Outsourcing

Outsourcing Software Development to Venezuela: An Optimal Nearshore Destination

April 21, 2022
Reх Huхford
More companies are outsourcing software development to Venezuela. Learn why and how to take advantage of this nearshore destination.
Outsourcing Software Development to Venezuela: An Optimal Nearshore Destination

As a startup owner, you may not have the resources to hire full-time local tech talent, particularly if you're in the US. Salaries for US-based devs have been steadily increasing over the past few years. According to Glassdoor, the salary of a web developer is $81,595 per year in Boston, MA.

That's where outsourcing comes in as a feasible option for tech companies. When you hire remote developers from other countries, you get to save a lot of money and effort in the long run. Popular outsourcing destinations include India, Ukraine, the Philippines, and Latin American countries like Venezuela, Argentina, and Uruguay.

Venezuela, in particular, is a good pick for many reasons. It's only one hour ahead of US Eastern Standard Time and has a highly-educated and English-proficient tech workforce. Read on to learn why you should consider outsourcing software development to Venezuela.

Reasons to Outsource Software Development to Venezuela

Companies wanting to build a remote workforce don't need to look too far to find the right talent. You can nearshore software development in Venezuela and enjoy many benefits this country provides.

Overlap With US Time Zones

The Venezuelan Standard Time zone is only one hour ahead of US Eastern Standard Time throughout the year, so you can easily Zoom with your Venezuelan hires and collaborate with them on real-time projects. Working in the same or similar time zones has many benefits. The harmonized working hours help teams stay on the same page at all times and easily communicate when most needed.

Large Untapped Workforce

Although not the most famous offshoring software development country in Latin America, Venezuela has a highly-skilled tech workforce thanks to the late Venezuelan leader Hugo Chávez's dream of "one computer per child." Starting in 2008, the Venezuelan government embarked on a program to show students how to use computers from early childhood. The government bought pre-assembled computers through a contract with Portugal.

However, the Ministry of Science and Technology later created a program to build their computers. The Ministry also developed educational materials and opportunities for schools to teach people to make and use computers. Eventually, the Ministry opened a computer assembly plant named after their operating system, Canaima. This factory operated 24 hours a day until 10 million computers were given out to children and university students.

Chávez's program also created:

  • 1,200 InfoCentros. These were internet cafes where people had free access to the internet and learned about digital literacy. Unfortunately, due to the US blockade, the government only created 400 InfoCentros.
  • Free university programs. The programs included free education abroad, and students could learn from other countries, such as Denmark, Italy, and China.

As a result of these initiatives, Venezuela has a large population of university-educated computer programmers and devs.

English-Speaking Talent

At first glance, Venezuela doesn't seem to be a hub of English-speaking tech talent. According to the EF English Proficiency Index 2021, Venezuela ranks 15th out of 20 countries in Latin America and 73rd out of 112 globally. However, this is just an average rating. Most university-educated Venezuelans are highly proficient in English, particularly those looking for remote jobs abroad.

Geographical Proximity to the US

Venezuela is also quite close to the US. Flights from major US cities to Caracas, the capital of Venezuela, typically take 10 to 13 hours, depending on your location and flight availability. The proximity of your remote teams can help you travel back and forth at your convenience without spending a lot of money. In times of need, you can gather in the headquarters with ease.  

Cultural Similarity

Like the US, Venezuela values technological development and entrepreneurship. Being close to the US, the country nurtures a similar culture in general, allowing smooth cooperation with your home-based teams.

Many Venezuelans, particularly those with computer science degrees, are also fully bilingual in English and Spanish. They can make your business operations much easier in large Spanish-speaking populations like Southern California, Texas, and Florida.

Cost-Efficient

Finally, outsourcing software development to Venezuela is very cost-efficient. On average, a Venezuelan software developer makes around 120,000 Venezuelan Bolívar (VES) or $27,427 annually. In comparison, the average San Francisco-area software developer makes about $95,589 a year. You can save close to $60,000 in annual hiring costs if you hire remote software engineers in Venezuela.

Cost of Hiring Venezuelan Software Engineers

Naturally, you may be most interested in the costs of outsourcing software development to Venezuela. You'll be pleased to hear the salary ranges of tech talent in this country are much lower than those in the US.

Average Yearly Salary Rates for Venezuelan Developers

The average yearly salary for Venezuelan devs is 120,000 Venezuelan Bolívar (VES) or $27,427. Depending on the developer's experience and skillset, salaries can range from 55,000 VES ($12,570) to 190,000 VES ($190,000).

Average Hourly Rates to Outsource to Venezuelan Tech Talent

Since the average yearly salary for Venezuelan devs is 120,000 VES, the hourly wage would be around $15 per hour. This is less than half the amount charged by US developers.

Here are the hourly rates for software engineers in major US cities for comparison:

US City

Hourly Rate

New York City, NY

$38

Philadelphia, PA

$34

San Francisco, CA

$37

Los Angeles, CA

$34

Miami, FL

$33

Disadvantages of Nearshore Software Development in Venezuela

When you nearshore software development in Venezuela, you get to enjoy all the benefits listed above. However, there are also some disadvantages you should be aware of before building your remote workforce.

Difficult for Foreign Businesses to Find and Vet Top Talent

It's not that easy for foreign companies to find and vet top talent in Venezuela. Most Venezuelans use local job sites and boards written in Spanish to find opportunities. Unless you're fully bilingual in Spanish and know which job boards are the most popular, it will be challenging to attract the talent you want.

Additionally, some geopolitical realities may affect your ability to find and vet top Venezuelan talent. Former President Trump's Executive Order No. 13884 expanded US economic sanctions against Venezuela so that no US citizen, entity, permanent resident alien, or any person located in the US can have any dealings with the "government of Venezuela."

