Planning to build an external team in Latin America but unsure where to set it up? Then, you’ve likely considered several options, comparing countries like Colombia and Mexico for nearshore technology outsourcing.

Nearshore outsourcing in Latin America has been booming, and for a good reason. With a skilled IT workforce, competitive software development rates, and geographic proximity to North America, companies are finding building their tech teams in the region beneficial.

Colombia is one of the LATAM countries leading the charge, offering a rapidly growing tech sector and a vast pool of skilled developers. With a favorable time zone for US-based businesses, competitive software development rates, and a business-friendly environment, Colombia has become a top choice for companies looking to scale their teams.

You may wonder how Colombia compares to other Latin American IT powerhouses like Mexico, Brazil, Peru, or Costa Rica. Let’s take a closer look at it as a nearshoring destination and see whether it’s the right fit for your business.

Quick comparison: Colombia vs. Latin American countries for nearshore IT outsourcing

Colombia Mexico Costa Rica Peru Uruguay Argentina Brazil
Quality of IT talent 5/5 4/5 5/5 3/5 4/5 5/5 5/5
Cost of software development $$ $$ $$$ $ $$$ $$ $$
Time zone (vs EST) -1 hour -1 hour 0 hours 0 hours +2 hours +1 hour +2 hours
Cultural compatibility with US High High High High High High High
ICT market maturity Medium High High Medium Medium High High
English proficiency (EF EPI Index) 2024 Low Low Moderate Moderate Moderate High Low
IT infrastructure Medium High High Medium High High High
Political/Economic stability Medium Medium Medium Low High Medium Medium
Government support for ICT sector High High High Medium High Medium High
Legal IP protection Medium High High Medium High Medium Medium

Comparison factors

1. Talent pool and tech expertise

If top-tier IT talent is your priority, countries like Argentina, Brazil, and Costa Rica have the strongest reputation in the region for high-quality IT staff. Colombia and Mexico also offer solid tech expertise, making them competitive choices.

2. Cost of outsourcing

Looking for a reasonable price-quality ratio? Colombia and Peru stand out as the most cost-effective destinations, while Costa Rica and Uruguay tend to be pricier. On the other hand, Argentina and Mexico fall under the mid-price range, so you can consider these countries as a balanced solution.

3. Business environment and government support

Mexico, Costa Rica, and Uruguay have well-established ICT markets strategically upheld by the government. Colombia’s ICT sector is growing rapidly with increasing government support. Peru and Argentina, on the other hand, are facing economic challenges, which could divert government attention away from their tech sectors.

4. Time zone and proximity to the US

Time zone alignment is crucial for real-time communication between local and nearshore units. Mexico and Colombia offer perfect overlap with US business hours (-1 hour EST), while Costa Rica and Peru have zero time difference. Uruguay and Brazil, on the other hand, are just a couple of hours ahead.

5. Cultural and language compatibility

English proficiency and cultural similarities matter when it comes to nearshore communication. In this regard, Costa Rica, Peru, Uruguay, and Argentina offer higher English proficiency than the rest of LATAM countries, making them the optimum choice for U.S. businesses. On the other hand, Colombia and Mexico fare well in cultural fit, which is vital for smooth team integration.

Now, let’s compare Colombia with other top contenders in Latin America to see which stands out as the best nearshore outsourcing destination for your business needs.

Colombia vs. Argentina for nearshore technology outsourcing

  • Talent pool

A long-standing IT powerhouse, Argentina boasts approximately 115,000 software developers. Colombia, while having a limited talent availability, is rapidly emerging as a tech hub, with over 62,000 developers. So, if you’re seeking a more mature talent hub, nearshore in Argentina stands out; however, if you’re after a market on the rise, Colombia is one to watch.

  • Cost

Argentina and Colombia offer similar nearshore rates, typically ranging from $25 to $49 per hour, according to Clutch data. However, Argentina’s economic fluctuations can impact budgeting predictability. Colombia, on the other hand, provides more financial stability, ensuring a more predictable outsourcing experience for long-term partnerships.

