Why Invest in Colombia?
Thanks to the overall growth of the economy in Latin America and a diminishing gap in social inequality, investing in Colombia has become very attractive to international investors over the recent years. To add to this phenomenon of investor confidence, Colombia has improved its public image since it has focused on eliminating its internal conflicts. This has further enhanced the perception of the country as a stable business opportunity and given investors yet another reason to invest in Colombia.
On a global scale, here are some of the reasons why it is worth investing in Colombia sooner than later:
-Economic stability: The Colombian economy has maintained an average 4.8% growth over the past five years, also GDP growth above the estimated average for Latin America.
-Investor trust: In 2014, Colombia went from Baa3 to Baa2 on Moody’s rating system which has also been endorsed by Standard & Poor’s and Fitch.
-Investor protection: According to Doing Business 2015 published by the World Bank, Colombia ranked tenth worldwide and the first in Latin America in terms of investor protection. The same report recognizes the country to be the friendliest destination in Latin America to do business in.
-International market: Colombia currently has 10 free trade agreements and 3 pending agreements in the making, which give preferential access to over 45 countries and about 1,500,000,000 consumers in markets located in the United States, European Union, Brazil, Mexico, Chile and Peru; and soon to be with Costa Rica and Korea, nations with which Colombia is currently negotiating.
-Qualified Workers: According to the IMD 2014 ranking, Colombia has most skilled work in all of South America. Colombia surpasses countries such as Brazil, Chile, Peru, Argentina and Venezuela.
-Competitive legal structures: Colombia is a reference point in Latin America for the reforms it has put in place for business development. Since 2005, the country has implemented 29 reforms supported by the Doing Business 2015 publication from the World Bank.
So Now, How to Establish a Company in Colombia?
There are a number of company types available to suit every business type and need, but the most popular is an SAS company, which is a “Simplified Stock Corporation”. Establishing this type of company in Colombia is relatively simple, fast and well suited to most business needs. Whereby only one person is needed to register the company, albeit a legal representative must be appointed that is either a Colombian national or a foreigner with an appropriate visa. This type of company allows free operation, with no currency controls or restrictions. Also with a SAS company, shareholders are only liable personally if there has been proof of fraud, as such there is no personal liability for corporate actions, including labor disputes, tax issues or other litigations that might arise with company operation.
The complete process to establish a SAS normally takes between two to three weeks (plus a further week to open a company bank account), but is also dependent on the complexity of the company, the availability of relevant personal documents and that of the founding owners. With a SAS, the founder members may also be eligible to apply for a visa in Colombia, allowing them to stay in Colombia whilst there businesses are operating, assuming that they make a sufficient investment aligning to a minimum of 100 time the legal minimum Colombian Salary (as at the time of writing, equating to approximately USD$21,000). A SAS company in most cases is the best commercial vehicle for business operations in Colombia, offering maximum flexibility, limited personal liability and a way to secure a visa to stay in Colombia.
If you want further information about this company type and its process, don’t hesitate to contact us. Our team is willing to solve all your doubts and assist you in the constitution of your company and the setup of your business.