As businesses in North America searched for alternatives closer to home than the Philippines or India, they discovered an attractive destination nearshore: Brazil. Cost advantage, abundant talent pool, minimal time zone differences with North America, and strong skills are just some of the reasons that make the country a sweet spot for software outsourcing.   

As a software development expert with over 16 years of experience, we’ve helped 122 global companies build their remote teams, including LATAM. In this post, we’ll walk you through the main pros and cons of nearshore software outsourcing in Brazil as well as take a look at the Brazilian tech sector. 

The state of nearshoring software development in Brazil

Brazil overview: 

Capital: Brasília  

Population: 212 million  

Currency: Real (R$)  

Language: Portuguese  

Time zone: GMT-3-GMT-4  

Software developers: 500,000+‍  

Ease of doing business: 58.59 out of 100  

World economic data quality rating class: B  

Brazil is currently the largest economy in Latin America and the 9th-largest globally, with a GDP of approximately $2.08 trillion as of 2023. Supported by strong market dynamics, Brazil’s outsourcing software development industry shows immense potential for growth. Let’s explore this thriving sector and its opportunities.  

Acknowledged as an emerging market, Brazil boasts 12th in the world IT market and represents 36.5% of the Latin American IT market.   

The highest recognition a country’s nearshoring sector’s potential can receive is featured in Kearney’s Global Services Location Index (GSLI). In 2023, Brazil was ranked 4th among the most attractive locations for offshore business services. This high recognition is due to its large talent pool, improving digital skills, and competitive business environment. These factors make Brazil especially appealing to businesses looking for nearshore developers.

Another thing to know about the Brazilian software market is that, according to ABES research, it was valued at $73.93 billion, accounting for 4.5% of the national GDP. In terms of exports, Brazil’s market contributed $689 million, out of which $497 million (over 70%) is ICT services such as nearshore development.  On the other hand, the export of Brazilian IT services and software showed modest growth since 2022, with services exports growing by 2.9%. This reflects a stronger domestic need for IT services, which may stifle the growth of nearshore software outsourcing in Brazil.   

Over the next few years, the country’s tech sector is expected to see an increasing demand for cloud services, data management and fintech solutions.   

When it comes to nearshore outsourcing, Brazil stands as a key player in LATAM. As the 2nd-largest recipient of Foreign Direct Investment (FDI) in the region, Brazil attracted $86 billion in FDI in 2023, just behind Mexico. The IT sector is one of the key drivers of investment, making Brazil a prime location for nearshoring.   

READ ALSO: Nearshoring in Mexico: The Market, Companies, Talent Pool, and Salary Research

Nearshore in Brazil: What is the talent pool like?  

Brazil’s massive pool of developers and its strong emphasis on STEM education make it a highly attractive destination for hiring nearshore developers. 

A deep pool of software developers. Brazil has the largest developer talent pool in Latin America, with over 500,000 software developers. Each year, more than 45,000 engineers graduate from Brazilian universities, which lends itself a continuous supply of young, creative IT-focused professionals.   

But let’s say the sizable pool of talent isn’t the key reason to nearshore in Brazil. In that case, companies should consider other factors that lend themselves to the skills of local developers like skills of local developers and the overall ecosystem.  

Competitive skills. Brazilian developers are known for their high-level skills in programming languages such as Java, Python, and JavaScript. They also, according to Coursera’s Global Skills Report, excel in areas like software engineering, data science and cloud computing. Overall, Brazil takes place among the top 14% globally in technology skills and within the top 2% in data science, which makes the country a solid choice for nearshore AI software development and other cutting-edge technologies. Brazil also stands out for its strong global reputation in software development, frequently competing at a high level on platforms like TopCoder, where its developers are currently ranked 16th out of 90 contenders.   

A variety of skill sets. Brazilian software engineers shine in a range of programming languages, with standout expertise in Python, Java, and JavaScript. These competences let engineers join a wide range of nearshore projects with various tech stacks. Beyond these core languages, Brazilian IT specialists are also well-versed in Node.js, Ruby, PHP, and mobile development platforms such as iOS and Android. Here’s talent availability you can count on when you nearshore software outsourcing in Brazil, based on LinkedIn data.   

Strong IT ecosystem. The robust IT infrastructure in Brazil, coupled with supportive government programs like Start-Up Brasil and Inova Simples, further enhances the capabilities of Brazilian technologists. Companies like Google, Microsoft, IBM, and Oracle have already set their footprint in the landscape of nearshore software outsourcing in Brazil. This contributes to an increased volume of skilled IT professionals working within Western management practices and familiar with the cultural environment.   

Nearshore Software Development in Brazil: What Do Tech Companies Look Like?

According to Clutch, there are about 366 active providers of nearshore software development in Brazil.  Like everywhere else, they are a mixed bag, ranging from large IT companies to small agencies and freelancers:   

• 8 large companies (1,000–10,000 employees): These companies offer comprehensive IT services to businesses worldwide.  

• 77 Mid-size Companies (100–1,000 employees): Mid-size players, including our team at HLAD tend to focus on custom software development and IT staff augmentation.   

