Tech talent shortage is a critical problem for many tech leaders in the US: It’s never been more challenging to build a strong local team. According to a recent survey, 66% of managers said they needed help adding IT professionals with the right skills to their teams.

By 2030, the situation isn’t going to look up.

Under these circumstances, searching for tech talent abroad is the best solution, especially delegating your software development activities to a region with a booming IT sector like Latin America.

With 2025 on the horizon, IT outsourcing in Latin America remains a preferred choice for Western companies due to large pools of skilled talent (over 1 million developers ) and cost-efficiency (up to 70% in savings).

In particular,  the idea of “outsourcing Colombia” is turning heads. But why do many tech leaders choose to drop a pin in this up-and-coming tech hub? Well, it boasts financial attractiveness, digital resonance, and tech skills as well as strategic location, culture fit, and compatible time zones.

In this post, we’ll put the benefits and challenges of Colombia as the ultimate outsourcing destination under scrutiny. Let’s begin!

Why companies are choosing Colombia for software development outsourcing

Let’s take a closer look at why Colombia outsourcing could be the ideal choice for your needs. Curious about how it could add value to your project? Here are the key benefits to consider.

Cost-effectiveness. With Colombia outsourcing, you can achieve unparalleled cost-efficiency. The local rates are not only more affordable than in other LATAM countries but are also a fraction of what you’d pay in the US or EU.

Most of the time, you’ll meet a paycheck of around $25 per hour of software development, which makes Colombia one of the most budget-friendly options in the region. To compare, Brazil IT outsourcing costs on average between $30-$45 per hour.

The affordability of Colombia outsourcing can be chalked up to a lower cost of living – about 61.3% lower than in the US. For comparison, the average software development cost in North America ranges from $62 to $209 per hour, according to Accelerance. Thus, by opting for a Colombia, you can reduce costs by 40%-70%.

Let’s break down the local rates so you can see firsthand that Colombia outsourcing has the upper hand when compared to in-house solutions in the US.

According to Indeed.com, Glassdoor.com, and Payscale.com in 2024

Time zone compatibility. Colombia outsourcing offers a close-to-home solution that will keep all your team members connected in real-time. The country’s time zone alignment with the U.S. pales in comparison with far-flung locations like Asia. With just a small time difference, your Colombian team will work in sync with your U.S. squad. This assumes impeccable coordination of tasks execution, synchronous communication, instant feedback, and prompt troubleshooting.

For instance, if you build a team in Bogotá, you’ll benefit from the following common time windows with major U.S time zones:

Growing, skilled talent pool. Colombia’s outsourcing landscape, according to LinkedIn as of November 2024, is powered by over 75,000+ software development specialists. Given the statement in the National Digital Strategy, Colombia is set to grow the developer pool by promoting digital technologies in the education sector.

Another factor that drives Colombia outsourcing is solid STEM education. The country boasts one of the highest rates of science and engineering graduates in LATAM – with 16.92% of tertiary education graduates specializing in tech-related fields.

Globally recognized educational institutions such as the Universidad de Antioquia, Universidad de los Andes (Colombia), and Universidad Nacional de Colombia are regularly featured among LATAM’s top 20 universities. These establishments are the stomping ground for over 13,000 ICT graduates each year.

When it comes to technology proficiency, Colombia excels in several areas. As per Coursera Skills Report 2023, the local learners are ranked #2 in LATAM and #6 worldwide in tech skills, achieving high scores in:

• Technology (95%)
• Operating systems (99%)
• Computer networking (98%)
• Computer programming (94%)
• Data science (68%)

While data science isn’t their strong suit, when it comes to Colombia outsourcing, you can count on skilled technologists and programmers.

Government support and business environment. The Colombian government has made strides in creating a business-friendly environment for the tech sector. Key initiatives driving Colombia outsourcing include tax breaks, Free Trade Zones (FTZs), state-of-the-art tech parks, and other innovation-focused programs. Here are the key initiatives that have come into the spotlight in recent years.

