Risks of Doing Business in Colombia

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Colombia's infrastructure and security improved throughout the 2000s
Colombia's infrastructure and security improved throughout the 2000s (Image: PONT SUR LE FLEUVE MAGDALENA image by lkudelka from <a href='http://www.fotolia.com'>Fotolia.com</a>)

Colombia's image as a dangerous, war-torn country persists in the international media, despite considerable improvements. The Unidas party's security and free trade policies during the 2000s have made Colombia a more hospitable place to do business. Paramilitaries have demobilized, the leadership of the Revolutionary Armed Forces of Colombia--FARC, the main guerrilla group--has been largely imprisoned or killed, and the widespread deployment of the army has lowered crime. Furthermore, Unidas's liberalization of the trade regime and alliance with the U.S. facilitates foreign investment and has considerably eased the economic risks of doing business in Colombia, according to the U.S. Commercial Service.

Corruption, Inflation and Counterfeits

The risks of doing business in Colombia now reflect the normal political and economic risks of doing business anywhere between Buenos Aires and Boston. Political corruption persists at all levels, threatening the reliability and impartiality of the judicial system and other government offices. Due to historical trends, the risk of high inflation should be considered before making any long term investments, but in the past Colombia has controlled inflation better than most countries in the region. If a business plans on dealing in U.S. dollars, personnel must become savvy to the tactics used by Colombian counterfeiters, who use sophisticated equipment and produce up to 15 percent of the world’s counterfeit dollars, according to the BBC.

Urban Crime

Crime is more of a concern for personnel than for a business itself. Despite a strong military presence in many cities, petty crime is pervasive and businesspeople are frequently targets of armed theft. Colombia has lost its status as the world’s kidnapping capitol, but kidnappings targeting high profile businesspeople are not uncommon.

Guerrillas

The FARC is probably one of the smallest risks facing a foreign business that wants to invest in Colombia. Military action during Uribe's presidency shrunk the rebel-controlled territory within Colombia to a portion of the eastern rain forest, according to the Independent. Guerrilla actions rarely take place far from rebel-controlled territory, which most businesses should be able to avoid. Transport in and out of the rain forest can be dangerous, but most major roads are safe and patrolled by the military.

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