LatAm Developers: Rates, Pros, Cons, Insights. Latin America

Ani Gasparyan

Last updated on January 17, 2025 | 17 min read

IT marketLatAmOutsourcing

• Latin America is an attractive destination for companies seeking diverse tech talent, with over 2 million software developers across the region.
• This article will explore the benefits and challenges of hiring developers from Latin America, including access to top talent, cost efficiency, and time zone alignment with the US.

Hiring tech talent has become a significant challenge for businesses worldwide due to the growing demand for skilled developers and the rapid pace of technological advancement. Companies often need help finding qualified candidates locally, facing issues such as talent shortages, high competition for top candidates, and rising salaries. These challenges are particularly evident in fast-growing industries like FinTech, AI, and software development, where the need for skilled professionals far outpaces the supply. Recent studies reveal that 54% of global IT organizations mention that a lack of talent is stopping their growth.

As a result, many businesses are turning to outsourcing as a viable solution to address their talent gaps. Outsourcing allows companies to access a global pool of skilled professionals, enabling them to scale quickly, reduce costs, and remain competitive in this fast-evolving market. A study by Deloitte found that 63% of businesses view cost savings as a major benefit of outsourcing. In particular, Latin America (LatAm) has emerged as a popular outsourcing destination due to its proximity to the US, high-quality education systems, cost efficiency, and a growing pool of talented developers.

In this article, we will explore the key aspects of working with Latin American developers, including an overview of their competitive rates, the advantages and challenges of hiring tech talent from the region, and valuable insights into the overall development landscape.

Latin America’s growing role in the global tech landscape

Latin America is rapidly emerging as a global leader in tech talent and software development, with its software engineering sector experiencing impressive growth. Studies show that the South American software market is expected to grow by over $3 billion in the next four years, ultimately reaching a total revenue of $15.36 billion by 2029. Similarly, the Latin American outsourcing market is projected to surpass $27 billion by 2029. The region is also home to over 9000 startups, including 60 unicorns (startups valued at over $1 billion), which collectively attracted $3.9 billion in venture capital investment in 2023.

Additionally, Latin America plays a key role in the global FinTech sector, housing 23% of the world’s FinTech businesses. For instance, the Mexican unicorn Stori is driving demand for alternative financial services. In the transportation industry, unicorns such as Mexico’s Kavak and Colombia’s Rappi are leading the way. Latin America’s potential for digital transformation has also been recognized globally, with countries like Brazil, Chile, and Mexico featured in the 2023 Global Innovations Index. These trends underscore the region’s growing influence and position it as an attractive destination for companies seeking skilled developers and innovative solutions.

Why LatAm is the ideal destination for outsourcing

Latin America offers a unique combination of benefits that make it an ideal choice for outsourcing. Let’s look at some of the key factors contributing to its growing popularity as a tech outsourcing hub.

Proximity to the US

The geographical closeness of Latin America to the United States makes collaboration effective, with minimal time zone differences. It typically ranges from 1 to 4 hours, making communication and team management easy. While the cultures in the region may differ, the shared work ethics and high levels of English proficiency foster effective cooperation across teams, enabling smooth collaboration despite cultural distinctions.

Talent pool

Latin America is home to a vast pool of highly skilled developers across various technologies, with over 2 million software developers in the region. Here’s a breakdown of the developer talent distribution:

This impressive talent pool spans diverse tech stacks, including mobile development, AI, FinTech, and cloud technologies.

Cost efficiency

Outsourcing to Latin America offers significant cost savings, especially when compared to North America. For instance, a full stack developer in the US earns up to over $120,000 annually, while the average salary for a software developer in Brazil ranges from $30,000 to $45,000 per year. This price difference makes Latin America an appealing destination for companies looking to reduce development costs while maintaining high-quality output.

Quality of education

The quality of tech education in Latin America is improving, with universities and coding boot camps offering rigorous programs in software engineering, AI, and other cutting-edge fields. Institutions like the University of São Paulo (USP), the University of Campinas (Unicamp), the Federal University of Rio de Janeiro (UFRJ)and are among the top contributors to this growth. This strong educational foundation ensures a workforce that can handle complex projects with expertise. As a result, over 430 universities are ranked in the QS World University Rankings, contributing to a tech talent pool that continues to evolve and produce highly skilled engineers.

Challenges of outsourcing to Latin America

While Latin America presents numerous advantages for outsourcing, there are also challenges that businesses must consider.

Data security risks

Cybersecurity remains a significant challenge in Latin America, with some countries still lacking robust legal frameworks for data protection. While countries like Brazil, Argentina, and Chile have made progress in developing national cybersecurity strategies, others still struggle with enforcing data protection regulations. To protect your intellectual property, it’s crucial to implement strong database security and encryption. Moreover, consider selecting an outsourcing model where you retain the IP rights within your company, such as directly hiring developers rather than using third-party staffing agencies.

Complex taxation

While Latin American taxation can be favorable for foreign tech companies, understanding the differences between employment contracts is essential. For instance, in Brazil, software developers are subject to different tax rates depending on their employment model. Traditionally employed developers pay both personal income tax (which can be up to 27.5%) and corporate tax (which is 34, including surtax and social contributions). However, developers working under the B2B (business-to-business) model typically only pay a 25% tax rate on their income.

