5 Reasons to Trade in Colombia

Colombia is known for having a diverse landscape, with plenty of cultural heritage from food and coffee, to music and art. Nowadays it is also a hub for business trading and investment, with more and more businesses expanding into the market. We are going to explore 5 reasons why trading in Colombia can be a great opportunity for your company.

1.Ease of doing business

According to the 2020 World Bank Doing Business Report, Colombia is one of the top 3 best countries to do business in, in Latin America. It also ranks 67th out of 190 countries for the ease of doing business. With this in mind, it suggests that there are favorable conditions in the country whether that be to access finance, day-to-day operations or finding a location to conduct business, allowing for a reliable supply chain and the opportunity to find clients and allies. Furthermore, despite the impacts of the pandemic, Colombia recovered in 2021, with GDP growth reaching over 7%, aided by a boost in petroleum exports, increased household consumption and the continuous application of fiscal support.

2. Geography

Colombia’s location is unique in the region as it is the only country in Latin America with a coast in both the Pacific Ocean and the Atlantic. It also acts as a connection point between countries in the Northern and Southern Hemisphere, making it an entrypoint into the Americas. The diverse landscape also means that many different crops and natural resources can be produced, including coffee, bananas and rice, to emeralds, oil and coal. Despite the agricultural sector being important, the services sector is also growing, representing 59.5% of the GDP.

3. Free Trade Zone

Colombia benefits from their free trade zone agreement which provides many advantages for global trade. The free trade zone area allows for lower income tax, no VAT or tariffs on imports made from the free trade zones, No VAT on raw materials sold from anywhere in the country to users of the free trade zones, Companies in the free trade zones can carry out their business without having to make customs declarations. Goods sold in any part of the country only accrue VAT on the inputs that were imported.

4. Economic Policies

Foreign Direct Investments into Colombia have rapidly increased and improved the country’s economic development. It has also led to increased employment opportunities, meaning business development and private activity is at the forefront. Economic Policies in the region are dynamic and are supported by strong institutions. A democratic framework means that the country is able to provide guarantees to investors and entrepreneurs. There is also an incentive policy that Colombia offers to more than 60 countries which helps to boost the arrival of investments. The country has a young and urban based workforce, encouraging companies globally to invest in Colombia.

5. Sustainable Economic Development

With sustainability concerns continually on the rise, Colombia demonstrates an active role in helping to reduce the environmental emissions. They aim to reduce greenhouse gas emissions by 51% by 2030, and achieve carbon neutrality by 2050. Colombia is also the leading energy transition in Latin America.

Therefore given Colombia’s business friendly climate, location and economic policies it is clear to see that there are many opportunities, making it attractive for many investors and could be a great place for you to bring your company. If you are interested in expanding your business to Colombia or anywhere else in Latin America get in touch with us.