A new $100,000 surcharge on H-1B visas is sending shockwaves through U.S. employers already struggling to fill tech roles. The Trump administration's policy change, layered on top of rising USCIS filing fees, has turned skilled-worker sponsorship into a six-figure gamble. For many firms, it's a breaking point. Legal costs are climbing just as burnout and labor shortages erode the domestic workforce.
Instead of navigating red tape and unpredictable lotteries, companies are looking south to Latin America for tech specialists. With Mexico now the U.S.' largest trading partner, and nearshoring spreading from manufacturing to digital services, LatAm is becoming a strategic extension of the North American labor market.
The steep rise in visa fees is only a symptom of a deeper issue: the U.S. tech sector is seeing a talent deficit. McKinsey informed that 60% of companies reported that a lack of tech talent is stalling transformation. Moreover, Gallup reports workplace well-being has tumbled, with only half of employees saying they're thriving and stress reaching record levels. Additionally, companies are now paying up to $200,000 premiums to secure AI technology professionals.
Eugene Malobrodsky, managing partner at One Way Ventures, told Crunchbase News: "For somebody like OpenAI, Anthropic, Google or Microsoft – $100,000 is what they might spend on soap in their office ... "Do I think that the whole H1-B program needed to be reformed? Absolutely," he said. "But this is not the way to reform it."
To overcome these escalating issues, some companies are pivoting south. Building teams in Mexico, Colombia, and Brazil, for instance, offers operational stability, real-time collaboration, cost visibility, and freedom from U.S. visa bureaucracy, even if payroll and compliance still vary across jurisdictions. With Mexico now the U.S.' number one trading partner, LatAm isn't just filling talent gaps, it's starting to reshape North American supply chains.
Average tech wages in LatAm are about 39% of U.S. levels, giving employers meaningful cost savings without sacrificing skill. And while the pay gap alone is compelling, it's the scale and sophistication of the region's talent that's really the selling point.
The three largest LatAm tech talent markets are Mexico City, São Paulo and Santiago, home to R&D centers and thriving startup economies backed by local universities and accelerators.
Monterrey, Mexico, has become one of the country's most important tech hubs, powered by a mix of university talent and cross-border investment. In the second quarter of 2025, the state pulled in $3.03 billion in foreign direct investment—about 8.8% of Mexico's total and up 31.6% year-on-year, according to the National Registry of Foreign Investments. Much of that money came from the U.S., reinforcing Monterrey's growing role as the northern anchor of the Texas–Mexico innovation corridor.
Further south, Bogotá now counts over 110,000 technology professionals, a 30% increase in just five years. The city has made a name for itself by offering strong educational pipelines and competitive salaries. Colombia's ongoing investment in digital-skills education is proof of how sustained public and private investment can reshape an economy in under a decade.
Additionally, cities such as Quito boast growing tech ecosystems. Source Meridian, a multinational technology company specializing in life sciences software development, announced this year its new office in Ecuador, which comes at a crucial time. The company specializes in software solutions for the healthcare sector, an area with significant potential in the country.
Beyond cost and time-zone alignment, AI-enabled nearshore teams are compressing delivery timelines. Companies like Gorilla Logic show how this model works in practice, with hubs across the U.S., Colombia, Mexico, and Costa Rica linking engineering talent across borders. It's a snapshot of how U.S. firms are building regional operations that are integrated, data-driven, and capable of real-time collaboration that goes far beyond traditional outsourcing.
Meanwhile, the U.S. appears to be retreating from long-term workforce investment. In March, the Department of Education reduced its workforce by nearly 50%, and the administration withheld $6.9 billion in federal K–12 education funding. Cuts like these could imperil the domestic pipeline that once powered the U.S. technology industry.
On the other hand, Latin America's tech momentum isn't happening by chance—it's the result of deliberate public investment. Governments are beginning to treat digital training as a national export. In Colombia, for instance, the ICT Ministry's new AvanzaTEC 2025 program has opened registration to train 35,000 people in AI and digital skills. Brazil's SENAI-SP has teamed up with ServiceNow to deliver large-scale AI upskilling across industrial sectors. And in Chile, the long-running Digital Talent for Chile initiative has already granted 30,000 scholarships; nearly eight in ten graduates land jobs within six months, and their incomes jump by almost 50%, according to program data.
Companies are starting to notice the difference. José María Rancano, managing director at Slalom Latin America, told Mexico Business News, "Our clients consistently highlight the strategic mindset of our Latin American teams, noting their ability to challenge business assumptions and connect technology initiatives to measurable outcomes."
These programs represent one of the most rapidly expanding public-private efforts in tech workforce development in the Western Hemisphere, showing a significant shift toward positioning LatAm as a nearshoring talent powerhouse.
Obstacles still facing the region
Yet the region's nearshoring boom still faces hurdles that could slow its climb, from patchy infrastructure to policy fragmentation and volatile currencies.
Connectivity remains the region's biggest equalizer. Fixed broadband subscriptions grew by 5.9% in 2024, and fiber-to-the-home connections have increased at a 41.5% 10-year CAGR. Yet this rollout is uneven. Broadband reach and network reliability still vary greatly between metropolitan centers and smaller cities, meaning remote teams can't always rely on stable connections.
This means digital inequality is still stark. Around 18% of Latin American 15-year-olds from low-income backgrounds lack internet access at home and at school, compared to less than 2% across OECD countries. Around 24% also lack access to a computer or tablet, limiting digital readiness from the start.
Regulatory fragmentation poses another obstacle. Each country operates under its own mix of labor codes, tax rules, and data privacy standards. For instance, Argentina, Bermuda, Brazil and Paraguay have enacted data protection laws, but Bolivia, Chile, and Colombia are pending legislation. For employers, that means compliance isn't one checklist but several.
Then there's the question of economic stability. Brazil's benchmark interest rate at about 15% continues to restrict credit and investment. In Argentina, repeated peso devaluations and capital controls have eroded compensation stability for employees paid in local currency. For U.S. firms, these swings translate directly into payroll volatility and unpredictable budgeting.
Therefore, the logistics of paying cross-border teams are being rethought. Traditionally, U.S. firms face delays and banking hurdles when sending salaries to contractors across LatAm, an obstacle that often erases the cost advantages of nearshoring. Remote workers in Argentina even got creative with sending payments through crypto wallets to avoid restrictions on the U.S. dollar. These sorts of challenges are spurring new fintech infrastructure.
Platforms such as MiDi allow companies to send U.S. dollar payments directly to Latin American workers' U.S.-based accounts. "We want to be the account that centralizes the financial life of remote workers," Marcelino Bellosta, Chairman of MiDI, told Contxto. Y-Combinator backed Coba and Remitly are other examples. Innovations like these point to progress, but they don't erase the broader challenges.
The region's challenges, of course, don't negate its promise, and U.S. immigration policy toward foreign tech talent could help spur even more growth in LatAm's nearshoring sector.
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