Outsourcing Software Development to Chile: Why You Should Hire Chilean Developers

Outsourcing Software Development to Chile: Why You Should Hire Chilean Developers

September 9, 2022
Reх Huхford
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More companies are choosing to outsource their software development to Chile. Learn why and how you can benefit from hiring Chilean developers.

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As the hourly rates of US-based developers continue to skyrocket, many startups have started to outsource their software development to other nations. The most popular countries include the Philippines, India, Ukraine, and Latin American countries like Argentina, Uruguay, and Chile.

Chile in particular is worth taking a look into. Widely celebrated for its natural beauty, vibrant street art, and thriving software development industry, Chile is a great pick for your outsourcing needs. The country has great IT infrastructure, a highly-skilled workforce that's proficient in English, and similar time zones compared to the US.

Read on to learn why and how you can benefit from hiring Chilean developers.

Advantages of Outsourcing Software Development to Chile

There are many advantages of outsourcing software development to Chile.

Strong English-Speaking Skills

The native language in Chile is Spanish. However, Chileans also have solid English-speaking skills. Chile was placed seventh in Latin America and ranked 47 globally on Education First's 2021 English Proficiency Index.

Chile moderate english proficiency

A decade ago, English proficiency in Chile wasn't as common nor encouraged as it is now. However, thanks to the government's efforts, there's been a significant improvement in the last few years. Students now have more incentives to improve their English — for example, good English skills are required for students to be eligible to apply to several scholarship programs at high school and college levels.

Close Time Zones With the US

Chile has three time zones that match up with US time zones:

  • Most of continental Chile uses UTC -03:00 in summer and UTC -04:00 in winter
  • The Chilean Antarctica region and the Magallanes use UTC-03:00 for the whole year
  • Easter Island uses UTC-05:00 in summer and -6:00 in winter

These time zones almost match up perfectly with Eastern Standard Time, so you can work with your Chilean hires in real-time as if they were an extension of your in-person team. This will simplify the process of setting up Zoom calls as well as help you and your team send and answer emails on time.

Growing Tech Talent Pool

Chile is home to a rapidly growing tech talent pool. This is because the Chilean government has been preparing its universities, teachers, and students for computer science education for many years. Starting in the 1990s and early 2000s, Chile introduced a federal education program, Enlaces, to give internet connection and digital devices to nearly every school in the country. Educators have since used this IT infrastructure to teach students computer science.

Fast forward to 2021 and Chile now has a large talent pool of web developers. Chile has 60 different universities, many of which have computer science as a bachelor's degree. Many Chilean web developers, particularly those from Santiago, have degrees from the University of Chile, which is the nation's top university. Ranked 4th in Latin America and 183rd worldwide, the University of Chile is well-known for its computer science programs. Research by Coursera has also shown that as of 2020, Chile ranks 33rd worldwide for technological skills and 27th for data science. In Coursera's 2021 Global Skills Report, Chile was considered cutting edge for computer programming, mobile development, and data analysis. It was also considered competitive for databases.

Innovative IT Infrastructure

Chile also has an innovative IT infrastructure. As one of Latin America's most highly-rated tech hubs, Chile has been called "Chilecon Valley" by many in the tech world. The nation has reliable and fast internet connectivity, enabling business centers and companies to provide great outsourcing services.

The nation's capital city, Santiago, has always attracted many IT companies. In recent years, other cities like Concepción, Valparaíso, and Viña del Mar have also emerged as excellent outsourcing options. These cities have high-tech hubs and technology parks, giving startups access to premier research facilities and IT infrastructure.

Chile is also known for its popular startup accelerators, the most famous of which is Start-Up Chile (SUP). This accelerator has gained worldwide recognition and offers startups around the world equity-free funds of up to 80,000 USD in addition to office space, access to the SUP community, working visas, and training. Some other examples of start-up accelerators, hubs, and technology parks in Chile include:

  • Chile Global Ventures
  • Hubtec
  • Know Hub Chile
  • Hubapta
  • Imagine Lab

What's more, research by IDC suggests that organization spending on IT infrastructure will grow by 12% between 2021 and 2024. In particular, public cloud providers' purchases of servers will play a large role in the growth of IT infrastructure.

Cost Advantages

If you're an American company, outsourcing or nearshoring software development to Chile can provide a lot of cost advantages. Compared to the US, Chile has a low cost of living, so its developers offer world-class services at competitive prices. It's also relatively new to the outsourcing world, making it less competitive than India, the Philippines, or even Brazil. This lowers the cost of hiring web developers even more.

The operating cost in Chile is similar to that of other Latin American countries, like Argentina, Mexico, Colombia, and Costa Rica. This means that hiring developers in Chile won't cost you too much. According to Glassdoor, the average annual salary of a web developer in Chile's capital, Santiago, is around 2 million Chilean pesos (CLP) or 2,370 USD. Compare that to the average annual salary of a web developer in New York City, which is 77,000 USD.

