July 27, 2021

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Costa Rica Nearshore Software Development Guide

Costa Rica Nearshore Software Development Guide


If you are planning to hire software developers in Costa Rica but wish to explore all the profitable options before signing a contract with a local vendor, this article will look at the current state of the Costa Rican IT market, the good and the bad of Costa Rica software development. nearshore and whether there are advantageous alternatives to signing up with a nearshoring company Сosta Rica.

The current state of software development in Costa Rica

When it comes to Latin America, Costa Rica proves to be a leader in education, business innovations, IT solutions and English proficiency among neighboring countries. According to the World Economic Forum’s 2019 Global Competitiveness Report, Costa Rica ranks first in the skills of the current and future workforce in Latin America. In addition, Costa Rica is a leader in the digital skills of the population among Latin American countries.

The latest Global Innovation Index 2020 report ranked Costa Rica 56 among 131 world economies and 51 for innovation performance. At the same time, these are some of the main achievements for Latin American countries.

According to the Embassy of Costa Rica in Washington DC, the Costa Rican government’s support for the IT market and social development has led to the creation of strong industry sectors, including software development, advanced manufacturing, and medical solutions. Foreign investors and US businesses, in particular, are interested in Costa Rica’s software services, thanks to the country’s political stability and high levels of education.

The Deloitte Doing Business in Costa Rica 2020 report defines Costa Rica as a top software development outsourcing destination for the United States. According to the report, Costa Rican software engineers tend to work in research and development, food technology, and medical technology projects. More than 300 US IT companies have opened their R&D and software development outsourcing centers in Costa Rica, with 24% being Fortune 100 companies, including IBM, HP and Intel.

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This makes the country a popular outsourcing and nearshoring option, especially for US companies that are geographically close to the country. Also, the costs of nearshore outsourcing in Costa Rica are much lower than hiring IT experts locally in the US, so many US companies are very interested in outsourcing software to Costa Rica.

Let’s take a look at the main characteristics of the software development market in Costa Rica:

  • Time zone: GMT-6
  • Technological talent pool: 46,400
  • The largest technology hubs: San José, Delicias
  • Innovation level: # 56 globally, # 3 in Latin America (GII 2020)
  • Main programming languages: Javascript, HTML, SQL, Java, C #
  • Average monthly rate: ₡ 1,004,728 ($ 1,640)

Pros and Cons of Opting for Nearshore Software Development in Costa Rica

To get started with a good hand, let’s first explore the undeniable advantages of nearshore software development Costa Rica:

  • A growing IT talent pool with strong government support for the IT industry;
  • One of the most developed educational systems among the countries of Latin America;
  • The ability to hire a dedicated professional and multilingual development team, as there are many skilled software engineers and English is taught in schools, so most people are fluent in English;
  • High quality technology infrastructure, with San José being the fastest growing Costa Rican IT hub with many US companies having their R&D centers open here;
  • Low attrition of Costa Rican programmers, which means that the employer shouldn’t worry much about looking for a replacement for a particular IT expert in the middle of the project;
  • Costs for software development services in Costa Rica are much lower than in the United States;
  • A convenient time zone difference (only 2 hours) allows for convenient real-time communication between the US headquarters and software development in Costa Rica, which leads to timely performance and fast problem resolution.

However, as with anything, there are also some possible pitfalls and drawbacks of nearshore outsourcing in Costa Rica:

  • Tax issues, since the Costa Rican tax system, requires each employee to contribute 10.84% ​​of their salary for social security, according to the GPMI report, and many programmers may prefer to work illegally without official employment and earn more. in this way, it would complicate things for the employer;
  • Difficulty finding IT experts with much needed specific technical qualifications and many years of experience;
  • Compliance difficulties when it comes to trade laws for US companies holding software development in Costa Rica;
  • Data breach and other security risks when partnering with a non-credible vendor;
  • High risks of natural hazards;
  • Cultural and communication difficulties with international companies.

Ukraine as a cost-effective alternative to Costa Rica for outsourced software development services

Although Latin America was one of the first IT hubs and nearshore software development, Costa Rica is a popular option for US companies; we have found a rapidly growing interest in hiring offshore programmers from other countries with enormous potential.

Nowadays, Eastern Europe and Ukraine, in particular, are gaining momentum as an outsourcing paradise for companies based in the United States and Western Europe.

