Nearshore Software Development in Argentina: Benefits + 5 Hubs

Nov 22, 2023 | Insights

Argentina has earned its status as a nearshore software development powerhouse thanks to its exceptionally skilled workforce and cost-effective IT services.

But that’s not all.

Its stable business environment, favorable legal framework, and time zone that aligns with North America only add to the appeal.

Let’s explore the current state of the country’s nearshoring market and 10 compelling reasons for considering nearshoring in this location.

We’ll also guide you on partnering with Distillery for nearshore software development success.

Further Reading:
Planning to nearshore software development? Here’s the Ultimate Guide on Nearshore Software Development.
Not sure which outsourcing model to opt for? Discover the pros and cons of Nearshore vs Offshore Outsourcing. 

This Article Contains

A Brief Look At Argentina’s Software Development Market 

In terms of innovation, Argentina stands out as a frontrunner in the Latin American region, securing the 69th spot on the 2022 Global Innovation Index. 

Here are compelling facts highlighting Argentina’s promise as a nearshore development destination:

  • The revenue generated from Argentina’s IT services market is estimated to be $3.59 billion in 2023. 
  • Argentina boasts a thriving IT outsourcing ecosystem with approximately 253 software development companies specializing in various services, including web development, custom software development, web design, UI/UX design, digital marketing, branding, etc.

The Government of Argentina has also undertaken several initiatives and reforms to strengthen the country’s technological and innovation prowess. These include: 

  • Argentina Programa: An initiative that promotes tech skills among young people through software development training. Participants also get stipends and scholarships for getting access to computers or the internet.  

The program involves two phases:

  • #SéProgramar: Teaches young people the fundamentals of programming.  
  • #YoProgramo: Equips program participants with the skills to become a junior full-stack web developer. 
  • Programa Aceleradoras Buenos Aires Emprende: Undertaken by the Ministry of Economic Development and Production, Buenos Aires, this initiative supports startups and has invested 28 million ARS ($3.5 million) in local entrepreneurs. 
  • Teleworking Law: This 2020 law states that employees engaged in teleworking (work-from-home) must receive the same rights and obligations as those working in-office, and their remuneration can’t be less than their on-site counterparts.
  • Building Tech Parks: The Argentinian government has been developing tech parks to create hubs where startups and professionals can collaborate. The main locations are Parque Austral, Buenos Aires IT Hub, Córdoba Technology Cluster, and parks in Bahia Blanca, Mendoza, La Plata, and Rosario.

Now that we’ve explored Argentina’s IT market, let’s understand what makes Argentina a popular nearshore software development outsourcing hub in South America.

10 Convincing Reasons to Nearshore Software Development to Argentina 

With a thriving tech scene supported by government initiatives and innovative startups, this Latin American country has proven to be a robust and reliable software outsourcing destination. 

Here’s why: 

1. Highly Skilled Talent Pool 

In 2021, Argentina ranked 34th in the global list of top countries with the best education system, demonstrating its substantial investments in the educational sector.

As of 2022, Argentina boasts a sizable and highly skilled tech talent pool comprising 115,000 professionals engaged in offshore software development. 

The surge in foreign investments and the need for skilled IT and engineering teams has increased the number of Argentinian universities offering top-notch technical programs.

The 2023 QS World University Rankings listed over 40 top Argentinian universities for computer science programs, with 14 in Buenos Aires.

Additionally, nine Argentinian universities are listed among the Best Global Universities in Latin America for 2022-23.

With a robust educational system producing thousands of software engineering and technology graduates annually, the country’s IT professionals are well-equipped for:

  • Software development
  • IT consulting
  • Other tech-related services like mobile app development, web app development, and more. 

2. Cost-Efficiency

Hiring a nearshore developer in Argentina is more affordable than hiring an onshore or offshore developer from the US or other European countries.

For example, on average, a senior software engineer in Argentina makes around $5,714/month. On the other hand, their US counterparts earn around $10,269/month. 

As a result, North American companies can access skilled professionals without breaking the bank.

The bonus?

