Software Outsourcing to Argentina in 2025: A New Perspective

David Gomez Lead IT Recruiter in LATAM

According to Deloitte research, the demand for technical talent in the US is expected to reach 7.1 million tech positions by 2034. With many of these roles already unfilled, American tech companies are increasingly turning to outsourcing in LATAM, particularly favoring software developers from Argentina for tech skills and cost-efficiency. But could Argentina be the missing piece to your tech puzzle? I’m David Gomez, Alcor’s Lead IT Recruiter in LATAM. With our all-in-one solution, we help US tech companies expand to Latin America by setting up software development centers in Argentina, Mexico, Chile, and Colombia. With no legal entity needed, we scale their development teams from 0 to 100 Silicon Valley-caliber engineers in just a year.

In this article, I’ll provide a comprehensive overview of the software development industry in Argentina, exploring its benefits, tech trends, core hubs, and median developer rates. Additionally, I’ll introduce several alternatives to software outsourcing to Argentina, empowering you with an optimal solution for your tech business.  So, let’s set aside the extras and get right to the business!

Software Development Industry in Argentina

Being one of the country’s rapidly expanding sectors, Argentina’s ICT industry is a key driver of digital innovation and modernization. Forecasts predict this market will grow at a CAGR of 8.3% between 2024 and 2029, fueled by digital transformation initiatives, particularly the rapid expansion of 5G networks, investments in IT infrastructure for e-government services, and rising demand for cloud computing, AI, and IoT solutions. This thriving tech landscape is bustling with 19 commercial structures, 3,800 tech businesses, over 1,200 startups, and 11 unicorns. Ranking 4th in LATAM for the startup ecosystem, Argentina is home to MercadoLibre, OLX, Globant, Uala, and Despegar—shining examples of Argentina’s tech prowess. The country’s innovation success is mirrored in its ICT service exports, which reached an impressive $2.45 billion or 15% of the total exports in 2023, propelled by strong demand for nearshoring and offshoring services, particularly in software development and tech support. According to OPSSI, the IT software development sector is the crown jewel of foreign investment in the country, accounting for 58%. The IT services market is set to reach $3.106 billion in 2024, with an average CAGR of 5.4% from 2024 to 2029. Beyond 2025, tech outsourcing is expected to maintain a dominant position, with 452 software development businesses in Argentina blazing trails in custom software, tech strategy consulting, mobile app outsourcing, and Big Data.

Software Development Outsourcing Trends in Argentina

AI technology

Argentina is actively adopting artificial intelligence (AI) to spur economic growth. Ranking third in Latin America for AI policy implementation, the country applies this technology across various sectors, including finance, healthcare, agriculture, transportation, and logistics. Argentina hosts over 20 AI startups and has the region’s fifth-largest potential for producing AI-driven solutions. The real game-changer? The National Plan for Science, Technology, and Innovation 2030, launched in 2021. This initiative focuses on fostering economic growth and social development through digital transformation and emerging technologies like AI. It aims to enhance industrial productivity, boost regional competitiveness, and address societal challenges such as sustainable development and equitable access to technology.

Cloud computing services

Argentina is a pivotal market in South America for cloud computing technologies. The widespread adoption of these technologies is expected to significantly impact Argentina’s economy. It is projected that by 2038, cloud adoption will contribute an average of $42.8 billion annually to the country’s GDP. To put this into perspective, Argentina’s total GDP in 2021 was approximately $440 billion, highlighting the substantial potential for economic growth driven by cloud innovations.

E-commerce

Argentina ranks as the fourth-largest e-commerce market in Latin America and the 20th globally, with a projected CAGR of 20.69% from 2022 to 2027. The surge is attributed to a growing user base in internet, mobile, cardholders, and digital wallets. Buenos Aires-based online marketplace MercadoLibre is pivotal in propelling e-commerce development in Argentina. Another source of continued development of this tech sector is the country’s rising popularity of software development services.

Don’t hesitate to check the specifics of the software development in Mexico! 

Why Companies Choose to Outsource to Argentina

Outsourcing software development to South America, particularly Argentina, has become a workable solution for many US and Western European tech businesses. Here are some reasons why outsourcing software development to Argentina can beef up things in your tech company:

1. Growing Talent Pool

Argentina has a remarkable tech talent pool of over 115,000 software engineers. With local universities producing around 27,000 STEM graduates annually, the number of tech gems has likely surpassed the 150,000 mark in 2024. Governmental initiatives like Argentina Innovadora 2020 and Argentina Conectada are also fostering the programming vocation among the younger generation to create a talent bank of highly skilled software developers in Argentina for the future. Meanwhile, Argentina Programa 4.0 is already contributing to the country’s tech workforce by offering free coding and digital skills training.

