Expand Business in Colombia
Global Upside helps businesses expand into Colombia by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with Colombian laws and regulations.
The hiring and incorporation processes in Colombia are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in Colombia. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.
Colombia has seen an acceleration in its economic growth in recent years, mostly driven by strong private consumption and stronger finances. Once the domestic restriction actions come to ease, the low-interest rate facilitated by the central bank is expected to augment the private consumption growth.
- Colombia ranks as the 42nd largest economy in the world in terms of nominal GDP.
- Colombia ranks as the 3rd largest economy in South America.
- Colombia is the world’s 67th best country for business.
- Colombia is a large exporter of nuts, grains, and tropical fruits.
General Partnership (Sociedad Colectiva) is a form of establishment that requires at least 2 investors who have supplementary personal liability. The investors can administer overall responsibilities or hire a manager.
Limited Partnership (Sociedad en Comandita Simple y por Acciones) is a kind of establishment that has two categories of partners – at least one limited and managing partners. In the case of a shared limited partnership, there need to be at least five partners. The limited partners have limited obligations, meanwhile, the managing partners have personal obligations.
Limited liability company (Sociedad de responsabilidad limitada) can have 2 to 25 partners whose liabilities are equivalent to their amount of share.
Corporation (Sociedad Anónima) must have a minimum of 5 investors and they have no personal liabilities. The board of directors elected by the investors comprises the managing body.
Simplified Stock Company (Sociedad por Acciones Simplificada) is a form of a legal entity set up that needs a minimum of 1 investor who will have no personal liabilities.
It takes approximately one to two months to establish a legal entity set up in Colombia, depending on the kind of establishment required.
In Colombia, the sources of labor and employment law are varied and include –
- core labor principles and obligations are established by the constitution
- laws applicable to employment agreements, collective bargaining agreements, employment benefits, wage and hour, and vacation and sick time are governed by the Substantive Labor Code
- the guidelines and decisions are issued by the Constitutional Court, labor courts, and the Ministry of Labor.
The employment agreements here, are known as Contrato de Trabajo which can either be written or oral, however, a written bond is preferred.
Mentioned below are the terms to be included in Colombia’s employment contract:
- Name and address of both the employer and employee
- Time and place of the signatures
- Job location
- Job title and description
- Salary and Payroll Cycle
- Contract duration
- Probationary period
The payroll cycle, in Colombia, is bi-weekly or monthly. That said, employees who are paid on a bi-weekly basis are paid on the 15th of the month. As for the employees who are paid monthly, their salaries are paid on the last working day.
In Colombia, the employees are enabled with a 13th-month salary which is paid in 2 installments – the first half in June and the second half in December.
Companies need to be in total compliance with International Financial Reporting Standards (IFRS), also known as Normas Internacionales de Información Financiera (NIFF).
Colombia identifies two major laws for personal data protection under Articles 15 and 20 of the Constitution – i) the right to privacy and ii) the right to data modification. Furthermore, individual data processing is administered by two legal laws and numerous decrees that set out data protection liabilities. The laws state that all employees have the right to control and update their data and information.
Anti-Bribery & Anti-Corruption Law
The Colombian Criminal Code is implemented for any public official and private individual who is involved in corrupt practices with public officers. The Anti-Bribery Statute was approved by the Colombian Congress in July 2011, with an effort to emphasize the prohibition, examination, and forfeiture methods against public and private corruption.
1. Bribery for Public Officials
i) Imprisonment for 6 to 12 years.
ii) A monetary fine of USD 13,000 to around USD 30,000.
iii) Removal from holding a position in the organization for 6 to 12 years.
For legal entities
i) A monetary fine of USD 40 million.
ii) Prohibition from commercial activities.
2. Bribery for private officials
i) Imprisonment for 4 to 8 years.
ii) A monetary fine USD 200,000.
A legal entity or organization could be liable for remunerating the damages caused by the crime.