Debunking 7 common myths about nearshore software development

Nearshore software development is a great choice for companies of any size.

However, there’s still a lot of confusion about what it actually is – and isn’t.

You might hear it’s too expensive, hard to manage, or only works for big companies.

But that’s not actually true. 

And it might stop you from making the best choice for your business.

In this article, we’ll break down 7 of the biggest myths about nearshore software development and show you why they don’t hold up.

Let’s dive in!

Nearshore outsourcing is always more expensive than offshore outsourcing

Cost is one of the biggest concerns when outsourcing software development. 

But, many companies believe nearshore outsourcing is always more expensive than offshore outsourcing. 

And this makes them dismiss it as too costly.

At first glance, hourly rates in offshore regions, like India or the Philippines, indeed are lower than in nearshore hubs. 

Here’s an overview of the average rates by role and region:

Average hourly development rates by role and region

But, that’s not the whole story. The true cost of development goes beyond just hourly wages.

Hiring cheap offshore developers often comes with hidden costs, like:

• More rework due to lower code quality
• Delays caused by communication barriers
• Time zone delays

These costs quickly add up. 

And by the time you solve these issues, you’ll end up spending more than if you hired a high-caliber nearshore team.

Nearshore development gives you a better balance between cost and value because it offers:

• A better fit with your business practices
• Real-time collaboration
• Better cultural and communication fit
• Fewer revisions and higher quality output

All of this translates to lower long-term-costs, even if you have to pay higher hourly rates upfront.

If you look at the total cost of ownership, including productivity, efficiency, and product quality, nearshore outsourcing is often the better choice.

And that’s why you should go for it, too.

Nearshore teams are harder to manage than in-house teams

Another common myth is that nearshore teams are harder to manage than in-house teams. 

The assumption is that if a team isn’t physically in the office, it’s more difficult to ensure high-quality output.

Some other common concerns companies have are:

• Lack of visibility – You might worry about not knowing what the team is working on.
• Different work culture – You may assume they won’t align with your way of working and company culture
• Slow response times – You might fear they won’t be as responsive as your in-house team.

However, if you’re working with an experienced nearshore partner, management isn’t harder – it’s just different.

A well-structured nearshore team from a reliable partner can easily adjust to your processes and give you the same level of collaboration and control as an in-house team.

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And that’s especially true if you hire a dedicated team which, like the name suggests, is fully dedicated to your project.

But, there’s a (small) catch – you need to smoothly integrate your nearshore team to set them up for success.

Here’s what you should do:

• Set clear goals – Define clear and realistic timelines, deliverables, and priorities from the start.
• Use the right collaboration tools – Keep communication clear with Slack, track progress with Jira, and document everything in Confluence or Notion.
• Hold regular check-ins – Hold weekly progress meetings and daily stand-ups to keep development on track.
• Make them part of the team – Involve your nearshore team in strategy discussions, creating product roadmaps, and your company culture.

In short, nearshore teams aren’t harder to manage. 

You just have to hire the right people and you won’t have a problem.

Security and compliance risks are higher with nearshore development

Data security and regulatory compliance are top concerns in software development. 

And a persistent myth is that outsourcing creates higher security and compliance risks.

Companies worry about:

• Data breaches – Sensitive information being leaked or mishandled, resulting in large losses
• Regulatory non-compliance – Failure to meet industry standards and regulations like GDPR, HIPAA, or SOC 2.
• Less oversight – The assumption that external teams won’t follow strict security protocols and best practices.

And there’s a good reason for that. 

In 2024, the average cost of a data breach reached its highest total ever – $4.88 million.

So, it’s understandable why you might worry about security when outsourcing.

But, the risk level mostly depends on the nearshore partner you choose – outsourcing isn’t inherently riskier.

Top nearshore development companies often follow very strict security standards, especially if they work for clients in highly regulated industries like finance or healthcare.

And, since they’re geographically and culturally close to you, chances are they have similar business laws and data protection standards.

GDPR in the European Union is a great example. Here’s what it covers:

source: Emotiv

If you’re EU-based and hire a nearshore team from another EU country, like Croatia or Poland, you won’t have to worry about GDPR compliance, since they follow the same regulations.

Still, when it comes to security, it’s always a good idea to play it safe.

Here’s what you should do to ensure security when outsourcing development:

• Work with certified partners – Make sure your nearshore partners have globally recognized security certifications, like ISO/IEC 27001
• Sign strict NDAs and contracts – Set clear legal protections and confidentiality obligations to keep your data safe.
• Run regular security audits – Schedule routine security audits to check for vulnerabilities and ensure compliance.
• Control access levels – Limit data access with role-based permissions, especially around sensitive user data.

