Today’s companies aren’t limited by geography when it comes to finding skilled tech talent. You can hire locally or tap into global markets like Latin America through outsourcing. If you’re aiming to strike the right balance between cost, quality, and ease of collaboration, outsourcing to Brazil is a perfect approach. With an IT outsourcing market projected to reach $7.24 billion in 2025, Brazil has become a go-to destination for IT outsourcing. ​So, why are more companies turning to Brazil? Is it the right fit for your business? And how do you get started? Let’s break it down.​

Benefits of outsourcing to Brazil

Skilled talent pool

Firmly established as one of the largest IT outsourcing markets in Latin America, Brazil outsourcing is powered by 500,000+ software developers. The country also belongs to the top 10 nations with the highest percentage of STEM students globally. According to different estimates, from 24,000 to 46,000 STEM graduates enter the workforce each year, graduating from the University of São Paulo (USP), the State University of Campinas (UNICAMP), and the Federal University of Rio de Janeiro (UFRJ). These universities are globally recognized for excellence in ICT disciplines.

Quality is a key differentiator in software development services. Brazil has earned strong marks in the 2023 Coursera Global Skills Report, particularly in data science and technology proficiency, which makes Brazil a top choice for software development using modern technologies like AI, ML, and Data.

Technology – Global Rank: 14

  • Cloud Computing: 86%
  • Computer Networking: 85%
  • Computer Programming: 92%
  • Databases: 100%
  • Mobile Development: 88%
  • Operating Systems: 22%
  • Security Engineering: 15%
  • Software Engineering: 16%
  • Theoretical Computer Science: 21%
  • Web Development: 24%

Data Science – Global Rank: 2

  • Data Analysis: 98%
  • Data Management: 99%
  • Data Visualization: 100%
  • Machine Learning: 62%
  • Mathematics: 14%
  • Probability & Statistics: 9%
  • Statistical Programming: 98%

A wide range of developer skills

Among the biggest Brazil outsourcing advantages is a great skill diversity. According to data from Stack Overflow surveys, Brazilian developers excel in JavaScript, HTML, SQL, Java, Node.js, and Python. According to LinkedIn data, Brazil boasts the biggest developer pool in the following technologies:

  • JavaScript
  • Python
  • Java
  • SQL
  • C++
  • C
  • C#
  • Bash/Shell
  • PHP

Cost efficiency

Lower software development costs is another reason why outsource to Brazil. Living costs in the country are nearly 50% lower than in the US, which means savings across various aspects of outsourcing to Brazil, from salaries to office space rental.

Favorable exchange rate: The Brazilian Real’s favorable exchange rate against the US dollar allows companies to reduce their budgets.

Lower salary expectations: For companies that outsource, Brazil offers an average salary of software developers in the range of $30,000-$40,000 per year. In contrast, the average salary for a software developer in the US is about $110,000 per year.​

No overhead costs: Brazil IT outsourcing eliminates expenses related to office space, equipment, and employee benefits, as they are typically handled by the provider.

Time zone compatibility

​Working with external software developers in real-time is possible, thanks to outsourcing to Brazil:

  • Overlap with US time zones: Brazil is on Brasília Time (BRT), which is typically just 1 hour ahead of US Eastern Time and 4-5 hours ahead of Pacific Time. That gives both your teams a near-full day overlap for real-time communication.
  • Agile-driven collaboration: Daily stand-ups, sprint planning, and code reviews with your Brazilian developers can happen during your common hours.
  • Real-time feedback: With Brazil outsourcing, you’ll get quick issue resolution, immediate feedback, and same-day results.

Cultural affinity and language proficiency

IT outsourcing Brazil runs on communication, and working with a local team is akin to working with your local staff, thanks to the following aspects:

Adequate English skills: While Brazil’s overall English proficiency ranks mid-level in Latin America, the IT sector demonstrates notable advancement. English education is mandatory in Brazilian schools, and many developers pursue additional certifications through private classes and courses.

Western work culture alignment: Thanks to experience working with foreign software development companies that outsource to Brazil, your team will be familiar with Western business practices, including Agile methodologies, proactive problem-solving, open communication, and a sense of ownership.

Team synergy: When developers are familiar with your culture, communication, and decision-making building camaraderie in offshore software development is much easier.

