Workforce and Regulations:
Colombia was one of the Top 3 Latinamerican countries in the World Talent Ranking in 2019. This means that Colombia offers a high labor availability of highly qualified personnel at low hourly costs. For example, the average wage per hour in the manufacturing sector is as low as 1,9 USD, so Euromonitor International.
In addition, one of remarkable Colombia’s strengths in terms of nearshoring services, is its flexible labor regulations when it comes to hiring and firing workers. The regulations also make it easier for employers to expand the number of working hours. Furthermore, the Colombian government aims to incentivize the hiring of young people for the first time by implementing regulations like Article 88 of Law 2010 from 2019, which states that 120% of the salaries paid to employees who are under 28 will be deducted from taxpayers’ tax returns.
Governmental Incentives for Investments:
The Colombian territory offers several benefits to its over a hundred Free Trade Zones for investors, like a 20% income tax rate and zero tariffs or VAT for goods in the Free Trade Zone. Not to mention tax deductions for anybody who invests in the research, innovation, renewable energy, and environmental improvement sectors.
Optimal geographical location:
Colombia has a great strategic geographical location, and it’s home to one of the best-connected ports in the world. The country is now part of Dubai’s World Logistics Passport, which is expected to increase the country’s connectivity even further, and allow access to the main ports of America in an even shorter amount of time.
Bogotá also holds the 1st place when it comes to cargo traffic in Latinamerica, mobilizing over 740 thousand metric tons in 2018 and surpassing cities like Sao Paulo, Mexico City, Lima and Santiago de Chile. Additionally, the country has one of the most competitive air freight in the world, offering 30 direct and indirect air routes and charging only 1,12 USD per kg to the US.
Latin America region has relevant zones for those services such as Colombia, that has a full workday overlap with the US, making it easier to collaborate in real-time for most of the year.