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Improved Business Environment in Colombia - Open for Business

Traditionally, Colombia has been a safe investment option for coffee, oil and most recently has benefited from an exploding tourism industry. New York Times placed the country as the second most desirable travel destination in the world, behind what I consider a rather controversial choice, New Orleans (apologies to any locals). This popular recognition is indicative of a wider national trend in the country: a fervent desire to remodel a tainted reputation and welcome the benefits of globalization and foreign investment. The transformation in recent years has been remarkable and has allowed for the growth of a bustling and far more varied industry. Colombia is now a regional leader in software development and agro-industrial services, to name but a few.

This article will provide a brief explanation of the current political and economic performance in Colombia.

Change begets Change...

It may seem futile to spell the following out, but the impact that FDI (Foreign Direct Investment) has had on the Colombian workforce has been colossal. It is a simple, circular relationship which, for many, has been a major contributory factor in driving the recent upsurge in domestic performance and economic prosperity. How does it work?

A talented and well educated Colombian workforce that can be employed by investors for slightly cheaper prices than in Europe or North America, receives Foreign Direct Investment. Not only monetary investment, but investment through the introduction of industrial expertise and commercial know-how that perhaps emerging countries such as Colombia lack. This, in turn, drives competition in the country, forcing workers to ‘catch-up’ or be ‘left behind’, and creates a more talented and specialised workforce than the one that existed before. As a result, new industries will want to capitalise on the growing and modernising workforce and potential in the country…and so on. As so wisely stated in Star Trek, “Change begets change. Nothing propagates so fast” 

                                

As well as being absolutely breath-taking, Medellin is the start-up capital of Colombia.

This cycle can be used to explain the recent ‘boom’ that Colombia has enjoyed in various key industries such as e-commerce and agricultural technology. Indeed it is a trend that can be seen across the Latin American region and is a major factor in making the continent so treasured and desirable- the opportunities for growth are endless.

PRO TIP: Allying yourself with a local agent or company can be a very smart way to get insight into industry performance, to understand local legal requirements for operation in different sectors and to receive assistance in finding the right team to join your company! Click Here for more information.

Well Located and Well Connected

Another recent development in Colombia that has facilitated economic growth has been the considerable domestic effort to improve the telecommunications infrastructure in the country. Responding to the demands of a further digitized global economy, Colombia has invested heavily in improving its internet speed and efficiency. The GSMA (Global System for Mobile Communications Association), a European-based company that promotes the expansion of telecommunication software and the improvement of mobile networks for social gain, estimates that in 2016, the telephone network industry accounted for roughly US$10.3 billion, 3.8% of GDP. They estimate that by 2020, the industry will be worth over US$13 billion and will account for 4.2% of the GDP! The industry employs around 60,000 people.

Much of the evidence collected in the GSMA CountryReview points to an improving telecommunications infrastructure, with nearly 95% of the country having access to 3G coverage, but also to various areas where the country lags behind regional averages. One problem that is particular to Colombia, is the fact that much of the population lives at high altitude and therefore lack communication resources. Given the well-documented advantages of widespread access to the internet and the technology that is available in other parts of the world, perhaps there is a very interesting industry entrance point for foreign investors...

                     

                             Bogotá is the business powerhouse of Colombia

Where to do business in Colombia?

After a successful decade in terms of social security and peace negotiation talks to clean up the legacy of Pablo Escobar, previously unimaginable destinations such as Cali, hugely affected by cartel violence in the 90s, are now crucial business destinations in Colombia. Indeed, there are business opportunities flourishing in all regions of the country, from Bogotá to Barranquilla. Listed below are some of the major destinations for commercial activity and some information on the industries that are growing.

● Bogotá: The powerhouse of Colombia. The splendid capital with a population of over 8 million, the city comprises nearly ¼ of the country’s GDP.

● Barranquilla: A bit of a dark horse… has fantastic universities which produce some of the brightest talents in the country, a stunning cultural heritage which puts the fun back into business and finally has fewer bureaucratic procedures and lower running costs than the other major cities.

● Cali: A booming economy based on the production of goods, the city’s close proximity to the most important port in the Pacific, Buenaventura, makes Cali a stalwart business location

● Medellín: A thriving economy of start-ups, and recently voted the world's most innovative city.

Learn moreabout the Opportunities Colombia has to Offer!

Colombia has an economy of roughly US$300 billionand is the 4th largest economy in Latin America. It also is a country with an impressive network of Fair Trade Agreements, giving access to an overall market of US$43 trillion.  The potential is evident for all to see, and the signs suggest that the country will grow and grow.

In terms of a place to live, there are few better. In terms of a friendly and open-minded place to conduct business, there are few better. To maximise the potential of your business, you simply need to be well organised and logistical about approaching a country so culturally different to where you may come from, ensuring that you have a specialist support network to assist you in properly conducting business in Colombia.

Once you have taken these necessary steps, we can assure you, as far as your business ventures go, the sky truly is the limit.


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