IT Outsourcing Latin America: Market Overview

Tatia Tatoshvili

Last updated on December 18, 2025 | 17 min read

IT marketLATAMMarket-reportOutsourcing

Introduction

Latin America is rapidly gaining recognition as a global hotspot for IT outsourcing. With its combination of high-quality talent, cost efficiency, and geographical convenience, the region has become a go-to destination for companies worldwide looking to enhance their competitive edge.

With a strategic location that allows seamless collaboration with North American businesses and a booming tech-savvy workforce, the region has positioned itself as a key player in the global IT services market.

Latin America’s growth as an IT outsourcing hub is fueled by its ability to provide top-tier expertise at highly competitive labor costs.

Moreover, the region’s shared time zones and cultural compatibility with North America facilitate real-time collaboration and foster long-term business relationships.

According to Statista, the IT outsourcing market in Latin America is experiencing remarkable growth, with revenue projected to reach $19.54 billion in 2025 and expand further to $27.57 billion by 2029. This strong demand, driven by an annual growth rate of 8.99%, highlights the region’s increasing appeal for outsourcing services, offering cost-effective solutions and skilled talent.

This growth is fueled by an influx of skilled professionals, with countries like Brazil and Mexico producing a steady stream of IT experts supported by government initiatives and an expanding tech ecosystem. Latin America is not just an alternative outsourcing destination; it’s becoming a strategic choice for businesses aiming to stay competitive in the global digital economy.

Moreover, the Inter‑American Development Bank (IDB) estimates that nearshoring could boost exports from Latin America and the Caribbean by a staggering $78 billion annually, including $14 billion from services alone, a clear indication that IT outsourcing is propelling the region’s broader export-driven economic expansion.

In this article, we’ll explore the key aspects of outsourcing to Latin America, providing a comprehensive overview of the region’s growing prominence in the IT outsourcing industry.

Why outsource to Latin America?

Outsourcing, the practice of hiring external organizations or professionals to handle specific business functions or services, has become an increasingly attractive option for companies seeking high-quality IT services. Latin America offers a unique combination of advantages that make it a top choice for businesses worldwide. Let’s take a closer look at the key reasons why outsourcing to Latin America could be the strategic move your company needs.

Skilled workforce

Latin America has firmly established itself as a rapidly growing hub for IT talent, attracting global attention for its abundant and diverse workforce. According to Statista, in 2023, Brazil led the region with approximately 500000 software developers, followed by Mexico with around 220000, and Argentina with approximately 115000. This growing talent pool is bolstered by a regional commitment to STEM education, which forms the foundation of the skilled workforce. Universities and technical institutions in countries like Brazil, Mexico, and Argentina are preparing thousands of graduates annually who are proficient in areas such as software development, data science, machine learning, and artificial intelligence.

Cost savings

One of the most significant advantages of outsourcing to Latin America is cost-effectiveness. Labor costs in the region are substantially lower than in North America and Western Europe. For instance, according to Awana, in 2023, wages in Latin America decreased by 15% compared to the previous years, offering an average of 51% in savings compared to those in the US. This allows companies to optimize budgets without compromising on quality.

Compared to Western Europe, Latin America delivers strong cost-efficiency without compromising on quality. For example, according to the research, the average annual salary for a software developer in Switzerland is approximately $97518, while in the United Kingdom, it’s around $55275. In contrast, Latin American countries offer significantly lower rates, making them an attractive option for outsourcing.

Proximity advantage

Latin America’s geographical proximity to North America is a significant advantage, making it a preferred destination for IT outsourcing. Sharing similar or overlapping time zones allows for real-time collaboration, ensuring smooth communication, faster decision-making, and higher productivity.

The short travel distance facilitates in-person interactions, with direct flights between major cities, such as Miami and São Paulo or Houston and Mexico City, taking only a few hours. This accessibility enables companies to conduct on-site visits and face-to-face meetings, fostering trust and seamless integration of outsourced teams.

English proficiency

Strong English proficiency is a key success factor in outsourcing, and Latin America continues to improve rapidly in this area. Many IT professionals in the region demonstrate solid English communication skills, particularly those working with international clients or graduating from bilingual technical programs. This reduces communication gaps, supports agile workflows, and allows teams to collaborate efficiently with North American stakeholders.

