Outsourcing Software Development: Argentina or Brazil?

Argentina is a cost-effective, yet quality choice when it comes to relying on seasoned developers for innovation.

For many IT companies, acquiring software development expertise can be quite difficult. This is because the entire process of recruiting and onboarding in-house employees usually involves high costs and can take up to a year. Not to mention that local employment legislation may require companies to retain their workers even though there is insufficient workload. Therefore, outsourcing has become an economical alternative. This article explores Brazil and Argentina as potential locations where organizations can outsource.

Looking for a better fit

Brazil is the largest economy in Latin America, and software outsourcing is a flourishing market that generated over $10 billion in 2021. Argentina is the third largest economy in the region and has a pool of highly qualified developers. Software outsourcing is considered to be a major sector that would bring in significant trade prospects for the country. Both countries rank more or less the same out of the 190 countries for ease of doing business according to the World Bank.

When choosing which country would be a better fit for your company’s needs, a business may consider the following criteria: a macro environment for outsourcing development, knowledge and competence of engineers, interpersonal and working relationship, as well as salaries.

The macro environment and professional competences

In Argentina, the government is very proactive in supporting the IT industry, with the Federal Education Council concentrating on tech-focused learning in 2019. This resulted in a high number of proficient and globally competitive software developers. At present, over 200,000 engineers are working and living in Argentina. The country’s tech services make up for 10% of the country’s exports, half of which goes to the US.

In Brazil, the government also strongly supports tech companies. For instance, there are reduced corporate income taxes and net income social distribution for businesses that invest in research and development to boost innovation. Most of the top 10 unicorns in Latin America and over 500,000 engineers call Brazil “home.”

It is important for developers from either country to have strong English skills for team communication. Placing 30th, Argentina outranks Brazil in terms of English proficiency in the Education First English Proficiency Index with a score of 556. Brazil only places 60th with a score of 497 and is classified as Low Proficiency.

Time differences and salaries

Both countries’ time zones are beneficial for western companies looking to outsource.  Brazil has four time zones: GMT-2, GMT-3, GMT-4, and GMT-5, with Sao Paulo being one hour ahead of New York (GMT-4) and four hours ahead of California (GMT-7). Argentina is located in a single time zone—GMT-3. This means, it is similar to Sao Paulo in terms of time difference to New York and California.

As for salary, companies can typically save more when hiring Argentinian developers without sacrificing the quality of work. According to Glassdoor, the annual salary of engineers from these two countries are usually less than half when compared to US-based peers (whose salaries are usually $133,000 for back-end, $120,000 for full-stack, and $120,000 for mobile experts).

To sum everything up, Brazil’s IT infrastructure cannot be disputed and is perhaps the reason why the country has a higher salary for software engineers. Most of Latin America’s tech unicorns and top-ranking universities are located here. On the contrary, Argentina is more proficient in English and has a more modest annual salary for developers, making the country a more suitable choice for software development outsourcing.

If you want to dive deeper into the topic, you may read this blog post, which analyzes various factors to help you choose a destination to outsource development.

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