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Colombia PEO (Professional Employer Organization)

Hiring employees in Colombia through an international Professional Employer Organization (PEO) can be an advantageous approach for businesses, particularly those looking to establish a presence in the country without setting up a legal entity. A PEO manages employment compliance, payroll, and benefits, enabling companies to focus on their core operations. This simplifies the hiring process and ensures adherence to Colombian labor laws, which might be unfamiliar to foreign businesses. Read on to find out more about Colombia PEOs

Key Takeaways

  • A Professional Employer Organization (PEO) in Colombia is a company that manages HR and administrative tasks for other businesses.
  • Colombia PEOs offer numerous benefits,including compliance with local regulations, efficient payroll administration, and ease of business expansion.
  • Disadvantages include a potential lack of control over HR matters and the need for due diligence in choosing a PEO.
  • Horizons, Ongresso, Globedesk, Globalization Partners, and Atlas are among the top PEOs in Colombia, thanks to their local expertise, comprehensive services, and robust technological platforms.

What is a Colombia PEO?

A Professional Employer Organization (PEO) in Colombia is an entity that provides comprehensive HR solutions for businesses. Companies engage PEOs to outsource employee management tasks, such as benefits, payroll, worker’s compensation, recruiting, and training.

A Colombia PEO acts as the ‘co-employer’ of your team in Colombia, taking care of the administrative and compliance aspects of employment and leading you to focus on core business. It is similar to a Colombia Employer of Record (EOR) company, which becomes the local legal employer of your Colombia workforce. 

This outsourcing model allows businesses to focus on their core functions while the PEO ensures compliance with Colombia’s labor laws and regulations.

How does a Colombia PEO work?

A PEO in Colombia operates under a co-employment model. Essentially, the PEO becomes responsible for compliance matters for the client’s employees. However, the client company retains control over business operations and management.

The PEO handles payroll processing, benefits administration, compliance with employment regulations, and risk management. They are responsible for ensuring all these aspects align with Colombia’s laws and cultural norms. For multinational companies operating in Colombia, this model provides a streamlined solution for managing their Colombian workforce.

Depending on the Colombia PEO chosen, they may provide additional services, such as sponsoring Colombia work visas or helping with recruitment in Colombia.

The Colombia PEO also becomes the legal employer of your workforce in Colombia, they are known as a Colombia Employer of Record. 

What are the benefits of a Colombia PEO?

There are several key benefits of utilizing a PEO in Colombia:

  • Compliance with Local Regulations: Colombian labor laws can be complex and are subject to frequent changes. PEOs have local expertise and stay up-to-date with these laws, ensuring your business remains compliant. For example, a Colombia PEO can advise on how to comply with the new Colombia digital nomad visa requirements. 
  • Efficient Payroll and HR Administration: PEOs handle payroll, benefits, hiring, and firing, allowing your company to focus on its core business activities.
  • Ease of Business Expansion: For companies looking to expand into Colombia, PEOs provide a simple way to hire local employees without the need to establish a legal entity in the country.
  • Risk Management: PEOs manage certain employment-related risks, providing workers’ compensation coverage and dealing with employment disputes and issues.

What are the disadvantages of a Colombia PEO?

Despite their benefits, PEOs in Colombia also come with potential drawbacks:

  • Lack of Control Over HR Matters: Some businesses may find the co-employment model restrictive, as they have less control over their HR operations.
  • Due Diligence Required: Businesses must carefully select a PEO. The wrong choice could result in non-compliance with local laws, poor service, or unfavorable contract terms.

Top 5 leading Colombia PEOs

  • Horizons: Horizons is an international PEO that hires and onboards staff across Latin America and the world, including in Colombia. For hiring, recruitment and visa support in Colombia, Horizons is a smart choice. 
  • Ongresso: Ongresso are experts in latin america business expansion with a specific focus on supporting companies expanding and hiring in Colombia. Alongside their Colombia PEO solution, Ongresso also supports global companies with Colombia market entry including tax support, company formation, and back office outsourcing
  • Globedesk: Globedesk are Colombia hiring and relocation experts. Alongside their Colombia PEO solution, they also offer recruitment and staffing support, with a special focus on tech and marketing talent in Colombia. 
  • Globalization Partners: This PEO simplifies international business by enabling companies to hire and retain team members in 187 countries, including Colombia. Their in-country legal expertise ensures compliance with local laws.
  • Atlas: Atlas (also known as Atlas HXM) provides a comprehensive PEO service in Colombia, taking care of HR tasks and ensuring compliance with Colombian labor law. Their service allows businesses to operate smoothly in the Colombian market. Find out what makes Atlas different from other Colombia PEOs in our 2023 Atlas HXM review. 

Hire employees in Colombia — with a Colombia PEO

Colombia PEOs are invaluable resources for companies operating or planning to operate in the country. They simplify the HR process, ensure compliance with local regulations, and offer efficient payroll and HR administration. However, businesses must carefully consider their choice of PEO, taking into account their specific needs and the expertise and reliability of the PEO.

Our pick for the top 5 Colombia PEOs in 2024 are Horizons, Ongresso, Globedesk, Globalization Partners and Atlas

FAQs

A PEO is the co-employer for your local workforce in Colombia. An Employer of Record (EOR) is the legal employer of your Colombia-based team and takes on all employment responsibilities and liabilities. 

Yes, PEOs can manage the recruitment process, from job posting to hiring. They can also provide insight into local employment norms and expectations, helping to ensure that your company attracts and retains the best talent.

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