• 240 Small Companies (10-50 employees): The lion’s share of Brazil’s IT sector comprises specialized services in mobile app development, web development, and custom software solutions.  

According to ABES research, nearshore software development in Brazil involves 8,478 companies. Of these, approximately 93% were classified as micro and small enterprises with up to 100 people.  

What about their areas of expertise? The IDS report highlights that many companies specializing in IoT, data, cloud solutions, cybersecurity, AI, and blockchain are attracting significant investment in Brazil. Here are several typical fields of specialization you can find in the country:

Cloud Computing: Brazil’s cloud market, led by companies like AWS, Microsoft, and Google, is forecasted to continue growing, with revenue expected to rise from $12.8 billion in 2022 at a CAGR of 27.2%.

AI and Big Data: The adoption of AI across sectors is also a key driver, with companies investing in data centers and digital infrastructure.  

Telecom: With 5G expansion, telecom companies like Vivo and Claro are integrating cloud solutions, IoT, and AI into their services.

With these areas on the rise, you can be sure to find software developers with relevant expertise when you nearshore software outsourcing in Brazil.

Furthermore, Brazil drives its tech talent from a vibrant startup environment. Globally, Brazil is ranked among the top 30 startup ecosystems and is the largest in Latin America.  Overall, Brazil has produced more than 20 unicorn companies, including Nubank ($41 billion valuation), Wildlife Studios ($3 billion), and QuintoAndar ($4 billion), showcasing the country’s capacity for nurturing tech giants. The Brazilian Development Bank (BNDES) also supports tech innovation, investing in sectors like fintech, agriculture tech, and health tech.  

Another essential question is where can you find the best company to hire nearshore developers? Several key cities serve as hubs for tech innovation and nearshoring.   

São Paulo: Known as the Silicon Valley of Brazil, São Paulo is the largest tech hub in Latin America. The majority of Brazil’s startups and providers of nearshoring in Brazil are located in the capital. With over 2,000 tech startups, São Paulo attracts significant venture capital investment. This is probably the best location to nearshore fintech developers, given that the city is a stomping ground for such successful products as Nubank and Neon.   

Number of software development providers: 70+

Talent availability: 100,000+

Rio de Janeiro: Another brilliant tech hub, Rio is home to several multinational tech companies (Cisco, IBM, Oracle, etc). Rio’s vibrant economy supports numerous startups.  

Number of software development providers: 30+

Talent availability: 20,000+

Campinas: Often referred to as a technology innovation center, Campinas is home to TechTown and InCamp, industrial technology parks that host thousands of tech companies, making the city a perfect location for building an R&D center.   

Number of software development providers: 20+

Talent availability: 7,000+

Porto Alegre: Known for its innovation-driven economy, Porto Alegre is another key hub for nearshoring in Brazil. The city’s Tecnopuc, a technology park, plays a significant role in nurturing local startups.  

Number of software development providers: 20+

Talent availability: 8,000+

The software development community in these cities is highly active, hosting regular events and meetups such as Campus Party Brazil, Case Startup Summit, Python Brazil, Women Who Code São Paulo, and Agile Brazil frequently organize meet-ups and hackathons, contributing to the vibrant tech culture.  

READ ALSO: Your Guide to Nearshoring in Argentina

The role of tech education in Brazilian nearshore software development 

Brazil stands out as one of the top producers of engineering talent in Latin America. As of 2018, approximately 24,000 students in Brazil graduate annually with a STEM degree. This number reflects around 17% of college students completing degrees in fields such as engineering, computer science, and other related STEM disciplines. The consistent influx of skilled graduates in engineering, computer science, and related fields has made nearshoring to Brazil an attractive destination for companies seeking to tap into a well-educated and growing workforce.   

Brazil’s educational system is widely respected, with several top institutions excelling in STEM education. Six Brazilian universities are ranked among the top 50 in Latin America, according to QS rankings.  

Ahead of the pack is the University of São Paulo (USP), recognized globally for its cutting-edge research in engineering and technology.  

Another prestigious university is UNICAMP (State University of Campinas), renowned for its focus on research and innovation, particularly in the technology sector. Federal University of Rio de Janeiro (UFRJ) also plays a key role in producing world-class engineering graduates, contributing to the talent pipeline essential for Brazil’s growing tech industry. 

To further enhance STEM education, Brazil has implemented initiatives like Federal Institutes of Education, Science, and Technology, which offer low-cost or tuition-free education. These institutes aim to make STEM education more accessible, helping to foster a new generation of tech-savvy professionals. This initiative is crucial for ensuring that Brazil continues to produce a steady flow of talented individuals capable of contributing to the country’s burgeoning tech and software development sectors.  

What are the rates of Brazilian software developers?  

The salary of Brazilian IT experts varies based on their experience and the specific technologies they specialize in. Below is a comparison of the average salaries of Brazilian specialists in various technologies versus US talent talent equivalent.   

Naturally, the final rates will vary based on their specific skills and level of experience. Feel free to contact us for a detailed cost breakdown based on your project.  

