Hiring in Colombia
Bernard Légaut is the co-founder and CEO of Vegora, a company that helps Silicon Valley digital health startups build scalable and secure digital health consumer products by staffing elite engineers from across LATAM. In this interview, Bernard will share his experience on how to find an executive director for Colombia. What are the three most common mistakes when looking for a director for Colombia? It depends on the situation of the company. If it is a new one, you need someone who knows Colombia to avoid wasting time. It’s essential to avoid wasting time due to a lack of knowledge about the country. Building trust with the foreign company that is establishing itself in Colombia requires someone who has experience in Colombia but also has the agility to connect with foreign companies. You need someone who is an expert in the business with technical knowledge or a Colombian executive director who understands the market and can promote sales. What is your main recommendation to get one? It depends on the stage of the company’s life cycle; the profile is different. At the stage of setting up the company, you need to reach a certain level and make it grow. Avoid falling into the trap of trying to implement all processes at once and be able to develop them gradually. When there is a good structure in the company, it becomes much easier (such as in the commercial or human resources areas). The first profile must focus on building the team. The second profile must be able to develop the business and will be the one to bring in new ideas. It can be the same person, but they should not have the same qualities. It can be a Colombian with experience; they may even have less experience if they have a supporting structure. Why would you recommend looking for your CEO through the Europa Network? Because of the profiles of the people here who know Colombia and have networks in the country. They know where to find information. At the same time, they have connections with Europe. Ultimately, it is important to have an expert in a specific sector.
Managing a Company from Colombia
Christophe Delcourt is the co-founder of Espagnol à la Maison, a company based in Colombia that teaches Spanish using an innovative method. In this interview, Christophe shares his knowledge and experiences on how to manage a company in France from Colombia. What are the main mistakes that people make when managing a company from Colombia? There are two main mistakes: The first one, is that they must be careful with taxes because when bringing money to Colombia, you need to be aware of the tax laws. Regarding health and pensions, you must take into account the existing obligations. It is essential to seek advice on this matter to evaluate the impacts. The second mistake is that, in order to work with people here, it is crucial to understand the culture and communication styles. It’s important to learn how to work with people from each country, as there are many things to learn and discover. For example, in Colombia, word of mouth works, but it is not always reliable. What is the main advantage? Connecting with the French network and people you could never have imagined connecting with. Because the community is so small in Colombia, you can connect with people that would not have been possible if you had stayed in France. You can find good profiles. Additionally, the cost of living is lower. You can work with trustworthy people at a lower price. What recommendation could you give to a person who has employees in Colombia and clients in other parts of the world? I work with independent employees, but you must be careful to connect with good and trustworthy people. Once you find them, you should take care of those relationships. Why would you recommend joining the Europa Network to a European entrepreneur? The network is excellent for people who have a business, especially for B2B professionals. In addition to creating professional contacts, you build connections and friendships. You can receive advice on how to start a business. For me, the network has introduced several people to the classes. On a personal level, I come to meet and talk to people. I can connect with others and benefit from their experiences.
Software Development in Latin America
Mobiera is a company dedicated to software development. We have two business lines: the first is software development for our own exploitation through the commercialization of solutions for mobile operators. For example, we help them grow sales and monetize their databases. The second is software development for third parties, mostly SMEs or large companies with ideas that need to be formalized. Who could be an ideal customer for Mobiera? Large groups of operators anywhere in the world. This could be in Latin America, but also in Asia and other continents. Regarding our second business line, there are two types of ideal customers. First, they can be local customers here in Colombia who have an idea and want to bring it to life as a project. This way, we can help them from the beginning until the delivery of the project. We are also looking for European clients; since we have the 29B110 certification, we can guarantee high quality. This quality stems from the great skills of Colombian engineers, allowing us to offer quality at a lower cost, making us very competitive. Additionally, many people in our company speak English and French, enabling us to provide remote services with the same quality as a local company. Can you think of a client you particularly enjoyed working with? I have a client I particularly like, even though it was hard to secure. It is a very good client. I met with a Vietnamese company called Vietel, owned by the Vietnamese government. At that time, they had recently established an operator in Peru, so I traveled to Peru to meet with them and negotiate. In the end, we were able to implement all the solutions for mobile operators with them and helped improve their average monthly spend per user by 15% to 20% in six months. Nowadays, we are in Asia thanks to this first contact we made at the World Mobile Congress. What are you looking for from Europa Network? First, to grow our second business line, software development for third parties. Second, I am interested in expanding my network by connecting with other entrepreneurs or people who are part of large companies. Nonetheless, I also want to make friendships and enjoy good wine. What made you come to Colombia? I had an experience in Mexico that I really enjoyed. Once I returned to Europe, I had grown accustomed to the Latin lifestyle, so I wanted to come back to Latin America. I chose Colombia for many reasons. The first time I came here, I really liked how people received me and what I saw. Therefore, I decided to sell my house, come here with my wife and kids, and found Mobiera. Has it been easy to found a company in Colombia? I have not had any problems creating the company here. I know there could be some issues with visas as a businessman, but it was easier back then than it is now. This is the only aspect; everything else has been easy. Colombian people are verfriendly, and it is a pleasure to work here in Colombia. I like it. People are happy, and the office environment is enjoyable. International clients notice this and tell us we have good energy, which has helped us attract clients. What advice would you give to a European businessman who wants to come to Colombia? I would tell him that, thanks to the good education we have received in Europe and the many opportunities here in Colombia, coming and establishing a business locally is a good opportunity. However, it is important to avoid wasting time on excessive research, as only a small part of it will be helpful. To sum up, it is better to come, see how things work, and adapt yourself.
