Minister of Commerce, Industry and Tourism, María Ximena Lombana Villalba, indicated that this agreement was negotiated to provide continuity between the UK and Colombia as originally agreed to within the framework of the Free Trade Agreement with the European Union, which the United Kingdom left on December 31, 2020.

The tariff commitments acquired by the two countries are developed through Decree 894 of May 31, 2022. With the implementation of this agreement, Colombia has 18 active bilateral or multilateral international trade agreements in force.

Between 2002 and 2021 UK based entities invested more than $22.6 billion USD in Colombia.

In 2021, trade between the two countries totaled $934.5 million USD, with exports of total goods from Colombia to the UK for $451 million USD, which represented 1.1% of what the country sold globally and 10.1% of what it exported to continental Europe. These exports grew 19.6% compared to 2020.

Between January and April of this year, sales to that market totaled $215.2 million USD, an increase of 39.5% compared to the same period in 2021. Of that total, US$133.2 million corresponds to non-mining assets.

“That country has a population of 67.2 million inhabitants that grows annually by 0.6% and is characterized by being a high-income society, where trends towards sustainable and responsible consumption have grown. It is a country with high purchasing power, with a GDP per capita of US$41,059, so it was necessary to maintain that preferential access for Colombian products,” said Minister Lombana.

One of the sectors for which the UK is a relevant market is for agriculture. About 68% of exports corresponded to this class of products, among which bananas stand out (representing about 30% of total exports), coffee (17%), flowers (11%), Hass avocado (almost 6%). Tilapia and passion fruit are also emerging exports, along with latex balloons, instant coffee, and medicines.

Minister of Commerce, Industry and Tourism, María Ximena Lombana Villalba

During this first meeting, CARICOM member countries and Colombia discussed mutual requests regarding commerce, current sensitivities, and agreed to alternately advance meetings of health ministries on both sides to advance in the admissibility of products of interest.

“We hope to increase access to the markets that are part of this group, both in agricultural and industrial products. This deepening is part of our strategy to take advantage of trade agreements and strategic markets,” said Colombia’s Minister of Commerce, Industry and Tourism, María Ximena Lombana Villalba.

Trade between Colombia and CARICOM reached $870 million USD in 2021, of which Colombia’s exports were $616 million. In the first four months of 2022, Colombia exported $158.4 million into CARICOM, including $90.7 million of mining and energy products.

This data was researched and compiled by the Office of Economic Studies of Colombia’s Ministry of Commerce, Industry and Tourism, based on figures from the Bank of the Republic and the governmnent’s statistics agency DANE.

This behavior of the non-mining export basket (goods + services) indicates that the 2021 target was surpassed by 114.8%, originally set at $22.499 billion pandemic adjusted dollars.

The Minister of Commerce, Industry and Tourism, María Ximena Lombana Villalba (above photo), said that this “is the result of an articulated work with entrepreneurs. We have programs to support and promote exports of both goods and services, which we have put at the service of the productive sector. We continue to walk from reactivation to growth, and in this process, foreign trade is an important lever of growth.”

Services Exports

Within the services export sector, the travel sector was the largest, making up 34.6% of the total. In 2021, Travel exports reached $2.6 billion, an increase of 64% compared to 2020 during the worst of the COVID pandemic.

“Other Business” represented 29.7%, with exports reaching US$2.3 billion, an approximate increase of 21% compared to 2020. Meanwhile, exports of services associated with transportation accounted for 17.4%, totaling US $ 1.3 billion, an increase of 8.6% compared to 2020.

The ministry reports that various Belgian firms are active in Colombia, including Jan de Nul, Puratos, AB InBev, Bakaert, Acalis, Etex, Delta Light, Café Velvet, Procecal, Incofin,and others.

“These announcements of foreign investment are very positive news to strengthen employment and competitiveness of the country. Belgium is a great ally of ours in Europe in international trade, tourism and investment, so we want to further strengthen our relations, at a time when we are advancing in the secure economic reactivation. By consolidating our economic relations with these European nations, we have achieved that more and more foreign entrepreneurs and investors see Colombia as the best investment and business destination,” said Minister of Commerce Maria Ximena Lombana Villalba.

