Identifies common practices to be aware of when selling in this market, e.g., whether all sales material need to be in the local language
As Colombia’s largest trading partner, the United States traditionally has been a “natural” market for products and services. The factors favoring U.S. exports are: the geographic proximity of the two countries, many Colombians who study abroad study in the United States and develop an affinity for U.S. products, the large number of U.S. firms operating in Colombia, the technological leadership that the United States maintains in many key industrial sectors, the existence of a free trade agreement between the two countries, and the high quality of U.S. made products.
U.S. suppliers should be aware, however, that their ability to compete in Colombia could be hampered by unfair business practices such as contraband, counterfeiting, intellectual property rights violations, under-invoicing, money laundering, and dumping. If a company has specific concerns, it should check with the U.S. Commercial Service office in Bogotá.
Quality, profitability, functionality, financing, and price all play an important role in the buying decision.
After-sales service is significant, not only in the original buying decision, but also in maintaining the sales relationship. U.S. suppliers must either have their own representative with adequate operations or obtain a Colombian representative who can offer sufficient after-sales service.
To obtain better prices, guarantees, parts, and after-sales servicing, Colombians prefer to deal directly with manufacturers rather than trading companies.
U.S. firms competing for major infrastructure contracts should begin early in the contracting cycle. U.S. manufacturers and construction, service, and engineering companies should initiate contact as soon as possible with government entities and private firms, which have indicated plans, or even just an interest, in developing projects. Once a project has gone to tender, it is usually too late to be competitive if the supplier company has not already involved themselves up front in the process.
As mentioned in the section “Selling to the Government”, a local agent or legal representative is required for all government contracts. Therefore, U.S. companies interested in government procurement or contracts should conduct due diligence and appoint an agent or representative as quickly as possible.
- Andean Community (CAN)
- Andean Development Corp. (CAF)
- Banco de la República (Colombian Central Bank)
- Banking Superintendent
- Bogotá Chamber of Commerce
- Colombian Banking Association
- Colombian National Tax and Customs Directorate (DIAN)
- Colombian Government
- Colombian Merchants Association (Fenalco)
- Colombian Statistics Bureau (DANE)
- Energy and Gas Regulatory Commission (CREG)
- Export-Import Bank of the United States
- Inter-American Development Bank
- National Electoral Council
- National Industries Association (ANDI)
- National Planning Department
- Oficia de la Presidencia de la República (President’s Office)
- Overseas Private Investment Corporation (OPIC)
- Superintendent of Corporations
- Superintendent of Industry and Commerce
- Telecommunications Enterprise
- Trade Americas
- World Bank
Trade Promotion and Advertising
Introducing new consumer products to the Colombian market usually requires an extensive advertising campaign. Companies’ marketing strategies frequently include media ads and printed technical and sales articles in a combination of media — radio, television, cable TV, social media, newspapers, periodicals, trade magazines, and on Internet websites— announcing sales and special offers.
Some companies and supermarkets are effectively using a variety of marketing techniques to promote consumer products, including raffles, discount coupons, and accrual of points in exchange for a variety of products and/or services. Credit card companies, magazines, newspapers, and cell phone companies also offer promotions and discounts to their clients. Promotional seasonal “sales” have also become popular in Colombia throughout the year, usually on special holidays such as “Amor y Amistad” Day (similar to Valentine’s Day but held in September), Father’s Day, Black Friday, Mother’s Day, Halloween, Christmas, etc. Extended hours of shopping during long weekends are being introduced in many malls in major urban centers.
Colombia has approximately 30 important daily newspapers (three of the principal daily papers are in Bogotá), a large number of trade and business papers and magazines, nationwide and regional television networks, AM and FM radio stations, and private local cable TV companies. Also available is a great variety of business, industrial, and trade publications from most Colombian industrial and trade associations and private publishers. Most publications have web sites. U.S. exporters of consumer goods should seriously consider advertising in local daily papers in major cities.
