Outsourcing Software Development to Uruguay: Why You Should Hire Uruguayan Developers

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Fred Monnier
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Fred Monnier
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Chief Staffing Operations Officer
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Learn why more companies are outsourcing their software development to Uruguay as a nearshoring center for the US and how you can benefit from hiring Uruguayan developers.
Published on
December 8, 2021
Updated on
April 11, 2024

Uruguay is among the top South American nations with remarkable software development and other tech talents. The recent wave of technological advancement and tech-based employment has brought the brimming talent in Uruguay to the surface. Thanks to this, foreign companies, such as those in the United States, can hire Uruguayan developers as either short-term contractors or long-term full-time employees.

But before you begin outsourcing software development to Uruguay, it's essential to know the advantages of hiring in the country and the challenges you may face. We take a look at both these things in the guide below.

Advantages of Outsourcing Software Development to Uruguay

With a population of over three million, Uruguay is home to many software developers and other tech professionals. However, that's not the only advantage of hiring from the country. Take a look at some of the other benefits:

Time Zone Alignment with the US

When companies hire foreign employees, time zone differences can often create problems, such as missed calls, emails, and other communication issues. However, Uruguay is in the same time zone as the US, which makes it easier for companies in the US to communicate with their Uruguayan hires without experiencing too much lag time.

Uruguay is only an hour ahead of the US, which means you can streamline daily tasks. Your remote developers will probably work at the same hours as you and be available when you need them the most. Moreover, if your US and Uruguayan developers work in the same period, they can easily collaborate on team projects.

Meanwhile, when companies hire employees from Asia or Eastern Europe, they sometimes have to face a time difference of up to 12 hours. The time zone difference can slow response times for work-related communication, which can further cause project delay and cost you money in the long run.  

Real-time communication is significant for software development projects as it allows for quick and effective collaboration, resulting in faster and better-quality product output. With prompt communication, software developers can raise queries and resolve issues quickly. This can add to the overall productivity of a software development team working in an agile environment.

Top Ranked English Proficiency in Latin America

Thanks to technological advancements in the last decade, language barriers aren't as high as they used to be years ago. However, that still doesn't mean all developers in the world have the same English proficiency. If you hire contractors who are not that familiar with your working language, you'll spend a lot of your valuable time explaining concepts. Even worse, your developers may not understand what you want from them and make mistakes on the projects.

However, when you hire Uruguayan developers, you can rest assured they'll be proficient in English. According to the TOEFL ranking, Uruguay is on the top in Latin America for its English skills. The developers in the country are known to have excellent language abilities, which can help you expedite communication. All your team members will be on the same page, and projects will get delivered at the highest accuracy.

The Uruguayan government has made a concerted effort to improve the English skills of its citizens. In addition to increasing the budget for English education, the government has also introduced many initiatives to make learning the language simpler. These initiatives include providing free classes for all students and making it mandatory for all high school students to pass an English proficiency test.

The TOEFL rankings also rely on student tests for the most part. Thus, fresh graduates from Uruguay make perfect employees for US companies since they are already proficient in the language. Moreover, if your business is in a particular industry that requires frequent interaction with English-speaking clients, having developers who can speak and write well in that language might help you expand into new markets.

Strong Education in Tech

In 2018,  the literacy rate in Uruguay was 98.07%, which is quite impressive. Statistics also show that the literacy rate in the country has been growing consistently every year. It's no wonder why. The country's government focuses on quality education, providing the upcoming youth with free primary education. There are also programs to give free Wi-Fi and laptops to students, allowing them to keep up with the global tech trends.

Since young and freshly graduated Uruguayans are highly educated in tech, you can expect them to be valuable assets for your company. In addition, if you hire Uruguayan developers, you won't have to worry about them delivering low-quality work. The quality of education in the country filters through all students and makes only the top talents stand out.

Because the government supports educational initiatives, Uruguayan programmers often choose to develop new skills through online courses. They also attend programming workshops and participate in other learning opportunities provided by companies. All of this shows their passion for the profession and makes it easier for you to find highly-skilled developers for your company. As you can see, there are many good reasons for outsourcing software development to Uruguay, and we've just started the list.

