Employing in Colombia

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Expanding into
Colombia

Expanding into Colombia offers many opportunities to international companies. The country is “open for business” and looking to play a broader role in global economies. The Colombian Government is continuing to develop an increasingly welcoming attitude towards private enterprise and entrepreneurial activity. Consumerism is growing in this upper-middle income market, along with development in the electronics, chemicals, services and high-tech sectors, thanks to a highly-educated and well-motivated workforce. Traditional economic strengths still lie in mining for gold and precious gems, oil and petrochemicals, coffee, textile and agriculture.

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Global Expansion is a step to make for any business, regardless of your goal. But the opportunities that can come with an expansion can be stimulating as well as intimidating and confusing, especially when you consider all of the registration procedures that need to be done and the documentation required.

Going at it without the proper support can increase the costs, time and risks involved.

The legwork and potential red tape can be worked through more efficiently and cost-effectively with the support of a Professional Employer Organisation (PEO) such as Bradford Jacobs, primarily through our Employer of Record (EOR) framework.

It can be best utilised when businesses are just beginning their expansion process and require more information before incorporating an entity and fully establishing themselves in that market.

Country EOR Guide - Bradford Jacobs

Download our Guide to Colombia

Learn all about expanding into Colombia and see what we can do to make your expansion easier.

Download our Guide to Colombia

Learn all about expanding into Colombia and see what we can do to make your expansion easier.

Country EOR Guide - Bradford Jacobs

Hiring Staff
in Colombia

Hiring Staff
in Colombia

The Main Sectors of the Colombian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Colombia is one of the five largest producers of coffee, avocado and palm oil and one of the ten largest producers of sugarcane, banana, pineapple and cocoa. Colombia produced, in 2018, 36.2 million tons of sugarcane (7th largest producer in the world), 5.8 million tons of palm oil (5th largest producer in the world), 3.7 million tons of banana (11th largest producer in the world) and 720 thousand tons of coffee (4th largest producer in the world, behind Brazil, Vietnam and Indonesia). Although its neighbour Brazil is the largest producer of coffee in the world (3.5 million tons produced in the same year), the advertising carried out by the country for decades suggests that Colombian coffee is of higher quality, which generates greater added value to the country’s product.
Colombia is among the 20 largest producers worldwide in beef and chicken meat production. In Colombia, the exploitation and breeding of cattle are carried out on small and large farms. Black-eared white, casanareño, coastal with horns, romosinuano, chino santandereano and hartón del Valle are the Colombian breeds with the highest production. In 2013, livestock occupied 80% of productive land in Colombia. The livestock sector is one of the most outstanding in areas such as the Caribbean Region, where seven departments have livestock as their primary vocation.
Although Colombia has been producing domestic appliances since the 1930s, it wasn’t until the late 1990s that Colombian corporations began exporting to neighbouring countries. One of Colombia’s largest producers of household appliances, HACEB has been producing refrigeration since 1940. Some domestic corporations include Challenger, Kalley, HACEB, Imusa, and Landers. In 2011, Groupe SEB acquired Imusa to expand to the Latin American market. Colombia manufactures for foreign companies as well, such as Whirlpool and GE. LG has also been interested in building a plant in Colombia. Colombia is also Latin America’s 3rd largest producer of appliances behind Mexico and Brazil and is proliferating.
Colombia is a major electronics producer in Latin America and South America’s 2nd largest high-tech market. Colombia is also the 2nd largest producer and exporter of electronics made by domestic companies in Latin America. Since the early 2000s, major Colombian corporations began exporting aggressively to foreign markets. These companies include Challenger, PcSmart, Compumax, Colcircuirtos, and Kalley. Colombia is the first country in Latin America to manufacture a domestically made 4K television. In 2014, the Colombian government launched a national campaign to promote the IT and Electronic sectors and invest in Colombia’s own companies. Although innovation remains low globally, the government sees heavy potential in the high-tech industry. It is investing heavily in education and innovation centres all across the nation.
This has played a vital role in the economy and is increasing at almost 20% annually. As a result, Colombia sees a historic building boom. The Colombian government invests heavily in transport infrastructure through a “Fourth Generation Network” plan. The target of the Colombian government is to build 7,000 km of roads for the 2016–2020 period and reduce travel times by 30% and transport costs by 20%. A toll road concession program will comprise 40 projects and is part of a larger strategic goal to invest nearly $50bn in transport infrastructure, including railway systems. It will make the Magdalena river navigable again and improve port facilities and Bogotá’s airport. Long-term plans include building a national high-speed train network to improve competitiveness vastly.
Colombia is well-endowed with minerals and energy resources. It has the largest coal reserves in Latin America and is second to Brazil in hydroelectric potential. Estimates of petroleum reserves in 1995 were 3.1 billion barrels (490,000,000 m3). It also possesses significant nickel, gold, silver, platinum, and emeralds. The country was the 12th largest coal producer in the world in 2018 and the 20th largest petroleum producer in 2019, with 791 thousand barrels/day. In mining, Colombia is the world’s largest producer of emeralds. The discovery of 2 billion barrels (320,000,000 m3) of high-quality oil at the Cusiana and Cupiagua fields, about 200 kilometres (120 mi) east of Bogotá, has enabled Colombia to become a net oil exporter since 1986.

