What is Nearshore Software Development: How-to-Benefit Guide for Startups and SME?
8 min.

Looking to develop high-quality software products while minimizing costs and maximizing efficiency? Look no further than nearshore software development! At ProCoders, we have extensive experience in providing top-notch nearshore development services to startups and small to medium-sized enterprises (SMEs).

Many SMEs have concerns about outsourcing, from communication challenges to project management issues, to potential quality and security risks.

But fear not – at ProCoders, we understand your worries and have tailored our nearshore development services to address your specific concerns, including concerns related to staffing agency contracts.

Nearshore Software Development

Definition of Nearshore Software Development and What Does it Mean for Startups and SME

Nearshore outsource software development is a form of outsourcing where a company partners with a software development team in a nearby country or region with similar time zones and cultural backgrounds.

For example, when Frontegg from Israel works with us, since ProCoders are in Central Europe, it is considered nearshoring, but when we work with RosRiver from North America, it is considered offshoring.

For startups and SMEs, nearshore development offers a number of advantages. Companies can lessen time zone and communication obstacles by collaborating with a nearby development team, which can hasten development and enhance collaboration. In addition, nearshore developer teams can provide a more affordable alternative to employing an internal development team and a higher quality alternative to outsourcing to a less expensive region. The nearshore team’s close proximity makes it simpler to travel and, if necessary, hold face-to-face meetings.

Moreover, nearshore teams often have a high level of expertise in the latest technologies and methodologies, enabling them to provide innovative and effective solutions to a company’s software development needs. This expertise can help startups and SMEs to stay competitive in the market and keep up with the latest trends.

nearshore software development services for startup

Nearshoring Software Development Trends, Costs and Market Overview

In recent years, the trend of nearshoring software development has grown significantly, as more and more companies discover the benefits of this model. According to a report, the global outsourcing market is projected to reach 98 billion U.S. dollars by 2024. One major trend in nearshore software outsourcing is the increasing use of agile methodologies, which emphasize collaboration and flexibility in the development process. Another trend is the rise of cloud-based technologies, which enable teams to work together seamlessly and securely from remote locations.

Cost is a major factor that companies consider when deciding whether to outsource their software development needs, and nearshoring offers an attractive option due to its potential cost savings. 

In general, it is typically less expensive than onshore development in countries such as the United States, Canada, and Western Europe, where labour costs are high. And while nearshore development teams may charge higher rates than offshore teams in, for example, China or India, they often offer higher quality work and faster turnaround times due to their proximity and cultural similarities. Nearshore teams may also offer better communication and collaboration, which can lead to a more efficient and successful project.

When it comes to a market overview, nearshore developers are becoming increasingly popular in regions such as Latin America, Central Europe, and the Caribbean. These regions have a highly skilled workforce with expertise in a wide range of technologies, making them attractive destinations for companies seeking to outsource their software development needs. As a result, many nearshore software solutions companies have emerged in these regions, providing a variety of services and solutions to companies around the world. So here are outsourcing benefits for startups and SMEs.

Types of Software Outsourcing by Location And Their Pros and Cons

Outsourcing can take several forms, each with its own advantages and disadvantages. Let’s consider the three main types of software outsourcing by location: onshore, offshore, and nearshore software development. Make sure to check out software development outsourcing models!

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Onshore Software Development

Onshore software development means collaborating with a team based in the same nation as the company. Difference between onshore and offshore software development helps compare both the models.


  • Same time zone and language
  • Better cultural understanding
  • High level of control


  • Higher labour costs
  • Limited access to specialized talent

Offshore Software Development

Offshore software development is partnering with a development team located in a different country, typically with a large time zone difference. Offshore software development countries will tell you more! 


  • Lower labor costs
  • Access to specialized talent
  • A large pool of resources
  • Round-the-clock development cycles


  • Language and cultural barriers
  • Time zone differences
  • Less control over the development process
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Nearshore Software Development

It involves partnering with a development team located in a nearby country with a similar time zone and cultural background. Nearshore software development in Central Europe is a must read for a detailed insight! 


  • Cost-effective solution
  • Similar time zone and cultural background
  • Access to specialized talent
  • Better communication and collaboration
  • Diversity in business culture


  • Limited access to certain resources
  • Potential language barriers
  • Limited cultural differences

In conclusion, each type of software outsourcing has its own advantages and disadvantages, and the choice will depend on a company’s specific needs and budget. Onshore software development offers the highest level of control and collaboration, while offshore development provides cost savings and access to specialized talent. Nearshore development offers a balance between the cost savings of offshore and the collaboration benefits of onshore development.

nearshore software outsourcing

Examples of Outsourced Nearshore Software: How it works for you?

But how exactly does the process of nearshoring work? We at ProCoders have extensive experience in this type of outsourcing, and we are ready to share it with you along with tips on choosing the right outsourcing partner! Here’s an example of how it worked for our client, Frontegg:

The client identifies software development needs

Frontegg needed a high level of software engineering to get their SaaS-based company off the ground, but they faced challenges in expanding a development team in Israel.

Partnering with a nearshore development team: 

They opted to partner with ProCoders, situated in Central Europe, to construct a team of high-level, English-speaking full-stack programmers and developers.

