Investing in Colombia is easy and safe, and here ColombiaOne offers a practical guide for carrying out economic operations in the country without surprises and with certainty. Thanks to a consolidated economic system, tue Republic of Colombia offers investors a legal security that has remained unchanged for decades, and a stable democratic system, far above other countries in the region.
Even though in recent years the economy has shown slow growth, the situation offers a panorama rich in opportunities to make a good business and achieve a quick profit with little risk.
Investing in Colombia, an easy and safe operation
According to data from the Ministry of Commerce, foreign investment receives the same treatment as domestic investment. In this sense, there is no preferential treatment, but neither is there any discrimination or extraordinary taxes due to the foreign origin of capital.
To invest, it is not necessary to request any authorization, with the only exceptions being investments in the financial sector, which require authorization from the Financial Superintendence, a public entity in charge of the proper management of the banking sector in the country. Similarly, investments in hydrocarbons and mining are subject to a special regime.
The investment is universal and the investor may invest in any sector of the Colombian economy with only two exceptions: toxic, hazardous, or radioactive waste derivatives not produced in the country and concessionary companies of open television services, which may not have foreign investment exceeding 40 percent of the total capital stock of the concessionaire.
The foreign investor must register its investment free of charge with the Bank of the Republic, as the country’s central bank. This procedure will offer the possibility of remitting abroad the proven net profits generated by the investment periodically; reinvesting profits; capitalizing the amounts with the right to draw, product of obligations derived from the investment, and remitting abroad the amounts received as a product of the disposal of the investment within the country.
Colombia’s depreciated currency, an opportunity
The Colombian peso, the country’s currency, is going through a devaluation phase that began with the arrival of the COVID-19 pandemic in March 2020 and, despite subsequent stabilization phases, has not recovered.
This fact offers a good opportunity to invest in dollars or any other major currency. Over the last months, the exchange rate with the dollar oscillates between 4,100 and 4,400 pesos, when only four years ago, the exchange value was approximately 3,500.
The same happens with the euro, whose exchange value today in Colombia oscillates between 4,200 and 4,500 pesos when a little more than four years ago, the exchange value was 3,800 pesos for each euro.
There is no minimum amount to invest in the country. However, when the inflow of money is small, the exchange is made automatically by the bank receiving the foreign currency. However, when the amount arriving in the country, coming from a foreign bank, exceeds 10,000 dollars, a negotiation is made with the bank, a scenario that is usually more favorable than in the first case.
Where to invest in Colombia?
The most attractive sectors for foreign investors in the last year were telecommunications, tourism, and renewable energies. Other areas, such as the oil sector, construction, and the financial sector, followed closely behind.
Although the construction sector has been going through difficult times for years, due to its low growth, analysts expect the sector to recover in the second half of this year and to consolidate in 2025. On the other hand, the downturn in business offers good opportunities for those who decide to invest at this precise moment.
In terms of corporate stocks, the first place goes to Ecopetrol, an oil and hydrocarbons company, and Grupo Argos, a cement and energy company. Both companies are the most recommended for investing in shares, according to the portal Valora Analitik.
The tourism sector, the most sought-after
Regarding the tourism sector, Colombia is the country ranking second in the region for foreign investment in this area. According to United Nations data, 69 percent of all foreign investment coming into the country is directed to the tourism sector, with the greenfield projects division being the most represented and the United States, Spain, Luxembourg, Panama, United Kingdom, and Uruguay the most interested investors.
In addition, the Colombian government is strongly committed to this sector, convinced that, together with other aspects of the economy, it can serve to replace oil and gas extraction, the traditional pillar of the Colombian economy, in the medium-term future.
With a strong image campaign projected abroad, and with the decrease of criminal activities in the last decade, the arrival of foreign tourists soared in 2023 and promises to surpass these record numbers by the end of this year.
Other ways to invest
A study by BBVA bank offers a diversified panorama for the foreign investor who also resides in Colombia. In this regard, the Spanish parent bank says that the following investment models are the most popular for domestic and foreign investors.
Fixed Term Certificates of Deposit (CDT). This is the most conservative option; they are documents that validate that a certain bank will hold the money for a certain period (from 30 to 360 days), during which yields will be received, which depend on the institution where they are acquired. It should be taken into account that they do not cover inflation, so they are not a good long-term instrument. The central bank’s high rates have favored a higher yield for the last two years, which, although it has fallen, still stands at around 12 percent.
Investment funds. This is the simplest and safest option for savers and families. Through these instruments it is possible to invest with minimum amounts in assets of different markets and instruments, thus diversifying investment risks. It is the most attractive in terms of dividend yield. The prices of the shares of Colombian companies allow for generating higher yields than a traditional investment. In addition, digital media can be used, where the cost of an Internet transaction is considerably lower than that charged by a commission agent.
Collective investment funds and real estate investment funds. Both are financial instruments used in Colombia to invest in different types of assets and diversify risk. Collective investment funds are investment vehicles made up of resources from multiple investors that are grouped to invest in a diversified portfolio of financial assets, such as stocks, bonds, and derivatives, among others. They are managed by trust companies or authorized stockbrokers. Real estate investment funds are a variant of collective investment funds that specialize in investing in real estate assets, such as real estate, construction projects, shopping centers, offices, and hotels, among others. They allow investors to participate in the real estate market without the need to directly acquire properties.
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