  • Government support

Argentina invests heavily in STEM education, producing well-educated ICT professionals. Meanwhile, Colombia supports IT companies with tax incentives, making it an attractive destination for international businesses. So, comparing Colombia vs Argentina for nearshore technology outsourcing, Argentina stands out as a repository of highly skilled ICT experts. However, if you’re looking for a more business-friendly environment, Colombia has the upper hand.

  • Time zone and proximity

One of the biggest advantages of nearshore outsourcing is working within a similar time zone as the US. Luckily, both Argentina and Colombia are well-aligned with US business hours, enabling seamless real-time collaboration.

Argentina: UTC−03:00
+2 hours ahead of EST

Colombia: UTC−05:00
Aligned with EST

  • Language and culture

If English proficiency is a top priority, Argentina has the edge with the highest English proficiency in LATAM – unlike Colombia with low language skills among its population. That said, both countries share a strong cultural affinity with the US, making communication and collaboration smoother than with more offshore destinations like Asia.

Colombia vs. Brazil for nearshore technology outsourcing

  • Talent pool

In terms of developer availability, Brazil has the largest IT workforce in Latin America – 500,000+ software engineers. It’s a massive market that offers a deep talent pool for companies looking to scale rapidly. Colombia, on the other hand, has a growing tech sector powered by 62,000 developers. While smaller in size, it can offer more targeted staffing and a shorter team formation period.

  • Cost

Due to heavy taxes and complex employment regulations, Brazil’s software development rates are significantly higher, ranging from $50 to $99. In contrast, Colombia offers more competitive rates, between $25 and $49, making it a more cost-effective option.

  • Government support

Brazil has a well-developed IT infrastructure, but its regulatory landscape is convoluted. It means that with nearshore software outsourcing in Brazil, you’ll have to face challenging labor laws and tax policies. Colombia, in contrast, offers streamlined business processes and government incentives that make nearshoring much more accessible.

  • Time zone and proximity

Comparing Colombia vs Brazil for nearshore technology outsourcing regarding real-time collaboration potential, Colombia is better positioned for real-time collaboration, although both locations offer favorable time zone alignment.

Colombia: UTC−05:00
Aligned with EST (Eastern Standard Time)
1 hour behind EDT (Eastern Daylight Time)

Brazil: UTC−03:00
2 hours ahead of EST
1 hour ahead of EDT

  • Language and culture fit

When it comes to language proficiency, both Colombia and Brazil fall under the Low Proficiency band, according to the EF English Proficiency Index. However, Colombia’s key tech hubs – Bogotá, Cali, and Medellín- stand out with higher English skills among professionals. In Brazil, a greater number of cities demonstrate advanced English proficiency, including major tech hubs like Porto Alegre, São Paulo, and Rio de Janeiro.

Colombia vs. Costa Rica for nearshore technology outsourcing

  • Talent pool

Costa Rica boasts a highly educated workforce with a strong emphasis on STEM education, housing approximately 16,000+ software developers. In contrast, Colombia offers a larger talent pool, with over 62,000 IT professionals.

  • Cost

Costa Rica has a strong economy, but that also means higher IT labor costs. Developers in Costa Rica command higher salaries compared to those in Colombia, where nearshore outsourcing remains more cost-effective. Many software development companies in Costa Rica charge between $50 to $99 per hour, compared to Colombian ones charging between $25 to $49 per hour. So, if budget is a key factor for you, Colombia takes the lead as the more affordable choice.

  • Government support

Another factor in comparing Colombia vs Costa Rica for nearshore technology outsourcing is government support for the ICT sector. Although Costa Rica has strong government programs, the cost of business operations is high. Colombia, on the other hand, has more business-friendly policies and tax incentives that streamline nearshoring operations.

