Buying and Selling

flag Colombia Colombia: Buying and Selling

In this page: Market Access Procedures | Reaching the Consumers | Distributing a Product | E-commerce | Organizing Goods Transport | Identifying a Supplier

 

Market Access Procedures

International Conventions
Member of World Trade Organisation
Party to the Kyoto Protocol
Party to the Washington Convention on International Trade in Endangered Species of Wild Fauna and Flora
Party to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal
Party to the Montreal Protocol on Substances That Deplete the Ozone Layer
Party to the Wassenaar Arrangement on Export Controls For Conventional Arms and Dual-Use Goods and Technologies
Party of the International Coffee Agreement 2007
International Economic Cooperation
Colombia has signed many international trade agreements, including:

- Latin American Association of Integration - ALADI
- Andean Community - CAN -Colombia, Equator, Peru, Bolivia
- CAN - Mercosur
- Central American and the Caribbeans
- FTA - Free Trade Agreement Colombia and Chile
- FTA Colombia, El Salvador, Guatemala and Honduras
- FTA Colombia, Peru and Canada
- FTA G2- Group of Two - Colombia and Mexico
- FTA Colombia and Peru - EFTA
- FTA Colombia and United States
- Trade Union CAN - UE

Colombia is part of the Pacific Alliance.

For more information consult this link.

Non Tariff Barriers
Several non-tarriff barriers to trade exist in Colombia: a cumbersome bureaucracy; pilferage in customs warehouses and trucks; shipment detainment in customs because of improper tariff schedule classification, incorrect address or typing errors; inspections carried out by import operations observers; import licences, pre-approval or phytosanitary registration and permits.

All imported goods have to be registered with the Ministry of Foreign Trade (Mincomex) on a form called 'Registro de Importacion', worth 21,500 pesos. Most products are automatically authorised to be imported if this form is presented (imports under the 'Registro' procedure). There are nevertheless a certain number of goods (especially agricultural products) that are subject to licence (imports under the 'Licencia' procedure).
Import authorisations (automatic and licensed) are valid for 6 months, except for the following products: capital goods: 12 months; perishable foodstuffs: 2 months. The goods have to be claimed at Customs before the expiry date of the licence.
Besides that, some products are subject to phytosanitary measures, and the importer should be registered with a certain number of organisations: the Instituto Colombiano Agropecuario for plants and animal products, the INVIMA for medicines, medical underwear, cosmetics and the Ministry of Transport for all types of vehicles. Some farm products can be imported only with a visa from the Ministry of Agriculture, as long as the importer also buys identical local products. According to local conditions, it is also possible that the Ministry does not permit the import of certain products during a given period.

The import of vehicles, tires, second hand clothes and violent toys is forbidden. The import of weapons is strictly limited to the army.

Customs Duties and Taxes on Imports
The average rate is 4.5%. For more details, consult the UNCTAD website.


Customs Classification
Colombia applies the Harmonised Customs System. Customs duties are calculated Ad valorem on the CIF value. The customs duties system (4 rates) was fixed within the Andean PACT and is applicable to Colombia, Ecuador and Venezuela.
Import Procedures
The importer must submit an import declaration to the DIAN (Customs). This declaration includes the same information contained on the import registration form and other information such as the duty and sales tax paid, and the bank where these payments were made. This declaration may be presented up to 15 days prior to the arrival of the merchandise in Colombia or up to two months after the shipment's arrival. Once the import declaration is presented and import duties are paid, customs will authorise the delivery of the merchandise. Customs officials are responsible for inspecting merchandise to verify that the description and classification are consistent with the importer's declaration. A customs inspection group often performs after-clearance random investigations to detect fraud, foreign exchange irregularities, and tax evasion. Major customhouse brokers have a customs office in their own bonded warehouses where most clearance procedures are completed before the merchandise is delivered to the customers.
Besides the Customs declaration (SAD) 2 traditionally required for all goods dispatched, consignments sent to Colombia must be accompanied by the following documents:

  • The commercial invoice in quadruplicate; it must be drawn up in Spanish for preference and indicate beside the usual details: the value or exchange value of the goods in U.S. dollars, the number of the 'registro de importacion' (the certificate of registration of import) sent to the exporter by the Colombian consignee.
  • The certificate of origin. It is drawn up in the community form.
  • The certificate of non-contamination by radioactivity, required for agro-food products and especially for milk, is issued by the Departmental Directorate of Veterinary Services.
  • The phytosanitary certificate, required for fruit, vegetables, seeds and other plants, is issued by the Regional Service for the Protection of Plants.
  • The health certificate issued by the Departmental Directorate of Veterinary Services.
  • The certificate of free sale for cosmetics.

Other products may be subject to the presentation of certificates of free sale to be registered in Colombia. For more information, please visit the website of Colombian Customs.

Importing Samples
After a special form provided upon arrival at an international airport is filled out, demonstration equipment may stay in the country up to 90 days. The regulations regarding the importation of samples varies according to the type of products. It is recommended that you contact the National Department of Customs.
 
