Nearshore software development covers a range of technical and creative services that are outsourced to nearby countries or regions. The most outsourced nearshore software development services include: 

• Software, web, and app design and development 
• Game development 
• UI/UX 
• VR/AR 
• AI and automation 
• Database administration 
• DevOps 
• Security

A nearshore software development company is a firm that provides services to businesses in other countries that are geographically, and often culturally, close.  

The structure of a nearshore company is like that of any software development team, comprising: 

• Project managers 
• Tech leads 
• Architects, developers, and engineers 
• UI/UX designers 
• QA engineers 

The top nearshoring locations per region are: 

There are many differences between nearshore, offshore, and in-house software development, ranging from location to costs to how compatible your values are. Below are some of the typical differences between the three: 

A popular example of nearshore outsourcing is how Google contracts out its business operations. In 2007, Google partnered with Globant (located in Latin America) to augment its software development team. 

More than 16 years later, Globant still works with Google, training 1,500 Google-certified engineers and investing in Google Cloud capabilities. Additionally, it provides over 27,000 employees to other US-based tech companies and to businesses in other parts of the world. 

The cost of nearshore software development companies can vary wildly depending on where they’re based, ranging from an average of $15/hour for Indian nearshore software development to $70 - $100/hour for developers based in the US.  

Here are the average hourly rates for nearshore software development by region: 

[Source: Bluelight Consulting / Geniusee / Sumatosoft]

On average, the top 50 nearshore software development companies on DesignRush charge $45/hour. Moreover, 3.5% of nearshore software development outsourcing firms on DesignRush accept a minimum budget under $1,000 while 10.5% accept a minimum budget over $50,000. 

Costs can also vary because nearshore developers charge depending on: 

• Their level of expertise, size, and reputation 
• Client’s project scope, complexity, and timeline 
• Required tech stack 

Established nearshore developers typically charge more than their inexperienced peers. The table below breaks down nearshore development rates based on expertise: 

You should hire a nearshore software development outsourcing company because you can strategically expand your operations without inflating overhead costs. At the same time, it avoids the inherent risks and delays of offshore software development companies.  

Below are additional reasons why you should hire a nearshore software development outsourcing firm: 

• Augment your staff: Experts predict that there will be 85 million job vacancies due to skill shortages. Nearshore software development fills that gap by providing experts from other parts of the region to areas with large shortages. 
• Gain an agile team: Nearshore development agencies operate in similar time zones, allowing for faster communication, easier schedule alignment, and real-time collaboration. You can expect quicker response times and project turnaround rates. 
• Affordability: Cost-efficiency is the biggest reason brands outsource. With a lower cost of living in other regions, nearshore software development companies can offer more affordable rates without sacrificing the quality of work. 
• Experience strong cultural fit: Countries located in the same region often share different similarities in organizational culture, work ethics, and values. They might even share your language. It’s easier to work with them, as there is little-to-no cultural and language barrier. 
• Expand your resources: Since nearshore software development outsourcing companies can transcend geographical borders, you can access a wider range of global talents and experts who can better serve your business goals. 
• Ensure legal compliance: Being geographically close means nearshore software development firms are likely more familiar with your country’s technological and data laws, better ensuring legal compliance. 
• Increase flexibility and efficiency: Nearshore software development firms help you easily scale your team on demand, allowing for flexibility and faster business growth. At the same time, they let your team focus on vital business activities by taking some responsibilities off your plate. 
• Mitigate risk: 74% of small- and medium-sized businesses are considering nearshoring to improve supply chain stability and security. Nearshore software development minimizes the risks associated with outsourcing, given their time zone and cultural and language compatibility. 

The revenue of business process outsourcing services in the US is projected to reach $134.3 billion in 2024, signifying increasing demand and competition for nearshore software development outsourcing firms. 

AMSJ is one example of a business that has greatly benefited from working with a nearshore software development firm. After 50 years in the healthcare industry, ASMJ’s needed to digitize its customer channels. Previously, patients needed to call or visit its clinics to book an appointment. But, after the partnership with Octobot, patients could schedule appointments via web and mobile portals. 

Through this digital transformation, ASMJ gained over 20,000 active users and booked more than 2,000 appointments per month. This helped the healthcare facility increase patient retention and growth, boost efficiency, and grow its revenue.  

You can choose the best nearshore software development outsourcing firm for your business by following the steps below:

1. Identify business needs: Work closely with your team to determine your current capabilities and shortcomings. Then, specify your objectives in hiring a nearshore software development firm. 
2. Define your project requirements: Outline the project scope, timeline, communication guidelines, and technologies needed. These dictate the specific skills and expertise you’ll need for your project. For example, a brand that wants to build on Shopify wouldn’t need a WordPress developer. 
3. Consider industry experience: Review company portfolios and case studies for projects like yours. Agencies familiar with your industry, target markets, and project specifications have the relevant expertise to meet your goals, better anticipate your needs, and accelerate project delivery. 
4. Look at their track record: Find reviews and rankings, check their social media, and read case studies. This will reveal their work quality, reliability, and how easy it is to collaborate with them. 
5. Research their home country: Understand the political and economic stability of the companies you’re considering. Agencies in countries with a lot of political strife pose a higher risk of project complications and even incompletion. Additionally, understand the country’s education and reputation in the field. Some popular nearshoring countries rate highly in technological education and skills rankings worldwide.  
6. Set a budget: Your budget will help you narrow your list of candidates, as it determines which agencies and services you can afford. 
7. Send a request for proposal (RFP): Every project is unique and will be priced differently. Send a request for proposal (RFP) to your shortlist of nearshore developers. 
8. Conduct an interview: Even if nearshore software development companies often have a stronger cultural fit than other types of outsourcing, you still need to meet directly with agencies to test your compatibility. An interview will better show if they share the same values and work ethics as your business. 
9. Choose your nearshore software development firm: Notify your final candidate of your decision, sign contracts, and discuss in detail your project scope, expectations, and business goals. You must also establish your project management and communication process to make sure you’re always aligned and updated. 

For tailored recommendations on the most suitable outsourcing partners for your project, let us know your needs and our team will help you find your perfect solution. You can browse our Marketplace for more details. 

The best nearshore software development companies around the world include: