LATAM Expansion Strategy: Dominican Republic vs Colombia vs Honduras
Comparative analysis of our three LATAM markets after 800+ hires. Cost structures, talent pools, cultural considerations, and the surprising winner for different use cases.
Executive Summary
LATAM was supposed to be our "nearshore alternative" to Asia. What we discovered were three distinct markets, each with unique advantages that changed our global strategy.
Dominican Republic
- • Best for: Customer service
- • 350 employees
- • Bilingual excellence
- • Caribbean work culture
Colombia
- • Best for: Technical roles
- • 300 employees
- • Largest talent pool
- • Time zone aligned
Honduras
- • Best for: Cost efficiency
- • 150 employees
- • Hidden gem market
- • Loyal workforce
"Just pick the cheapest Spanish-speaking country" was the advice we got in 2020. Four years and $8M later, we've learned that LATAM isn't a monolith—it's a collection of unique markets with distinct advantages.
Our LATAM operations now employ 800+ people and generate 35% of our global revenue. Here's the unfiltered analysis of what works, what doesn't, and which country you should choose for your expansion.
The Numbers: Side-by-Side Comparison
| Factor | Dominican Republic | Colombia | Honduras |
|---|---|---|---|
| Average Monthly Cost/Employee | $850 | $720 | $580 |
| English Proficiency | Excellent (85%) | Good (70%) | Moderate (60%) |
| Talent Pool Size | 150K qualified | 500K qualified | 50K qualified |
| Annual Attrition | 32% | 28% | 18% |
| Time Zone | EST/CST | EST/CST | CST |
| Infrastructure Reliability | Good | Excellent | Moderate |
| Political Stability | High | Medium | Medium |
Key Insight: Cost isn't everything. DR's higher costs deliver 2.3x better English scores. Honduras's low attrition saves $180K/year per 100 employees. Choose based on your priorities.
Dominican Republic: The Customer Service Powerhouse
Santo Domingo Operation (350 employees)
What Works
- Bilingual talent: True Spanish/English fluency
- US affinity: Baseball, music, family ties
- Service mindset: Tourism-driven economy
- Stable democracy: Consistent policies
- Growing sector: Government support
Challenges
- Power grid: Daily outages without backup
- Cost creep: 10% annual wage inflation
- Limited tech talent: Great for service, not dev
- Island logistics: Equipment shipping delays
- Competition: Many US companies here
4.8/5
Customer Satisfaction
Highest in our network
87%
Bilingual Proficiency
No accent reduction needed
$850
Total Cost/Month
Including all benefits
Our DR Success Formula
Location in Piantini (upscale area) + American-style management + Caribbean work-life balance = 32% attrition vs 45% industry average.
Key Learning: Pay 20% above market for 50% better retention. The math works.
Colombia: The Technical Talent Hub
Bogotá Operation (300 employees)
What Works
- Tech ecosystem: 50K+ developers
- Education quality: Top universities
- Infrastructure: Best in LATAM
- Time zone: Perfect US alignment
- Cost efficiency: 60% savings vs US
Challenges
- English levels: Investment needed
- Bureaucracy: Complex regulations
- Political protests: Occasional disruptions
- Currency volatility: Peso swings
- Formality culture: Slower decisions
Colombia Tech Talent Breakdown
45%
Full-Stack Devs
React, Node.js
25%
Data/Analytics
Python, SQL
20%
DevOps/Cloud
AWS, Azure
10%
Mobile Dev
iOS, Android
Colombia Scaling Strategy
Started with 5 senior developers. They recruited their networks. Now we have 120 technical staff delivering products for Fortune 500 clients. The talent depth is real.
Pro tip: Invest in English training. $200/month per employee returns 3x through expanded client opportunities.
Honduras: The Hidden Gem
San Pedro Sula Operation (150 employees)
What Works
- Cost leader: 40% below DR/Colombia
- Loyalty: 18% attrition (lowest)
- Work ethic: Grateful, dedicated workforce
- Low competition: Few multinationals
- Government support: Tax incentives
Challenges
- Safety concerns: Location matters
- Limited talent pool: 50K qualified
- Infrastructure gaps: Invest in redundancy
- English skills: Significant training needed
- Political instability: Monitor closely
The Honduras Opportunity
Everyone warns about Honduras. We found a dedicated workforce eager for opportunities. With proper security measures and located in business districts, it's been our most pleasant surprise.
