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Bogotá
GMT -5

01:59 pm

New York
GMT -4

02:59 pm

L. A.
GMT -7

11:59 am

Tokyo
GMT +9

03:59 am

Sydney
GMT +10

04:59 am

London
GMT +1

07:59 pm

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  1. Home
  2. How to invest
  3. Which Foreign Investment Incentives exist?
Foreign Direct Investment Incentives
Created by:
Araujo Ibarra consultores en negocios internacionales

Which Foreign Investment Incentives exist?

*Due to changes in the tax regime (Law 2010, December 27th, 2019) this chapter is being updated*
Ricardo López Sánchez, vice president in Araújo Ibarra lawyers firm, presents the "Incentives to Direct Foreign Investments" from the 2019 Bogota's Foreign Investment Guide.

Colombia has established a series of instruments that provide wide-ranging benefits for investors. These include the free-trade zones regime, incentives for mega-investments, the Vallejo Plan, the orange economy incentives, investments in agribusiness, and renewable energies, among others.

Free-trade zones, for example, are delimited geographic areas where industrial activity involving goods, services, and commercial activity takes place under a special customs regime. These zones can be permanent, special permanent, offshore permanent and transitory, and all of them offer the following benefits: 

  • A special income tax rate of 20%
  • Exemption from sales tax (VAT).
  • The possibility of carrying out partial procedures in the national customs territory. 
  • Benefiting from all the trade agreements signed by Colombia for exports to third countries.

Additionally, Colombia provides incentives to attract foreign capital for mega-investments that are made between January 1 of 2019 and January 1 of 2024, offering the following special regime incentives: 

  • An income tax and a complementary tax rate of 27%.
  • Exemption from the special tax on dividends.
  • Exemption from the net worth tax.
  • The possibility of depreciating your assets over a minimum period of 2 years, regardless of the lifespan of the asset.
  • The possibility of entering into tax stability contracts, through which the Colombian state will guarantee that the aforementioned tax benefits will remain in place for the same period of time. 

In addition, the Colombian state offers financial incentives for the creation of jobs for young people between 18 and 28 years old with different levels of education, providing subsidies for companies for the payment of employees’ salaries and social benefits.
 

Keep in mind

  • There is a special system for imports and exports arising from the Vallejo Plan, offering benefits related to total or partial exemption from the customs duties that apply to the importation of raw materials, consumables, capital goods and spare parts.
  • International Logistics Distribution Centers (CDLI) are public warehouses, made available by customs authorities and located at seaports or inland ports and international airports, where goods can be taken for storage, preservation and to be prepared for distribution. 
  • In order to qualify as users of a permanent free-trade zone, companies must meet requirements regarding their real productive fixed assets to determine their commitment in terms of the number of direct jobs and the generation of new investment.
Learn More Here

Eng-BogForeignInvst. V10 - Chapter 6.pdf369.63 KB

//www.slideshare.net/slideshow/embed_code/key/pFaP40HDB1eIvU
Araujo Ibarra consultores en negocios internacionales
Nombre abogado
Araújo Ibarra

A leading consulting firm in Colombia in terms of investment mechanisms and international trade, Araújo Ibarra acts as a consultant to Colombian and international businesspeople, governments and government agencies in identifying, designing and optimizing investment strategies and taking advantage of business opportunities in order to help them to be more competitive in a globalized world.

Visit The Homepage

Related topics

 

Medical Cannabis
Doing business with medical cannabis
What regulations does Colombia have for growing and processing medical cannabis? What business opportunities are there in this field?
Corporate Insolvency Regime in Colombia
How a Company is Liquidated in Colombia
How are companies liquidated in Colombia? What guarantees exist for the effective payment of creditors’ debts in the event of a company having to go into liquidation?
Foreign Direct Investment Incentives
Which Foreign Investment Incentives exist?
*Due to changes in the tax regime (Law 2010, December 27th, 2019) this chapter is being updated*

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