© Crown copyright 2015
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: email@example.com.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/exporting-to-colombia/doing-business-in-colombia-colombia-trade-and-export-guide
1. Colombia export overview
Colombia is the third largest country in Latin America with a population of 48 million people. Its economy is currently the 28th largest in the world.
Contact a Department for International Trade (DIT) Colombia export adviser for a free consultation if you are interested in exporting to Colombia.
Over 100 UK business operate in the Colombia, including well known companies like Virgin, BT, and Shell, as well as some small and medium sized companies.
Colombia is ranked by the World Bank as the 34th easiest country to do business. It ranks first in Latin America and the Caribbean. You can set up a new business in Colombia within 11 days.
Incentives for British business exporting to Colombia include:
- the UK’s fifth largest export market in Latin America
- one of the most open markets in Latin America with 13 Free Trade Agreements (FTA)
- a developing location as a regional hub with duty free access to the other Andean nations, Mercosur and Chile
Strengths of the Colombian market include:
- a ‘top reformer’ in 5 of the last 8 years according to the World Bank
- a tradition of stable economic growth
- the top country in Latin America (and sixth in the world) for investor protection
- skilled workers and the second most flexible labour market in Latin America
2. Challenges doing business in Colombia
There are certain unique challenges when you are doing business in Colombia. These include:
- taking a long term approach to business with constantly changing deadlines
- difficult geography and poor transport infrastructure
- between 5 and 6 hours behind GMT
- 12 hours away from the UK by plane
DIT and the FCO have created a report that looks at issues UK businesses may face when operating in Colombia including the economic and political environment, intellectual property, organized crime, human rights, bribery and corruption and terrorism.
For more information plase see the Colombia Overseas Business Risk
3. Growth potential
3.1 Economic growth
The economic growth for 2011 was 5.8%, which reduced to 4% in 2012 and 4.7% 2013. This success is due to a number of reasons including:
- inflation has been low and stable
- unemployment rate is below 10%
- rapid expansion of the extractive industries, such as oil, coal, and nickel
- highest Foreign Direct Investment (FDI) in Colombia’s history at USD16.7 billion in 2013
- Colombia’s credit rating raised to Investment Grade by Moody and Standard & Poor
Colombia has a relatively open economy with foreign trade worth 29% of GDP. Colombia has been invited to start Organisation for Economic Co-operation and Development (OECD) accession negotiations.
3.2 Free trade agreements
Colombia has 13 trade agreements in force and 8 that are signed or being negotiated with different regional blocs. These include:
- CAN (Customs Union between Bolivia, Colombia and Ecuador)
- Caribbean Community (Caricom)
- Group of 3 (G3) – Colombia, Mexico, and Venezuela
- European Free Trade Association (EFTA)
- The US-Colombia Free Trade Agreement
The newly signed FTA with the European Union, Colombia and Peru will open up markets on both sides and increase the stability of the trade relationship. The relationship was worth EUR 21.1 billion in bilateral trade in 2011.
4. UK and Colombia trade
The UK is the second largest investor in Colombia after the United States, with recorded investments of USD 15.6 billion between 2000 and 2013. UK exports to Colombia are relatively small, however, UK exports increased by 126% between 2009 and 2012. The total UK exports of goods to Colombia reached £303 million in 2012.
The UK’s main exports to Colombia include:
- whisky (accounting for as much as 16% of total UK export to Colombia)
5. Opportunities for UK businesses in Colombia
DIT provides free international export sales leads from its worldwide network. Search for export opportunities.
The British Embassy in Colombia is working closely with the Government to offer a portfolio of British expertise to cover the different infrastructure needs. Transport infrastructure is one of the sectors that require most of the attention. Opportunities exist in the following sub sectors:
- buses – the 5 top cities in Colombia needs new technologies to integrate buses to the different transport systems
- rail – updating the system for passengers and cargo
- airports – the expansion of 8 airports
Contact firstname.lastname@example.org for more information on the transport sector.
