Colombia has established itself as one of the most attractive destinations for foreign investment in Latin America, thanks to economic, strategic, and policy factors driving its competitiveness in the global market. It is the fourth-largest economy in the region and has an attractive domestic market of more than 52 million people.
Strategic Location and Access to International Markets
With its Atlantic and Pacific coasts, Colombia’s geographic position facilitates access to key markets in the Americas, Europe, and Asia. In addition, the country has more than 16 trade agreements in force, which grant preferential access to more than 60 countries and close to 1.5 billion consumers, including economies such as the United States, the European Union, Brazil, Mexico, Chile, Peru, Costa Rica, and South Korea.
Tax Incentives and Free Trade Zones
Colombia offers multiple tax benefits for foreign investors. Companies that establish themselves in free trade zones can access a special regime with tax advantages, facilitating goods production and services provision. In addition, there are income tax exemptions for specific sectors (20%), compared to the general rate of 35%.
Economic Diversification and Sectorial Opportunities
Foreign investment in Colombia has diversified beyond mining and oil, encompassing sectors such as electricity, gas, water, financial services, manufacturing, transportation, and communications. This diversification reflects the solidity and stability of the Colombian economy, offering a wide range of opportunities for international investors. It has also been presented as a response to some incentives, including the Pact for Credit, which brought together the Government, the real sector, and Asobancaria (Banking and Financial Institutions Association of Colombia).
The manufacturing industry is the sector that most attracts foreign direct investment (FDI) in Colombia. In 2023, this sector received approximately USD 3,086 million, representing a growth of 104.6% compared to the previous year. In addition, the trade, restaurants, and hotels sector also showed a remarkable performance, attracting USD 1,709 million, equivalent to an increase of 10.8% over 2022.
Together, these two sectors account for about 42% of the total FDI that reached the country’s non-mining-energy sectors. Other sectors with potential for foreign investment include agribusiness and construction, although manufacturing is the primary recipient of foreign capital.
Commitment to Sustainable Development
The country is committed to attracting sustainable capital and is focused on biodiversity protection and energy transition. By 2030, the commitment is to reduce greenhouse gas emissions by 51% and reach zero deforestation. By 2050, the goal is for Colombia to be carbon neutral.
Between October 21 and November 1 of this year, the United Nations Conference on Biodiversity (known as COP16) was held in Colombia, with historic advances in global agreements for the integration of biodiversity in development sectors, the synergy between the biodiversity and climate agendas, the promotion of the bioeconomy, and the conservation of the Amazon. This framework serves as a roadmap for the 196 countries party to the Convention to take action at the national level to achieve the four goals and targets established to halt and reverse biodiversity loss by 2030.