Colombia has slowly been emerging as one of the most attractive countries for trade in Latin America. The combination of a stable government, strategic free-trade agreements, sound economic policies, and declining insecurity have helped the country to establish itself as an economic leader in the Latin American region. As a result, a growing tide of foreign investors are interested in doing business in Colombia.
Colombia has achieved significant growth through foreign direct investment in the oil and mining sectors in recent years, as well as emerging as one of Latin America’s prime destination for start-ups and foreign entrepreneurs. A tremendous variation in investment opportunities makes thorough, industry-specific market research and in-depth analysis of the investment landscape crucial. With that in mind, many potential investors benefit from the in-depth understanding of doing business in Colombia that a locally-based partner can provide.
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Doing Business in Colombia: Employment Law
Colombian employment laws highly favor employees regardless of the context. Full background checks should always be completed before hiring at any level, and employment contracts should be carefully structured with the advice of qualified lawyers. The Colombian welfare system does not provide unemployment benefits, and any organization that fires an employee is liable to cover their costs if a complaint about unjustified dismissal is lodged. Outsourcing the recruitment process to an employment agency is a cost-effective way of avoiding potential and unnecessary legal and financial burdens of doing business in Colombia.
Cash Economy
Informality remains a driving force of the Colombian economy, and a significant proportion of the population does not have a bank account or own credit cards. Meanwhile, Colombian interest rates are high, making it very expensive for Colombians to secure bank loans. Both factors should be taken into account when developing a business model.
Language Barrier
Unlike some other Latin American countries, English is not widely spoken in Colombia, making a locally-based partner critical to the success of anyone who wants to invest that doesn’t speak Spanish. Because while English might be the official language for doing business in Colombia, Spanish helps build understanding and strong relationships.
Doing Business in Colombia: Local Customs
Colombians are known for being good negotiators and doing deals in the country often involves significant bartering and exchange, so the phrase “non-negotiable” is not always well-understood. Being aware of such quirks and customs can be essential to striking a good deal and doing business in Colombia.
Biz Latin Hub can assist you doing business in Colombia
At Biz Latin Hub, our multilingual team of corporate support specialists has the knowledge and expertise to support you doing business in Colombia. Our comprehensive portfolio of services, including company formation, accounting, tax advisory, and hiring & PEO, means we can provide tailored packages of integrated back-office solutions and be your single point of contact for doing business in Colombia, or any of the other 17 markets around Latin America and the Caribbean where we have local teams in place.
Contact us now to discuss how we can support your business.
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