With remote work breaking down borders, businesses now have more options than ever to find skilled software developers worldwide.
While many companies still hire locally, others — especially startups with limited budgets, teams trying to fill specialized roles, and businesses that need project-based workers — turn to regions such as the Asia-Pacific (APAC) and Latin America (LATAM) to find the tech talent they need.
Both regions have strong technical talent, active developer communities, and competitive rates — but the best fit for your company depends on your software development needs.
Key takeaways:
- APAC excels in scalability and cost efficiency, while LATAM stands out for its real-time collaboration and cultural alignment with North American teams.
- Compliance is a crucial consideration when hiring internationally, as each country has its own unique employment, tax, and benefits regulations.
- Ultimately, the best region is the one that aligns with your company’s workflow, budget, and collaboration needs.
Why Companies Outsource Software Development
Outsourcing software development isn't just about cutting costs; it's also about leveraging expertise and utilizing resources effectively. For many businesses, it’s a strategic decision to help their company stay competitive in an increasingly globalized and fast-moving tech landscape.
One of the biggest drivers behind IT outsourcing is access to global expertise. Finding the right talent locally can be challenging, particularly in specialized areas such as AI, DevOps, and mobile app development.
Eighty-seven percent of companies report that they're experiencing skills gaps or expect to soon. Hiring internationally enables companies to tap into a broader pool of professionals with the necessary skills and expertise.
Another significant advantage of global hiring is a faster time to market. Distributed teams working across different time zones allow companies to maintain continuous development cycles. This “follow-the-sun” model enables faster product iterations, quicker bug fixes, and shorter launch timelines.
Cost efficiency is also an essential factor. Global outsourcing enables businesses to scale their engineering capacity without incurring significant overhead costs, such as office space. Additionally, hiring software developers in certain regions can be more affordable due to lower living costs.
Finally, outsourcing brings a level of operational flexibility that’s hard to achieve with in-house teams alone. Companies can easily scale up resources to meet tight deadlines or scale down after a project wraps.
Understanding Your Core Needs Before Diving Into Hiring
Before weighing APAC and LATAM for outsourcing, it is essential to be clear about your business needs so that you can choose the region — and even the country — that aligns best. Here are some questions to consider.
1. What technical skills do you require?
First, determine the type of work you need to have performed. Are you looking for experts in AI/ML, mobile app development, embedded systems, frontend/backend, DevOps, cybersecurity, or another specialized field? Some regions have strong tracks in specific skills or tech ecosystems that favor certain specialties.
2. What’s your budget?
Typical tech salaries vary widely by region, and even more so by country, seniority level, and certifications. For example, while LATAM is typically more cost-effective than North America, the region tends to cost more than many parts of Asia, particularly for specialized talent. Setting your budget in advance will help you focus on the talent you can afford to hire.
3. How important is time-zone alignment?
If your team depends heavily on real-time interaction and you need developers who share hours with your core team, you’ll benefit from hiring in an area with overlapping time zones. For example, if your business is based in the United States, it may be beneficial to nearshore developers in LATAM, as many countries in the region share U.S. time zones.
4. What level of cultural compatibility do you need?
Culture encompasses many aspects of the workplace, including communication styles, hierarchical expectations, problem-solving approaches, and attitudes toward feedback, and it plays a crucial role in both employee engagement and retention.
Poor cultural alignment can lead to miscommunications, misunderstandings, and lower morale; therefore, it's essential to maintain cultural compatibility. For example, many engineers in LATAM are already familiar with U.S. business norms, which can be beneficial for North American companies looking to hire there.
Overview of the APAC Tech Landscape
Asia-Pacific is one of the biggest global hubs for software development outsourcing, with countries such as India, the Philippines, Vietnam, and Indonesia leading the region in terms of both talent and outsourcing volume. Here’s a breakdown of what makes this part of the world attractive, as well as some of the challenges companies may face hiring there.
Advantages of Sourcing in APAC
First of all, the sheer size of the talent pool in the APAC region is a significant draw — India alone is home to approximately 5.8 million developers.
Competitive rates are also appealing, with rates for junior software developers as low as USD 10 to USD 12 per hour. However, pay for senior-level developers, or those in fields like AI, machine learning, and cloud architecture, is typically higher, sometimes reaching USD 80 per hour.
High English proficiency in some APAC countries also makes the region a popular place to hire. The Philippines, in particular, ranks highly because English is taught extensively and used widely in both higher education institutions and the business sector.
Another advantage is that the time zones of APAC countries enable many companies to engage in round-the-clock operations. Due to the time differences, APAC teams can pick up work when others are offline, allowing for near-continuous progress on projects for companies based in North America or Europe.
Challenges of Sourcing in APAC
Despite these advantages, there are trade-offs to consider when hiring in this region. For one, the time zone differences that allow follow-the-sun work can also be a barrier, especially for software teams accustomed to real-time collaboration.
Infrastructure issues can also be a problem. For example, Vietnam’s internet connectivity relies heavily on undersea cables, which are vulnerable to damage. In fact, there have been several instances where three or more of the country's five cables were simultaneously out of service. Power stability can also be a problem in less urban areas of some APAC countries, such as rural India; however, cities tend to have solid connectivity.
Cultural and communication nuances are another aspect to consider. In many APAC countries, work culture tends to be more hierarchical, feedback is less direct, and expectations regarding punctuality and meeting practices may differ from Western and Latin American company customs.
Overview of the LATAM Tech Landscape
Latin America — with leading markets such as Brazil, Mexico, Argentina, and Colombia — has rapidly emerged as a preferred destination for tech outsourcing, particularly among U.S.-based companies.
