EMPLOYER OF RECORD IN COLOMBIA

Colombia has one of the most attractive economies in Latin America for foreign investment. The country is a signatory to 17 commercial agreements, and it’s friendly to global trade with access to a market of 1.5 billion consumers. Additionally, Colombia has ports on both the Pacific and Atlantic Oceans, ensuring it is a strategic business location.

Colombia is a founding member of the powerful Latin American trading bloc, Alianza del Pacifíco (the Pacific Alliance), which includes Chile, Peru, and Mexico. The bloc represents 50% of Latin America’s foreign trade and 45% of total foreign direct investment in the region.

Due to political stability and consistent economic growth, more than 700 multinational companies introduced Colombian investment programs.

Colombians are known for being innovative and having an entrepreneurial spirit. In 2021, Colombia's literacy rate reached 99%. It’s easy to hire motivated and skilled workers in Colombia. With the help of an employer of record in Colombia, it can be even easier to hire and onboard new workers at your company.

The Colombian government introduced the Ministry of Science, Technology, and Innovation in 2009 to invest heavily in educating and training its population to be competitive in the job market.

Colombia has one of the most attractive economies in Latin America for foreign investment.

In Colombia, an employment agreement or contract is not mandatory by law. However, the following terms are required to be written, if applicable:

• Probation period
• Fixed-term contract
• Integral salary (benefits included in the salary)
• Non-salary payments

If fixed-term employment agreements are not agreed in writing, it is implied that the agreement is for an indefinite term.

• President Iván Duque Márquez announced and ratified Colombia’s minimum wage for 2022 in December 2021. The wage was set to COL$1,000,000 monthly (USD$231.72), with a transportation allowance of COL$117,000 (USD$27.11). The minimum wage in Colombia is set every year by the national government and enforced by the Ministry of Labor.

• Colombia has an income tax structure where an employee’s income is taxed in units. There are thresholds of units for each salary range. As of 2022, the Colombian tax value unit (UVT) is COL$ 38,004. Colombia’s 2022 income tax code provides for the following categories

Taxable Income Tax rate Up to 1,090 UVT: 0% 1,091 UVT – 1,700 UVT 19% 1,701 UVT – 4,100 UVT 28% 4,101 UVT – 8,670 UVT 33% 8,671 UVT – 18,970 UVT 35% 18,971 UVT – 31,000 UVT 37% Above 31,000 UVT 39

• Colombian labor law guarantees employees annual paid leave of 15 days for each year of service, after one year of service. Employees must use at least six annual leave days a year. They can carry over any untaken vacation to the following year, based on an agreement with the company.