Bogota is an ideal center in the Americas for developing and exporting pharmaceutical and healthcare products. Find out why.
(Bogota, pharmaceutical capital)
Due to the current context of the world, it is expected that global spending on healthcare will increase in the coming years, from 2.8% between 2015 and 2019 to 4% between 2020 and 2024. In Colombia alone, the growth expectation of the pharmaceutical and healthcare industry sectors is even above the country’s growth expectation.
In addition to the above, some countries have taken measures to secure their supply chain, minimize distribution times, and have more flexibility and agility in their production. In this case, one of the strategies being implemented by companies in countries such as the United States is nearshoring, which consists of relocating their operations to closer markets.
In this context, Bogota is positioned as an ideal center from which to develop and export pharmaceutical and health industry products for the following reasons:
- It has multiple trade agreements and preferential access to international markets.
Companies located in Bogota not only have access to a domestic market of more than 50 million people, they also have access to multiple markets around the world thanks to Colombia’s 17 trade agreements, which open the door to 60 countries and more than 1.5 billion consumers.
In addition to this, Colombia has the free trade agreement with the best access conditions to the United States, a market that imports more than USD 220 billion in pharmaceutical and health industry products, such as medicines, medical devices, and active ingredients.
- It has outstanding air logistics.
Pharmaceutical and healthcare products largely travel by air, to ensure immediacy, cold chains, and proper shipment handling.
In this regard, Bogota is the star of the region, due to its strategic geographical position in the middle of the continent, and for having the El Dorado International Airport, which is the most important air cargo terminal in Latin America.
Also, Colombia has one of the most competitive air freight rates in the region, above countries such as Mexico, Brazil, Peru, and Chile.
- Offers incentives for investment in the pharmaceutical and healthcare industry.
Colombia offers multiple incentives for foreign investment and business development. These include incentives for youth employment, income tax deductions for investment in R&D+i projects (research + development + technological innovation), and TAX exemption for the importation of equipment or elements destined to CT+i (science + technology and innovation).
Additionally, Bogota Region has six free trade zones with conditions such as sales tax exemption for the purchase of raw materials, parts, inputs, and finished goods made by users in national territory; zero tax and duty for imports to free trade zones; special income tax of 20% for users, among others.
- Human talent.
Bogota has a human talent recognized in the region. It has close to half of Colombia’s professionals with Ph.D., specialization, and master’s degrees related to the pharmaceutical and healthcare industry.
Proof of this quality is the growth of medical tourism in Bogota and Colombia, which positions the country as the fourth-best in Latin America and 25th in the world in the Medical Tourism Index 2020/2021; and the high number of international companies that year after year settle in Bogota, such as Fresenius, Mindray, Pfizer, Sanofi, Abbott, MSD, among others.
- It has a stable environment for private enterprise and foreign investment.
Among the countries in the region, Colombia stands out for its stability and safe business environment in the development of companies.
This is reflected in rankings such as the Global Competitiveness Report 2019, which ranks the country as the best in Corporate Governance and the second in financial system stability in Latin America; the Doing Business 2020, which places Colombia first in minority investor protection in Latin America; and the Global Arbitration Review’s Whitelist 2018, which recognizes the Arbitration Center of the Bogota Chamber of Commerce as the best arbitration institution in Latin America.
Additionally, according to the OECD, Colombia is the country in the Americas with the fewest barriers to foreign direct investment, with fewer restrictions than large countries in the continent such as the United States, Canada, Mexico, or Brazil.
(Read 10 reasons that make Bogota one of the top business cities in Latin America)
(The role of foreign investment in Bogota’s economic reactivation)