Expand your business into Colombia, with or without having a Colombian entity
The South American country of Colombia has taken huge strides in recent years, turning its back on the political instability and endemic violence of the past and successfully driving substantial economic and cultural reform. As such, it has begun to attract more and more foreign investment.
However, expanding your organization to Colombia can come with unforeseen delays. The country has a distinct set of national business and employment laws that can make the process difficult to navigate. In many cases, establishing a presence and expanding into Colombia can take weeks or even months to complete.
At Horizons, we offer an extensive set of outsourcing services to help organizations expand into Colombia quickly and effectively. Our professional employer organization (PEO), payroll, and employ of record (EOR) services give you the ability to outsource all the complex administration and legal compliance work so you can focus your efforts on a rapid and successful expansion.
Our dedicated in-house recruitment team can also help you to find, hire, and onboard new employees in Colombia. If you have not yet established an entity in the country, you can use our local subsidiary as employer of record, providing all the benefits of hiring talent in Colombia but without any of the associated administration.
Our outsourcing services could cut your expansion expenditure by thousands, speed up your growth, and give you greater flexibility moving forward.
How Horizons outsourcing can help you expand into Colombia
Horizons enables your business to expand its operations into Colombia, even if you don’t have a Colombian subsidiary.
Hiring in Colombia - Employment Law Overview
📝 Colombia employment contracts
It is not completely necessary to have an employment contract in Colombia, but we strongly recommend that you provide a written contract for every employee. Contracts should be written in Spanish and include details of the employment such as compensation, vacation leave, and so on. Any references to money should be in the local currency of the Colombian peso.
⏰ Working hours in Colombia
The typical working week in Colombia is 48 hours long, spread over five or six days. Overtime is paid at a rate of at least 125% of normal pay, or 175% for night shifts.
📅 Public holidays in Colombia
New Year’s Day
St. Joseph’s Day
Saints Peter and Paul’s Day
Declaration of Independence
Battle of Boyacá
Assumption Day (in lieu)
Day of the Races
All Saints’ Day
Independence of Cartagena
Immaculate Conception Day
🏖 Vacation in Colombia
Employees in Colombia are generally entitled to at least 15 days of paid vacation leave.
😷 Sick leave in Colombia
In general, employees in Colombia receive two-thirds of their normal pay when absent from work through sickness. This is covered by their employer for the first two days, then by the state up to 180 days.
👶 Maternity and paternity leave in Colombia
Female employees in Colombia are entitled to 14 weeks of paid maternity leave, split into two weeks before giving birth and 12 after giving birth.
Male employees in Colombia are entitled to eight days of paid paternity leave.
💰 Employee severance and terminations in Colombia
Termination of employees in Colombia can be difficult, and it is common for employees to take legal action if they feel unfairly treated. To avoid this, it is always best to come to an agreement with employees, which may involve providing a bonus payment.
Employees are generally also entitled to a severance payment upon termination, which equates to one month of salary for every year of service.
🏦 Tax laws in Colombia
Employers and employees in Colombia are required to pay a percentage of salaries into various social schemes:
- Health insurance = 8.5% from employers and 4% from employees
- Workplace risk insurance = Between 0.348% and 8.7% from employers, depending on the nature of the work
- Family welfare fund = 9% from employers
- Pension = 12% from employers and 4% from employees
The income tax rate in Colombia is between 0% and 39% depending on income level.
Corporate tax in Colombia is charged at a rate of 32%, but this is set to decrease slightly in 2022.
🏥 Health coverage in Colombia
Colombia does have a social healthcare system, so private insurance is not necessary. However, many employers do choose to offer private insurance as a benefit, and private care can be superior to public care.
💳 Colombia compensations & benefits
Compensation laws in Colombia
The minimum wage in Colombia (in 2020) is 377, 803 pesos per month for full-time employees.
Benefit management in Colombia
Setting up a benefits system for your Colombian employees can be difficult if you are unfamiliar with the country and its unique labor laws. If you want to independently set up your benefits system, you can expect it to take weeks or even months, potentially presenting significant delays to your Colombian expansion.
Outsourcing your benefit management process ensures that you fully understand and adhere to the rules, ensuring your compliance and speeding up the process significantly. At Horizons, our Colombia employment experts will help you to find and arrange your benefits, advise on your strategy, and ensure compliance with the law.