According to the EF English Proficiency Index 2024, Latin America scores within the “High” to “Moderate” proficiency bands, with several countries ranking competitively on a global scale. Argentina stands out as the regional leader with a high proficiency score, while countries such as Chile, Brazil, Mexico, and Colombia show steadily improving results driven by increased participation in global tech markets and multinational employment. Ongoing collaboration with US and Canadian businesses, widespread access to online learning platforms, and English-language university programs continue to raise proficiency levels, especially among software engineers, data professionals, and product specialists. While English skills may differ by location and seniority, most mid-level and senior developers involved in international projects are well-prepared to operate in English-speaking, cross-functional teams.

Ease of doing business

Across key Latin American outsourcing hubs, businesses benefit from modernised public-services infrastructure and digital government reforms, which reduce friction in company setup, tax administration and contract enforcement. For example, Mexico has pursued a “National Digital Strategy” aimed at expanding online services, improving government-digital capabilities and streamlining business registration and licensing processes. In addition, the region has made strides in intellectual-property protections and open-data initiatives, for instance, countries such as Brazil, Mexico and Colombia have ratified the Madrid Agreement (via World Intellectual Property Organization) which facilitates trademark registration for foreign companies. The financial-infrastructure landscape also supports growth: Brazil is home to a highly developed banking and payments system, easing cross-border transactions and outsourcing vendor payments. Overlapping time-zones with North America mean less operational friction for real-time collaboration, and increasing government focus on digital service delivery and transparency helps reduce bureaucratic delays. While regulatory variation remains across countries, and local subtleties (tax regimes, labour law) require careful navigation, the overall trend in Latin America is one of simplifying business processes, making the region increasingly attractive for firms looking to offshore or near-shore their IT operations. This positive business environment is further validated by the growing number of American corporates and startups already outsourcing to Latin America, demonstrating proven adoption and market maturity.

Tech innovation

Latin America is undergoing a remarkable transformation, with its tech ecosystem experiencing significant growth and diversification. According to Statista, in Brazil alone, there are over 9000 companies specializing in software development and production, including major players like TOTVS, Stefanini, CI&T, and Linx S.A., and more than 15000 enterprises in the IT services sector as of 2023. These numbers highlight the region’s increasing role as a global player in the IT industry. This rapid expansion is driven by robust government initiatives that include investments in technology parks, startup incubators, and innovation hubs, fostering an environment ripe for technological advancement. As a result, Latin America is becoming a leading source of cutting-edge solutions in areas like FinTech, artificial intelligence, and software development, making it a strategic choice for companies seeking innovative IT partnerships. This ecosystem not only caters to traditional IT services but also pushes the boundaries of emerging technologies, positioning the region as a hotbed for technological innovation and entrepreneurship. Latin America’s growing investment in digital technologies like cloud computing, AI, and cybersecurity has strengthened its position as a competitive IT outsourcing hub. Companies benefit from access to advanced tools and innovation that enhance efficiency and support long-term growth.

Average software developer salaries in 2025

To better understand the cost advantages of outsourcing to Latin America, here’s a breakdown of average software developer salaries across key countries in the region. These figures reflect mid-level to senior professionals with 3-6 years of experience and highlight the region’s cost-efficiency compared to North America and Western Europe.

These figures typically reflect mid-level to senior developers with 3-6 years of professional experience. By leveraging the lower labor costs in this region, companies can achieve substantial cost savings while maintaining strong engineering standards and reliable delivery.

Source: Aggregated data from Glassdoor (2025).

Latin America vs Eastern Europe: IT outsourcing comparison

When evaluating global IT outsourcing destinations, both Latin America and Eastern Europe consistently rank among the top choices for companies seeking skilled talent, cost efficiency, and reliable service delivery. While these regions differ in location, language, and market dynamics, they share several strengths, such as robust developer communities, expanding tech ecosystems, and growing international demand.

This side-by-side comparison helps businesses make informed decisions based on factors like talent availability, costs, time zone compatibility, and cultural alignment, depending on their specific needs and geographic priorities.