Growing IT Infrastructure

Uruguay has made a couple of strides in the software industry since it started to focus on building its tech infrastructure. The country is now home to more than 700 tech companies, which is a testament to the growing IT infrastructure in the country. Tech parks in Uruguay, like Pando Science and Technology Park, foster the growth of the software development industry in the country. Additionally, the National Agency of Investigation and Innovation is a government body in Uruguay that supports the growth of IT and startup industries.

All these factors point to the fact that Uruguay is emerging as a serious player in the global tech industry. Since its infrastructure is constantly growing, you can expect the Uruguayan developers to get even more skilled with time.

Low Cost of Hiring

Compared to impressive software development talent in other countries, such as the US, Canada, the UK, and Australia, Uruguayan developers charge less. You'll get the same world-class developer talent at discounted rates when you hire from Uruguay. In fact, US companies that onboard Uruguayan developers have to pay lower costs than when hiring employees within the US.

It's significant to note that you pay lower rates for the same quality of work when you hire Uruguayan developers. You don't sacrifice performance at all, as we already saw when revising educational and English proficiency skills above. What makes developers in Uruguay charge less than others is the low cost of living and doing business in the country. Additionally, hiring remote employees reduces overhead costs like office space and equipment, making it easier for companies to expand teams without spending more.

Cultural Compatibility

South American culture is very similar to the US, which means developers from Uruguay won't have trouble transitioning to your company's work culture. They'll blend well with your team and probably share some common customs which can streamline processes during vacations, holidays, and more.

In addition, Uruguay offers a unique blend of cultures that US businesses can benefit from in the long term. The country is located right at the heart of South America and is home to people of different races and religions. If you're looking to grow an international team with global knowledge, this can help you open up to new market opportunities.

The Cost of Hiring Uruguayan Software Developers

When outsourcing software development to Uruguay, it's imperative to know about the average yearly salary rates and employee benefits you're required to offer. We provide a detailed overview below to help you better understand your obligations.

Average Yearly Salary Rates for Uruguayan Software Developers

According to PayScale, the average annual salary of a software engineer in Uruguay is 41,000 USD, while that of a software developer is 24,000 USD. Meanwhile, the median salary of software developers in the US was 107,510 USD in 2019. The lowest-paid 25% of them make 82,430 USD yearly, which is still much higher than what Uruguayan software developers are paid annually. With this in mind, it's easy to see that hiring software developers in Uruguay can be cost-efficient in the long run.

Junior Salary Rate

Junior software engineers in Uruguay make 16,007 USD on average. In comparison, junior software engineers in the US make 84,044 USD per year.

The responsibilities of junior software developers include working with a team of developers to design, build, and maintain software products. They may also be responsible for the coding, testing, and documenting software programs. A junior software developer typically has 1-3 years of experience in the field.

Mid-Level Salary Rate

In Uruguay, mid-level software engineers make an average salary of 22,584 USD, while in the US, they make an average of 95,302 USD.

Senior Salary Rate

Uruguay pays its senior software engineers an average salary of 28,531 USD, whereas senior software engineers in the US make 114,238 USD per year.

The responsibilities of a senior software developer typically include mentoring junior developers, managing projects, and working on more complex tasks. A senior software developer typically has 4-7 years of experience in the field.

Average Monthly Salary Rates

According to Glassdoor, software developers in Uruguay earn nearly 50,000 Uruguayan pesos a month, which is equivalent to 1,132 USD. Meanwhile, senior software developers make up to 100,000 UYU, with the average being 109,000 UYU.

The monthly salary of a software developer can differ based on experience, position, company size, and other factors. As evident, the pay discrepancy between junior software engineers in Uruguay and the US is vast.

Average Hourly Rates to Outsource to Uruguayan Senior Developers

On average, the hourly rate for outsourcing software development jobs to Uruguay is $11 to $15, much lower than what you'd have to pay software developers in the US. Most professionals in Uruguay are focused on working with JavaScript, so you can find someone to meet all your Java and JavaScript needs at a budget-friendly price.

Common Challenges When Outsourcing to Uruguay

Uruguay has a strong technology infrastructure and one of the best internet security systems in the world. We are, therefore, bound to conclude the software engineers from Uruguay already have experience with high-level projects. Add to the equation the solid education system that sees many talented graduates every year, and it's easy to see Uruguay is a perfect place for seeking new hires.

You can easily hire talented students who gained degrees in computer science and engineering at the above-discussed charges. Essentially, making Uruguayan professionals part of your team is an excellent business opportunity, but you should still explore the challenges. Every country has its regulations and issues, and Uruguay is not an exception.

