Blog Summary:

This blog is a short but definitive guide on hiring a Nearshore Agile Software Development team to build a custom final product. It outlines the skills, benefits, challenges, and estimated costs associated with specific skills, cutting-edge tools, processes, and diverse design approaches needed for unique project demands.

Finding the right talent at an affordable cost is a challenging task for development companies. Recruitment costs are getting higher, which increases the need to save costs and instead invest in hiring specific skills that the in-house teams lack.

Let’s have a look at some of the following interesting figures that make nearshore agile software development a competitive marketplace:

  1. Global software development outsourcing is projected to reach USD 40.16 billion by 2025.
  2. 80% of North American companies are actively considering nearshore in 2023.

Global access to talented software developers provides better expertise and accelerates project deliveries. With nearshore software development, companies can get a lucrative option that is:

  • Geographically closer
  • Culturally similar
  • Synchronized with time zones
  • Flexible without borders

In this blog, we’ll uncover more on how nearshore development can boost your team productivity and help you simplify your struggle to find the right nearshore partner.

What is Nearshore Agile Software Development?

Nearshore agile software development is a cost-effective solution that expands the app development capabilities of your in-house teams. It enables the current teams to work with other development teams that are near your company’s location. Sharing similar cultures, work environments, and time zones leads to a productive partnership.

Let’s understand this through an example.

Suppose an IT development company in Texas is looking to expand its development teams. They want to invest in a cost-effective, talented team with minimum language barriers.

Compared to nearby locations like California and Arizona, Mexico’s culture aligns most with Texas. So, the ideal option should be to hire nearshore app developers from Mexico to ensure real-time interactions with the closest proximity.

Benefits of Nearshore Agile Software Development

Nearshore software development benefits both the in-house developers and the external team hired to bring in new skills. The neighboring vendors are affordable because local development companies don’t have to pay to recruit new employees with new skills. Here’s how:

Cost Efficiency

The development costs of nearshoring destinations are lower than the location of the home. Suppose you’re seeking software development services in the Latin American region.

Argentina is one of the top destinations for nearshore app development, with a well-educated workforce and strong IT infrastructure. Buenos Aires and Rosario are your ideal bets for outsourcing software development services.

Cultural and Language Compatibility

This can only be achieved when the home country has outsourced development services from a location that shares a similar language and culture. Suppose your development company is in the South American region, and the primary language is Spanish. Thus, hiring app developers from nearshore locations like Costa Rica, Colombia, and Peru makes sense as they have similar language.

Time Zone Alignment

The alignment of time zones between the home development company and the nearshore company is heavily dependent on how near the location is. For example, Costa Rica’s central time zone syncs with most of the US locations with just a 3-hour difference.

Similarly, Western European countries like Poland, Ukraine, and Romania are top locations for nearshore software development services.

Access to Skilled Talent Pool

Nearshore developers work exclusively with in-house teams, enabling a smooth communication flow throughout the project management cycle. Moreover, the options for choosing the right team are unlimited. For example, many US locations are switching to Argentina for nearshore development because of distributed environments and wider UX/UI capabilities.

Faster Time-to-Market

With an additional team, development time is reduced, and development processes experience a speedy shift. Agile software development practices like DevOps outsourcing help deliver a product in small iterations and faster market releases.

For example, Canada remains a top nearshore destination due to the government’s tax incentives and funding in the tech industry, which quicken product market release.

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Process of Outsourcing Nearshore Development

The demand for expert talent is a priority for many companies, yet there is a high scarcity of niche-specific talent. However, when it comes to hiring an experienced team, talent matters more than the location. Here’s how you can make that process easier:

Identifying Business Needs and Goals

If the home company is located in Latin America, it’s best to list nearshore locations with swift tech progression and a thriving development market. For example, China and Brazil are globally recognized nearshore destinations in North America, with expert talent ranging from basic to intricate applications.

Selecting the Right Nearshore Partner

Apart from evaluating domain expertise and technical skills, client retention and risk management are some of the top criteria for selecting the right nearshore development company. Additionally, it’s crucial to evaluate your in-house talent based on their development expertise, available budget, and ability to afford the upfront cost of hiring a development team.

Defining the Scope and Objectives

The scope of development objectives should be to reduce the total cost of engagement. If you are in North America, consider if the time zones of the nearshore partner align with yours.

For example, engaging with Eastern European countries like Belarus might give you access to talented engineers from Belarusian universities. Still, the distance is almost 14 hours, leaving no room for face-to-face meetings.

Contract Negotiation and Legal Considerations

Negotiating contracts includes provisions for protecting sensitive information and trade secrets with Non-disclosure Agreements (NDAs). Additionally, Service Level Agreements (SLAs) help manage expectations of deliverables, payments, compliance, and exports. For example, California requires CCPA regulations under the GDPR laws.

Establishing Communication Protocols

Hiring app developers from Eastern European countries can be a worthwhile investment for nearshore development. If you want lower labor costs, then offshore development from Western Europe and the USA can deliver quality services at lower workforce costs. Similarly, Ukraine and Russia will provide developers with proficiency in more than one foreign language.

