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Doing Business in Colombia

Doing business in Colombia is highly attractive for numerous reasons. Colombia, Latin America’s fourth-largest economy, has continuously evolved, showcasing its potential as a hub for business and investment. Colombia has a diverse economy is blessed with rich natural resources, including coal, gold, and coffee. Furthermore, its government has been working diligently to foster a business-friendly environment, enhancing economic stability and growth.

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Statistics About the Economy

Recent statistics portray a vibrant Colombian economy, with key sectors, including services, manufacturing, and agriculture, driving its GDP. Despite facing hurdles like other developing nations, Colombia has demonstrated a resilient economy with a steady growth rate. It is prudent to note that the nation has witnessed an influx of foreign direct investment (FDI), which is a testament to its burgeoning economic landscape. Investors and business entities are encouraged to continually monitor economic trends and statistics to navigate the Colombian market effectively.

Understanding the Colombian Economy

  1. Diverse Economy: Colombia boasts a diverse economy, with key sectors, including services, manufacturing, and agriculture, playing pivotal roles in driving its Gross Domestic Product (GDP).

  2. Resilient Growth: Despite facing challenges common to developing nations, Colombia has consistently demonstrated a resilient economy, maintaining a steady growth rate over the years. This stability provides a favorable environment for business operations and investments.

  3. Foreign Direct Investment (FDI): Colombia has attracted substantial foreign direct investment, showcasing its attractiveness to international investors. The influx of FDI underscores the nation’s expanding economic opportunities and potential.

  4. Robust Service Sector: The service sector significantly contributes to Colombia’s economy, encompassing areas such as finance, tourism, and telecommunications. This sector’s growth reflects the country’s increasing urbanization and modernization.

  5. Manufacturing Hub: Colombia has emerged as a manufacturing hub in Latin America, with industries ranging from automotive to textiles and electronics. The country’s strategic location makes it an ideal base for companies looking to tap into regional markets.

  6. Agricultural Strength: Agriculture remains a fundamental sector, with Colombia being a leading producer of coffee, flowers, and tropical fruits. The nation’s agricultural exports contribute significantly to its economic prosperity.

  7. Trade Agreements: Colombia has entered into various trade agreements, such as the United States-Colombia Trade Promotion Agreement, which has facilitated access to international markets and promoted trade relations.

  8. Infrastructure Development: Ongoing investments in infrastructure, including roads, ports, and airports, are improving logistics and connectivity within the country, making it easier for businesses to transport goods and services.

  9. Government Initiatives: The Colombian government has implemented initiatives to promote entrepreneurship and innovation, providing support and incentives for startups and technology-driven ventures.

As Colombia continues to evolve and diversify its economy, it remains an enticing destination for established businesses and those seeking growth opportunities in Latin America.

Key Statistics on the Colombian Economy

GDP (nominal)$343.2 billion USD
GDP growth (annual)1.7% (projected)
GDP per capita$6,664 USD
Unemployment rate15.00%
Inflation rate10.18% (projected)
Trade balance-$20.4 billion USD
Foreign direct investment (FDI)$15.2 billion USD
Currency (Colombian peso)COP 4,940 per USD
Major exportsOil, coffee, coal, flowers, gold
Major trading partnersUnited States, China, Venezuela, Ecuador, Mexico
Poverty rate21.06% (measured at $3.20 a day PPP)
Human Capital Index (HCI)0.54

Why Companies Should Consider Doing Business in Colombia

graphic showing benefits of doing business in colombia

Economic Opportunities

Colombia presents a wealth of economic opportunities for businesses. The nation has consistently demonstrated robust economic growth in recent years, making it an appealing destination for investors and companies seeking expansion. Its strategic location in South America offers easy access to major global markets, facilitating international trade and commerce. 

Additionally, Colombia boasts abundant natural resources, including oil, coal, minerals, and renewable energy sources like hydroelectric and solar power, which can be advantageous for companies in the energy and mining sectors. Furthermore, the country has entered various free trade agreements, such as the United States-Colombia Trade Promotion Agreement, providing businesses with favorable trade conditions and access to global markets. 

Colombia’s economy’s diversity, encompassing sectors like services, manufacturing, agriculture, and technology, means that companies can find opportunities across a wide spectrum of industries and niches.

Market Advantages

Colombia offers several market advantages that make it an attractive destination for businesses. The nation’s growing middle class signifies an expanding consumer market with increasing purchasing power, creating demand for a wide range of products and services. 

The Colombian government provides various investment incentives to incentivize further foreign investment, including tax breaks, grants, and streamlined processes for starting and operating businesses. Infrastructure development projects are ongoing, improving transportation and logistics and enhancing the ease of business within the country. Colombia’s political environment has become increasingly stable and secure, reducing risks associated with business operations in the region. Moreover, the country boasts a well-educated and skilled workforce, particularly in sectors like technology, engineering, and finance, making it an ideal destination for companies seeking qualified employees. 