  • Time zone and proximity

One of the biggest advantages of nearshore outsourcing to either Colombia or Costa Rica is their geographic proximity to the US. Moreover, both countries are in favorable time zones for North American businesses, enabling real-time collaboration in both cases.

Colombia: UTC-5
Aligned with EST (Eastern Standard Time)
1 hour behind EDT (Eastern Daylight Time)

Costa Rica: UTC−06:00
1 hour behind EST (Eastern Standard Time)
2 hours behind EDT (Eastern Daylight Time)

  • Language and culture fit

Costa Rica has an edge in English proficiency, which can potentially streamline communication with US-based teams. Both countries also share strong cultural ties with the US.  If fluent English is a top priority, Costa Rica takes the lead. But in terms of cultural fit and overall communication, both countries perform well.

Colombia vs. Peru for nearshore technology outsourcing

  • Talent pool

Colombia has a well-established tech talent pool and experienced developers across various fields. Peru, on the other hand, is an emerging player in the IT outsourcing market, housing around 32,000 software developers. While the country is investing in tech education, it still has a smaller pool of seasoned developers. So, if market maturity matters, Colombia is the best choice.

  • Cost

If budget is your primary concern, both locations offer cost-effectiveness, with average software development rates between $25 to $49 per hour. But if you seek a balance between affordability and expertise, Colombia is the better choice. It’s because Peru has fewer experienced developers, which might mean longer team formation and onboarding times.

  • Government support

Colombia has stronger government policies and tech-friendly regulations, making it easier for foreign businesses to operate. Peru’s outsourcing industry is still in early days, and its regulatory environment isn’t as well-developed yet. For a smoother, business-friendly outsourcing experience, Colombia is the clear winner.

  • Time zone and proximity

Both Colombia and Peru align well with US business hours, making real-time collaboration easy. Whether you need overlapping workdays or same-day response times, both countries offer perfect alignment.

Colombia: UTC−05:00
Aligned with EST (Eastern Standard Time)
1 hour behind EDT (Eastern Daylight Time)

Peru: UTC−05:00
Aligned with EST (Eastern Standard Time)
Aligned with EDT (Eastern Daylight Time)

  • Language and culture fit

Both countries have strong cultural compatibility with the Western world, which is essential for nearshore outsource collaboration. Spanish is the primary language in both Colombia and Peru. When it comes to English proficiency levels, Peru stands out with moderate language skills as opposed to low levels pertaining to Colombia.

Colombia vs Uruguay for nearshore technology outsourcing

  • Talent pool

Uruguay has a strong tech scene driven by 16,000+ software developers. Thus, Colombia has a more diverse IT workforce, offering more availability, faster hiring, and a broader range of expertise.

  • Cost

Uruguay is one of the most expensive outsourcing destinations in Latin America. The cost of living is higher, which means higher salaries and operational expenses. Software development rates in Uruguay typically range from $50 to $99 per hour. In contrast, Colombia offers more competitive rates, with many firms charging between $25 to $49 per hour.

  • Government support

Both countries prioritize tech growth but in different ways. Uruguay has a tech-friendly business environment with strong infrastructure and digital innovation policies. However, Colombia offers more nearshore outsourcing incentives, including tax benefits for IT companies

  • Time zone and proximity

When comparing Colombia vs Uruguay for nearshore technology outsourcing, both countries are well-aligned with US business hours. However, working with Uruguayan teams requires slight scheduling adjustments due to the 2-hour difference from EST and 1-hour gap from EDT.

Colombia: UTC−05:00
Aligned with U.S. Eastern Standard Time (EST)
1 hour behind Eastern Daylight Time (EDT)

Uruguay: UTC−03:00
2 hours ahead of EST
1 hour ahead of EDT

  • Language and culture fit

Uruguay has higher English proficiency, which can be a big advantage for companies looking for no-barrier communication. That said, both Colombia and Uruguay share strong cultural ties with the US. If English fluency is a top priority, Uruguay has the edge. But in terms of overall cultural fit, both countries offer seamless alignment with the Western world.