Similar Culture

Finally, Chile has a similar culture to the US. This similarity allows your new hires to blend in with your existing team, making them easier to onboard, train, and communicate with.

Like the US, Chile is a very business-oriented country. According to the 2020 Global Innovation Index, Chile was the most innovative country in Latin America and 54th globally. In the 2021 version of the same index, Chile continued to rank first among the 18 economies in the Caribbean and Latin America, and it had also ranked 53rd globally. Despite the impact of COVID-19 on the global and national economy, Chile's gross domestic product (GDP) has been growing rapidly as well. According to Trading Economics, Chile's GDP rose 17.2 percent in the third quarter of 2021, which was the second-fastest pace of expansion in the history of the country's economy.

Another similarity that the US and Chile have is that both countries value English and Spanish language skills. The US has large Spanish-speaking communities — in fact, it has the second-largest population of Spanish speakers in the world. Since Chilean companies can offer English and Spanish bilingual services, this makes them a great pick for outsourcing services to US firms.

The Cost of Hiring Chilean Software Developers

Offshoring software development to Chile is much more cost-effective than hiring US-based developers.

Average Yearly Salary Rates for Chilean Software Developers

Junior salary rate

The average monthly base pay for junior software developers in Chile is 1,192,273 CLP (1,412 USD). This means the yearly salary rate for Chilean junior developers is around 14,307,276 CLP or 16,954 USD.

Mid-level salary rate

The average monthly base pay for mid-level software developers in Chile is around 1,770,877 CLP (2,098 USD). Accordingly, the yearly salary rate for mid-level programmers in Chile is 21,250,524 CLP or 25,181 USD.

Senior salary rate

The average monthly base pay for Chilean senior developers is 2,500,000 CLP (2,962 USD). This means that the yearly salary rate for Chilean senior developers is around 30,000,000 CLP or 35,550 USD.

Average Monthly Salary Rates by Tech Stack

Average monthly salary rates can vary widely by tech stack. Here's supporting data from Salary Explorer:

  • SOC Engineer: 1,750,000 CLP (2,073 USD)
  • Software Architect: 1,690,000 CLP (2,002 USD)
  • Software Development Manager: 2,330,000 CLP (2,761 USD)
  • Software Test Engineer: 1,510,000 CLP (1,789.35 USD)
  • Systems Engineer: 1,510,000 CLP (1,789.35 USD)
  • PHP Developer: 1,880,000 CLP (2,227 USD)
  • Ruby Developer: 1,700,000 CLP (2,014 USD)
  • iOS Developer: 2,020,000 CLP (2,393 USD)
  • Java Developer: 1,940,000 CLP (2.298 USD)
  • Android Developer: 1,840,000 CLP (2,180 USD)
  • Angular Developer: 1,590,000 CLP (1,884 USD)
  • Blockchain Developer: 1,630,000 CLP (1,931 USD)

Average Hourly Rates To Outsource to Chilean Senior Developers

Certain hourly rates are much more expensive in the US than in Chile. We've done some research on Glassdoor — here are the most expensive hourly rates that you should outsource to Chilean senior developers:

Role Name US Chile
 Senior JavaScript Developer 53/hr USD   22/hr USD
 Senior NodeJS Developer 69/hr USD  29/hr USD
 Senior Python Developer 57/hr USD  24/hr USD
 Senior Ruby on Rails Developer 54/hr USD  26/hr USD

Disadvantages When Outsourcing to Chile

As we've covered, there are many advantages to outsourcing development to Chile. Chile has a rapidly growing economy, great English proficiency, and a number of cultural similarities to the US. However, there are also some disadvantages you should look out for.

Hard for Foreign Companies To Engage With Local Talent

It can be hard for foreign countries to engage with local talent. Most job boards and sites are entirely in Spanish, so if you don't know the language, it will be harder for you to post job ads. You can also try looking for talent through dev shops and startups, but they don't always have the best tech talent. You may need to spend many hours vetting and testing potential candidates before you can find the best picks for your team.

Navigating Labor and Tax Laws

When hiring Chilean remote workers, you need to know how to navigate local tax and labor laws. This will help you protect your intellectual property and rights as well as your hard-earned money and reputation.

Although there are translated laws and summaries online, understanding the full context of these laws can be trying — even if you're a lawyer. Consider contacting a local attorney for more guidance. If you fail to meet Chilean legal requirements, you and the supplier company may be penalized and fined by the Labor Authority. Chilean labor courts typically rule in favor of employees' rights and make decisions according to the "rule of reason," so make sure you understand the relevant laws thoroughly before deciding to outsource to Chile.

