Employer of Record In Colombia
Skuad's Colombia EOR (Employer of Record) solution helps your business expand into Colombia without the need for an entity setup. Our unified and automated global HR platform enables you to expedite the onboarding of your remote team, manage their payroll, benefits, etc. compliantly. We help you streamline the global expansion process with the able assistance of our international network. Learn more about Skuad’s customized EOR solutions.
Colombia at a Glance
- Estimated Population: 50.3 million
- Currency: COP Colombian Peso
- Capital: Bogotá
- Languages frequently used: Spanish
- GDP: USD 323.6 billion
Employment in Colombia
What You Must Know Before Employing in Colombia
Different sources provide a comprehensive view of the Labor Code of Colombia. While the Constitution of Colombia lays out the core principles and obligations of employment, the main source of employment resources is the Colombian Labor Code.
The Colombian Labor Code lays out elaborate details associated with employment in the country. This includes benefits, the conditions of employment, social security, as well as the rights and duties of employees.
Yet another source of labor-related regulations is the decrees of the Colombian Ministry of Labor, as well as case law of Labor Courts. Put together, all these sources form a comprehensive view of the Colombian labor and employment system. The 1990s were a period when the Colombian labor scene changed significantly, but since then, the code has been fairly consistent.
Some of the provisions of Employment Laws to note before hiring in Colombia are as follows.
Timings, Holidays, And Leave Policies In Colombia
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Contractors Vs. Full-time Employees
Colombia has a host of different higher education institutions that provide training in everything from engineering to arts. Several Colombian students also choose to gain their educational stripes in other countries of South America. All these factors lead to the development of a highly trained young section in the Colombian Society. These educated youth are constantly on the lookout for new opportunities, and your company can benefit from this.
Just as in the rest of the world in Colombia too, remote work has been the major form of work in the past few months. The internet and communication infrastructure in Colombia has always been robust enough to handle this upsurge in remote work. The internet is available in all corners of the country and access to it is not an issue either for companies or for individuals.
Colombia does not officially recognize many types of employment. However, the employment contract can be for a limited duration or an indefinite duration. Both limited duration and indefinite duration contracts in Colombia are protected under nearly the same laws and covenants. The contract must be developed in such a way that the nature of employment and the type of employment are clear.
Whether your organization requires contractors or full-time employees, Skuad’s EOR solution can cater to all your hiring requirements. Learn more by talking to Skuad experts.
Scope of Negotiating Terms
The scope of negotiation in a Colombian employment contract depends squarely on the type of role that you are applying for. Several employees and labor associations in the country tend to negotiate on the behalf of a large number of workers. Trade unions and associations are very powerful and have significant sway in negotiations. If you belong to the manufacturing sector or any other sector that involves hiring workers en masse, you might have to negotiate with such associations.
When it comes to individual hiring, the scope of negotiation depends on the seniority of roles. For junior roles, companies the margin of negotiation will be small. However, for senior roles, candidates are not available in the kind of volume they are for junior ones. After a long recruitment process, companies generally listen to the demands of the candidates and try to find a middle ground between their requirements and the capabilities of the candidate. Call Skuad experts to know more about the specifics of employment types in Colombia.
Hiring in Colombia
Hiring in Colombia is similar to other countries. Internet platforms are extensively used to hire candidates at all levels in Colombia. Additionally, there are also several job platforms specific to Colombia and Latin America that have come up over the years. LinkedIn is also active in Colombia, though it is not used as much as in several other countries.
The first step toward hiring candidates is to create a job description. This needs to be done in conjunction with the team that has a vacancy. Once the job description has been drafted, it is posted on the company’s website, job portals, and other job sites. Depending on the requirements of the job, the HR team will receive a volume of applications that they will then have to sift through.
After the initial screening, the shortlisted candidates need to go through several rounds of interviews. This process might also include written exams if the volume of candidates is high. After the final selection, the HR team needs to conduct a thorough background check of the candidates to ensure their integrity.
A drawback of hiring online is that the HR team may be inundated with several applications that they might not be able to analyze in time. This is why having an EOR partner can be useful. EOR partners carry out all HR activities for you, including employee hiring and management, as per your need and requirements. To know more about the hiring process in Colombia, connect with Skuad experts today!
