Offshore vs. Nearshore: Why Latin America Stands Out for Software Development

Pull up a map or scroll through Google Earth, and just south of the US, you’ll find over 20 million square miles of diverse countries, cultures, and cities we all know as Latin America. 

Except here, Java isn’t just a strong cup of coffee in Peru, Python isn’t just a snake slithering through the Amazon, and Rust isn’t just what happens to your car along the humid coastline of Costa Rica.  (Yes, we know pythons don’t live in the Amazon … but go with us on this one.)

This region is home to a rapidly growing tech industry, where expert developers are building everything from fintech platforms to AI-driven applications.

For US companies, offshore software development in Latin America means access to top talent, competitive rates, and time zones that make real-time collaboration easy. 

We’ll break down nearshoring vs. offshoring, highlight the best outsourcing hubs, and share tips for working with Latin American teams. Whether you’re hiring your first offshore dev or scaling up, there’s plenty to explore.

Why Latin America Is a Leading Destination for Software Outsourcing

For companies looking to scale without overspending, offshore development in Latin America (LatAm) is an increasingly popular choice. The region is thriving with a growing pool of highly skilled developers fluent in JavaScript, Python, Java, C#, and TypeScript.

And if your project requires more specialized expertise, you won’t have to look too hard. While languages like Rust, Kotlin, and Scala may not be as common, they’re becoming increasingly accessible as LatAm’s developer community matures.

A region driving growth at scale

Latin America’s rise as a tech outsourcing hub isn’t random—it’s backed by government initiatives and international trade agreements. Free trade deals like CAFTA-DR and bilateral free trade agreements with Chile, Colombia, Panama, and Peru have made cross-border collaboration with US businesses easier than ever.

Workforce upskilling is another key factor. According to the World Economic Forum’s Future of Jobs Report, 84% of LatAm’s workforce has adapted to digital transformation, driving a 51% net growth in data analysts, 50% in AI/ML specialists, and 31% in BI analysts. 

The Future Investment Initiative Institute’s Future of Work report highlights a 10% annual increase in e-commerce-related tech roles, and the region now holds a 0.43 preparedness score for generative AI and automation, on par with APAC, another major outsourcing hub. 

Additionally, the region has seen the highest increase in female workforce participation globally at 8.5%.

Cost savings: A salary debugging session

Nearshoring (outsourcing to nearby countries) is helping businesses optimize workflows while reducing costs.

That’s why US companies are now fueling their growth by nearshoring to LatAm. 

For example, according to our experience and salary guide, businesses can expect significant savings when hiring a full-stack developer in Latin America for a year-long project, for example:

• LatAm full-stack dev salary range: $48,000 – $78,000
• US full-stack dev salary range: $66,000 – $161,000
• Potential average savings: 30 – 50%

That’s $18,000 to $83,000 in savings per developer, which can stack even higher if you’re hiring a full team.

Similar cost advantages apply to other key roles:

• QA Engineers: Up to 56% savings
• DevOps Specialists: 54% savings
• Software Engineers: 57% savings

Nearshore vs. Offshore: How Does Latin America Compare with Other Regions?

When businesses explore outsourcing, they often compare nearshoring vs. offshoring. 

But let’s be clear about what we mean by nearshoring. It’s a specific type of offshoring where you hand off tasks or roles to talent in nearby countries. So for US companies, that would be Canada or countries in Central and South America (Latin America)—where our focus is in this article.

Unlike traditional offshoring to distant regions, nearshoring keeps your team in similar time zones and cultural contexts.

While both involve working with overseas talent, nearshoring offers geographic and operational advantages, particularly for US-based companies.

Time zone alignment: Real-time collaboration

One of the biggest advantages of nearshoring to LatAm is the ability to work in sync with US teams. Time zone differences might not seem like a dealbreaker, that is, until you’re stuck in a cycle of delayed responses. 

Imagine your project manager in New York is staring out the window watching the sunset, wrapping up tasks on their Gantt chart for the afternoon, while your Python developer in the Philippines is only just greeting the sun and waking up to their morning coffee. 

