In the previous iteration of this article published in 2024, we noted that ‘nearshore outsourcing is on the rise’. Today, in this revised edition of July 2026, it’s safe to say that nearshore has, in fact, since matured in that rise, and throughout the rest of the update to this article, we will look at pieces of evidence that prove just that.

Although the numerous advantages that nearshore offers to businesses seeking to optimize their operations and reduce costs while maintaining high-quality service are considered to be the backbone of its momentum in recent years, it turns out also that the need for stability and control was an even bigger driver of the shift to outsourcing to a similarly cultured region than previously thought.

Over the past two years, the criticism that outsourcing creates limitations around scalability, intellectual property ownership, security, and delivery execution remained; however, much like in the past, these criticisms remain surmountable and thus consequently muted.

Regardless, as we explored in the previously published article on our blog, Latin American countries such as Uruguay are among the prominent emerging outsourcing destinations, and this is particularly true for North American companies.

We’ll explore more of the reasons for this to begin the article, and in between, we’ll paint a picture of why this pattern of work engagement has solidified in 2026, with the exception of business process outsourcing, which is being transformed by the momentous shift towards AI.

Latin America

As I’ve mentioned, and like every other region on this list, LATAM is fast becoming the go-to destination for corporate outsourcing for North American companies looking to take advantage of the proximity, cultural affinity, and large pool of skilled professionals proficient in English and other languages in South America.

Uruguay is a strong leader in the technology industry in LATAM.

As a matter of fact, nearshoring to the Americas has grown 15 to 20 percent annually over the past year, with the Dominican Republic, Colombia, Mexico, and Costa Rica the primary beneficiaries of BPO outsourcings and the likes of Uruguay, Mexico, Brazil, and Argentina capturing the biggest share of the IT outsourcing to the region.

Countries like Uruguay, Mexico, Brazil, Colombia, and Argentina have also become key players in the nearshore outsourcing landscape since the revision due to the proliferation of Tech hubs such as the ones in Montevideo in Uruguay and São Paulo in Brazil that have made sure that, unlike a few years ago, finding large-scale qualified IT staff in the region is possible due to a maturing training and infrastructure pipeline.

Another noteworthy trend is that outsourcing to the region is driven by more than cost. Apart from the typical nearshore driver such as time zone alignment, reduced collaboration friction, etc., it is increasingly the case that changing geopolitics and the subsequent regulatory landscape that has forced businesses to look inward in the past year becomes long-standing.

As we’ve seen in the backtracking of cost-based outsourcing to what business leaders now call ‘Best-Shore’ or best-shore strategy in industrial operation outsourcing, the travails of the regulatory landscape have proven to be sticky and have long been taken seriously by sections of outsourcing businesses.

For an idea of how Latin America is growing as a destination for outsourcing, last year, the Latin America outsourcing services market generated a revenue of USD 205,246.5 million, and in terms of segment, engineering services outsourcing was the largest revenue-generating service type in 2025.

Even more remarkable is the prediction that the market is expected to grow at a compound annual growth rate of 10.85% from 2026 to 2033, outpacing many of the other destinations in this article.

Eastern Europe

Aside from North American companies outsourcing to Latin America, in Europe, nations such as Poland, Ukraine, Romania, and Hungary have long been popular outsourcing destinations for global companies.

These countries boast a highly educated workforce, competitive labor costs, and favorable time zones that overlap with Western Europe.

Cities like Warsaw, Krakow, and Bucharest are powerhouses offering a wide range of IT and business process outsourcing services. However, more recently there has been a downward trend in a lot of predominant destinations for outsourcing in Eastern Europe.

Distribution of Eastern European outsourcing agencies pre 2026.

According to recent data from the World Bank’s Spring 2025 Economic report, regional growth in Eastern and central Europe is expected to decelerate to an average of just 2.5% for 2025 and 2026. And even if you strip out Russia, the forecast only modestly improves to 3.3%, which is below the 4% average recorded from 2010 to 2019.

As a matter of fact, Economists at the Warsaw School of Economics are predicting that the prospect of overall economic growth in the eastern and central Europe region over the next decade is much less optimistic.

Nevertheless, certain countries like Hungary continue to grow and drive investment into their economy in sectors besides IT – for instance, in manufacturing.

The huge number of technical universities and the suitable business atmosphere compared to Western Europe were the two contributing factors that stimulated the growth of the region’s outsourcing industry from about 2010 to 2019 before the destabilization and short-lived rebound from COVID and ongoing geopolitical tussles.

Southeast Asia

While traditionally known for offshore outsourcing, countries like Vietnam, the Philippines, and Thailand have also emerged as nearshore outsourcing destinations, particularly for businesses in Asia-Pacific and Europe.

These countries have long offered competitive labor costs, a large pool of English-speaking professionals, and a relatively favorable business environment. Tech hubs like Ho Chi Minh City, Manila, and Bangkok cater to a diverse range of industries that include software development, digital marketing, and back-office support services.

The recent report from McKinsey and Grand View Research records a strong close to the region’s 2025 economy, driven by the recruitment process outsourcing (RPO) segment, which dominated the market and accounted for a revenue share of over 25.0% in 2024, with a slight increase last year.

The rapid expansion of industries such as technology, e-commerce, healthcare, and financial services in the region is a significant driver of the segment.

Deep Market Insights also predicts that IT Outsourcing is set to register the highest growth rate in the region over the next few years, with the expected CAGR of its IT outsourcing sector set at 9.06%.

Outsourcing here has notoriously been reputed as cost-motivated, but as economic fortunes in the region compound, automation is expected to force talent pipelines to converge to higher value add that transforms the large and once cheaper talent pool in the region.

See our article on the strategies for cost-effective outsourcing to this region and every other one on this list for helpful tips.

Final Thoughts

In conclusion, this article represents an overview of the countries and regions where founders are actively moving their IT projects to reduce operational costs and move closer to home in response to both socio-economic and geopolitical changes.

As these once emerging markets evolve and mature, we expect them to play an increasingly prominent role in the global outsourcing markets.

All in all, I hope this piece serves as a valuable resource for you if you’re considering available options for nearshore outsourcing and invite you to consider downloading our founder’s guide to software outsourcing if you found this article helpful.

Further, you may wish to also reach out to us today directly through the form attached to the bottom of this page to request a free consultation session if you currently need an outsourcing service provider.

We’ll be glad to hear from you!