The need to streamline business operations and reduce costs has led many companies to outsource software development services to various regions across the globe. Every major outsourcing region presents a distinctive set of advantages and disadvantages, so making the right choice can be challenging.

Latin America offers a competitive advantage over other outsourcing destinations, with a large pool of skilled IT professionals and cost-effective rates. Additionally, time zone proximity to the North American market, cultural affinity, and English fluency make communication and collaboration easier for the US and Canadian companies seeking nearshore outsourcing options. N-iX has conducted this analysis to explore the potential for software development outsourcing to Latin American countries.

Software development in Latin America

About this report 

The report by N-iX examines the tech landscape of Latin American countries, such as Colombia, Brazil, Argentina, Mexico, Uruguay, Costa Rica, Chile, and others. It aims to help senior executives, tech and business leaders make informed decisions when looking for a software development partner in Latin America, choosing the destination for building a development center, and forming their sourcing strategy.

The report uses over 150 various sources, including government publications, market research reports by the World Bank, OECD, Statista, and industry studies. It delves into the business climate of each country, examining factors such as economic stability, ease of doing business, and legal frameworks. It also explores the tech climate, analyzing the level of technological infrastructure, innovation, and talent pool available in Latin American countries. The ICT sector of each destination is also studied, evaluating the level of technological expertise and the quality of the workforce in the software development in Latin America. 

Another important aspect explored in this report is education and English proficiency levels in Latin American countries. It plays a critical role in determining the quality of the talent pool, the ability of companies to communicate effectively, and the success of future cooperation. 

A thorough assessment of the technological and commercial landscape of Latin American nations is presented in the analysis, which covers aspects such as economic stability, governmental policies, technological infrastructure, innovation potential, and availability of skilled workers. The primary objective of the report is to aid senior executives and leaders in the technology and business domains in decision-making regarding outsourcing software development in Latin America.

Overview of the tech industry Latin America

As the need for digitization continues to grow, businesses worldwide are seeking the most efficient and cost-effective ways to implement their projects - whether they aim to automate processes and optimize operations or increase their revenue streams. One solution that has become increasingly popular in recent years is outsourcing software development to Latin America. Countries such as Colombia, Brazil, Argentina, Mexico, Uruguay, Costa Rica, and Chile became attractive destinations for companies looking to establish a nearshore or offshore development center. 

Latin America is an excellent location for software development due to the region's abundant and highly qualified tech talent pool, which is continually growing. The competition for top specialists in software development in South America is much lower than in North America, making staffing easier and faster.

Latin American countries excel in a variety of international rankings, such as the GSLI, Global Innovation Index, and Ease of Doing Business. Specifically, Kearney GSLI places them in the top 50, while the Global Innovation Index ranks them in the top 100. Additionally, countries such as Colombia, Mexico, Costa Rica, and Chile are ranked within the top 100 on the Ease of Doing Business Ranking. Most governments in the region focus on digitalization, infrastructure, digital skills, and foreign investment. Consequently, businesses can find the right resources and support for their tech projects more easily, thanks to a growing number of accelerators, tech incubators, and technology parks.

Moreover, Latin America has a tech talent pool of almost 2 million professionals. As a result, the region's growing tech industry and skilled workforce make software development outsourcing in Latin America an attractive option for businesses looking to tap into the region's potential.

