Nearshoring in LatAm: Why It's the Smart Choice for U.S. Tech Companies in 2025?

The global tech landscape is permanently evolving. In circumstances of geopolitical tensions, economic incertitude, and extreme competitiveness, it's even more critical to be aligned with the latest business strategies in order to face both unprecedented opportunities and extraordinary challenges.

For American companies, the deficiencies in traditional offshoring strategies have become evident in recent years, and the pressure to scale rapidly and keep costs under control, while guaranteeing a high level of quality in products and services, has developed an alternative solution: nearshoring in Latin America.

In this guide, we'll explore how nearshoring in Latin America is way more than a corporate trend. It's an effective solution for companies seeking to expand their teams, foster new tech talent, and enhance efficiency. With the collaboration of trusted partners such as Lupa Hire, nearshoring in LatAm can be the smartest move for your business.

What Is Nearshoring and Why It Matters Today?

In order to fully grasp the concept of nearshoring, we must first establish its distinction from offshoring. Here, one word becomes the key: Distance.

Offshoring is normally associated with moving business operations and/or partnering with providers in far-away regions, such as East Asia, typically connected with lower wages and a less strict regulatory framework. Nevertheless, this also brings new challenges like cultural disparities, weak oversight, and different time zones.

Nearshoring, on the contrary, favors the idea of relocating operations to nearby countries with similar time zones. Prioritizing proximity, not only geographically but also culturally, allows businesses to enable a smoother real-time collaboration and easier oversight.

In recent years, the benefits of nearshoring have become evident to the entire American business environment, and the Western Hemisphere in general. Already dealing with rising labor costs in Asia and increasing geopolitical disturbances, the Covid-19 pandemic came into play, exposing all the fragilities of the traditional offshoring model.

Chaos in the global supply chain, higher shipping costs, huge delays… the pandemic caused significant disruptions for any U.S. company relying on production and/or suppliers on distant lands. This crisis was a turning point for many American companies, forcing them to rethink their global sourcing model, and aim for higher resilience and better diversification.

Looking for international partners that could offer faster delivery times, greater stability, and easier communication, American eyes turned to LatAm countries. The region offers reduced transit times, increased agility due to the geographic proximity and cultural alignment, and perhaps more importantly, access to a huge talent pool.

Some sectors have been eager to take advantage of this in recent years, with the most active being:

Manufacturing: Automotive, electronics, pharmaceuticals, and other goods can be made in LatAm and be transported to the North American market with reduced costs and shorter waiting times.

Tech: For an industry that demands agile development actions, quick coordination between teams and professionals, and real-time problem-solving, LatAm proximity offers a perfect alternative to these issues.

Customer support: Culturally aligned professionals with a high degree of English proficiency ensure customer satisfaction for American companies.

5 Benefits of Nearshoring to LatAm for U.S. Companies

For U.S. tech companies, nearshoring to LatAm can provide a strategic advantage that could lead to tangible benefits such as significant growth and increased innovation. Let's explore them in a more specific way:

Skilled tech talent pool

LatAm is home to a rapidly expanding pool of highly skilled tech workers. Countries such as Argentina, Colombia, and Mexico produce thousands of specialized professionals in areas like engineering, IT support, or software development (for example, Mexican universities produce over 100,000 engineers and tech specialists each year).

Many of them are involved in highly demanded areas like cybersecurity, cloud engineering, and full-stack development and are used to competitive work environments, making them great assets for any American company looking for new talent.

Time zone alignment

Unlike outsourcing to remote countries such as Vietnam or India, nearshoring allows your team to work in similar time zones. Most LatAm countries operate within a 1-3 hour difference from the U.S. time zones, enabling considerable overlapping during working hours and facilitating real-time communication.

This is critical in tech areas where synchronicity, instantaneous feedback, and simultaneous work are key factors to reach delivery times.

Cost efficiency

Compared to hiring domestically or in other high-cost regions, hiring in LatAm countries offers a significant reduction in labor costs, from 40% to 60% depending on the industry in most cases. This saving translates also to other components of the work relationship, such as operational expenses and benefits.

