Here’s What You Need To Know About Offshore Software Development

With so many US employers struggling to find tech talent and development costs continuing to rise, more companies are turning to global offshore software development. But if you’re just starting to explore this option, the landscape can feel overwhelming.

Should you hire directly, use staff augmentation, or work with an end-to-end development agency? Focus on one region or build a globally distributed team? And how do you manage developers across different time zones?

After helping many companies build successful offshore development teams, we’ve learned what works. Let’s break down everything you need to know to make offshore development work for your business.

Why Companies Choose Offshore Development

Companies choose offshore development for different reasons. Some need specialized skills they can’t find locally. Others want to scale their in-house development team quickly without breaking their budget. And some are looking to add development capacity in different time zones.

Here are the most common benefits of offshoring:

Access to the specialized skills you need

Let’s say you need a senior developer with experience in a specific tech stack—maybe someone who knows Node.js and has worked with payment APIs.

In a single US city, you might find 2–3 candidates who fit your requirements, and they’re probably already fielding multiple offers.

But when you expand your search internationally, suddenly, you have access to developers who’ve built similar systems for big players, often with availability to start within weeks rather than months.

This isn’t theoretical. We regularly see companies cut their hiring time from 6+ months to just 3 weeks when they stop limiting their search to local candidates. And because many of these offshore software developers have already worked with US companies, they understand the workflows and coding standards you need.

Significant cost savings without compromising quality

The math here is straightforward. Here’s an example, a senior developer in the US often expects $130K+ annually. That same level of experience might cost $60K in Latin America or $48K in Eastern Europe.

These savings come from lower costs of living, not lower-quality work.

Ability to scale teams quickly

When you need to grow your development team quickly—whether due to new funding or increased demand—offshore development gives you much more flexibility than in-house hiring.

Most companies scale their offshore teams through specialized recruitment or staffing partners rather than trying to source talent directly. This dramatically speeds up hiring because these partners already have networks of pre-vetted developers ready to interview. 

Instead of spending months building relationships in a new market, you can tap into a partner’s existing pipeline of qualified candidates.

The cost efficiency means you can build your team based on what you need right now, not what your budget might allow six months from now.

When you spot a market opportunity, you can act on it immediately rather than waiting to accumulate enough budget for additional US-based hires.

24/7 development cycles

With teams across time zones, you can potentially have development happening around the clock. While this requires careful management to work well, it can significantly speed up project timelines when implemented correctly.

Key Challenges to Prepare For

Every development approach comes with its own set of challenges to manage, whether you’re building an in-house team or working with developers across different locations. 

Here are the most common offshore development challenges companies struggle with and how to handle them:

Communication barriers

When your team is distributed, communication takes more deliberate effort. You lose the natural information flow that happens when people are in the same office—those quick desk-side chats, informal updates during lunch, or spontaneous whiteboarding sessions.

Different time zones can add complexity to scheduling meetings, while varying cultural contexts might affect how people interpret requirements or give feedback.

It’s not just about language proficiency—though that matters. It’s about ensuring clear requirements, feedback, and project updates across time zones and cultures.

Even with strong English skills, technical discussions can be more challenging when they happen over Slack or email rather than in person. Nuances can get lost, and it’s harder to pick up on when someone might be stuck or hesitant to ask questions.

How to handle it:

• Set up clear communication channels and protocols from day one
• Use asynchronous communication tools effectively
• Schedule regular video calls to maintain alignment
• Document everything important to avoid misunderstandings

When you have the right processes in place, distributed teams often end up communicating more effectively than co-located ones because they’re more intentional about it.

Quality control

Every development team needs strong quality control processes, whether they’re sitting in the same office or distributed across locations.

With distributed teams, you might not have the luxury of walking over to someone’s desk for a quick code review, but the fundamentals of maintaining code quality remain the same.

How to handle it:

• Implement standardized code review processes that work asynchronously 
• Set clear coding standards and documentation requirements upfront 
• Use automated testing and continuous integration to catch issues early 
• Schedule regular architecture reviews to keep everyone aligned on best practices 

• Create detailed documentation that makes knowledge sharing easy across time zones

The key is having clear, well-documented processes that any team member can follow, regardless of location.

You might find that building these systems for offshore teams actually improves your overall development practices, as it forces you to be more intentional about quality control.

