Exporting to Colombia
Growing market
Colombia’s GDP grew 2.6% in 2018. Growth is expected to reach 3.4% in 2019 and remain in that region for the next few years (IMF, 2019). Positive GDP performance and stable inflation and interest rates underpin optimistic forecasts for 2020 and beyond (IMF, 2019).
Ease of doing business
Colombia is ranked 2nd in Latin America for ease of doing business (World Bank, 2018). Contributing factors are the country’s political stability, a growing middle class and improved safety and security after the signing of a peace agreement in 2016.
Ease of doing business
67th
out of 190 countries (World Bank, 2019)
Currency
Colombian peso
Business language
Spanish
You're likely to need a translator
GDP per capita
$6,641
UK is $41,030 (IMF, 2019)
Economic growth
2.6%
(IMF, 2019)
Time zone
GMT -5
Opportunities for exporters
There are opportunities for UK companies across a broad range of industries. Our trade advisers in Colombia have identified particular opportunities for UK businesses in the following sectors.
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Infrastructure
Infrastructure is an important sector for Colombia’s sustainable development. From 2011 to 2017, the national infrastructure agency, ANI, requested proposals for approximately $9 billion worth of infrastructure contracts (Colombia Chamber of Infrastructure, 2017).
Government investment
The Colombian government is investing in its National Transport Master Plan to upgrade the country’s roads, railways, waterways, maritime and air transport. The public-private partnership framework in Colombia has created opportunities for UK businesses to take part in infrastructure projects in areas such as construction, consulting, and supplying materials.
Major public transport opportunities
Colombia is set to relaunch the country’s railway network with several projects, including reopening the railway line from La Dorada to Santa Marta Port, building the first Bogota Metro line, and reviving the Antioquia and Pacific Railways (freight rail service). The government is also looking to expand Colombia’s airports, offering further potential for UK businesses.
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Energy
Colombia has a regulatory scheme to ensure reliable long-term power supply. This guarantees that generated resources can meet demand during energy shortages at efficient prices.
Oil and gas opportunities
Hydrocarbon sector opportunities include exploration of offshore resources. Additional opportunities include the development of onshore reserves and recovery of crude prices in enhanced exploration investments.
High demand for renewable energy systems
In 2018, the Ministry of Mines announced the introduction of renewables to the country's energy matrix. The decree establishes guidelines to promote long-term contracting of electric power generation projects from renewable sources, this provides opportunity for UK businesses.
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Life sciences and healthcare
The Colombian healthcare sector has developed rapidly over the last 2 decades and the market is expected to continue growing. Strong investment in public sector healthcare and the country's growing noncommunicable disease burden have driven significant demand in this sector.
Demand for healthcare affiliates
Healthcare is established as a fundamental right for all Colombian citizens by law and there is a regulated social security system. The total expenditure as a percentage of GDP was 5.9% in 2016 (World Bank, 2017). Private healthcare represents around 29% of healthcare spending (WHO, 2015)
Demand for medical devices
Colombia is the 3rd largest medical device market in Latin America. The main medical devices sold are consumables such as bandages, sutures, syringes, needles, first aid kits and gloves.
Pharmaceuticals and technology
Tighter regulations on bioequivalence have been put in place, and this is driving rapid growth in the bioequivalent generic drug market. The x-ray technology market is also expanding rapidly.
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Education
There are opportunities for UK educational establishments in English language training, higher education, private and public partnerships.
Signed agreements
Colombia and the UK signed a Mutual Recognition of Qualifications Treaty in 2016. Colombian universities are looking to partner with UK universities to offer dual, joint and blended degrees.
English language training
The majority of Colombian universities require students to obtain English level B1 in order to graduate. There are commercial opportunities for English language training (ELT) companies to sell products and services to university language centres. Some private schools are also looking to procure ELT and teacher training services and products.
Public and private investment
Private education is common in Colombia. The private, bilingual school networks include Uncoli in Bogota and Redcol (outside of Bogota). The new administration will focus on increasing welfare and equity in access to education, particularly primary and middle school, and investment in education infrastructure.
Doing business Colombia
Preparing to export
Taxation
The UK and Colombia have signed a double taxation agreement, meaning the same income is not taxed twice. However, this is still due to be ratified and is not yet in force.
VAT
If you’re registered for VAT, it may be possible to zero-rate the goods you export to Colombia, provided certain conditions are met.
The standard rate of VAT (IVA) in Colombia is 19%. Certain products are subject to different rates.
Corporate tax
The company tax rate for a Colombian resident company is currently 33% of its taxable income.
Regulations
The National Tax and Customs Authority (website in Spanish) is in charge of financial regulation and tax collection in Colombia.
Colombia has a complex legal and regulatory framework. UK companies interested in more information should get in touch with DIT Colombia who can put you in touch with law firms and other entities that can advise on a case-specific basis.
Operating in Colombia
Challenges
Bribery, corruption, excessive red tape and high tax burdens are common challenges when doing business in Colombia. However, the Colombian government is committed to improving the economic environment and prospects look good.
The GAN Business Anti-Corruption portal provides some basic procedures you can establish to protect your company.
Intellectual property
As a first step, we advise you to speak to an intellectual property (IP) lawyer if you think you need patent protection when exporting.
Manufacturers and traders are strongly advised to patent their inventions and register their trademarks in Colombia.
Using agents and distributors
You’re advised to use an agent or a distributor. Colombians prefer to do business with foreign companies that have local representatives in the country.
UK companies entering into agreements in Colombia should seek professional advice.
Next steps
DIT can advise you on doing business abroad, and help put you in touch with other people who can help such as lawyers and distributors.