This access to a highly skilled workforce with a lower budget is particularly important for startups and growing firms, enabling them to use those resources in other core business areas without sacrificing quality.

Cultural and language compatibility

LatAm countries and the United States of America have a considerable cultural affinity, often sharing similar frameworks in work-related areas like work ethics, team structures, and business practices.

Additionally, English proficiency is remarkable in many countries, especially among younger generations. As an example, for 2024, countries such as Argentina, Honduras, Uruguay, and Costa Rica have performed well in the EF English Proficiency Index.

This cultural and linguistic compatibility enhances fluent communication, reduces misunderstandings, and improves cohesiveness within remote teams.

Reduced risks

Working with a partner close to home allows shorter travel times, reduced logistical complexities, and better oversight, reducing vulnerabilities associated with extensive supply chains.

Predictability is also increased, since stable regulatory frameworks for the private sector and trade agreements contribute to create a better ecosystem for foreign direct investment.

10 Best Countries in LatAm for Nearshoring in 2025

LatAm countries are way more than exotic landscapes and a vibrant cultural destination for adventurers. Beyond the paradisiac Caribbean beaches, unfathomable jungles, and impressive mountains, LatAm is also a hub of nearshoring opportunities for North American companies looking for strategic advantages in their overseas operations.

Each nation brings something special to the table, offering diverse profiles and benefits for tech companies aiming to join the nearshoring trend in the next few years. Let's discover the 10 countries leading the way.

Mexico

It's the first nation that comes to mind, due largely to its direct border with the U.S. and significant time zone overlap, However, in recent years it's become a considerable talent pool just south of the border, with major tech clusters in cities such as Mexico City, Guadalajara, and Monterrey, and abundant professionals coming out of universities yearly.

Additionally, the United States-Mexico-Canada Agreement (USMCA) trade agreement boosts cooperation, mobility, and trade between the United States, Mexico, and Canada, streamlining operations under a stable legal and commercial framework.

Costa Rica

Traditionally considered a safe haven in Central America, its economic growth, well-educated population, and political stability has attracted international investors such as Amazon and Intel in recent years. Its commitment to high-value sectors and innovation is turning this small country into a reliable choice for complex projects.

A good example is their huge development in the renewable energy sector, with more than 98% of the energy consumed in the country being generated by hydroelectricity, geothermal energy, solar power, etc.

Colombia

Being the third-largest labor force in LatAm, the abundance of English proficient workers and the low labor costs have boosted the establishment of abundant customer support firms, tech call centers, and business process outsourcing (BPOs). Other sectors like fintech and mobile app development have also grown significantly in recent years.

Argentina

Argentina is renowned for its highly educated workforce and strong English proficiency. Despite economic turmoils and political tensions, the country continues to produce a steady stream of skilled professionals with a strong culture of remote work, especially in cities like Buenos Aires and Cordoba.

Chile

Renowned for its good infrastructure, strong legal framework, economic growth, and political stability, Chile has become an attractive destination for companies looking for certitude in convulsed times. It has a strong tech community, supported by numerous events, boot camps, and forums, making it a vibrant destination for innovation.

Brazil

Being the largest economy in LatAm and one of the countries aiming to become a leading nation in the global scene, Brazil is an economic behemoth with a massive talent pool in major tech hubs such as Rio de Janeiro and São Paulo. Its booming tech sector has achieved international fame in areas like AI, software development, aerospace tech, etc.

Peru

Even though not as famous as its competitors, Peru's tech sector has been rapidly growing in recent years, aiming to catch up with its neighbors through heavy government investment. Its cost-effectiveness and growing talent pool, particularly in Lima, makes it a noteworthy destination.

Uruguay

Often called «the Switzerland of South America», its political stability and rule of law have turned it into a privileged international destination for companies and startups.

With a digital literate workforce and considerable English proficiency, Uruguay is now a hotspot for innovation, even becoming the largest software exporter per capita of South America.

