There are a number of reasons Latin America is becoming the preferred outsourcing and nearshoring destination for North American companies. Labor costs are similar to those of other outsourcing locations like India or Ukraine, there is a high level of skill, shared time zones, and higher familiarity with North American language and culture. But Latin America covers a pretty large area, which can make it difficult to choose which area is right for your company’s needs.
To help your company sort through the different outsourcing regions, we’ve listed the top ten tech outsourcing cities in Latin America in no particular order. There are a lot of factors that play into what makes an outsourcing destination worth it, so we’ve tried to highlight a few of the specialties of each place. We’ll share at the end which destination we believe offers the best overall options for outsourcing, nearshoring, and Build-Operate-Transfer scaling.
Brazil has long been a top outsourcing destination for North American companies. Not only do they have some of the top engineering schools in Latin America, but they have also invested significantly in entrepreneurship, IT talent, and collaborative space.
São Paulo is the largest city in South America with over 18 million people. Not only does it have the benefit of a large population, but there is a very large tech and innovation culture. Between the heavy investment from companies like Google and universities like the University of São Paulo, talent continues to grow.
As is the case with other cities in Brazil, the cost of an intermediate-level engineer is on the high side at $30 – $50/hr. However, it is still well below North American salary expectations.
Not only does Mexico have the second-largest amount of outsourcing talent in Latin America, but it is also a quickly developing engineering hotspot, global industry hub, and on the lower end of cost for highly skilled labor.
Mexico City, like São Paulo, is the largest city in the region by far and carries with it a lot of the same benefits. There is a history of investment by both the government and private companies to build tech talent. Stanford’s Startup Garage is a great example.
Large conglomerates like Honeywell, Salesforce, and now Pinterest have already established a strong presence in the city and attract talent from the entire region. CDMX is a gatekeeper in many ways to influence the rest of Latin America, but the cost of labor is significantly lower than São Paulo, Brazil, at $20-$30/hr.
Due to political and cultural challenges, Buenos Aires, Argentina had a late start for developing tech talent and opening its doors to outside business. However, they have caught up in significant ways and now have a lot to offer from an outsourcing perspective.
Buenos Aires is a well-rooted global city with deep cultural and academic foundations. Between the high levels of education and state investment, it is also becoming one of the leading hubs for tech talent.
The average cost of an intermediate software engineer is the highest of all the regions but is still significantly lower than the American or Canadian counterpart. With companies like Google, Amazon, and Twitter building a presence in Argentina, the long-term investment as an outsourcing or BOT option is strong.
Colombia boasts some of the lowest average costs for an intermediate software developer, making it immediately appealing as an outsourcing destination. It also has a growing pool of tech talent both through university graduates and regional draw. Bogotá, its largest city, leads the way in outside investment and talent. The strong start-up scene makes it an appealing place for young programmers wanting to join a driven community.
The government has also done a lot in recent years to cultivate high-quality engineering talent through the Ministry of Science, Technology, and Innovation. With a shared time zone with New York and the East Coast, Bogotá, Colombia is a great option for outsourcing software development.
Santiago, Chile is a great example of what happens when the government puts serious investment into the tech and innovation economy. Chile has some of the highest enrollment rates in engineering in Latin America and has some of the most favorable visa options for workers involved in the tech and innovation space.
The government has stayed on the cutting edge of engineering by investing in BlockChain development and the fintech industry. Although the average salary cost of an intermediate developer in Santiago is relatively high compared to other parts of Latin America, there is still a large and growing pool of tech talent at a relatively affordable rate.
Over the past twenty years, Guadalajara has seen one of the biggest startup and tech booms in all of Latin America. Elon Musk, in 2016, called it the Silicon Valley of Latin America. The government made it the Central Digital City in Mexico. There is a vibrant infrastructure for tech innovation and talent training that keeps some of the top Latin American talent relocating to Guadalajara.
There is also a strong university presence in Guadalajara, growing available tech talent every year. With conferences like Talent Land, Guadalajara is an outsourcing and BOT city you can’t ignore.
Florianópolis, for many, is a surprising location for a burgeoning tech scene. An island off the coast of South Brazil typically known for its beaches and scenery has also become one of the biggest tech hot spots in South America.
The co-working boom thrived in “Floripa,” creating an atmosphere of collaboration that permeates the startup and tech culture there. Strong universities and a number of innovation parks make the city appealing for not just Brazilian tech talent, but also international corporations.
With a population of only 400,000 in the city, it is surprising how many talented and affordable software engineers reside in San José, Costa Rica. Much of this is due to a stable government, high levels of tech investment, and great universities.
Companies like IBM and Intel have already invested in building offices and presence in San José, which has only attracted more talent to the city. With it sharing a time zone with the states and the relative proximity to the U.S., there is a strong outsourcing potential for the country.
Main benefit: Great universities and stable, internationally friendly government
Most common software developers: Agile Software Developers
Average salary: $4,171/month ($25 – $35/hr)
Top companies with an outsourcing presence: IBM, HP, Intel
Shared U.S. time zones: CST
Like the other two Mexican cities mentioned, Monterrey is a fast growing destination for tech talent and development. With some of the best universities in Mexico, close proximity to the United States, and a growing innovation investment, Monterrey is a great option for outsourcing in Latin America.
The Tecnológico de Monterrey and the Universidad del Estado de Monterrey graduate more than 14,000 new engineers every year and a growing number of startups and venture capital firms call Monterrey home.
San Juan, Puerto Rico is currently investing heavily in training talent for AI, BlockChain, and IoT innovation. Though it has a smaller, and thus more competitive, workforce, the talent is highly skilled and part of an exciting shift towards the global tech economy.
There has been significant growth in the fintech world, attracting talent and large firms alike to grow roots in San Juan. With a shared time zone and a short plane ride, Puerto Rico is a solid contender for outsourcing and BOT, particularly for companies in the finance industry.
When it comes to outsourcing, nearshoring, and BOT, Latin America is filled with great options. However, we do believe there is one region that stands out. Guadalajara, Mexico is our leading recommendation for outsourcing, nearshoring, and BOT, although you can’t go wrong with pursuing options in any of the countries discussed on this list.
Not only does Guadalajara have a growing number of software developer talent, but it has a number of benefits the other regions don’t have.
There is great talent across all of Latin America, so continue to do your research and tap into the benefit of great talent at fractional costs, regardless of which region you work towards.
Schedule a call with a tech consultant today to find out how this thriving Mexican city can be the key to your future growth. You can also download our Mexico Tech Salaries 2021 report, compiled from survey data from over 15,000 developers, for deeper insight into the ecosystem and the salary trends.