That’s a full workday lost before the first update even comes in. 

Meanwhile, if you hired a developer in LatAm, say, Colombia or Peru, they would be online at the same time, keeping projects moving in real time.

With nearshoring to Latin America, businesses eliminate the lag time that often comes with working across distant time zones. That means real-time collaboration, faster feedback loops, and fewer late-night calls just to keep projects on track.

Cultural and business alignment

Beyond time zones, shared business norms make it easier for Latin American teams to integrate seamlessly with US companies. 

From agile development to direct communication styles, cultural familiarity is another reason why so many US businesses offshore to LatAm instead of working with regions where expectations around workflow, hierarchy, and deadlines differ significantly.

Talent quality and availability

Latin America’s developers are fluent in modern tech stacks, from JavaScript and Python to cloud platforms and AI tools.

Depending on what software outsourcing model your business needs, finding specialized expertise is often easier in LatAm compared to regions where talent shortages are more pronounced.

Cost competitiveness: Smart economics, not cheap labor

Latin America provides one of the best price-to-quality ratios in software development offshoring.

When companies first look at LatAm talent, they often focus solely on cost savings. But here’s what actually matters: you’re getting A-player talent at B-player US prices.

Take a senior software engineer position. In the US, you’re looking at $130K+ for someone with the experience you need. In LatAm, that same level of expertise—we’re talking about developers who’ve worked with companies like Microsoft and Google—costs $55K+.

This isn’t about finding the cheapest possible labor. Companies that push to save 70%+ on US salaries might fill positions, but they’ll get what they pay for. The sweet spot is around 30–55% savings—you still get significant cost benefits while attracting top-tier talent who stay with you for the long haul.

The math works because of basic economics, not corner-cutting. Living expenses in LatAm tech hubs are substantially lower than in US cities. A developer in Buenos Aires or Mexico City can maintain an excellent standard of living on a salary that would barely cover rent in San Francisco. This means you can offer competitive local rates that both attract great talent and make sense for your budget.

This approach has worked for companies like Microsoft, PWC, JP Morgan, and Google—they’ve been building teams in Latin America for decades.

Now, thanks to remote work becoming standard, smaller companies can tap into the same talent pool.

Top Latin American Countries for Software Development Outsourcing

Being such a diverse region, Latin America offers a wide range of outsourcing destinations, each with its own strengths. 

From Argentina, with its cutting-edge telecommunications tech, to Costa Rica, home to a billion-dollar semiconductor hub, the question isn’t whether to nearshore, but where in LatAm should your business go for nearshore development?

1. Brazil: The powerhouse of Latin American tech

With over 500,000 developers, Brazil has the region’s largest tech workforce, excelling in AI, IoT, and mobile app development.

Its GMT-3 time zone means it’s 1–2 hours ahead of EST (it fluctuates as they don’t have Daylight Savings Time), eliminating scheduling issues and aligning with much of the greater US. 

In our experience, the English proficiency among Brazilian developers is moderate to high.

2. Argentina: The science & technology hub

Argentina leads in telecommunications, IoT, and AI development.

This is the country we see the most US companies hiring from. However, it’s not the cheat code for growth it once was. For a long time, inflation was out of control, and demand for US dollars was off the charts. But now that the peso is stabilizing a bit, local employers are offering better salaries and benefits that offshore contracts often don’t include.

But your dollar still goes farther than it would in the US, and Argentina’s talent is world-class. So it’s still worth considering. 

Like Brazil, there is a 1–2 hour difference with EST, depending on the time of year.

3. Mexico: The nearshoring champion

Proximity to the US makes Mexico a prime nearshoring choice. USMCA agreements simplify hiring, and Mexico (GMT-6) aligns with Central Time, meaning smooth operations, especially for midwest states. 

We find the English proficiency of Mexican developers is really high, so you can expect a good level of communication efficiency with nearshore developers there.

4. Colombia: A rising tech hub

In Colombia, tech talent is growing and supported by ProColombia, a government initiative that attracts foreign investment and strengthens the IT sector. These programs provide funding, training, and tax incentives, making it easier for businesses to hire skilled developers. 

