, Colombia area is COP 13,000,000 per month, equivalent to $3000 and just about $36K per year. On Upwork, the hourly rates of software developers in Columbia range from $10 to $60 per hour, depending on skill set, experience, and project complexity. The $20-$30 per hour range aligns with mid-level freelancers. Entry-level freelancers may charge closer to $10-$15/hour, while highly specialized professionals or senior developers can demand $50/hour or more.

Economic Stability: Colombia has become more economically stable, which is great for its outsourcing industry. The country enjoys a growing economy, controlled inflation, and a good investment environment. The government offers tax incentives and free trade agreements, especially with the US, to attract foreign businesses. It, along with a skilled workforce and lower labor costs, makes Colombia a strong outsourcing option. While some areas have occasional political and security issues, cities like Bogotá, Medellín, and Cali are generally stable for business.

Conclusion: Colombia’s strategic focus on education and tech-friendly policies, coupled with competitive salaries and a growing pool of skilled developers, makes it a noteworthy player in the Latin American outsourcing market. While areas like English proficiency still need attention, its economic stability, innovation-focused hubs, and a steady influx of tech graduates, its trajectory points toward becoming a leading tech hub in the region.

Final Thoughts

Latin American countries are a great choice for businesses looking to outsource their software development. The region offers a skilled workforce, cost-effective development, and proximity to major markets. When hiring remote talent from Latin America, US companies should consider talent pool size, tech expertise, English skills, and economic stability in the particular country. Brazil stands out for its talent pool, even though English proficiency is lower than in many other outsourcing destinations. Argentina has highly educated professionals and excellent English skills but comes with some economic risks. Mexico stands the best for proximity with the US, though slightly pricier. Colombia, while having the smallest talent pool, is rapidly growing and offers promising talent. At ScrumLaunch, we've prioritized Brazil and Argentina for their exceptional talent and potential.