Business and Colombian taxes
Fabio Osorio’s experience Fabio Osorio helps companies do business in Latin America. He is part of the Praxity Global Alliance, which is a network that assists companies not only in Colombia and Mexico but also in more than 100 countries with tax compliance and financial services focused on administrative and tax operations. What are the top three mistakes that people make when opening a business in Colombia? First, it is very important to understand the tax regime in Colombia and its benefits. Many people assume it is similar to other countries in Latin America, but this can be a mistake. Secondly, people often don’t choose the right legal entity. They usually opt for an SAS, which is the most common type in Colombia, but it is not necessarily the best choice; it depends on the specific case. Lastly, it’s crucial to understand the market and how they will establish their presence. Additionally, they should consider whether they can utilize free trade zones as a benefit for their operations. Do you think this also applies to buying a business rather than opening one? Yes, in these cases, many don’t invest in due diligence to identify potential impacts before acquiring a company. They may realize after the acquisition that there are tax or financial issues they hadn’t considered, which could lead them to pay more than necessary. What are the biggest perks of doing business in Colombia in terms of tax benefits specifically? I would say it depends on the types of activities the company will engage in, but there are several advantages. For instance, if you are a manufacturing company or even a company that provides services, you can take advantage of the free trade zone regime. The corporate tax rate in free trade zones is 20%, while outside of these zones, it is currently 31%. This represents an 11-point difference, but the free trade zone regime is not available to all entities, so it depends on the type of activity being performed. Also, one must consider the «orange economy» in Colombia, which provides many tax incentives for at least seven years for qualifying businesses, depending on their activities. This initiative was originally designed for technology companies or those offering similar services, allowing them to avoid paying taxes in Colombia for at least seven years. There are other specific exemptions for local energy entities and renewable energy companies, which is very important. Is Colombia tax-friendly compared to other places? I would say it can be, yes. It is not the most expensive country in terms of taxes, but it is not the least expensive either. It is friendly in that international companies can benefit from various opportunities while doing business in Colombia. There are many possibilities for business here, and one of the most important aspects for companies looking to operate in international markets is Colombia’s strategic location in Latin America. It allows for easy business dealings in Central America, North America, and South America. It is a good place to establish a business nowadays, especially for manufacturing and companies providing IT or technological services, as Bogotá and Medellín are two cities expanding in these sectors and are also free trade zones. Working within the orange economy can be a significant advantage for companies, so we can say that Colombia can be tax-friendly if you follow the right path. Tell us about your experience with the Europa Network. Why would you recommend someone use it? I think the Europa Network is a great resource for doing business and establishing entities in Colombia. It provides valuable assistance in understanding what companies need to consider when starting a business here. The European Network has built a strong network of various entities and advisors who can offer not only advice but also insights from other investors who have already established businesses in Colombia. This perspective is very important as it helps to avoid mistakes that others have made when starting their businesses. So, I believe that being part of the European Network is a significant advantage.
The Colombian market
Jorge Montoya’s Experience Jorge Montoya works with a Spanish firm called Fullstep, which specializes in purchasing and procurement. They also offer technology consulting and outsourcing services. Fabio is an expert in procurement. He is a civil engineer and also has an MBA from France. Do you think it’s hard to break into the Colombian market? I think it is hard, as in any country. The market, of course, has its particularities. When you start doing business in Colombia, you must navigate its culture, society, and all the challenges related to taxes. It is necessary to manage all the situations and particularities; every city has its own characteristics—Medellín is different from Bogotá. Can you tell us two main roadblocks that you had to face? I don’t think there is one particular thing. I believe there is always someone who knows how to solve a problem in the right way, so for me, the way to do my job is to find the right connections that can help me. What is the biggest mistake someone breaking into the Colombian market can make? It can be the mindset because sometimes people assume that the business is the same as in the place they come from. They do not understand that this is another country with a different culture. It is necessary to be flexible and adapt. Also, you need to read between the lines, and this is not always easy. Tell us three tips you would give to someone who is just starting. It is hard because I think the path you follow is what you need to learn, and there is no shortcut, even if someone tells you there is. You must learn in your own way. But my advice would be to trust that you can solve the problems that arise in this job. How has your experience been with Colombian clients? In my experience, Colombians are more open than in other countries. In the end, it comes down to one thing: trust. If you gain their trust, they will be open with you. What would you recommend to someone who wants to start doing business in Colombia? What makes the Colombian market different from other countries? Every country and every market is different, but I can say that Colombia is a country full of opportunities. To seize them, you have to take risks. So, if you are risk-averse, I do not recommend Colombia. However, if you are willing to take some risks, there are a lot of opportunities. You have to understand that the market is not huge and the country is not very sophisticated in many ways. If you come with a very sophisticated service, the market will be very small, but if you find something that may be needed by the masses, it is a huge opportunity. Why would you recommend the Europa Network? I think it is important for connections. If someone is thinking about joining, the most important aspect is networking. You must also attend events frequently to be seen, so you can take advantage of the opportunities. With the Europa Network, you can find people you can trust and do business with. In the end, the only way to build trust is to engage actively.