Probation & Termination
There are no specific laws concerning probation in Colombia, but the usual duration ranges from a month to a year. The process and method of termination are significantly more fluid in Colombia than in other countries, especially when it comes to individual termination. There is generally no notice period required for termination, and the only case in which it might be required will be in fixed-term contracts. In other cases, termination can take immediate effect. There is generally no reason required for termination unless a fair value has been challenged in the court of law.
Three main causes lead to the termination of employees in Colombia. Legal reasons for termination include the death of an employee or other factors such as a change in laws and regulations that make termination compulsory. Fair causes include reasons associated with the conduct of an employee and the employee’s behavior at the workplace. Termination without a fair cause is generally not practiced and can be challenged in the courts. It may also lead to the reinstatement of the employee. Book a demo with Skuad to learn more about probation and termination laws in Denmark.
Given the range of hiring and subsidiary incorporation regulations in Colombia, it is important to have a partner to simplify legal and compliance-related matters for you. Players such as Skuad have a significant grasp over Colombia’s local laws and regulations and are, hence, experts if you are looking to expand your company to places such as Colombia.
Outsourcing Employment Through An EOR In Colombia
Working with an Employer of Record helps you simplify the process of expanding to a new country and saves you the time spent maneuvering legal hurdles and local complications. Employers of Record such as Skuad will help you develop contacts and associations tailor-made to your requirements and significantly speed up hiring, incorporation, and other processes. Learn more about the benefits of EOR solutions from Skuad experts.
Types of Visas in Colombia
To know more about Visas required in Denmark and how Skuad can secure them for you, speak to Skuad experts today to kick-start your expansion journey.
There are no separate work permits required if you are looking to migrate to Colombia for professional reasons. All you need is a migrant work visa as described above. To apply for the work visa, you will need to be sponsored by your employer and furnish proof of employment. Learn more about the work permit authorization process from the Skuad team.
Payroll & Taxes in Colombia
Setting up payroll in Colombia can be a rather tricky task. This is primarily because the labor regulations in Colombia are dynamic and the existing labor regulations can be rather hard to maneuver. Several parts of the payroll are statutory requirements as per the Colombian Labor Code. These requirements count towards the compensation of the employee, and hence the payroll development must be carried out with full knowledge and cognizance of these regulations.
This is another one of the many reasons to have an EOR partner in a country such as Colombia. EOR partners such as Skuad have a deep insight into the local laws, customs, and regulations associated with employment in Colombia. As a result, the time it takes for you to complete the expansion as well as the amount of effort the process consumes, are considerably less.
Taxation in Colombia
To understand how Skuad manages payroll and taxes for you in Colombia, Talk to Skuad experts and book a demo.
Each year, a 15-day semi-annual bonus (prima de servicios) is paid on the last day of June and the 20th of December.
Incorporation: How to Set Up a Subsidiary in Colombia
Setting up a subsidiary in Colombia can be a complex and long-winded process. There are several steps involved in setting up a subsidiary in Colombia.
The first step is to accumulate and collate the documents required to set up the subsidiary. The list of documents includes the certificate of incorporation of the parent company in its host country, the power of attorney you have granted to the legal counsel, the parent company bylaws, as well as the resolution of the company that lays out the details of the subsidiary setting up in Colombia.
Next, you need to formalize the public deed. You will need to pay the notary fees, which is a percentage of your capital, and get your legal representative in Colombia to sign the deed. You also need to present letters of acceptance from the branch representatives that the parent company has appointed in Colombia.
All the above documents will now be presented to the National Taxes and Customs Directorate of Colombia for your registration to complete. This step will also lead to the generation of your tax identification number, which will be essential in complying with government taxation regulations in the country.
Next, you will need to approach the Chamber of Commerce to register the company ledger with it. The ledgers must include the accounts journal of the subsidiary as well as the general ledger.
To incorporate a subsidiary in Colombia, you must have a bank account in Colombia. There is no restriction on the bank that you can open your account with, but the account needs to be in the country.
Finally, apart from the initial investment that you make in the subsidiary, all additional investment from foreign sources needs to be registered with the Central Bank of Colombia. For setting up a subsidiary in Colombia and finding a bespoke solution for your expansion, get in touch with Skuad experts.