• Foreign tax credit: Colombia offers a foreign tax credit to avoid double taxation, benefiting international companies looking for Colombia outsourcing solutions.
• National Digital Strategy 2023-2026: The strategy prioritizes ICT sector growth, strengthening Colombia’s digital economy, and attracting tech investments from abroad.
• Special CIT rate for free trade zones (FTZs): These initiatives offer a reduced Corporate Income Tax (CIT) rate where foreign businesses can benefit from lower taxes. From 2023, FTZs enjoy a special CIT rate of 20%.
• The ICT Sector Modernization Law: Enacted in 2019, this law modernizes ICT regulations to help Colombia keep pace with international tech standards.
• Fedesoft (Federación Colombiana de Software y TI): An organization that works with the government to foster policies that benefit tech development.
• ProColombia: An organization that focuses on attracting foreign investment, including Colombia outsourcing within the ICT sector.
• Apps.Co: Initiated by The Ministry of Information and Communication Technologies, this program focuses on nurturing startups and digital entrepreneurship.
• Cutting-edge tech parks: Colombia strives to be an innovation-centered country with tech parks, often located in Free Trade Zones. The most prominent are Zona Franca Bogotá (Bogotá Free Trade Zone), Ruta N (Medellín), ParqueSoft (Cali).

The quality of Colombian outsourcing solutions: Quality and reliability are cornerstones of Colombia’s providers, with local ICT professionals building a solid reputation in both areas. Local technologists boast expertise across a wide range of programming languages and frameworks, from Java, C#, and PHP to the increasingly popular Python, as well as specializations in AI and Machine Learning. JavaScript is also among the favorites, contributing to the versatility of Colombia’s tech talent.

With a solid STEM foundation and a drive to stay updated on industry trends, local developers will add substantial value to your project.

Key advantages of outsourcing to Colombia

Cultural affinity: When working with providers of Colombia outsourcing solution, you won’t be dealing with a completely unfamiliar environment. In fact, the local work culture is highly compatible with the general vibe and work ethics of US companies, given that most local developers strive to land positions at US-based projects. Thus, they have a strong sense of responsibility and tend to treat tasks and deadlines with due diligence. They excel in communication and proactiveness, bringing a high level of engagement to your organization.

Geographic proximity: Apart from shared culture, it’s also easier for US-based businesses to visit their Colombian teams in person than when dealing with far-off locations. With seven airlines providing direct flights from the U.S., you can find yourself in the capital within 4-7 hours, depending on your location:

• From Miami to Bogotá: ~3 hours 40 minutes
• From Atlanta to Bogotá: ~4 hours 30 minutes
• From New York (JFK) to Bogotá: ~5 hours 30 minutes
• From Houston to Bogotá: ~5 hours
• From Los Angeles to Bogotá: ~7 hours
• From Chicago to Bogotá: ~6 hours

Besides that, U.S. residents don’t need a visa for short business visits, which makes outsourcing in Colombia an approachable choice.

Diverse tech ecosystem: Colombia’s startup ecosystem is in its heyday, solidifying the country’s status as a top innovation hub in LATAM. With 1,720 registered startups by the end of 2023 – a 30% jump from the previous year – Colombia now ranks 38th globally and 2^nd in the region in terms of the best location to launch a startup.

If you’re wondering about where to seek vendors of outsourced software in Colombia, consider the key startup cities. According to Statista, the most vibrant tech hubs are Bogotá, Medellín, Cali, Barranquilla, and Bucaramanga.

Another key factor to consider when outsourcing in Colombia is the concentration of investments in specific fields. Investor confidence is the highest in:

• Fintech (39%);
• Proptech (29%)
• Energytech (8%)

In total, these three fields account for 76% of startup funding in the country. This focus supports the growth of tech talent specializing in these areas, making Colombia an ideal choice to dive into expertise in one of these domains.

Infrastructure and connectivity: Colombia’s infrastructure and connectivity are poised for transformation as per the National Digital Strategy 2023-2026. This roadmap mainly focuses on expanding connectivity infrastructure, promoting e-government, and establishing ubiquitous internet access.

Other aspects covered by this program, which may affect the quality of Colombian outsourcing solutions, are:

• Bolstering the ICT infrastructure;
• Ensuring quality and affordable internet;
• Increasing mobile and fixed internet access;
• Developing 5G deployment;
• Developing data infrastructure and cybersecurity.

Above all, the country seeks to create an environment where digital transformation can thrive and set a foundation for sustained growth in ICT infrastructure and connectivity in the near future.

