Solving LatAm Freelancer Taxes: Tumo’s Joaquin Panos on Remote Work, USD Payments & Global Compliance | Nearshore Cafe

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**Host:** Welcome everyone to another episode of the Nearshore Cafe podcast. We’re in for a treat today, you guys, because we’re going to go into a region we haven’t talked about yet, and that’s the Caribbean. It’s all part of Latin America, but we’re talking nearshoring to the Caribbean, in particular, the DR, Dominican Republic. And we’ve got a specialist today on this very region, a guy who’s been nearshoring for the last five to six years for a company called Blue Coding. And it’s my pleasure to welcome Jared Andreason, VP of Sales for Blue Coding, to the show today. And before we say hi to Jared, special thanks to our sponsor, Plug Technologies, plug.te. A great way to find software engineers all over Latin America for US companies. Jared, excited to have you! Thanks for coming.

**Jared:** Yeah, man, thanks for having me here. Absolutely.

**Host:** So, let’s just get it rolling. The Caribbean, I think that’s what I’ve got a lot of curiosity on. I think a lot of our audience, you know, when nearshoring, I think it’s really taken off, especially this last decade. Even more so, every year it gets hotter. But Mexico, Argentina, and Colombia are usually the countries that come up a lot. Can you just tell us about the DR and what does that look like? How did you guys get started there? I’d love to hear that story.

**Jared:** Yeah, so our CEO, David, is actually, well, I wouldn’t say he’s from the DR; he lives in the DR. He’s originally from Venezuela, moved to the Dominican Republic, in a city in about the middle of the country called Santiago. The DR is not a massive island or country, but it has a couple of really big cities, one being Santo Domingo, the other being Santiago. And I would say you would find the majority of technology in those two cities.

**Host:** Cool. How did you guys settle on the DR? There are so many countries, places to look at in Latin America. How did that make the list? How did you guys get through this?

**Jared:** Yeah, well, the way Blue Coding started 10 years ago was it was basically David with his friends who were software developers. He was a Ruby on Rails engineer, and then he started working for US companies, got some of his friends to join, and it kind of naturally expanded from there. So it wasn’t really intentional, but the DR has a pretty substantial population of software engineers. Everybody speaks really good English, great tech skills, a variety of different tech stacks, so it’s a really good place to nearshore.

**Host:** Were you guys one of the first ones in the DR? Was there already an existing, kind of, validated marketplace, like Microsoft was there, or somebody else?

**Jared:** There are a lot of small companies in the DR, a lot of local companies that employ engineers. But I would say in the nearshoring segment, we probably have the majority share of the Dominican Republic when it comes to connecting engineers to US companies. So, to be honest with you, I don’t know the answer to that question if there are a lot of other large organizations. Typically, the DR was used for a lot of call centers, not necessarily engineers, but there’s a very heavy presence of call centers in the DR.

**Host:** Yeah, I was going to say, I’ve actually employed a few recruiters from the DR, but never engineers. So this is a whole new thing for me. English, yeah, I can definitely, definitely testify to that. How does it maybe compare? I think Puerto Rico, especially for tax purposes, has been on everybody’s radar. How does that compare talent-wise, PR versus DR?

**Jared:** So I’m definitely more familiar with the DR market, but the talent in general in the Dominican Republic, I would probably say, is top-notch. I say that because of a few different reasons. One, a lot of people start their careers in the call centers, whether they’re developers or not. That’s a major employer there, and so they learn really good English, how to talk to US customers, so they have a really good base going in. There are also some really good universities; people are highly educated, and ultimately that leads to a better experience for the customer. So there are a lot of large organizations that are entering the Dominican Republic in one capacity or another. It’s also kind of become a hot spot for people from the US that are moving. There are a lot of tax incentives from the government to move to the Dominican Republic, a lot of good food. It’s very warm there. There are beaches and cities, and everything’s modern. And I think Latin America in general, and the Caribbean, the infrastructure has gotten so much better over the past 10 or 20 years that you don’t really notice anything different than you do from the States.

**Host:** Interesting, interesting. Yeah, I was going to say, I’d imagine there are probably myths and misconceived notions about some of these places. What do people tend to think about when you tell them that you’ve got a team in the DR? And then, what do you have to convince them of, maybe, about how they’re thinking about it?

