Right after Brazil, Mexico and Argentina, Colombia is the fourth largest economy in Latin America. It is one of the only countries in South America with two coastlines – the Pacific and the Caribbean. This provides global investors with a great shipping advantage. It also has had a steady economic growth and a moderate inflation which makes it a promising market for exporting to Colombia. Also there are five distinct commercial hubs in the country.
With all this positive points, it stands as the latest and emerging market providing global businesses a great opportunity to venture out into. Here, let’s discuss how to export to Colombia – the challenges, opportunities and strategies:
• Existing government framework requires open bidding and public tenders. There could be a lack of transparency and fairness in bidding.
• Secondly, only registered firms under Colombian law were even allowed to provide legal services. International law firms had to form a joint venture with a local law firm.
• For bidding in Colombian government contracts, commercial presence was a requirement.
• For international banking there is a requirement to maintain commercial presence in the country. Insurance companies have restrictions as regards to providing policies under certain conditions where insurance policies are not considered equivalent to bank guarantees.
Despite all the challenges faced, Colombia offers global businesses with a plethora of opportunities. Let’s discuss a few here:
• Planned infrastructure projects in Colombia will require most or all of the following services. Project financing, public works sub-contracting, logistics, construction equipment for public roads and airports.
Some other areas of interest for international investors could be water treatment, water supply, electric power generation, oil and gas exploration and pollution control equipment.. Transportation equipment, security and defense items and services too have a lot of demand in this place.
• Airport services and upgrade to the existing infrastructure is seen as a great opportunity for foreign investment here.
• Key sectors that have always attracted attention to trade in Colombia are: oil and gas, petrochemicals, renewable energy, telecommunications and refineries.
• Other export opportunities include cotton, wheat, corn, soy products, automotive parts, food and beverage processing etc.
• Packaging equipment and medical equipment are also a quite in demand here.
Before you get into the details of how to export to Colombia, it’s equally important to analyze your market entry strategies. Here are a few tips:
• An agent or representative or a distributor in Colombia would be your best bet. This requires a proper contract to meet the Colombian Commercial Code.
• Negotiating contacts with trust and a professional relationship is a must.
• You can offer excellent after sales services as a strategy.
• Affordable financing and competitive pricing could be the key to your entry as compared to others that are competing for the same.
• Attending trade shows and advertising there could be a perfect way to make yourself known.
• Finally, it’s highly essential to be able to communicate in Spanish language.