Since companies are spending less on labor costs, they can allocate more resources toward cutting-edge technology, boosting innovation and their competitive edge – making their nearshore software outsourcing initiative a success. 

However, it’s important to note that although Argentinian software developers are known for their affordability, the total cost can vary depending on:

  • The complexity of your project and its technological requirements.
  • The level of skill and experience of the software developer.

You may incur additional costs if you want to hire a senior software developer with advanced expertise. 

3. Bilingual Workforce 

As per the English Proficiency Index 2021, Buenos Aires ranks number 1 in English proficiency, scoring 567 out of 800 (highest among all other LATAM countries).

Cordoba, another city in Argentina, secured the second spot by scoring 561 out of 800. 

Overall, globally, Argentina ranks 30th in the ‘high-proficiency’ category of the English Proficiency Index 2021.

Argentinian software developers can easily communicate with clients or team members in English-speaking countries to understand project requirements. 

Proficiency in English facilitates clear communication between the quality assurance team and the nearshore software developer, guaranteeing thorough testing and compliance with international standards. 

4. Time Zone Overlap and Geographical Proximity 

Argentina is in the GMT-3 time zone, making it easier for companies in the United States and Canada to nearshore their software development to this country.

This time zone overlap gives you a 5-8 hour window to connect with your remote development team in Argentina. 

You can use this time to:

  • Conduct regular/daily meetings
  • Share feedback
  • Collaborate with your team of nearshore software developers and engineers
  • Monitor the progress of your projects

Another advantage of outsourcing software development to Argentina is the proximity and ease of travel. 

Besides, if you’re a US citizen, you won’t be required to apply for a visa when you visit Argentina. 

5. Cultural Similarities 

Argentinian software developers are likely to share a strong cultural affinity with North American and European counterparts.

Why’s this important?

Shared cultural values and business ethics help Argentine developers create a more seamless working relationship with clients from North America and Eastern/Western Europe. 

This ensures both sides practice similar work ethics, enhancing problem-solving and innovation. 

6. Positive Investment Environment

Argentina promotes foreign investment through specialized economic zones offering tax incentives and simplified regulations.

For instance, the Entrepreneurs’ Law simplifies business registration, enabling entrepreneurs to start their business online in one day — at reduced costs. It also offers a 75% tax deduction to support tech startup growth.

Some other initiatives undertaken by the government to foster innovation in Argentina are:

  • Teleworking law
  • Argentina Innovadora 2020
  • Knowledge Economy Law
  • Argentina Conectada
  • Plan 111Mil
  • Red Argentina 
  • Argentina Programa 

7. Highly Developed Information and Communication Technology (ICT) Infrastructure  

Advanced infrastructure ensures reliable and high-speed internet connectivity. This enhances communication, efficient data transfer, and seamless collaboration between the development team in Argentina and their clients abroad.

Argentina’s government remains committed to infrastructural development, mainly focusing on improving the fiber-to-the-home (FTTH) technology. 

This includes: 

  • Rolling out and improving the 4G+ LTE network. For instance, ARSAT, a state-owned Argentinian company, continues extending its primary fiber network to connect over 1,200 towns nationwide.
  • Broadening access to high-speed internet services.
  • Enhancing data transmission, broadband connectivity, and digital content delivery through cellular networks.
  • Providing satellite services for remote and rural regions of the country

8. Agile and Scrum Project Management Teams

Argentina’s software development industry is renowned for widely adopting Scrum and Agile methodologies. These methodologies revolutionize software outsourcing with scalability, automation, and higher productivity. 

This accelerates team performance, fostering better communication and adaptability – which is crucial for nearshore software development outsourcing.

9. Robust IT Outsourcing Record 

Argentina has the fifth-largest IT market in the LATAM region, making it a trusted nearshore outsourcing destination for delivering high-quality software development services. 

According to a 2023 CESSI report, approximately 59% of software outsourcing work done in Argentina involved companies in the United States. This is due to its affordable pricing, overlapping time zones, English proficiency, and ability to deliver a high-quality software solution. 