**Jared:** I think some of the biggest questions I get are around English level. For example, if you’re speaking to a CTO at a software company in the US, they’re really curious to know about a few things. One is English level. Two is infrastructure, reliable internet. And then three is really any security concerns, making sure that their organizations are safe working with external sources. I would say those are the main questions. And, you know, it’s really country by country in Latin America, but the DR in general is a really good bet for nearshore.

**Host:** Yeah, I was going to say, you know, we’ve seen a couple of years ago the hurricanes to Puerto Rico. Haiti’s obviously had a lot of devastation. And, you know, sometimes, at least in my experience in nearshoring, sometimes it’s kind of looked upon as like one place, right? Like, you know, they might see like guerrilla warfare in some place, and then, “Well, you know, Argentina and this country are different.” Does the DR often get kind of wrapped into the, you know, “Will the internet go out because of a tropical storm? Will this happen?” Can you talk about that?

**Jared:** So my understanding, based on people I’ve spoken with in the DR and engineers, is the DR is a little more shielded from hurricanes than Puerto Rico. They don’t typically take the brunt of it. Now, I’ve been to the DR, spent some time there. I’ve never noticed any guerrilla groups or cartels or anyone operating throughout the country. But it’s a really nice place: modern infrastructure, modern buildings. There are a lot of really cool local Colonial zones. I had a really good time there.

**Host:** Yeah, tell us about your travels there. What did you do off-time?

**Jared:** Yeah, kind of a funny story. So I would say that my Spanish is great. Okay, I can get by, I can order food, I can do some of the basic stuff. But I actually stayed in the heart of Santo Domingo. It’s a pretty congested city. I definitely stood out. Everybody was super nice to me. Some people even wanted to take pictures. I think where I stayed was a little bit unique, being sort of in central Santo Domingo, but it was a really good time. I was able to walk around freely, take cabs everywhere, Ubers, ate my share of local food. The, I forget the hotel I stayed at, it was called like a Hotel Aladino or something, but they had a really nice restaurant and bar downstairs. And I can tell you unequivocally, I had the best steak of my life in that hotel bar. Really. And I’ve told my wife about this, I’ve told other people about this, but I think I stayed at that hotel for four or five days specifically, and I had the same item every day. And the funny story about that is I went in there on day four to order it again, and the price had gone up. So I think I specifically caused the price to go up on the steak at the hotel in Santo Domingo.

**Host:** That’s great. You’re impacting a local supply and demand market.

**Jared:** I am. I am. I changed the market on the steak in Santo Domingo.

**Host:** You are, you are a market mover. I knew that from the first time I met you.

**Jared:** That’s right.

**Host:** So, steak, so we know the steak is good there. Any particular local food that you’d call out for anybody who’s never been before?

**Jared:** Yeah, shrimp and patacones. Sounds a little weird in practice. It’s amazing. I can’t attest to anything else, but I had a few drinks that night, and I can tell you that shrimp and patacones, they hit the spot. They hit this… Yeah, I don’t know, we ate it numerous different places. Everything was really good, but I can tell you that shrimp and patacones after four or five margaritas is a good choice.

**Host:** I like it. Weather-wise, this seems to fit the characteristic of the tropics, the Caribbean: nice, warm, calm weather.

**Jared:** Yeah, yeah. Did you make it to the beaches too?

**Host:** A little bit.

**Jared:** Not a ton. It was kind of a working trip, and then, you know, going out and eating and having drinks. But yeah, it’s very warm. I think I was there in August, which made it extremely warm, but I adapted pretty quick. No large issues. I didn’t pass out anywhere, so yeah, it was all good.

**Host:** Yeah, so one of the preconceived notions that I’ve seen is in these really hot places, you often think about siestas, right? So maybe the workforce is working in the morning, they eat their big lunch, they take their nap in the heat of the day, and then get back to it. Does that figure there, or not at all?

**Jared:** I don’t notice it with any of the people I work with. As I get older, I think I take more siestas than most people, but it could just be like passing out on the couch for 10 minutes. But we don’t notice it, our clients don’t notice it. I judge everything by Slack; that’s how we communicate, and so when I see green circles, I’m happy. But I don’t notice any large siestas or people just chilling out for half the day.

**Host:** That’s great. That’s great. Speaking of Slack, what kind of infrastructure are you guys using? Tools, things like that?