 
For Further Information
National Directorate of Taxes and Customs
Colombia Trade Portal

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Reaching the Consumers

Marketing opportunities

Consumer Profile
With a GDP per capita of USD 5.750 in 2021 (IMF), Colombian consumers tend to have middle-class consumption habits and household debt remains quite high. The growth of private consumption remains satisfactory (+4.45% in 2019 - World Bank, latest data available). Since 2012, Colombia has experienced steady growth in the middle class which continues to expand considerably. At the national level, 35.7% of the Colombian population lives under the poverty line and around 31% of the population is considered as being part of the middle class (Departamento Administrativo Nacional de Estadística, 2019 latest data available). The profile of Colombian consumers is not homogeneous and there exists a substantial gap between urban and rural areas.

Colombian household consumption mainly concerns primary needs and education, but a change in consumer habits can be observed and Colombian consumers are increasingly willing to buy non-vital products. Colombian consumers are strongly influenced by fashion trends, brands and promotions, but there is also a strong influence of traditions on consumption habits. Colombians are currently experiencing increasing brand loyalty levels. Healthy and ethnic food categories are especially fast-growing, and organic food products are a new trend, as Colombian consumers are more concerned about ecological issues.

Consumer Behaviour
In the aftermath of the financial crisis, purchasing power has declined for the poorest households, which have struggled to buy commodities. While the development of local industry remains insufficient, Colombians have become accustomed to buying imported products. Price is an important factor in buying decisions in Colombia. However, Colombian consumers are giving increasing importance to ecological and ethical characteristics when buying a product. Colombian consumers are increasingly curious about where and how the product is made. They also pay attention to whether the product is recyclable or not.

Regarding food products, consumers take heed of the brand's reputation, the quality of nutritional information and the attractiveness of the packaging. After-sales service and consumer support are decisive factors in the purchase decision. Only a minority of Colombians has a high purchasing power, and for the majority of Colombian consumers the price remains the main criterion.

Even though online commerce remains underdeveloped, it is growing steadily and has benefited a lot from the lockdowns due to the COVID-19. The growth rate of online sales in 2020 was 34% (Statistica). In the coming years, ecommerce is expected to benefit from massive investments in network infrastructure by the Colombian government. Colombian online consumers are used to buying from foreign websites, mainly American, Chinese, Mexican and Brazilian.

Consumers Associations
Colombian Confederation of Consumers
Main Advertising Agencies
Advertising Agency Pezeta
Advertising Agencies Directory
Publicitaria
Advertising Agency Dattis
See the list of advertising agencies affiliated to the UCEP

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Distributing a Product

Evolution of the Sector
Western style, large supermarkets are part of a noteworthy retail transformation in the last decade with major, domestic and international grocery chains opening new stores, of varying sizes, at intense rates. Over the past years, discount stores have increased market share and continue opening outlets throughout the country offering wide private label portfolios cheaper than grocery chains. Traditional retail is still the most common retail format in Colombia. Outlets are small, independent and are present all around the country; a recent commerce survey concluded that in Bogota there is a mom-and-pop store for every 94 homes. Small remote towns only count on these traditional stores to cover their basic food and beverage needs since modern retail is not present. Mom-and-pops usually offer small/individual packaging products (one sausage, small oil bottles, etc.) and purchase frequency is higher.

Under-invoicing of goods and contraband articles sold at deep discounts remain a problem for legitimate retailers. The Colombian government has attained encouraging results in its effort to reduce contraband. Free trade zones and bonded warehouses are commonly used for imported merchandise and processing of export-oriented goods. Modifications to the Free Trade Zone legislation took effect in November 2007 and offer interesting benefits. The MUISCA electronic customs system will address contraband and invoicing issues.

Online commerce is becoming more common among Colombians. Most retailers have websites available for shopping online and all kind of smartphone applications ease the grocery shopping experience. According to Euromonitor, food and beverages are among the products preferred by Colombian consumers when buying online. Recent tax reform led to a VAT increase from 16% to 19% that increased prices and affected     Colombian consumer purchase decisions. As a consequence, consumers started looking for more affordable, good quality products, leaving room for private label options and hard discount stores.
Market share
All sales channels are available in Colombia, with different distribution methods depending on the type of product. These methods range from traditional wholesalers to more sophisticated methods, such as department stores and hypermarkets, which are gaining popularity. While most imported goods, especially capital goods and raw materials, are still purchased through agents and distributors, some large domestic manufacturing companies import them directly. The most important commercial areas are in large cities: Bogota, Medellin, Cali, Barranquilla, Bucaramanga, Cartagena and Pereira.