The English proficiency of Brazilian developers  

When it comes to English proficiency, Brazilians are positioned somewhere in the middle compared to other nations in Latin America. However, English education is becoming increasingly accessible in Brazil, especially when it comes to the tech and business sectors. In our experience, nearly half of Brazilian software engineers have a working knowledge of English. These professionals are able to effectively collaborate with English-speaking clients. However, a significant portion of developers are still at an introductory level, with their skills more focused on reading and writing rather than fluency in speaking.   

The advantages of nearshoring software development in Brazil  

Still wondering why you should nearshore software outsourcing in Brazil? In addition to a large talent pool, Brazil is a favorable destination for nearshoring because:  

• Geographical proximity to North America  

The country is a sweet spot for U.S. companies looking to nearshore. Brazil’s time zones are just 1-3 hours ahead of Eastern Standard Time (EST). Thus, Brazilian teams can work in real time with your headquarters. The proximity also makes hopping on a plane for face-to-face meetings easy, thanks to direct flights between major U.S. cities and São Paulo or Rio de Janeiro.   

• Highly skilled tech talent  

For one, Brazil has the largest tech talent pool in Latin America, with over 500,000 developers. Brazilian engineers are skilled in key programming languages like Python, Java, and JavaScript, and have profound expertise in cloud, data, and AI. This large and growing talent pool lets businesses source the needed skilled software engineers with any skill sets.   

• Cost-effectiveness  

One of the major advantages of nearshore software outsourcing in Brazil is lower costs of local developers. On average, Brazilian engineers charge 50-60% less than their counterparts in the U.S. and Europe. This makes Brazil a highly affordable option for companies looking to optimize their software development budgets without cutting corners on quality.   

• Strong business environment   

Brazil’s business environment is designed for tech innovation, with a solid foundation that promotes growth in technology-driven industries. The government offers tax incentives and encourages investment in the nearshore software development in Brazil with such initiatives like Startup Brazil and Inova Simples.   

• Intellectual Property protection  

Brazil adheres to the TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights) under the World Trade Organization. Its government has implemented strong IP laws in line with international standards. These regulations include safeguarding software development and technology transfer agreements. The country’s legal framework also covers patents, trademarks, and copyrights. For instance, major multinational tech companies such as Google and Microsoft have securely nearshored in Brazil, benefiting from the country’s strong IP laws.   

• Cultural compatibility   

Culturally, Brazil and North America see eye to eye on many aspects of business practices and work ethics. Brazilian engineers excel when it comes to international client expectations, especially regarding deadlines, communication, and quality standards.   

• Adequate English proficiency  

Although Brazil, according to the EF English Proficiency Index, falls within the group of countries with moderate proficiency, many Brazilian engineers, especially with long history working in the tech industry, tend to have upper-intermediate English skills (B2 level). With cultural and language alignment, these engineers are able to build strong relationships with English-speaking teams.   

Challenges of nearshore software outsourcing | Brazil  

While Brazil is, without a doubt, an attractive nearshoring destination, there are a few potential impediments that businesses should keep in mind.  

• Bureaucracy  

The country’s regulatory and legal frameworks can be tough to navigate, making it challenging for foreign companies to nearshore in Brazil smoothly. With red tape potentially slowing such processes as company registration, hiring, and taxation, tech leaders risk facing delays in project kick-offs.   

Partnering with providers of nearshore software development in Brazil, like HLAD will help you smooth the path towards team launch, as we have a local presence and are familiar with the intricacies of the Brazilian legal system.  

• Occasional political and economic instability  

Brazil has experienced political and economic instability over the years, which could affect business processes, especially with long-term projects. Such turbulence may throw a wrench in the stability of investments and business operations. On the other hand, the tech industry shows resilience and remains a bright spot despite these challenges.   

• Longer ramp-up time  

Potential cultural gaps, language barriers, and unfamiliar work practices can contribute to longer ramp-up times when adding Brazilian software developers to your team. Even though you work with Brazilian developers with strong communication skills, getting teams fully aligned with company processes may take time. Collaborating with an experienced provider of nearshoring in Brazil, like HLAD, can help establish the right communication processes and integrate remote engineers faster.   

• Infrastructure limitations in certain areas  

Although São Paulo and Rio de Janeiro are well-developed tech hubs, infrastructure quality can vary significantly across the country. In more remote regions, companies may face challenges related to internet connectivity or reliable power supply. Thus, companies looking to nearshore software development outsourcing in Brazil should carefully pick the location for their tech team.  

Wrapping up  

If you’re looking for nearshore outsourcing for your IT needs, Brazil checks all the boxes that make it a flawless destination. To make the most of Brazilian tech talent, rely on us as a provider of tech teams with a local presence. We have your back when it comes to: 

Full management control  

You have complete decision-making power over the project scope, engineers’ workload, and daily tasks.  

We hire nearshore developers specifically for your company  

Teams are custom-built to match your exact goals and work under your leadership.  

Complete integration of your nearshore team into your operations 

All engineers will be a part of your company – from everyday operations to culture and communication.  

Top 1% talent  

We target experienced, skilled candidates with STEM education for impeccable development quality.  

Get in touch with us to chat about your business needs and how nearshoring in Brazil can help you meet them.