When you look at the statistics, it’s unsurprising to hear that Colombia is fast becoming one of South America’s most popular places for foreign investment. According to the 2023 World Investment Report, «FDI to Colombia grew by 82 per cent to $17 billion, led by extractives; construction; finance; and transport, logistics and communication services». With continuous improvements to urban infrastructure, technology and language proficiency, more and more expats are looking to start businesses in Colombia. For this reason, we’ve picked out the five best industries for foreign nationals to invest in, and why they are such lucrative business opportunities. Let’s begin with the biggest up-and-coming industry in Colombia.
1. Digital B2B Services
B2B services are not new to the business world, but Colombia is slowly becoming a hub for foreign tech startups to grow and prosper.
Colombia is currently Latin America’s second largest provider of IT services and ranked as Latin America’s third largest tech hub by Startup Blink. With an array of B2B tech markets emerging in larger urban areas, improvements in Colombia’s commercial wireless communication services have made it easier for digital enterprises – particularly startups – to survive and grow.
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Furthermore, Colombia’s major cities such as Bogotá, Medellín and Cali now have digital PR, health & fitness software and IoT businesses thriving under foreign ownership, some of which have been growing in Colombia for over a decade.
As the service sector makes up over 62.1% of Colombia’s national GDP, healthy competition with low barriers to entry make digital B2B services an attractive proposition for foreign investment.
2. Hospitality - Real Estate Services
Sticking with services, the retail side of Colombia’s economy is more established and arguably even easier to begin.
The massive influx in foreign tourism has contributed to a significant rise in foreign-owned hospitality businesses. In fact, 5’869,869 non-resident visitors visited Colombia at the end of 2023, according to the Office of Economic Studies of the Ministry of Commerce, Industry and Tourism. Significantly, this was higher than any other Latin American nation.
Over the past decade, there’s been more than 100 hotels, bars and restaurants set up through foreign investment. Part of this is due to the Colombian government issuing favorable fiscal policies for hospitality-based businesses, including tax exemptions for all capital goods in tourism-based exports, and tax discounts for the employment of handicapped or disabled workers in this sector.
Given the large number of available hospitality sector workers in Colombia, many of whom are bilingual, starting a restaurant, hostel or hotel makes a whole lot of sense to expats looking to invest. If you’re looking a place to start an hospitality business in Colombia, in Real Estate by expatgroup.co, we can help you to choose one.
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Keeping with the theme of language, expats’ greatest intellectual asset is widely regarded to be the language they speak.
Thousands and thousands of Americans, Brits, and Australians flock to Colombia each year, and manage to stay by teaching English as a second language. The demand for learning English, as well as French, German, Spanish and even Chinese is huge in Colombia.
Whether it’s a desire to get into Colombia’s top universities, work for international corporations or travel around the world, Colombians are acutely aware of the need to learn English. Adding to this that Colombia ranks a mere 17th as Latin America’s most English proficient country, the desire for English classes from native speakers has only increased in recent years.
If you’re looking for a model to base your language academy on, the British Council have successfully recruited thousands of native speaking English teachers and developed into Colombia’s most prominent and sought after institution for learning English. Or, you can create a spanish school for expats and hire local talent.
4. Mining Sector
In terms of the primary sector, Colombia is renowned worldwide for its booming mining industry. With a special focus on gold, coal and emeralds, Colombia’s foreign investment in mining its precious minerals has only got bigger over the last decade. Why? Because the Colombian government has implemented business legislation that actively encourages foreing investors to engage in mining activities.
Also, according to the Ministry of Mines and Energy, Colombia is a very attractive country for all mining investors, and uses resources generated by mining activity in at least 10 socioeconomic sectors.
There still exist questions over the ethics and social responsibility of owning a mining company. As many know, mining causes serious environmental issues such as erosion, deforestation and soil contamination. As the second-most biodiverse country in the world, Colombia’s natural habitats are put at serious risk by extensive mining operations, making mining companies a bad choice of business PR wise.
Nevertheless, mining remains incredibly profitable within Colombia for now, even if we could see heavy restrictions in the near future for the sake of environmental preservation.
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5. App Technology
Returning to digital industries, mobile apps are proving to be extremely profitable enterprises in Colombia.
The best examples of these tech unicorns are Rappi and Habi. Rappi leads the pack with US$2,192 million in investments, followed by Habi, a real estate company, with US$315 million. As a fast food delivery app as Rappi, a digital center of property management as Habi, these Startups have integrated gamification and fantastic front-end UX to make its app the most popularly used apps in Latin America and Colombia.
By leveraging great Latin American designers and coders to create an incredible app. In Colombia, there’s a large skill mismatch between workers with computer technology education backgrounds and their job roles. Not only are these people underemployed given their level of skill with coding, computational development and design, they often find themselves underpaid in comparison to their North American and European counterparts.
In short, the potential for starting an app-focused business in Colombia is huge, as the human resources required exist, with business expenses being relatively low.
How to create your businesses in Colombia as a foreigner?
When creating a business in Colombia as a foreigner, there are several things to consider. One of the most important is the transfer and legalization of money. It’s essential to clearly understand the foreign exchange regulations and the processes involved in transferring money to Colombia. This ensures that your investment is secure and legally compliant.
Another important consideration is obtaining an investment visa. This requirement is for those looking to invest in Colombia and is issued by the Ministry of Foreign Affairs. Before applying for the visa, it’s essential to ensure that you meet the eligibility criteria and have all the necessary documents.
In addition, working with a qualified company that can guide you through creating a business in Colombia is essential. This includes registering your company with the Chamber of Commerce, obtaining a tax ID number, and complying with all legal requirements.
With the proper guidance and support, creating a business in Colombia as a foreigner can be a successful and rewarding investment opportunity. Contact our specialists today to learn more about the process and how we can help you achieve your business goals in Colombia.
FAQs about profitable businesses in Colombia
Colombia has a legal framework in place to regulate foreign investments and promote and protect investors’ rights. The primary law governing foreign investments is Law 80 of 1993, which establishes the basic rules for foreign investment in Colombia. Additionally, Colombia has signed international investment protection treaties to offer further guarantees to foreign investors. It is important for foreign business people to understand these laws and regulations to ensure compliance and protection of their investments.
If you are a foreigner looking forward to establishing a company in Colombia, you should follow some essential steps. Firstly, you must register the company with the local Chamber of Commerce and acquire a NIT (Tax Identification Number). Next, depending on the business activity, you must get a business or investor visa. After that, you must fulfill the tax and labor requirements and obtain all necessary permits and licenses to operate the business legally in the country. Seeking professional legal and accounting assistance is highly recommended to ensure a smooth and glitch-free establishment process.
Colombia has a diverse economy with several promising industries for investment. Some of Colombia’s best industries to invest in include technology, tourism, education, mining, agriculture, manufacturing, and renewable energy.
Seeking professional advice before starting a business in Colombia is highly recommended. It can help you navigate the legal and financial aspects of setting up a business in the country and ensure you comply with all the necessary regulations. Therefore, consulting with a lawyer, accountant, or business consultant with experience with the local market and regulations is advisable. Contact expatgroup.co and we’ll help you with all your projects.
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Create a Colombian company
- Incorporation of a company in COLOMBIA
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