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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 82 percent 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 sector 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. Startup Blink ranks Colombia as Latin America’s second-largest provider of IT services and third-largest tech hub. 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—mainly startups—to survive and grow.
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 makes digital B2B services an attractive proposition for foreign investment.
Sticking with services, the retail side of Colombia’s economy is more established and arguably even more straightforward to begin.
2. Hospitality – Real Estate Services
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. This was significantly higher than in any other Latin American nation.
Over the past decade, more than 100 hotels, bars, and restaurants have been established through foreign investment. Part of this is due to the Colombian government’s 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 lot of sense to expats looking to invest. If you’re looking for a place to start a hospitality business in Colombia, in Real Estate by expatgroup.co, we can help you to choose one.
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3. Language Academies
Keeping with the theme of language, expats’ greatest intellectual asset is widely regarded to be the language they speak.
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 they want to get into Colombia’s top universities, work for international corporations, or travel worldwide, Colombians are acutely aware of the need to learn English.
Considering 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 on which to base your language academy, the British Council has 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 grown over the last decade. Why? Because the Colombian government has implemented business legislation that actively encourages foreign investors to engage in mining activities.
Also, according to the Ministry of Mines and Energy, Colombia is a very attractive country for mining investors. Resources generated by mining activity are used in at least 10 socioeconomic sectors.
- Sands, gravels, gypsum, iron, copper, silica, aluminum and zinc.
- In medicines, supplements, radiology, orthopedic elements and implant. Mining Sectors
- Manufacture of aircraft and navigation instruments (gold, aluminum, iron, nickel and titanium).
- Coal and uranium.
- Manufacture of jewelry and decorative elements (gold, silver, platinum, precious and semiprecious stones).
- Fertilizers, nutrients, soil correctors (phosphoric rock, limestone, sulfur, magnesium, manganese, zinc and kaolin).
- Food refining and preservation (salt, limestone, dolomite, magnesium, mica, sulfur).
- Vehicle manufacturing (iron, aluminum, copper, palladium, nickel, cobalt, mica, titanium, kaolin, talc, wollastonite, mica, talc and lead, among others).
- Coal, iron, nickel, titanium, limestone and fluorspar.
- Computers, cellular phones, refrigerators, televisions, GPS, microwaves, vacuum cleaners, fans, etc.
Questions remain about 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, extensive mining operations put Colombia’s natural habitats at serious risk, making mining companies a wrong PR choice.
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.
5. App Technology
Returning to digital industries, mobile apps are proving to be highly 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 like Rappi and a digital property management center like Habi, these Startups have integrated gamification and fantastic front-end UX to make their apps the most popularly used in Latin America and Colombia.
By leveraging great Latin American designers and coders to create an incredible app. In Colombia, there’s a significant 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, but they often find themselves underpaid compared 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. The Ministry of Foreign Affairs issues this requirement for those looking to invest in Colombia. Before applying for the visa, it’s essential to ensure that you meet the eligibility criteria and have all the necessary documents.
In addition, it is essential to work with a qualified company that can guide you through creating a business in Colombia. This includes registering your company with the Chamber of Commerce, obtaining a tax ID number, legalizing your foreign direct investments, 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.
