We build and operate top-tier tech teams in LATAM and Eastern Europe.
Up to 40% savings. 100 people a year. No entity. No buy-out fees.
Struggling to fill tech roles? You’re not alone—76% of executives are in the same boat. With over 2M skilled tech workforce at half the cost, nearshore outsourcing in Latin America could be the oar that helps you steer ahead in your expansion. But which location to choose? Here is the hint from Kearney’s GSLI: Mexico and Colombia are the most attractive LATAM destinations for nearshoring.
I’m David Gomez, Lead IT Recruiter in LATAM at Alcor. We help tech companies nearshore in Latin America 100% compliantly and hassle-free by building R&D centers. We combine Latin American IT staffing services, EOR, and operational support to scale teams from 10 to 100 elite developers within a year.
After reading this article, you’ll discover the key reasons to opt for nearshore software outsourcing in LATAM. You’ll also get insights into the region’s tech market dynamics, top nearshore destinations, and uncover a practical solution to enter this growing market successfully.
Key Takeaways
- Backed by $184.3 billion in FDI and rapid tech adoption, LATAM is emerging as a true innovation hub. 9,000 startups and 60 unicorns are fueling the IT market to hit $59.7 billion in 2025.
- 2M+ tech experts, 54% salary savings vs. the US, highly skilled and motivated talent, and cultural & time zone proximity to the US are the core reasons hi-tech companies choose to nearshore software outsourcing in Latin America.
- Every LATAM destination has its own gems. Pick Mexico, with its 800K talent, if you want to scale your dev team swiftly. Opt for Argentina or Uruguay to save up to 56% on dev salaries. Or enjoy innovative and AI-driven infrastructure in Colombia or Chile.
- Unlock the full potential of LATAM advantages via the tech R&D center. Unlike IT outsourcing, it’s 40% cheaper, offers zero buyout fees & markups, ensures IP rights protection and team loyalty as it’s yours from day one.
Latin American IT Market Development 2022-2025
In the turbulent year of 2022, the Latin American software development industry defied the odds, achieving a whopping $105 billion in market value. The regional leaders? Brazil claimed the largest share with $45 billion, followed by Mexico at $28 billion. Colombia and Argentina shared third place with $11 billion in market value each.
This explosive growth didn’t go unnoticed. Latin America and the Caribbean attracted $184.3 billion in FDI, demonstrating foreign investors’ trust in the local economy and its potential in the technology industry.
LATAM’s momentum doesn’t stop at funding. With widespread adoption of cloud computing, AI, IoT, and 5G, the region is becoming a hotbed of innovation. Consider this:
- Brazil, Colombia, and Chile are now the top three startup ecosystems in South America, and Mexico leads in Central America.
- LATAM houses over 9,000 startups, including 60 unicorns, which attracted $3.9 billion in VC investment in 2024.São Paulo, Mexico City, and Buenos Aires together received over $2 billion.
- Fintech dominates the region with 3,069 companies—a 340% growth in just six years. Brazil, Mexico, and Colombia account for a total of 57% of fintechs.
And when it comes to nearshore software outsourcing to LATAM, the numbers tell a compelling story. The Latin American outsourcing market is set to hit almost $20 billion in revenue this year, with a CAGR of 9% over the next 5 years. Colombia and Brazil are expected to show the fastest development, with a CAGR of 9.4%. Even Uruguay is stepping into the spotlight, with its IT outsourcing revenues to reach $1 billion in 2029.
But why do US hi-tech companies decide to nearshore IT outsourcing to Latin America? Well, see for yourself…
Reasons Tech Companies Nearshore Outsourcing to LATAM in 2025
1. Goldmine of tech talent
No fluff, just fact—LATAM is home to 2M+ tech experts, with Mexico (800K), Brazil (500K), and Colombia (165K) leading the pack. For CEOs or CTOs of expanding tech companies, nearshoring software development to Latin America translates into quick access to engineers with diverse skill stacks and rare specializations, providing a strong competitive edge. While others wrestle with talent shortages, you can hire 2 times faster!
Just like Franki did. This California-based tech company needed senior mobile developers with niche RxSwift skills in Mexico to scale their app. Alcor recruited 2 iOS and 3 Android Developers and 2 Quality Control Engineers with an average time-to-hire of just 28 days. Plus, we managed B2B contracts, compliance with Mexican labor laws, payroll, and hardware procurement, all within our tech R&D center solution.
2. No Silicon Valley price tag
What about tech salaries when nearshoring software development to LATAM, you would ask. The short answer—they’re about 54% lower than in the US. Yes, you heard it right. You can cut your expenses on remunerations by 2 times and invest this money in your software product!