With moderate to high English proficiency and Bogotá (GMT-5) perfectly aligned with EST, US teams can collaborate efficiently without major scheduling challenges.

5. Chile: Stability meets innovation

As an OECD member, Chile benefits from strong economic policies, a rising GDP, transparent regulations, and sustained infrastructure investment, making it one of the most stable outsourcing destinations in Latin America. 

With high English proficiency and a GMT-4 time zone that aligns well with EST, businesses offshoring with Chile can expect reliable operations and a well-developed tech ecosystem.

6. Costa Rica: The Silicon Valley of LatAm

Costa Rica is top-ranked in Latin America for business environment and tech innovation, and it’s easy to see why. Intel’s $1.2 billion investment in semiconductor production has fueled a thriving tech sector, attracting top engineering talent and driving innovation. 

With very high English proficiency and a GMT-6 time zone that aligns with US Central Time, it’s one of the top countries for software development outsourcing in South America.

7. Peru: An emerging fintech & AI hub

Peru has been expanding its tech sector through education and AI-driven workforce development. The country is planning on investing heavily in infrastructure upgrades, strengthening its position as an outsourcing destination. 

As fintech and AI industries continue to grow, Peruvian workforce upskilling initiatives are creating a steady pipeline of skilled developers. 

With moderate English proficiency and a GMT-5 time zone aligning with EST, Peru is an increasingly attractive option for businesses looking to outsource.

How To Collaborate Effectively With Latin American Developers

Successful offshore development in Latin America comes down to clear communication, well-structured workflows, and choosing the right outsourcing partner.

Here’s how to build a strong working relationship with your LatAm development team and pick the right outsourcing company:

• Use the right communication tools: Keeping everyone on the same page is essential. Platforms like Slack for real-time chats, Jira for project tracking, and GitHub for version control help streamline collaboration and prevent any setbacks.
• Set clear expectations from day one: Outline project goals, deadlines, and deliverables early to avoid confusion. Get project managers involved in sharing roadmaps to maintain priorities and work efficiently.
• Pick the right outsourcing partner: Not all companies are created equal. Look for companies with experience in your particular tech stack, good client reviews, and a history of successful projects. Ideally, this information should be readily available. You also need to decide if you want to work with an end-to-end development company and hand off your whole project or a specialist recruitment company to hire nearshore developers.
• Check infrastructure reliability: Most of the cities in LatAm have reliable infrastructure, but it’s still wise to confirm that your team has stable internet, secure systems, and proper cybersecurity measures in place.
• Understand legal and contract details: Different countries have unique labor laws, tax regulations, and IP protections. Make sure contracts are airtight to avoid compliance issues later. (Or work with a partner who will handle compliance with local labor laws for you.)

When following these steps, offshore development in Latin America can provide your business with affordable, skilled talent while keeping collaboration smooth and efficient.

Final Thoughts

Talent shortages and rising wages in the US aren’t going away anytime soon. If you’re struggling to find developers locally or your hiring budget is getting squeezed, LatAm offers a practical solution that doesn’t force you to compromise on quality.

The key is approaching nearshoring strategically. Look for developers who have experience working with US companies, strong English skills, and expertise in your tech stack. The time zone alignment means they’ll be online when you are, and the cultural similarities make collaboration straightforward.

Whether you’re just starting to explore nearshoring or ready to scale your team, we can help with every step—from sourcing and screening to making competitive offers that attract top talent. We’ve spent years building relationships in the LatAm tech community, so we know exactly what it takes to hire and retain the region’s best developers.

At Near, we don’t just match resumes—we dig deep to understand your company culture. Sure, we know our front-end from our full-stack and our JavaScript from our Java, but finding the right developer isn’t just about checking technical boxes. It’s about finding someone who will thrive in your team’s environment and contribute to your company’s success.

Ready to explore nearshore hiring in Latin America? Let’s talk about your specific needs. Book a free consultation call today.