Major Newspapers and Periodicals
- El Espectador
- El Nuevo Siglo
- El Tiempo
- La Republica
- El colombiano (Medellín)
- El Heraldo (Barranquilla)
- El Mundo (Medellín)
- El País (Cali)
- El Universal (Cartagena)
- La Opinión (Cúcuta)
- La Patria (Manizales)
- La Tarde (Pereira)
- Vanguardia Liberal (Bucaramanga)
- La Nota Económica
Trade Fair Authorities
- BLU Radio
- La FM (Part of RCN’s radio network)
- La W (part of Unión Radio/Caracol)
- Cable Noticias
- Canal RCN
Colombian consumers buy many imported products. Consumers may pay between 60 to 80 percent over the Free On Board (FOB) price of the product. The final price of most imported consumer goods is calculated by estimating 20 percent of the FOB price for freight and insurance, warehousing, and other documentation costs; a 16 percent VAT (in most products); the import tariff (if the product is not duty free); and a 30-40 percent profit, thus putting the final price at an approximately 60-80 percent over the FOB price.
Department stores and supermarkets extend concession contracts to individuals and companies by permitting promotional space in their facilities to promote and sell consumer goods. These promotions include both familiar and unknown labels, and the goods are offered at discount prices in some cases. If the products are unknown in the market, the department stores or supermarkets may place them in the stores on a demonstration basis for a given period of time and will only place new orders if the products are well accepted by the public and sell relatively quickly. The largest supermarkets and drugstores also carry private labels at discount prices.
Suppliers to large chain stores, supermarkets, and super stores must provide certain guarantees on the continuity of products offered to avoid foreign surplus stock or remnants entering the Colombian market (i.e., foodstuffs, textiles, apparel, appliances, etc.). Imports of old or used clothing, closeouts, irregulars, off-season, or expired merchandise are prohibited.
When buying a food product, Colombians look for three things: brand recognition, which is usually related to high quality and social status; reliable and sufficient nutritional information such as the number of portions, nutritional value, and expiration date; attractive, colorful packaging and labeling. This tends to be more important for children’s products. All this information should be in Spanish.
Sales Service/Customer Support
After-sales service and customer support are decisive purchasing factors in Colombia. Government and private firms often request that their potential suppliers provide testimonials regarding client satisfaction with equipment and after-sales service.
“Warranty imports” are an important factor that supports after sales service in Colombia. Warranty imports that include replacement parts and components by a foreign manufacturer or supplier are exempted from Colombian import duties. The Colombian Customs Code of 2000 in Section IV, Article 141, establishes that all merchandise or goods that have been repaired abroad or new ones that will replace items previously exported because they were found to be damaged, imperfect, having malfunctions or with an unsuitable end-use, and are under warranty by a foreign manufacturer or supplier, may be imported into Colombia without the payment of import duties.
All original import and re-export documentation should be kept and presented with replacement imports to clearly identify goods, together with a valid warranty document, transport documentation, etc. A warranty import process must be completed and import declaration documents presented within a maximum of one year from the date the items subject to repair or replacement were exported.
In some instances, Colombian Customs may authorize the import of replacement goods without the requirement of having previously exported the damaged goods or parts for replacement and/or repair. However, Customs will require a warranty bond equivalent to 100 percent of custom duties paid, valid for one year from the date replacement goods are being imported. This would ensure that damaged goods would then be exported within the following month from the date replacement goods were re-imported.
Local Professional Services
U.S. companies bidding on major government, or even private sector, projects/procurement and those entering into joint ventures or other long-term contractual arrangements should seek local legal advice. Also, companies that are concerned about the protection of intellectual property such as trademarks, copyrights, and patents should also seek legal counsel before entering the Colombian market.
There are a number of good Colombian law firms that specialize in various aspects of commercial law. Additionally, a number of major U.S. firms that operate internationally have affiliate arrangements in Colombia. Several legal and business services providers in Colombia are found on the U.S. Commercial Service’s Colombia webpage.
Association of Automotive Importers and Exporters (Asopartes) - Asopartes is a non-profit association representing and defending the social, commercial and technical interests of the automotive sector in Colombia. It offers to its members a channel of communication between government authorities and private companies.
Association of Pharmaceutical Research and Development Laboratories (AFIDRO) - AFIDRO is a private and non-profit trade association that brings together the Pharmaceutical Research and Development (R&D) companies established in Colombia. AFIDRO defends the principles of Intellectual Property (IP), efficacy and pharmaceutical safety for medicines.
Banking Association (Asobancaria) - Asobancaria is the representative association of the Colombian financial sector. It is composed of national and foreign commercial banks, both public and private, the most significant financial corporations, and special official institutions. Asobancaria’s main objective is to promote the development of the banking sector in alignment with the country’s strategic interests.