2. Solid Tech Skills

Software engineers in Argentina are globally recognized since the country ranks 38th worldwide and holds the #4th position for data science and #7th position for technology skills in LATAM. These developers excel in mobile development, computer programming, and databases, with a particular strength in data analytics. Plus, their proficiency in technologies like Python, TensorFlow, SQL, R, and NLP makes them ideal candidates for companies that are seeking staff augmentation in Argentina.

3. Top STEM Education

The exceptional expertise of developers in Argentina is nurtured by national universities known for their excellent computer science programs. Argentina’s commitment to developing the education system is evident in the World Population Review, where it ranks 38th. Ten Argentinian universities, including the University of Buenos Aires, the National University of La Plata, and the National University of Cordoba, are among the Best Global Universities, based on their research performance and ratings by academic community members worldwide and within Latin America.

4. Cultural & Language Compatibility

Software developers in Argentina are distinguished by their high proficiency in English, ranking #1 in the region and 28th globally. Beyond language skills, Argentina’s business culture resembles the Western one, making onboarding and collaboration with such developers a breeze. Their exceptional qualities are diligence, punctuality, attention to detail, and a notable passion for their craft. When you work with a development team in Argentina, you can be confident that they will consistently go the extra mile in developing your product.

5. Time Zone & Geographical Proximity

Other generous bonuses for choosing Argentina as the nearshoring location for a US company are geographical proximity and convenient time zones. Being only one hour ahead of most American cities allows you to schedule suitable meetups for both sides and establish common deadlines.

Check out our article on nearshore software development to Colombia 

as an alternative for your business expansion.

6. Government Support

Beyond the influential local tech community, the Argentinian government actively fosters favorable conditions in the local market for foreign companies seeking to outsource software engineers in Argentina. Several pertinent programs like Startup Buenos Aires and IncuBAte were designed to bolster tech entrepreneurship and play a pivotal role in boosting software development in Argentina.  In response to the challenges posed by the pandemic, Argentinian authorities enacted the Legal Regime of the Teleworking Law. This legislation safeguards the rights of remote workers, specifying regulations for remote work relationships.  Additionally, Argentina has taken steps to digitize its bureaucratic system, enabling businesses to be fully established online within just 24 hours. This commitment to streamlining processes demonstrates the government’s dedication to creating an attractive environment for foreign companies.

7. Taxe Incentives

To foster innovation, the government has introduced various tax initiatives for companies with software development centers in Argentina, as well as those planning to enter the market. Argentina offers initiatives like the Régimen de Incentivos para Grandes Inversiones (RIGI), which provides tax breaks and economic incentives to attract both foreign and domestic investment in key sectors, making it an appealing destination for tech companies setting up R&D centers.  Additionally, Law 27,506 (amended by Law 27,570) introduces a special promotional regime for knowledge-based activities, offering tax reductions for companies involved in software engineering in Argentina, computing, and digital services until 2029. This includes a 60% CIT reduction for small firms, 40% for medium-sized, and 20% for large companies, as well as export duty exemptions and fiscal credits.

Software Development Outsourcing Hubs in Argentina

Buenos Aires

The Argentine capital shines as Argentina’s entrepreneurial heartbeat and ranks as the 5th largest tech powerhouse in Latin America. Known for its innovation, Buenos Aires hosts 58% of all startup activity in Argentina, including three outstanding unicorns: MercadoLibre, Uala, and Globant. The city’s dynamic startup ecosystem comprises a notable concentration of fintech, social & leisure, foodtech, and e-commerce startup companies.  This vibrant city is also home to approximately 85% of the Argentinian developers, recognized as the most well-educated in the country. These skilled tech professionals fuel a vibrant scene anchored by parks and centers such as AreaTres, Startup Buenos Aires, Palermo Valley, and Catalinas Norte Technology Park.

Córdoba

The country’s second-largest tech center is often called La Docta due to its high concentration of bright minds and skilled software developers from Argentina. The city attracts and nurtures thousands of new experts, including software developers. A key player in the tech sector is the Córdoba National University (UNS), which has a national student population of around 132,000.  Córdoba is gaining recognition for its growing number of startups and accelerators. One of the most active accelerators is Incutex, the first-ever in Córdoba and ranked as the 5th best accelerator in Latin America. The city is home to approximately 400 tech companies and 200 startups featuring stars like Xcapit, Wibond, and Mobbex. Notably, between 30% and 40% of all software development exports from Argentina originate from Córdoba.

Mendoza

An emerging tech hub in Argentina, Mendoza, is actively cultivating the entrepreneurial spirit. To make it a reality, the government launched the “Consejo Consultivo Emprendedor” (CCE) initiative that resulted in an impressive 20,000 employment, over 4,000 new establishments, and 200 investments. Mendoza also boasts a growing startup ecosystem known for its two successful startups: Energe and Eventioz.

