Nearshore to Argentina: Top 5 Reasons to Outsource Your IT to Local Talent

Did you know that Argentina is no longer an "emerging" IT nearshoring location but rather one of the most prosperous ones? Following Brazil, Mexico, and Colombia , the country continues its aggressive growth as an epicenter of innovations and exceptional engineering talents. Argentina has become LATAM's tech industry leader thanks to its governmental efforts. So, what opportunities does nearshore outsourcing present for business owners, investors, and startups, and why should you nearshore to Argentina? Let's explore together

Nearshoring your IT to Argentina: 5 major advantages

Known for its tango, fantastic wine, rich culture, and exquisite cuisine, Argentina is a magnet for travelers and digital nomads from all over the globe. But why does it prosper as a sought-after outsourcing destination for the U.S. and globally? Apparent reasons will be common ones like time zone overlap, affordable labor costs, similar culture and values, great education, and excellent English.

But there is more to nearshore outsourcing in Argentina than these apparent facts. Check out the hands-on insights from TEAM Buenos Aires about the Argentine IT IT outsourcing landscape , in 2024 and beyond.

#1 Robust IT ecosystem

You shouldn't be afraid to nearshore software development in Argentina since the country provides a rich, tech-focused infrastructure that ensures the rapid growth of the software outsourcing industry. It's well-packed with the latest tech inventions, IoT equipment, research institutions, high-speed internet connectivity, and numerouss innovation parks. The country is a big, prosperous tech hub comprising smaller but robust ones in major cities. Experts forecast the Argentine IT industry market share to hit $2.7 billion by 2026..

Moreover, Argentina offers around 150 coworking spaces for IT talents and small companies across big cities. In these modern or renovated facilities, they can work consistently, with even better connectivity and workspaces. Around 30 other IT ecosystem initiatives are distributed nationwide across over 15 locations.

All hubs and parks cooperate tightly with local tech universities and R&D institutions, businesses, and the government. They drive the growth of IT nearshore outsourcing by:

• providing internships and training

• implementing government and private-funded IT programs

• financing local entrepreneurs

• organizing relevant events to connect investors and founders

#2 Thriving startup scene

Over the last decades, Argentina has invested heavily in developing its startup environment and supporting joint Argentina-U.S. initiatives. For instance, Buenos Aires, the “Paris of South America,” hosts over 85 percent of tech hubs and up to 90 percent of Argentinian tech startup activity. The safest city in LATAM (The Economist, 2017) is driven by innovative entrepreneurs and highly educated IT talents who launch the most successful tech unicorns in Latin America.

The capital is famous for the country's largest ecosystem of cryptocurrency communities and the Latin American Bitcoin and Blockchain Conference. But dozens of other startup hubs and programs like SUBA or IncuBAte focus on companies that promote business R&D, outsourcing nearshore, and technological advancements.

As for local accelerators and incubators, the most famous of them are:

• The Rosario startup community—supports 40 public and private organizations like Global Shapers, Startup Weekend, and Junior Achievement.

• AreaTres is a major entrepreneurship hub that provides a work, educational, and innovation space in El Salvador with around 220 individual members and over 65 companies.

• Globant Ventures—invests in local and international startups and offers mentorship programs.

• Córdoba's Incutex is the fifth-best accelerator in LATAM.

• MercadoLibre's MELI Fund—has invested in 25+ companies.

• NXTP Ventures is the most active early-stage fund for LATAM tech startups.

• Wayra is a global, connected, and tech-focused innovation hub that has worked with more than 57 local and 400 international companies.

• CITES is the leading insurance company in Argentina that practices deep tech venture investments in scientific-based startups

The Argentine IT sector promotes a culture of continuous innovation and creative thinking, so startups play a crucial role in building a diverse community of skilled developers. Moreover, the country welcomes many international IT events, hackathons, conferences, and meetups. So, when you nearshore to Argentina, you can rest assured that it has enough resources and the required infrastructure to support your engineering projects and creative business ideas.

#3 Tremendous governmental support for the IT sector

Staying true to its course to become the center of Industry 4.0, the country has put its software development outsourcing services into the spotlight through various government programs and the stimulation of private investments. Argentina became the most attractive tech hub in the region by introducing the Law of Promotion of the Software Industry and the Entrepreneurs' Law. With these, the government made it easy and attractive for global entrepreneurs and companies to start businesses in Argentina or outsource their engineering projects to local specialists.

Such readiness to back founders up and help them succeed flooded the country with investment companies eager to join your venture. This resulted in the nationwide adoption of the US Silicon Valley work culture and entrepreneurship boom. Consequently, despite the pandemic and economic crisis, the Argentine IT industry has increased the number of tech workers and vacancies by nearly 30 percent since 2017. And the sector keeps growing faster than the local economy itself.

