How Is Colombia the Score in Latin America for Investments?

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The decision to invest and carry out new ventures in a country depends not only on its geographical position or the quality of life of its inhabitants but is also subject to other important aspects such as political conditions and benefits or tributary incentives.

According to The World Economic Forum, at least a third of the favorable conditions are determined by each country's government and stresses the importance of formulating policies with a view to incentives and improvement, which promote the opportunity to create new companies and micro-economies. Therefore, depending on each country and its internal policies, there are greater and better conditions to undertake and create.

New business ideas are constantly emerging, and new SMEs are being developed. Although in March 2020, the global economy was affected by the quarantine, between 2021 and 2022, entrepreneurship grew by 4.54% in web search engines.

The Global Entrepreneurship Monitor (GEM) recently rated the favorability of each country to develop new businesses with a score of 0 to 10. The index is based not only on each country's political and social conditions and the fiscal and tax advantages but also on the entrepreneur's experience, the seed capital, and the ability to continue investing once the idea is developed.

The report also calls on public entities to finance new ideas since some benefits are focused on ventures that have existed for at least two years; even though a new activity may represent an investment risk, they deserve the opportunity.

The report also aims at the private sector sponsoring new projects in exchange for tax benefits. Unsurprisingly, economies with high economic power rank better than those with medium and low economic power.

The list of the 50 best countries to invest in and develop new economies is headed by the United Arab Emirates with a score of 6.8. They are followed by the Netherlands (6.3), Finland (6.2), Saudi Arabia (6.1), and Lithuania (6.1). Colombia has the best score in all of Latin America, ranking 25th in the global ranking, with a score of 4.7. At the Latin American level, Colombia is followed by: Chile (4.5) in 27th place, Uruguay (4.3) in 32nd place, and Mexico (4.3) in 33rd place.

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Based on the 57 Chambers of Commerce commercial registry in Colombia, Confecamaras prepared its Business Creation Dynamics Report for the year 2021 (from 1/1/2021 to 12/31/2021), which shows as a result that 307,769 new companies were created, corresponding to 10.6% more, compared to 2020. Of these, 74.4% belong to natural persons, and the remaining 25.6% to companies. Of this percentage of natural persons, 61.3% correspond to women entrepreneurs and 38.7% to men. While of the percentage of companies, 23.2% have capital participation by women.

According to that same report, the companies created constitute the creation of at least one direct job, so new projects are not only carried out, but they also create new opportunities and reduce the unemployment rate. It also emerges as relevant data that 40% of these new companies have female staff on their staff, as well as 9% of management positions are held by women.