Colombia vs. Mexico for nearshore technology outsourcing

  • Talent pool

With 220,000 software developers, Mexico has one of the largest IT workforces in Latin America. Colombia’s talent pool is growing rapidly, with more companies turning to its expanding repository of skilled developers. If you need high-volume staffing, outsourcing to Mexico is a better choice. But if you’re looking for a fast-growing market with increasing availability, Colombia is second-to-none.

  • Cost

When comparing nearshore outsourcing rates between Mexico and Colombia, both countries err on the side of cost-effectiveness. According to Clutch data, software development rates in both countries typically range from $25 to $49 per hour. This makes both locations lucrative options for companies looking to trim software development costs.

  • Government support

Mexico has well-established IT hubs in cities like Guadalajara and Monterrey, providing a strong infrastructure for tech businesses. Colombia, on the other hand, offers attractive tax incentives for IT firms, making it easier for companies to set up remote branches. If you want an established ecosystem, consider nearshore outsourcing to Mexico. If you’re looking for business-friendly incentives, Colombia is the best solution.

  • Time zone and proximity

While both countries offer good time zone alignment, Mexico is the closest match, especially for West Coast and Central U.S. companies. If time zone overlap is a top priority, Mexico stands out.

Colombia: UTC−05:00
Aligned with U.S. Eastern Standard Time (EST)
1 hour behind Eastern Daylight Time (EDT)

Mexico: UTC−06:00 to UTC−08:00 (varies by region)
Best alignment for U.S. Central and West Coast time zones
1 hour behind EST (Central Mexico – UTC−06:00)
2 hours behind EST (Mountain Mexico – UTC−07:00)
3 hours behind EST (Pacific Mexico – UTC−08:00)

  • Language and culture fit

Both Colombia and Mexico have strong cultural compatibility with the US, making nearshore outsourcing beneficial. When it comes to English proficiency, neither Mexico nor Colombia has the edge with overall low-level competence among the population. When it comes to proficiency in large tech hubs, Colombia is ahead, given that professionals in Medellín, Cali, and Bogotá are more likely to have stronger English communication skills than their Mexican counterparts.

Conclusion

By now, you’ve seen how Colombia stacks up against top nearshore outsourcing destinations in Latin America. Each country has its strengths, but the right choice depends on what your business needs most.

At the end of the day, Colombia strikes the best balance between affordability, talent availability, and business-friendly policies. It’s a strong contender for any US company looking to scale their operations with high-quality talent.

Time to build your nearshore team

At HLAD, we help companies build scalable nearshore IT teams in Latin America tailored to their needs. Here’s what we offer:

Top-tier talent, hired specifically for your project

We build teams with LATAM’s top 1% of software engineers. Our rigorous four-step screening process guarantees high-caliber talent that aligns with your technical, cultural, language proficiency, and business needs.

Full control and close integration of your nearshore branch

You’ll have direct access to your engineers, managing your project on your terms while we handle office space, IT infrastructure, and employee retention. All teams we provide are fully integrated and dedicated to our clients’ projects.

Record-speed team formation

With a presence in the region and a vast network of local tech talent, we assemble high-performing development teams within 2-6 weeks, allowing you to scale without delays.

Dedication and long-term collaboration

Your team is fully dedicated to your project, working 40 hours per week, five days a week, in complete alignment with your internal workflows.

HLAD in numbers:

  • 125,000+ skilled engineers in our network, including niche skills like AI/ML, Data, Cloud, and more;
  • 4.8/5 rating on Clutch for client and employee satisfaction;
  • 94% of clients would recommend us;
  • 98% engineer retention rate for long-term stability;
  • 95% of our software engineers speak English at B2-C1 level.

We’ve helped 120+ companies, including Greenpeace, AstraZeneca, Dentsply Sirona, Rakuten Viber, and doTerra, hire in LATAM and Europe.

Contact us and let’s start building your custom-tailored nearshore software development team today!