Key Benefits Nearshore Software Development Services Bring to US Companies

Today, most US companies recognize the importance of developing long-term partnerships with regional outsourcing IT providers to help them meet their software goals while saving costs. This kind of cooperation, known as nearshoring, is a type of outsourcing where IT processes are transferred to a software partner in a nearby country with similar cultural traits. It’s much different than offshoring, a form of outsourcing that occurs when you partner with a faraway country, both in terms of geography and culture. Latin American Countries (LATAM) are a natural software partner to unlock the potential of US companies.

US companies are increasingly outsourcing software development to Latin American Countries. In 2025, the projected revenue for the IT Outsourcing market in South America is estimated to be $10.32 billion USD, according to Statista. This market is expected to grow at a compound annual growth rate (CAGR) of 7.29% from 2025 to 2030, leading to a market volume of $14.67 billion USD by 2030. Additionally, the average spend per employee in the IT Outsourcing market is anticipated to reach $49.32 billion USD in 2025. 

Over the past three decades, Latin American countries have made significant strides in building macroeconomic resilience, thereby making them more resistant to shocks such as rising inflationary pressures, global uncertainty, and increased debt. According to a latest report by The World Bank, the region’s Gross Domestic Product (GDP) is expected to grow by 2,1 percent in 2025, followed by growth rates of 2.4 percent in 2026, proving that LATAM countries are and will be a stable and trustworthy partner for outsourcing software development.

Reasons why Latin America is great for nearshore outsourcing development

Software developers rates – North America and Latin America 

Average compensation by experience (6-10 years) in Latin America equals $47,206 yearly in comparison to $113,025 in North America, according to the IT Skills & Salary Report 2024. IT Executives in North America earn around $163,611 USD yearly, while in Latin America, the average salary is $101,571 USD. Individuals responsible for IT consulting in Latin America earn an average of $49,568 USD, while in North America, it’s $117,145 USD.  

Compensation data from IT Skills & Salary Report 2024

Experience, education and skills

Saving costs used to be the main reason companies turned to outsourcing providers from other countries, especially since onshore providers have become more expensive than before. Today, developing a nearshoring partnership is more than just about being cost savvy. Turns out 96% of IT staff members in Latin America are certified, compared to 87% in North America – as noted by the IT Skills & Salary Report. A staggering 59% of IT professionals in Latin America have over 10 years of experience in their respective fields, only 4% less than in North America. LATAM’s IT professionals provide the technical expertise US companies seek, as STEM (science, technology, engineering, mathematics) education standards are modeled after North American systems. Along with these competencies comes investment, as Latin American companies firmly fund cloud computing, cybersecurity, machine learning and infrastructure projects.

Compatible time zones

While time-zone gaps with traditional offshore locations make it easier to hold frequent online meetings, sharing the same or a similar time zone allows for real-time communication. Although this benefit is crucial at every step of the development process, it is particularly valued when dealing with problems that require real-time solutions.

With almost no time difference between the United States and Latin America, you cannot argue that the continent isn’t an excellent destination for growing your team. Whereas Eastern Time (ET) is only one hour behind UTC-3, Central Time (CT) is just two hours behind, Mountain Time (MT) is only 3 hours apart, and Pacific Time (PT) has the most significant difference at 4 hours behind. However, some places in Latin America (UTC-5) only have a 2-hour difference with PT, for instance. Knowing that your team is working while you are working is a significant advantage, especially in contrast with other common outsourcing destinations, which can have a difference of 12 hours.

English proficiency

According to the 2023 EF English Proficiency Index, 70% of LATAM countries have very high to moderate English proficiency. In Latin America, children learn the language from a young age, and being bilingual is a must when working in the IT industry, which makes it much easier to communicate with their North American partners, who do not need to rely on translations or be worried about misunderstandings.

Many software development teams have members who have studied, received training or even worked at US companies, meaning they are familiar with the language, US workplace culture and American approach to software development. With teams experienced at working on several different projects, they can not only offer solutions for your current software needs but also drive innovation in your own company, while helping you introduce new technologies, processes and best practices.