1. Talent pool and expertise

• Latin America: The region boasts a substantial and growing IT workforce, with an estimated total of over 1 million software developers. As mentioned, Brazil has over 500000 software developers, Mexico around 225000, and Argentina approximately 115000. Latin American developers are proficient in technologies such as .Net, Java, Ruby, Python, C++, C#, React, and Node.js.
• Eastern Europe: The talent pool in Eastern Europe is similarly strong, totaling around 1.2 million IT professionals. According to the Future of IT Report 2023, the talent pool is comparable, with countries like Poland housing 525000 IT professionals, Ukraine 363000, Romania 221000, and Bulgaria 108000. Eastern European developers excel in JavaScript, TypeScript, PHP, HTML, Swift, Python, and C++.

2. Market Growth

• Latin America: According to Statista, the IT outsourcing market in Latin America is projected to reach approximately US$19.54 billion in 2025. The market is expected to grow at a compound annual growth rate (CAGR) of 8.99% from 2024 to 2029, culminating in a market volume of around US$27.57 billion by 2029.
• Eastern Europe: According to Statista, in Eastern Europe, the IT outsourcing market is anticipated to generate revenues of about US$4.93 billion by 2024. The region is expected to experience a CAGR of 7.78% over the same period, reaching a market volume of approximately US$7.17 billion by 2029.

3. Cost considerations

Latin America (Based on Euvic Group):

• Junior Developer: $28-$55 per hour
• Intermediate Developer: $27-$60 per hour
• Senior Developer: $32-$65 per hour

Latin America offers a broad range of hourly rates depending on the developer’s experience level and country. The region is known for its high-quality services, strong technical expertise, and innovation.

Additionally, Latin America provides nearshore advantages for North American companies, such as overlapping time zones and cultural alignment.

Eastern Europe (Based on Euvic Group):

• Junior Developer: $22-$31 per hour
• Intermediate Developer: $27-$40 per hour
• Senior Developer: $30-$59 per hour

Eastern Europe is recognized for its highly skilled technical workforce and strong adherence to international quality standards. The rates vary by country and experience level, making it a competitive choice for outsourcing software development. Many companies in Western Europe and North America turn to Eastern Europe for its cost-effectiveness and deep talent pool in software engineering.

4. Time zone alignment

• Latin America: Shares similar or overlapping time zones with North America, facilitating real-time collaboration and seamless communication.
• Eastern Europe: Time zone differences with North America can pose challenges for synchronous communication, potentially affecting project timelines. However, these differences can also be advantageous for companies seeking round-the-clock development and support by enabling continuous workflows across time zones.

5. Cultural compatibility

• Latin America: Cultural similarities with North America contribute to smoother working relationships and easier integration of teams. These include a strong emphasis on personal relationships and trust-building, a collaborative and team-oriented work style, similar communication approaches that value openness and directness (while often balancing formality), and a shared focus on customer service and responsiveness. These common values help bridge potential gaps and foster effective cross-border collaboration.
• Eastern Europe: While cultural differences exist, many Eastern European professionals are accustomed to Western business practices, though some adaptation may be necessary.

6. Language proficiency

• Latin America: English proficiency varies by country, with nations like Argentina and Brazil demonstrating higher levels, which can enhance communication. Argentina ranks highest in Latin America with an EF English Proficiency Index (EPI) score of 562, indicating high proficiency (World Population Review). Brazil has a moderate proficiency level, with an EPI score of 466 (EF Education First).
• Eastern Europe: Generally, there is a high level of English proficiency among IT professionals, facilitating effective collaboration. Poland exhibits high proficiency with an EPI score of 592. Romania also demonstrates high proficiency, scoring 602 on the EPI.

Eastern Europe generally has higher English proficiency scores than Latin America, with Romania (602) and Poland (592) outperforming Argentina (562) and Brazil (466). This suggests a slight language advantage for Eastern Europe, though Latin American countries are steadily improving and closing the gap.

While Latin America is emerging as a powerful nearshoring destination for North American companies, Eastern Europe remains a long-established outsourcing hub, particularly for Western European firms. Comparing the two regions can help businesses determine which location aligns best with their goals, whether it’s maximizing real-time collaboration, accessing niche technical expertise, or optimizing costs.

