The dynamic shift towards digital transformation has spotlighted Latin America as a premier destination for outsourcing in Latin America, particularly in software development and IT services. The region's appeal lies not only in its skilled workforce but also in its geographical proximity to North America, facilitating seamless collaboration across time zones. As of 2023, Brazil led the charge with a robust pool of around 500,000 software developers.
Following closely, Mexico boasted about 220,000, Argentina had around 115,000, and Colombia was home to approximately 62,000 tech professionals. This burgeoning talent pool underscores Latin America's potential as a nearshoring powerhouse, offering a blend of technical proficiency, cost efficiency, and strategic alignment with North American business hours.
Number of software developers in selected Latin American countries in 2023 (in 1,000s)
Top 10 Cities for Outsourcing in Latin America
1. São Paulo, Brazil
São Paulo, the largest city in South America, is a burgeoning tech hub, often dubbed the "Silicon Valley of Latin America." Home to over 18 million people, it boasts a vibrant tech and innovation culture, significantly bolstered by investments from giants like Google and esteemed institutions such as the University of São Paulo.
With over 290,000 DevOps, Brazil leads in Latin American tech talent, contributing to São Paulo's status as a major tech hotspot. Despite the higher cost of intermediate-level engineers ($30-$50/hr), São Paulo's startup ecosystem outpaces Chile, Colombia, Argentina, and Mexico combined, reflecting its growing prominence on the Global Innovation Index.
The city's tech market, with a CAGR of 8.34%, is expected to reach US$27.79 billion by 2028. Developers in São Paulo are proficient in English and skilled in Java, Python, and JavaScript, making the city a pivotal center for technological advancement in fintech, biotechnology, and beyond.
Why It Shines: Its cosmopolitan vibe and extensive corporate ecosystem make it ideal for partnerships and innovation.
Learn more about: Hire Tech Talent in Brazil
Our thoughts on the pricing structure of Toptal
While it's not possible for us to find details about how much of what a client pays ultimately goes to a candidate, we believe clients looking for transparent and straightforward pricing may want to look at other alternatives.
Our opinion is that if they are charging a client more than $12,000 monthly for a developer, they should at the very least be giving $9,600 to the candidate, but it's likely that it's even less than that.
What Hiring Managers Should Ask Before Choosing a Talent Partner
Before partnering with any talent provider — whether Toptal, Teilur, or others — hiring managers should consider asking the following key questions:
- What percentage of the fee actually goes to the talent?
- Are replacement or satisfaction guarantees included in the contract?
- How are regional salary benchmarks determined?
- Is there full transparency in how rates are broken down?
- What is the long-term cost difference between hiring directly and through a platform?
These questions can help businesses make informed decisions and ensure that pricing aligns with both market realities and ethical compensation practices.
3. Buenos Aires, Argentina
Buenos Aires, despite initial political and cultural hurdles, has rapidly evolved into a prominent tech hub within Latin America, offering substantial outsourcing advantages. This global city, enriched by its deep cultural and academic roots, now stands at the forefront of tech talent development, thanks to high education levels and significant state investment.
Although the cost for an intermediate software engineer in Buenos Aires is the highest in the region, it remains markedly lower than in North America. Attracting major companies like Google, Amazon, and Twitter, the city showcases its potential for long-term outsourcing partnerships.
With over 50,000 software developers, Buenos Aires boasts the highest English proficiency in Latin America, ranking 28th globally on the EF EPI Index. The city's tech ecosystem, particularly strong in Ruby on Rails, Python, and Java, is the epicenter of Argentina's tech startup activity, accounting for 90% of it, and has a notable presence of cryptocurrency companies, underlining its diverse and highly educated workforce.
Why It Shines: A city with a rich cultural heritage, offering a blend of innovation and creativity in tech solutions.
Learn more about: Hire Tech Talent in Argentina
4. Medellín, Colombia
Medellín stands as a testament to transformation, evolving into Colombia's most innovation-driven tech hub. This metamorphosis is underpinned by substantial investments in infrastructure, education, and forward-thinking initiatives like Ruta N, which collectively nurture a fertile ground for startups and tech ventures.
The city's academic excellence is evident, with 80 higher education institutions contributing to 13% of Colombia's tech graduates, ensuring a steady flow of highly skilled talent into the workforce. Medellín's appeal is further magnified by its competitive labor costs and a vibrant ecosystem that champions innovation and collaboration.
With tech giants such as Blackbeard, Oracle, and Red Hat anchoring their operations here, and the government's ambitious plan to create 20,000 new tech jobs within the decade, Medellín is not only the most affordable but also the most forward-looking tech hub in Colombia.
Why It Shines: Its commitment to innovation and education has fostered a supportive environment for tech companies and startups.
Learn more about: Hire Tech Talent in Colombia
5. Santiago, Chile
Santiago de Chile exemplifies the transformative power of governmental investment in the tech and innovation sectors. With one of the highest engineering enrollment rates in Latin America and favorable visa policies for tech workers, Santiago has become a beacon of technological advancement, notably in Blockchain and fintech.
Despite the relatively high average salary for intermediate developers, Santiago offers access to a substantial and growing tech talent pool at competitive rates. Home to an estimated 50,000 developers, the city's tech industry is burgeoning, offering ample opportunities to hire skilled developers in LATAM.
Santiago distinguishes itself with a higher developer concentration and satisfactory English proficiency levels, ranking 52nd globally on the EF EPI Index. The city's tech ecosystem thrives on popular stacks like JavaScript, Python, and Ruby on Rails, marking Santiago as a vibrant hub for technological innovation and talent in Chile.
Why It Shines: Strong government support for tech and innovation, coupled with a growing entrepreneurial ecosystem.