Robust tech ecosystem and infrastructure

When you outsource to Brazil, you’ll get the right environment, with proper infrastructure to support your project, including the following:

Reliable connectivity: Tech hubs like São Paulo and Campinas offer high-speed internet that supports distributed collaboration.

Cloud-ready infrastructure: Global cloud providers like Microsoft, Google, and IBM have established data centers in Brazil, with modern cloud platforms.

Established innovation hubs: Several cities have become pillars for Brazilian outsourcing industry:

  • São Paulo: The country’s financial and tech center, densely populated with startups.
  • Campinas: Known as Brazil’s Silicon Valley, the city boasts a strong R&D presence and connections to top universities.
  • Recife: Through Porto Digital, a local technology park, the city hosts 100+ tech companies, encompassing 10,000+ IT experts.
  • Curitiba: A city is well-known for its innovation-driven economy and fruitful IT sector.
  • Rio de Janeiro: A rising tech talent hub with a growing ecosystem in fintech, business process outsourcing, and creative industries.

Support for IT initiatives: Innovation is backed by local accelerators and incubators that help startups transform ideas into profitable businesses.

  • ACE Startups: Provides funding to early-stage companies;
  • Startup Farm: Participated in the launch of 300+ startups through its acceleration program;
  • Wayra: Connects startups with global resources and partners.

What is the average salary for a developer in Brazil?

With competitive rates and a growing pool of talented professionals, outsourcing to Brazil offers a significant cost advantage for companies seeking skilled software developers.

Below is a comparison of hourly rates for Brazil IT outsourcing based on recent data from Glassdoor, ZipRecruiter, and WildCodes:

Junior developer ($/hour) Mid-level developer ($/hour) Senior software engineers ($/hour)
Frontend $10-$20 $20-$32 $32-$45
Backend $12-$20 $20-$33 $33-$48
Full-stack $12-$20 $20-$37 $37-$50
Mobile $13-$24 $25-$36 $36-$50
DevOps engineer $15-$25 $25-$35 $35-$55
Data Science  $10-$15 $15-$25 $25-$45

Step-by-step guide to outsourcing software development to Brazil

Step 1: Define your requirements

Before bringing in a provider of outsourcing in Brazil, define your project vision, scope of work, and roles you need to fill. That way, your outsourcing partner will know exactly what kind of talent your team needs and dive into their network to handpick the best ones.

Step 2: Research and shortlist providers

When evaluating a potential provider of Brazil software development outsourcing, look for companies with a strong track record. Dive into their case studies, client reviews, and experience in your tech industry.

Step 3: Understand legal and contractual obligations

When outsourcing to Brazil, make sure your contracts handle the legal essentials, including the following:​

  • IP ownership: Include an IP assignment clause in your agreement with the provider;
  • NDAs: Sign them with your team members and provider to protect sensitive data;
  • LGPD: If your developers will handle personal data, apply proper consent, security measures, and a breach plan.

Step 4: Choose the right engagement model

When outsourcing software development to Brazil, you will come across several cooperation models, and choosing the right one depends on your goals, time frame, and involvement.

Here are the key models:

Dedicated Team: Suitable for long-term projects that need tight collaboration with your Brazilian software developers. You’ll get a team of reliable software developers who works under your leadership and integrates into your company’s operations.

Best for: Ongoing development with evolving requirements.

Project-based outsourcing: Delegate your short-term development needs with a clear scope. Specify the tasks, and the vendor’s team executes them without your direct involvement.

Best for: Short-term side projects with fixed timelines and deliverables.

Managed services: A full-cycle outsourcing to Brazil. The vendor handles the entire SDLC, from planning to delivery.

Best for: Companies that need a working product, without direct involvement.

Staff augmentation: The best approach for adding skilled Brazilian software engineers you lack in-house to handle temporary workload spikes.

Best for: Scaling your local team quickly or covering specific skills.

Step 5: Align on communication and collaboration tools

Effective communication and collaboration are vital for managing your IT outsourcing Brazil. First of all, leverage the right tools:

  • Slack: Keep your teams connected and conversations organized in proper channels;
  • Jira: Plan and manage sprints, track issues, and keep daily work on track;
  • Trello: Use task boards for visual planning and progress tracking;
  • Zoom: Enables face time with your distant squad when you outsource to Brazil.