  • Colombia has emerged as one of Latin America's top outsourcing destinations over the past few years. In 2021, Colombia ranked third in the region after Mexico and Brazil in terms of IT market size, with $10.2B. By 2025, the Colombian Federation of IT and Software Industries aims for software to account for 5% of Colombia's GDP.  Major cities such as Bogotá, Medellín, and Cali are home to a thriving startup ecosystem fueled by government incentives, access to funding, and a growing pool of skilled tech talent. Some of the renowned Colombian tech startups are Rappi, Tpaga, and Ayenda.
  • Brazil has the largest tech market in Latin America, with a strong emphasis on fintech, e-commerce, and mobile app development. The country ranks 124th in the Ease of Doing Business, but the government has launched various initiatives to improve innovation in the IT sector, including science and technology parks, digital inclusion programs, startup support, and cybersecurity initiatives. Brazil's ICT market is growing rapidly, with a projected 5% increase in 2023, approaching US$ 8B. The country moved up four places on the Kearney GSLI to enter the top 5 in 2021. São Paulo and Rio de Janeiro are the country's major tech hubs, with a growing number of startups emerging in areas such as artificial intelligence, blockchain, and big data. In 2021 São Paulo was attracting more tech start-up investment than Chile, Colombia, Argentina, and Mexico combined.
  • Mexico is the second-largest tech market in Latin America, with a focus on software development, fintech, and e-commerce. It ranks 12th globally in innovation and 3rd in Latin America and the Caribbean. The country has several government programs, tech parks, and startup investments that contribute to its strong technological foundation. Mexico also has a massive pool of tech talent, with over 700,000 developers and 3 million STEM professionals recorded in 2020-2021.
  • Argentina has made significant progress in developing its technology climate and infrastructure, with government programs and funding aimed at promoting innovation and technology. The country ranks 69th in the Global Innovation Index, with a focus on software, biotechnology, and nanotechnology, among other fields. Argentina's strong talent pool of over 115,000 software developers, emphasis on STEM education, and a high level of English proficiency make it an attractive location for outsourcing software development in South America. 
  • Uruguay has a small but growing tech industry with a focus on software development, gaming, and e-commerce. Montevideo is the country's biggest tech hub, with a growing number of startups emerging in areas such as fintech, ed-tech, and health tech. Uruguay ranks as the second most digitally prepared country in Latin America. Its ICT market has been growing, with over 1,000 software development companies that generate almost $1 billion in exports. The country's 2025 Digital Agenda aims to further promote innovation and development in the digital sector.
  • Costa Rica is an emerging destination for software outsourcing due to its favorable tech climate, infrastructure, and talent pool. The country ranks third in the Latin American and Caribbean region for the Global Innovation Index, with 22% of its ICT companies being associated with Industry 4.0 technologies. Costa Rica also has a highly educated workforce, with over 45,000 software developers and 7,000 STEM graduates annually. Additionally, the government and private sector have invested in innovation hubs and training programs, while initiatives like the Costa Rican Coalition for Development Initiatives and the National Council for Scientific and Technological Research promote foreign investment and funding for research.
  • Chile has a strong tech climate and infrastructure, making it an attractive destination for software outsourcing. Chile's Global Innovation Index 2021 rank is the highest among the 18 economies in Latin America and the Caribbean. The country has implemented several programs to promote tech innovation, including a public startup accelerator program called Startup Chile and the Digital Chile Agenda. Chile's global ICT market is expected to reach $13.93B by 2026, and the country has a strong tech talent pool with nearly 61,000 people employed in the IT sector.


Get a complete overview of the 2023 software development market in Latin America!

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Other attractive destinations for software development in Latin America include Peru, Panama, and Ecuador. They offer tax incentives and have a pool of proficient English-speaking developers who have experience working with US and European clients.

Major tech markets in Latin America

To find out which Latin American country ranks first in the Ease of Doing Business ranking, which is the most digitally prepared country, which one has the highest English proficiency level, download PDF version of the report.

About N-iX

N-iX is a global software solutions and engineering services company that helps world’s leading organizations turn challenges into lasting business value,  operational efficiency,  and revenue growth using modern technology. 

With over 2,000 professionals in 25 countries across Europe and the Americas, N-iX offers expert solutions in cloud, data analytics, embedded software, IoT, AI, machine learning, and other tech domains. Being in business for over two decades, we have worked with dozens industry-leading enterprises and Fortune 500 companies creating value across a wide variety of sectors, including finance, manufacturing, supply chain, retail, and more. 

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