Time zone management

Time zones affect everything from daily standups to urgent bug fixes. If your developer is eight hours ahead, a “quick question” might mean waiting until the next day for an answer.

This can slow down development if not managed properly. But time zones can also work to your advantage—imagine having bugs fixed while your local team sleeps or development continuing after your US office closes.

The impact varies significantly based on location. With teams in Asia, you might have only 1–2 hours of overlap with US working hours. But with Latin American developers, you’re looking at a full day of overlap with US time zones. A developer in Argentina or Brazil is typically only 1–2 hours ahead of EST, making real-time collaboration as easy as working between NY and Chicago.

How to handle it:

• Define core hours where teams overlap. Be explicit about when everyone needs to be available for meetings and collaboration. 
• Build an async-first culture. Use tools like Loom for updates and detailed, organized Slack threads for discussions that don’t need immediate responses. 
• Set clear response time expectations. Distinguish between urgent issues that need immediate attention and regular communications that can wait. 
• Document decisions and discussions thoroughly so team members in different time zones can catch up when they start their day. 
• Consider nearshore options in Latin America if real-time collaboration is important to your development process. 
• Use the time difference strategically. Plan code reviews, QA, and deployments across time zones to maintain continuous progress.

The key is being intentional about when you need real-time collaboration versus when async communication will do just fine.

Understanding Your Outsourcing Options

Before diving into offshoring software development, you need to choose an engagement model that matches your needs.

Here are the main approaches we see companies take:

Direct hiring

You hire remote developers either as full-time employees or long-term contractors who work directly with your company. This gives you the most control and direct relationship with your developers.

While it involves understanding international employment laws and managing payroll across countries, many companies simplify this by working with recruitment partners who handle everything from sourcing and technical assessment to legal compliance and payroll.

This lets you focus on interviewing pre-vetted candidates and building your team, while the partner manages the complex parts—finding great candidates, screening them, testing their technical skills, and handling all the administrative details.

Staff augmentation

Work with an agency that employs the developers while they work exclusively for your team. The agency handles payroll, benefits, and compliance, while you manage the developers’ day-to-day work. This model combines the control of direct hiring with the simplicity of working through a partner.

Project-based outsourcing

Hand off entire projects to offshore software development companies. They manage everything from planning to delivery. This requires less oversight but also gives you less control over the development process.

Which model is right for you?

If you need specialized skills for ongoing work and want direct control over your development process, direct hiring or staff augmentation usually works best. 

If you have a clearly defined project with fixed requirements—and it’s for a software project that’s not core to your business—project-based outsourcing might make more sense.

In our experience helping companies build offshore teams, direct hiring often leads to the strongest long-term success. When developers are hired directly (whether as employees or contractors), they tend to be more invested in the company’s success and stay with the team longer. Plus, you maintain complete control over your development process and team culture.

Choosing Your Development Locations

Let’s clear up some terminology first. Throughout this article, we use “offshore development” as a broad term for working with developers based anywhere outside the US. But while it’s sometimes used as a catch-all term for any international development, it’s often associated with teams in distant regions like Asia or Eastern Europe. “Nearshore deveopment,” on the other hand, specifically means working with developers in countries close to the US, like those in Latin America. But even those developers are technically “offshore.” 

The key difference is proximity and time zone alignment. Therefore, your choice of location shapes how your team will work together day-to-day.

Nearshore development in Latin America

The proximity to the US creates natural advantages:

• With only 0–5 hours time difference depending on the country and where you are in the US, you get 3–8 hours of overlap with your US team each day. This means developers can join your daily standups, participate in real-time code reviews, and respond to urgent issues immediately.
• Many developers have experience working with US companies like Google and Microsoft, so they understand American business culture and development practices.
• English proficiency is strong, particularly in tech hubs like Argentina and Brazil, where talented developers regularly work with US clients.
• Cost savings of 30–70% compared to US rates due to lower living costs, while still providing competitive local salaries.
• A rapidly growing tech scene means you can find software developers with experience in modern tech stacks and agile practices.