In short, security isn’t about geography – it’s about processes, policies, and accountability.

And if you hire the right team, you’ll minimize any security risks.

Time zone differences create communication issues

One of the biggest myths about nearshore software development is that you still have to deal with time zone differences and communication issues.

In fact, the opposite is true.

Nearshore means a time zone difference of 3 hours or less between you and the team you hire.

Let’s take Europe as an example.

If you’re based in Europe and hire a nearshore team from another European country, they’ll be a maximum of 2 hours ahead of you.

source: Wikimedia Commons

You’ll have plenty of overlapping work hours, which makes collaboration easy and efficient.

You won’t have to worry about:

• Long response times
• Finding meeting slots
• No real-time collaboration

Minimal time zone differences mean less waiting and better collaboration.

And that translates to faster project delivery, which is why nearshore development is a great option.

Nearshore development is only suitable for small and non-critical projects

Many assume nearshore development, and outsourcing in general, is only for simple, non-critical projects.

Investopedia notes in their definition of outsourcing that “outsourcing is also used by companies to focus on the core aspects of the business, spinning off the less critical operations to outside organizations.”

But, in truth, huge enterprises and companies in tightly regulated industries all rely on outsourcing to build mission-critical software.

The myth that nearshore teams can’t handle large-scale projects comes from outdated views on outsourcing, where some believe they:

• Lack the experience and expertise to build enterprise-grade software
• Can’t scale quickly enough to meet demand
• Aren’t suited for highly regulated industries like finance and healthcare

But the truth is, nearshore teams successfully build and maintain thousands of high-impact solutions across a wide range of industries.

One great example is our work with Metaswitch, where we helped them build some of the best unified communications (UC) applications on the market.

So, it’s definitely a mistake to think nearshore teams can only handle small projects – in reality, they often build the software that powers global giants.

But, we understand your hesitation, especially if you’re a huge enterprise.

If you want to make sure your nearshore team can handle a critical project, you need to:

• Work with industry experts – Check if they’ve got previous experience in your industry.
• Make sure they can scale – Your nearshore team should be able to grow as your product does and your needs evolve.
• Look for cloud and DevOps expertise – A strong infrastructure is key to mission-critical apps.
• Start small, then scale – Run a pilot project and test their capabilities before you commit long-term.

In short, nearshore development isn’t just for small projects.

It’s a great fit for any project, no matter the size.

Nearshore outsourcing delivers lower quality than in-house teams

Another huge myth is that outsourcing means sacrificing quality.

Some companies don’t want to outsource development because they worry about:

• Skill levels
• Quality control
• Lower development standards

And the reality? 

Nearshore teams are just as good, and sometimes even better, than in-house teams.

Software quality isn’t about location. It’s about having the right expertise, processes, and high quality standards.

You just need to choose the right company to partner with. Here’s how you do it:

• Review their portfolio and case studies – Check if they’ve done enterprise-grade projects and have experience building complex products.
• Evaluate their tech stack – Make sure they’ve got experience with the technologies you’re looking for.
• Check their reviews – Read unbiased, third-party reviews on sites like G2 and Clutch to find any red flags.
• Review their development process – Ensure they follow software development best practices before you hire them.

If you find a good fit, you’ll get the right team, with the right expertise, at the right price.

And that’s what nearshore development is all about.

Nearshore development is only for big businesses

Another myth is that only big companies can afford to hire a nearshore team.

This is because of several misconceptions, like:

• Nearshore teams are too expensive for small businesses
• Startups need in-house developers to build their core product
• Outsourcing only works for companies with large IT budgets

None of these are true.

In fact, nearshore development allows businesses of any type and size to access world-class talent without the overhead of hiring an in-house team.

Outsourcing development can help you cut development costs by up to 53%.

source: Existek

When you outsource, you avoid or minimize costs like:

• Recruitment and onboarding costs
• Training costs
• Employee benefits
• Rent and office maintenance costs

And these savings are huge, especially for small and medium enterprises (SMEs).

Nearshore development provides the expertise and flexibility that growing companies need, without massive overhead.

It’s a great choice if you want high-quality software without breaking the bank.

Nearshore software development myths: FAQs

Want a reliable nearshore development partner?

Are you interested in outsourcing development but can’t seem to find a company that’s the right fit?

Well, you’re in the right place.

We’re a high-caliber, EU-based software development company with 12+ years of experience building complex software solutions for a wide range of industries.

And we’re always on the lookout for new and challenging projects – you name it, we can build it.

If you want to learn more, feel free to reach out and our team will be happy to answer all of your questions.