May 05, 2012
Figures from the Central Bank about Foreign Direct Investment in 2011 confirm that Colombia has become a very attractive investment destination. Bogota is the Colombian city that most concentrates capital flows towards value-added sectors.
While Foreign Direct Investment (FDI) flows reaching US$ 2,828 million in 2011, Bogota received 70% of the national total amounts, not counting investments in the oil industry and financial portfolios. Compared to 2010, investment grew by 74%, which is clear evidence of good economic performance and of the city's significant dynamism.
From a sectors perspective, FDI accounted for over 60% of the inbound flows, followed by FDI coming from the trade and hospitality sectors. In terms of countries of origin, Spain (US$444.5 million) and Chile (US$436.7 million) were the main originators of FDI towards Bogota, with shares of 16% and 15%, respectively. It is noteworthy that, compared to 2010, Chile displaced the United States, as the latter showed investment figures of US$203.6 million.
Invest in Bogota, the agency for the promotion of investment in the city, has identified the following strategic sectors to attract foreign investment, based on their generation of high added-value employment and the transfer of technology and knowledge: agro-industry and bio-technology (fruits and vegetables, cosmetics and pharmaceutical), energy (services for the hydrocarbon, mining and renewable energy sector), professional services (BPO / ITO / audiovisual production), industrial (plastics, auto-parts, medical devices), health and tourism.
Since 2006, Invest in Bogota has facilitated and supported the establishment of about 75 foreign companies in the city, with investments close to USD400 million, generating close to 10.500 jobs.
The agency's success stories include multi-nationals such as Genpact, Indian leader in BPM (Business Process Management), which established itself in the Bogota Free Trade Zone; Solalia, a Spanish Software Developer; CPL Aromas, a British company which produces industrial fragrances; Agrekko or Cameron, companies providing services for the oil and gas industry.
On May 8th, the results from the ranking of Most attractive Latin American Cities for Investments in 2012 will be published, as developed by Inteligencia de Negocios (IdN), a Chilean firm, and the Universidad del Rosario (CEPOEC). The main purpose of this study is to determine which are the cities in Latin America which are most attractive for investors.
It focuses mainly on the variables and indicators that make a city more or less attractive for investors, when making investment decisions. What few information is already known about this ranking, is already interesting:
Bogota was ranked 5th, higher than Buenos Aires.
It is the first time that Bogota manages to be ranked within the select five in Latin America.
Bogota continues to be the leader among the cities in the Andean Region.
This result comes in addition to the other achievements the city has already been reporting for over seven years.
This report allows Bogota to compare its strengths, weaknesses and opportunities against other cities in terms of attracting investments. Nowadays, it is the cities the ones competing to position themselves as attractive investment destinations, and in this "competition", having first-hand knowledge about the successful experiences to draw investment, gives both the City as well as Invest in Bogota the possibility of adopting international best practices in that sense.
How did Bogota manage to be ranked among the "top 5"?
- Internationally, Bogota boasts a very favorable image, and has an admirable position, which has allowed it to climb up this ranking.
- In terms of managing the city's appeal and promotion, Bogota has been traditionally viewed as one of the most dynamic in the region. In more recent times, the favorable investment conditions that Colombia offers, as a country, have supported the city's positive results.
- The city has been renowned for providing abundant and high-quality information via Internet for investors and businessmen who are making decisions about opening their operations or headquarters somewhere in Latin America.
- The recent results from the World Bank's "Doing Business", which use Bogota as a benchmarking, attest to the significant progress that the city has had in reducing transaction costs. The number of steps and costs associated to enterprise proceedings has gone down, which allows the city to receive a positive score as a venue to do business in.
- The recent establishment of several multi-national companies, has allowed for positive dynamics to be generated, making it all the more attractive for a company to establish itself in the city. This is a sign of investor confidence.
- Economic strength. With an estimated GDP of over US$70.000 million, and a market size in excess of 7 million inhabitants, Bogota has become one of the most important business centers in the region.