August 5, 2021 –

How does my business benefit from nearshoring?

Table of Contents

With nearshoring software development services, you can find experienced talent and specialized services that will be key for your business growth.

Nearshoring Services - Nearshoring team on a meeting in the office

The Context

To understand the nearshoring concept, we have to start by understanding the entire concept of software outsourcing.


The main thing to know is that there are three main models: nearshoring, offshoring, and onshoring.


While we will look at outsourcing primarily from the software development perspective, their principles are valid across industries. With just a few adjustments here and there, you can use the primary outcomes from this blog post to gain a competitive advantage in various businesses.


Nearshoring: you delegate specific tasks or entire projects to a software development team in a nearby country. An example of this would be:

  • A company based in New York outsourcing to a software development business (like DNAMIC) in Costa Rica
  • A customer in England delegating work to a design team in Madrid

The main advantage of this model is the proximity of the nearshoring partner. The time difference, if any, is typically no more than a couple of hours.


Offshoring: is very similar to nearshoring, but the main difference is that the offshore team is typically located on another continent. The main drawbacks of this model include considerable time differences, cultural and language barriers, and higher travel costs. The result may be a negative impact on your business operations.


Onshoring: this is “domestic” outsourcing. An example would be outsourcing development from your office in Madison Avenue to, say, Albany. However, it will still be more expensive than nearshoring.


near•shore ni(e)r SHôr adjective "The transfer of business or IT processes to companies in a nearby country, often sharing a border or time zone with your own country," where both parties expect to benefit from one or more of the following dimensions of proximity: geographic, temporal (time zone), cultural, linguistic, economic, political, or historical linkages.

Nearshoring advantages for business

Choosing to outsource can change how a business works and be highly beneficial and highly profitable. It can solve time restrictions, budget limitations, lack of efficiency, to name a few. Contracting nearshoring development services, you will find a variety and experienced talent that will be key for your business to grow and advance.


The objective of using external providers is to reach international markets, improve the quality of your business, and create a strategy that can focus on expansion and progress. Working with global talent can make your business an authority in the market because it stands out.


For any business, the markets need innovation and quick, effective, and creative results. When it comes to software development, you need a staff with a wide range of knowledge, fluency in the fundamental and latest web languages, and an initiative to create solutions to unseen problems—trusting your partner when outsourcing is vital to make the transition successfully.


At DNAMIC, we make sure our partners grow together with an experienced team of specialists and the latest technology to bring their projects to the world. Fluent and clear communication is essential for an exceeding result.


Remote developers working for highly effective results with a well-communicated partner and experienced talent make nearshoring development teams the best option compared to other outsourcing models.

In 2019 when the COVID-19 pandemic hit the world, most businesses fell in distress, not only because the health of many workers came into play but because the idea of the world as we knew it was hanging on pure uncertainty. Two years in, and the world has adapted to new ways of work, and nearshoring became a top choice for many companies, especially nearshoring in Latin America.


The pros of nearshoring are growing with time now, and the remote, highly effective, and well-communicated option makes it more attractive for any company to consider. In comparison to offshoring, nearshoring in Latin America can save you an over 20 hours flight, miscommunications, or extra effort to express the vision of your project.


Nearshoring in Costa Rica offers high-class experienced staff with cutting-edge technologies and software specialists. We can bring the quality and quantity necessary to upgrade a business understanding your culture, and fluently interact to get feedback, problem-solving, and out-of-the-box creative thinking solutions to the table.


The United States has relied heavily on China, India, and even Europe as an outsourcing choice. Still, the cost has been increasing on these operations has incentivized them to look elsewhere to work.


According to a tax specialist, the Total Costs of Ownership (TCO) that traditionally works with offshoring include documentation, travel expenses, infrastructure, and productivity loss due to time zone differences and delayed communication.


Extra TCOs could be avoided or significantly reduced by choosing nearshoring to Latinamerica. The large quantity of qualified and available Latinamerican talent understands the global market needs, especially the US market, making this region a prominent option for collaboration. It can be mentioned as well that the affinities between the US and Latinamerica are much benefical than the popular offshoring location.

Nearhoring Services - World Map

A Successful Nearshoring partnership in short

An academy of tourism education, which has taught face-to-face classes for years, wants to innovate and adjust to the changing demands of the education sector and create an online learning platform. This platform will include full accredited degrees through video lessons. The project was going to be developed from scratch.


