Here’s a striking fact: South America’s tech outsourcing market is expected to grow at an annual CAGR of almost 10% in the next five years, with Colombia and Brazil emerging as top countries from the list. Both of them offer unique advantages, but how can you benefit when choosing your ideal location between Colombia vs Brazil for nearshore technology outsourcing?
I’m David Gomez, LATAM Lead IT Recruiter at Alcor, an R&D center solution provider and a perfect alternative to traditional outsourcing models. Alcor makes the dream of cost-effective expansion into the LATAM and Eastern European tech markets come true and helps companies like yours build teams of up to 100 Silicon Valley-caliber talents within a year by offering the ideal blend of tech recruitment, Employer of Record (EOR) services, and operational support—but more on that later.
In this article, I’ll share the insights about the tech markets of these prominent tech hubs, outline the profile of their software developers, and highlight the key differences in software development in Colombia and Brazil.
So, Colombia vs Brazil for nearshore outsourcing: are you ready to find out who will win in this battle?
Tech Business Industries in Colombia and Brazil
Colombia
Market dynamics: Colombia’s ICT market was valued at $20.54 billion in 2023 and is expected to hit $35 billion by 2028. ICT service exports in the country soared to $1.6 billion in 2023, driven primarily by the USA, the UK, Mexico, Costa Rica, and Spain as the key global markets. With more than 11,000 software development companies, the Colombian tech services market will count at $2 billion in 2024, and with an expected annual growth rate of 6.21%, it will lead to a market volume of $2.7 billion by 2029.
Top tech sectors:
- Fintech: As of 2024, Colombia ranks as the 3rd-largest fintech market in the region, with around 400 startups primarily focused on lending, payments, and remittances. A major trend within this thriving sector is the rapid adoption of AI, transforming how these services are delivered and scaled.
- E-Commerce: In the past few years, Colombia has stood as the Latin America’s third-largest e-commerce market, with a volume of $42.3 billion. By 2026, it is projected to reach $87 billion, becoming a perfect destination on the global market for digital entrepreneurs and tech companies looking to capitalize on the booming online shopping sector.
- Cloud: As another thriving technological sector, it has positioned Colombia among the top 5 LATAM countries for data center market size. In 2023, public cloud computing contributed $17.3 billion to GDP, with an estimated average boost of $24.8 billion per year to GDP from 2023 to 2038.
Startup ecosystem: Colombia’s vibrant startup ecosystem boasts 1,720 startups and an impressive three unicorns, earning the country a solid 2nd place in LATAM. This growing innovation landscape highlights Colombia’s rising influence in tech, positioning it as a key player in the global startup arena.
Investment growth forecasts: Colombia has drawn in nearly $5 billion in VC in the last five years, setting the stage for even greater investment growth projected through 2025-2027. A little hint: investments in the fintech industry will lead the way, as the startups in this competitive industry attracted 46% of VC investments in 2023 in the LATAM region.
Mature tech hub in Colombia:
Bogota
- Rating: 1st in the country
- Startups: 810
- Top tech sectors: Transportation, Foodtech, Fintech
- Annual developer salary: $38,000-$54,000
- Top universities: National University of Colombia, University of Los Andes, Pontifical Xavierian University
- Foreign tech giants with R&Ds: Microsoft, IBM, Cisco, Amazon, Qualtrics
- Other tech hubs: Medellin, Cali
Brazil
Market dynamics: Brazil’s ICT market is booming, with last year’s valuation soaring to $96.6 billion. By 2024, tech services are projected to bring in $22.4 billion, rising to nearly $30 billion by 2029 at a CAGR of 5.89%. Holding the crown as Latin America’s largest tech hub, valued at $49.9 billion, Brazil is home to over 24,000 tech companies, many of which specialize in software development outsourcing, support services, and system integration.
Top tech sectors:
- E-commerce: As the regional leader in e-commerce, Brazil accounts for a whopping 57% share of e-commerce sales in Latin America. In 2023, its revenue reached approximately $37 billion, doubling since 2019 and showcasing a 9.5% growth from 2022.
- Fintech: In Brazil, just like fintech in Mexico, is gaining momentum, positioning the country as the leading hub in Latin America, with 1505 companies operating in the sector. The most common areas of activity are WealthTech, PayTech, and Lending & Crowd, which open up development opportunities for local and foreign businesses.
- Agtech: Being one of the global top players in agricultural production and exports, Brazilian agtech market reached $362.7 million in revenues in 2023. This sector boasts around 1,600 startups specializing predominantly in precision agriculture, crop monitoring, and smart farming solutions. The agtechs are heavily supported by government initiatives and venture capital investment, attracting about $1.7 billion in 2022.
Startup ecosystem: Brazil ranks 27th globally in startups, boasting around 13,400 innovative ventures. Additionally, it has 18 unicorns with Nubank, Ebanx, iFood, and C6 Bank topping the list, showcasing Brazil’s capacity to foster high-growth companies that have achieved billion-dollar valuations.
Investment growth forecasts: In the past five years, Brazilian startups have raised an impressive $17.6 billion in venture capital, making up 47% of all investments in Latin America. This strong funding trend highlights Brazil’s growing importance as a tech hub and suggests that further progress is likely in the following years.