Here's a brief overview of some of the most important Chilean labor and tax laws you need to pay attention to when outsourcing talent from Chile:

1. Outsourcing contracts

There are two different ways to outsource transactions in Chile:

A) Employee's provision by a temporary services company (empresa de servicios transitorios)

In this outsourcing system, you hire a temporary services company to give you employees for your project. The outsourced employees will be subject to your company's rules. They'll also be considered regular employees of your company after they've provided services to you for a specified time period.

Note that you can only get this type of outsourcing under exceptional circumstances and only for a limited period.

B) Contractor and subcontractor system

This outsourcing system involves hiring an outsourcing supplier or contractor to perform a type of service. This system is regulated through a service agreement established between you and the supplier, which lays out the terms of the services and safeguards the rights of both parties.

The contractor and subcontractor system limits you from exerting control over the supplier's employees regardless of how long they've worked for you and how involved they are in your company. You also aren't required to turn any employee from the supplier into a regular employee.

2. Data processing and security

A company can only collect and process an employee's personal data if:

  • It has the legal authority to do so
  • The employee has consented

Companies must also tell employees why they're collecting the data and whether they will transfer their personal information to a third party in the future. However, there are some exceptions to this rule. If you're collecting information that is publicly available, such as public banking information, then there's no need to obtain employee consent.

3. Employee transfer

Before you transfer an employee from the supplier company to your own company, you must obtain the consent of the employee. This applies whether the transfer is contractual or voluntary. After obtaining the employee's consent, the supplier company must end the existing contract and pay the owed compensation. Only then can you establish a new employment relationship with the employee.

4. Hiring as a foreign entity

According to the Chilean Labour Statute, foreign employers don't have to create a local hiring entity to hire a Chilean employee. However, if Chilean employees are rendering services to a foreign employer under labor subordination, the employer must designate a representative in Chile to sign local employment contracts and pay social security contributions and salaries. This representative is usually a payroll provider.

5. Limitations on background checks

Chilean law prevents employers from deciding on a hire based on economic records such as credit scores. Employers also can't request HIV checks or pregnancy certificates.

6. Minimum legal wage

According to the Chilean Labour Statute, the minimum legal wage as of 2021 is 265,000 CLP per month, which is equivalent to around 408 USD per month. You must also:

  • Grant your employees at least 15 working days' vacation per year
  • Limit work to a maximum of 45 hours per week
  • Give your employees severance, profit sharing, and social security contributions

7. Taxes

Employee remuneration is subject to a monthly Second Category Income tax. This is a progressive tax scale that you are responsible for deducting. You will then pay the tax to the Treasury of Chile within the first 12 days of the month following the date of the deduction. As of 2021, the tax brackets range from exemption to a 40% tax rate.

Revelo: We Handle the Logistics of Sourcing and Hiring Chilean Developers

Outsourcing to Chile can be difficult, especially if you're new to outsourcing and you're a fresh startup with limited time and resources.

Fortunately, you can bypass all of these challenges by using Revelo. As Latin America's premier tech talent platform, we make it easy to source and hire Chilean developers. We'll give you access to thousands of pre-vetted Latin American developers who have been pre-screened and tested for their English proficiency and tech skills. You won't have to do any vetting yourself. We'll also manage payroll, benefits, compliance, and more so you can hire Latin American talent without having to establish a local entity.

Where To Find and Hire Chilean Software Engineers

There are many places you can find and hire Chilean software engineers, from local job boards like Laborum.cl and Opcionempleo to continent-wide talent marketplaces like Revelo.

Chilean Job Boards

Laborum.cl

laborum.cl chilean job board

Laborum is a Chilean job site. Think Indeed, but for locals. Job seekers look for the types of jobs they can apply to by typing queries into a search. The site then provides users with lists of jobs.

As an employer, you can post a job listing for free. Feel free to write it in English — there are a number of English-language job posts on this site. Posting your job in English will also ensure that you only get applicants who are confident in their English-speaking abilities.

This site also has a Coaching Lab, which contains links to podcast episodes and blogs that help job hunters refine their resumes and job-seeking skills. Contact the administrator to see if you can write a blog post on Coaching Lab or be a featured guest on their podcast. This will expose your startup and your job posts to an even larger audience.

Chile Trabajos

chile trabajos chilean job board

Chile Trabajos is another popular Chilean job board. It's a well-organized site that has jobs in almost any field you can think of. Its telecommunications section is particularly busy — on any given day, you can expect this section of the site to have anywhere from 3,000 to 4,000 jobs.

Since this section is quite saturated, you should make your job post in English. This will attract talent that has the required English skills and also help your job post stick out from the thousands of other posts in that part of the site.

Learn More: What Programming Languages Are Used to Make AI?