The "government of Venezuela" is defined quite broadly since it includes any agency, political subdivision, or instrument of the government of Venezuela, including:

  • The Central Bank of Venezuela
  • Any entity controlled, indirectly or directly, by the Venezuelan government or anyone who has purported to act or acted indirectly or directly on the government's behalf.

Therefore, US companies need to vet Venezuelan hires. If you violate the Executive Order, your property will be blocked worldwide. As such, you need to do your due diligence before hiring Venezuelan software developers. Hiring US and Venezuelan attorneys to help you navigate this complex political landscape may be a good option.

Processing Complex Local Regulations

You also need to follow Venezuela's complex local regulations when hiring devs. Here are some Venezuelan labor and tax laws that you need to consider when outsourcing software development to Venezuela:

1. Requirements for entering an employment relationship

Venezuela's Labor Law doesn't require employers and employees to enter into written employment agreements. However, they should be made in writing and contain the following information:

  • Both parties' full name, nationality, identity card number, marital status, age, and address
  • If a legal entity is involved, the address, registration data, and identification of the person who represents the company.
  • The name of the job position
  • A precise description of the services that the hire will offer
  • Starting date of the employment relationship
  • Whether the contract is for a fixed term, for a specific project, or an indefinite term
  • The working hours
  • The salary, including calculations, currencies, and benefits
  • The location of services (i.e., remote or at an office)
  • Collective bargaining agreements
  • Any other legal stipulations agreed between the parties.

As the employer, you also need to record the time and date you delivered a copy of the written contract to the potential hire and get acknowledgment of receipt signed by the employee.

Note that the general rule under the Labor Law is that employment agreements should have open-ended or undefined terms. Fixed-term contracts are only valid when executed according to the Labor Law. Specifically, a fixed-term employment agreement is only allowed if:

  • Required by the nature of the job (i.e., you're hiring a dev for a two-month project)
  • Needed because the Venezuelan hire is rendering services abroad (i.e., the hire is working for a US company but living in Venezuela)
  • Necessary to substitute an employee for another (i.e., your first hire finished the project, and now you want a second hire to do another project)
  • The employee didn't finish the task, and the employer still needs services (i.e., your hire couldn't complete the project you hired them for, so you need to hire another dev to do so)

2. Establishing a branch of your company in Venezuela

You can hire Venezuelan devs without being a registered business in the country. However, Venezuelan law requires every employer, regardless of nationality, to register its employees with labor agencies such as the Social Security Institute. You may need to create a subsidiary or branch of your company in Venezuela and register this entity with relevant authorities. After receiving your tax identification number and labor identification number, you'll then be able to hire employees.

Revelo: We Source, Vet, Hire, and Compliantly Onboard Venezuelan Developers for You

As you can see, sourcing and vetting Venezuelan developers can be trying, particularly when you don't have the time and resources to create and register a subsidiary company in Venezuela. Fortunately, Revelo can help you out.

We are a talent marketplace that connects the best talent in Latin America with companies that need them. All of our devs have been vetted for English proficiency and tech skills, so you don't have to go through a stack of resumes to find the talent you want. We'll also handle legal compliance, onboarding, and other demanding tasks so you can focus on working with your Venezuelan talent.

Where to Find and Hire Venezuelan Software Developers

There are several places you can find and hire Venezuelan tech talent, including tech hubs and talent marketplaces like Revelo. Let's explore some of them together to find the one that would work best for you.

Tech Hubs in Venezuela

Caracas

Caracas, the capital of Venezuela, has many tech hubs that you can use to source tech talent. Impact Hub Caracas, for example, has more than 200 entrepreneurs and open workspace offices. As a community that favors innovative ideas, this tech hub attracts a range of devs, including students, fresh grads, and experienced programmers.

Maracaibo

Maracaibo is the second-largest city in Venezuela and the capital of the state of Zulia. Like Caracas, it has many tech hubs. The most famous is the University Institute of Technology of Maracaibo, created by presidential decree Number 1642 on March 5, 1974.

Latin American talent marketplaces

Although tech hubs connect you with relevant professionals, they don't provide the most efficient way of finding and hiring Venezuelan talent. Tech hubs don't pre-vet their talent, and you would have to spend a lot of time and energy looking through applicants' resumes and LinkedIn profiles to determine if they're a good fit for your team.

On the other hand, talent marketplaces pre-vet and pre-test their talent pools, so you don't have to look through resumes yourself. After submitting an application that explains what kind of talent you want, these marketplaces will pick the perfect team member for your company.

Revelo

If you want to scale your teams quickly and efficiently, consider partnering with Revelo. We connect companies with highly-skilled Latin American talent pre-screened for English-speaking skills and over 100 tech skills, including Ruby on Rails, React, Python, Node, and more.

All you have to do is share your business needs with us. Within three days, we'll give you a list of the best candidates for the job. You can then interview and hire the candidates you want. Better yet, you can start developing a team with a free 14-day trial. If you think that our talent isn't a good fit for your company within two weeks, you don't have to pay anything.

Key Takeaways

Venezuela is an excellent choice for US companies looking to save money on hiring but not wanting to sacrifice the quality of work. Because of the similar time zone with the US and a largely untapped workforce, this country is an ideal place for searching for tech talent. Moreover, traveling to Venezuela is quick and budget-friendly, the culture is similar to the US, and the salary ranges are lower.

If you're interested in outsourcing software development to Venezuela, contact Revelo today. We'll support your recruitment journey by providing the best talent for your needs.

Need to source and hire remote software developers? Get matched with vetted candidates within 3 days.

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