Since we are talking about a small country with a lower living standard, Uruguay may not have the same resources or infrastructure as larger countries. The lack of resources can lead to challenges with logistics and project management. Before outsourcing software development to Uruguay, consider how you could overcome these challenges to ensure you make the right choice for your business.

Learn More: Your Guide to Remote Developers Management

Uruguay's Labor Laws Can Be Difficult to Navigate

The labor laws in Uruguay can be tricky to navigate, and it is essential to know what you are getting into before signing any contracts. Because the country has many regulations to protect its workers, keeping track and complying with them can be challenging.

For instance, the laws dictate how much vacation time employees must receive and how much they must be paid. When hiring Uruguayan developers, you also don't want to trigger a permanent establishment, which could lead to double taxation on Uruguayan income.

These factors can trigger a permanent establishment:

  • Having a place in Uruguay where the company performs activities for an extended period
  • Having an employee act on behalf of the company, such as opening bank accounts, signing contracts, etc.

If a company violates these rules, it may face penalties and fines along with reputational damage. A risk of misclassification can also bring these issues. If employees get deemed as contractors even if they are full-time workers, they may become ineligible for statutory protections. Misclassifying employees can lead to costly lawsuits and fines. There's also a risk of non-compliance and termination of contracts with local authorities.

Uruguay has an Intricate Tax System

Besides the labor laws, you also have to understand the Uruguayan tax system, which can be quite complex. Uruguay has many taxes, including income tax, value-added tax (VAT), and export duties. The income tax is progressive, meaning that the more you earn, the higher the percentage you will pay in taxes.

Additionally, there are some exemptions and deductions that companies can take advantage of when working with contractors. You also have to ensure that your employees are registered on the Uruguayan tax system. Otherwise, you will end up with administrative problems later when filing your taxes.

Generally speaking, if you're not compliant with Uruguay's tax laws, you may face hefty fines. That's why working with an accountant or tax specialist can be highly beneficial. A professional familiar with Uruguay taxation laws can help you stay compliant and take advantage of all the available deductions and exemptions.

Despite the challenges that may seem intimidating, Uruguay remains a great place to outsource software development, thanks to its well-educated workforce and solid technology infrastructure. With the right planning and communication, outsourcing to Uruguay can be an excellent way to get high-quality software developers at a fraction of the cost of hiring developers in North America.

Revelo: We Handle the Compliance When You Hire Uruguayan Developers

When you're in the process of scaling your business, you need to look after many tasks. Unintentionally, you may overlook compliance among other significant business operations. Why go through the hassle and risk penalties when you can let us take charge of finding the best software development professionals for you in Uruguay?

Revelo is a talent platform that allows you to source and hire vetted remote software engineers. We give a chance to US companies to hire tech talent from Latin America without worrying about compliance or going through lengthy recruitment processes. Revelo manages all these processes, ensuring you stay compliant while growing your workforce.

Where to Find and Hire Uruguayan Software Engineers

Now that you know sufficiently about outsourcing software development to Uruguay, let's discuss the most fitting places for hiring developers for your team.

Uruguayan IT Sourcing Companies

An IT sourcing company is an organization that provides offshore software development services, including finding and vetting developers, managing projects, and handling communication between the client and the developer.

There are quite a few IT sourcing companies in Uruguay, but not all of them are created equal. Be sure to do your research before selecting one. Some good IT sourcing companies to check out include:

  • Octobot: Octobot is a software consultancy based in Latin America that provides a wide range of IT services. They have a development center in Uruguay specializing in web and mobile app development.
  • Cedarcode: Cedarcode is an offshore software consulting company that provides high-quality, cost-effective solutions to corporations big and small. The developers are spread across the world, with a good portion being in Uruguay.

The main benefit of hiring software developers from IT sourcing companies is the speed and ease of hiring. The large team of these organizations allows them to find and vet talent very quickly, so you can get a head start on your project faster than if you did it yourself. In addition, they know how to manage the development process from beginning to end, making sure everything runs smoothly.

Remote Freelancing Sites

If you don't want to go with full-time employees and prefer working with freelancers instead, you can hire Uruguayan developers from various remote freelancing sites. The most popular site for finding developers is Upwork, followed by Freelancer and Guru.

