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Chapter 5: In This Chapter
• Introduction
• Foreign ownership
• Financing
• Commercial real estate
• Residential real estate
• Rental property
• Licensing and brokerage
• Government
• Legal system
• Taxes and fees
• Economy and business
• What you need to know
• Beyond the basics
• Key contacts

Map of Colombia
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Source: CIA World Factbook

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Introduction to Colombia
• Democratic republic divided into 32 departments and capital of Bogotá
• Rising economic star
• New stability and security
• Advancement in drug war

Colombia —The Rich Tapestry
4
Source: Wikipedia

Colombia —The Rich Tapestry
5
Source: Wikipedia

Colombia —The Rich Tapestry
6 Source: Wikipedia

Colombia —The Rich Tapestry
7 Source: U.S. Geological Survey;
N. Banks

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Foreign Ownership of Real Estate
• Freely allowed
• Some restrictions on public-domain beachfront property
– Leasehold rights possible
• Sales proceeds can return to country of origin

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Financing
• Mortgage market growing due to policies and low bank rates
– Securitization market
• Difficult to obtain by foreigners

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Commercial Real Estate
• Growth attributed to economy
– Retail
– Industrial
• Tourism
– Some hotel development

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Residential Real Estate
• Home prices stabilizing after rising at a heated pace
– Increasing demand
– Well-regulated mortgage market
– Loans to developers, although land is in short supply
• Second-home market growing

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Rental Property
• Neutral to pro-landlord
• Lease agreements
• Rents
• Deposits
• Evictions

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Licensing and Brokerage
• No licensing
• Listings
• Transaction process
• Language of contracts
• Appraisals
• Transferring money with Form #4

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Realtor.com/international

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What You Should Know About
Government
• Republic with executive, legislative, and judicial branches
• Pro-market policies to expand foreign investment and trade
• Engagement with FARC

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Legal System
• Civil law system
• Courts at different levels and with different duties
• Lengthy proceedings due to process inefficiencies and number of courts actions
• Corruption an issue

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Real Estate Taxes and Fees
Registration Fee
Real Estate Taxes and Fees
Tax or Fee Amount
1.5%
Stamp Tax
Municipal Taxes
Notary Fees
Real Estate Transfer Charge
Agent Fees
Property Tax (annual payable to state)
Paid by
1.5%
1%
Buyer
Buyer
Buyer
0.3%
0.15%
0.15%
3-5%
Buyer
Buyer
Seller
Seller
0.1-1.6% of value Owner (Buyer)
Source: Global Property Guide

Business and Income Taxes
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• Individual income tax
– Residents: 0-33% on worldwide income
– Nonresidents: 33% on Colombia-sourced income
• Business income tax
– Resident and nonresident companies with permanent establishments: 25%
– Nonresident corporations with no branch or permanent establishment: 33%
• Withholding tax
– Dividends: 25% unless certain conditions apply
– Royalties paid to nonresidents: 33%
– Interest: 33% if loan term does not exceed 12 months; 14% otherwise
– Management fees: 10%
• Capital gains
– Generally 10%
• Value-added tax
– 0-16%
• Other taxes

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Economy and Business
• Strong economic trends
– Pro-market policies dating to the 1990s
– Challenges include reliance on oil exports and inadequate infrastructure
• Major industries and exports
• Colombian coffee

Economic Drivers
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• Global investment
– Oil and mining
– Manufacturing
– Banking
– Transport
– Communication
• Medical tourism
• Free trade agreements
• Free trade zones
Sources: Guardian Media, Wikipedia, Proexport
Colombia

What You Need to Know
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• Substantial economic growth
• Few restrictions on foreign ownership
• Office, retail, and industrial sectors
• Home prices still rising but stabilizing
• No real estate agent licensing
• Pro-market government policies, sophisticated legal system
• Economic drivers

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Beyond the Basics
• Appearance
• Greetings
• Business cards
• Meetings
• Communication
• Negotiations
• Hierarchy
• Dining
• Family
• Gift giving

Key Contacts
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• US-Colombia International Chamber of
Commerce
• Proexport Colombia
• U.S. Embassy
• Embassy of Colombia
• FEDELONJAS
• Marco Island Area Association of
REALTORS® (Ambassador Association)