**Jared:** Slack, Jira, email, basic communication tools. Daily standups. People have weekly cultural meetings where they kind of share what they’ve done for the week, any cool plans that they have. We’re very connected as a team. I know people’s kids’ names and, you know, what their hopes and dreams are. So it was an experience for me coming from a completely different industry, not being super aware of everything going on in Latin America, to interacting with people from there on a daily basis. I would say 95% of our staff is from Latin America or the Caribbean, so it’s been a learning experience for me also. What I thought would be very different turned out to be very much the same. Our engineers and admin staff know American culture better than I do. They’re up on the trends way more than I am. They know our celebrities better than I do. So it was different, but not as much as you’d think it would. I think it’s a preconceived notion here in the US that Latin America or the Caribbean isn’t similar to North America, but the culture…

**Host:** Yeah, I agree. I think, you know, I almost divide it into these three groups: Central, South America, and then the Caribbean. And I’d probably make the case that what you’re changing is that the Caribbean is for tourism, right? The Caribbean is for that seven-day island cruise, and, you know, you stop in the Bahamas. I just got back from there. So, if you don’t mind just talking a little more about that, like maybe the transformation you’ve seen, you know, year by year, of economies maybe shifting from all in on tourism to less and less, and moving into exportation of services.

**Jared:** So I think Latin America has changed over the years. There were a lot of countries, you know, in Mexico, that mainly relied on tourism, the same with the DR and more of those beachy countries, I would say. But tech in Latin America has really exploded over the last 10 years, specifically the last five. You can look up studies everywhere on the internet and, you know, see how much growth there is. I think, and don’t quote me on this, but I think the Dominican Republic has the fastest-growing GDP in the world right now.

**Host:** Really? Wow! Growing that quick.

**Jared:** So your chance to snag an affordable house are slowly going away.

**Host:** Wow, interesting, interesting. When you’re talking to clients about the DR, is this usually the first time they’ve thought about the DR, or are you steering them to the DR, or were they already thinking about it and you’re facilitating that?

**Jared:** I try not to steer any of our clients specifically to a certain country. Now, every now and then, I will run into a situation where a client says, “Hey, I want to hire 20 senior Ruby on Rails devs in Costa Rica.” Okay, great. That sounds nice in practice, but Costa Rica is not a massive country. There might be only 20 senior Ruby on Rails developers in Costa Rica. So, yeah, San Jose is great. It would be nice to, you know, build a team there or an office. But I think as an organization looking to hire developers or tech people in Latin America, it’s really best to sort of open your vision up to every country, understand the nuances, understand the tax implications, understand the people that are there, and what their culture is like. We have a lot of our team members on our admin staff. Probably 25% of them are from Argentina, and the culture between Argentina and the States is so similar. The English level is so good. Even speaking with my internal team members, some of them have zero accent. So Argentina is another one of those countries that is growing substantially.

**Host:** Now, Jared, you’re in a favorable position. You’ve built a really nice brand with Blue Coding. Companies are finding you, especially CTOs, right? Especially CTOs. Can you talk about what some of these conversations look like, what they feel like? We’ve got a lot of different CTOs listening to this call, and, you know, I’m sure there’s just a lot of curiosity lately. Like, what should I be thinking about if I’m a CTO and I’m doing this for the first time ever? Can you kind of get us inside the room? What do those look like?

**Jared:** I think traditionally, a lot of organizations have had experience with offshore teams, whether that’s India or Pakistan, or maybe even Eastern Europe or the Philippines. And, you know, when COVID hit, nearshoring and Latin America in general got a lot more appeal: same time zone, similar culture, English-speaking countries, or at least most of them. And so the conversation is really education-based. They want to understand the different tech stacks available in Latin America, what kind of engineers they could hire, the costs associated with that, how much of a savings it is versus North America. So there are a lot of standard educational questions that come up in those meetings. I think our target market on education primarily is CTOs. We develop our content in a very educational way. We talk about locations, rates, everything you could expect with working with Latin American engineers. So conversations really flow effortlessly. CTOs or executives of companies are trying to educate themselves and see if it’s a good decision for them to move into Latin America.

**Host:** What usually comes up as most common, for lack of a better word, concerns? You know, what are they worried about? What are they concerned about?

**Jared:** Yeah, I think everybody’s first question is price: What are my cost savings versus working with North America? And then it really transitions down into security, making sure that people are working from VPNs, if they need some sort of cloud environment to work in, virtual desktops, any internal policies that we have. And once you really get past those barriers, then it boils down to choosing the best country for you to work in. A lot of North American companies now have really taken culture and sustainability into account, so they want their Latin American team members to feel part of the team. They want to go there, they want those team members coming here, even if it’s just for a short meeting or company events. So I think a lot of those questions come into play, but those are really the main concerns that I see, and then obviously, availability of tech stacks and finding the right skills.

