With a population of 48 million people, Colombia is the third largest country in Latin America, and it’s economy is the 28th largest in the world.
The UK has recorded investments of around £11 billion in Colombia since the turn of the millennium and is the country’s second largest investor, after the United States.
And although still relatively small, UK exports to Colombia increased by 126% between 2009 and 2012 and the total UK exports of goods to Colombia reached £303 million in 2012.
The UK’s main exports to Colombia include:
- Whisky (accounting for as much as 16% of total UK export to Colombia)
So there are definite investment opportunities out there and the structure is in place for UK businesses to make a go of it in this South American powerhouse.
Before we look at setting up the call though, let’s take a look at some of the positives and negatives of exporting to Colombia…
The pros and cons of exporting to Colombia
After Brazil and Mexico, Colombia has the largest economy in South America, worth around $378billion, which is roughly one-seventh the size of the UK and it is increasing at a rate of about 4.5%.
Inflation is controlled at 2.5% and the Colombian government maintains a positive attitude to foreign direct investment with relatively few limits, and the strengths of the market there include:
- A ‘top reformer’ in 5 of the last 8 years according to the World Bank
- A tradition of stable economic growth
- The top country in Latin America (and sixth in the world) for investor protection
- Skilled workers and the second most flexible labour market in Latin America
And the incentives for UK companies investing in Colombia include:
- The UK’s fifth largest export market in Latin America
- One of the most open markets in Latin America with 13 Free Trade Agreements (FTA)
- A developing location as a regional hub with duty free access to the other Andean nations, Mercosur and Chile
It’s not without it’s problems though, and you need to be aware of the following problems you may encounter there:
- Taking a long term approach to business with constantly changing deadlines
- Difficult geography and poor transport infrastructure
- Between 5 and 6 hours behind GMT
- 12 hours away from the UK by plane
- Concern around organized crime, human rights, bribery and corruption and terrorism.
If you’re doing business in Colombia, you’ll need a reliable and cost-effective conference call provider to help keep in touch when travelling isn’t an option. Here’s How to set up a conference call between the UK and Colombia.
And remember, you can now screen share and video conference, using Crankwheel.
Tax and customs
VAT in Colombia is set at a rate of 16%, but there are certain products that are set at a different rate. Resident companies in Colombia pay company tax at a rate of 33% of its taxable income.
The highest level of duty set on imports to Colombia is usually 15%, but there are some exceptions, and you’ll need the following documentation when exporting and importing to Colombia:
- Customs import declaration
- Declaration of dutiable value
- Commercial invoice
- Pro forma invoice
- Packing list
- Certificate of Origin
- Air/sea waybill
- Bill of Lading
- Single Tax Register (RUT) of importer
Some goods may be subject to additional requirements.
Image from Pablo by Buffer.