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EOR in Colombia: hire great professionals without an entity

Colombia is changing its narrative and encouraging foreign direct investment. An EOR in Colombia can help you expand into this emerging country.
A picture of a Colombian flag to illustrate article about EOR in Colombia

Colombia has a longstanding reputation for business opportunities and is home to a growing pool of skilled labor, making it a good choice for companies interested in hiring international professionals.

For anyone looking to quickly and compliantly hire professionals without needing to set up a local entity, working with an EOR in Colombia is a strong option.

When you work with an EOR in Colombia, you can hire qualified talent that will report directly to you, without needing to worry about managing their payroll or dealing with other administrative and compliance issues.

SEE ALSO: Call center outsourcing: 5 great destinations to consider 

If you don’t already have people lined up for the roles you need to fill, the EOR will also be able to use its established recruitment network and expert unsderstanding of the local job market to help you source outstanding candidates.

Selected candidates will be employed by the EOR’s entity in full compliance with local labor laws, meaning you can quickly establish a presence in the market, without having to worry about navigating unfamiliar regulations.

If you are looking to quickly and compliantly hire top professionals in Colombia,contact us today.

A Serviap Global map of Colombia to illustrate and accompany an article on EOR in Colombia.
An EOR in Colombia can help you hire quickly and compliantly

Colombia: country overview

Colombia is located at the meeting point between South and Central America, meaning it has a privileged position for international investors, being the only South American country offering access to both the Atlantic and Pacific Oceans.

Colombia is the largest Spanish-speaking country in South America, with more than 51.5 million inhabitants, and a median age around 30 — lower than many developed economies. There is a lively and free press and the country is well known for a thriving cultural output, particularly in music.

Unlike many of its neighbours, Colombia has a strong democratic record, despite serious conflict and security issues in the last century. Much of the 1980s and 1990s saw armed groups active in various parts of the country with frequent clashes.

However, in the past decade the country has undergone significant political and social change, signing a peace deal with rebel group the FARC-EP to end the longest conflict in the Western Hemisphere. As the country has moved forward into its new chapter, foreign direct investment has been increasing.

Cities such as Medellin have changed their narrative to that of an innovation capital, while the capital Bogota, nicknamed the ‘Athens of the Andes’, is famed for its universities. Elsewhere in the country, cities like Bucaramanga, Manizales and Barranquilla are outward-looking and eager to participate in the global economy.

The Colombian market at a glance

Colombia’s main export commodities include mineral fuels and oils, as well as precious stones and metals. Agricultural production is also high, with Colombian coffee famously well-regarded around the world. In the tertiary economy, tourism is a growing sector full of potential, with Medellin and the historic coastal city of Cartagena increasingly popular destinations.

EOR in Colombia may be based in the colonial city of Cartagena, which has the country's highest land values. Image by Ricardo Gomez Angel on Unsplash
Cartagena, a tourist hotspot

Foreign direct investment is increasing rapidly, and the country has a long history of friendliness to outside business. Recently, labor market fluidity has been increasing, while employment rates have notably been above the regional average, growing steadily since 2021.  

Educational standards are also improving, with the country turning out growing numbers of STEM graduates each year and specializing in robotics. However, according to Jobs Diagnostic research, high-skilled workers are often an underutilized workforce.

These professionals face higher unemployment rates than low-educated workers, even though they are more frequently formally employed. This scenario creates many opportunities for finding ambitious, skilled specialists ready to work via an EOR in Colombia, often at competitive rates. 

Thus, Colombia is growing as a popular outsourcing destination. The tech sector has received heavy focus, with tech professionals increasingly entering the workforce, along with the expansion of internet access, programming training, and global tech companies influx. Medellin especially is targeting these industries to build on its reputation as a city of innovation.

Why you should hire via an EOR in Colombia? 

The simplest way of hiring great talent without establishing a foreign entity is via an EOR in Colombia.  An employer of record (EOR) assists you as a third-party collaborator of your organization to help find, hire, and manage personnel. They work on your behalf to simplify the processes of employing abroad, while always maintaining compliance with local regulations. 

An EOR can play many different roles in your company, according to your hiring needs. In any case, some of the main benefits are the local knowledge and strong pre-existing network connections they can bring, making your business expansion in a new market and territory much faster and easier.  

An EOR in Colombia may well be based in the thriving intellectual capital, Bogota. Image by Random Institute on Unsplash.
Bogota’s Plaza de Toros de Santamaría

The EOR has expertise in selecting the most qualified candidates during recruitment. Additionally, they will be well-versed in navigating applicable regulations to the onboarding process. They can oversee many elements like contracts, payroll, benefits, work permits, and termination procedures. 