Mature tech hub in Brazil:
São Paulo
- Rating: 1st in Brazil
- Startups: 15
- Top tech sectors: Fintech, E-commerce & Retail, Transportation
- Annual developer salary: $46,000-$66,000
- Top universities: University of São Paulo, São Paulo State University, Federal University of São Paulo
- Foreign tech giants with R&Ds: Google, Amazon, Microsoft, Facebook
- Other tech hubs: Rio de Janeiro, Curitiba, Belo Horizonte, Recife
Colombia vs Brazil for Tech nearshoring: A Developer’s Portrait
When choosing a nearshoring location between these tech hubs in Latin America, it’s essential to understand what local talents have to offer. So, without further ado – let’s compare the portraits of Colombian and Brazilian software developers!
Vast talent pool
Together, Colombia and Brazil boost more than 960,000 tech developers and rank 1st and 3rd in terms of tech talent in the region. In Brazil, São Paulo is home to around 197,000 tech professionals, accounting for more than 36% of the country’s tech professionals. Colombia, in turn, has a growing number of tech professionals, with over 150,000 developers contributing to its fast-expanding ICT sector.
Hi-tech education
Overall, tech specialists in Colombia and Brazil have Bachelor’s and Master’s degrees and together produce more than 250,000 STEM graduates annually. Leading tech universities such as the National University of Colombia in Bogotá та University of São Paulo are among the top 20 universities in Latin America for computer science.
Moreover, these countries actively implement various government programs to promote tech education among young students. One of the most well-known Colombian tech education programs is Misión TIC. It’s run by The Ministry of Information and Communication Technologies (MinTIC) and offers free programming courses to students and professionals.
In Brazil, educational programs such as ABES Conecta+, in collaboration with Microsoft Brazil, cover different levels of technology knowledge and offer the basic skills required by the labor market, from digital literacy to more advanced modules in cloud computing, artificial intelligence, data science and cybersecurity for the public.
Tech skills
In 2024, Brazil and Colombia are ranked 2nd and 5th, respectively, in terms of tech skills in LATAM. With a broad specialization and focus on AI, cloud computing, and big data, Colombia is gradually gaining attention from global tech firms for software development services. Brazilian specialists, in turn, excel in Fintech, Blockchain, and AI, with many startups emerging in these areas. Regarding programming languages, local developers have extensive expertise in JavaScript, Python, C++, PHP, Java, Ruby, and HTML.
Proficiency in foreign languages
English is taught as a second language in both countries and is common among developers. It has official status in some cities in Colombia, such as San Andrés, Providencia, and Santa Catalina Islands. Spanish is also commonly spoken in both countries, and German can be found in some communities in Brazil.
Soft skills & cultural compatibility
Brazilian and Colombian developers share many strong soft skills, such as excellent teamwork, communication, problem-solving abilities, creativity, and adaptability, which allow them to ensure efficiency in dynamic work environments. Colombian developers are mainly known for their time management and dedication while valuing work-life balance. Friendliness, openness, and respect in the communication of Brazilian engineers further enhance global team collaboration.
Moreover, cultural proximity to the US and shared work ethic enables both Brazilian and Colombian developers to deliver innovative and user-friendly solutions for American tech companies.
Average developer salary
An equally important factor that may concern you as a tech business owner when choosing between Colombia vs Brazil for tech nearshoring is the salary difference. That’s why my team of recruiters has prepared a detailed comparison chart with salary ranges based on the position and programmer’s expertise level, which will certainly come in handy.
| Developer’s Gross Annual Income, USD | |||||
| Colombia | Brazil | ||||
| Position | Middle | Senior | Middle | Senior | |
| PHP Developer | 33,600 | 48,000 | 38,500 | 52,000 | |
| Java Developer | 42,000 | 60,000 | 48,000 | 65,000 | |
| Mobile Developer (iOS/Android/Xamarin) | 42,000 | 62,000 | 47,500 | 68,000 | |
| DevOps Engineer | 42,000 | 70,000 | 47,000 | 73,000 | |
| Python Developer | 42,000 | 60,000 | 47,000 | 64,000 | |
| Golang Developer | 35,500 | 63,500 | 38,500 | 67,000 | |
| .NET Designer | 42,000 | 54,000 | 44,500 | 57,500 | |
| AI Developer | 45,000 | 65,000 | 49,500 | 69,000 | |
| Cloud Engineer | 42,000 | 70,000 | 47,500 | 73,000 | |
Despite their geographical proximity, software developer’s salary in Colombia and Brazil varies by an average of $3,000 to $4,000. At first glance, this may seem like a minor difference, but optimizing costs is one of the top priorities when it comes to tech expansion abroad.
But more about the differences between Colombia vs Brazil for nearshore tech outsourcing – right here!
Discrepancy between Colombia and Brazil for a technology outsourcing
Colombia
- Advantages
A growing tech talent pool and government programs like National Digital Strategy and Colombia Bring It On contribute to the development of the tech industry and provide opportunities for foreign companies, investors, and entrepreneurs to expand their capabilities and discover this emerging innovation and technology hub.