Panama

The country's geostrategic position, business-friendly environment, and dollarized economy have turned this small nation into a regional hub for logistics and finance, attracting abundant foreign investments in areas where connectivity is essential.

Guatemala

With remarkable initiatives like Campus Tec in Guatemala City to boost local tech companies, this country is trying to become a strong competitor in Central America in the near future, mainly for companies seeking diversification from Mexico, especially in the BPO and IT sectors.

How Lupa Hire Simplifies Nearshoring in Latin America

So far, the decision of nearshoring in Latin America seems to be an easy call. Nevertheless, it should not be taken without careful consideration, since there are some important challenges on the way. Some are associated with cultural gaps and small time zone issues. However, the most critical ones are often linked to legal barriers and labor compliance.

Let's mention those issues and see how Lupa Hire helps you with its practical, result-oriented approach:

Talent matching

Tired of time-consuming recruitment and hiring processes that end up draining the resources of your HR department? Lupa Hire connects you directly with the best talent available through its extensive network of pre-vetted, highly skilled professionals in LatAm.

Lupa Hire not only ensures that candidates possess remarkable technical expertise, but also have the cultural and communication skills for a successful integration into an international team. Whether you need software engineers, app developers, or product managers, Lupa Hire connects you with the best talent available across LatAm.

Legal & payroll support

Handling international labor laws and tax regulations can be overwhelming, especially for small companies and growing startups. That's why Lupa Hire takes care of it. Lupa Hire handles employment contracts, benefits, payrolls, and all legal compliance without any hassle.

This comprehensive support allows the companies to be protected from any legal risks while operating overseas while they focus on their core activities.

Agile onboarding

Traditional onboarding processes can last weeks or even months due to all the bureaucratic and administrative tasks it involves, frustrating any plans for a quick team scaling. With Lupa Hire, top-tier international talent can be integrated within a few days, allowing you to accelerate product development and respond to market demands.

Ongoing support

Lupa Hire's support does not disappear after initial placement. Lupa Hire is committed to continuous support to guarantee an effective onboarding process and long-term success. From cultural integration to performance tracking, Lupa Hire remains an active partner, ensuring your team delivers excellent results.

As you can see, Lupa Hire is the nearshoring partner of choice for any company looking to expand operations and scale up their team, recruiting the best international talent available. Lupa Hire simplifies the complex process of international hiring by reducing the administrative burden, accelerating timelines, and minimizing legal risks.

Ready to simplify your nearshoring process and access top Latin American tech talent? Contact Lupa Hire today for a personalized consultation and start building your dream development team!

FAQs

What is the Latin America and Caribbean Nearshoring Act? 

It's a U.S. legislative proposal aiming to strengthen U.S. supply chains providing financial and diplomatic support to trusted partners in Latin America and the Caribbean, promoting economic development and reducing Chinese influence in the region.

What has the United States done to nearshore so far? 

Has focused on encouraging American companies to relocate back in the U.S. or, at least, in regional partners in the Americas. This has been made through incentives and trade agreements.

How do I figure out how much to pay LatAm professionals? 

Since salaries vary by country and role, the best option is always to partner such as Lupa Hire. These agencies have control variables that use local market data and salary calculators to determine fair salaries for each position.

Why is everybody suddenly talking about hiring globally and nearshoring and offshoring? 

The Covid-19 pandemic caused a major disturbance in global economic rules and trends, obligating countries and companies to rethink the way to approach their participation in the global market and seek new strategies.

Other important factors are geopolitical tensions with major powers such as China and the surge of remote work adoption.

How to start a nearshore software base in Argentina? 

Since this involves defining corporate needs, understanding legal/tax regulations, establishing a solid network with local talent, the best option is always to partner with expertise in the local market, such as Lupa Hire.

How do nearshore software hubs work? 

Hubs are basically regional or local offices where remote teams work for foreign companies. These centralized locations have been designed and developed to ensure productivity and efficiency; therefore, they count with adequate infrastructure, robust communication channels, and access to quality talent.