Your company can shorten processes and save time through the legal entities of your EOR in Colombia, which can facilitate the many factors to consider when hiring international employees, ensuring compliance with the local labor laws, and avoiding fees or other legal problems that can come with employee misclassification. 

In Colombia, the Department of Labor is responsible for fostering stable labor regulations, while also offering employment services and information to the community. There are many types of contracts that can be established, so collaborating with an employer of record keeps you from navigating them on your own. 

Regulations an EOR in Colombia will take care of

Colombian employees are covered by the labor act rules so they are guaranteed proper leave, salary and payroll taxes. An EOR in Colombia can greatly help you navigate this legal scenario.

Minimum wage: Salaries vary according to job positions and industries, but companies must follow the minimum wage of COP$1,160,000 as of January 2023 regulations, with a travel subsidy also available to many.

Working hours: employees are allowed to work a maximum of 8 hours a day and a 48-hour work week. For overtime, employers can raise the weekly work hour to 56 hours with prior agreement.

Vacations and national holidays: 15 days minimum annually. The working week is defined as six days, but most companies give two days off per week. There are 18 public holidays in most years. As some move to the nearest Monday and others do not, this varies by year.

Maternity and paternity leaves: Mothers receive 18 weeks of paid time off. Mothers must also be allowed two daily breaks for breastfeeding during work. The paternity leave consists of 2 weeks of paid time off for working fathers directly after childbirth.   

Tax liability: Corporate income tax is high at 35%, although there are double taxation agreements with a number of countries. Sales tax (known locally as IVA) is at a general rate of 19% with exemptions for non-luxury items. Employer contributions for social security projects such as healthcare are 25% in total.

How to recruit through an EOR in Colombia in 6 steps 

Hire top talent in an easy and hassle-free way through an EOR in Colombia by following the steps below:

1) Define employee requirements 

Determine the specific roles and responsibilities you need to fill. Create a clear outline for the required qualifications and skills. This is important so that your EOR in Colombia can gather as much information as possible and narrow the hiring options. 

2) Complete preliminary screening 

Once the EOR in Colombia has the necessary documents and information, they will start searching for possible hires, and applications will begin coming in. Preliminary screenings will be made to select the candidates that best fit the requirements you have presented them with. 

3) Start interviews 

At this stage, your EOR in Colombia will then undertake initial interviews, probing candidates in order to verify that the experience and qualifications they have were accurately reflected in the resume they submitted and meet the requirements of the role. 

4) Send job offers 

After a candidate is selected and demonstrates suitability for the available position, a job offer can be extended to them. In Colombia, an employer of record typically maintains readily available versions of essential recruitment documents, including offer letters, which can be easily customized to meet your company’s expectations. 

5) Initiate employee onboarding 

An EOR in Colombia can also assist you in the onboarding process, after a candidate accepts the job offer. This includes contract signing, familiarizing the employee with their rights and responsibilities, and providing insights into the company’s operations and objectives. 

6) Manage payroll and benefits 

If you’d like, the EOR can be responsible for processing payroll, withholding taxes, and making social security contributions on behalf of the employees. They will also provide the necessary benefits, such as health insurance and pension contributions, as mandated by Colombian labor laws. 

Alternatives to hiring via an EOR in Colombia 

In case you want to hire full-time employees without the assistance of an EOR in Colombia, you will need to directly set up a legal entity in the country, which requires you to handle all of the hiring process, as well as the local labor regulations, that may differ from country to country.  

This alternative can turn out to be very time-consuming, especially if you have little to no experience in the Colombian market. However, if you choose to hire directly, an EOR can still help you in finding the best candidates, and will often offer recruitment as a standalone service. 

Another option is hiring international contractors. They are an alternative for employing new workers without setting up a local entity, other than hiring full-time employees. Independent contractors are professionals who work on their own for specific projects from other companies.  

Legally, they are not official employees and won’t be under the same obligations and protections, but can cooperate in many functions of a company. This means that the regulations of the contract are flexible and will depend on the particularities of both parties.  

Independent contractors can be an opportunity for finding diverse expertise, while also ensuring adaptability and some cost saving. They can also be hired via an EOR in Colombia, which can guarantee more legal protection and precision. An employer of record can facilitate all arrangements with independent contractors. 

Serviap Global is an EOR in Colombia 

Serviap Global is an experienced employer of record in Colombia. We specialize in providing international PEO / EOR services. Our comprehensive solutions enable companies to swiftly hire skilled professionals in the country. 

In addition to our EOR services, we offer global talent acquisition support, facilitating both direct hires and contractor placements for businesses. With our extensive expertise, we streamline the recruitment process and ensure seamless onboarding.  

Contact us to find out how we can help you as an EOR in Colombia.

If you would like to get an idea of salary and other costs involved in hiring talent around the world, check out our free paycheck calculator.

Serviap Global supports global hiring in over 100 countries worldwide

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