$580
Avg Monthly Cost
18%
Annual Attrition
4.2/5
Performance Score
Honduras Success Factors
- 1.Location strategy: Altia Business Park in SPS - secure, modern, reliable
- 2.Transportation: Company shuttles from safe neighborhoods (must-have)
- 3.Local partnerships: Work with established BPOs for shared services
- 4.Career development: Promotion opportunities create fierce loyalty
Cultural Intelligence: What Really Matters
Dominican Republic
- Communication:
Direct, warm, relationship-first. Small talk matters. - Work Style:
Flexible, creative, customer-focused. Rigid processes fail. - Management:
Personal connections crucial. "Jefe" vs team member. - Motivation:
Recognition, family benefits, career growth.
Colombia
- Communication:
Formal, polite, indirect. "Yes" might mean "maybe." - Work Style:
Process-oriented, quality-focused. Documentation important. - Management:
Hierarchical respect. Titles and formality matter. - Motivation:
Stability, learning opportunities, work-life balance.
Honduras
- Communication:
Respectful, eager to please. May not voice concerns. - Work Style:
Hardworking, loyal, follows direction well. - Management:
Appreciates clear structure. Values job security highly. - Motivation:
Stable employment, fair treatment, growth potential.
Universal LATAM Success Factors
- ✓ Invest in relationships before tasks
- ✓ Celebrate achievements publicly
- ✓ Respect family obligations
- ✓ Provide clear career paths
- ✓ Maintain work-life balance
- ✓ Show cultural appreciation
Your LATAM Decision Framework
Choose Dominican Republic If:
- Customer service is your primary need (call centers, support)
- Bilingual (Spanish/English) capability is critical
- You serve US Hispanic markets
- Cultural alignment with US is important
Choose Colombia If:
- You need technical talent (developers, analysts, engineers)
- Scale is important (500K+ talent pool)
- Infrastructure reliability is critical
- You plan to grow beyond 500 employees
Choose Honduras If:
- Cost efficiency is your primary driver
- You need back-office operations (data entry, processing)
- Low attrition is valuable to your model
- You can invest in English training
The Real Numbers: Total Cost to Operate
100-Person Operation Annual Costs
| Cost Category | Dominican Republic | Colombia | Honduras |
|---|---|---|---|
| Salaries & Benefits | $780,000 | $648,000 | $504,000 |
| Facilities & Infrastructure | $156,000 | $180,000 | $96,000 |
| Management Overhead | $84,000 | $84,000 | $72,000 |
| Recruitment & Training | $96,000 | $84,000 | $54,000 |
| Compliance & Legal | $48,000 | $72,000 | $36,000 |
| Total Annual Cost | $1,164,000 | $1,068,000 | $762,000 |
| Cost per employee/year | $11,640 | $10,680 | $7,620 |
Hidden cost alert: Factor in 15-20% currency volatility. We lost $127K in one quarter due to Colombian peso devaluation. Hedge or maintain USD reserves.
LATAM Launch Timeline
From Decision to Operation: 6-Month Journey
Month 1: Market Research & Legal Setup
Entity formation, legal counsel, location scouting
Month 2: Infrastructure & Partnerships
Office lease, IT setup, recruitment partners
Month 3: Leadership Hiring
Country manager, operations lead, HR manager
Month 4: First Wave Recruitment
Hire 20-30 employees, begin training program
Month 5: Pilot Operations
Soft launch with select clients, refine processes
Month 6: Full Production
Scale to 50+ employees, full client migration
Key Takeaways for LATAM Success
1. There's No "Best" Country
DR excels at customer service, Colombia at technical work, Honduras at cost-efficient operations. Match the country to your specific needs.
2. Cultural Fit Trumps Cost Savings
Our Dominican team costs 45% more than Honduras but delivers 2x the customer satisfaction scores. Know what matters for your business.
3. Infrastructure Investment is Mandatory
Budget 25% above office costs for backup power, internet redundancy, and security. Downtime in LATAM is not if, but when.
4. Local Leadership is Non-Negotiable
Every successful LATAM operation needs strong local management. Remote management from the US simply doesn't work. Invest in country leaders.
5. Start Small, Scale Smart
Begin with 20-30 employees, prove the model, then scale. Our Honduras operation started with 15 people and grew organically to 150.
Ready to Expand to LATAM?
Get our complete LATAM expansion playbook with detailed cost models, cultural guides, and step-by-step implementation plans for all three countries.