**Host:** Yeah, well, Blue Coding has really set a nice standard for the industry on how to grow, how to do it successfully. Can you talk a little more about that journey of scaling? You know, maybe where you guys were a few years ago, how this has come about, challenges, things like that?

**Jared:** Yeah, plenty of challenges. Like I said, 10 years ago, David, our CEO—awesome guy, I hope you get to meet him—he started this basically getting some of his friends positions at different companies. And then from there, they had a very small marketing and sales team of one person, maybe a few admin team members, and, you know, up until about five years ago, the company was very small. I kind of started my career after the Navy, manufacturing, started doing sales part-time, got connected with David, and pre-COVID, there wasn’t as much interest in Latin America as there is now. So we started putting out a lot of educational articles, SEO content, trying to drive people to the website to learn more about nearshoring, Blue Coding specifically, and just really tried to approach it from a salesy approach, helping people understand the talent in Latin America. So when COVID hit, I want to say March of 2020, we saw a huge amount of demand for companies looking to hire Latin American developers, different roles too: PMs, QA, really anything ancillary of development. So that kind of kickstarted our growth. And then really from 2020 till now, we’ve doubled in size almost every year.

**Host:** That’s awesome. Can you talk about those two different use cases? The use case of, “Hey, we’re already outsourcing to Asia, but now we want to move to Latin America,” and the other case of, “Normally I’d have my team in the States, but now they’re working from home, I might as well move them to Latin America.” Can you talk about each of those separately and how you approach those?

**Jared:** Yeah, it’s interesting. For the companies that typically have experience with offshore, I have some of that experience also. I’ve worked with offshore engineers; many of them are great. The big disconnect between North America and offshore happens because of the time zone. So, let’s say you’re a CTO at a $100 million company, you work all day, you’re building applications, you’re checking your code, checking on your developers. And then, you know, you have a different team working when you’re about to go to bed, and so you have to pop over to your laptop and check up on how they’re doing, what releases were. And a lot of people are trying to find alternatives to that. Now, even internally here, we have some team members that are from Asia. They work on different products internally; they’re great engineers. But a lot of companies are looking to work between Pacific and Eastern and find the right team from a technology standpoint to get that work done. So that’s really how Latin America comes into play, because it checks so many boxes. The other use case… what was the other use case you were talking about?

**Host:** Other use case, at least for us, we’ve seen companies that maybe had their engineers in San Francisco or New York. Then COVID hit, everybody’s working from their houses.

**Jared:** Yeah, huh. You know, this is interesting. I think there are a couple different contributing factors to that. In 2021, in 2020, a lot of large tech companies were doing a ton of development. They had US team members, but the competition was so fierce for engineers in North America that they began to start looking elsewhere, whether that was offshore, nearshore, whatever that may be. And it created sort of a bidding war within North America. And so you would have senior developers in Silicon Valley making $300,000-plus dollars a year. If you’re a scaling company with a couple million dollars in revenue, you can’t sustain that. Even if you have venture capital or an influx of money, it doesn’t always make sense to pay a team of 30 developers hundreds of thousands of dollars apiece. Latin America in general, based on what we found, can be anywhere from 30 to 50% more affordable, and that appeals to companies that are looking to scale their development teams. So that’s really the other major use case. And many times it’s a split: they’ll have a US or North American engineering team, and they’re looking to add more team members from Latin America. And it really blends, you know, technical excellence with culture, and a lot of companies have found that’s the right fit.

**Host:** You know, another maybe preconceived notion that we’ve seen is, “The best engineers are in the States; the engineers outside the States will do the stuff that we don’t want to bog the best engineers down with.” Fact or fiction? Can you talk more about that?

**Jared:** I would say it’s everything in life, any profession, it all depends on the person. It doesn’t matter where you’re from. You can be the most educated person in the world, you can be extremely intelligent, but you have to apply yourself. You have to show up every day. You have to do a good job. So whether it’s, you know, onshore, offshore, nearshore, I really don’t think it matters. It’s about finding the right person that wants to build the right product for you. There has to be interest on the developer side, there has to be interest on the client side. You can’t just hire somebody and say, “Hey, build me this.” The best work always gets done when you’re super connected with the product and you care about it. That’s just my own personal life experience. I don’t think that if I was making the decision to hire someone from the US or India or Latin America, the question would really come into play of, “Is this person better because of where they’re located?” It would always be more about, “Let’s see your background. Let’s see what you’ve done in the past. What’s your education? Have you invested in yourself?” I think those are all questions that you have to ask when trying to find the right engineer.