The Main Sectors of the Colombian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Colombia is one of the five largest producers of coffee, avocado and palm oil and one of the ten largest producers of sugarcane, banana, pineapple and cocoa. Colombia produced, in 2018, 36.2 million tons of sugarcane (7th largest producer in the world), 5.8 million tons of palm oil (5th largest producer in the world), 3.7 million tons of banana (11th largest producer in the world) and 720 thousand tons of coffee (4th largest producer in the world, behind Brazil, Vietnam and Indonesia). Although its neighbour Brazil is the largest producer of coffee in the world (3.5 million tons produced in the same year), the advertising carried out by the country for decades suggests that Colombian coffee is of higher quality, which generates greater added value to the country’s product
Colombia is among the 20 largest producers worldwide in beef and chicken meat production. In Colombia, the exploitation and breeding of cattle are carried out on small and large farms. Black-eared white, casanareño, coastal with horns, romosinuano, chino santandereano and hartón del Valle are the Colombian breeds with the highest production. In 2013, livestock occupied 80% of productive land in Colombia. The livestock sector is one of the most outstanding in areas such as the Caribbean Region, where seven departments have livestock as their primary vocation.
Although Colombia has been producing domestic appliances since the 1930s, it wasn’t until the late 1990s that Colombian corporations began exporting to neighbouring countries. One of Colombia’s largest producers of household appliances, HACEB has been producing refrigeration since 1940. Some domestic corporations include Challenger, Kalley, HACEB, Imusa, and Landers. In 2011, Groupe SEB acquired Imusa to expand to the Latin American market. Colombia manufactures for foreign companies as well, such as Whirlpool and GE. LG has also been interested in building a plant in Colombia. Colombia is also Latin America’s 3rd largest producer of appliances behind Mexico and Brazil and is proliferating
Colombia is a major electronics producer in Latin America and South America’s 2nd largest high-tech market. Colombia is also the 2nd largest producer and exporter of electronics made by domestic companies in Latin America. Since the early 2000s, major Colombian corporations began exporting aggressively to foreign markets. These companies include Challenger, PcSmart, Compumax, Colcircuirtos, and Kalley. Colombia is the first country in Latin America to manufacture a domestically made 4K television. In 2014, the Colombian government launched a national campaign to promote the IT and Electronic sectors and invest in Colombia’s own companies. Although innovation remains low globally, the government sees heavy potential in the high-tech industry.
It has played a vital role in the economy and is increasing at almost 20% annually. As a result, Colombia sees a historic building boom. The Colombian government invests heavily in transport infrastructure through a “Fourth Generation Network” plan. The target of the Colombian government is to build 7,000 km of roads for the 2016–2020 period and reduce travel times by 30% and transport costs by 20%. A toll road concession program will comprise 40 projects and is part of a larger strategic goal to invest nearly $50bn in transport infrastructure, including railway systems. It will make the Magdalena river navigable again and improve port facilities and Bogotá’s airport. Long-term plans include building a national high-speed train network to improve competitiveness vastly.
Colombia is well-endowed with minerals and energy resources. It has the largest coal reserves in Latin America and is second to Brazil in hydroelectric potential. Estimates of petroleum reserves in 1995 were 3.1 billion barrels (490,000,000 m3). It also possesses significant nickel, gold, silver, platinum, and emeralds. The country was the 12th largest coal producer in the world in 2018 and the 20th largest petroleum producer in 2019, with 791 thousand barrels/day. In mining, Colombia is the world’s largest producer of emeralds. The discovery of 2 billion barrels (320,000,000 m3) of high-quality oil at the Cusiana and Cupiagua fields, about 200 kilometres (120 mi) east of Bogotá, has enabled Colombia to become a net oil exporter since 1986.

Commercial Laws in
Colombia

The primary legislation in Colombia regulating the relationship between employer and employees is the Labour Code (Código Sustantivo del Trabajo), last updated in 2021 and known as the Substantive Labour Code.

The Code is periodically updated by other Laws, Decrees and Amendments rather than by entire individual pieces of legislation. The Labour Code will regulate the company’s employment relationship with its staff regarding statutory minimums. However, case law, Decrees and Collective Bargaining Agreements (CBAs) can also apply.

These are vital considerations when hiring, onboarding and drawing up contracts with new staff.

  • A contract, either verbal or in writing, must be agreed upon at the start of the onboarding process.
  • Written contracts are recommended, but in the case of oral agreements, they must at least cover the role, salary and duration of employment.
  • Fixed-term contracts must be in writing and can total a maximum of three years.
  • Probationary periods must be confirmed in writing and cannot exceed two months for an open-ended contract or 20% of a fixed-term contract.
  • Medical examinations by the company are compulsory for prospective employees, carried out at least three days before they are due to start work.
  • The employee must sign documents in person, as digital signatures are not allowed.

Commercial Laws in
Colombia

The primary legislation in Colombia regulating the relationship between employer and employees is the Labour Code (Código Sustantivo del Trabajo), last updated in 2021 and known as the Substantive Labour Code.

The Code is periodically updated by other Laws, Decrees and Amendments rather than by entire individual pieces of legislation. The Labour Code will regulate the company’s employment relationship with its staff regarding statutory minimums. However, case law, Decrees and Collective Bargaining Agreements (CBAs) can also apply.

These are vital considerations when hiring, onboarding and drawing up contracts with new staff.

  • A contract, either verbal or in writing, must be agreed upon at the start of the onboarding process.
  • Written contracts are recommended, but in the case of oral agreements, they must at least cover the role, salary and duration of employment.
  • Fixed-term contracts must be in writing and can total a maximum of three years.
  • Probationary periods must be confirmed in writing and cannot exceed two months for an open-ended contract or 20% of a fixed-term contract.
  • Medical examinations by the company are compulsory for prospective employees, carried out at least three days before they are due to start work.
  • The employee must sign documents in person, as digital signatures are not allowed.

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