Colombia is currently undergoing a construction boom in the Urban Regeneration sector.
There are opportunities for companies with expertise in design, project management and PPP schemes for many projects. These include:
- construction of a national administrative centre, valued at approximately £4.5 billion
- housing and urban regeneration project, valued at £1.22 million
- 4G road concession, valued at USD 25 million
Contact email@example.com for more information on the construction sector.
Colombia is looking for collaborations between government bodies, public and private institutions and high quality education entities in the UK. There are opportunities in areas such as:
- vocational training
- content in English Language, Mathematics and Science
- design of international curriculum
- English language training
- consultancy in projects, such as developing student-friendly cities
- education technology
- design of assessment activities
There are also opportunities for joint work, such as:
- research projects
- establishing regional Vocational Training Centres
- joint agreements between UK and Colombian universities
- joint degrees
Contact firstname.lastname@example.org for more information on the education sector.
5.4 Oil and gas
The economic contribution of the oil sector is about 31% of national revenue. With less than 8 years of reserve life, the Colombian government is committed to helping companies make new discoveries. There is particular focus in the offshore sector, where the UK has a significant expertise.
Ecopetrol, the national oil company, plans to invest USD 85 billion over the next 5 years. This will create opportunities for UK companies in developing offshore oil and gas operations, and enhanced oil recovery.
Contact email@example.com for more information on the oil and gas sector.
5.5 Science and innovation
Colombia is investing USD 500 million per annum in science and innovation.
There are opportunities for UK companies in all areas, particularly in biotechnology.
Contact Christopher.Banahan@fco.gsi.gov.uk for more information on the science and innovation sector.
By 2012, the mining sector represented 2.4% of the Colombian GDP. Coal, gold and nickel have made the largest contribution.
In addition, Colombia produces a number of other minerals in modest amounts including:
It also produces other industrial minerals, such as cement.
Contact firstname.lastname@example.org for more information on the mining sector.
5.7 Financial services
Colombian PPP offers significant opportunities for the UK advisory and financial sectors. The Government will need assistance in the design, tender and financing of projects. There are also opportunities for UK companies in:
- retail banking
- services to the Colombian financial institutions
- consumer transaction technologies
Contact DIT Colombia for more information on the opportunities in the financial services sector.
6. Start-up considerations
There are 3 common forms of business enterprise in Colombia:
- limited liability partnership
- branch of a foreign company
The most widely used is a foreign branch. It operates under Colombian rules and it must be registered with a Notary Public.
It is advisable to use an agent or a distributor. Colombians prefer to do business with foreign companies that have local representatives in the country.
You should seek legal advice as the tax and legal obligations of each business structure can differ.
7. Legal considerations
Colombia has legal stability and legislation.
Investors who are in a permanent business in Colombia must establish a subsidiary or a branch of a foreign company.
UK companies entering into agreements in Colombia should undertake professional advice.
8. Tax and customs considerations
Value added tax (IVA) is collected in Colombia. The general rate of IVA is 16% but certain products are subject to different rates.
The company tax rate for a Colombian resident company is currently 33% of its taxable income.
Duties on imports to Colombia are generally no higher than 15%, but there are exceptions.
You can find more about import tariffs in the Market Access Database (MADB).
The general documentation requirements for importing and exporting to Colombia are:
- customs import declaration
- declaration of dutiable value
- commercial invoice
- pro forma invoice
- packing list
- Certificate of Origin
- air/sea waybill
- Bill of Lading
- Single Tax Register (RUT) of importer
Some goods may be subject to additional requirements.
9. Entry requirements
All visitors must have a valid passport to enter to Colombia. British nationals do not need visa for Colombia.
9.1 Travel advice
If you’re travelling to Colombia for business, check the Foreign and Commonwealth Office (FCO) travel advice page beforehand.
Contact the DIT Colombia team for more information and advice on opportunities for doing business in Colombia.