Doing business in Colombia

Colombia’s Economy & Business Environment 

Colombian Industry 

Energy & Mining 

The mining and energy sector in Colombia is at a pivotal moment, as national and sectoral policies are geared toward developing strategies and actions that will allow for a Just Energy Transition (TEJ). This means that the national government is working to transform the energy mix to reduce dependence on oil and gas, mitigating the negative impacts these activities have on the environment and advancing toward a productive transformation that maintains a community and territorial focus. 

The Just Energy Transition demands a strategic diversification of labor and production, which is essential for developing robust supply chains and enhancing installed capacity in alignment with the opportunities presented by new energy sources. This diversification will directly facilitate the establishment of agricultural, industrial, and eco-tourism alternatives in regions where traditional economies have become unsustainable. Invest in training and qualifications to empower individuals to realign their productive activities. Furthermore, understanding the critical importance of this transition within a framework that prioritizes life and respects nature is non-negotiable. 

Agriculture 

Agriculture in Colombia is diverse and influenced by factors such as geographic location, climate, and local culture. The main agricultural crops grown in Colombia include bananas, coffee, sugar, floriculture, and plantains. However, the agricultural sector in Colombia also faces various challenges, such as the lack of access to modern technologies, the scarcity of natural resources, and the impact of climate change. 

Services & Finance 

The services sector accounts for over 60% of GDP. Bogotá serves as the financial hub, hosting most national and multinational banks, insurance companies, and FinTech startups. 

Foreign Direct Investment (FDI) 

Colombia is one of the leading recipients of FDI in South America. Major investment destinations include Bogotá, Medellín, and the Caribbean region, with a focus on energy, infrastructure, real estate, and technology. 

Some incentives that the country proposes are legal stability agreements, government-backed investment promotion via ProColombia, and free Trade Zones (FTZs) offering preferential tax regimes. 

Economic Outlook and Reform Agenda 

The Colombian government is concentrating on social and tax reforms, sustainable development, and addressing inequality. The National Development Plan for 2023–2026 emphasizes digital transformation, green energy, and rural development to promote long-term growth. 

Free Trade Agreements 

Colombia has established a network of 17 Free Trade Agreements (FTAs) with various countries and regional blocs, facilitating trade and investment. Notable agreements include those with the United States, Canada, the European Union, Mexico, Chile, and the Pacific Alliance. These FTAs aim to eliminate tariffs, remove trade barriers, and promote economic integration. For instance, the U.S.–Colombia Trade Promotion Agreement, effective since May 15, 2012, has significantly enhanced bilateral trade by eliminating tariffs and improving market access for goods and services. 

Visas for Foreign Investors 

Colombia offers specific visa categories to attract foreign investors:  

• Migrant (M) Visa: This visa is available to individuals who invest in Colombian businesses or real estate. For example, an investment of approximately $25,000 USD in a Colombian business or $75,000 USD in real estate can qualify an investor for this visa. The M visa is typically valid for three years and can be renewed. 

• Resident (R) Visa: After maintaining an M visa for five years, investors may apply for an R visa, granting permanent residency. This visa is a pathway to Colombian citizenship, provided the investor meets additional requirements, such as language proficiency and continuous residence. 

International Investment Laws in Colombia 

Colombia has developed a robust legal framework to protect and promote foreign investment. The country adheres to international standards of investor protection and offers equal treatment to both local and foreign investors under Law 9 of 1991 and Law 963 of 2005. These laws guarantee free movement of capital, profits, and dividends, as well as legal stability for long-term investments through special agreements known as legal stability contracts. 

Banking & Financial System in Colombia 

Colombia has a well-regulated and modern banking system, supervised by the Superintendencia Financiera de Colombia (SFC). The financial sector plays a critical role in the country’s economic growth and offers a wide range of services for both individuals and businesses, including checking and savings accounts, international transfers, investment products, and commercial credit. 

The Central Bank, known as Banco de la República, manages the country’s monetary policy, controls inflation, and regulates currency exchange. Foreign investors and companies can freely remit profits, capital, and dividends, if their investments are properly registered with the Central Bank. 

Technology & SAP Business One in Colombia 

Cities like Bogotá, Medellín, and Cali are recognized for their digital infrastructure, tech clusters, and commitment to innovation, attracting both startups and multinational corporations. SAP Business One stands out as a leading ERP platform tailored to the needs of small and mid-sized businesses (SMBs). In Colombia, the adoption of SAP Business One is growing across industries like manufacturing, retail, logistics, and services. 

Foreign Companies in Colombia 

Foreign companies can establish a presence in Colombia through several legal structures, including subsidiaries, branches, or representative offices. Branches are commonly used for direct operations and must be registered with the local chamber of commerce and DIAN. They are treated as extensions of the parent company and are subject to local tax obligations. 

Business Entity Structures in Colombia 

When starting a business in Colombia, investors can select from various types of legal entities based on their objectives, the nature of their operations, and considerations regarding liability. Below is a summary of the most common structures. 

