Andrew
Burak
CEO at Relevant

Software Development Outsourcing to Costa Rica in 2021: A Complete Guide

Outsourcing

For decades, Europe and Asia have dominated the offshore software development landscape. 

However, in the past few years, Central American countries, particularly Costa Rica, have made notable strides to get a share of this lucrative outsourcing industry (the global outsourcing market accounts for over 92.5 billion dollars).

Currently, Costa Rica is the #1 exporter of high value-added services in Central America, and according to the 2019 Global Innovation Index, Costa Rica exported $3.3 billion in IT-related services in 2018 alone.

This makes it one of the best countries to outsource software development, not only in Latin American but the world at large. 

From sharing similar cultures with the U.S. to an ideal geographical location, and time zones, a vibrant developer community, and ranking #2 in innovation, Costa Rica presents very few software outsourcing challenges compared to Eastern Europe and Asian countries.

Costa Rica in Global Rankings for software outsourcing

All this, coupled with the emergence of numerous Fortune 100 companies such as HP and Intel in Costa Rica, have significantly strengthened the Costa Rican IT talent pool. Certainly, there’s more to this #1 country in the Happy Planet Index than just beautiful smiles.

Five countries making the headlines for IT outsourcing

Before we get into the nitty gritties of outsourcing to Costa Rica, it’s also important that we explore other best countries to outsource software development in 2021. 

This will help you to make comparisons and come to an informed decision easily. Here are the top five competitor countries to Costa Rica you may consider:

1. Argentina

Over the past few years, Argentina has significantly invested in its educational system, providing free elementary education and a plethora of government scholarships. This has certainly paid off; currently, software development is the main source of Argentina’s foreign investment, constituting 58%.

In 2018, around 70% of dedicated software development teams in the country invested in research and development and fruitfully generated approximately $ 1.7 million in total.

These developments are but a few of what should put Argentina on your radar for your IT outsourcing projects.

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2. Poland

Poland has one of the most friendly tax regimes and considerably lower labor costs. 

With over 247,800 technical and Information Technology faculty students graduating from Polish universities each year, there’s a large variety of developers in the country. A bit of good research will undoubtedly score you the ideal candidates without breaking the bank. 

Besides, Poland has one of the most central locations in Europe; flights from France, Germany, or Sweden take less than an hour or two.

3. India 

It’s hard to talk about outsourcing without India coming to mind as one of the major tech hubs. If you want significant cost savings, India is certainly the way to go. 

With the world’s largest talent pool, attractive government subsidies, and state-of-the-art tech infrastructure, India is definitely the one to beat. And this is to mention a few.

4. Ukraine

Ukraine is a well-established outsourcing destination, also boasting of having one of the largest IT talent pools in Europe. 

With over 4000+ tech companies, 210 000 IT specialists, 110+ R&D centers, and 1000+ tech events each year, Ukraine is undoubtedly a force to reckon with in the IT outsourcing sphere. 

Credit goes to its high skill value, an average score index of 91.26%. This has evidently kept the country on the world map in major international tech-associated rankings. 

In the recent A.T. Kearney Global Services Location Index, Ukraine held the 20th position and was named the “Offshoring Destination of the Year” by the Global Sourcing Association (GSA), U.K.

The International Association of Outsourcing Professionals (IAOP) also listed 13 Ukrainian companies among the top 100 global outsourcing companies. 

5. Costa Rica

As mentioned earlier, the Costa Rican government has invested in its nation’s education, and it has fruitfully paid off. 

In the sections ahead, we will look at the benefits of nearshore outsourcing to Costa Rica at length. For additional information on the best countries to outsource software developers click here.

The Costa Rican IT environment 

When considering outsourcing software development to Costa Rica, you want to evaluate the general IT environment carefully. The country is ranked 37th globally regarding production process sophistication, thus helping them export over USD 3 billion worth of tech services. 

With these achievements and more, Costa Rica has attracted over 20 Fortune100 companies and over 200 other multinational companies in the IT sector. 

outsourcing software development to costa rica

Costa Rica has also seen the rise of domestic software development companies. Here are a few international Costa Rica outsourcing companies and domestic companies helping create a healthy IT ecosystem.

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 Fortune 100 and multinational companies include:

  • NBC
  • Intel
  • HP
  • IBM

Indigenous to Costa Rica:

  •  Trip Fab
  • Green Cloud
  • Zero Army
  • SaborStudio

These developments have been instrumental in putting Costa Rica on the map as a worthy software development destination.

