1. Introduction

 

This document highlights the key reasons investors should consider Colombia an investment destination. Colombia, known for its rich culture and diverse landscapes, is emerging as an exciting investment destination in Latin America. It offers a wealth of opportunities for foreign investors.

 

2. Economic Stability and Growth

 

Colombia boasts one of the most stable economies in Latin America, with consistent GDP growth throughout the years. The country has a diversified economy with vital agriculture, mining, manufacturing, and services sectors. Colombia is poised for renewed economic growth after a robust recovery from the COVID-19 crisis. The Colombian economy is characterized by the private initiative of individuals and entrepreneurs with little state intervention. This approach promotes free competition and innovation, creating a favorable private investment and entrepreneurship environment.

 

The country’s medium-term growth prospects are not just promising, they are brimming with potential, contingent on maintaining its solid macroeconomic framework and implementing more reforms to enhance the already business-friendly environment that attracts high levels of investment. This potential for growth in Colombia’s economy should fill you with optimism and hope about investment opportunities. The current exchange rate is favorable for investors from European countries, making investments in Colombia more attractive and profitable. This exchange rate advantage allows investors to get more value for their money and maximize their returns.

 

Colombia is implementing reforms aimed at increasing tax revenues and improving spending efficiency. These reforms will create fiscal space for essential social and productive investments. Additionally, investments in connected transport infrastructure, strengthening subnational government capacities, and enhancing equalization mechanisms in the budgetary transfer system will promote balanced development across the country.

 

This highlights Colombia’s positive outlook and the proactive measures, not just measures, but a comprehensive strategy, to ensure sustainable growth and development. Moreover, its economy is projected to grow more than other major Latin American economies such as Brazil and Mexico. With a population of more than 52 million, Colombia offers a large and diverse domestic market, with a majority of young people driving consumption and innovation.

 

 

3. Political Stability and Division of Powers

 

Colombia has remarkable political stability and a functional and practical division of the three branches of government (executive, legislative, and judicial). This robust institutional framework ensures investors a predictable and secure environment, promoting confidence and transparency in business operations.

 

4. Strategic Location

 

Colombia has multiple geographic advantages that position the country as a key destination in the region. Being the only country in South America with a coastline in the Pacific and Atlantic Oceans and the Caribbean Sea allows it to have a wide window for foreign trade, with easy access to the global market. Since 2004, significant investments in ports, airports, and road networks have enhanced Colombia’s logistics capabilities.

 

5. Solid and Reliable Banking System.

 

The Colombian banking system is one of the oldest and most solid in the region, offering confidence and stability to investors. The country’s financial institutions are well-regulated and have a modern infrastructure that facilitates transactions and access to credit.

 

6. Favorable Business Environment

 

According to the Constitution of Colombia, it is governed by a democratic system that respects and protects private property and free initiative. It guarantees freedom of enterprise in Colombia. According to Article 333, economic activity and private initiative are free if the limits of the common good are respected. The foreign investment regime in Colombia is based on Constitutional provisions and laws developed through decrees and regulations. The Constitution, in Article 100, establishes that foreigners have the same civil rights as nationals, except for legal limitations. This means equal treatment, except in matters of public order, according to the Constitutional Court.

 

It is important to describe some aspects related to the Colombian legal framework briefly related to business activities:

 

1. Colombia’s foreign exchange regime is free, which implies that there is freedom to negotiate foreign currency and free convertibility of the currency, and such operations are not subject to prior authorization by any authority. The exchange regulation establishes a series of procedures and reporting or registration obligations for different exchange operations subject to exchange control, one of the purposes of which is to obtain statistics on the entry and exit of foreign currency from the country, statements of international investments, balances of the exchange balance, among others.

 

1. Colombia’s corporate regime enjoys excellent stability and legal certainty; its stable legislation has been continuously modernized. Any investor intending to develop its business in Colombia permanently must, generally, incorporate a legal vehicle, such as a company or a branch of a foreign company. Colombian commercial legislation is flexible and modern in corporate matters, allowing the incorporation of unipersonal investment vehicles where the liability of the sole shareholder is limited to the amount of its respective contribution. A foreign investor may develop a business in Colombia without a partner or a local investor. With some exceptions, the companies’ total capital may be foreign, and its repatriation has no restrictions.

 

1. Labor legislation in Colombia comprises rules of public order and, therefore, cannot be derogated by agreements between employer and employee. Any labor relationship executed in Colombia is governed by Colombian law. Employers and employees are free to agree on the salary. Companies must affiliate employees to the social security system. Any payment derived from the labor relationship is oriented to compensating for the work and, therefore, is considered a salary. However, the payment of extra-legal benefits may be agreed if they comply with the regulations on the matter. Labor contracts in Colombia may be for an indefinite, fixed term or for the duration of the work or labor contracted. A trial period may be agreed upon in labor contracts if it does not exceed two (2) months or one-fifth of the duration in fixed-term contracts that are less than one (1) year.

 

1. Colombia, as a signatory to the World Trade Organization (WTO) Agreement, has foreign trade legislation based on freedom of trade. Colombia has signed more than twenty (20) free trade agreements covering more than 64 countries, 17 of which are currently in force, expanding the potential market for companies in Colombia, including the European Union.

 

1. Colombia has executed more than twelve (12) treaties to avoid double taxation in force, and the ones signed with Spain, Chile, Switzerland, Canada, Mexico, South Korea, Portugal, India, the Czech Republic, France, the United Kingdom, and Italy are currently in force.

 

1. Some tax benefits or incentives for foreign investors include exemptions and deductions. Free Trade Zones with reduced tax tariffs and simplified customs exist.

 

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