Tax deductions and R&D incentives such as the Volume-Based R&D Tax Credit and the Dedicated R&D Tax Credit for SMEs stimulate research and innovation activities in the country and create beneficial business environment for companies in the Colombian tech market.
Another key advantage in the Colombia vs Brazil for nearshore tech outsourcing landscape is time proximity. Colombia is in the GMT-3 time zone, just a one-hour behind New York, Washington D.C., and Miami, and two-hour ahead of San Fransisco, making it possible for you to work in real-time with your Colombian team of engineers. On top of that, convenient location means travelling from the US to Colombia takes significantly less time than a trip to Brazil, meaning you’ll spend less time in the air and more time with your nearshore team in Colombia.
In addition, lower salary rates create another extra perk to consider this country as your offshore or nearshore location in 2025. By expanding to Colombia, you can reduce your costs—sometimes by as much as 50%—making this a strategic decision for your business.
Curious about Uruguayan developers’ salaries? Explore it in our latest article on Colombia vs Uruguay for nearshore technology outsourcing!
- Disadvantages
Although Colombia’s tech talent pool and its ICT market are smaller than Brazil’s, the Colombian government is actively enhancing the sector and attracting foreign tech companies. In fact, it’s easier to hire developers in Colombia, as there’s generally less competition for top talent. Moreover, the success of small tech hubs in Eastern Europe demonstrates that a limited talent pool does not hinder the ability to draw in investments and foster growth, just as Colombia is doing in its pursuit of becoming a competitive player in the tech landscape.
Political instability can also be an obstacle. This is a common problem in many Latin American countries. When comparing options such as Colombia vs Brazil or Colombia vs Mexico for nearshore technology outsourcing, it is crucial to recognize that Colombia is actively working to strengthen its political landscape and economic stability. By introducing significant economic reforms in taxation, healthcare, and pensions, the government is trying to reduce the economic inequality that has fueled conflict and instability in the country.
Brazil
- Advantages
Brazil’s main strengths are the larger tech market in Latin America and its more developed infrastructure, including start-up clusters and a thriving innovation landscape, which facilitate the rapid development of new technologies.
Brazil stands out due to its vast IT ecosystem and an impressive pool of approximately 760,000 technology professionals, providing a rich landscape for companies seeking to tap into diverse talent and innovative solutions.
- Disadvantages
One of Brazil’s main drawbacks is the complexity of doing business. Ranked 124th in the Ease of Doing Business index , the country presents significant bureaucratic challenges that can be testing for companies. Starting a business, obtaining construction permits, registering property, and navigating tax obligations can all be daunting tasks.
And this leads to another disadvantage – a more complex tax system. This includes multiple layers of taxation, a complex VAT system as well as frequent changes in tax legislation that may create additional challenges for international companies seeking to enter the Brazilian market.
In addition, the developer’s salaries are somewhat higher than in Colombia, which is also an essential factor to consider if you are looking for your ideal destination for expansion in Latin America.
Another important factor is the significant number of cyberattacks. As of 2022, Brazil was ranked 2nd in the region regarding the number of cyberattacks on private enterprises and government agencies, with 103 billions of incidents. Moreover, by choosing software development outsourcing, the risk of potential data leakage increases even more. Keep reading this article to find out about a safer option of expanding to Latin America.
Factors to consider when picking a location
So, in conclusion, I must emphasize that choosing your ideal destination primarily depends on your company’s goals. If you’re looking for a dynamic, yet already well-established and bustling tech market with a large pool of tech specialists, then Brazil is the right choice. However, keep in mind that competition for talent, higher costs, and taxation complexity are more prominent issues here than in Colombia.
But if you’re seeking something fresh and rapidly expanding, then Colombia deserves your attention. It’s a thriving tech market with greater cost efficiency and a more business-friendly environment, making Colombia an attractive spot for remote team scaling.
So, as you weigh your options and decide on your outsourcing strategy in Colombia or Brazil, it’s crucial to stay aware of the potential challenges and risks you might face regardless of the hiring practices you choose. But here’s the big question: What could be your game-changer?
Secret Tip to Ease the Process
R&D center solution is the answer! As the best alternative to traditional outsourcing models, Alcor helps you conquer foreign tech markets by expanding your software development in Latin America or Eastern Europe. With our 360° R&D center solution you’ll get:
- Silicon Valley-caliber developers with an average retention rate of 2.5 years;
- Dedicated team of developers working under your corporate culture and practices;
- Stress-free expansion without the need to register a legal entity and paying buy-out fees.
We hire top-10% tier software developers within 2-6 weeks, manage EOR services, and handle all operational work. What do we need from you? Just focus on what matters most—your product development.
Want to know how to succeed with Alcor? Our clients’ stories, such as Sift, People.ai, and BigCommerce, speak for themselves, as their R&D offices are now successfully operating, delivering exceptional results.
Still, have doubts or questions? Share your specific needs, and we’ll offer you tailored solutions based on the availability of talent and give you a ready timeline for setting up your team and software development center in Colombia, Mexico, Chile, or Argentina.
Let’s schedule a call and make your expansion goals a reality!