Examples of global companies outsourcing in Colombia

Companies worldwide have recognized the value of IT outsourcing in Colombia. The brightest examples of businesses relying on the local tech talent pool are:

• Amazon
• IBM
• Cisco
• Google
• Microsoft
• Oracle
• McKinsey

These examples prove that partnering with an outsourcing company in Colombia is worthwhile. Most of these tech giants chose to hire LATAM developers based in Colombia for significant cost savings and to reduce project timelines.

How many outsourcing companies in Colombia are at your disposal? Clutch.co shows 421 firms specializing in everything from custom software and mobile app development to IT staffing services. When it comes to their areas of specialization, the following are most common:

• Financial services (87)
• Information technology (79)
• Medical (69)
• Business services (58)
• Retail (50)
• eCommerce (48)
• Other industries (46)
• Education (39)
• Consumer products & services (35)
• Energy & natural resources (34)
• Telecommunications (32)
• Supply Chain, Logistics, and Transport (31)
• Government (25)
• Advertising & marketing (21)
• Manufacturing (21)
• Media (14)
• Automotive (12)
• Real estate (12)
• Arts, entertainment & music (11)
• Utilities (11)
• Gaming (10)
• Hospitality & leisure (9)
• Non-profit (9)
• GPS, Navigation & GIS (7)

If you stem from a non-tech business, you can easily stumble across an outsourcing company in Colombia that will develop a mobile/web application or consult you in terms of your strategy. Take a look:

• Mobile App Development (206)
• Web Development (173)
• IT Strategy Consulting (108)

For instance, as a provider of Colombian outsourcing solutions, we at HLAD can help you assemble a skilled tech team in the tech hub of your choice, be it Bogotá, Medellín or other cities.

Challenges and considerations of outsourcing in Colombia

Every business strategy, no matter how beneficial, has its shortcomings. In this part, we’ll put a spotlight on some risks of outsourcing in Colombia and how we can help you overcome them.

Language barriers and cultural differences: Many Colombian ICT experts, especially in major cities, tend to excel in English, but language gaps can still occasionally cause miscommunications between your local and Colombian teams.

On another note, while Colombia shares many Western work values, cultural nuances can sometimes seep into communication. Recognizing and embracing these differences is essential for building out synergy when outsourcing in Colombia.

How do we solve this challenge? Our priority is to build a team with strong English skills a priority. Moreover, most of our employees attend English classes on a weekly basis as a part of their skill development program.

English proficiency is also a key part of our screening process, as we ensure every candidate has full working fluency. Additionally, we use effective tools to promote clear communication and proactively address any issues well before they disrupt the project flow.

Security concerns: Colombia has made impressive strides in improving security over the past few decades. Still, certain areas may be prone to challenges associated with crime and instability. While there’s a slim chance that this will impact your Colombian outsourcing experience, staying aware of the security environment is essential.

How do we solve this challenge? A provider like HLAD that’s well-versed in both Colombia outsourcing and U.S. business practices will help you navigate any security concerns. With a strong LATAM expertise, we prioritize secure office locations, reliable security infrastructure, and measures and enforce strict protocols to protect your operations.

Complex labor laws: Colombia’s labor laws present some challenges compared to those in the U.S., particularly when it comes to contract types and employee protections. Misclassifying employees can lead to substantial penalties, so it’s crucial to fully understand these regulations or work with local experts to ensure compliance.

How do we solve this challenge? By partnering with a provider of IT services Colombia like HLAD, which understands both the specifics of software outsourcing in Colombia and U.S. legal standards, you’ll be better positioned to stay compliant. We emphasize clear contracts, ongoing legal updates, and regular compliance checks to keep legal risks to a minimum. A dedicated account manager will always be in touch to consult you on any questions you might have.

Wrapping up: Colombia is the best choice for North American companies

Software outsourcing in Colombia has emerged as a game-changing solution for North American businesses seeking to leverage skilled talent, a robust IT ecosystem, cost-effective rates, and more. Here’s what you can expect when choosing Colombia for outsourcing:

• Matching time zones
• Well-educated pool of software developers
• Cultural proximity
• Cost-friendly developer rates
• Robust startup scene
• Innovative tech infrastructure

If you want to find a reliable partner to outsource software in Colombia, try searching among local providers. Not sure where to start? Get in touch with our team – as an experienced vendor with a regional presence, we have access to 75,000 software developers across various fields and can build your tech team in under 4-6 weeks. Let’s talk about your project needs!