Colombia Business Overview

Business and Economic Overview

The Colombian economy has begun to recover from the recession it entered in 2014, as a consequence to the fall in hydrocarbon prices.

Indeed, real GDP growth is expected to increase between 2.8-3.6% annually over the next four years. Nevertheless, mineral products, predominantly hydrocarbons, account for almost 50% of Colombia’s exports whilst mining and agricultural products form another 20-21%. As such, the economy is in need of further reform.

Nevertheless, the country is ranked 59 of 190 in the World Bank’s Ease of Doing Business Index and 96 of 190 in the World Bank’s Starting a Business Index. It has also been ranked consistently as a ‘top reformer’ by the World Bank.

The main challenges to doing business in Colombia include the poor transport infrastructure outside of the main urban metropoles, a sometimes-opaque bureaucracy, a large informal sector, lack of skilled labour and low productivity as well as a fluid security situation.

There are, however, a number of opportunities. Colombia is a regional hub, with good access to all other South American nations and the USA, and it has duty free access to MERCOSUR, the Andean nations as well as Chile.

Colombia also has the second most flexible labour market in Latin America and with 13 free trade agreements; it is one of the most open economies in Latin America.

The USA and UK are the largest investors in Colombia and significant opportunities exist in a number of sectors.

There are a number of large infrastructure and construction projects underway which require machinery, design and project management expertise. The hydrocarbon sector is also a best prospect market, particularly as reserves dwindle and the government seeks to diversify to, explore and exploit off-shore resources.

It is recommended that market entry is done through an agent or distributor in Colombia, with a contract that meets Colombian law.