Deloitte projects a demand for 7.1 million US tech jobs by 2034, driving the surge in nearshoring software development in Tijuana and other Mexican cities. Plus, more than 40 countries invest in Tijuana, with the United States contributing over 65% to the total score. Any benefits your tech company could reap?
I’m David Gomez, Lead IT Recruiter in Latin America at Alcor. We build R&D tech teams in Mexico and other LATAM and Eastern European countries. With Alcor, US product companies get from 0 to 100 Silicon Valley-caliber engineers in a year as a viable alternative to outsourcing. Our model allows companies to cut costs by up to 40% and hire the top 10% of the tech market.
In this article, I’ll share key tech market insights about recruiting software developers in Tijuana—from industry overview to salary breakdowns. Let’s dive in!
Software Development in Tijuana Overview
In 2023, US companies nearshoring software development boosted the FDI in Mexico by 48%. The trajectory remained positive: in the first quarter of 2024, Mexico’s FDI increased by 7% compared to the same period in 2023, totaling $31.1 billion.
Of this, Baja California secured $1.1 billion, ranking as the third-largest recipient of FDI in Mexico. Its capital, Tijuana, accounts for 74% of the total state’s investment. This figure puts it ahead of 26 Mexican cities, with a strong focus on the manufacturing sector. Even before the wave of outsourcing software development, the city received $635 million in investment in 2022, primarily for its electrical and residential infrastructure.
Continuous investment, up to $31,5 million in international sales, and strides in automotive technology drew in the EV manufacturer Zeekr, which announced its future expansion to Tijuana. This company, however, is not the first to chart the territory of Tijuana’s IT market. Here are the software development companies that have established their operations in the shining LATAM tech hub:
- YouTube
- Microsoft
- Samsung
- Huawei
- T-Mobile
- Honeywell
- Teradata
- True Games Interactive
- Pixel2Canvas
- Uber
Keep reading to find out more about the tech talent pool in Tijuana and create your own nearshore software development team!
Software Developer Salaries in Tijuana
According to Alcor’s salary data, the average IT salary in Mexico among senior software engineers with 6+ years of experience amounts to $57,750 a year.
Let’s take a look at how much senior software engineers from Tijuana earn a year compared to their counterparts in San Francisco.
| Position | Gross Annual Income, USD | |
| Tijuana | San Francisco | |
| JavaScript Developer | 45,600-60,000 | 132,000-162,000 |
| Python Developer | 54,000-63,600 | 150,000-177,600 |
| .NET Developer | 51,600-63,600 | 144,000-174,000 |
| C++ Developer | 50,400-63,600 | 144,000-174,000 |
| AI Engineer | 57,600-79,200 | 150,000-182,400 |
| Cloud Engineer | 57,600-75,600 | 144,000-170,400 |
| DevOps Engineer | 57,600-74,400 | 144,000-170,400 |
| Blockchain Developer | 66,000-84,000 | 144,000-162,000 |
| Mobile Developer (iOS/Android/Xamarin) | 60,000-72,000 | 138,000-165,600 |
| Full Stack Developer | 54,000-72,000 | 144,000-180,000 |
| Product Manager | 54,000-69,600 | 132,000-156,000 |
| Engineering Manager | 93,600-105,600 | 198,000-222,000 |
| Average Annual Salary | 58,500-73,600 | 147,000-174,700 |
Suppose you were to assemble a software development team of a Full Stack Developer, AI Engineer, DevOps Engineer, Cloud Engineer, and Product Manager. In San Francisco, you’d have to pay the rates of $714,000-$859,200 in annual wages. In Tijuana, the overall amount would reach $280,800-$370,800. A whopping 57% to 61% lower!
Nearshoring to Tijuana in 2025: Pros and Cons
Pro: Considerable Cost Savings
As seen from the table above, the salaries of senior developers in Tijuana are 2.5 times lower than those in San Francisco. But it’s not just about wages—if you use nearshore IT services from Mexico and open your own office in Tijuana, you can drastically cut overhead costs. For example, in San Francisco, commercial rent ranged from $47 to $121 per square foot in 2023. In Tijuana, the costs reach only $24 per square foot a year on average.
