Outsourcing software development to Chile: Your guide to the local ICT market

If you've stumbled upon this article, it's one of the two. Either you lack specialized expertise in-house and can't choose between several outsourcing locations, or you already consider outsourcing software development to Chile and want to do it right. And there's no wonder many enterprises are interested in the location–Chile lures potential partners with diverse expertise, high service quality, a wide variety of tech vendors, and innovative hubs.

What are the other benefits of choosing Chile as an outsourcing destination? How to use local expertise to your advantage and introduce a new technology or develop a custom solution with seasoned LatAm experts? Keep reading to discover the local market and learn practical tips for your upcoming project.

Why should you go for software development outsourcing in Chile?

Chile's attractiveness as an outsourcing location is proven by its high position in global rankings. The country has made it to the top 25 on the Kearney Global Services Location list due to the high scores in both the financial attractiveness and the business environment categories (2.03 and 1.70, respectively). In terms of the latter, the country has left behind many LatAm countries, including Brazil, Mexico, and Costa Rica. What other factors make enterprises from the US and other locations outsource to Chile? 

• Chile has a favorable business landscape

One of the vital aspects to assess is the business climate of your outsourcing location, as it directly influences your project outcomes. The economic landscape is linked to project disruption risks and the stability of operations. In these terms, software development outsourcing in Chile is an attractive option. Along with Colombia and Brazil, the country is one of the fastest-developing economies in Latin America. Its rapid growth is mainly attributed to the services sector, which constituted 54.65% of the country's GDP in 2021 and includes the ICT industry. Chile has proven its reputation as a favorable location for business by high positions in international rankings. For instance, the country reached 59th place among the global economies on the Ease of Doing Business list by the World Bank. It is the leading position in the region, which makes Chile an optimal choice for businesses seeking to outsource their software development project.

Read more: Hire software developers in Colombia: A comprehensive guide

• The local government supports the ICT domain

How can governmental measures translate into practical value for businesses that hire a software development team in Chile? Let's take a look at the financial incentives as an example. CORFO, a Chilean government agency, is one of the local organizations that supports start-ups with funding. They provide promising tech companies with grants that cover up to 50% of the total project cost. By receiving funding support, local tech vendors can allocate their resources more efficiently and invest in research and development, talent acquisition, and infrastructure improvement. 

Another effective initiative is The Digital Chile Agenda which focuses on the development of a digital economy in the country. The main reason to implement such initiatives is to enhance the availability of digital technologies and foster innovation. By tapping into the innovative ecosystem, businesses can effectively collaborate with local talent, leverage cutting-edge technologies, and stay ahead of the competition. As a result, outsourcing software development to Chile becomes a viable option for enterprises from North America and Europe.

• Time zones in Chile overlap with major business hubs

Some businesses care a lot about time zone differences when it comes to software development outsourcing. Chile fully or partially overlaps in time zones with the US. The country is just two hours ahead of New York, Boston, and Washington D.C., making it easy for US-based enterprises to collaborate with their remote teams from Chile. The time zone overlap facilitates real-time communication, efficient coordination, and smoother workflow between the outsourcing partners. 

• The Chilean tech education system guarantees a consistent talent inflow

The above-listed benefits of outsourcing software development to Chile make many global enterprises hire local developers to work on their projects. So how does the local talent pool meet the ever-growing demand? It's mainly due to a robust ICT education system, a constant source of highly qualified experts. According to a PageGroup report, between 2016 and 2019, Chile had the highest percentage of STEM graduates in Latin America, accounting for 44.6%. To compare, in Colombia and Brazil, the percentage of students qualifying for tech careers constitute 34% and 17% of all graduates, respectively.

Moreover, the government in Chile facilitates qualification courses for engineers, contributing to talent inflow and enhancing the quality of their development services. Local software engineers also demonstrated proficiency in English, ranking 6th in Latin America according to the EF English Proficiency Index. High English proficiency translates to seamless professional communication between clients and their remote teams.

Related: The ultimate guide to outsourcing software development services

Outsourcing software development to Chile: Market overview

Now that you're familiar with the business landscape in Chile and initiatives for the digital sector, it's time to dig deeper into the local tech market and its opportunities. Let's explore the advantages you can gain by choosing Chile as your outsourcing destination.

Large tech talent pool

The substantial number of software developers in Chile makes the country an attractive outsourcing location in terms of talent availability. The country boasts a talent pool of 61K ICT professionals, most of which reside in Santiago, Valparaíso, Concepción, and other major Chilean engineering hubs. In fact, Santiago closes the top three cities in Latin America with the highest digital talent availability, behind only Sao Paulo and Mexico City.

You might also be interested in Nearshore software development in Mexico: Market overview, key destinations, and benefits

Diverse expertise

Want to solve your business request with technology and lack specific expertise? Then outsourcing software development to Chile might be the optimal solution due to the diverse specialization of the local engineers. The top two technologies in the country are C# and C++, with approximately 39K engineers specializing in each programming language. Among other popular specializations are DevOps and front-end development–they are primary focus areas for around 4K and 3,3K specialists in Chile.

Developed infrastructure

Regarding the tech climate, the local government has committed to its development by investing in connectivity and building tech hubs. As of July 2023, the country's Internet penetration is 86.7%, and it is expected to grow to 88.8% by 2026, unlocking new prospects for the local ICT market. It is a high percentage as compared to other outsourcing locations. For instance, in China, only 70.1% of the population actively uses the network, while in India, this figure is no more than 49%.