Traditional distribution, symbolised by local groceries and other small shops called 'tiendas', witnessed the arrival of modern distribution networks: supermarkets, hypermarkets and shopping centres. The leaders of mass distribution in the country are the following: Grupo Exito, Olimpica, Jumbo-Cencosud, and Alkosto.
Retail Sector Organisations
National Traders Federation (FENALCO)
Association of Colombian Shopping Centres
Ministry of Trade, Industry and Tourism
Chamber of Commerce of Bogota

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E-commerce

Internet access
With a population of nearly 50 million people, and almost 29 million internet users, 58.1% of Colombians were connected to the internet in 2017. Broadband is widely available from many internet providers. Colombia is the third largest   Latin America in terms of broadband subscriptions, placing itself only behind Brazil and Argentina. There are nearly 4 million fixed-broadband subscriptions in the country and a little over 2 million mobile subscriptions. Even though Colombia's broadband penetration is relatively high, growth in the sector has been hampered by poor infrastructure in many of the country's 32 departments. Most fibre broadband connections are concentrated in high-density urban areas, but investment in development of areas with outdated technology is being made. 
E-commerce market
Colombia is Latin America’s fifth largest e-commerce market, and the only country in Latin America with a Ministry of E-Commerce, making it clear that the market is a priority for the government. The Colombian e-commerce market exploded between 2015 to 2016, growing by 64% in one year. In 2017, growth was still high, albeit much more modest, at 22%. In 2017, there were about 12 million online shoppers and more than 87 million online transactions were made by Colombians. According to Statista, e-commerce in the country generated approximately US$ 4.8 billion in 2017. According to the Colombian Chamber of Electronic Commerce (CCCE), e-commerce accounted for 5.61% of the country's GDP in 2017. E-commerce in Colombia has improved substantially within the last year, and has begun to catch the eye of international retailers. In 2017, there was a 3.5% increase in e-commerce website visits when compared to the previous year.  Access to the internet, especially through smartphones, and an increase in online services, like banking and online payment services, are the top factors driving growth in e-commerce in Colombia, particularly in the B2C segment. The segment is becoming more popular, however it is constrained by poor infrastructure, especially highways that connect to ports, which makes supply chains difficult, and complex logistics challenges such as the country’s mountainous geography and lack of integration with international markets. The biggest segments in the Colombian e-commerce market are tourism (airlines and hotels), fashion (clothing and footwear) and technology. B2B sales of industrial and agricultural products, and food sales have been growing significantly. Most Colombians use computers and laptops to buy goods online, but mobile commerce is growing, and 14% of people use their phone to make purchases online. Cash on delivery is very popular due to low credit card penetration rates in Colombia, and accounts for 40% of purchases.

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Organizing Goods Transport

Main Useful Means of Transport
Goods transport inside the country is mostly by road. For further information consult the Ministry of Transportation.

Imported goods must be accompanied by the transport documents, packing list and transport insurance. Colombian regulations make insuring consignments for the country compulsory. Wooden packaging entering Colombia must be treated (fumigated) and marked with the standard NIMP n°15.

Ports
The Port of Carthagena
The Port of Buenaventura
Airports
International Airport El Dorado, Bogota
International Airport Alfonso Bonilla Aragon, Cali
International Airport Jose Maria Cordova, Medellin
Sea Transport Organisations
Division for Ports and Transportation
Ministry of Transportation
Air Transport Organisations
Colombian Civil Aviation
Road Transport Organisations
Ministry of Transportation

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Identifying a Supplier

Type of Production
For the resources for businesses on managing the manufacturing and the supply chain risk due to the outbreak of the Covid19 pandemic, please consult the report COVID-19: Managing supply chain risk and disruption (Deloitte Canada, 2020), as well as the insights on COVID-19: How to fortify your supply chain (Kearney, 2020).
The World Economic Forum's COVID Action Platform provides useful information on the latest strategic trends regarding COVID-19 implications for businesses, including manufacturing and supply systems. The report Outbreak Readiness and Business Impact (World Economic Forum in collaboration with the Harvard Global Health Institute) offers insights on handling coronavirus by businesses and strategies for effective response and resilience.

The industrial sector accounts for a third of Colombia’s GDP and is dominated by coal mining and oil and gas production. Colombia is the world's fourth largest coal exporter and Latin America's fourth largest oil producer. Other major industries include manufacturing, construction, chemical, pharmaceutical, textiles and food processing.

Business Directories

Multi-sector Directories
All.biz - Colombia - Directory of companies in Colombia
Angloinfo - Bogota business directory
Colombia Business Directory - Colombia business directory
Colombia Empresarial - Directory of companies, industries, products and services in Colombia
Expat.com - Colombia business directory
Express Business Directory - Colombia business directory
Planeta Colombia - A search engine for companies in Colombia
 

To search directories by industry in Colombia, check out our service Business Directories.

 
Professional Associations by Sector
30 professional associations listed for Colombia.
 
Trade Agencies and Their Representations Abroad
Chamber of Commerce of Colombia
Chamber of Commerce of Bogota
General Professional Associations
National Association of Colombian Businessmen
National Federation of Shopkeepers
 
 

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Latest Update: June 2022