Frequently Asked Questions
Why do business in Colombia?
Colombia is one of the biggest economies of Latin America (4th after Brazil, Mexico and Argentina) and has shown attractive, constant growth rates over the last decade. Since 2015 GDP growth has slowed due to a decrease in commodity prices but its overall economic outlook remains solid and the liquidity position sound.
Poverty rates have dropped considerably over the last years. Most of the debt is financed domestically and long-term, at fixed rates. The country is committed to free trade and has signed several international agreements.
Last but not least, the security situation has improved significantly. A milestone in this process is the peace accord the Santos government signed with the main guerrilla movement FARC in 2016 after five decades of violence. Though its full implementation has a way to go, there is definitely a new spirit of optimism.
How much time does it take to set up a S.A.S.?
The whole process of incorporation usually takes less than 15 business days, including the opening of a bank account and getting the permanent tax ID (RUT).
What types of employment contracts exist in Colombia?
Colombia’s Labour Code (Código Sustantivo de Trabajo) defines five different employment contracts:
Indefinite term contract (contrato a término indefinido)
This contract is either verbal or in writing and has no ending date. The employer pays benefits, vacations and contributions, and is liable for severance pay.
Fixed term contract (contrato a término fijo)
This contract must be in writing and state a specific period of employment. It cannot exceed a duration of three years without renewal of the contract.
Contract for the duration of a work or contracted job (contrato de obra o labor)
Project-based employment; once the job or project finishes the contract ends automatically. This contract type is common for jobs in construction and teachers at universities and schools that are hired for the academic term. In terms of employers’ contributions, it equals the indefinite and fixed term contract.
Temporary contract (contrato temporal)
This contract is only valid for a maximum of 30 days. It can be a verbal or written and is designed for temporary or casual jobs.
Apprenticeship contract (contrato de aprendizaje)
By this special form of contracting, an individual receives theoretical education in an authorized educational facility under the auspices of a sponsoring company so the person can receive systematic and complete professional training. The contract does not imply subordination, is established for a period no greater than two years and must be in writing. The apprentice will receive a support payment that is not to be considered salary.
There exists another type of contract that is very common but strictly speaking not an employment contract:
Services Agreement (Contrato civil por prestación de servicios)
This contract is between a company and a (natural or juristic) person. It is not regulated by the labour code and therefore does not imply the payment of benefits such as pension, vacation, severance, and maternity leave. The hired person has to pay social security on his/her own account. The agreement can be defined based on a predetermined duration or project.
Why choose to do business in Peru?
Peru has had the highest growth rate and the lowest inflation in Latin America over the last decade. Without exception, rating agencies give Peru positive reviews and certify a stable development (Standard & Poors, Fitch Rating BBB+, Moody’s A3).
Peru is expected to grow 2,8 % in 2017 and 4% in 2018. The country is committed to free trade. The World Bank’s Doing Business Report ranks Peru 2nd in Latin America. Together with Mexico, Chile and Colombia, Peru is part of the Pacific Alliance, a trade block that represents the world’s eighth-largest economy.
How much time does it take to start a business in Peru?
That depends on the type and size of the business. Generally speaking, it takes about a month to start a new business, including the opening of a bank account and getting the permanent tax ID.
The World Bank: Doing Business in Peru
Which sectors offer the most interesting business opportunities in Peru?
Which corporate legal structure would you recommend for Peru?
In most cases, we would recommend to establish a Closely Held Corporation (Sociedad Anónima Cerrada), short S.A.C. for their simplicity, limited risk and low cost of establishment.
Other common forms are Joint-stock companies (Sociedad Anónima/S.A.), Publicly held corporations (Sociedades Anónimas Abiertas/S.A.A.) and Limited liability companies (Sociedad Comercial de Responsabilidad Limitada/S.C.R.L.). Please contact us to check which type of company is the most suitable for your specific business endeavors.
What types of employment contracts exist in Peru?
Peruvian Labor law defines three types of contracts:
Indefinite term contract (Contrato indefinido):
It includes all labour benefits for the employee such as social insurance, gratifications and vacations and doesn’t have an expiration date.
Fixed term contract (contrato a plazo fijo o determinado):
Typically applied in case of starting a new activity, commercial campaigns, temporally caused raises in production. It includes labour benefits for the employee and is renewable until a total of maximum five years.
Part-Time contract (contrato a tiempo parcial):
It is valid for an maximum of four hours per day. This modality suspends some of the labour benefits for the employee.
Is Ongresso a consulting firm?
We certainly offer professional advice to foreign entities in strategic, operational and legal matters. However, unlike traditional consulting firms, Ongresso goes beyond consulting by offering a full-service package that covers all phases of doing business – from market investigation to implementing your strategy to operating your back office to reassessing your existing business.
For which industries does Ongresso offer its services?
In which countries does Ongresso offer its services?
In which language can I get in touch with you?
What does “Ongresso” mean?
The name Ongresso is not just picked off a list of available company names. It has a meaning for the company and the team, and it is reflected in the company’s vision: Unlock the Potential of Latin America! Read more here
Would you like to get in touch with us? Please send us a message and we will get back to you as soon as possible.