Controlled Resource Costs
One of the most significant financial benefits of having a team of developers in LATAM is lower costs reflected in your project budget. Finding the right vendor/partner may be time-consuming. Still, once you have found the right fit, you’ll benefit from fixed, fully loaded hourly rates in exchange for highly qualified talent. Some represent managing more effectively OR increasing revenue in longer-term projects up to 40% to 60%. These cost savings can be significant, especially for small to medium-sized businesses with limited resources.
Tax Incentives
Many countries in LATAM offer tax incentives to companies that invest in their local economy, including hiring local talent. For example, in Colombia, companies can receive up to a 40% tax credit on the salaries of new employees for their first five years of employment. Depending on the country, you’ll need to understand which tax benefits apply to your operation, but more often than not, that’s something to consider as a positive mark on your ledgers.
Reduced Infrastructure Costs
Many LATAM countries have a robust technology infrastructure, including high-speed internet, reliable power, and advanced telecommunications networks. This means businesses don't have to invest in expensive infrastructure to support their remote teams. This can result in significant cost savings, as this is transferred to your vendor/partner, who will run that part of the show for their resources allocated to your projects.
Recruiting and Project Management are built into the support structure.
Your local team is focused on making your client happy, and you want that to continue. When growing your team in LATAM, the recruiting process is less of a hassle for your local group as your vendor/partner assumes the initial sourcing and filtering. Your team will focus on interviewing already-interviewed, pre-fit candidates, eliminating more than 60% of the time invested in those tasks while sourcing the process locally.
In addition, many vendor partners will have their team and project management structures already built-in to support the people they already have, plus those new ones they bring on board. This frees your team to complete more project onboarding and focusing on delivering, rather than managing day-to-day tasks related to human capital support tasks.
Cost-saving should be a great incentive to consider having a team abroad. Still, other decision-making factors come into play when establishing a foothold outside the US. Prime among them are how good of a fit your vendor partner is to your existing team, the quality of the talent to bring on board, and the overall cultural alignment between your local and potential offshore team.
Always narrow down your search by making sure there is experience and delivery proven track record for those possible partners you consider, assess their actual capacity, and then see your quarterly revenue reports improve over time.
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