Offshore software development, the practice of outsourcing software development to a company or team located in a distant country or region, has been a highly popular practice for years now. Companies of all sizes recognize the benefits that come with offshore outsourcing, such as cost savings, access to a skilled workforce, and the ability to operate 24/7. In that context, Latin America has become a popular destination for companies looking to outsource software development.

But why is Latin America such a popular destination for offshore software development? There are several reasons, including a growing pool of highly skilled developers, competitive pricing, timezone matching, and cultural proximity to the US and Canada. According to a 2021 report by Statista, Latin America has nearly 1 million offshore software developers, mostly located in Brazil, Mexico, and Argentina.

Although it's home to more than 2 million developers in total, there are still many more professionals available offshore. Moreover, this talent pool is highly skilled and growing rapidly, with many universities and technical schools focusing on training students in the latest technologies and programming languages.

Why offshore to Latin America

Lower costs

Outsourcing software development to Latin America can lead to significant cost savings for companies. According to a Latin American Private Equity & Venture Capital Association report, the average salary for a software developer in Latin America is around 30-40% lower than in the US and Canada. Additionally, many Latin American countries offer generous tax incentives for companies looking to establish a presence there.

Proximity and time zones

Latin America is geographically close to the US and Canada, making it easy for companies based there to communicate and collaborate with their outsourced team. Additionally, most Latin American countries are in the same time zone or only one hour behind, so North American companies can work with their team during regular business hours without the need for overnight or early morning meetings.

Cultural alignment

Latin America's cultural proximity to the US and Canada makes it an excellent destination for outsourcing software development. Many Latin Americans speak English and have a similar business culture as their North American counterparts, making it easier for companies to work together and understand each other's needs and concerns.

Skilled talent

As mentioned earlier, Latin America has a growing pool of highly skilled developers who are well-versed in the latest technologies and programming languages. Many of these developers have experience working with companies in the US and Canada, and they understand the unique challenges and needs of these companies.

Tips for offshoring to Latin America

Conduct thorough research

Before offshore outsourcing software development to Latin America, it's important to conduct thorough research on the region's different countries, regions, and providers. This includes researching local laws, regulations, tax incentives, availability of skilled talent, and cost of living.

Consider the language barrier

While many Latin Americans speak English, it's still critical to consider the potential language barrier when outsourcing software development. Make sure that your team and the outsourced team have good communication skills and a clear understanding of the project's goals and objectives. Also, check each country's English proficiency, as some countries (like Argentina) have better English capabilities than others. 

Establish clear guidelines and expectations

To ensure the success of your outsourcing project, it's indispensable to establish clear guidelines and expectations for your outsourced team. This includes setting deadlines, outlining the project's scope, and defining each team member's roles and responsibilities.

Build a strong relationship

Building a solid relationship with your outsourced team is crucial for the success of your project. Regularly communicate with your team and make sure to address any issues or concerns in a timely manner. Additionally, consider visiting your outsourced team in person to build trust and understanding.

Final thoughts on offshoring to Latin America

Offshoring software development to Latin America can be a cost-effective and efficient way for companies to access a growing pool of highly skilled developers. However, it's essential to conduct thorough research, consider the language barrier, establish clear guidelines and expectations, and build a strong relationship with your outsourced team to ensure the success of your project. One of our articles might help you with that.

Furthermore, it's significant to note that Latin America isn't just a one-size-fits-all destination for offshoring. Different countries have different strengths and capabilities, so companies should carefully evaluate their options and choose the country that best fits their needs. 

For example, Mexico has a large and well-educated workforce with a strong focus on technology, while Brazil has a large domestic market and a strong presence in financial services and e-commerce. Meanwhile, Argentina has a strong tradition in software development and is home to a growing startup scene.

Companies that are interested in offshore outsourcing to Latin America should also keep in mind that the region is constantly evolving and changing. This means that companies should be prepared to adapt to new developments, such as changes in regulations, new technologies, and the arrival of new competitors. By staying informed and being prepared to adapt, companies can make the most of their outsourcing investment and build long-term partnerships with their outsourced teams.