Here are some renowned American tech giants that have outsourced their software development to Argentina:

  • Microsoft
  • Google
  • IBM
  • HP
  • Intel
  • Cisco
  • Nokia 

10. Thriving Tech Startup Scene 

Argentina’s startup ecosystem ranks 4th in the LATAM region due to the growing number of emerging software development companies.

Approximately 64% of startup companies in Argentina (out of 456) are located in Buenos Aires. Cordoba, the country’s second-largest city, serves as the headquarters for 126 startups.

These IT hubs house highly skilled professionals, expanding the nearshore talent pool for outsourcing companies.

What’s more?

The thriving startup culture in the region has attracted significant international investment, providing attractive opportunities for companies who want to outsource software development. 

Here’s a list of a few popular nearshore outsourcing hubs in Argentina you must know about. 

Top 5 Nearshore Software Development Hubs in Argentina 

Nearshore development hubs in Argentina are thriving centers for software development outsourcing and IT services. These hubs are typically located in major cities like Buenos Aires, Cordoba, and others. 

Read on. 

1. Buenos Aires

Buenos Aires, Argentina’s cosmopolitan capital city, is a dynamic and innovative tech center. 

The city’s vibrant tech ecosystem is characterized by a skilled and creative workforce that excels in:

  • Custom software development
  • IT services
  • FinTech
  • eCommerce
  • Web app development
  • Mobile app development, etc.

With a solid educational foundation and a cultural affinity to the US, Western, and Eastern Europe, Buenos Aires is a prime destination for businesses seeking top-quality software solutions. 

Time zone compatibility with North American companies, cost-effectiveness, and strong government support also works in its favor. 

Additionally, the city is home to numerous startups, startup incubators (programs designed to help new startups succeed), and tech parks, fostering innovation and collaboration.

2. Cordoba

Cordoba, Argentina’s second-largest city, is a prominent software outsourcing hub renowned for its skilled community of software developers, IT specialists, and tech entrepreneurs.

With two major universities, the National University of Cordoba and the Cordoba Institute of Technology, the city consistently produces many STEM (Science, Technology, Engineering, and Mathematics) graduates. 

Why’s this important?

This drives the growth of the city’s local IT sector and has led to the emergence of numerous nearshore outsourcing companies that primarily serve clients in the United States.

Cordoba has also cultivated an exceptional IT ecosystem with nearly 200 startups, representing approximately 36% of the country’s startup landscape. 

It’s also home to multiple startup incubators and technology parks and is supported by government-backed IT initiatives.

3. Mendoza

While Mendoza may have a smaller IT workforce than Buenos Aires, its workers have practical experience in various domains, including:

  • Software engineering
  • Data science
  • Energy and environmental technologies
  • Educational software development

Many reputed universities, such as the National Technological University and the University of Mendoza, offer multiple programs in computer science and Informational technology.

The government has also undertaken several initiatives to support new entrepreneurs and fund businesses.

For example, The CCE initiative, focused on promoting entrepreneurship and innovation, has created 20,000 jobs, giving rise to over 4,000 new businesses and attracting 200 investments. 

Moreover, the initiative allocated $3.5 million to startups, aiming to create a positive influence on society, the environment, and Mendoza’s technology sector.

4. Rosario 

Rosario is rapidly becoming a dynamic IT outsourcing hub. Not only is the cost of living in Rosario cheaper than in Buenos Aires, but you also get access to a highly skilled workforce.

The city’s leading educational institutions, such as the Universidad Nacional de Rosario –- one of the top universities in Argentina – offer many software engineering and business courses, producing a steady stream of tech graduates.

What’s more?

Many prominent global companies such as Apex America, Globtant, and IBM have also set up operations in Rosario. 

5. La Plata

Often called the “Boston of Latin America,” La Plata is home to more than 35 higher education institutions providing various courses, including IT and engineering. 

As a result, large and small companies are attracted to La Plata because of cost savings and the high-quality nearshore software development service professionals available in the city.

As you can see, outsourcing nearshore software development to Argentina offers many benefits.

But there are also a few potential challenges you might face.

We’ll take a look next.

2 Potential Challenges of Nearshore Software Development to Argentina 

Nearshoring software development to Argentina presents businesses with unique opportunities and challenges. 

