Doing Business in Colombia
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Colombia is one of the most stable economies in Latin America. It experienced a historic economic boom over the last decade despite political turmoil. The country is rich in natural resources and has experienced rapid growth in the industries of information technology, construction, mining, shipbuilding and tourism. Colombia is now one of the fastest-growing major economies in the world and has been enjoying above-average economic growth and decreasing poverty levels for several years.
In The World Bank Ease of Doing Business Survey for 2020, Colombia was ranked 67th out of 190 economies. The country scored highly for the ease of obtaining credit (11th), protecting minority investors (13th), and resolving insolvency (32nd). It fell short in enforcing contracts (177th) and paying taxes (148th).
Before conducting business in Colombia, expats should familiarise themselves with the local customs that will influence their dealings in the country. Colombians are warm and expressive, emphasising the importance of family and friendship. Thus, establishing personal relationships and building trust is crucial to a successful working environment. Family-owned companies, or family members working together, are quite common in Colombia for this reason.
The Colombian approach to time and punctuality is very flexible, both socially and in business. Expats should not take offence if meetings begin an hour late or if a colleague calls back a week later instead of the next day. Business proceedings need to allow for small talk and socialising, and should not be rushed.
Working hours are generally Monday to Friday from 8am to 6pm, with a one- or two-hour lunch break. Although some companies may conduct business on Saturdays, the weekend is usually reserved for family.
Spanish is the official language of Colombia. Although an increasing number of businesses may have English speakers on their staff, it is advisable to engage an interpreter and to ensure that initial contact with potential business partners is conducted in Spanish. Any effort made in speaking the language, even with basic greetings, is sure to be met with a positive response.
Appearance is important in Colombia. Expats should be neat and presentable and should dress conservatively in dark suits and ties for men, and dresses or suits for women. Clothing may be less formal in the warmer regions of the country.
Gifts are generally received well and are expected when visiting a colleague’s home. It is polite to say thank you and show one’s appreciation. However, wrapped gifts should not be opened in front of others. Women are typically given flowers, particularly roses, while men will appreciate a bottle of liquor, as imported alcohol is expensive in Colombia.
Although gender equality may be something of an issue in Colombian society, it should not be a problem for foreign businesswomen in the corporate world as they will be treated with courtesy and respect (though perhaps some curiosity).
Business culture in Colombia
The business culture tends to be quite formal in the major cities like Bogotá and Medellín, with a more relaxed attitude in the hot coastal regions. It is always important to engage in small talk before focusing on business concerns, and Colombians also prefer doing business in person. Face-to-face meetings are favoured over phone calls or emails.
Handshakes are central to Colombian culture and are expected upon arrival and departure, accompanied by direct eye contact and a smile. Once business partners know each other well, greetings may become warmer and men will embrace and pat each other on the shoulder, while women kiss once on the right cheek. First names should only be used once invited to do so. People should be addressed by their title – Señor (Mr), Señora (Mrs) or Señorita (Miss) – and their surname.
Communication tends to be quite subtle and indirect in Colombian business so as not to offend. To save face, expats should read between the lines, using context and non-verbal cues. Colombians may decline without saying "no" or "I can’t do it". Mistakes should never be pointed out in a public setting.
Though communication may be more indirect than expats are used to, Colombians are also very warm and animated communicators. It is important to engage in small talk, asking about family, friends and hobbies, before diving into business discussions. Trust and personal relationships are central to Colombian culture. In terms of personal space, Colombians may interact within closer physical proximity than expats are used to.
Business meetings should be scheduled a few weeks in advance and confirmed closer to the time. Since time is very flexible in Colombia, it is a good idea to leave a few hours in between appointments in case meetings are delayed or last longer than expected. Meetings do not always follow the agreed-upon agenda, and will generally go on as long as they need to – one should not try to rush the proceedings. Corporate lunches and dinners are a popular method of conducting business in Colombia.
Attitude towards foreigners
Colombians tend to have a positive attitude towards foreigners. They'll always ask one’s opinion about Colombia and how it differs from what was expected. Colombians are eager to help their country escape its global reputation as a place of violence and drugs by welcoming foreigners and emphasising the best of Colombia.
Dos and don’ts of business in Colombia
Do accept invitations to social events
Don’t offer opinions on local politics or make jokes about drugs or Colombian history
Do make an effort to learn some Spanish
Don’t mistake Colombian animation for aggression, as it is an emotional culture
Do take time with business dealings, rather than rushing things