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Hiring Employees & Recruitment Requirements in Colombia


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Colombia has evolved as one of the strongest economies in Latin America, having a diverse range of attractive business sectors. To take advantage of these business opportunities, foreigners can employ local staff in two ways; through a local legal entity or through Professional Employer Organisation (PEO). Both are attractive options, however, this will depend on a companies business needs.

Interested in engaging staff in Colombia? Watch the short presentation below and ensure you are aware of both employment requirements in addition to methods of employment in Colombia.

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Hiring Employees & Recruitment Requirements in Colombia

  1. 1. Hiring Employees + Recruitment Requirements in Colombia
  2. 2. Key Considerations: Employment Find below, some of the key considerations that should be taken into account before contracting staff in Colombia Yes – 2 months Is there an employee probation period? Yes Do staff need a local employment contract? Yes Can expatriate staff be hired? 15 days per annum Vacation entitlement Maximum employer contribution is 47% Total cost of employment Employers - they must also pay employee’s social security Who manages withholding tax? • 13th salary • Health Insurance • Severance/Severance Interest Employee benefits
  3. 3. Pathways to Hiring Staff Through a local legal entity Through a PEO solution: Professional Employer Organization
  4. 4. Forming a Legal Entity in Colombia In Colombia, there are (3) main types of legal entities: Corporations (SA), Limited Liability Companies (LTDA), and Simplified Stock Company (SAS) Advantages: • Greater control of your employees • Better knowledge of local market, laws and regulation • Viewed more positively than a PEO solution Disadvantages: • High set-up/ongoing costs • Administration involved in managing a local company • Accounting and tax obligations
  5. 5. Professional Employer Organization Advantages: • You can operate without forming and maintaining a local entity • Limited legal responsibility • Cost-effective way to convert international contractors into employees Disadvantages: • The PEO becomes a co-employer • Loss of control • Costs involved with PEO services • Compromised company culture International PEO is a method to employ staff without having your own company
  6. 6. Are you looking to hire staff? As you are now aware, you have two options to hire staff: a) Through a Local Legal Entity or b) Through a PEO solution Need assistance hiring employees? Partner with Biz Latin Hub to learn how we can support you and your business in Latin America
  7. 7. Doing Business in Colombia? Learn More Here! What Is the Total Cost of an Employee in Colombia? Colombian Company Incorporation: Everything You Need to Know How to Hire an Employee or Contractor in Colombia