Hiring & Recruiting in Colombia
Capital
Bogota
Official Language
Spanish
Currency
Colombian Peso
Payroll cycle
Monthly, Bi-Weekly
Quick facts about Colombia
Straddling the border between Central and South America, Colombia is one of the most biodiverse countries in the world. From the country’s high altitude sprawling capital Bogotá to the Caribbean island San Andres, Colombia offers some of the best natural resources in the world. The country is known for its robust education system, which makes it an appealing place to build out a local employment hub.
Hiring in Colombia gives you access to country's booming tech and startup scene.
If you’re considering hiring in Colombia, you’ve probably already considered:
The lower employer costs
That the time zone coincides with business hours in much of the United States
The highly educated population
The country's strong ties to the Latin American marketplace
What are the options to hire employees in Colombia?
When you hire in Colombia, you have a few options:
Outsource to a PEO
Partner with an EOR
Open your own subsidiary in Colombia
Partnering with a PEO in Colombia
When using a PEO service in Colombia, you will still need to establish an entity or subsidiary in the country. PEO services do not take any legal responsibility for compliance. If any issue arises, the parent company is still held accountable for any mistakes made by the PEO service.
The problem with establishing a business in Colombia is that the process can take a few months and requires a significant amount of approval from the correct government agencies.
Opening a subsidiary in Colombia
Setting up a subsidiary in Colombia makes it easier to tailor your business practices to the culture in the country. However, entity setup in Colombia takes months and can cost upwards of $10,000 USD.
You’ll need to:
Set up a local branch with a local bank account
Register with local institutions
Maintain a strong presence in the country
Hire a lawyer(s)
Hire an accounting firm to run payroll
Hire an internal HR team
What does an EOR handle?
An EOR is responsible for local HR processes, such as:
Understanding local employment laws
Drafting employment contracts in Spanish
Managing payroll and taxes, including withholdings and deductions payments as well as bonus payments like Aguinaldo (13th month pay)
Administering local benefits, such as private health insurance and mental health resources
Recently, Via helped a FinTech startup in Colombia and Mexico onboard over 50 contractors. Via reduced employer costs related to HR and payroll, saved the company thousands of dollars by avoiding incorporation without the legal management team ever needing to step foot into the country.
A Colombian employer-of-record may be your best solution to expand into the country quickly and save your company money.
Classifying contractors vs. employees
When hiring Colombian employees, it is important that you properly classify your independent contractors and full-time employees, even for remote workers. Proper classification will help you avoid litigation issues as well as problems with taxes.
There are a few important factors to know about classifying a contractor in Colombia:
The employer has little to no control over the contractor's individual work. If the employer has too much control over the contractors working hours, the worker is likely an employee
Employers and contractors should use invoices to keep records to properly pay taxes
Independent contractors must register with the National Tax and Customs Authority (Dirección de Impuestos y Aduanas Nacionales) through their own unique tax register ID in order to properly submit taxes at the end of the year
Foreign entities do not have to report to the DIAN unless they have a branch or subsidiary. However, they do still need to ensure that they are paying their taxes and their independent contractors compliantly.
If a business improperly classifies employees in order to avoid payroll taxes, the employer may face litigation from the contractor for not paying for benefits and social security taxes.
Throughout this article, we’ll explore how hiring in Colombia works regardless of the method you choose to recruit and onboard employees.
Where to find talent to hire in Colombia?
When beginning the recruitment process in Colombia, you can start with these Colombian and Latin American-specific job boards:
All three job boards are extremely popular in Colombia for recruiters looking to hire digital and remote workers, with Jobomas having 330,000 monthly visitors.
Partnering with Via will allow you to be put in direct contact with recruiters in Colombia for talent in all positions.
Work study
Colombia has some of the most prestigious universities in Latin America, with huge areas of focus in finance, medicine and agriculture. Bogotá, Colombia’s capital and largest city, has such a strong reputation for education that it is sometimes referred to as the Athens of South America.
Many Colombian universities offer internship programs (known as practicas) that help students get practical training and employers recruit recent graduates with hands-on experience.
Top universities with work-study programs in Colombia:
Pontifical Javeriana University (Bogotá)
University of the Andes (Bogotá)
University of Antioquia (Medellín)
If you plan to recruit the best talent, always ensure that you offer basic required employee benefits in Colombia like 13th month salary and paid vacation, as well as additional perks like transportation stipends and lunch stipends. An EOR can help you create a best-in-class, Colombian-specific benefits packages.
Employment laws you should know in Colombia
Before hiring in Colombia, be aware of these important employment laws:
Important Colombian laws to know:
Minimum wage: $1,000,000.00 COP per month
Working hours: Full working week is 42 hours spread out between 5-6 days (usually 8 hours per day)
Vacations: 15 days per year
Salary payments: Bi-monthly (on the 15th and last day of the month)
What should an employment agreement contain?
When creating an employment agreement in Colombia, make sure to include the following:
Hours of work
Temporary, permanent, or contracted worker
Salary
Benefits
Vacation
Employment position
Why companies partner with VIa
Via makes hiring talent around the world and building your global team seamless by helping you onboard workers in as little as 2-3 business days. With our easy-to-use platform, Via helps you manage local HR processes for direct employment such as work visas & permits, employee data privacy compliance, benefits, global payroll, background checks, and more. Our team of local labor lawyers and on-the-ground experts provide 24-hour local support and ensure that your company remains compliant while expanding abroad. As your employer-of-record/entity abroad, Via assumes responsibility for employment liability, so that you can focus on what matters: recruiting and managing your team