While the country boasts a vibrant tech scene and skilled professionals, businesses must be aware of its political, economic, and regulatory challenges. 

Here’s a closer look:

1. Macroeconomic Imbalances

The Argentinian economy has faced multiple economic challenges, such as high inflation rates, foreign debts, a recession, and currency depreciation. 

Following a sharp global economic decline caused by the COVID-19 pandemic, 2021 was anticipated to be a year of recovery in Argentina. 

Unfortunately, despite achieving substantial economic growth and returning GDP to pre-pandemic levels in 2022, macroeconomic imbalances continue to persist in the country. 

The result?

  • Increased costs: These imbalances may raise the prices of outsourcing services for international companies and foster an uncertain business environment. 
  • Currency instability: Currency fluctuations can impact exchange rates and financial planning for outsourced projects, potentially affecting budgeting and profitability.

2. Complex Political and Economic Context

Despite being one of the biggest economies in Latin America, Argentina has encountered numerous political and economic challenges.

Here’s how this may impact your software outsourcing endeavors:

  • Regulatory impact: Frequent political shifts and policy changes can lead to changes in outsourcing regulations. Such regulatory changes may require software outsourcing companies to adapt their operations, revise contracts, or navigate new compliance requirements. 
  • Trade relations and agreements: Argentina’s international trade relations and agreements are susceptible to political fluctuations, which may lead to trade disruptions and regulatory and supply chain adjustments for companies outsourcing to Argentina. 

Now, the easiest way to outsource your software development to Latin America would be to partner with a trusted nearshore software development company like Distillery.

Why?

Let’s find out. 

Partner with Distillery for Hassle-Free Nearshore Software Development in Argentina

Distillery is an award-winning nearshore software development company that provides top-tier tech talent in Latin America. 

With Distillery, you can access a scalable workforce of senior nearshore developers for all your software development project needs. 

Using our flexible, cost-effective engagement options, you can retain complete control and visibility over the day-to-day operations.

Services We Offer 

Distillery has a team of cross-functional experts that harness the right tools and technologies to ensure the success of your project with the help of:

How We Hire First-Class Tech Talent

All our software engineers undergo a thorough technical interview to test if they possess the necessary expertise and experience to meet your project’s objectives.

Here are a few stages in our hiring process:

  • Targeted talent acquisition: Prioritizing applicants with high-demand technical skill sets.
  • Validation of technical skills: Conducting online tests to validate each candidate’s skills.
  • Technical assessment: Scheduling a one-on-one coding interview with Distillery’s technical lead. 
  • Behavioral assessment: Conducting HR interviews to evaluate applicants’ cultural fit and English skills. 
  • Project alignment: Handpicking candidates who are ready to start your project. 
  • Client interview: Allowing you to speak to the candidates directly to ensure they fit your project requirements.

How We Work

Distillery’s software outsourcing delivery model is adaptable, expandable, and built on cooperation, focusing solely on using our expertise to achieve your business goals.

Here’s our expert approach to building quality solutions: 

  • Tailored Service Delivery Approach (SDA): Our Service Delivery Approach (SDA) is a refined version of the Agile software development process that allows us to deliver value services quickly and scale your business demands.
  • Customized cross-functional teams: We provide custom-made teams skilled in DevOps and cloud, UX/UI design, QA, and project management. This skill set enables them to deal with challenges and ensure the success of your software development project.
  • Scalability and flexibility: We offer the right blend of skills at the right time, giving you the scalability and flexibility you need to meet your objectives – as per your business requirements. 
  • Collaborative, long-lasting client partnerships: We collaborate with our clients throughout the development process, dedicating time to fully understanding their business objectives.

Harness Argentina’s Software Development Expertise through Distillery

Argentina is a thriving nearshore development hub with a vast pool of highly skilled tech professionals.

By outsourcing software development to Argentina, you can access top-tier tech talent and cutting-edge technology at a competitive price while maintaining seamless collaboration with your remote development team. 

So what are you waiting for?

If you need a trusted partner to start nearshoring to Argentina, sign up with Distillery right away!