Investment Incentives

 

The government has progressively introduced a number of investment incentives designed to promote investment, employment and various other aspects of the Colombian economy.

 

In the 2010 “Doing Business Report,” The World Bank ranked Colombia as the most business friendly country in Latin America.  In this section you will find the most relevant investment incentives:

1. Permanent Free Trade Zones: Colombia has the most competitive Free Trade Zones in Latin America: A single 15% income tax rate, allowing sales in the local market.
2. Single Enterprise Free Trade Zones: This type of Free Trade Zone allows companies to establish themselves anywhere in the country.
3. Legal Stability Agreements: These agreements provide insurance that the laws and their respective interpretation that investors found to be determining for investing will not be modified.
4. Other Incentives: The Colombian government has created investment incentives concerning income tax exemptions in the following sectors:
  • Hotels and Ecotourism Services
  • Late Yield Crops
  • Medical and Software products
  • Aeolian, Biomass and Agricultural Energy Generation
  • Publishing Companies
5. Special Import - Export System for Services: "Plan Vallejo": This import-export system allows service exporting companies to import capital goods exempt from custom duties and sales tax (VAT).

 

Learn about the average cost of establishing your company at a Permanent Free Trade Zone in Colombia.

 

INVESTMENT OPPORTUNITIES

The Ministry of Commerce, Industry and Tourism has developed the Productive Transformation Policy. This is based on two strategies: greater quantity and quality; and, the development of new and emerging sectors. These are designed to achieve sustained growth in both the economy and employment.

After completing an analysis with the assistance of the private industry, some sectors were identified as offering unique business opportunities for investors and having government support in their development.

 

Biofuels

  • Income tax exemption for ten years.
  • 6.5 million hectares (16.1 million acres) suitable for biofuel production.
  • World’s fifth largest palm oil producer.
  • Productivity of 9,000 liters of ethanol per hectare every year.
  • Growing market. For 2020, a production of 1.4 billion liters of ethanol and 1.2 billion liters of biodiesel per
  • year.
  • Assured demand. In 2020, E20 and B20.
  • Creation of a “green seal” to identify the national biofuel production with good environmental and socialpractices.

Cosmetics

  • Market of USD 2.6 million and production of USD 2.4 million.
  • Cosmetics exports grew by 23% between 2003 and 2007.
  • Country with the second largest flora biodiversity in Latin America.
  • Market for men’s cosmetics is expected to grow 20% per year.
  • Colombian women cosmetics pocket share duplicates the European women share.
  • More than 242,000 professionals and technicians available to work in the cosmetic industry.
  • Products with natural ingredients grew 9% between 2003 and 2008.

IT Services

  • 27,000 business graduates and 13,000 engineering graduates per year.
  • Seven cities with more than 500,000 inhabitants.
  • Neutral Spanish accent.
  • Market: USD 1 billion, growing at a rate of 42% in three years.

Tourism

  • 1.45 million foreign travellers visited Colombia in 2008.
  • Tourism growth to Colombia (9.73%) more than doubled the worldwide growth (2%).
  • Income tax exemption for new or remodeled hotels.

Medical Tourism

  • Pioneer Program in reproduction immunology; the first test tube baby born in Latin America; first pacemaker in the world.
  • Colombia is the second best country for scientific and health infrastructure in Latin America: (IMD, 2008).
  • 3,000 medical graduates per year.

COLOMBIA’S KEY STATISTICS

 

2005 2006 2007 2008 2009
GDP (USD Billion) 144,6 162,5 207,8 242,6 248,8
GDP Per Capita (USD) 3.142 3.471 4.338 5.027 5.542
GDP (Annual Variation in %) 5,7 6,8 7,6 2,5 0,4
Unemployment (%) 11,8 12 11,2 11,3 12
Exports (USD Billion) 21,2 24,4 29,9 37,6 32,8
Imports (USD Billion) 21,2 26,2 32,9 39,7 32,8
FDI (USD Billion) 10,2 6,4 9 10,6 7,2
Exchange Rate (vs. USD End-Of-Period) 2.320 2.357 2.078 1.966 2.044
Inflation (%) 4,9 4,5 5,7 7,7 2
Population (millions) 42,9 43,4 43,9 44,5 44,9

 

Source: National Statistics Administrative Department (DANE), Latinfocus, Economist Intelligence GDP at current prices of 2000. * Forecast: Economist Intelligence Unit (EIU)

 

WORLD CLASS SERVICES FOR INVESTORS

 

The Colombian Government creates favorable conditions and offers the best support for investors. PROCOLOMBIA occupied position 16 in the list of the best investment promotion agencies of the world and provides the following services to foreign investors:

  • Information requests (economic, sector specific information, legal, procedural, etc).
  • Contacts with public and private sectors.
  • Set up of agendas when investors decide to visit Colombia.
  • Aftercare services for investors that are already established in the country.
  • Assessment and improvement of business climate.

 

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Proexport Colombia  is the bureau in charge of tourism, foreign investment and export promotion in Colombia.

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