Advantages of Sourcing in LATAM
One of the biggest draws of LATAM is its strong alignment with both culture and time zone with North American companies. Because many countries in the region share or overlap with U.S. time zones, teams can easily communicate in real time, making remote collaboration much smoother.
Access to high-quality education in LATAM is increasing, and cities like São Paulo, Buenos Aires, Bogotá, and Mexico City are tech hubs with strong technical universities and a growing number of coding bootcamps. In fact, Mexico graduates a higher percentage of STEM students than the U.S. (26% vs. 20%), and Brazil isn’t far behind with 17%.
Strong English proficiency is another area where LATAM shines. While fluency varies by country, engineers in countries such as Mexico, Argentina, Colombia, and Costa Rica frequently work with international clients and are recognized for possessing strong English skills.
Finally, LATAM boasts a burgeoning startup scene, particularly in Brazil, Argentina, Colombia, and Mexico, which means developers are exposed to cutting-edge technologies, design thinking, and agile practices, bringing a fresh perspective to projects.
Challenges of Sourcing in LATAM
However, there are trade-offs to hiring in LATAM, with one of the most immediate being wage inflation in top tech hubs. As demand for LATAM developers grows — both domestically and internationally — rates in hubs like Brazil and Mexico have increased.
Salaries vary by country, seniority, and specialty, but you can expect to pay between USD 40 and USD 75 per hour, which is often higher than what APAC developers typically expect.
Another challenge is regulatory variation. Each Latin American country has its own labor laws, taxation requirements, benefits obligations, and distinctions between contractors and employees. Navigating these without the assistance of an Employer of Record (EOR) can be complex.
English proficiency varies widely across the region, especially in comparison to an APAC country like the Philippines, where it’s spoken more uniformly. English speakers are generally easy to find in urban areas, especially among those who already work with foreign clients, but there’s less English proficiency in remote areas.
Comparing Key Factors: APAC vs. LATAM
When deciding between APAC and LATAM for outsourcing software development, it often comes down to a few key factors.
Cost Efficiency
APAC: This region tends to shine in terms of affordability, with average developer salaries ranging from USD 20 to USD 50 per hour. However, rates can be significantly lower, depending on the country and the developer’s experience. Accelerance’s 2024 Global Software Outsourcing Rates and Trends Guide cites that junior-level developers are available for rates as low as USD 10 per hour in India, Pakistan, and Bangladesh.
LATAM: Wages are generally higher here than in APAC, but they’re still significantly below U.S. and Western Europe benchmarks. Mid-to-senior developer rates in LATAM typically range from USD 40 to USD 75 per hour, depending on the country, specialization, and experience.
Talent and Skillset
APAC: Software developers in this part of the world are known for their expertise in backend, cloud infrastructure, and QA automation, as well as large-scale IT operations.
LATAM: Tech workers in this region are renowned for their expertise in startups, product-driven development, UX/UI design and mobile app development.
Time Zone and Communication
APAC: Developers on this side of the globe are many hours ahead of North American and even European teams, which means minimal real-time overlap, especially during core working hours. For teams that require daily stand-ups, fast feedback cycles, or constant collaboration, this gap can be challenging to manage. That said, the time zone differences do enable 24-hour development cycles.
LATAM: Collaborating with developers in LATAM countries provides a more seamless overlap with North American teams, with a time difference of only 0-3 hours. This makes synchronous meetings, real-time communication, and agile delivery much more feasible. However, it means teams won’t be able to work around the clock.
Cultural Compatibility
APAC: The work culture here tends to lean more toward structure and hierarchy, with less direct criticism or feedback. Teams are generally reliable and process-driven, and communication styles tend to be more formal.
LATAM: This region is more aligned with how North American teams work in terms of communication, collaboration, and flexibility, and there’s typically more directness in feedback. LATAM software engineers also often have experience working with international partners in overlapping time zones, so they may already be familiar with a North American work style.
Which Region Is Right for You?
Both APAC and LATAM are home to outstanding software talent, so determining which area is the best fit for your team depends on your goals, communication preferences, and project needs.
Choose APAC if you:
- Need large-scale engineering support, backend, cloud, or QA expertise
- Want lower hourly rates
- Can work asynchronously across time zones or value continuous development
Choose LATAM if you:
- Value real-time collaboration and overlapping hours with North American businesses
- Want agile workflows, frequent communication, and cultural alignment with North American teams
- Focus on UX/UI, product-driven development, or startup-style iteration
Compliance and Hiring Considerations
Whether you hire in APAC or LATAM, you’ll need to do so in a compliant manner. From taxes and benefits to local labor laws and contract terms, every country has its own regulations that you must comply with, or you risk incurring costly penalties or reputational damage.
There are two options for compliantly hiring across borders: opening a legal entity in each country where you hire or partnering with an EOR.
Establishing a legal entity offers more control; however, it also requires navigating local company formation, payroll, taxation, and HR compliance, which can be expensive and time-consuming.
When you work with an EOR, they act as the legal employer on your behalf, taking on all compliance risk and managing all employment responsibilities, including drafting employment contracts, processing payroll, and managing tax contributions. EORs like RemoFirst also support onboarding, equipment shipping, and work permit or visa applications.
Build Your Software Developer Global Team With RemoFirst
There’s no “best” outsourcing destination between APAC and LATAM — just the one that best aligns with your company’s goals. APAC offers scalability and affordability, while LATAM delivers better collaborative hours and cultural fit for North American businesses.
Whichever you choose — or if you decide to hire in both regions — RemoFirst makes it easy to employ top software developers quickly and compliantly without setting up local entities or navigating complex employment laws. We’ll handle compliance, contracts, payroll, and more while you focus on growing your software team.
Book a demo to learn more.