See yourself by comparing the wages of senior developers from South America with those from the US:
|
Senior Positions |
Senior Developer’s Gross Annual Income, USD | |||||
| USA | Mexico | Colombia | Chile | Argentina | Uruguay | |
|
AI/ML Engineer |
$132,000 | $61,000 | $60,000 | $62,000 | $57,500 | $60,000 |
|
Coud Engineer |
$174,000 | $68,500 | $54,000 | $62,500 | $68,500 | $62,500 |
|
Blockchain Developer |
$132,500 | $68,500 | $62,500 | $61,500 | $60,000 |
$60,000 |
| Mobile App Developer | $115,500 | $62,500 | $62,000 | $62,000 | $62,000 |
$62,500 |
| DevOps Engineer | $138,500 | $72,000 | $70,000 | $70,000 | $63,500 |
$62,500 |
| Java Developer | $114,500 | $66,000 | $60,000 | $60,000 | $57,500 |
$57,500 |
| Python Developer | $126,000 | $62,500 | $60,000 | $60,000 | $57,500 |
$57,500 |
| Vue.JS Develoepr | $120,000 | $54,000 | $62,500 | $60,000 | $56,500 |
$56,500 |
| Angular Developer | $120,000 | $50,500 | $48,000 | $48,000 | $45,500 |
$45,000 |
| .NET Develoepr | $114,000 | $60,000 | $54,000 | $60,000 | $54,000 |
$54,000 |
3. Excellent tech expertise
I bet you’re now thinking: but does paying two times less equal a two times lower software quality? Not at all, and here is why.
Firstly, LATAM software developers get an all-around STEM education from the 17 Best Global Universities for Computer Science in LATAM. Their tech savviness is further enhanced by local initiatives like Mexico’s Codeacademy, Argentina’s 4.0 Program, and Chile’s Digital 2035 plan.
Secondly, Latin American programmers are in top 40 globally for their tech skills. Just look at the stats from Coursera:
- Top for tech skills in LATAM: Uruguay, Brazil, Mexico
- Top for data science in LATAM: Brazil, Chile, Mexico
And thirdly, they are proficient in a variety of programming languages and modern technologies, while demonstrating exceptional skills in mobile development, data analytics, cloud computing, database development, and operating systems. A 100% chance you’ll benefit from nearshore outsourcing in LATAM.
- Mexico: JavaScript, Java, Python, C++, SQL
- Colombia: Java, C++, Python, SQL, Ruby
- Argentina: Python, TensorFlow, Cloud APIs, SQL, NLP
- Chile: Java, Python, PHP, Node.js, ASP.NET
4. Cultural affinity with the US
Tech excellence is not the only superpower of LATAM developers. Their long-standing history of cooperation with the US tech companies makes these engineers an invaluable asset to any software development team.
- Business culture: Software engineers in Latin America embrace a familiar work culture, demonstrating proficiency in both collaborative efforts and independent tasks. They show a high degree of dedication, going the extra mile for the success of your product.
- Smooth communication: Developers from Argentina, Uruguay, and Chile demonstrate an upper intermediate (B2) level of English language proficiency. And what about Colombia and Mexico? Even though they rank lower, their major tech hubs like Bogotá, Cali, Medellín in Colombia and Monterrey and Guadalajara in Mexico are still in the “high” category. So, barrier-free communication with these developers is guaranteed.
5. Highly motivated talent
Let me tell you —you need LATAM developers just as much as they need you. Intriguing? Actually, the number of applicants for nearshore tech jobs in LATAM has skyrocketed by 370% over the past 4 years. Why? Because these developers are hungry for better salaries, hi-tech projects, career advancement, and remote work opportunities—all provided by American businesses. It’s a win-win waiting to happen.
6. Time zone proximity to the US
When tech companies nearshore software outsourcing to Latin America, they gain a major perk—convenient time zones. For instance, Mexico is just 1 hour ahead of the US West Coast, and there’s no difference at all with Tijuana. Colombia? Just a 2-hour gap. Go further south—3 hours with Chile and 4 hours with Argentina and Uruguay. This makes coordination with your remote software development team a breeze.
7. Flourishing business ecosystem
The LATAM software development environment is in full swing—the region hosts over 9,000 funded startups, which last year raised a combined $3.9 billion in VC investment, according to Dealroom. It also harbors over 60 unicorns, with stars like Kavak, Rappi, Butterfly, QuintoAndar, and others on the list.
What’s fueling such amazing results? Numerous governmental initiatives, such as Plan Mexico 2025, Ruta N in Colombia, and Fundación Impulsar in Argentina. That’s why all the major tech locations in Latin America have from A3 to B level business climate, which is optimal for doing business. On top of that, there are R&D incentives for companies that nearshore outsourcing to Latin America:
- Mexico grants immediate tax deductions of 56% to 89% on fixed asset investments for tech companies. Plus, there is an extra deduction of 50% to 75% on incremental spending for businesses focusing on worker training.
- Colombia provides a 30% tax credit for investments in R&D or tech innovation projects approved by the Ministry of Science, Technology, and Innovation.
- Chile guarantees a tax credit of 35% on R&D expenditures. Plus, the remaining 65% can be deducted as necessary business expenses, meaning 100% of your R&D investment is tax-beneficial.
