The first decision for international companies expanding into Colombia is which business structure best suits their plans. The preferred choice is to open a subsidiary as a limited liability company, known as a Sociedad de Responsabilidad Limitada, SRL, which operates under the Commercial Code. This is necessary for dealing with the Colombian Tax and Customs National Authority (Dirección de Impuestos y Aduanas Nacionales, DIAN) and the General System of Social Security in Health (Sistema General de Seguridad Social en Salud, GSSSH).
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 for hiring, onboarding and drawing up contracts with new staff.
Once Bradford Jacobs’ Professional Employer Organisation (PEO) recruitment networks have located the best talent for your company, we step in to steer you through this crucial element of recruitment.
Open-ended contracts can be written or verbal, but specific rules apply to fixed-term contracts.
Indefinite, open-ended employment contracts (Contrato a término indefinado): This typical contract form can be written or oral, without any variation between the terms and entitlements for the employee. The contract can be terminated mutually or by either party in compliance with termination and severance regulations.
Fixed-term employment contracts (Contrato a término fijo): These must be in writing and can be agreed for any term within three years, either cumulative or in one agreement. If the initial contract is for less than one year, it can be renewed only three times, after which it can only be renewed again for a minimum of one year.
Probationary Period (Período de prueba): On open-ended agreements, these can be a maximum of two months. For fixed-term contracts, the trial period is up to 20% of the length of fixed-term.
Duration of work employment and occasional employment contracts: Duration contracts can be verbal or written, assigned to a specific project, and automatically expire when the work is completed. Periodic agreements can be written or spoken but cannot exceed one month.
Collective Bargaining Agreements (CBAs): Employers and employees have the constitutional right to associate through trade unions and employers’ associations. Only the unions may negotiate on behalf of their members and start the collective bargaining process towards an agreement with individual employers or associations.
General considerations include:
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