Should You Build or Hire a Software Development Team in Latin America?

Hiring skilled developers is hard. Doing it cost-effectively is even harder. That’s why more companies are turning to Latin America to build or hire software development teams. The region is rich in tech talent, aligned with US time zones, and increasingly seen as a top nearshoring destination.

But should you hire a ready-made development team or build your own LATAM tech team from scratch? The right answer depends on your timeline, budget, and how much control you want.

This article breaks down both hiring and building options so you can make an informed decision. You’ll learn how nearshore software development in Latin America works, where the top developer hubs are, and what legal and operational factors to watch out for. Let’s walk through the key pros, cons, and important decision points!

Understanding the Difference: Hiring vs Building a Tech Team in LATAM

Hiring a software development team in Latin America means working with an already-formed group, often through a nearshore agency or development firm. You’re tapping into a ready-made unit with defined roles, established workflows, and often, a track record. Building a tech team, on the other hand, involves sourcing individual developers yourself and assembling the team internally, either directly or through an Employer of Record (EOR).

Speed and setup are major differences.

When you hire a pre-built team, onboarding can happen in days. Building a team takes longer, often several months. You’ll need to recruit, vet, negotiate contracts, and manage onboarding. According to CodersLink, the average time-to-hire for a developer in LATAM is 5 to 8 weeks when hiring individually. If your project is time-sensitive, that’s a critical factor.

Control is another key trade-off.

Building your team gives you full oversight on hiring decisions, tech stack choices, and cultural fit. It’s ideal if you want to nurture long-term employees and embed them into your company DNA. But it also means more HR, compliance, and retention work, especially across borders.

Hiring a team shifts much of that burden.

You don’t need to manage local labor laws or payroll if you work with a nearshore partner. They handle team dynamics and legal obligations. That said, you’ll have less say in team composition and processes. This model works well for companies looking to scale fast without setting up infrastructure in-country.

Cost structures also differ.

Building a team might save money long-term, especially if you avoid vendor fees. But short-term costs are often higher because of recruitment, legal setup, and management overhead. Hiring a team typically involves a flat monthly fee that bundles salaries, benefits, and admin, providing clearer cost predictability.

Scalability plays a role, too.

It’s easier to scale up quickly when hiring through a nearshore agency. If you build a team yourself, scaling requires additional hiring cycles and management bandwidth. For startups or companies with limited HR resources, this can slow momentum.

Both models give access to the same developer pool. Latin America has more than 1 million software engineers, with Brazil and Mexico leading in headcount and specialization, according to Evans Data Corp. The difference lies in how you engage that talent and how much control or flexibility you need.

The Key Considerations Before You Hire or Build a Software Development Team in Latin America

Before you commit to hiring or building a software development team in Latin America, there are some non-negotiable factors to evaluate. These go beyond talent availability; they impact legal exposure, financial planning, delivery timelines, and long-term scalability.

1. Budget isn’t just about salaries.

LATAM developers typically earn less than their U.S. counterparts, but pricing varies sharply by country and seniority. For example, a mid-level developer in Argentina averages around $30,000 to $45,000 per year, while in Mexico, the range may stretch to $45,000 to $65,000, depending on tech stack, according to Accelerance. If you’re hiring through an agency, factor in service fees. If you’re building internally, account for recruitment costs, compliance, and benefits.

2. Time-to-productivity matters.

Hiring a full team through a nearshore vendor can cut ramp-up time dramatically. Some providers deploy teams in under 3 weeks. Building a team from scratch takes longer. Latin America’s average developer time-to-hire is 6 to 9 weeks, based on data from VanHack and Terminal. If you’re on a tight product roadmap, that delay can be costly.

3. Legal and labor laws vary widely.

Each country in LATAM has different employment regulations. Brazil and Argentina, for instance, have strict labor protections that can complicate terminations or limit contract flexibility. Using an Employer of Record (EOR) or partnering with a nearshore firm often simplifies legal risk, but if you're building a team directly, you’ll need localized legal guidance to stay compliant.

4. Intellectual property protections are not uniform.

IP laws in LATAM generally align with international standards, but enforcement can be inconsistent. Countries like Chile and Costa Rica have stronger reputations for IP protection, especially for tech firms. Make sure contracts are airtight and governed under favorable jurisdictions, this is critical whether you're hiring an external team or onboarding individuals directly.