Policies, laws, and programs that stimulate the IT sector

1. Tax incentives:

• 15 percent rate for income tax (a reduction from 35 percent)

• No value-added tax

• Employer's social security contributions deduction

• Tax credits for income tax and VAT payment

• Lower labor costs

The local authorities hope this tax incentives bill will double employment and increase IT service exports by $4 billion within 10 years.

Entrepreneurs' Law:

This pro-entrepreneur law allows you to register a new business in Argentina online in one day and get a 75 percent tax deduction if it's a tech startup.

Employment

• The Federal Strategic Plan 2018-30 launched by the CESSI aims to create 500,000 new IT jobs in Argentina by 2030.

• Endeavor Rosario initiative now backs more than 80 companies across Santa Fe. Rosario's best entrepreneurs compete with world-renowned big tech companies.

• The Consejo Consultivo Emprendror initiative, launched to promote and coordinate innovative entrepreneurship, led to 20,000 new jobs, over 4,000 organizations, and 200 investments.

• Aceleradoras BA Emprende program has invested around $3.5M in local entrepreneurs.

• Teleworking Lawpromotes remote work and regulates the rights of the sides involved.

Education:

Along with encouraging government regulations for the IT industry, Argentina prioritizes top-quality software development education. The local education system is open and accessible. Authorities regularly establish grants, scholarships, free programming classes, and courses to nurture IT talents.

#4 Affordable cost of living

The cost of living in Argentina is significantly lower than in the U.S. or Europe. Still, you get a high quality of life, infrastructure, and services for much lower prices, even in major cities. So, setting up a nearshore IT outsourcing center in this country can be a life-saving choice considering the recession and rising inflation.

The estimated monthly cost of living in Argentina:

• For a family of four: $2,412 (ARS 430,131)

• For a single person: $973 (ARS 173,535)

#5 Higher workforce retention

The employee attrition level in the tech sector is low since nearshore developers in Argentina prefer to stay at a good company for as long as possible. Moreover, Argentine labor laws are pro-employee and support labor unions. So, you'd have better chances to retain local talents. This is a massive benefit if you launch a long-term project with tight deadlines requiring team consistency and knowledge retention.

Major labor requirements:

1. All employees are entitled to equal benefits and conditions regardless of work time terms.
2. Unauthorized overtime must be less than 30 monthly and 200 hours per year.
3. Overtime hours are paid as regular salary plus 50 percent.
4. Work during weekends or public holidays must be paid twice the regular salary.
5. A standard workday is nine hours with lunch breaks.

Hiring IT talent in Argentina: Summary

It wasn't always this good, but for the past 20 years, the country has been working hard on overcoming economic challenges and establishing a stable growth strategy. Seeing the opportunity to become one of the biggest tech hubs in the region, this LATAM country took it. Now, Technavio researchers project the global IT market in Argentina to hit around $6.7 billion by 2027.

Free STEM education and forward-looking governmental IT support programs stimulate entrepreneurs from all over the globe to use nearshore software in Argentina. Another tangible advantage is that the work visa application process is relatively easy and fast in Argentina, which dramatically simplifies the relocation of your staff from anywhere abroad.

In early 2022, TEAM International initiated its new global growth strategy and set up several offices across Europe and LATAM. Buenos Aires became home to one of them, so we can confirm that having a nearshore team in Argentina is a great and beneficial idea.

Local nearshore software development companies understand that finding good specialists is essential for any business owner who wants to gain a competitive edge with their products. Moreover, Argentine experts focus on cutting-edge technologies and programming languages instead of outdated ones. Hence, you can expect tech talents to have advanced, top-ranked skill sets.

So, in Argentina, you'll get high-quality IT outsourcing services from a nearshore software development company regardless of lower rates than in Canada or the U.S. Also, Argentine engineers and emigrants from MERCOSUR countries are skilled in Agile development, which is a must for most U.S. companies. And we can't stress enough how critical the availability of such experts is now amid the Great Resignation and global talent shortage.

Look up Argentine developers on Clutch and Glassdoor. You can see that they cover areas from custom software engineering and managed IT services to mobile and web apps, automation, security engineering, and consulting. Regarding industry domains, Argentina is recognized for successful projects in AgTech, finance and banking, e-commerce, enterprise solutions, and others

The country is a land of vast potential in IT nearshoring waiting to be uncovered

P.S. And of course, what a sporty country Argentina is! They are currently the world soccer champions, and their athletes and teams are usually at the top of their categories.