Despite facing challenges such as limited access to venture capital and overall investment, Mendoza is steadily establishing itself as a player in the IT sector. With a large population of university graduates and access to great talent, this hub attracts an increasing number of foreign tech companies looking to build development teams in Argentina.

Outsourced Software Developer Salaries in Argentina

Price is often a critical factor when tech companies consider outsourcing to Latin America. Argentina’s software outsourcing standouts in this regard, as this LATAM destination offers some of the most cost-effective salaries for senior tech talents. Check out the table below for a closer look.

A remote team in Argentina will typically cost you 12% less than in Mexico, 13,5% less than in Chile, and a staggering 55% less than in the US. In case you’re interested in comparing rates for employee outsourcing to Argentina with Colombian ones, have a look at our article on outsourcing to Colombia or use our free software cost calculator.

Still, when choosing an outsourcing destination for hiring developers, you should also pay attention to these significant salary-formation factors:

• Experience. When hiring software developers in Argentina, outsourcing costs vary based on their seniority, tech stack, and specialization. The usual difference between the remunerations of junior, middle, and senior software developers fluctuates between 30%-50%. For instance, a junior AI engineer in Argentina typically earns around $25,000 annually, while a senior developer’s salary can be over 50% higher, reaching up to $60,000.

• Level of education. The level of education has a significant impact on a software engineer’s salary in Argentina. According to global statistics, individuals with a Bachelor’s degree earn, on average,67% more than high school graduates, yet their earnings are still 19% lower compared to those holding a Master’s degree.
• Type of company. Company type also plays a huge role in the cost of software development and application outsourcing to Argentina. For example, product tech companies usually pay more to Argentinian software engineers than outsourcing and outstaffing tech companies. Why? Because the former develop their own products, which requires programmers to have more advanced hard & soft skills and experience, resulting in higher compensation. At the same time, the latter provide software development services to other businesses, and to receive more profit, they tend to cut the pay for their coders.

Challenges of Outsourcing to Argentina

Developer dedication

One significant challenge tech companies encounter when opting for software outsourcing in Argentina is team loyalty. When hiring your own programmers, you can rely on their commitment to your product as they become official employees invested in your company’s growth and success. In contrast, outsourced developers are a temporarily leased workforce that tends to treat each project as one of the many, nothing special. Going the extra mile and putting in effort may not be anticipated by such experts, which can further lead to possible development complications and even low-quality products.

Data protection

Did you know that data storage leaks are increasing year-over-year, while over 82% of breaches involve data stored in the cloud? Offshoring software development to Argentina significantly increases the risk of exposing your sensitive data. When entrusting a third party with your information, you rely on their safety standards. If your tech outsourcing provider lacks robust security measures or experiences a compromise, your data may be at risk. Another concern is the reliability of outsourced developers, as they might use your confidential information or developments for other projects.

Cloudy pricin

There is a common belief that IT outsourcing is often seen as a cost-effective solution, and it’s true that getting services in lower-cost countries like Argentina can save you money. The pitfalls arise because most outsourcing providers tend to add markups on top of their monthly fee. These additional costs may involve procuring extra equipment, delivering unnecessary tech services, or requiring developer training. Moreover, potential product adjustments could impose a financial burden over time and transform software development outsourcing into a potentially costly venture.

Lack of control

Software outsourcing to Argentina presents a challenge for tech product companies due to limited supervision of the development process. When outsourcing, most management functions are delegated to the service provider, who handles the project from beginning to end. Consequently, the client has minimal involvement in software development and is mainly waiting for the result.   Moreover, a project manager typically conducts all communication with the developers. This setup may significantly extend task completion time and potentially result in misunderstandings and errors that impact the quality of the end product.

Tips to Successfully Outsource Software Development to Argentina

As you can see, Argentinian IT outsourcing has quite a few drawbacks. So, if you own a tech product company, it’s better to refrain from this cooperation model, keep all software development in-house or in your R&D center in Argentina, and outsource only operational functions to a reliable provider.

Here are some tips on how to perform this kind of strategic IT outsourcing in Argentina:

• Define the scope of the work. First of all, you should identify the specifics of your project. Suppose it involves the development of a software product in the long term. In that case, consider getting your own team of developers instead of sharing your ideas and sensitive data with third parties. If you’re a non-tech business that needs to complete a task or project for which you lack expertise, you may find outsourcing a good way to go.

• Pick a cooperation model. The next step is to select the best option for cooperation with your future vendor. There are 4 prevalent engagement models: tech R&D center, Employer of Record, tech recruitment, and tech outstaffing in Argentina that I will describe in more detail in the next section.
• Choose a service provider. When scrolling the websites of potential vendors, pay attention to their expertise, guarantees, case studies, and client reviews on independent platforms.