Next, establish clear communication protocols:

Set up regular meetings: Schedule daily or weekly stand-ups, sprint planning sessions, and retrospective meetings.​
Define communication channels: Designate channels within communication tools for specific topics or projects to keep discussions organized.
Establish reporting: Create structured reporting, such as weekly progress reports or dashboards, to track progress and team performance.​
Plan for time zone differences: Keep in mind time zone differences when scheduling meetings and setting deadlines.

Step 6: Start and scale

If you feel apprehensive about outsourcing to Brazil, begin with a small team to assess quality, communication, and cultural fit. This is a low-risk approach that provides a clear picture before you commit to a larger team.​

Why should you start small with Brazil outsourcing?

Lower risk: A pilot team of 1-3 software engineers allows you to evaluate if the provider meets your standards.​ If this approach doesn’t suit you, you can wrap up and explore other nearshoring options like Brazil vs Colombia.

Process evaluation: Check if your company is ready for outsourcing to Brazil. Evaluate the effectiveness of communication channels, project management tools, and workflows to ensure you can handle outsourcing.​

Cultural fit: Assess if your internal team resonates with Brazilian staff in terms of values and work culture.​

Better cost control: Starting with a small team of skilled developers streamlines budgeting.

If the pilot Brazil team meets your expectations, you can outsource with full confidence:​

1. Establish specific goals and metrics to guide the expansion of your Brazil outsourcing efforts;

2. Increase team size gradually, ensuring each new member integrates smoothly into existing processes;

3. Implement regular check-ins and performance reviews for new team members;

4. Improve workflows and communications based on your experience during the pilot phase.​

Legal and operational considerations

Labor laws and contract models

Software development outsourcing Brazil requires an understanding of the legal distinction between independent contractors and full-time employees.

If you hire someone as a full-time software engineer under Brazil’s CLT (Consolidação das Leis do Trabalho), you must cover benefits, protections, and paperwork. This framework includes:

  • Paid vacations
  • 13th-month salary
  •  Severance package
  • Healthcare
  • Overtime pay
  • Notice period

Hiring individual contractors via nearshore software development Brazil is much less bureaucratic. In this arrangement, you won’t be obliged to pay for employee benefits, social contributions, and IT infrastructure, as the vendor will cover these expenses.

On the flip side, if a contractor is engaged as an FTE with fixed hours and dedication to a single project, the employer may face legal action. The best practice for Brazil outsourcing is to hire through a local Employer of Record (EOR) or vetted outsourcing partners like HLAD, who will handle employee contracts legally.

Taxes and payments

US companies going for Brazil software outsourcing often deal with international platforms that make cross-border payments simple, fast, and secure. Below are several helpful tools:

  • Deel: An all-in-one platform for hiring, paying, and staying compliant with laws in South America.
  • Wise: A tool for transferring funds directly to Brazilian bank accounts in BRL or USD, with favorable exchange rates and lower fees.
  • Payoneer: A common payment method among freelancers and remote teams.

When it comes to taxation, keep these aspects in mind when you outsource software development Brazil:

IRS Form W-8BEN: This form confirms that your hired software engineers aren’t US taxpayers. Without it, US-based employers may be required to withhold 30% in taxes.

No tax treaties between US and Brazil: Currently, no agreement simplifies nearshore outsourcing Brazil when it comes to taxes, which means tech leaders must pay due diligence with payment documentation.

Diligent payment tracking: Be sure to document contracts, invoices, and payments to stay compliant with IRS guidelines for international collaboration.

If your outsourcing strategy Brazil includes hiring a large team, it’s best to work with a partner like HLAD who will handle local taxes and payroll, so you don’t have to worry about noncompliance.

IP protection and data security

Brazil offers a strong legal framework for IP and data protection, making it a reliable choice for outsourcing. Here are a few aspects that will solidify your cooperation:

Software rights: In Brazil, software is protected under the Software Law (Law No. 9.609/98) and the Copyright Law (Law No. 9.610/98). These laws give full IP rights to the creator, unless a contract states otherwise.