Costa Rica is also a very startup-friendly country. A lot of accelerators and incubators here help young entrepreneurs to build and grow their businesses. Some of the examples are Parquetec, Incuba UNA, Carao Ventures, and Auge.

Startup Accelerators in Costa Rica

Why outsource to Costa Rica?

The growing IT expertise in the country has made IT outsourcing to Costa Rica more attractive than ever. The similarities of the Costa Rican and American cultures, especially time zones, has been a major contributing factor. 

Companies that outsource software development to Costa Rica enjoy some of the following benefits:

  • Costa Ricans are well-educated
    Among the Latin American countries, Costa Rica has the highest level of education. Since 1948, the government has committed to free education for its citizens and offers scholarships to help students study abroad and bring back inspired innovations. 
    This initiative has created a pool of intellectuals capable of grasping the complex concepts required to develop software— and cultivate the passion forITin Costa Rica.
  • Strong developer community
    The Costa Ricans have created communities that help support and develop software development in the country. 
    MenTe, a government initiative, helps establish the trade with an emphasis on female software developers. 
    You will often hear of small communities meeting up to share ideas and map out trade development methods. This speaks powerfully to the devotion and passion that the Costa Rican developer community has.
  • Calm political environment
    For over a hundred years, Costa Rica has enjoyed a democratic tradition. The country holds many accolades as the safest and the most politically stable country in Latin America. The government is so democratic that since 1948, they disbanded their army. 
    The World Bank Survey for Global Governance indicators of 2008 has stated that Costa Rica is safe and attractive in foreign investors’ eyes. This is why outsourcing companies in Costa Rica are almost always increasing.
  • Aesthetically pleasing landscapes 
    The fact that Costa Rica is beautiful works in its favor. With beautiful beaches, volcanoes, and gorgeous mountains, potential investors can look forward to quiet the scene when they visit on business. 
    Thus, software development outsourcing to Costa Rica comes with many perks besides the business side.
  • Time zone
    Costa Rica shares a time zone with most of the United States, so it will be especially convenient for US businesses to outsource development to this country.

Software outsourcing to Costa Rica enables virtual business meetings and standard phone calls at convenient times for both parties.

Advantages of software outsourcing to costa rica

Choosing between Costa Rica and Ukraine for a software development destination

Optimizing costs is one of the leading factors to outsourcing. The quality of services provided, however, will determine who gets the job. China, Germany, the UK, India, and Brazil are well known for outsourcing. 

However, Ukraine and Costa Rica are a more objective and eye-opening comparison. 

This insightful comparison will help you decide between one of the leading outsourcing destinations in Eastern Europe and Central America. 

Advantages of outsourcing to Ukraine include:

  • Better IT infrastructure
  • Developers have experience working with U.S. firms
  • Ukraine has a denser developer population
  • Time zones are acceptable
  • Workforce is affordable

The disadvantages include:

  • Salaries are governed by Ukrainian bodies and may vary from time to time
  • The U.S. culture is different from the Ukrainian culture
  • Ukraine’s geographical location might make it difficult to just “pop in.”

On the same note, hiring Costa Ricans also has its pros and cons.

Advantages:

  • Costa Rica is geographically much closer to the US
  • Culture-wise, cooperation between Americans and Costa Ricans is quite easy
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Disadvantages:

  • Less experienced software developers
  • Business laws make it hard to hire Costa Ricans when the organization is American
  • Risk of security violations

Considering other factors such as IT infrastructure in each of these countries, the level of education of the citizens, among other factors, mostly you will not go wrong with any of these two options. 

While there are numerous factors to consider, you may make your own decision based on tailor-made specifics that meet your needs as an organization or individual. Software development teams in Ukraine are just as competitive as they are in Costa Rica.

In conclusion

In a nutshell, it all adds up to doing your research well to find the offshore software development destination that fits you best.

In today’s economy, outsourcing is a vital tool; thus, the ability to design outsourcing methods that work is synonymous with a thriving business. Also, keep in mind that finding a qualified tech partner is just as important as choosing a destination, if not more. 

Therefore, when choosing an outsourcing provider, you should pay more attention to their accomplished projects. For instance, Relevant Software has extensive experience in implementing the most challenging outsourcing tasks. 

Here are the great things that we have built for our clients. If you need experienced IT specialists or a skilled, dedicated team, contact us!

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Tags: outsourcing
Written by
Andrew Burak
CEO at Relevant
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