Colombia

Ease of Doing Business Rank: 67

Overview

 

Geographic location

The Republic of Colombia is a country located in northwestern South America. The Caribbean Sea lies to the north, the Pacific Ocean and Panama to the west, Venezuela and Brazil to the east and Peru and Ecuador lie to the south.

Spoken language

The official language of Colombia is Spanish, spoken by 99.2% of inhabitants. English has official status in the islands of San Andrés, Providencia and Santa Catalina.

Population

The 2020 population estimate is 50.62 million.

Bogotá is the capital and largest city (8,181,047), followed by Medellín (2,529,403) and Cali (2,445,405).

Popular industries

The top industries in Colombia are textiles, food processing, oil, clothing and footwear, beverages, chemicals, cement, gold, coal, emeralds, shipbuilding, electronics, home appliances and furniture.

Education

The Times World University Rankings includes one Colombian university in the top 500 in the world and another in the top 1,000.

The Legatum Prosperity Index ranks Colombia’s educational system 73 out of 167 countries.

Popular entity types

The most common types of business entities in Colombia are Simplified Stock Company, Limited Liability Company and Corporation.

The overwhelming majority of businesses are in the form of a Simplified Stock Company.

Colombia incentives for business

Colombia offers a foreign tax credit, subject to limitations. Companies must provide a certificate verifying they distribute dividends and include the profit value, tax rate abroad and taxes paid.

The country also offers several corporate income tax exemptions on principal and interest and related commissions and fees paid towards public foreign debt operations.

Qualifying companies may also enjoy a 15-year exemption if they generate income from industries such as wind, biomass or agricultural waste energy, providing they meet social reinvestment and Greenhouse Gas Reduction requirements.

Profits for share sales on the Colombian stock exchange of less than 10% of total share holdings are not subject to CIT or capital gains tax.

Colombia also offers a 7-year exemption to qualifying start-ups involved in cultural, artistic or patrimonial activities (orange activities). Businesses must employee a minimum of 3 employees and invest at least USD 50,000 within three years.

The country also offers a 10-year exemption to companies within the agricultural sector providing they employee at least 10 employees and invest at least USD 276,000 within six years.

Companies building new hotels or refurbishing old hotels or building new theme parks, ecotourism parks, agritourism parks or boat docks may qualify for a 9% CIT rate. The duration of this special rate depends on the city and number of inhabitants.

Businesses operating in free trade zones pay a reduced CIT at a rate of 20%.

History & Features

 

Main cities for business

Bogotá is the capital and financial center of the country. However, Barranquilla, Cartagena de Indias, Medellín and Montería are also thriving business centers.

Popular historical & tourist attractions

Colombia has a rich cultural and natural history including 9 UNESCO World Heritage Sites. The seaport of Cartagena has some of the most extensive colonial fortifications in South America with palaces and merchant and laypersons’ quarters.

UNESCO also recognizes Colombia’s unique coffee culture. It is the third-largest producer of coffee beans in the world and their 18 coffee plantation regions in the Eje Cafetero foothills of the Andes still grow coffee on steep hills below traditional villages.

Bogotá is Colombia’s sprawling, high-altitude capital city. It includes the historic center of La Candelaria, the Museo del Oro with over 30,000 of pre-Colombian gold pieces, and the center for Colombia’s government: Plaza Bolívar.

About a third of Colombia is blanketed in dense jungle and the area where Colombia, Peru, and Brazil meet on the Amazon River is a favorite for eco-tourists. Isla de Los Micos is home to over 5,000 squirrel monkeys. Parque Ecologico Mundo Amazonico includes over 700 amazing species of flora such as giant water lilies with 3-foot-wide leaves.

The protected beaches and lagoons of Tayrona National Natural Park offer dramatic views of the Sierra Nevada de Santa Marta, the world’s highest coastal mountain range. Snorkeling is a favorite pastime in the coral-rich sea teeming with lobsters, fish and rays.

Colombia also has a famous 27-mile hike to Ciudad Perdida, a lost city in the Sierra Nevada de Santa Marta Mountains. It was built by Tayrona Indians and is said to be one of the largest pre-Colombian settlements in the Americas.

Colombia also has spectacular volcanic peaks in the Los Nevados National Park. It is popular with hikers due to the local wildlife such as Andean condors, pumas and more.

The country also has the world’s second largest Carnaval in Barranquilla. The festivities include parades, live music, festivals and traditional, brightly-colored costumes.

History

The territory that became Colombia was first visited by the Spanish in 1499. They initiated a period of annexation and colonization and dominated most indigenous cultures.

By 1717, Colombia, Ecuador and Venezuela fell under the jurisdiction of the Viceroyalty of New Granada within the Spanish Empire. However, control from Spain was never very effective. Eventually, they established an autonomous Captaincy General in Caracas in 1777. However, some indigenous peoples still warred with the Spanish and regained much of their territory.

In 1808, Napoleon occupied Spain and declared his brother king. However, the general population rejected the new king and Colombia declared independence in 1810. However, the Spanish retook the area between 1815 and 1816.

Fueled by calls for independence, Simon Bolivar eventually defeated the Spanish and formed the Republic of Colombia in 1819. It included Colombia, Panama, Venezuela and Ecuador. Regional differences caused the republic to splinter and Bolivar became dictator in 1828. In 1830, he resigned and Colombia and Panama separated from Ecuador and Venezuela.

Colombia experienced civil war throughout the 19th century. In 1903, Panama broke away and became an independent nation. There was little turmoil in Colombia at the turn of the century and coffee exports increased. However, civil war returned in 1948 after the assassination of a political leader.

A general became dictator in 1953, but stepped down in 1957. The two opposing parties agreed to alternate the presidency between them between 1957 and 1974. However, the Colombia’s government, crime syndicates, paramilitary groups and communist guerrillas fought for power from about 1958 until 2013.

In 2016, the Colombian government and the guerilla rebels signed a historic ceasefire deal, but it was later rejected in a referendum. A new peace plan was approved by The House of Representatives and the Senate the same year. However, fighting resumed and continues.

The country operates as a democratic republic with a free market economy.

Other relevant facts

According to 2014 data, most Colombians identify as Mestizo (49%), followed by White (37%), Black, including Mulatto (9.34%), Amerindian (4.4%) and Roma (.01%).

Most inhabitants identify as Roman Catholic (79%), followed by Protestant (14%), other religions (2%) and unspecified religion (5%).

Additional Information for Business

According to Forbes’ 2019 Best Countries for Business, Colombia is 67th in the world for conducting business.

The 2019 Index of Economic Freedom rates Colombia 49th globally and states, “Deeper institutional reforms are needed to strengthen the rule of law and reduce corruption. Fiscal reform and constitutional and judicial reforms will be among the key policy goals in the government’s efforts to promote entrepreneurship.”

World Bank’s “Doing Business” rankings rate Colombia 67th for ease of doing business in the world.

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