Here’s why Ukraine can be a profitable alternative to software development in Costa Rica:

  • High level of IT skills and remarkable reputation of Ukrainian developers on the global market;
  • Higher education level (14M + with higher education, according to the latest KPMG report);
  • The largest IT talent pool in Europe (200,000 IT experts, as mentioned by TechUkraine);
  • This IT talent pool continues to grow rapidly (over 400,000 graduates per year, according to the KPMG report);
  • A significant number of senior programmers have experience working with US and European companies;
  • 160+ R&D centers already opened in Ukraine (including Microsoft, IBM, Apple, Samsung Electronics, as highlighted in the latest Deloitte report);
  • The vast majority of Ukrainian IT experts are fluent in English;
  • Ukraine has a corporate culture and values ​​similar to Europe;
  • Ukrainian IT companies can comply with global data protection requirements (GDPR and more);
  • The time difference is not essential for successful cooperation;
  • Convenient location in the center of Europe with well-developed transport infrastructure;
  • Rates several times lower than US programmers and roughly the same costs as Costa Rican programmers.

“After trying several remote collaborations in different countries, Mobilunity has been exceptional in hiring very talented people.”

Jimmy Beauregard, 3rd player

Hiring Software Developers in Costa Rica vs. Ukraine: summing up

To summarize the specifics of nearshore software development in Costa Rica and Ukrainian services as an alternative option, we have created the table below. The average monthly rate mentioned in the table is based on Payscale data and research by Mobilunity’s recruiting team on local labor markets.

Costa Rica Ukraine
Time Zones GMT-6 GMT + 2
Size of a tech talent pool 46.400 200,000
Knowledge of the English language Tall Tall
School level Good Good
Availability of talent Easy to find Junior programmers and hard to find Senior programmers High for both Junior and Senior experts
Risks related to natural hazards Tall Extremely low
Average monthly fee for average developers ₡ 1,004,728 ($ 1,640) $ 2,000
Data security and insurance Moderate level (# 53 in the global NCSI) High Level (# 25 in the global NCSI)
Correspondence between quality and price Good (good quality at low cost) High (high quality at an affordable cost)
Ease of doing business Moderate Easy

As you can see, both Costa Rica and Ukraine have their advantages and disadvantages. Understanding the specifics of the project and working with a reliable supplier is essential when choosing your nearshoring / outsourcing country.

For example, if you’re on a tight budget and prefer to work in the same time zone, Costa Rica might be your best bet. However, if you need highly experienced programmers with a solid understanding of a specific field (fintech, edutech, etc.), it may be more beneficial to work with Ukrainian developers known for their outstanding IT experience and coding skills than to choose one. software development company in Costa Rica.

Whether you are opting for software development in Costa Rica, Ukraine or Colombia, it is important to pay attention to the following points:

  • Research the provider in question: how long has it been on the market, what services it mainly provides, their successful projects, case studies, online presence, and so on;
  • It would be extremely helpful to check out customer feedback, online reviews, and social media mentions. You could also get in touch with previous customers to find out how the collaboration with the given supplier went;
  • Before starting a project, see who will work on it from the supplier’s side, check their technical skills, qualifications, experience, etc .;
  • Before signing a contract, be sure to define responsibilities, reporting format, means of communication, progress tracking, timing, etc .;
  • Make sure you respond to reports and inquiries from your dedicated team, communicate frequently, and monitor performance to make sure everyone is on the same page.

Mobilunity as your reliable Ukrainian supplier

If you are considering turning to offshore software development in Costa Rica and would like to explore all viable alternatives, Ukraine proves to be a haven for outsourcing with highly skilled IT experts available at affordable cost. You can hire a dream team if you work with a reputable IT service provider, and Mobilunity is a renowned Ukrainian provider that you can trust in your software development.

For more than 10 years, Mobilunity has been operating on the global IT market, helping SMEs and large corporations find the best programmers with related skills and advanced capabilities.

As you can see, Ukraine is indeed a great outsourcing destination that can easily compete with Costa Rica’s nearshoring and surpass it in many ways. You can get in touch with Mobilunity experts, see how we work, what our customers are saying and let us find the right developers for your project.

Are you thinking about nearshore software development in Costa Rica? Contact Mobilunity and find out why Ukraine could be a better option!