The nation’s tourism potential, with diverse landscapes, rich culture, and historical attractions, offers opportunities for companies in the hospitality and tourism sectors. Colombia is also home to a thriving entrepreneurial ecosystem, with numerous startup incubators and accelerators, making it an ideal environment for innovative companies and entrepreneurs. 

Additionally, Colombia’s proximity to neighboring countries allows for easy access to regional markets in South America, creating opportunities for cross-border trade. The country’s focus on sustainability and environmentally friendly practices can attract companies looking to align with these values and tap into the green economy. Lastly, Colombia’s cultural diversity and vibrant cities offer a unique environment for businesses to connect with local communities and consumers.

Business Considerations

While Colombia presents many economic and market advantages, businesses should consider key considerations when establishing operations or investing in the country. Thorough market research is essential to understand the specific dynamics of the Colombian market, consumer preferences, and competition. 

Additionally, navigating regulatory requirements and compliance with local laws and regulations is crucial for ensuring a smooth and legally sound operation. Businesses should be prepared to adapt to local business practices and cultural norms to build solid relationships and partnerships within the Colombian market. By carefully considering these factors and conducting due diligence, companies can position themselves for success in this dynamic and promising business environment.

How to Hire in Colombia

Hiring in Colombia necessitates a clear understanding of the local labor laws and regulations. Any company considering doing business in Colombia needs to take these important employee matters on board. Here are some crucial aspects to consider:

1. Contractual Agreements Employment contracts in Colombia are generally categorized into definite term, indefinite term, and for the duration of a specific project. Understanding these is pivotal in forging beneficial employee-employer relationships.

2. Social Security Contributions Employers are mandated to contribute to the social security of their employees, which includes health, pension, and labor risks.

3. Recruitment Channels Utilize various recruitment channels including online job portals, recruitment agencies, and LinkedIn to tap into the Colombian talent pool.

How to Register a Company

Doing business in Colombia with your own company can be beneficial in limited cases. Registering a company in Colombia involves a series of standardized procedures, outlined as follows:

1. Business Name Start with choosing and registering a unique business name at the Colombian Chamber of Commerce.

2. Legal Structure Determine the most suitable legal structure for your business. The structures can range from simplified shares companies to traditional corporations.

3. Tax Registration Following the company registration, proceed with registering for the national tax registry to acquire a Unique Tax Registration (RUT) number.

How to Get a Work Visa

If you intend to hire international employees as you set out doing business in Colombia, understanding the work visa process is essential. Colombia offers several types of visas, including the Migrant visa (type M) and Visitor visa (type V). The M visa is often used for those looking to work in Colombia, provided they have a formal job offer. It’s advisable to consult with a local legal advisor to facilitate the visa application process and ensure compliance with the regulatory norms.

Employer of Record Solution

Businesses keen on doing business in Colombia with rapid market entry can opt for the Employer of Record (EOR) solution. An EOR is a third-party entity that handles various administrative and legal responsibilities, thereby reducing the intricacies of setting up a new business entity. This includes payroll, tax management, and ensuring compliance with local labor laws, facilitating a hassle-free business expansion.

Here are the five reasons to use an EOR in Colombia:

Compliance and Legal Expertise

  • Colombian labor laws and regulations can be complex and subject to frequent changes.
  • PEO/EOR in Colombia specializes in employment law and compliance, ensuring adherence to local labor and tax regulations.
  • Reduces the risk of legal issues, fines, or penalties related to employment practices.


  • It avoids the expenses and administrative burdens associated with establishing a local entity.
  • Eliminates the need to register with government authorities, handle payroll, and manage benefits.
  • Allows businesses to focus on core operations while reducing operational costs.

Quick Market Entry

  • Enables swift and efficient entry into the Colombian market.
  • Starts hiring local employees and commences operations without delays related to legal entity setup.
  • It is ideal for capitalizing on market opportunities promptly.

Risk Mitigation

  • Assumes legal employer responsibilities for your workforce in Colombia.
  • Handles HR matters, employment contracts, and employee relations.
  • Reduces exposure to employment-related risks, such as labor disputes or wrongful termination claims.

Local Knowledge and Support

  • Possesses a strong local network and knowledge of the Colombian business landscape.
  • Assists with cultural nuances and market insights and supports areas like recruitment and talent acquisition.
  • Enhances the chances of success and effective navigation of the Colombian market.


Doing business in Colombia offers many opportunities, paired with its robust economic landscape and government incentives that cater to business growth. While establishing a business in Colombia, understanding the local market dynamics and regulatory landscape can offer a competitive edge. Whether you register a company or lean towards the efficient Employer of Record solution, arming yourself with the proper knowledge can pave the way for a successful business venture in Colombia’s vibrant economy.

cropped Travis Kliever 1
Article By

Travis Kliever

Travis is a global business development advisor. He has spent the last 14 years supporting business establishment and development in North America, Southeast Asia, and throughout the world. With multiple degrees from the University of Oregon, Travis currently splits his time between the US, and Bali, Indonesia. At RemotePad, Travis writes about remote work, hiring internationally and PEO/EOR business models.