The investment promotion agency of Bogota presents a report that shows why the Colombian capital is the best investment destination in Latin America. The report includes figures on the growth of FDI, tthe state of the city entrepreneurship and information regarding the recognition that Skytrax recently gave El Dorado International Airport as the best in South America.
In its birthday, Bogota region has reasons to celebrate. In 2021, the new and in expansion FDI in the city had a significant rebound, exceeding USD 1,551 million, which is equivalent to a growth of 78.4%, compared to what was registered in 2020.
Invest in Bogota analysis show that in 2021, this region received 115 greenfield FDI projects; the majority corresponds to new projects (76.3%). A remarkable fact is the increase in the proportion of reinvestment projects in the last two years. In 2019, the proportion of reinvestment projects was just 3.9%, while in 2021 it was 23.7%, which reaffirms the potential of Bogota-region as a destination for business growth.
In terms of job creation, FDI in the Bogota region generated 20,195 positions in 2021, which is equivalent to a growth of 103.9%, compared to 2020. This figure shows that the Bogota region is a destination for impact investment projects with great capacity to generate employment. A fact that reflects this circumstance is that in 2021 the greatest creation of jobs per project in the last decade was achieved, with an estimation of 185.3 jobs on average per project.
As for the first quarter of 2022, it is estimated that the Bogota region received 32 new and expansion FDI projects, valued at USD 383 million. The number of projects increased 18.5%, compared to the first quarter of 2021; This increase is mainly due to the execution of projects that were delayed in 2021 due to the uncertainty of the pandemic. The generation of employment on account of FDI presented an increase of 176.8%, compared to the first quarter of 2021, with 5,082 jobs. The behavior of these figures is due to the fact that the investments that are coming to the city are labor-intensive and not capital-intensive.
What 2022 looks like?
It is estimated that, by 2022, FDI will increase compared to 2021, without reaching the levels registered in 2019, the year with the greatest attraction of foreign capital in the decade.
A survey developed in January 2022 by Invest in Bogota to various companies reaffirms the strengthening of greenfield FDI and the good prospects for materializing investment projects that had been stopped and canceled. According to the results, 81% of the companies consulted consider developing investment projects in 2022, mainly in expansion projects.
What sectors of the economy are receiving foreign capital?
During the first quarter of 2022, the sectors that materialized the largest number of new and expansion FDI projects in the Bogota region were: software and IT services (18.2%), financial services (12.5%), corporate services (12.5%), communications (9.4%) and others (25.0%), which confirms the city’s vocation for services.
The availability, quality and cost of labor, advances in bilingualism and the strategic position of Bogota have contributed to investors perceiving it as an ideal destination for the development of their services and operational activities.
In terms of investment amounts, the communications sector led the attraction of FDI with USD 210 million, mainly from Ireland, the Unidad Kingdom and Spain. Communications is positioned as a high-growth sector in the Bogota region.
Capital raising by Bogota ventures is on the rise and equals the levels recorded before the pandemic. In the first half of 2022, they raised USD 1,087 million. This figure is due to 70 investment operations, which corresponds to 80% of the transactions carried out by the entire entrepreneurial ecosystem of the country in the first half of the year, the highest figure recorded compared to any other half of the last 7 years. With this result, Bogota continues to ratify its position as the leading capital of entrepreneurship and innovation in Colombia. The United States stands out as the country with the highest participation in the financing rounds, with 25%.
The sector with the best performance in raising capital in the first half of 2022 was Proptech. The most outstanding undertakings were Habi, La Haus and Acasa. These three companies carried out 4 of the 10 largest value transactions during the semester.
The best airport in South America
Skytrax, a British international air transport rating organization, recently recognized Bogota’s El Dorado Airport as the best in South America. El Dorado climbed eight positions on the World Airport Awards ladder and ranked 35th among the best airports in the world. Get to know the complete list here.