Latim America’s tech trends and companies 

Several key technology areas have become particularly prominent and are central to the services offered by the region’s top talent. 

• Cloud computing: This is the bedrock of LATAM’s tech transformation. Massive investments from AWS, Microsoft Azure, and Google Cloud in local data centers across Argentina, Brazil, Chile, and Colombia have democratized access to enterprise-grade infrastructure. Consequently, expertise in cloud architecture, migration, and cloud-native development is now a core competency. Companies specialize in creating scalable, resilient solutions built entirely on the cloud, reducing latency for North American clients. 
• AI, Big Data, and Generative AI: This interconnected domain thrives on the massive amount of data generated by the region’s large, digitally active population. Fintechs like Nubank and e-commerce giants like Mercado Libre leverage Big Data and predictive AI for credit scoring, fraud detection, and hyper-personalization. Generative AI has exploded in popularity. Nearshoring partners now offer sophisticated services in developing and fine-tuning Large Language Models (LLMs) for advanced customer service chatbots, marketing content creation, and developer productivity tools. 
• Cybersecurity: As the region’s digital economy has expanded, cybersecurity has become a critical, non-negotiable priority. The surge in digital banking and data-intensive applications has created a massive demand for specialists in cloud security, data protection, and threat intelligence. LATAM firms are now key partners in helping global companies secure their digital assets, comply with international data privacy regulations, and defend against increasingly sophisticated cyber threats. 
• DevOps & cloud-native practices: To compete on a global scale with speed and reliability, LATAM firms have aggressively adopted a DevOps culture. This focus on Continuous Integration/Continuous Deployment pipelines, infrastructure as code, and automation is essential for managing the complex applications running on cloud infrastructure. This expertise ensures that software is developed, deployed, and maintained efficiently and securely, offering significant value to clients seeking agile and robust development cycles. 

Cultural proximity

There needs to be more than online meetings and real-time problem-solving to ensure good communication with a partner. Forging an excellent software partnership requires commitment and synergy, and it demands both your team and your partners to have the ability to merge into one joint force. Your partner should be able to grasp the essence of your company to develop a deep understanding of your main goals and values. You can only achieve it with a shared cultural mindset. This is where, once again, nearshoring stands out as compared to offshoring. Latin American countries have a much more European way of working and thinking. They have been strongly influenced by American culture in the last decades, which creates a common ground they can both profit from.

For companies in the US, Latin America is a place with a workplace culture much akin to theirs. Proactiveness, a proneness for innovation and creativity and the importance of relationships based on mutual trust are some of the most relevant and common traits of Latin American software engineering teams. In addition, with direct flights from most LATAM cities to major US airline hubs, it is easy to travel from one place to another and meet face-to-face if required.

Becoming a proven US nearshore software development services partner

Such a clear depiction confirms that software development centers in Latin America possess the necessary resources to partner with and assist North American businesses in expanding their operations. Although the decision to establish a collaboration with a nearshoring development team may seem daunting, it provides access to exceptional talent, expertise, and innovative problem-solving techniques. Moreover, the shared cultural mindset and a focus on maximizing value demonstrate that partnering with LATAM software companies can help businesses achieve the necessary competitiveness.

If you’re a US-based company seeking an experienced LATAM nearshore software development partner to boost your business, get in touch using this form.

FAQ

What are the advantages of nearshore outsourcing?

The main advantage of nearshore outsourcing is its alignment with time zones, which enables seamless, real-time collaboration. Unlike traditional offshoring, which often entails significant time differences, nearshoring allows teams to work during the same business hours. This makes scheduling meetings, asking questions, and resolving issues easier. These benefits foster a greater cultural affinity and understanding, reducing communication barriers. Additionally, traveling conveniently and affordably strengthens relationship-building and enhances integration between in-house and nearshore teams. This results in increased oversight, improved team cohesion, and a more agile response to project changes. Ultimately, nearshoring provides a compelling balance by offering access to a skilled talent pool at a competitive cost without sacrificing the critical advantages of close collaboration and streamlined communication.