Labor laws

In Latin America, labor laws vary significantly between countries, especially regarding paid time off (PTO), working hours, and national holidays. These variations can lead to challenges for international companies managing teams across the region.

For instance, Brazil requires a minimum of 30 days of PTO, while other countries have their own guidelines based on labor agreements and employment contracts. In Mexico, employees are entitled to 6 days of paid leave after one year, with more days added as they gain seniority. In Argentina, employees receive 14 days of paid leave after the first year, also increasing with seniority.

Working hours also vary. Brazil’s standard workweek is 44 hours, while in Mexico and Argentina, it is typically 48 hours. National holidays are another point of difference, with Brazil observing 13 holidays, Mexico 7, and Argentina 15.

Thus, to navigate these complexities and avoid legal issues, businesses must familiarize themselves with the local labor laws in each country where they outsource. Partnering with experts such as DevsData LLC, which specializes in international IT recruitment and staffing with a particular focus on Latin America, can help mitigate these risks.

Overview of Latin American software developers

As discussed, Latin America is becoming an increasingly popular destination for outsourcing tech talent, with countries across the region offering highly skilled software developers. These developers bring technical expertise and unique cultural traits that enhance creativity, collaboration, and productivity. Below, we highlight the strengths of developers from different Latin American countries, focusing on their technical expertise, soft skills, and the qualities that make them valuable support for global companies.

Mexico

In Mexico, software developers are known for their expertise in mobile development and FinTech and their proficiency in programming languages such as JavaScript, Java, Python, SQL, and C++. With strong technical skills that rank highly in Latin America and globally, Mexican developers excel in individual and team-based projects. Their communication is direct and assertive, while their work ethic is centered around punctuality and delivering high-quality results. Culturally, their focus on teamwork, collaboration, and a continuous learning mindset allows them to thrive in fast-paced environments.

Colombia

Software developers from Colombia bring a dynamic and innovative approach to the tech industry, particularly in the startup sector. Skilled in languages like JavaScript, Python, Ruby, SQL, HTML, and CSS, Colombian developers are part of a rapidly growing community, with over 3000 members in the JavaScript hub alone. Culturally, Colombians value trust, close-knit teamwork, and taking initiative, making them reliable partners dedicated to their projects’ success.

Chile

Data science, analytics, and statistical programming are areas where developers from Chile truly excel. With expertise in languages such as Java, Python, Node.js, Perl, PHP, and ASP.NET, Chilean developers are highly skilled in handling complex technical tasks. Chile is recognized for its strong digital skills and English proficiency, ranking among the top 10 in Latin America. Known for their problem-solving abilities and effective communication, Chileans bring a flexible and adaptable approach to their work. Culturally, they are celebrated for their loyalty, modesty, and strong sense of solidarity within teams.

Argentina

When it comes to technical skills, developers in Argentina are highly regarded for their work in database management, mobile development, and languages like Python, TensorFlow, SQL, NLP, R, and Cloud APIs. Argentina stands out not only for its technical expertise but also for its high level of English proficiency, which is the best in Latin America. Developers in Argentina are known for their ability to work autonomously, their attention to detail, and their commitment to delivering top-quality work. With a strong cultural emphasis on innovation and creativity, Argentinian developers thrive in environments that encourage forward-thinking solutions.

Comparing developer salaries: Latin America vs. the US

Developer salaries in Latin America are much lower compared to the United States, mainly due to differences in living costs, demand for tech talent, and market conditions.

In the US, software developers typically earn between $75000 and $120000 a year, depending on experience, location, and the tech stack. In tech hubs like Silicon Valley and New York City, salaries are on the higher end of this range, influenced by the higher cost of living.​

Salaries in Latin America are generally lower, reflecting the region’s cost of living. Developers in countries like Brazil, Mexico, and Argentina usually earn between $20000 and $45000 annually. In larger cities like São Paulo and Mexico City, experienced developers can expect higher salaries, while smaller markets tend to offer lower wages.

The salary gap also varies based on the developer’s role and expertise. Frontend developers, for example, typically earn less than backend or full stack developers, with the latter category often earning closer to the higher end of the regional salary ranges. Additionally, specialized skills such as data science or blockchain development can command higher salaries across both regions.​

Here’s a brief salary comparison table summarizing the data:

How to hire skilled developers from Latin America

When hiring skilled developers from Latin America, businesses have several strategic options based on different needs and goals. We will discuss 4 key approaches for hiring developers in the region:

1. Offshore Development Centers (ODCs)

An offshore development center involves establishing a dedicated team in a foreign country, such as Latin America, to work as an extension of your company. This model provides businesses with more control over their development operations, as teams can be directly managed and aligned with business goals. However, ODCs require a significant investment in recruitment, infrastructure, and management, as the team will operate as a subsidiary or separate entity.