5. Infrastructure and internet reliability differ by region.

Most urban hubs in LATAM, like Bogotá and Buenos Aires, have strong internet and coworking infrastructure. But developers in secondary cities may face connectivity issues. Ask about internet redundancy, power backup, and work environment, especially when building remote-first teams.

6. Talent retention is a growing challenge.

The demand for LATAM developers is rising fast. According to Deel’s Global Hiring Report, software developer salaries in the region rose by 20% year-over-year in 2023, and attrition rates are climbing. If you build your team, plan for retention strategies like bonuses, career development, and equity. Hired teams often include baked-in retention support, but you still need a clear handover and communication plan.

7. Team integration shouldn’t be an afterthought.

When you hire a team, integration with your internal workflows is vital. Do they follow Agile? Are they familiar with your tech stack? If you build your own, you shape the team’s habits from day one. But that also means taking responsibility for onboarding, training, and cultural alignment.

How to Decide: Should You Hire or Build Your LATAM Software Team?

The decision to hire a software development team in Latin America or build your own depends on a few core business variables. There's no one-size-fits-all approach, just trade-offs that affect speed, budget, control, and long-term alignment.

1. Timeline is the first filter.

If you need a functioning team in less than 30 days, hiring is the more viable option. Established nearshore providers in LATAM often deploy ready-to-code teams in 2 to 4 weeks. Building your team takes longer. On average, sourcing, interviewing, and onboarding an individual LATAM developer can take 6 to 10 weeks, according to CodersLink.

2. Budget clarity vs. flexibility.

Hiring a team through a vendor usually means fixed, all-in monthly pricing. That’s great for predictability, but long-term, it might be more expensive due to service fees. Building gives you more control over salaries and compensation structure, especially in countries like Colombia or Peru, where average developer salaries are lower, ranging from $25,000 to $40,000 per year, according to Evans Data. But factor in recruiting costs, payroll taxes, and retention incentives.

3. Control and company culture.

If tight alignment with your internal processes is a priority, building a team makes more sense. You select each person, shape the workflows, and instill your culture from day one. Hiring a nearshore team gives you less influence over team composition and management, although it removes much of the operational overhead.

4. Internal bandwidth and hiring expertise.

Do you have the internal resources to recruit, vet, and manage developers across borders? If not, hiring might save you time and HR strain. Building requires a working knowledge of local hiring practices, labor laws, and cross-cultural management. Without that foundation, scaling can become a drag on your core team.

5. Long-term vision for the product.

For ongoing development with high IP sensitivity or strategic importance, a built team embedded in your company may provide more continuity. You’re more likely to retain product knowledge internally. On the other hand, if you’re building an MVP or need help shipping a feature set quickly, a hired team can reduce your time to market.

6. Legal and compliance appetite.

Are you ready to handle country-specific employment laws, contractor compliance, and tax risks? If not, hiring through a partner reduces exposure. If you build, you’ll need to navigate this with help from EOR platforms or regional legal advisors.

7. Future hiring scalability.

If this is just the start of your LATAM expansion, building may offer better long-term scalability. You’ll own the process and pipeline. But for short- to mid-term needs, hiring lets you bypass infrastructure and scale faster. Deel’s 2023 Global Hiring Report shows a 62% increase in U.S. companies hiring LATAM talent, often through staffing models first before committing to direct hiring.

Ready to Build Your Own Software Development Team in Latin America?

Deciding whether to hire or build a software development team in Latin America isn’t just about talent; it’s about timing, risk, control, and long-term ROI. LATAM is now the second-fastest-growing region for software outsourcing, with tech exports from countries like Brazil and Mexico exceeding $24 billion annually, according to the World Bank. The opportunity is real, but so are the operational complexities.

At BOT LATAM, we specialize in helping companies navigate the BOT and software development processes with clarity. Whether you're looking to build an embedded team from scratch or hire a ready-to-go development squad, we provide on-the-ground expertise, vetted talent pipelines, and region-specific support. Our model is built for scale and compliance, backed by deep experience across all of Latin America. If you’re exploring LATAM for software development, we’ll help you move with confidence, not guesswork. Interested in getting started? The first step is to contact us and schedule a FREE discovery call!