When hiring from a remote freelancing site, you'll need to be more hands-on in the vetting process and make sure you're selecting a developer who has the skills you need and is compatible with your team. You'll also need to manage the project yourself, from budgeting to communication to delivery. However, this can be a great option if you only need a few developers for a shorter project.

There are many benefits of hiring freelancers. You get to enjoy a worldwide reach, fewer responsibilities, less supervision, flexibility, and cost savings. By hiring a freelancer, you can get work done quickly and efficiently without the added burden of managing someone full-time.

In addition, freelancers are often more flexible in working hours and deadlines. They can work around your schedule and meet your deadlines without any problems. Since freelancers are not on your payroll, you don't have to worry about providing them with benefits or paying them a full salary. If you only need to hire someone for a short time, this can greatly reduce costs.

Talent Marketplaces

Today, there are many online talent marketplaces open to brands. You can use them to find skilled professionals, including developers, at convenience and affordable rates. The main benefit of hiring from a talent marketplace is access to a wide candidate pool. These days, talent platforms have grown to such a degree that you can always find a perfect fit for your team.

However, because there are so many candidates available on these sites, it takes more time to sort through them all. When hiring developers from a talent marketplace, you must ensure they have the skills and experience you need. You may also want to hire a recruiter specializing in finding developers to help vet candidates and streamline the hiring process.

Revelo

If you're in the process of expanding your company, you may not have the time to go through lengthy processes to find, screen, and recruit software engineers and developers. Revelo matches companies with pre-vetted talents that have the potential to become full-time hires. We are a talent platform that allows you to skip the daunting recruitment process and access highly-experienced tech talent immediately.

With Revelo, you can fill positions quickly without expanding your recruitment team or modifying your career site. Plus, we prescreened all of our talents to streamline the entire process. As a result, our services save companies thousands of dollars in recruiting fees since we do everything for them - from sourcing to testing, vetting, and selecting candidates - so that they can focus on growing their business.

Key Takeaways

Uruguay is undeniably one of the best places to outsource software development, considering it has a steady business environment, top-notch internet infrastructure, affordable prices, and a highly-skilled workforce. With its stable political environment, companies can also rest assured that their investments in Uruguay will be safe. These are the reasons Uruguay made it to our list of the top countries to hire developers from:

  • Developed education sector: The education sector in Uruguay has kept up with the changing times and offers high-quality education. Students graduating from Uruguayan universities are highly skilled and have the relevant experience needed for software development positions.
  • Advanced internet infrastructure: Uruguay has one of the most advanced internet infrastructures in Latin America, with a high percentage of people having access to broadband internet. This allows businesses to easily communicate with their developers and get updates on their project progress.
  • Affordable prices: The cost of living and doing business in Uruguay is much lower than in other developed countries, making it an affordable option for outsourcing software development.
  • Negligible time difference: Considering Uruguay's time difference from the US is minimal, businesses can easily communicate with their developers and streamline daily tasks.
  • Cultural Compatibility: Major differences in cultural backgrounds can sometimes be difficult for employees. But since there's cultural compatibility between Uruguay and the US, businesses can rest assured that their employees will not feel alienated.
  • Tech initiatives: The government in Uruguay has started some tech initiatives, such as "One Laptop Per Child', which has given access to the internet to nearly 99% of the locals. Additionally, the country offers numerous grants and other incentives to IT entrepreneurs, such as tax cuts and exemption from import taxes.
  • Highly skilled workforce: Uruguay has one of the most highly skilled workforces in Latin America, with a literacy rate of 98%. The average skill level is equivalent to that found in Western Europe or North America, which makes Uruguay an attractive destination for outsourcing software development projects.

Final Words

Hiring international employees can be a great way to expand your company and access new markets. As we've already established in this article, outsourcing software development to Uruguay can be highly lucrative and cost-efficient for your business. The developers in the country are skilled and experienced due to the government's steps towards enhancing tech knowledge and education.

Most importantly, the cost of hiring developers in Uruguay is much lower than that in the US, saving you a lot of money in the long run. The only thing you need to pay attention to is compliance with local labor and taxation laws, but an experienced partner can help you with that.

If you're interested in finding tech talent in Uruguay, Revelo can support you with a wide selection of highly skilled and vetted professionals from Latin America. We also handle every step of the recruitment process to make things easier for you.  Contact us today and start building your new team straight away.

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