Colombia: an attractive destination for creative industries looking for software development outsourcing
Colombia's growing IT hub is particularly attractive for companies looking for software development outsourcing. The sector of BPO and IT services and audiovisual and creative industries, propelled by an innovative environment, are a driving force for economic reactivation in Colombia. The country is captivating companies from these sectors to invest in Colombia.
An IT services hub for software development outsourcing
Latin America’s first Center for Fourth Industrial Revolution is in Medellín. While this technological complex is a vibrant place for information technology and creative industries, it’s also a symbol recognizing the city’s progressive environment for innovation. Led by cities like Medellín and Bogotá, Colombia is facilitating the arrival of exporting firms in the sectors of outsourcing of BPO services, shared services and data centers, and other IT services.
In Medellín, the Ruta N complex is a hub where technology, entrepreneurship and innovation meet. Bogota’s Technological District is another area concentrating on the creative industries. Both cities have shown potential for resources and a talented workforce to develop and take on projects using artificial intelligence, IT health services, software for education, govtech, fintech, and creative industries.
Some have even argued that Colombia could be on it’s way to becoming Latin America’s “Sillicon Valley”. The country has now secured a reputation and a place on the global stage as a promising tech destination. Added to the selection of Medellín for the World Economic Forum’s Center for Fourth Industrial Revolution, the country received venture capital investments totalling $1.09 billion in 2020. According to the Association for Private Capital Investment in Latin America (LAVCA), Colombia is at the forefront of machine learning, fintech, e-commerce, and logistics as well as being a strategic location for nearshoring.
Firms as Gorilla Logic, Rockwell Automation, The Institute for Robotic Process Automation & Artificial Intelligence (IRPA AI), and Growth Acceleration Partners, have established themselves in Colombia, making it an IT services hub for the region and the United States.
Foreign direct investment in Colombia
Among the benefits of investing in Colombia, tech firms can be atracted by the outsourcing opportunities and a favorable tax incentives framework. Moreover, the country has a regime of Free-trade zones that favor investors, offering them special tax rates. As an added bonus, Colombia’s privileged location places it as one of the best countries to invest in Latin America with substantial development taking place in different cities. As a general outlook, projections made by Ministry of Finance and the Colombian Central Bank indicate that 2021’s figures for foreign investment in Colombia are expected to grow by up to 22.5% due to economic reactivation.
According to the Central Back, Colombia received foreign investments totaling US $7.69 billion in 2020. As a result of the pandemic, it decreased by 46% compared to 2019, when the figure was US $14.3 billion. In 2020, ProColombia fascilitated the arrival of 197 FDI projects with businesses to be developed with US $9 billion in investments. This surpassed the 170 projects and US $6.2 billion goal for that year.
Colombia is building a reputation as a tech destination. The prospects on direct foreign investment and the opportunities for outsourcing is motivating exporting and tech companies to invest in Colombia. Consider the outlook of international investor’s on investing in Colombia, or learn how to establish your company in Colombia, here.