Nearshore Software Development Basics: Latin American Teams

Software outsourcing has helped companies in all industries to stay productive, save on costs, and complete projects on time. Statista reports that in 2025, the global IT outsourcing market revenue is set to reach $588.38, with projections to reach $806.55 billion by 2030.

However, traditional outsourcing models, such as offshoring, proved to have many flaws that are only obvious in retrospect. The limitations of the offshore model pushed companies to come up with new solutions. At this point, the nearshore model seemed like a perfect fit.

In this article, we will review nearshore software development basics and how US-based companies can benefit from working with agile nearshore teams in Latin America.

Understanding Nearshore Software Development

It involves delegating partial or complete software development tasks to companies or consultancies that employ IT talent in countries geographically close to your country. For example, a company in Austin, TX, hires a React Consultancy that provides them with three senior software engineers based in Colombia to complete critical parts of their corporate chat application.

Another example would be a company in San Francisco, CA hiring a Ruby on Rails Consultancy to develop iOS and Android apps that are fully integrated with their existing web application. The consultancy built a dedicated team based in Latin America to complete the project.

Different engagement models fit all kinds of businesses and projects. Nonetheless, the foundation is the same: qualified IT talent, located within a minimal time difference of 1-3 hours compared to you, working as part of your local team or working on developing a specific project.

By outsourcing their development process, companies can get their products and ideas to market more quickly. Outsourcing also helps companies that don't specialize in software development to build a quality product, while allowing them to focus on their core expertise.

This is especially true when partnering with AI software outsourcing nearshore partners, who bring expertise in integrating machine learning and automation into your product while maintaining collaborative, real-time workflows across borders.

Let’s analyze the benefit for US-based companies of having Latin American software development teams:

Advantages of Latin American Development Teams:

• Better support for faster projects: These types of projects often face a lack of skilled developers to stay on track with the plan. Nearshore outsourcing is a great option in this case. Part of the project can be delegated to a software consultancy for taking the load off your main team.
• Faster software development: Part of the entire development cycle can be outsourced to skilled developers and managers. Latin American development teams help you avoid delays to other sectors of your company by delivering the projects on time based on mutual agreements.
• Lower development costs: Outsourcing your software development projects is actually much cheaper than having onshore talent. Nearshore outsourcing helps your company skip training in-house developers and providing them with specialized resources and tools that involve an expensive upfront cost and time.
• More time for your business: Focus on your business’s core expertise and leave the software development to highly skilled professionals.
• New ideas and knowledge: When outsourcing through a consultancy, you get the knowledge base they’ve built over time. The members of FullStack Labs Team of more than 100 software engineers share their expertise with one another, so when one developer is stuck with an issue it only takes one Slack message and a couple of minutes for them to get assistance from other skilled professionals.
• Strong talent pipelines: Software developer availability in Colombia in 2025 is expected to remain strong, with its government supporting tech initiatives. Brazil, meanwhile, has the largest tech talent pool in Latin America, making it one of the best nearshore countries for software outsourcing in 2025.
  

Disadvantages of Latin American Development Teams:

• Offshore rates are still lower: Leaving all the negative points of offshore aside, it still provides the lowest rates.
• Unclear roles around PM and QA: Some consultancies may not define who is responsible for project management and quality assurance. That’s why at FullStack Labs, we always clarify responsibilities up front to ensure transparency.
• Limited in-person interaction: There is a lack of face-to-face interaction with technical leads and team members. Even though the team's location is just a couple of hours away, there is still a need to take a plane in order to meet technical leads and team members face-to-face. 
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Interested in reading more about nearshore vs offshore software development? Learn more about the differences.

Our Approach to Nearshore Software Development

At FullStack Labs, we take a hybrid approach to our staffing. That means our team is a mix of US-based and Latin American designers, developers, and project managers. But every project, no matter its geographic mix, gets a US-based technical lead and project manager to ensure physical proximity and maximum communication.

We identified that the nearshore model could provide more value to our clients by also adding local resources. If you want to learn more about nearshore software development and want to know if it’s the right approach for your business, drop us a line — we’ll be happy to chat with you.