Numbers don’t lie: in 2025, the LATAM IT Services market will soar to $59.7 billion, driven by the growing trend of outsourcing software development to Latin America. Thanks to emerging technologies like 5G, blockchain, augmented reality, artificial intelligence, and robotic process automation, LATAM will continue to attract attention this year. But how can your tech company seize this opportunity and boost its growth in 2025?
My name is David Gomez, and I’m the Lead IT Recruiter in LATAM at Alcor, a software R&D accelarator for tech companies seeking expansion. With the blend of top-notch EOR services, tech recruitment, and operational support we seamlessly build offshore or nearshore Silicon Valley-caliber teams from 0 to 100 specialists in a year, ensuring 100% legal compliance across LATAM and Eastern Europe.
In this article, you’ll discover key facts about the region’s tech growth, learn about its compelling advantages and challenges, gain valuable insights from an experience-based comparison between Eastern Europe and Latin America, and most importantly—explore the best ways to work with software engineers in Latin America. Keep reading!
Is Latin America the Fastest Growing IT Outsourcing Destination?
China and India have long been at the forefront of tech outsourcing, largely because of low costs and workforce availability. Asia, according to Statista, remains one of the biggest tech outsourcing markets, with 2025 revenue projected to reach $126.9 billion. However, South America shows a higher annual growth rate—9.5% compared to Asia’s 9%.
The 2023 Kearney Global Services Location Index placed Mexico in the top 10, rating its business environment, financial attractiveness, digital resonance, and tech skills. This year, Mexico and Colombia overtook the Philippines, which is known as a significant Asian location for business offshoring.
On the whole, outsourcing from South America is a booming trend, but you would probably ask yourself…
What Companies Outsource to LATAM and Why?
Today, 71% of global companies seeking better alignment with business strategy, higher performance quality, and access to top talent turn to outsourcing. Meanwhile, around 300,000 US jobs remain unfilled each year, an increasing number of American tech companies are joining this trend. Microsoft, for instance, has outsourced its operations and has established an extensive network across Brazil, Colombia, Chile, and Mexico, while Intel has chosen Costa Rica as its primary outsourcing destination.
So, what are the reasons to outsource to Latin America that attract major market players?
Vast Talent Pool
The first reason to outsource to LATAM is the sheer number of developers—around 2 million and counting, with Mexico leading the way with 800K tech experts. Brazil comes in second with 630K software engineers, while Argentina and Colombia boast 150K and 165K programmers, respectively.
Competitive Salaries
One of the benefits of outsourcing to Latin America is that you can reduce the compensation budget by 2 times. Just take a look: in Mexico and Argentina, you would pay $62,400 and $60,000, respectively, for a senior AI specialist, while in the US, the same expertise and experience would range from $120,000 to $144,000.
The rates for C-level positions are also significantly lower: CTOs and CIOs in the US tech market will cost you around $212,000, whereas in LATAM, the average rate is $100,000. Consequently, if you hire Latin American developers, you can save up to 55%, which you can redirect toward your ambitious projects and product development. To get more insights into salaries across different LATAM countries, keep reading—my team has prepared a full table of rates for the most in-demand positions.
Impressive Tech Expertise
The staggering amount of development of education in technology in Latin America has created an opportunity for its software developers to be highly competitive in the world market.
- Mexico: Mexican developers are ranked 3rd in the region for data science proficiency, and the country itself is LATAM’s 2nd largest fintech ecosystem, making the choice of Mexico for software development outsourcing in any area practically a winning game.
- Colombia: JavaScript made it to the top five skills, and that’s what sets Colombia apart: it has one of the largest JavaScript communities in Latin America. Moreover, the country ranks #5 in overall technology skills in the region, excelling in operating systems and computer networking.
- Argentina: IT outsourcing to Argentina offers excellent mobile development, data analytics, and AI development, as the country ranks 3rd in the region for AI policy implementation. Moreover, thanks to government-led CESSI internships, its devs graduate fully ready for the job market.
- Chile: outsourcing software development to Chile guarantees expertise in PHP, Angular, and other languages and frameworks. Moreover, alongside Brazil and Uruguay, Chile demonstrates cutting-edge proficiency in tech and data science fields.
Developed Tech Network
Outsourcing to South America & Mexico opens the door to:
- Mexico’s 20+ innovation parks and well-established government-led incentives, such as 500 Startups LATAM and Fondo Nacional Emprendedor;
- Colombia’s innovative tech hubs, with its city Medellín dubbed the “Silicon Valley of Latin America”;
- Argentina’s favorable business environment and local taxation laws that allow tech startups to benefit from a 75% tax reduction under the Entrepreneurs’ Law.