2. IT Outstaffing

IT outstaffing offers businesses the ability to hire developers or full development teams to work exclusively on their projects. These developers work remotely but easily integrate into the company’s workflows, allowing organizations to maintain control over the day-to-day work. This option is ideal for businesses that need specific expertise without the hassle of internal hiring. It also provides flexibility and cost-effectiveness, as companies benefit from external talent while maintaining oversight of the projects.

3. Tech Recruitment

Instead of outsourcing or hiring remote teams, companies can choose to recruit tech talent directly through recruitment agencies. These agencies specialize in finding skilled developers who match specific requirements. This option gives businesses more control over the hiring process and allows them to build their in-house teams. However, this approach may involve longer lead times and higher costs compared to outstaffing or outsourcing.

4. Employer of Record (EoR) services

For companies looking to hire developers in Latin America without setting up a local entity, an EoR service simplifies the hiring process. The EoR acts as the legal employer for the developers, handling all HR, payroll, taxes, and compliance, while the client company manages the employee’s day-to-day tasks. This approach allows businesses to expand internationally quickly and cost-effectively, bypassing the complexities of local labor laws and regulations. It’s particularly useful for remote teams, offering an effective way to onboard and manage developers.

Each of these models offers flexibility, control, and scalability depending on a company’s needs and goals for expanding their development team in Latin America. The most important factor is to find a reliable partner who can help navigate the complexities of hiring skilled developers. DevsData LLC excels in this area, offering expertise in IT recruitment and software development outsourcing services, as well as EoR and business process outsourcing (BPO) solutions. With over 8 years of experience, DevsData LLC ensures access to top-tier talent in LatAm and smooth navigation of complex hiring processes.

DevsData LLC — your trusted partner in LatAm

DevsData LLC is a leading IT recruitment partner with a strong presence in Latin America, including local offices in Mexico, Argentina, Chile, Brazil, and Colombia. This widespread regional presence allows the company to effectively cater to the diverse needs of businesses looking to leverage highly skilled software developers across the region. The company holds a government-approved recruitment license and has access to a network of over 65,000 developers. With a team of 40 tech recruiters, they are able to deliver tailored solutions to meet client needs. Their hiring process includes a 90-minute interview and technical assessments to ensure only the most qualified candidates are selected.

With a perfect 5/5 client satisfaction rating on Clutch and GoodFirms, DevsData LLC is well-regarded as a top choice for finding top LatAm developers. The company has successfully completed more than 100 projects for over 80 clients across industries like IT, healthcare, and fashion.

Leveraging over 8 years of experience, DevsData LLC has built a reputation as a reliable outsourcing provider specializing in AI, machine learning, and data science. Their global team, which includes experts from the US, Europe, and Latin America, brings a wealth of knowledge and diverse perspectives to every project, enhancing the innovation and quality of their solutions. Their expertise spans web development and complex backend systems, making them well-equipped to handle high-impact projects.

DevsData LLC uses a success-fee pricing model to ensure alignment with clients’ goals and deliver the best talent. The company’s strong partnerships with global corporations and rapidly growing startups, particularly in the US and Israel, include notable clients such as Cubus, Skycatch, Varner, and Novartis.

In a recent case study, a client in the financial sector sought a tech lead-level engineer with deep expertise in cryptocurrency trading. DevsData LLC’s team of recruiters launched a multichannel search across Asia, Europe, the US, and Latin America. The recruitment process included technical assessments, coding challenges, soft-skills evaluations, and live coding interviews. Initially aiming to hire just one developer, the client was so impressed by the results that they hired four engineers. You can learn more about their successful partnerships here.

As an EoR provider, DevsData LLC handles all aspects of remote team employment, including contracts, payroll, benefits, and compliance with local regulations. This allows companies to focus on their primary operations. Their BPO solutions also help companies streamline operations by outsourcing non-core functions, such as customer support and administrative tasks. With a presence in key Latin American markets, DevsData LLC provides businesses with a strategic advantage for expanding their teams globally.

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Conclusion

LatAm developers offer a unique blend of technical expertise, competitive rates, and a culturally diverse workforce, making them a valuable option for companies seeking to scale their development teams. While cost-effectiveness is a major advantage, businesses should also weigh potential challenges, such as time zone differences and varying communication practices, when considering remote LatAm talent. Understanding the local market conditions, leveraging the region’s high level of education in tech, and working with experienced recruitment agencies can help mitigate any risks. Ultimately, LatAm developers present an attractive solution for businesses looking to innovate, grow, and manage costs effectively.

DevsData LLC, a leading IT recruitment agency with over 8 years of experience, specializes in connecting businesses with top-tier developers in Latin America. Known for its tailored recruitment solutions, DevsData LLC works with global clients, offering expertise in vetting and selecting candidates from the region’s thriving tech ecosystem.

Looking to leverage Latin America’s tech talent to improve your business efficiency and reduce costs? Reach out to DevsData LLC at general@devsdata.com or visit their website to learn how their tailored solutions can support your business objectives.

Address:

DevsData IT Recruitment LatAm
Parque Mariscal Sucre 9, Col. del Valle Centro,
Benito Juárez, CDMX, 03103, Mexico