Colombia, an excellent country to import
Juan Carlos García’s Experience Juan Carlos García is a professional in International Trade with 20 years of experience working in each of the links of the supply logistics chain, from the location of products to production, import, storage, and distribution of goods. MIT Group is a business group where each associated company offers services for each link in the chain mentioned above. In your experience, what are the advantages of exporting from Colombia?Colombia is not traditionally an exporting country; however, it has competitive advantages when exporting to large countries such as Mexico and the United States due to its proximity. The import factor is also a significant advantage compared to countries in the region. In your experience, what are the advantages of importing to Colombia?On the contrary, Colombia is primarily an importing country. The demand for imported products is high, which is a major advantage. Additionally, the transformation of local products depends heavily on imported inputs, which is another significant advantage. An important benefit is the geographical location of the country, allowing access from the east through Buenaventura and from the west through the Caribbean (Cartagena, Barranquilla, Santa Marta, among others). What has been your most successful case of importing to Colombia in terms of logistics?Fifteen years ago, I had the opportunity to lead the first tender to supply computer parts for a government education plan called «Computadores para Educar.» This logistics operation required the coordination of purchasing, transportation, assembly, and distribution of 150,000 desktop computers, which in terms of 40” containers means approximately 200 containers over a period of 2 months. In your experience, what are the three main mistakes people make when importing into Colombia? Not knowing Colombian customs regulations (procedures for nationalization, paperwork, licenses, and bureaucracy at ports and airports). Lack of knowledge about the requirements, permits, and taxes that the product must comply with to be free in the country. Not taking into account the correct mode of transport (air or sea) for your product, according to its final destination, whether it is the capital or alternate cities. Ignorance of INCOTERMS (negotiation terms). In your experience, what are the top three mistakes people make when exporting from Colombia? Miscalculating the costs of the export factor based on the type of transport. Failing to adhere to anti-narcotics procedures (which is common given the country risk). Not complying with packaging, labeling, and technical standards of the countries where the exports are headed. Ignorance of INCOTERMS (negotiation terms). As someone who is entering the Colombian market, is there something interesting that has caught your attention specifically in your sector?If you are a foreigner, you would be in a great position since, as I mentioned, Colombia is clearly an importing country. This means you can easily receive any type of good or service, as long as you consider the competition from local peers. Pricing is very important, as you will receive products from all over the world, and price becomes a determining factor. Why would you recommend the Europa Network?I believe it is an important gateway to gain insights from foreigners who have entered Colombia, as well as to interact with companies like mine that can provide advice and services to ensure success in their operations.
The health sector in Colombia
Jean Francois Heno’s Experience Jean Francois Heno is an entrepreneur and business administrator with 20 years of experience in corporate positions in general management, sales, and consulting, primarily in the technology sector in Europe, Latin America, and Asia. Since 2016, he has focused on developing his own business in the health sector in Colombia. In your experience, what are the biggest health sector opportunities in Colombia?I believe the biggest opportunities are in AI and software in general, as well as introducing new technologies. There is also potential in consulting to improve business organizations. Many skilled doctors run their businesses with very little academic background in business. Using three words, how would you describe the health sector in Colombia?Three words: passion, dedication, quality. Can you share three things you wish you knew before breaking into the Colombian health market?I wish I had known better about local regulations, which are sometimes outdated and present real difficulties for scaling up the business. What made you decide to do business in Colombia? Can you tell us a bit about yourself?I started working in Colombia as a consultant in 2003 for the startup Ola, which today is Tigo. Later, I did another assignment for Nokia in 2004 and accepted a job offer from Nokia. Once here, I started 1485 Dental Spa in 2015 and left my corporate job. My wife is Colombian, and I got married in 2002 in Spain, which obviously influenced our decision to move here initially. After spending many years as a consultant and then as a general manager in corporate firms, I decided to start a new life as an entrepreneur and launched 1485 Dental Spa, a network of dental clinics focused on customer experience and particularly on reducing stress and pain in dental treatments. I have two little girls, and I am fond of tennis and fencing. I have now been living here for 17 years, having initially come for a three-month project. Colombia is an attractive and charming place to live, and most people I have known end up staying longer than expected. Is there something in your specific sector that surprised you when opening your business? Something, for example, that was a huge roadblock that you had to work hard to pivot or push through?Yes. Licenses are very tough to obtain from the authorities. Another roadblock is the difficulty of dealing with health professionals who focus on health issues and tend to be underprepared regarding business considerations. Why would you recommend Europa Network?I would recommend Europa Network for their professionalism and the quality of the people I have met there.