Geographical and Time Zone Proximity
What makes US companies choose Latin America for outsourcing is the 1-4 hours’ time difference with main LATAM tech hubs. While Mexico operates in the GMT-6 time zone, along with Chicago, and Argentina in GMT-3, Colombia aligns with New York, Washington, Florida, and Virginia in GMT-5. The proximity of most countries in the region ensures effective communication and planning, as well as cultural affinity and similar work ethics, further enhanced by high levels of English proficiency. This ultimately leads to faster and better product development. As a result, companies that outsource software development from Latin America gain an advantage over those relying on the Asia-Pacific region.
Better Than Outsourcing to Latin America
To fully leverage the advantages of the Latin American market, outsourcing might not be enough to fuel your growth. But what’s the alternative?
A tech R&D center—your ultimate solution to outsourcing headaches and a perfect way to expand to LATAM seamlessly under full in-country support!
At Alcor, we follow a 360-degree approach to build product development centers for our clients, which includes:
- Tech recruitment, sourcing and hiring the top 10% of talent who integrate smoothly into your team and corporate culture.
- EOR with full regulatory compliance, payroll, and tax management to keep you free from legal risks in a new market.
- Operational support, including office leasing, hardware procurement, and, if needed, employer branding.
And all of this with zero buy-out costs and up to 40% cost savings compared to traditional outsourcing.
Latin America vs Eastern Europe for IT Outsourcing
Market Growth
Eastern Europe, in terms of rapid and consistent growth, mirrors the Latin American software outsourcing market. Their projected CAGR for 2025-2029 rates are quite similar—7.75% against 8.99%. As for the tech outsourcing market revenue projections, the Eastern European amount will reach up to $7.1 billion by 2029, while the Latin American one will grow to more than $27.5 billion.
Talent Pool & Skills
- The number of software engineers in Eastern Europe is also comparable to the pool of software developers in Latin America. The total number of software engineers in the region reached 1.3 million in 2023, and today, this figure has grown to 1.8 million—on par with Latin America. As of 2025, Poland houses 650K professionals, Ukraine— 302K, Romania—250K, and Bulgaria—116K of tech experts.
- While tech professionals from Latin America are proficient in .Net, Java, Ruby, Python, C++, C#, React, and Node.js, Eastern European software engineers excel in JavaScript, TypeScript, PHP, HTML, Swift, as well as Python and C++. Notably, both regions have high scores in Coursera tech skill tests.
Tech Education
In terms of technical education, both regions boast high-class universities in QS World University Rankings—133 for Eastern Europe and 437 for Latin America & The Caribbean. Some of the most well-known higher institutions in Eastern Europe include Warsaw University of Technology, Czech Technical University in Prague, National Technical University of Ukraine, Slovak University of Technology in Bratislava, and others.
In the meantime, Latin America host such prominent universities as Universidad Nacional Autónoma de México, Tecnológico de Monterrey, Universidad de Buenos Aires, and Pontificia Universidad Católica de Chile, annually supplying the local tech market with 186,200 STEM graduates and providing the world with access to fresh software developers from Latin America.
English Skills
Notably, Eastern Europe scores better in terms of English proficiency. For instance, Poland, Romania, Bulgaria, Hungary, and Slovakia are in the global top 20. On the other hand, developers in Latin America are proficient enough to undertake software development projects. For instance, both Colombia and Argentina boast high levels of English fluency, with Argentina being #1 in terms of language skills in Latin America.
Average Salaries
Here’s a quick overview of average annual salaries for senior programming positions in Eastern Europe and Latin America.
|
Position |
Gross Annual Income, USD | |||
| Latin America | ||||
| Mexico | Argentina | Colombia | Chile | |
| Python Developer | 62,400 | 57,600 | 60,000 | 60,000 |
| Java Developer | 66,000 | 57,600 | 60,000 | 60,000 |
| Data Scientist | 42,000 | 45,600 | 48,000 | 42,000 |
| DevOps Developer | 72,000 | 63,600 | 69,600 | 69,600 |
| Cloud Engineer | 68,400 | 68,400 | 54,000 | 64,800 |
| Position | Gross Annual Income, USD | |||
| Eastern Europe | ||||
| Poland | Romania | Bulgaria | Ukraine | |
| Python Developer | 81,600 | 81,000 | 69,000 | 72,000 |
| Java Developer | 84,000 | 81,600 | 78,000 | 60,000 |
|
Data Scientist |
66,000 | 54,000 | 54,000 | 42,000 |
| DevOps Developer | 87,600 | 81,600 | 78,000 | 72,000 |
| Cloud Engineer | 72,000 | 84,000 | 57,600 | 50,400 |
As shown in the table, the average salary in Eastern Europe is slightly higher than in Latin America—$70K against $56K. Eastern European Data Scientists and DevOps Developers earn the highest among the roles compared—$42K-$66K and $72K-$87K, respectively.