Onboarding and Knowledge Transfer

The last step is onboarding a team well-versed in their niche-specific skills. For example, the most prominent near-coastal locations providing some of the finest talent in software development are Vancouver, Montreal, Tijuana, and Toronto. Similarly, Costa Rica and Argentina provide low labour costs and an emerging highly educated workforce.

Cost of Nearshore Agile Software Development

Nearshore software development rates can be highly influenced by countries’ current exchange rates. Some countries have a higher cost of living, making them good locations for nearshore development services.

Similarly, other countries have better working conditions and a talented workforce. Hence, the rates can fluctuate from a minimum of USD 1,000 to a maximum of USD 1,00,000.

For example, if you’re in North America and looking for top locations to outsource development services, Latin America is the ideal choice. Here’s a tentative nearshore software development cost breakdown of the ideal areas in Latin America for US companies looking to outsource development:

Location Approx. Nearshore Development Rates Reasons to choose
Argentina USD 125 Ranks 14th in global education
Software engineering revenues up by USD 2.7 billion by 2026
Columbia USD 1.140 English is the official language in Andres, Providencia and Santa Catalina
Bogota and Cali emerging tech hubs
Costa Rica USD 2,425 Ranks 5th in Latin America for global skills
Cultural affinity and favorable time zones
Brazil USD 1,805 The software development market is valued at USD 11.3 billion
Expertise in Java and .Net
Spanish is the dominant language
Mexico USD 1,878 Vast developer talent pool of over 2,25,000
The software industry reached USD 3.9 billion in 2023
Chile USD 50 to USD 65 per hour The Chilean variant of Silicon Valley, “Silicon Valley”
Home to 61,000 developers generating USD 1.4 billion in revenue
Peru USD 45 to USD 65 per hour Best in Latin America with a YoY growth of 3.5%
Top-ranked universities and highest-skilled ReactJS developers

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Challenges in Nearshore Development

Choosing a nearshore product development region can invite its share of challenges. These can range from wrong evaluation of skills and rates to incompatible time zones. Additionally, cultural differences, such as English proficiency in countries from Eastern Europe and Latin America, can also pose some obstacles. Let’s understand them in detail:

Cultural and Communication Barriers

Cultural differences can cause communication barriers even if the neighboring countries have the same languages in terms of misunderstanding the strategies. For example, the United States can still face communication barriers with Canada because of differences in laws and regulations.

Time Zone Challenges

Geographical proximity is the biggest advantage of nearshore development, enabling work in similar time zones. However, balancing work schedules and overlapping hours can pose a concern. In such cases, adopting agile software development methodologies is best to solve misunderstandings and project delays.

Managing Expectations and Deliverables

Often, the client and the outsourcing partner have inconsistent processes due to different approaches and project management methodologies. Additionally, timelines, complexity, and cost expectations can become hurdles to incorrect resource assessments.

Quality Control and Assurance

Relevant domain knowledge and expertise are essential for quality assurance and control. Misinterpreting documentation might not address the client’s needs, leading to performance issues. Hence, testing practices and CI/CD integration can prevent such delays early in the development cycle.

How Moon Technolabs Help You With Nearshore Agile Software Development Challenges

Capturing your target audience is a time-intensive process. It requires understanding their core problems and building software that can solve them with the right functionality. In-house development teams can often reach a saturation point or have conflicting priorities, leading to the need for a different perspective.

Hiring a nearshore development team from Moon Technolabs can bring a fresh outlook and expertise to work with the in-house teams. It also enables delegating development tasks to niche experts while the business can run core operations. Get in touch with us today to onboard the right team members and complete your projects in record time.


Nearshore software development has emerged as a popular alternative to in-house development options due to its ability to maintain productivity, save time, and reduce costs for enterprises.

This approach enables organizations to delegate project segments while effectively optimizing operational efficiency. It streamlines remote team management with tailored solutions for product development without traditional recruitment delays.



What is the nearshore software development model?

Under nearshore software development, companies can hire a development team residing outside their country but are located quite close. For example, if a German company hires a team from Poland, they both have similar time zones and very few differences in working cultures.


What is offshore mobile app development?

Offshore development is an affordable strategy to delegate non-core tasks to expert mobile developers when you don’t have the required skills in your in-house team. It’s not limited to any specific country or time zone and you can negotiate maintenance terms, make changes in development plans and create long-term associations.


Is mobile app development still profitable?

Yes, mobile app development is a profitable investment because it’s an evolving field with new frameworks, programming technologies, and design approaches. Since it’s a highly competitive market, it provides a powerful source of time and resources to tailor to build scalable products that can face and adapt to business growth.
About Author

Jayanti Katariya is the CEO of Moon Technolabs, a fast-growing IT solutions provider, with 18+ years of experience in the industry. Passionate about developing creative apps from a young age, he pursued an engineering degree to further this interest. Under his leadership, Moon Technolabs has helped numerous brands establish their online presence and he has also launched an invoicing software that assists businesses to streamline their financial operations.