Nearshore vs Offshore Services

What is Nearshore/Offshore outsourcing?

Nearshore Software Development Services: This service model, gives companies a close dedicated team which allows them more control over project development flow, more engagement with the team in-house, and minimizes problem points thanks to faster reaction time and software development life cycle maintenance services.  

Offshore Software Development: Outsourcing abroad gives organizations temporary access to high-quality services and savings in operating costs. Collaborating with an external organization and assigning that organization to carry out some of its business or software development roles is a great alternative for technology projects.

Why is nearshore better than offshore? Let's take a closer look!

 Time zones: When thinking about outsourcing for your IT projects, nearshore software development services  make sense for any North American company, not only because of its convenience in terms of pricing and software development life cycle maintenance services.

Taking a look at geographical proximity, Central & South America's time differences are minor compared to outsourcing in Europe or Asia. Latin American countries offer the flexibility to have conference calls or make changes to current projects on the same day.

Did you know 70% of the world's outsourcing used to be held by India? Today, its share fell below 45% due to time zone differences.

Many governments offer incentives to those enterprises who wish to do business in their country. 

Central America: Costa Rica, Guatemala, El Salvador, Honduras, and Nicaragua have joined the WTO's Information Technology Agreement (ITA), which removes tariff and non-tariff barriers to IT products and services.

Mexico's outsourcing industry has developed in the last 10 years leveraging the country's proximity to the U.S., NAFTA free trade agreement, and its large pool of bilingual workers. Mexico's Software development program (Programa para el desarrollo de la industria del software, or PROSOFT) is promoting Mexico to IT clients as a world-class nearshore alternative by offering cash grants of up to 50% of the total investment and tax credits of up to 30% of R&D expenses. 

Argentina placed a high priority on the software industry and offers reduced tax rates and other special benefits to IT and software companies. Tax exemption of 60% of the total amount of income tax, reduction of employer contributions up to 70%, and no restrictions on wire transfers for imports of goods and services.