Colombian Association of Airlines (ALAICO) - ALAICO is a non-profit organization created in 1995 with the objective to preserve, defend, and develop the interests of the International Air Transport industry in Colombia.
Colombian Association of Flower Exporters (Asocolflores) - Asocolflores is the Colombian Association of Flower Exporters. It was created in 1973 to represent, promote, and strengthen the competitiveness of Colombian floriculture domestically and internationally. Its main office is in Bogotá and it has regional offices in Antioquia (Rionegro) and Pereira.
Colombian Association of Hospitals and Clinics (ACHC) - The Colombian Association of Hospitals and Clinics is a non-profit organization that promotes technical and administrative capacity building though information, training, and representation.
Colombian Association of Integrative Medicine Companies (ACEMI) - The Colombian Association of Integrative Medicine Companies is a non-profit organization created in 1992 with the purpose of representing the private affiliated companies that administer various healthcare services and health benefit plans.
Colombian Association of Systems Engineers (ACIS) - The Colombian Association of Systems Engineers is a non-profit organization that groups more than 1500 professionals. ACIS’ objective is to develop human talent in computer technology sciences in Colombia, strengthening the knowledge of IT and supporting the responsible application of Systems Engineering and related careers.
Colombian Association of Travel and Tourism Agencies (ANATO) - The Colombian Association of Travel and Tourism Agencies is a non-profit organization that represents, defends, and promotes the general interests of tourism and travel agencies in Colombia. It was created in 1949 and is comprised of associated agencies throughout Colombia with nine chapters of representation.
Colombian Engineers Society (SCI) - The Colombian Engineers Society is a non-profit organization created in 1887 to improve the quality of life and welfare of humanity through the advancement of science and engineering. The society has diverse groups that represent the different areas of engineering to provide a comprehensive technical advisory service in each field that fits the specific needs of its members.
Colombian Federation of Cattle Ranchers (FEDEGAN) - The Colombian Federation of Cattle Ranchers is a non-profit organization created in 1963 to represent the interests of Colombian cattle ranchers, regional and local cattle breeding organizations, as well as other entities linked to national livestock activity. The organization provides market research, information on livestock policy, and other services to the industry.
Colombian Hotel and Tourism Association (COTELCO) – The Colombian Hotel and Tourism Association represents and supports the interests of the Colombian hotel and tourism sector, strengthening its competitiveness and productivity.
Colombian Merchants Association (Fenalco)- Fenalco represents the trade and services sector in Colombia. Its mission is to strengthen private initiative and institutions and provide innovative products and services that drive business competitiveness. Fenalco’s main headquarters is located in the municipality of Cota, Cundinamarca, with 14 regional offices throughout the country.
Colombian Petroleum Association (ACP) - The Colombian Petroleum Association (ACP) is the association that groups private companies in Colombia that develop exploration, exploitation, transportation, and distribution of oil, distribution of liquid fuels and lubricants, and natural gas.
Council of American Enterprises (CEA) - The Council of American Enterprises is a progressive and dynamic non-profit organization founded in 1962 whose purpose is to support American Companies established in Colombia. Currently, CEA has more than 120 member companies, all of which are majority owned by U.S. corporations, representing the most significant sectors of the economy: agriculture, food, tobacco and beverage; automotive; machinery and equipment; chemical and agrochemical; communications and information technology; consumer products; energy; external auditing, consulting and professional services; insurance, banking and fiduciary; manufacturing, paper, cardboard and textile; pharmaceutical; medical equipment; security; and transportation.
National Association of Foreign Trade (ANALDEX) - ANALDEX is the National Association of Foreign Trade, founded in 1971, that aims to promote and strengthen national export activity, promote the image of Colombia abroad, and support the design and execution of export policies. ANALDEX provides consulting services for Colombian exporters to develop trade strategies. It also encourages exports and global competitiveness through workshops.
National Coffee Growers Federation of Colombia - The National Coffee Growers Federation of Colombia is a non-profit organization created in 1927 that represents coffee growers. It is considered one of the largest rural NGOs in the world and represents more than 500,000 coffee growers’ families.
National Federation of Cereal Growers (FENALCE) - In July 1960 a group of 50 farmers founded the National Federation of Cereal Growers to promote Colombian grain production. Its members include almost one million families who derive their livelihood from growing cereals, legumes, wheat, sorghum, barley, corn, and oats.