Also, while in Eastern Europe, the highest salaries are paid in Poland, in Latin America, this position is reserved for Mexico, whereas the lowest salaries can be found in Colombia and Argentina. In conclusion, while both regions offer cost-saving opportunities, outsourcing software development to a team from Latin America stands out as a smart, budget-friendly strategy.
Tips and Tricks on Overcoming Potential Risks
Data Protection Issues
In 2024, the global average cost of a data breach in organizations reached $4.88 million. Weaker security protocols, accessing data from unauthorized networks, or low cybersecurity awareness can put your company at risk. At the same time, in any nearshore technology, data security comes first both for your product and clients.
Solution: Mitigate the risks
If you have your mind set on outsourcing software development to South America & Mexico, think of protecting digital assets beforehand. I’d also suggest incorporating data security policies into your onboarding so that your software engineering team is informed about all preventative and maintenance measures for data protection.
Need for Local Help
Managing Latin American tech outsourcing alone is an uphill battle. Here’s why:
- Reason 1: Complex labor laws;
- Reason 2: Confusing taxation;
- Reason 3: Time-consuming payroll;
- Reason 4: Critical operational aspects.
You’ll have to deal with local differences, whether outsourcing to Chile, Argentina, or Mexico. While it’s possible to completely outsource these processes, the fees can soar. The reason for this is that outsourcing agencies usually suggest a full list of services for you to pay for, even if you need just a few.
Solution: Find a Trusted Provider
If you decide to outsource to Latin America and need a remote partner to manage payroll or set up an office but are not ready to pay the costs for other services, opt for a flexible and transparent provider. This way, you’ll be able to negotiate expenses depending on your needs when software outsourcing to Latin America. I’ll elaborate on how to approach your search below.
How to Choose a Business Process Outsourcing Provider
Reliability
Nothing beats a proven track record when you’re searching for an experienced provider to outsource software development to Latin America. Look out for case studies and evidence of consistently great performance. This way, you’ll be able to rely on the company’s promises.
Excellent Reviews
Client reviews will give you more insights into the provider’s communication and approach to cooperation. One of the most reputable resources is Clutch, but you can also check out the company’s website.
Speed & Efficiency
When it comes to outsourcing software developers from Latin America or other regions, recruitment speed is undoubtedly important, and so does overall efficiency. Ideally, you’d want a fully operating team within a short time frame and without the need to replace new hires. The time to hire depends on the specific skill set, location, and employer branding of your company in the chosen market.
Why Outsource to Latin America with Alcor
We are a trusted all-in-one place R&D accererator in Latin America and Eastern Europe. Our offer is better than simply software outsourcing from South America—not only does it guarantee a loyal team of professional devs, but it also incurs no buy-out fees and is oriented toward long-term projects.
But that’s not all—we bring together all three powerful elements mentioned above:
- Alcor is reliable: Alcor’s track record was precisely what compelled Sift, a US online fraud detection company, to start their cooperation with us. The client had a goal to set up a remote branch in Eastern Europe and hire 30 developers in a year. Our skilled IT researchers undertook this ambitious task and even closed the position of the Head of R&D from the second CV. As a result, Sift got 30 top-notch programmers and a fully legally compliant office in Eastern Europe.
- Alcor is trusted: With an average rating of 5 out of 5 on Clutch and a client retention rate of 99% in 2024, we’ve proven our ability to deliver results consistently. But what do our clients say about working with Alcor? Here’s a glimpse:
“I value their commitment to going the extra mile for their clients.”
- Alcor is results-driven: Alcor’s 40 recruiters usually “wow” our clients with their speed—just recently, we staffed 6 Full-Stack Engineers in 6 weeks for GoTransverse, a cloud-based software company. We also provided EOR services and managed procurement and tech infrastructure setup.
If you’re interested in extending your software development teams, opening R&D offices, or technical staffing in LATAM, feel free to contact us for more information.
References on Software Development Outsourcing to Latin America
- Statista
- 2023 Kearney Global Services Location Index
- Deloitte
- Demandsage
- Janco Associates
- Digitaldefynd
- CESSI
- Coursera Global Skills Report 2024
- Coursera Global Skills Report 2024
- EF English Proficiency Index
- IBM