Doing Business in Colombia - Fiscal Reform and the Current Economy in Colombia

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World Law Group

[co-authors: Martin Acero, Jorge Di Terlizzi, Juan Carlos Rocha]

1. What is the current business climate in your jurisdiction including major political, economic and/or legal activities on the horizon in your country that could have a big impact on businesses?

The pandemic has been slowly clearing up although there is still some uncertainty, especially generated by the proximity of the presidential elections and what a pre-electoral year in any country means. There are several factors that impacted the economy of our country: the devastating effects of the pandemic and related prolonged business closures, the failed fiscal reform, and the impossibility of tackling the fiscal deficit as well as the loss of Colombia's investment grade. Nevertheless, the Government has taken important measures to support the economy and contain the effects of the pandemic and the social outbreak. Now, with the vaccination program progressing well and a new fiscal reform proposal that it seems will be approved quickly by the Congress of the Republic, the Government will most likely focus on the recovery of the economy and employment. We hope that the perception of stability and confidence will improve.

2. From what countries do you see the most inbound investment? What about outbound?

We have seen there are many companies, especially from Europe, with interest in multilatina companies, especially those which have presence in the countries that are part of the Pacific Alliance (Chile, Peru, Colombia, and Mexico).

3. In what industries/sectors are you seeing the most opportunity for foreign investment?

Many of the transactions that were suspended last year have been reactivated. We’ve seen important operations related to construction and infrastructure projects. We should also see important movements in the energy and natural resources areas as well as in insolvency matters. The technology sector has also gained much relevance, so it’s very likely that we see many transactions involving startups and fintechs.

4. What advantages and pitfalls should others know about doing business in your country?

Despite the difficulties, Colombia is one of the less affected countries in the region by COVID-19. Our bank system is strong and that along with the aid given by the government to boost the economy has allowed many companies to avoid the crisis.

*Philippi, Prietocarrizosa Ferrero DU & UrÌa

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