National Financial Entities Association (ANIF) - Since its founding in 1974, ANIF has transformed from being a traditional association into a private think tank that develops economic policy. ANIF has become one of the main economic research centers in Colombia and has a wide influence in public opinion. Its main activities are carrying out studies, disseminating ideas, and hosting seminars
National Industries Association (ANDI) - The National Industries Association is a non-profit organization that promotes the political, economic, and social principles of free enterprise. It was founded in 1944 in Medellin and has become one of the most important business groups in Colombia. It is composed of companies from sectors encompassing industrial, financial, agribusiness, food, commercial, and services, among others.
Plastic Industries Association (Acoplásticos) - Acoplásticos is the industry association that represents companies in the following sectors: plastics, chemistry, petro-chemistry, rubbers, paintings, paints, and fibers.
Small Business Association (ACOPI) - ACOPI is a non-profit organization founded in 1951 that represents, supports, defends and seeks to improve the productivity levels of SMEs in the Colombian Atlantic region. Its main offices are located in Barranquilla.
Limitations on Selling U.S. Products and Services
Foreign investors face exceptions and restrictions in the following sectors: television concession and nationwide private television operators, radio broadcasting, maritime agencies, national airlines, legal practices, and shipping. Investment in financial, hydrocarbon and mining sectors are subject to special regimes.
All foreign direct investment that involves the establishment of a commercial presence in Colombia requires registration with the Superintendent of Corporations (‘Super Sociedades’) and the local chamber of commerce. Colombian law regulates the number of foreign personnel in several professional areas such as architecture, engineering, law, and construction where firms with more than 10 employees may not have more than 10 percent of general workforce or 20 percent of the specialists can be foreign nationals.
Economic needs tests are required when foreign providers of professional services operate temporarily; residency requirements restrict trans-border trade of certain professional services such as accounting, bookkeeping, auditing, architecture, engineering, urban planning, and medical and dental services.
A commercial presence is required to provide information processing services and to bid on Colombian government contracts.
Accounting, Auditing, and Data Processing: In order to practice within Colombia, providers must register with the ‘Central Accountants Board’ (‘Junta Central de Contadores’) and must have an uninterrupted domicile in Colombia for at least three years prior to registration.
Advertising, Radio, and Television Services: Open television programming is subject to the following restrictions: 70 percent of programming during prime time (7 p.m. to 10:30 p.m.) must be nationally-produced, additionally, 50 percent of programming between 10:30 p.m. and midnight as well as between 10 a.m. and 7:00 p.m. The national Television Commission charges foreign-made ads double the national rate for airtime compared to local-content advertising. Concessions to provide radio broadcasting services can only be granted to Colombian nationals or private entities legally constituted in Colombia.
Electricity: Only companies legally incorporated in Colombia before July 12, 1994 may engage in the simultaneous generation, distribution, and/or transmission of electricity under Law 143 of 1994, article 4.
Fishing: Foreign vessels may engage in fishing and related activities in Colombian territorial waters only through association with a Colombian company holding a valid fishing permit. Additionally, if a ship’s flag corresponds to a country with which Colombia has a complementary bilateral agreement, this agreement shall determine whether the association requirement applies.
Hydrocarbons/Mining: In order to provide services directly related to exploration and exploitation of minerals and hydrocarbons within Colombia, any legal entity under laws of any other foreign country must establish a branch, affiliate or subsidiary in Colombia unless the service is provided for less than one year (Law 685 of 2001, articles 19 and 20). Foreign companies may assume 100 percent of investment and risk activities in all exploration and production contracts. Oil companies may obtain the right to exploit fields for 30-years or until the land is depleted. There is a sliding-scale royalty rate on oil projects that establishes a five percent royalty rate on the smallest oil fields with an upper limit of 30 percent on the larger fields.
Legal: Legal services are limited to those licensed under Colombian Law where foreign law firms may enter the market by forming joint ventures with local law firms.
Transportation: Foreign companies can only provide multimodal freight services within or from Colombian territory if they have a domiciled agent or representative legally responsible for its activities in Colombia. Only Colombian ships may provide port services within Colombian maritime jurisdiction; however, vessels with foreign flags may provide those services if there are no Colombian-flag vessels capable of doing so (Decree 1423 of 1989, article 38).
Travel and Tourism Agencies: Foreign investors must be domiciled in Colombia to provide travel and tourism agency services within Colombia under Law 32 of 1990, article 5.