Opcionempleo

opcionempleo chilean job board

Opcionempleo has job listings for all kinds of professionals. Since this site is international and comes in many languages, you don't need to know Spanish to use it well. Just use the English version of the site at Careerjet.com, select your target country, and you'll be able to post jobs to Opcionempleo once you become a paying member. As a member, you'll also be able to:

  • Search for your ideal Chilean candidate by looking through CVs and contacting potential hires through the site
  • Get featured in Chile's top search results
  • Automatically index jobs

Remote Freelancing Sites

If you'd prefer using sites where English is the main language, consider using international remote freelancing sites like Freelancer, Fiverr, and Upwork. These sites have people from all over the world — not just Chile — so you can use them to find the best rates for the positions you want to fill.

You can use these as one-stop-shops for all of your startup needs since they have freelancers that specialize in various specialties. These range from web development and programming to web design and videography. Voice acting and illustration are even offered as well.

Additionally, there are many benefits to hiring freelancers. Unlike full-time employees, freelancers are paid by the hour or by project. This saves you a lot of money since you don't need to pay freelancers full-time wages or benefits. Freelancers are also capable of working independently, which means you don't have to spend time and energy supervising them. They're also more flexible when it comes to deadlines and working hours, meaning they can work around your schedule to meet deadlines if needed.

Talent Marketplaces

Finally, you can also try using talent marketplaces to source and hire web developers from Chile. Many of these have deep talent pools, helping you find the perfect match for your team. These platforms already have a large pool of pre-vetted candidates, too, so you don't have to look through a stack of resumes yourself.

Revelo

One of the best talent marketplaces on the web is Revelo. As the largest technology company in the human resources sector of Latin America, Revelo offers a selection and recruitment platform that connects startups with high-quality candidates. It allows you to find, hire, and retain top development talent all on one platform.

All of Revelo's engineers have been pre-screened for their English proficiency, knowledge, and experience. We have developers specializing in every tech stack, including:

  • Ruby on Rails
  • Python
  • Node
  • React
  • MySQL

What's more, we simplify the sourcing and hiring process itself. Say goodbye to contacting candidates through job portals and looking through their resumes to see if they have the skills you want. With Revelo, all you have to do is:

  1. Talk to us about what your company is like, what kind of talent you need, and what kind of goals you want to accomplish.
  2. Within three days, we'll send you a list of the developers we think are the best for your project.
  3. You will then get the opportunity to interview the candidates.
  4. Select the candidates you want to hire.
  5. Start working with your new hires at no risk with a 14-day free trial. If you find out that our talent isn't a good fit in two weeks, you don't have to pay anything.
  6. If you need more developers, check in with us at any time to scale your team.

You can also say goodbye to spending hours on the internet looking at translated Chilean labor laws. Our internal team will take care of any legal issues that pop up during the course of hiring Chilean developers. We also offer a number of benefits for your remote hires, such as:

  • Community engagement perks such as a state-of-the-art office, community events to reduce churn and keep your remote hires engaged, and a community of like-minded peers to work with.
  • Benefits packages that help your remote team feel like they're part of an in-person team. Our benefits focus on professional development and physical and mental health so that your developers are always at the top of their game.

Key Takeaways

Chile is one of the best picks for outsourcing software development. Boasting a rapidly-growing economy with great IT infrastructure and an entrepreneurial spirit, Chile is home to tens of thousands of highly-skilled developers looking for their next gig. Here's a summary of the main reasons Chile made it to our list of top countries to hire web engineers from:

  1. Affordable prices: Chile offers affordable prices for outsourcing web developers. Most hourly rates for web developers are half or a third of what you get in the US.
  2. English proficiency: Chileans, particularly those with university degrees, rank high on English proficiency. You won't have to worry about miscommunication.
  3. Negligible time difference: If you're running on EST or PST in the US, you're essentially in the same time zone as most of Chile. This will make it easier to work on real-time tasks and hold regular meetings with your new hires.
  4. Growing tech talent pool: Chile has been investing in its tech talent, and it shows. The country's premier university, the University of Chile, graduates many computer science majors every year.
  5. Advanced IT infrastructure: Chile boasts one of the most advanced internet infrastructures in Latin America. It was one of the first countries to introduce internet and broadband to schools in order to encourage students to learn computer engineering. What's more, Chile is also home to some of the most promising startup accelerators and incubators in the world, such as Start-Up Chile (SUP).
  6. Cultural compatibility: Finally, Chile has many cultural similarities with the US. Like Americans, Chileans are innovative and entrepreneurial. Many of them are also bilingual in English and Spanish. These language skills will empower your startup to provide services to a wide range of people in the US, particularly if you're located in an area with many Spanish speakers.

If you want to hire Chilean developers, contact us at Revelo today.

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Antonio G.
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Full-Stack developer with 6 years of experience working with MERN stack. Worked for multiple transnational companies focused on web and cloud, technology services, and R&D. Major professional experience in Frontend with Javascript, Node.js, React.js, and Vue.js

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