In the final days 2019, President Ivan Duque signed the Economic Growth Law, which was approved by Congress and designed to promote economic development while reducing income equality in Colombia. With strategic benefits, Duque’s government aims to draw more foreign investment, increase infrastructure spending, create jobs, and stimulate local business.
Among the reforms included in the new law are a variety provisions: income tax exemptions, VAT refunds for the poorest citizens, VAT exemptions, asset tax on the wealthy, corporate tax rate reduction, tax benefits creating jobs, and more. The list is long, but below are a few of the relevant aspects for foreign investors.
The Economic Growth Law includes extensions and additions to the Orange Economy, a plan created by President Duque to stimulate development in the creative sector.
- Three areas of business will now be deemed eligible to receive benefits: sports, recreation, free time activities.
- To develop the Colombian countryside additional industries will also receive the benefits: forestry & logging, fishing & hatchery, food processing, and beverage manufacturing.
- Companies in the agricultural sector may have their headquarters wherever they deem most convenient and will still be eligible for benefits (vs. being required to have headquarters in same municipality as their investments).
- The minimum required investment will drop from USD $46,000 to USD $16,000
- The maximum annual gross income is still USD $900,000 but exempted industries now include: agriculture and developers of videos, movies, TV shows, and commercials.