The Colombian economy is growing slow since last year. For instance, 2023 had a growth of 0.6% in contrast to the two previous years, with the highest growth percentages in the last 10 years, according to DANE. GDP clarifies that the low level of growth is due to high inflation, high interest rates and the uncertain political outlook.
Despite lower statistics over the past two years, Colombia’s economy is still receiving significant foreign investment, which is encouraging for the country’s future. Foreign entities find Colombia an attractive investment destination despite the economic uncertainty around the world. Both the public and private sectors have significantly improved its banking, travel, and commerce sectors, further enhancing its appeal to foreign investors. These developments show that Colombia is a dynamic economy with great potential for growth and prosperity.
Top Startups in Colombia
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Despite this panorama, investments have not stopped and Startups continue to lead the market and grow at an exponential rate, both in terms of assets and users. Habi, a PropTech (Startups related to Real Estate services) has the first place on the top ten of Startups in Colombia (valued in 133,4 millions USD). The second place was reached by the RetailTech food delivery platform Rappi (valued in 115,1 million USD) and the third place was taken by the fintech Lulo Bank (valued 111,1 millions USD). Now, it’s possible to do business in Colombia and reach high benefits and growth. Download the official guide about business below.
Download the OFFICIAL guide to make business in Colombia
It’s clear, therefore, that the question isn’t: ‘should you invest in a business in Colombia’ but rather ‘how?’. To help answer the above, we’ve broken down the best practices for doing business in Colombia in this comprehensive guide. Let’s start by taking a bird’s-eye view of Colombia’s economy.
The Colombian economy: An overview
Colombia is Latin America’s one of the largest economy in terms of GDP, leading the second place in terms of revenue, and and only being surpassed by Chile. Today, Colombia’s service and manufacturing industries dominate its economic output, as the economy has gradually pivoted from its reliance on agricultural trade. Oil and gas, along with coffee and gold remain Colombia’s biggest exports.
In terms of inflation, Colombia is gaining stabilty, going down in the first three months of 2024 at least 1,98% points regarding December 2023 and reaching an inflation rate of 7.36% in March 2024. On the other hand, the unemployment rate is descending rapidly since the Covid-19 pandemic, standing at 10.17% by October 2023. Diving deeper into its labor force, Colombia has an increasingly large pool of data and computer science graduates. This pool of talent regularly finds its skillset mismatched with Colombia’s relatively small selection of tech jobs.
What does this mean for you as a foreign investor?
That there’s serious scope for tech-focused enterprises to base themselves in Colombia and take advantage of this under-utilized talent. For more advice on the above, consult a qualified Colombia business creation consultant.
Book an appointment with one of our experts
This paints an idyllic picture of Colombia as a business opportunity, but what about Colombia’s relationship with foreign investment?
Foreign investment in Colombia
The Colombian government actively encourages foreign investment. In 2024, according with the Ministry of Industry and Commerce, more than 700 foreign companies are interested in invest in Colombia. Likewise, according to international comparative reports, Colombia ranks strongly for ease and speed of starting a business as a foreigner.
Moreover, Colombia has good trade relations with neighboring and external regions. It is part of the Pacific Alliance trading bloc, the Latin American Integration Association (ALADI) and has strong business connections with Spain and the European Union. For advice about how to invest your money effectively in Colombia, reach out to an experienced Colombian business service agency with specialist knowledge of Colombian markets.
Remember to comply with the Colombian labor code, the tax code, and any other disposition when operating your business.
- Get authorization for invoices and an electronic signature through the Colombian tax authority (DIAN)
- Timely declare all national, district and any other applicable taxes.
- Register with the mandatory EPS (Entidades Promotoras de Salud)
- Register with the Family Compensation Fund (Caja de Compensación Familiar)
- Register employees for company pension and severance fund
- Register the company with the Labor Risk Administrator (ARL)
Colombian business visa requirements
Passport copy
Digital Photo
1 digital photo 3 x 4 cm white background without accessories. Physical/printed photos are not accepted.
Chamber of Commerce
Updated Chamber of Commerce of a legal company with a capital amount higher than 100 SMLMV (approximately $32,500 USD).
Foreign investment certificate
Certificate of foreign investment issued by the Banco de la República. Supporting documents showing that the company is currently operating and that the capital is being invested for the interests of the business.
Certificate of shareholding composition
Certificate of shareholding composition made by an accountant.
Counter identification
Photocopy of identity card, professional card and current certificate of the accountant's disciplinary record.
Bank statements
Bank statements for the last 6 months in the name of the company. ***Applicable only in case the company is not newly created.
Income tax return
Last income tax return in the name of the company. ***Applies to companies with more than 1 year of incorporation.
Do business in Colombia with expatgroup.co
Before taking on a new business venture in a foreign country, it’s important to know your legal requirements, visa rights and most certainly the language. At expatgroup, we’ve already helped hundreds of foreign businesses like yours start, grow and prosper into established Colombian companies.
For information on what makes our business creation and consultancy service so special, or any advice about the content of this article, book a call with us here and start your Colombian enterprise adventure today.
FAQs about do business in Colombia
Colombia has a legal framework in place to regulate foreign investments and promote and protect investors’ rights. The primary law governing foreign investments is Law 80 of 1993, which establishes the basic rules for foreign investment in Colombia. Additionally, Colombia has signed international investment protection treaties to offer further guarantees to foreign investors. It is important for foreign business people to understand these laws and regulations to ensure compliance and protection of their investments.
If you are a foreigner looking forward to establishing a company in Colombia, you should follow some essential steps. Firstly, you must register the company with the local Chamber of Commerce and acquire a NIT (Tax Identification Number). Next, depending on the business activity, you must get a business or investor visa. After that, you must fulfill the tax and labor requirements and obtain all necessary permits and licenses to operate the business legally in the country. Seeking professional legal and accounting assistance is highly recommended to ensure a smooth and glitch-free establishment process.
Colombia has a diverse economy with several promising industries for investment. Some of Colombia’s best industries to invest in include technology, tourism, education, mining, agriculture, manufacturing, and renewable energy.
Seeking professional advice before starting a business in Colombia is highly recommended. It can help you navigate the legal and financial aspects of setting up a business in the country and ensure you comply with all the necessary regulations. Therefore, consulting with a lawyer, accountant, or business consultant with experience with the local market and regulations is advisable. Contact expatgroup.co and we’ll help you with all your projects.
Why should I use expatgroup.co services?
Create a Colombian company
- Incorporation of a company in COLOMBIA
- NIT Presentation
- Initial accounting documents
- Opening balance
- RUT
- Shareholder structure
- *Prices do not include: VAT, Colombian state filing fees
Do you want to know how to do business and how the tax regime works in Colombia?
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Hi,
Thanks you for this valuable information.
To start a non-profit organization is there still a $27,000 USD requirement?
Can you provide me any additional insight in how to form an ONG in Colombia?
Regards,
Christian
Good morning, Christian. We hope you are having a wonderful day. To answer your question: The non-profit organizations just need an investment of around one million pesos, which would be around 220,00 USD. We invite you to schedule an appointment with our specialists in business in Colombia; they will help you with all the details regarding this matter. You can book your appointment on the link below: https://expatgroup.co/english/book-an-appointment/ Have a great day!