Code ownership: If a developer is employed specifically to create software, the employer owns the rights. To ensure clarity when you outsource to Brazil, include explicit IP assignment clauses in contracts, transferring ownership of any developed software to your company.​

Registration: While not mandatory, you can register software with Brazil’s INPI for an extra layer of security in case of disputes.

Contractual safeguards: To protect your IP and data effectively, include the following in your contracts:

  • Non-Disclosure Agreements (NDAs): Ensure all employees and contractors sign NDAs that comply with Brazilian contract law.
  • IP clauses: Explicitly assign any developed IP to your company when outsourcing to Brazil.
  • Confidentiality: Cover the terms of handling sensitive information.

Data protection compliance includes:

  • LGPD: Brazil’s General Data Protection Law aligns closely with the EU’s GDPR. If your outsourced team is going to handle customer data, consider the following:
  • Data processing agreements: Establish clear terms on data handling, as well as roles, responsibilities, and security measures.​
  • Security protocols: Implement technical and organizational measures to protect personal data.​
  • A guide for breaches: Notify the National Data Protection Authority (ANPD) and affected individuals.

Challenges and mitigation strategies

Language and communication

Despite Brazil’s overall English proficiency being moderate, IT specialists often possess adequate English skills needed for reading documentation, daily communications, and generally working with US or EU clients. Here’s how you can make communication within Brazil IT outsourcing more effective:

Leverage visual tools: Use platforms like Miro (or other interactive whiteboards) to sketch out workflows, explain ideas, and break through misunderstandings.

Provide context: In addition to text-based communication, use tools like Loom to record and share video messages. This lets your team explain decisions or walk through code changes, bypassing a live call.​

Keep documentation: With tools like Confluence or Notion, you can manage structured and up-to-date documentation, which is crucial for keeping everyone aligned.

Establish regular communication: Schedule consistent meetings and syncs to spot and address issues promptly.​

Time zone differences

If you’re based in North America, you’re in luck: Brazil’s business hours line up well with yours. Whether your team works on Eastern or Pacific Time, there’s up to 7 hours of overlap for real-time collaboration, daily standups, and your “can we jump on a quick call?” needs.

For companies with European headquarters, IT outsourcing Brazil is more challenging. The common time window is much smaller, especially for teams working standard hours like 9-to-5. That doesn’t mean collaboration is impossible – it just means more adjustment on your part.

How to address time zone differences when you outsource IT to Brazil?

  • Rotate meeting schedules: Distribute the inconvenience of early or late meetings among both teams, so it feels fair to all team members.
  • Master asynchronous communication: Not all communication requires simultaneous participation. Track updates, decisions, questions, and feedback using tools like Slack, Trello, and Confluence to let team members respond within their working hours.​
  • Keep documentation neat: Keep your decisions, processes, and project updates accessible and understandable to everyone.​
  • Make the most of overlap: Even 2-3 common hours can make a difference. Plan in advance for overlapping windows for critical discussions and collaborative tasks.​

Cultural differences

Most of the time, local developers will be on the same page with your internal staff. Cities like São Paulo and Rio offer business environments similar to their US and Western European counterparts, especially when it comes to problem-solving and innovation. Local engineers are well-versed in Agile and build tight connections with foreign companies. For instance, your Zoom call can start with a casual conversation about a sports event.

How to deal with culture gaps when you outsource in Brazil?

  • Add a culture deep-dive to onboarding: Tools and processes matter – but so do your values, expectations, and business vision. Walk your new team members through your company values, how you give feedback, and what success looks like.
  • Set up regular check-ins: Schedule weekly/bi-weekly meetings to provide feedback, address concerns, and reinforce alignment.​
  • Conduct cultural awareness training: If you have no prior outsourcing Brazil experience, this can be helpful for both sides to learn about cultural differences.
  • Offer mentorship programs: Pair new team members with experts on your team who can walk them through cultural and organizational aspects.

Conclusion

In this post, we’ve covered benefits, challenges, steps to start, and local rates in Brazil. Outsourcing your software development to this country gives you real-time communication and cultural alignment, but with more competitive rates than your local market. Moreover, the country offers tax incentives, a fairly stable political climate, support from Brazilian government, and a robust outsourcing industry.

If you’re ready to explore Brazil to hire LATAM developers, contact us.