2015 was a challenging year for companies doing business in Colombia; we take a look at the year ahead - what opportunities does the Colombian market offer in 2016?
Last year was a mixed bag, with a series of changes and incentives from tax reforms on wealth, surtax on the existing CREE tax and new anti-evasion rules. In April, the Plan to Boost Productivity and Employment (PIPE 2.0) was implemented to improve growth and development in Colombia. The local initiative aimed at generating investment in infrastructure, urban and country housing, tourism and mining –PIPE is expected to facilitate port operations, enhance cross-border trade, guarantee higher financing tools and drive innovation for small, medium and large companies.
There were also challenges, particularly with companies and their payroll administration as the Parafiscal and Pension Management Unit (UGPP) cracked down on inspections. As the entity responsible for ensuring all companies in Colombia comply with Social Security contribution requirements it was recognised that lawyers, payroll managers and companies all have different interpretations of certain UGPP rules. Click here to read some real-life examples of non-compliance situations with the UGPP that are more common that you would expect.
Peace of mind for investors
The local government stated its commitment with maintaining PIPE 2.0, its participation in the Pacific Alliance as well as continuing to improve the anti-money laundering and financial terrorism regulations.
This year, the Colombian government may sign a peace treaty with the FARC rebel group (a "guerrilla" group also known as the Revolutionary Armed Forces of Colombia), which will provide investors with a significantly safer business environment.
Colombia is evaluating the opportunity of joining the Trans Pacific Partnership (TPP), which would increase Made-in-America exports, stimulate economic growth and promote job security. If implemented and maintained successfully the TPP is expected to be the world's largest trade pact in over 20 years, and will provide Colombia access to most of the principal economies, including APAC markets.
Also in the pipeline for 2016, are projects such as the digitalization of tax processes, and the 4G Highway Plan, which looks to improve roads, bridges and tunnels.
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