1. Sociedad por Acciones Simplificada (S.A.S.): Most common structure for foreign and local entrepreneurs due to its flexibility. It provides limited liability, meaning shareholders are only responsible for their contributions, and there is no minimum capital requirement. The S.A.S. has become the preferred option for startups, SMEs, and foreign investors establishing subsidiaries, mainly due to its quick incorporation process and simplified internal governance. 
    

1. Sociedad Anónima (S.A.): More suitable for larger corporations, especially those intending to issue shares or operate in regulated sectors such as banking or insurance. The S.A. requires at least five shareholders, none of whom may hold more than 95% of the shares. It is subject to stricter governance rules, including the mandatory appointment of a board of directors and a statutory auditor. 
    

1. Sociedad Limitada (Ltda): This entity can be formed by a minimum of two and a maximum of twenty-five partners. Liability is limited to the value of each partner's capital contribution. Unlike the S.A.S., the capital of a Ltda. is divided into quotas rather than shares, and changes in ownership tend to be more restrictive, making it less flexible. 
    

1. Empresa Unipersonal (E.U.): Allows a single person to create a business with limited liability. While once more common, this structure has declined in popularity due to the greater flexibility and advantages offered by the S.A.S. 

Selecting the right legal entity is a key strategic decision that depends on the scale of investment, the type of activity, and the long-term vision for doing business in Colombia. 

Colombia Business Culture & Practical Tips

Colombian Business Etiquette 

In their relationship code, meetings usually begin with a friendly conversation; topics such as family, culture, or sports are safe and even encouraged before discussing business matters. 

The corporate attire is generally formal and conservative, especially in large cities like Bogotá, Medellín, and Cali, where most corporate headquarters are based. Business professionals are expected to present a polished and elegant appearance, as it reflects seriousness, respect, and credibility in negotiations and daily interactions.

Business Hours

Offices typically operate Monday to Friday, from 8:00 a.m. to 6:00 p.m., with a long lunch break between 12:00 p.m. and 2:00 p.m. Government offices may have slightly different hours. 

Colombia Local Insights

Colombia's business norms vary by region. Bogotá has a formal environment, while Medellín and Barranquilla are more relaxed and entrepreneurial. 

Colombia's multilingual population is growing, but Spanish remains the dominant language of business. It is advisable to conduct meetings in Spanish or have professional interpreters available, particularly when dealing with government authorities or smaller companies. 

Ways of Communication in Colombia

In Colombian business culture, communication tends to be formal, especially during initial meetings. Titles and last names are used as a sign of respect, and Spanish is the primary language for most business interactions, although English is increasingly common in multinational environments.

Transportation

Bogotá is known for its TransMilenio rapid bus system, while Medellín boasts an efficient Metro network. Ride-hailing apps such as Uber, DiDi, and Cabify are popular and considered safer alternatives to traditional taxis. Domestic air travel is frequent and affordable, with airlines like Avianca and LATAM Colombia connecting major cities. 

Where lunch

In the Colombian capital, Zona G and Zona T are known for their high-quality cuisine, ideal for executive meetings. The El Poblado neighborhood, especially the Provenza area, is the culinary epicenter of Medellín, offering ideal options for business meetings. 

• El Cielo Restaurant: Recognized for its signature cuisine and unique sensory experiences. 

• Harry Sasson: Located in a restored house, it offers international cuisine with a focus on local ingredients. 

• Memory Restaurant: Located in the Wellcomm Hotel, it offers a panoramic view of the city of Medellín and a varied menu. 

Top Business Hotels & Workspaces in Colombia

In Bogotá, top business hotels include the Four Seasons Hotel Casa Medina, renowned for its elegant meeting rooms and personalized services, and the JW Marriott Bogotá, located in the financial heart of the city with state-of-the-art conference facilities. 

In Medellín, the Hotel InterContinental offers business amenities and relaxation areas, while Click Clack Hotel is ideal for creative professionals seeking a stylish atmosphere near El Poblado. 

Colombia's top cities provide a variety of flexible office and coworking space options for those in need. For instance, WeWork has locations in Bogotá, Medellín, and other major cities, offering flexible office spaces, private meeting rooms, and virtual office services in prime areas such as Calle 93 and El Poblado. 

Embassy & Consulate Information 

The U.S. Embassy in Bogotá is one of the largest diplomatic missions globally, offering services for American citizens and businesses, including passport assistance, notarial services, and commercial advisory support. 

Visit  https://co.usembassy.gov/  

Other important embassies located in Bogotá include the Embassy of Canada, the Embassy of the United Kingdom, the Embassy of Germany, and the Embassy of Spain, each providing consular assistance, visa services, and commercial support for companies and entrepreneurs looking to engage in Colombian markets.  

Business travelers are strongly advised to register with their respective embassies when visiting Colombia for extended stays or for important negotiations. For more information, you can consult https://www.cancilleria.gov.co/en/services/consular/directory