Colombia is quickly becoming a go-to destination for entrepreneurs, thanks to its prime location, booming economy, and talented workforce. Ready to dive in? Here are 5 must-know tips from our local business experts to launch your dream venture in Colombia.

Why Colombia should be your next business destination

As the fourth-largest economy in Latin America, Colombia is a hotspot for investors and a land of opportunity for entrepreneurs. Micro, small, and medium enterprises, which make up a whopping 99% of all businesses, are the main drivers of growth, innovation, and jobs in the country.

Colombia’s location near the Panama Canal makes it a gateway to diverse markets, linking North and South America and offering direct access to booming Asian markets. With connections to over 60 countries, entrepreneurs can reach 1.5 billion consumers. Plus, Colombia’s trade deals with big economies like the European Union, the United States, and Canada mean lower tariffs and easier entry for global businesses.

The country offers investment opportunities in tech, renewable energy, agriculture, and manufacturing. Cities like Bogotá, Medellín, and Cali are emerging as bustling tech and start-up hubs, with skilled professionals and supportive business climates. These cities offer business parks, accelerators, and start-up centres, where companies can connect, get mentorship, and plug into the entrepreneurial community.

The Colombian government backs entrepreneurs and foreign investors with various programmes. Each region hosts councils for small and medium enterprises, which bring together local and national governments, business groups, and chambers of commerce. Public agencies like INNpulsa and Ruta N help businesses grow, secure funding, and expand their networks. Colombia offers incentives for green projects, tax breaks in agriculture and renewable energy, and special tax rules for major investments. Plus, with a digital nomad visa, remote workers can live and work in Colombia for up to two years.

5 tips for a successful business in Colombia

1. Do your research

Thorough market research is key to understanding the Colombian market. Look into market trends, consumer preferences, and cultural norms to make sure your business meets local needs.

• Market trends: Analyse Colombia’s economic outlook, industry growth areas, and consumer spending habits. Resources like Euromonitor International, Mintel, and Statista publish regular reports on Colombia’s industry, demographic trends, and consumer lifestyles.
• Consumer preferences:To grasp Colombian consumer preferences, go beyond demographics. Focus on product features, brand loyalty, and preferred shopping channels. For example, Colombians are increasingly adopting ecommerce, with the market projected to grow and reach 6.9 million users by 2029.
• Cultural nuances:Colombia’s culture shapes how people shop and consume. Knowing these nuances will help you tailor your products or services to local tastes. Family gatherings, for instance, are a key part of Colombian life, so a food delivery service could offer family-size meals or options for larger groups.

2. Understand the legal and regulatory framework

To operate smoothly in Colombia, having a clear grasp of its legal and regulatory landscape is essential. Here are key areas to focus on:

• Registration procedures: Various business structures, such as sole proprietorship and simplified society, require specific registration processes at the chamber of commerce. The Colombian Ministry of Commerce, Industry, and Tourism website offers detailed guides for business registration.
• Tax obligations: Understanding Colombia’s tax system is important, including national and regional taxes like income tax, value-added tax, and industry-specific tax. Consulting a Colombian tax advisor or using resources like LexisNexis can help.
• Labour laws: Colombian labour laws cover key aspects such as minimum wage, working hours, vacation entitlements, and severance pay. Entrepreneurs can find detailed information on these regulations on the Ministry of Labour website.

3. Explore financing options

Securing funding is vital when starting a business. Here are some ways to get funding:

• Government grants: Colombia gives grants through programmes that support innovation, entrepreneurship, and industry development. Check out institutions like Bancoldex, the Colombian development bank, and ProColombia, the national export promotion agency. For example, Bancoldex helps tech startups, while ProColombia supports businesses entering new export markets. Each grant has specific criteria based on your business’s stage, industry, and project goals. Review these criteria carefully to see if your business qualifies.
• Loans: Banks like Bancolombia and Banco Davivienda extend business loans. To qualify, prepare a solid business plan, financial projections, and collateral. Microfinance institutions such as Promigas and Fundación WWB offer smaller loans with more flexible terms for small businesses. These organisations often prioritise supporting local entrepreneurs and fostering community development.
• Venture capital: If your business has strong growth potential, venture capital can provide significant funding. Investors look for companies with a proven track record, a capable management team, and a clear path to profitability. To secure funding, you’ll need a persuasive pitch deck that outlines your business model, market opportunity, competitive advantage, and growth strategy.

4. Mitigate risks

Colombia’s lively market offers opportunities but also challenges for entrepreneurs. Here’s how to handle key risks:

• Political instability: Stay informed through reliable sources and local business chambers to manage uncertainty. Spread operations across regions to reduce the impact of local instability.
• Regulatory uncertainties: Keep track of government and industry updates on regulations. Consult with a Colombian business lawyer for compliance and work with industry groups to advocate for favourable business conditions.
• Security threats: Improve security with cameras, alarms, and staff training. Stay updated on local security issues and collaborate with law enforcement and community groups for safety.
• Economic volatility: Colombia’s economy fluctuates, and that can affect small businesses. Prepare financially with strong cash flows and reserves. Diversity your customer base across industries or regions to manage sector-specific downturns.
• Corruption: Corruption can harm businesses through bribery and unfair competition. Adopt strict anti-corruption policies, vet partners and clients for integrity, and train staff on ethical standards.
• Infrastructure: Infrastructure challenges, especially in rural areas, can disrupt supply chains and operations. Choose locations wisely and plan for transportation and utilities backups. Invest in technology to improve efficiency and minimise infrastructure gaps.

5. Build strong relationships with local stakeholders

Building strong connections with local partners is essential for success in Colombia. Here’s how you can do it:

• Join industry trade shows:These events are prime opportunities to network, showcase your products, and stay on top of industry trends. For example, Colombiatex de las Américas, held annually in Medellín, is one of Latin America’s largest textile and fashion trade shows. Expo Agrofuturodraws farmers, suppliers, and agricultural experts, while Expoartesaníasspotlights Colombian handicrafts like pottery, weaving, and jewellery.
• Use business-to-business online platforms:Platforms like Connect Americas facilitate connections with trusted suppliers, distributors, and partners across Latin America and the Caribbean. They also offer resources like articles, webinars, and podcasts.
• Enter industry associations:Organisations like the National Business Association of Colombia (ANDI) and the Colombian Association of Micro, Small and Medium Enterprises (ACOPI) host events and offer members industry insights, market trends, and regulatory updates. Sector-specific training programmes and workshops are also available, such as those offered by Fedesoft for the IT industry.
• Work with a chamber of commerce:Join a chamber of commerce like the Colombian Chamber of Commerce or AmCham Colombia to use their extensive networks for finding partners, suppliers, and distributors. Chambers provide market insights, business growth programmes, and support for internationalisation. You’ll also boost your brand’s visibility, build trust, and be part of a community that backs your business interests.
• Partner with Enterprise Europe Network:Enterprise Europe Network Colombia, managed by Impact Hub Medellin, helps small and medium businesses innovate, grow globally, and build strong business connections. It covers a wide range of sectors, from tourism and tech to transportation and renewable energy.

The Network links Colombian and European companies, offers advice on EU funding and regulations, and hosts workshops on business development. The Network’s business advisers work closely with the Delegation of the EU to Colombia, chambers of commerce, business associations, universities, and innovation hubs. Since its launch in 2022, the Network has helped over 90 enterprises expand and find international partners.

Interested in how the Network can support your business, too? Contact your local contact point today.