But what’s the best way to leverage all these benefits…
Better than Nearshore IT Outsourcing to LATAM: Your Own Team from 0 to 100 Developers
Excited by the idea of nearshore outsourcing in LATAM? There’s a turnkey solution devised specifically for tech companies like yours—tech R&D center. And it’s more beneficial for you than traditional IT outsourcing and outstaffing. Here is how:
- Silicon Valley-caliber talent: Access the top 10% of the market developers, who match your tech requirements and culture.
- 40% savings: Get equivalent talent cheaper or 1-2 tiers higher developers for the same budget as with IT outsourcing/outstaffing.
- Zero buyouts: The development team is yours from day one, operating under your brand, culture, and practices.
- Transparent pricing: No pre-payment or markups—you control expenses.
- 100% compliance: Stay protected by our team of lawyers with expertise in IT law.
Think of our R&D center solution as a custom-built LEGO set. Each piece snaps perfectly into place to form a fully backed development team for you. See yourself:
– A to Z recruitment: Our 40 tech recruiters across Mexico, Colombia, Chile, and Argentina handle all aspects of hiring to find the best-fitting software developers in 2-6 weeks. 98.6% of our hires successfully pass probation and stay with our clients for an average of 2.5 years.
– Employer of Record in Latin America: Skip the red tape and save up to 3.5 months on business incorporation by using Alcor’s local legal entities to employ LATAM developers. We also cover legal compliance, payroll, benefits, and developer on/offboarding for you to nearshore to LATAM hassle-free.
– Operational support: If you need something extra like an office or coworking space, hardware, employer branding, or IT support, we’ve got your back! Plus, our Customer Success Managers are available to assist you 24/7.
Our R&D center solution isn’t just theory—it’s proven in practice. BigCommerce, Gotransverse, Ledger, People.ai, and others have already built their nearshore software development centers with us. In fact, 93% of tech CEOs and CTOs we’ve worked with say they’re satisfied with our services and dedication.
Top LATAM Nearshore Outsourcing Destinations
Now, let’s zoom in on what each country has in stock to pick a perfect destination for your nearshore software development in Latin America:
Mexico: Region’s largest talent pool
Indeed, the Mexican talent pool leads in the region for the number of tech professionals, offering a wide vrange of skills and expertise levels to choose from. But as the saying goes, numbers speak louder than words…
- Tech talent pool: 800,000
- Technology skills: JavaScript, Python, SQL, C#, React.js, and Angular;
- Senior dev salary: $57,800 per year
- % savings vs. the US*: 52%
- Innovation index in LATAM: #3
- AI adoption in LATAM: #6
- Tech hubs: Mexico City, Guadalajara, Monterrey, Tijuana
Colombia: JavaScript wizards of the region
Colombia is a true JavaScript powerhouse – the country boasts a vibrant tech hub with over 3,000 members and hosts regular JavaScript meetups in 8 different cities. But this prime destination for nearshore outsourcing to LATAM also offers…
- Tech talent pool: 165,000
- Technology skills: JavaScript, Python, C++, PHP, Java, and Ruby
- Senior dev salary: $54,800 yearly
- % savings vs. the US*: 54%
- Innovation index in LATAM: #4
- AI adoption in LATAM: #5
- Tech hubs: Bogotá, Medellín, Cali
Explore Colombia vs Mexico for nearshore tech outsourcing in greater detail to choose the best fit for your tech business!
Argentina: #1 for English skills
Did you know Argentinian developers are leaders in English proficiency, ranking number one in Latin America? Apart from this, Argentina boasts…
- Tech talent pool: 150,000;
- Technology skills: Python, Cloud APIs, TensorFlow, and SQL;
- Senior dev salary: $53,500 per year
- % savings vs. the US*: 55%
- Innovation index in LATAM: #8
- AI adoption in LATAM: #4
- Tech hubs: Buenos Aires, Córdoba, Mendoza
Chile: #1 in Latin America for digital skills
Chilean developers stand tall as digital frontrunners, being second-best in the region for data science skills. No wonder Chile leads the way in innovation and AI adoption in LATAM. See what Chile brings to the table…
- Tech talent pool: 100,000;
- Technology skills: Java, Python, Node.js, Perl, PHP, and ASP.NET
- Senior dev salary: $54,600 annually
- % savings vs. the US*: 54%
- Innovation index in LATAM: #2
- AI adoption in LATAM: #1
- Tech hubs: Santiago, Valparaíso, Concepción;
Learn about IT staff augmentation in LATAM to make informed decisions!
Uruguay: Region’s most technically fluent talent
When tech companies seek Latin American software engineers for hire, they also turn their gaze to Uruguayan talent. Known as the most literate in LATAM, they rank #1 in the region for tech skills! Additionally, this offshoring location features…
- Tech talent pool: 33,000
- Technology skills: Java, JavaScript, Go, Rust, and Python
- Senior dev salary: $52,800 a year
- % savings vs. the US*: 56%
- Innovation index in LATAM: #5
- AI adoption in LATAM: #3
- Tech hubs: Montevideo
*Estimated difference in cost where the average salary in tech in the US is $119,000 a year.
Ready to write your success story in Latin America together with Alcor? Fill out the form below and let’s discuss your expansion goals!