However, some cities are already making the most of the 5G network, fiber optic connectivity, and other digital technologies. Let's take a look at the most prominent tech hubs in Chile:

• Chile's capital, Santiago, is the largest technology hub in the country. It is home to around 143 tech companies that span from small start-ups to global enterprises;
• Located on the coast, Valparaíso has a reputation as an emerging Chilean tech hub that houses several notable companies such as OpenBionics, Valve, and Uber;
• Another prominent location on the map of tech hubs in Chile is Concepción. The main focus of tech companies located in the city is e-commerce, digital marketing, and cybersecurity domains.
• Antofagasta is one more thriving local technology hub known for software development for the mining industry and a vibrant community of IoT developers.

A wide variety of outsourcing vendors

A reliable outsourcing vendor like N-iX can help you tap into the best talent pools of Latin America, including Chile, Colombia, and other countries. With over 150 tech vendors in the country, hiring the software development team in Chile is a viable choice for global businesses looking to scale their operations. You can entrust your tech partner with responsibilities such as talent search, conducting technical interviews, and managing the team. Among global businesses that have already boosted their technical capabilities with Chilean developers are Oracle, Accenture, Yahoo, and Fortune 500 enterprises.

Keep reading: Top software development companies in Latin America: A comprehensive review

Outsourcing software development to Chile: 5 key steps

So, you firmly decided to outsource your next tech project to Chile. What are your further steps? Regardless of your business needs, nearshoring or offshoring software development methodology generally involves the same stages. Here are our guidelines to help you navigate the process and collaborate with top tech talent from Chile:

1. Define your project requirements

Understanding your project requirements, goals, and expectations is crucial before launching any project, and outsourcing software development to Chile is no exception. To set criteria for choosing your tech partner, outline the project scope, desired deliverables, timelines, and any specific technologies or methodologies to be used.

2. Choose a reputable outsourcing partner

Chile is home to around 150 tech vendors, so the outsourcing company selection process might be challenging. To begin with, we recommend you narrow down the list of potential partners by consulting reliable resources such as Clutch or GoodFirms. Focus on midsize and large vendors that employ more than 250 tech experts. Such enterprises generally have well-optimized development processes and can promptly provide access to the required workforce.

Additionally, it is crucial to go through the companies' portfolios, customer testimonials and reviews to gain insights into their previous projects and the business value they have already delivered. Take into account proven experience in the specific technology stack you require–that way, you will be sure that the chosen vendor has the expertise to handle your project.

More on the topic: How to choose the right software development partner: your outsourcing handbook

3. Research the vendor's data protection policy

Chile is currently in the middle of enhancing its legal framework for data and intellectual property protection. In May 2022, the local government approved a new bill to strengthen intellectual property rights in Chile. While the local government does its best to eliminate the possibility of potential data thefts, what can you do to protect your sensitive information and intellectual property?

Our experts at N-iX recommend examining the company's data protection policies. Compliance with international data protection rules and regulations is a crucial attribute of a trustworthy vendor. Some standards and regulations to look for are GDPR, PCI DSS, ISO 27001:2013, and ISO 9001:2015. Additionally, ensure that your software development vendor has a Business Continuity and Disaster Recovery Plan that addresses potential unforeseen incidents and disruptions.

4. Select the suitable cooperation model or service

When setting up IT outsourcing partnerships, it's essential to pick a service or cooperation model aligning with your business needs. Various factors influence this decision, including your business goals, the desired control level, and project flexibility.

The most flexible of all models is team extension. It is perfect for businesses that lack specific in-house expertise and want to fill in their talent gap with Chilean developers. Within this model, the key responsibilities of your tech partner span supplementing your existing team with the necessary experts and management of recruitment processes.

If you want to gather a new software development team in Chile for a specific project, the managed team model is your best fit. Not only does this option give you access to the diverse expertise of your tech partner, but it can also help you optimize resources. While your outsourcing vendor will handle team and process management, you can concentrate on other critical project aspects.

Custom solution development is the best choice for enterprises that want to implement tailored software from scratch. As you opt for this service, your tech partner becomes responsible for designing the project's roadmap, delivering a complete solution, and ensuring security and quality.

Lastly, if your primary aim is to tackle a business problem using technology, tech consulting in Chile is the perfect option. Experienced tech consultants can validate your business ideas, evaluate the feasibility of employing new technology, and offer strategic advice to address your business challenges.

5. Set up effective communication channels

After shaking hands with your engineering partner, your next move should be establishing efficient team management strategies. By using collaboration and communication tools, you can keep track of your project's progress and solve issues when they occur. Use business messengers to keep in touch with your remote teams and give them updates, organize teamwork with project management tools, and hold regular meetings through web and video call apps.

Learn more: How to streamline communication with your remote development team

How can N-iX assist in recruiting and retaining top developers from Chile?

• N-iX is a global engineering company with over 21 years of experience in delivering tech consulting and custom software development services to clients from manufacturing, logistics and supply chain, fintech, telecom, and other industries;
• Our client list spans such global enterprises as Bosch, Siemens, eBay, Gogo, Fluke, and many Fortune 500 companies;
• N-iX has a delivery center in Colombia and works with tech talent across the whole Latin America. We can help you access the region's top experts and hire professionals in 25 countries across Europe and the Americas;
• We comply with the data protection standards such as ISO 27001:2013, PCI DSS, ISO 9001:2015, and GDPR;
• N-iX is well-recognized in the industry: the vendor has been featured in the IAOP Global Outsourcing 100 rating and the CRN Fast Growth list for several years in a row. Moreover, N-iX has made it to Forbes and Forrester rankings.