4 Alternatives to IT Outsourcing in Argentina

Software R&D center

One of the most ingenious approaches to team expansion is to stop searching for an outsourcing partner and start building your own software development team in Argentina. Your ideal R&D center solution provider should offer a comprehensive set of services, including:

• Tech recruitment: Involves sourcing and pre-screening qualified candidates, conducting job interviews, and performing background checks to ensure a high-quality talent pool that matches your specific needs and company culture.
• EOR services: Allows you to forget about outsourcing payroll to Argentina. With a legal entity, your trusted partner handles legal matters related to employment, covers onboarding and offboarding of developers, manages monthly payroll and employee benefits to ensure full compliance and smooth expansion.
• Operational support: Typically covers a wide range of services, including office leasing, hardware procurement and WFH for your development team, visa support for international hires, insurance assistance, and employer branding campaigns.

The outcome is a fully supported team of dedicated software engineers, managed payroll and compliance, as well as a fully equipped office space. Have a look at how it worked out for US-based tech company People.ai:  

IT outstaffing

Another option similar to software development outsourcing is tech outstaffing in Argentina. In this model, external developers are temporarily leased to work on specific projects, allowing for quick team scaling up or down.  The critical advantage of outstaffing over outsourcing is greater control over the development process. You can monitor the product lifecycle and communicate directly with the tech team. However, this model doesn’t fully protect against potential intellectual property breaches, hidden costs, or team indifference. Additionally, if you wish to keep the external programmers long-term, buy-out fees could add significant expenses—usually tens of thousands of dollars per a software developer. Additionally, outstaffing can lead to challenges in team integration, as external developers may not fully align with your company culture or goals, and managing remote teams requires substantial communication and coordination efforts.

Explore the pros and cons of the staff augmentation model in Latin America!

Tech recruitment

A safer model to IT outsourcing in Argentina involves partnering with a tech recruitment agency. It handles the hiring process from start to finish—crafting ideal candidate profiles and EVP, sourcing talent, conducting job interviews, and making offers—ensuring you get software developers who perfectly match your needs.  Unlike traditional strategies for outsourcing to Argentina, partnering with a tech recruitment agency keeps you in full control. You decide on hires, team composition, and management. However, this model has its limitations. It focuses on talent acquisition alone and usually doesn’t presuppose additional support with employment contracts, onboarding/offboarding of developers, payroll management, compliance with international laws, etc. You would have to delegate these functions to another vendor which can be time-consuming, costly, and may even risk the security of your developers’ information.  Additionally, recruitment agencies without strong expertise in filling tech roles may struggle with urgent hiring needs or finding talents with rare skills, slowing team scaling and potentially impacting your revenue.  Still, not all hiring providers are the same. Here’s an example of how tech recruitment can be done successfully. The French cryptocurrency company Ledger turned to Alcor’s R&D center solution and got a fully backed team of 10 QA professionals. Our tech recruiters wowed the client by closing the QA Lead and 3 QA Manual positions within just 2 weeks. Meanwhile Alcor’s legal and operational teams took care of everything from legal and compliance, tax payments to payroll and IP rights support. This seamless expansion ensured Ledger’s engineering team hit the ground running with no bumps along the way.

EOR services

One more alternative to IT outsourcing in Argentina is cooperation with an Employer of Record (EOR) company. Instead of opting for a strategy to outsourcing to Argentina, the EOR partner employs your software developers on your behalf via their local legal entity. Plus, they handle monthly payroll, tax management, accounting, and employee benefits. However, this model usually excludes recruitment services, meaning you’ll need to source, interview, assess, and hire developers in Argentina on your own, unless you partner with Alcor and…

Set up Your own Software Development Center in Argentina

If you’re drawn to rapid team expansion and want to bypass the drawbacks of IT outsourcing and other engagement models, then Alcor’s software R&D accelerator is your best bet!  With the perfect turnkey solution, Alcor helps US tech companies expand into the LATAM and Eastern European markets. This includes not only hiring software developers in Argentina, Mexico, Chile, and IT staffing in Colombia, but also a full-scale EOR service along with the necessary operational support. 

Plus, there’s no need to register a legal entity and pay any buy-out fees—the development team is yours from day one. And the icing on the cake? It’s 40% cheaper than traditional IT outsourcing! But that’s only a glimpse of what we can offer. What truly matters is the success we drive for our clients. With 96% of them satisfied with our services, including top names like People.ai, ThredUP, and BigCommerce, Alcor consistently wows with top results.  Got specific needs or questions? Let’s hop on a call to discuss how quickly we can set up your R&D center and smoothly integrate it into one of our prime locations.