Our Employer of Record (EoR) / International PEO solutions enable staffing organisations and foreign businesses to expand into Colombia and hire employees without the need to establish a new corporate entity. 

We take care of the entire employment relationship including managing all social security costs, social benefits and statutory rights afforded to the employee. The best part is that our EoR solutions are completely managed by the Capital GES team, allowing you to concentrate on international expansion. 

Interested in doing business in Colombia? Here are the top five things you need to know: 

1. Social security
Social security provides coverage for health care, old age pension, industrial injuries and access to the state family compensation benefit system.

Employers’ contributions total approximately 30.5%. Employee’s contributions are withheld at source and range between 10% and 11% of the gross salary with a cap set by law, which is updated every year.

2. Employment contract details
There are no specific rules governing the language for employment contracts, but the employee must understand the contract language.

Fixed-term contracts must be in writing. Open-ended contracts can be verbal or written, though verbal contracts are clearly unsafe and not recommended.

3. Fixed-term contract extensions
Fixed-term contracts should always be in writing and can have a maximum duration of up to three years;

they may be renewed indefinitely. Fixed-term contracts can be automatically renewed for the same period 3 times if their initial duration is less than one year, after which extension is automatically for one year, irrespective of the initial agreement.

In order to avoid an automatic renewal/extension the employer has to be given 30 days’ written notice before the due date of the automatic renewal.

4. Termination costs
Open-ended contracts may be terminated with immediate notice. Fixed-term contracts require a notice period of at least 30 days.

If an open-ended contract is terminated without valid cause the employer must pay dismissal indemnities based on the employee’s wages:

Workers earning up to 10 minimum salaries per month are entitled to remuneration equal to 30 days’ earnings for the first year of service plus 20 days’ for subsequent years.

Workers earning 10 minimum salaries or more are entitled to remuneration equal to 20 days’ earnings for the first year and 15 days’ for subsequent years.

5. Probation periods
The maximum duration of the probationary period is 2 months, at any point during which the contract may be terminated unilaterally without prior notice. Any probation period must be agreed in writing.

During the probation period the employer will not pay any termination indemnities.

If you are looking to expand your workforce in Colombia (or any other of the 30 countries we operate in) without the burden of registering an entity and incurring significant expense and administration then please get in touch with Nick Broughton at Capital GES on +44 7539 337 563 or email Nick.Broughton@Capital-GES.com

Capital GES provides market-leading employment services to staffing companies, corporate clients and independent contractors in all sectors across Europe, Latin America and southern Africa. With headquarters in Switzerland and offices in USA, Brazil and UK, Capital GES provides services including Employer of Record, Contractor Payroll, Invoice & Pay and IC Compliance Checking.

For more detailed information on employment matters in Colombia, including statutory benefits, employment regulations and contract requirements, download our free guide today or contact our team for a free consultation. ​​