Below is a side-by-side breakdown of the two regions based on key outsourcing criteria:

Both Latin America and Eastern Europe offer strong developer talent and competitive rates. However, Latin America stands out for North American companies due to its time zone alignment, cultural compatibility, and growing market size. Eastern Europe may offer slightly lower costs and higher average English proficiency, making it a reliable option, particularly for European companies.

Ultimately, your ideal outsourcing location will depend on geographical priorities, communication needs, and project complexity. For North American businesses seeking a nearshore solution with real-time collaboration and strong cultural fit, Latin America is an increasingly strategic choice.

Challenges of outsourcing to Latin America

While outsourcing to Latin America offers numerous advantages, there are also challenges businesses must consider to ensure successful partnerships. Below are some of the key hurdles companies might face when outsourcing to the region:

1. Legal and regulatory complexities

Latin America comprises diverse countries, each with its own legal frameworks, tax systems, and labor laws. Navigating these regulations can be challenging, particularly for companies unfamiliar with the region.

Issues like complex tax requirements, employment laws, and intellectual property protections vary widely between countries, requiring businesses to seek legal expertise to ensure compliance.

2. Economic instability

Some countries in Latin America experience fluctuating economies and inflation rates, which can impact the cost of outsourcing and the stability of contracts. For example, currency volatility in countries like Argentina has posed significant challenges, with the peso experiencing substantial fluctuations that complicate budgeting for long-term projects. High inflation rates, such as Argentina’s, can further erode the value of contracts and increase operational costs, creating uncertainties for businesses relying on stable financial planning.

While such instability may occasionally present cost advantages due to favorable exchange rates, it often introduces significant financial and operational risks. These include potential disruptions in service delivery, challenges in accessing foreign exchange markets, and difficulties in navigating rapidly changing economic policies. Therefore, companies outsourcing to these regions must adopt robust risk management strategies and remain adaptable to economic shifts, underscoring the complexity of operating in volatile environments.

3. Limited availability of niche skills

While Latin America offers a strong pool of general software development talent, certain highly specialized skills, such as advanced AI research, specialized cybersecurity roles, or niche technology expertise, can be less common in the region. This scarcity means companies with very specific technical requirements might face challenges finding the right experts solely within Latin America. To address this, businesses often adopt a hybrid approach, combining Latin American teams with remote specialists from other regions, ensuring access to both broad and niche capabilities without compromising project quality or timelines.

4. Scaling and resource availability

Rapidly scaling IT teams in Latin America can sometimes be challenging due to the high demand for skilled professionals in certain regions or specialties, which may temporarily exhaust the local talent pool. Intense competition among companies for the same candidates can lead to longer hiring cycles and increased salary expectations. To overcome these hurdles, businesses should plan hiring well in advance, diversify recruitment efforts across multiple cities or countries, and build strong relationships with local talent networks and educational institutions to ensure a steady pipeline of qualified candidates.

5. Security and intellectual property risks

Some Latin American countries face higher levels of cybersecurity threats, which could pose risks to sensitive data and intellectual property.

Establishing strong cybersecurity protocols and choosing outsourcing partners with robust data protection measures are essential for mitigating these risks.

By acknowledging these challenges and implementing strategic solutions, businesses can maximize the benefits of outsourcing to Latin America while minimizing potential risks.

How DevsData LLC can help with LatAm outsourcing

Website: www.devsdata.com
Company size: ~60 employees
Founding year: 2016
Headquarters: Brooklyn, NY, and Warsaw, Poland

DevsData LLC specializes in connecting businesses with the top IT talent in Latin America, providing both IT outsourcing and recruitment services to help companies scale efficiently. Leveraging the region’s growing tech ecosystem to deliver customized solutions that align with both immediate project goals and long-term business strategies. Since its founding in 2016, DevsData LLC has built a strong reputation for excellence in tech recruitment, team augmentation, and IT consulting, focusing on services such as software development, AI, and FinTech innovation. The company also brings extensive experience working with global corporate clients and high-growth startups from various countries, including the US and Israel, showcasing its versatility and global reach. DevsData LLC has strategic offices across Latin America, including Chile, Colombia, Argentina, Mexico, and Brazil, strengthening its local presence and enhancing its ability to source top-tier talent efficiently.