**Host:** Yeah, yeah. Side question I forgot to ask earlier. Often, hardware comes up: you know, shipping, customs, all that. What does that look like in the DR?

**Jared:** Very similar to all the Latin American countries. My personal experience with it is some developers already have the right equipment. Some companies want to standardize and specify which equipment you should use, and they will send it to you. And then other companies would like companies like Blue Coding to fulfill that equipment. Be able to find that equipment and then ship it to the developer and take care of all that. Every country is different; sometimes the prices are different. I think recently we bought a very high-end machine from Brazil, and it was probably two or three times the cost we could find it in the US. But it just depends on the country. Ultimately, every situation is different; then you just have to find the best way to make it work for all parties.

**Host:** Yeah. So you can’t just order on Amazon. There are certain complexities you’ve got to think about to get the right hardware to the right person.

**Jared:** Well, I mean, we have Amazon—and I don’t say ‘we,’ but the Dominican Republic has Amazon. I send my team members gift cards to Amazon all the time. I don’t know if it’s as quick as it is here in the States. I think last week I ordered something, and it was at my door before I could have actually gone to the store to pick it up, which is mind-blowing to me now. But yeah, I mean, I think that Amazon has integrated into Latin America; it just might not be as fast as the US.

**Host:** Yeah, yeah. I remember years past, I think I was on my way to Argentina, and I made sure to bring plenty of hardware with me because it was actually cheaper for me to fly and bring it in a bag than ship it.

**Jared:** Have you shipped something to Argentina before?

**Host:** I have.

**Jared:** Yeah, it’s going to cost you your entire checking account.

**Host:** Yeah, yeah. Funny enough, I was even trying to get some textbooks shipped to Argentina, and they were effectively held hostage in customs for a while.

**Jared:** Yeah, so Argentina is a really unique place when it comes to that because even the airport taxes are through the roof. So if you’re ever looking to fly to Argentina, make sure you’ve got enough cash. And it’s a long flight too, here from the States.

**Host:** Yeah, yeah. You’re at the bottom of the world. You’re going to Antarctica, basically.

**Jared:** That’s right, that’s right, that’s right.

**Host:** I also wanted to ask you, Jared, just because you guys have had some really nice growth. We’ve seen more nearshore companies come up than ever before, a little bit of a gold rush, maybe. You know, this is mortgage brokers in 2006, and, you know, you see this kind of bubble. Any dos or don’ts, advice you have for the nearshore startup companies?

**Jared:** Yeah, it’s funny that you mention that because when I started in this industry, I swear there were only 10 companies that existed that did this type of work. And now if you Google ‘hire Latin American developers’ or ‘hire somebody in Mexico,’ there’s probably a thousand different results that will come up. What I would tell anybody looking to get into this industry is to do it the right way. Understand, travel to the countries that you’re hiring from. Get to know the people, the local culture. Understand what engineers want, understand what customers want. And then try and find a way to make it fit. As you mentioned, I think there is a little bit of a gold rush on Latin America now, which sometimes makes people think they can just start a company, and it’s going to be an instant success. But it doesn’t work that way in practice. There’s a lot of work that goes in behind the scenes and touch points and check-ins with developers and clients to kind of make this all work seamlessly. So by all means, I can handle more competition. If you think you’re ready, go for it.

**Host:** Yeah, good, good. Well, this is great. This has been really educational for me. You know, as I mentioned, this is the Nearshore Cafe podcast. We talk about Latin America a lot. We don’t really talk about the Caribbean. This is a really interesting market that you’ve tapped into. I think our audience learned a lot too. So really appreciate you being here, Jared. Thanks again to our sponsor, Plug Technologies, plug.te, for sponsoring the show. A great way to find engineers, as we’re talking about, all throughout Latin America. Jared, thanks again for your time. Really great having you on today.

**Jared:** Yeah, no worries. Thanks so much for having me.

**Host:** Absolutely. Until next time, we’ll see you on the Nearshore Cafe podcast!