Offshore development in Asia or Eastern Europe

These regions offer different trade-offs:

• With 6–15 hour time differences, most communication becomes asynchronous. Your developers might be finishing their day just as your US team starts, which means questions often wait until the next day for answers.
• Larger talent pools, particularly in India and Eastern Europe, can make it easier to find specialized skills.
• Rates can be lower than in Latin America, though the gap has narrowed in recent years—especially with Eastern Europe.
• Time zone challenges mean you need robust documentation and async workflows—you can’t rely on quick video calls to solve problems.

Single location vs. distributed team

Some companies prefer to hire all their offshore developers from one region for simpler team management. Others build globally distributed teams to enable 24/7 development cycles.

If real-time collaboration is important to your development process, focusing on one region (particularly nearshore) often works better. If you’re comfortable with async work and want to maximize cost savings, a distributed team might make sense.

Setting Your Team Up for Success

When you’re working with directly hired remote developers or using staff augmentation, you’re responsible for managing your offshore team members.

Based on helping hundreds of companies build successful remote teams, here are the key practices that make the difference between success and frustration. 

(Note: If you’re outsourcing entire projects to a development company, they’ll handle most of these aspects internally—your focus will be more on project requirements and milestone management.)

1. Invest in proper onboarding

A thorough onboarding process for remote international talent makes all the difference in how quickly new developers integrate with your team.

Take the time to:

• Set up their accounts and access permissions before day one (GitHub, AWS, project management tools, etc.) 
• Create a contact list of key team members with their roles and time zones 
• Establish a clear escalation path for technical questions and emergencies 
• Share your team’s coding standards and development workflow documentation 
• Schedule regular check-ins for their first few weeks, including both their direct manager and technical leads 
• Create a “buddy system” where they have a go-to person for quick questions 
• Document your communication norms (which channels to use for what, expected response times, etc.)

2. Make your offshore developers feel like real team members

Treat offshore developers as full team members, not just extra hands:

• Include them in company meetings and updates
• Create opportunities for casual interaction
• Recognize and celebrate their contributions
• Plan occasional in-person meetups when possible

3. Put the right collaboration tools in place

Your tech stack should support seamless collaboration:

• Project management (e.g., ClickUp, Asana)
• Communication (e.g., Slack, Microsoft Teams)
• Video conferencing (e.g., Zoom)
• Documentation (e.g., Notion, Confluence)
• Code repositories and version control

4. Nail down your development processes

Document and standardize:

• Code review procedures
• Deployment protocols
• Testing requirements
• Bug reporting and tracking
• Emergency response procedures

5. Master your time zone strategy

Don’t overcomplicate time zone management.

Based on what works for successful distributed teams:

• Set core collaboration hours when everyone needs to be available (usually 2-4 hours of overlap)
• Be clear about when developers can work flexible hours vs. when they need to match your schedule
• Have a system for urgent issues outside of overlap hours
• Plan your sprint planning and key meetings during overlap times
• Use asynchronous updates (like Loom videos or detailed Slack threads) for complex technical discussions that don’t need real-time interaction
• Keep a shared calendar that shows team members’ working hours and local holidays

If you’re working with developers in Latin America, you’ll have most of the workday overlapping with US hours. But even with bigger time differences, clear expectations and the right mix of sync and async communication make time zones manageable.

Final Thoughts

Building a successful offshore or nearshore team isn’t about finding the cheapest rates or the biggest talent pool. It’s about creating an environment where skilled developers can seamlessly integrate with your team and contribute to your company’s growth.

When you get the foundations right—choosing the right model, setting up proper processes, and managing communication effectively—offshore development becomes a strategic advantage rather than just a cost-saving measure.

This is why choosing the right partner matters so much. 

Most recruitment companies can help you find capable developers. They’ll run technical assessments and send you candidates. But at Near, we do things differently. Our recruitment team actually lives in Latin America. We’ve built real relationships within the tech community there, and we understand the local market dynamics that affect hiring and retention.

We take the time to deeply understand your company culture, work style, and what really matters to your team—because we know technical skills are just one part of the equation. This approach lets us connect you with developers who will thrive in your environment (yes, even if that environment is virtual).

We handle everything from sourcing and vetting candidates to managing payroll and compliance, letting you focus on building your product. Whether you need one developer or a complete team, we can help you hire top LatAm talent in under 21 days.

Ready to explore how nearshore development could work for your business? Book a free consultation call today.