Pro: Promising Tech Talent
Tijuana houses 100,000+ software engineers, an entire one-seventh of the overall pool of software engineers from Mexico. The city also boasts 35 public and private universities, providing higher education to outstanding programmers skilled in Python, C, Java, Swift, JavaScript, C#, and more. Leading tech universities, such as Universidad Tecnológica De Tijuana and Instituto Tecnológico De Tijuana, boost the number of software engineers in Tijuana by 16,500+ software developers every year. Add in top schools—the Autonomous University of Baja California and the Polytechnic University of Baja California—and increase the number of yearly tech graduates up to 20,000+.
Pro: Burgeoning Startup Ecosystem
The Startup Blink 2024 report placed the city in the top 10 startup ecosystems in Mexico. Here’s the breakdown of its top startups by industry:
- Software & Data: Cosmindie, Framework Science, La Chamba, Caret, Evolución Apps, Industrify.mx
- Fintech: Alibre.io
- Healthtech: Odontalify
- Transportation: Jelp Delivery
- Marketing & Sales: KatLinks, Localizado AI
Furthermore, software engineering in Tijuana is set on the rise thanks to new tech parks, Bit Center startup incubator, iTijuana and BuscaCorp ecosystems, and co-working spaces.
Pro: Unmatched Proximity
Nearshore outsourcing to Tijuana is as near as you can get. The city is only 17 miles from San Diego, CA, which makes it less than an hour from the US border. If your office is located in California, you won’t even need to factor in the time difference. Take New York, and it will still be only 3 hours. As a result, collaborating with software developers from Tijuana is the most convenient option for gaining access to high-quality talent at a lower cost.
Con: Legal Complexities
Despite a USMCA agreement between the US, Canada, and Mexico that aims to facilitate taxation, navigating Mexico’s taxes is still quite a challenge. On top of that, companies face labor differences, such as the 13th-month salary, double payment for overtime, and 48-hour work weeks. These nuances lead to tech companies outsourcing payroll in Mexico. Contracting an outsourcing agency may take this burden off your plate, too.
Accounting & payroll services are also typically part of Employer of Record (EOR) solutions. At Alcor, we take it a step further by combining EOR, tech recruitment, and operational support. Together, they make a tech R&D accelerator to help you launch an office with senior software developers from Guadalajara, Tijuana, Monterrey, and other Mexican cities in 2 months.
Our legal expertise is second to none. For our client Ledger, a French IoT & cryptocurrency platform, we built a 100% compliant hub of 10 QA engineers. We wowed them by managing payroll, HR, tax, accounting, and IP rights support. Win-win in the end—Ledger expanded to an offshore location without even having to open a legal entity! Alcor’s legal team made it seamless.
Con: Ban on Outsourcing
The Federal Labor law amendment dating back to 2021 still creates confusion around outsourcing practices. While it’s true that these legal changes prohibit outsourcing core business functions, its main target is subcontracting and related tax evasion, not outsourcing per se. What’s the difference?
When subcontracting, you hire an entire business to cover the functions where your team lacks expertise. Outsourcing, although sometimes similar to subcontracting, is more about delegating manageable tasks to individuals within an outsourcing firm, which allows your in-house professionals to focus on more pertinent issues. Therefore, you can still outsource but preferably seek help from a local legal agency to avoid violating this amendment.
Your Own Software Development in Tijuana
The best way to offshore development in Mexico is to find a reliable partner. By doing so, you’ll bypass the legal & tax technicalities and strengthen your tech company with more talent. The typical choice is to outsource the entire process. However, traditional outsourcing and Mexican IT staff augmentation often come with drawbacks like paying senior-level prices for junior or mid-level talent, steep buy-out and administrative fees, low developer loyalty, and the frustration of communicating through a third party.
We at Alcor outperform traditional outsourcing models by:
- Recruiting top 10% tech talent
- Giving you exclusive control over your remote team from day one
- Acting as your legal entity abroad
- Charging zero buy-out or setup fees
- Assisting you in finding an office and procuring tech equipment
Our client track record speaks volumes. We’ve helped Sift, Dotmatics, People.ai, and many more to build a dedicated R&D team in Latin America or Eastern Europe. How do we do that? 40 talented recruiters, 253K+ database of pre-vetted devs, and complete resolve to wow you by providing access to Silicon Valley-caliber talent.
Eager to scale? We’re here to help you!
References on Software Development in Tijuana
- Deloitte
- Tijuana EDC Insider Report
- Bloomberg
- Statista
- Mexico News Daily
- El Economista
- Gobierno de Mexico
- Mexico Business News
- KPBS News
- Solili MX News
- Startup Blink
- Nearshore Americas
- Investopedia