Beyond talent acquisition, DevsData LLC offers companies legal and tax advisory services, Employer of Record (EoR) solutions, and Business Process Outsourcing (BPO) to help navigate the complex IT landscape in Latin America. These services ensure smooth operations, compliance with local regulations, and optimized business processes.

DevsData LLC specializes in building customized teams by combining in-house expertise with top remote talent to deliver high-quality, cost-effective software solutions. Leveraging a global database of over 65000 IT professionals, the company emphasizes strong communication skills alongside technical excellence. Their rigorous recruitment process, featuring 90-minute technical interviews with under a 6% acceptance rate, ensures only the best candidates are selected. This approach enables DevsData LLC to serve diverse industries such as FinTech, eCommerce, and healthcare while maintaining a strong global presence.

In addition to recruitment, DevsData LLC also offers end-to-end software development services, allowing clients to fully outsource their projects to our expert engineering teams. With offices in Latin America and Europe, we provide flexible, scalable solutions tailored to each client’s needs.

DevsData LLC’s commitment to client success has earned them over 80 satisfied clients globally and a portfolio of 100+ successful projects. Client public testimonials showcase the company’s exceptional performance, backed by perfect 5.0 ratings on both Clutch and GoodFirms, a testament to an unwavering commitment to excellence.

As demand for IT outsourcing in Latin America grows, DevsData LLC’s collaboration with SyrenCloud Inc., a US-based data and cloud platform provider, highlights the strategic benefits of nearshoring backend development. Facing the need to scale its Azure-based infrastructure and data workflows, SyrenCloud partnered with DevsData to recruit three senior backend engineers from Brazil, Mexico, and Colombia. Within six weeks, the company assembled a remote-ready team with deep experience in ETL pipelines, custom APIs, and cloud-native systems. These hires quickly integrated into SyrenCloud’s global setup, reducing pressure on US-based teams and accelerating project delivery. The case illustrates a broader trend: North American companies turning to Latin America for high-quality engineering talent that offers both timezone alignment and strong technical fit.

Key features:

• Assembles top-tier IT teams in Latin America, leveraging the region’s growing pool of skilled developers and engineers.
• Develops scalable and cost-effective IT solutions tailored to the unique needs of nearshore outsourcing clients.
• Optimizes talent acquisition by accessing a diverse network of highly qualified professionals across Latin America.

Conclusion

Latin America has emerged as a dynamic and competitive destination for IT outsourcing, offering a unique combination of cost efficiency, skilled talent, geographical proximity, and cultural compatibility. With countries like Brazil, Argentina, and Mexico leading the charge, the region provides businesses with access to a robust and diverse IT workforce, making it an ideal nearshore outsourcing partner for North American companies.

While challenges such as legal complexities, infrastructure disparities, and talent competition exist, they are outweighed by the numerous advantages the region offers.

Companies that approach outsourcing to Latin America with a strategic mindset can unlock unparalleled opportunities for growth and innovation.

By focusing on tailored solutions, building strong partnerships, and implementing effective risk mitigation strategies, businesses can maximize the benefits of this dynamic region.

DevsData LLC exemplifies how businesses can successfully navigate the Latin American outsourcing market. By connecting clients to top-tier talent, offering tailored IT solutions, and leveraging expertise in cutting-edge technologies, DevsData LLC ensures that businesses not only meet their immediate project goals but also achieve long-term operational success.

As the IT outsourcing market in Latin America continues to grow, now is the time for businesses to explore its potential and harness the benefits of nearshoring to stay ahead in an increasingly competitive global landscape.

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Tatia Tatoshvili Copywriter and Marketer

Tatia Tatoshvili is a Marketing and Communications professional with deep expertise in digital strategy and project management. Tatia’s experience includes implementing strategic marketing campaigns, elevating brand visibility, and building partnerships that expand education and job opportunities in the digital sector. She is passionate about fostering innovation and advancing digital literacy to create lasting impact.

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