Why is LATAM Software Development Thriving? 


Published: 15 Dec 2022

LATAM software development

LATAM software development

Once called a land of unexplored opportunities, the Latin American software industry is currently in bloom and is up to a significant rise in the upcoming years. A vivid example here is Brazil – its software market is expected to reach a significant milestone of six billion USD by 2026, according to Statista. 

The biggest beneficiaries of the LATAM software development market are USA-based organizations in need of skilled technologists. Such countries as Argentina, Brazil, Chile, and Colombia are the strongholds of North American tech offshoots, which proves that the region has great potential when it comes to IT talent. 

If you plan to go beyond your usual lookout for tech talent, diving into LATAM software development is a reasonable step. This post is to help you size up the opportunities awaiting a company that aims to build a remote team in LATAM. 

Software development in Latin America: Tech education

The success of LATAM software development is grounded in solid tech education, which is backed up by robust educational programs from the government as well as private initiatives. Many countries in LATAM offer to pursue free formal education for everyone willing to work in the field of software development in Latin America. Such countries as Argentina, Chile and Brazil take the lead when it comes to the quality of Computer Science education. The governments of Argentina and Chile are proactive sponsors of educational initiatives aimed to attract more CS students. Besides formal education, there are many independent programs that help their graduates land internships and start their careers at IT companies. 


The second major reason behind the success of LATAM software development is that the local IT market offers lucrative costs of services. Building tech units here allows US-based organizations to lower their budgets significantly thanks to attractive rates of software engineers. Additionally, it reduces the number of full-time roles in their organizations and cuts the expenses that go into the package that comes with a local team.

READ ALSO: Offshore Product Development: Eastern Europe, Latin America or Asia?

When it comes to software development prices, the majority of providers of LATAM software development services charge between $25–$49 per hour, without fees imposed by providers. Other companies may run higher price tags – up to $99 per hour, and the average hourly rate for a skills software developer is $50+. Combined with a well-educated workforce, such rates are a magnet for many US-based organizations looking to have the best of both worlds – skilled software developers and reasonable software development budgets. 

Latin American software industry: Tech hubs

LATAM software development is powered by skilled tech environments that have proliferated across the region in recent years. These are communities of software developers that unite specialists that deliver LATAM software development services overseas and back up homegrown startups alike. 

The Latin American software industry attracts many global players in search of the benefits of remote engineering. For instance, Google is one of the long-term investors in Latin America and has recently announced a $1.2 billion commitment to the region. The initiative aims at developing “digital infrastructure, digital skills, entrepreneurship and inclusive, sustainable communities.” 

READ ALSO: How to Find Software Developers in Latin America

In recent years, in Brazil alone, appeared 13 unicorns, thanks to Google Startups program that upholds bold and dynamic initiatives. The investment is proven to pay off – the startups have raised more than 9 billion USD, creating 25,000 jobs. It means that a solid pool of software engineers have experience working with global organizations on projects, absorbing new ideas and skills in the process. 

Additionally, Crunchbase reported that investors poured an estimated 19.5 billion USD into LATAM software development last year, marking it the most rapidly growing region for venture funding. 

Many famous tech leaders rely on the Latin American software industry, including Amazon,  McKinsey, Airbnb, Dell, GoDaddy, Google, Netflix, HP, and IBM, to name a few. Such trust from global players further solidifies the local IT sector as a source of a skilled workforce. 

English proficiency

English is one of the main skills one should have to land a job in LATAM software development. As per EF English Proficiency Index (2021 data), several Latin American countries are ranked high when it comes to language proficiency. Among all countries of the region, Argentina takes the lead as a country with advanced English proficiency (C1-C2). 

The English level among tech job seekers is growing thanks to many international corporations present on the market and the job opportunities they offer. In fact, LATAM is a formidable competitor to the Asian region when it comes to English skills, which can make it more attractive to investors, as it allows them to work without impediments and misunderstandings. 

Time zone compatibility

Many US-based companies prefer to set up their remote units in the same time zone or in ones with a negligible time difference. 

Thanks to the fact that most LATAM countries have a 1-3 hour difference from the US, the region has risen to become a hotspot for nearshoring, a model of software development where companies delegate their tasks to teams located in neighboring countries. Due to time zone compatibility, LATAM software development has an upper hand over Asian IT hubs where the time zone difference poses a significant challenge for team collaboration.

READ ALSO: IT Outsourcing Market in Latin America: An Overview

If you aim for full synchronization of business hours between your units, here are some options you may want to consider:

  • If your headquarters operates in the US Pacific Time, Mexico is the optimum spot to set up your remote team, as most of its states are in the same time zone. 
  • For organizations located in the US Central Time zone, it’s a good idea to consider certain parts of Mexico, Costa Rica, Guatemala, El Salvador, Honduras or Nicaragua. 
  • For the EST time zone, it’s best to seek providers of LATAM software development services in such countries as Panama, Colombia, Cuba, Peru, and Ecuador. 
  • If you can tolerate a 1-2 hour difference, you can go with Argentina, Brazil, or Chile, which also offer solid pools of tech talent. 

READ ALSO: How to Pick the Best Nearshore Company in Latin America

Cultural similarities

Cultural clashes between distributed team members can bog down the software development process. When team members cannot relate based on similar values (like a strong work ethic or an individual’s potential to make a change), it can be hard to create a comfortable working environment. US companies can have cultural similarities by diving into LATAM software development rather than going with other regions. 

While LATAM is a rich tapestry when it comes to the culture where each country has its own identity, there’s a set of similarities that unites all the states of the region. Thanks to the power of globalization, LATAM software engineers use the same technologies and tend to follow Western standards in their work. 

Software development Latin America: IT Infrastructure

The LATAM software industry is powered by connection: 5G is already present in Brazil, Peru, and Colombia, and more countries are expected to make use of commercial launches of this advanced technology. 

Local governments are also investing heavily in connectivity, aiming to boost the speed of Internet connection and improve bandwidth and reduce latency, which allows for unimpeded work and meets the expectations of tech investors and remote team beneficiaries. 

LATAM software development services

As a result of the benefits we reviewed, LATAM software development services are blooming: A tech-savvy talent pool, attractive costs of local specialists, minimal time zone difference, minimum to zero communication barriers, and cultural similarities are welcoming Western companies to make the most of the region’s potential. 

As a provider of LATAM software development services, we can attest to all of these benefits. We believe that Latin America has immense potential for nearshoring. We can help you access tech talent in such hotspots as Argentina, Brazil, Colombia, and Mexico and build a sustainable remote team on a dedicated model. Contact us. 

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