Foreign Direct Investment

According to UNCTAD's World Investment Report 2023, FDI to Colombia grew by 82% to USD 17 billion in 2022, led by extractives; construction; finance; and transport, logistics and communication services.  Over the same period, the stock of FDI reached USD 233.9 billion, around 68% of the country’s GDP. According to data by the Central Bank, the main investing countries are United States (21.3%), Spain (11.9%), Panama (11.4%), England (9.9%), Switzerland (6.1%); whereas the sectors receiving the most FDI are petroleum sector (22.8%), financial and business services (77.2%), manufacturing industries (17.0%), mining and quarrying (including coal - 16.0%), transportation, storage, and communications (13.8%). In the first three quarters of 2023, the country received around USD 12.7 billion in FDI (Central Bank).

he Colombian government actively encourages FDI, and it establishes the same investment regulations on foreign investors that it does on national ones. Recently, the government introduced a special tax regime for mega-investments, providing tax breaks and other fiscal incentives. Furthermore, the government is working on implementing more measures to make doing business in Colombia easier, which include the creation of a one-stop shop for investors to centralise and speed up procedures and the strengthening of the country's tax-exempt zones.  Moreover, special taxes policies have been set up for any investment in creative and innovative activities/sectors. According to ProColombia, the government’s investment promotion agency, some of the most significant investments made in the country recently involved Chinese companies. On the negative side, corruption persists as a major obstacle. Despite Colombian government efforts to enhance the business environment, foreign investors raise issues regarding non-tariff barriers, regulations, and bureaucracy hindering trade, investment, and market entry across national, regional, and municipal levels. Stakeholders worry about regulatory decisions that seem to favor certain companies, creating an unequal competitive landscape. For any foreign direct investment intending to establish a commercial presence in Colombia, registration with both the Superintendence of Corporations and the local chamber of commerce is mandatory. In tender processes where conditions are equal, national offers take precedence over foreign ones. Similarly, among foreign bidders with equal conditions, those boasting substantial Colombian workforce resources, significant national capital, and/or better means to facilitate technology transfers are given preference. Foreign investment in the financial, hydrocarbon, and mining sectors is governed by special regimes, which include investment registration and concession agreements with the Colombian government. However, there are no restrictions on the amount of foreign capital allowed in these sectors. Moreover, several sectors require that foreign investors have a legal local representative and/or commercial presence in the country. Finally, Colombia ranks 66th among the 132 economies on the Global Innovation Index 2023 and 84th out of 184 countries on the latest Index of Economic Freedom.