Our nearshoring services company assembled a team of three engineers in two weeks, specialized in backend and frontend development with full-stack skills.


We were able to assemble a dedicated team to handle the project three times faster than if they had tried to hire an in-house team. The developers offered all their expertise and helped to adapt to the project’s needs, modernizing systems and implementing new technologies, working hand in hand with the client to meet their goals.


Providing the client with the necessary expertise, agility, and faster development was part of the benefits of hiring nearshore development services.


Nearshoring in Costa Rica

With the pandemic hitting the world and sending everybody to work from home, Costa Rica rises as a top choice for nearshoring services because of its political and financial growth. It has internet availability across the country, skilled professionals, and rooted remote working culture.

According to Costarican Investment Promotion Agency CINDE, Costa Rica has essential pillars that make it stand out:

  • The alphabetization rate is 98%
  • More than 14 free trade agreements (including the US, China, and Europe)
  • An attractive taxing system
  • Invitation to be part of the Organization for Economic Cooperation and Development (OCDE)

According to Álvaro Goicoechea, Investment Advisory Manager at CINDE: “In the case of the US market, Costa Rica is an ideal option because it has a similar time zone that allows the supplier’s chain to be close, in a way that facilitates the exportation and importation process.”

He also mentioned how the country’s priority is to attract different markets that rely on technology development to Costa Rica.


Industries nearshoring in Costa Rica

  • Customer Support
  • Financial and Taxes Management
  • Software Delivery
  • IT Infrastructure Management
  • Law Support and Assistance
  • Marketing and Design
  • Corporate Training
  • Human Resources

Another benefit of nearshoring is that cultural affinities between the US and Latin America are more significant than many popular offshoring locations.


In Costa Rica, high-level, well-known companies have chosen to nearshore due to its effectiveness and excellent results, with the commitment to nature conservancy as a plus. Businesses like Mckinsey, EY, and Intel have selected the country as their second home and have excellent experiences encouraging others to do the same.


The Latin American picture for nearshoring services

In a report published August 2020 by the Economist Intelligence Unit (EIU), the EIU said: “Latin America has the potential to gain considerably from nearshoring in the coming decade, given some comparative advantages, including its long list of free trade agreements, proximity to the US market and increasingly competitive wages.”


Using its business environment rankings to evaluate the potential of countries in the region, the EIU singled out Mexico, Costa Rica, Chile, and Colombia as well-positioned to compete with Asia.


The EIU evaluated various countries’ readiness to compete globally: Chile came in second, just behind Taiwan. Costa Rica, Mexico, and Colombia came in fourth, fifth, and sixth, respectively (behind Malaysia).


This evaluation provides an overview of Latin American countries’ competitiveness globally.


The so-called software factory effect in Costa Rica has proven to bring the best solutions for multiple problems that businesses in distress or just with the desire to elevate themselves come. Nearshoring in Costa Rica with DNAMIC assures the most desirable outcome with a team you can trust.

Nearshoring Services - Staff reviewing work on a laptop

Success tips for nearshoring

Communication  – It is the most vital part of any software development partnership. Nearshoring in Costa Rica, you’ll have a team in real-time when you need them; take that advantage to reduce misunderstandings and mishaps.


Define a clear action plan – Make your decisions based on cost and choose by estimating, evaluating, and contemplating the highest quality with cost proposals.


Find the winning team and hire them! – The best talent is in high demand, so hiring a nearshore software development provider will make your hiring process easier for assuring skilled and available senior talent.


Set clear milestones for your goals to be achieved – You need to have efficiency in your mind and passion in your heart. High ideals and realistic budgets, and an understanding of the path to go are fundamental when selecting a nearshore partner.


Establish a relationship on trust – Because trust results from good communication and well-set goals when dealing with professional development services.

Before you go

  • Nearshoring services can empower other company areas with the money saved, expanding the business, and working with high-tech technologies and valuable strategies.
  • The challenges created by offshoring can feel hurtful and incremental with time. In the end, nearshoring to Latin America is the best solution for North America’s businesses.
  • The improvement of operational efficiency, the cost savings, and the fact that Costa Rica is a nearby country benefit the teams to work together and elevate the results.

Want to learn how your company can benefit from Nearshoring services to your business with DNAMIC?
Talk to a specialist!

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