Assembling Frontegg’s team: 

ProCoders collaborated with Frontegg to determine the exact mix of talent they needed, and in just two weeks, ProCoders was able to assemble a small team of developers to meet Frontegg’s ongoing needs.

Meeting milestones and promoting business goals

ProCoders employed a team of developers, supplemented by an additional team of surge workers, to help speed up the development process and meet milestones, with time to spare.

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Ongoing support and maintenance: 

The nearshore development team provides ongoing support and maintenance to the client to ensure that the product continues to function as intended.

Frontegg found nearshore outsourced development methodology to be effective.  The outsourced team was able to act as if they were inside corporate personnel, reducing human resource expenses by 38% and enhancing project turnaround efficiencies by up to 30%. 

They were able to overcome the hurdles of increasing their staff in Israel and achieve their commercial goals by cooperating with ProCoders. Furthermore, the nearshore development team may provide continuous support and maintenance to guarantee that the product is up-to-date and working properly.

How Can Procoders Help You with Nearshore Software Development and Gain Costs and Time-to-Market?

Are you looking for nearshore software development services to help bring your project to life? ProCoders can be your partner! With our range of services, we can provide tailored solutions to meet your specific needs. These are the most popular solutions we offer: 

Discovery Phase:

At ProCoders, we start with a discovery phase to fully understand your business and needs. This ensures that we can provide a plan that fits your unique goals and requirements.

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Self-Managed Dedicated Team (SMDT):

Our SMDT model allows you to assemble a team of flexible software engineers with skills tailored to your specific needs. The team works as a self-sufficient unit, with all operational tasks managed by your own Project Manager. This allows for better control over the process and ensures that the team is working towards your specific business goals.

Staff Augmentation:

With ProCoders’ staff augmentation model, you can quickly and efficiently fill in missing pieces in your team. Within just a few days of the interview, We can match you with an experienced and talented developer who fits your needs perfectly, saving you time and money on recruiting, training, and onboarding.

And when you work with us, you’ll get more than just a team of developers. Here are some of the benefits you can expect:

Direct communication: 

We allow you to manage your nearshore software developers directly, ensuring maximum transparency and control over their performance. You can easily get in touch with our programmers and learn about their progress on a particular task.

nearshore developers

Complex project support: 

Each project is thoroughly examined by ProCoders to determine who and what it truly requires. To assist clients in succeeding, they share their knowledge and provide technical assistance.

Business ethics: 

Our software engineers have a unique experience of integrating into almost any team and bringing their expertise to the table. They hire sociable, hardworking people who can work with other employees and offer unique solutions for your projects. With our team’s combination of technical skills and ethical values, you can trust us to deliver exceptional results while staying true to your company’s values.

How to Choose the Right Nearshore Outsourcing Team?

Choosing the right nearshore outsourcing team requires considering several key factors, including location, cultural fit, skillset and experience, communication and project management, scalability and flexibility, quality assurance processes, and security and compliance.

To choose the right nearshore outsourcing team:

  • Consider the location and cultural fit
  • Check skillset and experience
  • Look for effective communication and project management
  • Choose a team that can scale and be flexible
  • Ensure effective quality assurance processes
  • Verify security and compliance with relevant laws and regulations.
When is nearshore product development profitable?

Nearshore product development is gainful when a business wants to reduce costs, access skilled talent, and accelerate time-to-market. It is particularly beneficial for startups and SMEs looking to bring their software ideas to life while minimizing costs and maximizing the chances of success. Additionally, nearshore development can provide greater communication and cultural similarity compared to offshore development.

What is the main reason for nearshoring?

The main reason for nearshoring is to access skilled talent and reduce costs while maintaining effective communication and cultural similarity. By partnering with a nearshore software development team, businesses can benefit from access to a skilled talent pool, lower labor costs, and similar time zones and work cultures. This can result in a more cost-effective and efficient development process compared to onshore development.

How to check nearshore partners?

To check nearshore partners, conduct a thorough evaluation of their location, skillset, communication and project management abilities, scalability, quality assurance processes, and compliance with relevant laws and regulations. This will help ensure that you choose the right nearshore outsourcing team for your needs and achieve your project goals effectively and efficiently.

To check your nearshore partners, consider the following steps:

  • Research: Conduct thorough research on potential nearshore partners, including their experience, reputation, and client feedback.
  • Skills and Expertise: Evaluate the nearshore partner’s skills and expertise to determine if they can meet your project requirements.
  • Communication and Collaboration: Evaluate the nearshore partner’s communication and collaboration capabilities to ensure they can work effectively with your team.
  • Security and Compliance: Verify the nearshore partner’s security and compliance measures, including data privacy and information security protocols.
  • Flexibility and Scalability: Consider the nearshore partner’s ability to scale up or down as your development needs change and their flexibility in terms of contract length, team size, and project scope.

By following these steps, businesses can select the right nearshore partner for their needs and ensure a successful development project.


Nearshore software development is a viable solution for startups and SMEs looking to reduce costs, access skilled talent, and accelerate time-to-market. By partnering with a great team, businesses can benefit from greater communication, cultural similarity, and cost savings compared to onshore development.

ProCoders offers a range of services, including staff augmentation and SMDT, that can be tailored to meet specific business needs. Our direct communication, complex project support, and business ethics provide an added layer of value to clients seeking to maximize their efforts.

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