Over the past decade, the ministry reports Belgian investment in Colombia totaling $349.5 million USD. The president of Colombia’s investment promotion agency called ProColombia, Flavia Santoro added: “We continue to promote Colombia’s investment potential as a business destination in the region for Belgian companies in key sectors for economic reactivation. We seek to attract impact investments and the high technological component that generate employment and exports with the use of incentives such as mega-investments and those of our renewed regime of free zones.”

Under the new regimen, the government has to make good on refunds within 10 days from filing when using a third-party VAT refund service, or one month when a traveler applies for a refund directly.

Previously, only certain purchases were eligible for VAT refunds. Now, all product purchases qualify.

To apply for a VAT refund request, travelers must initiate the procedure at the time of departure from the country and before checking luggage. In the event that the applicant’s flight itinerary has a domestic stopover, the return request should be made at the port or airport where the baggage is checked with the airline.

The documents to be submitted are:

• Request for refund in the format and through the mechanism indicated (DIAN tax authority form)
• Electronic invoices for purchases made. The date of the invoice must be between the date of entry into the country and the date of departure.
• Documentation of the visitor’s status as a tourist (as opposed to visiting Colombia on a work or residency visa).
• Upon request, the traveler must demonstrate to the DIAN that the purchased goods for which the traveler is applying for a refund are actually leaving Colombia with the traveler.
• The foreign traveler is still responsible for any customs or duties in his or her destination country.

The VAT refund may be credited to the international credit card issued outside the country and indicated on the return request, or alternatively in cash.

“We seek to encourage tourism by expanding the coverage of the VAT refund benefit to foreign tourists through an agile mechanism. This will boost the purchases of national products by those who visit us from abroad. In this way, we continue to work for the reactivation of the country’s economy,” said the Ministry of Commerce, Industry & Tourism’s director of Tax Management, Julio Lamprea Fernández.

“As tourism was one of the activities most affected by the pandemic, we are working for its recovery on several fronts. We are committed to restoring its importance in the national economy. We have the destinations and the infrastructure, which is complemented by stimuli such as this tax refund. This is one more incentive for world travelers to visit us and contribute to safe economic reactivation,” said Minister of Commerce, Industry and Tourism, María Ximena Lombana Villalba (above photo).

For questions about VAT refunds, please do not contact Finance Colombia! Instead, contact Rodriguez & Asoc. Bilingual tax specialists in Colombia at info@rodriguezasociados.co or click on the banner below.

Of that total, US$6,311 million, or 88.1%, corresponded to investments in non-mining energy sectors, which grew 32.6%.

These numbers come from the balance of payments report reported by the Bank of the Republic, which states that the sectors that received the most foreign capital in that period were financial services, transport, storage and communications, as well as the manufacturing industry.

“We are making progress in the safe economic reactivation and the result of the arrival of foreign investment shows the confidence in the recovery of the economy. Foreign investors continue to bet on Colombia. We have the tools to attract, facilitate and retain investment to enhance the arrival of foreign capital and our goal is to preserve and create jobs, as well as keep the engines of the economy running,” said the Minister of Commerce, Industry and Tourism, María Ximena Lombana Villalba (above photo).

The manufacturing sector received $1.13 billion USD, which positions it as the sector with the third highest flows of this type of capital in the analysis period and with the second highest growth, of 43.6%.

Deputy Minister González Garnica will lead the Productivity, & Competitiveness, Regulation and Small Business departments, as well as the coordination of free zones, technical regulation and the National Quality Subsystem. González will also manage a general policy portfolio with the aim of invigorating industrial development in the country.

González has previously served in various governmental positions including the Ministry of Interior, the National Planning Department, and in the departmental government of Cundinamarca, where he served as Secretary of Economic Development. He was also mayor of Zipaquirá between 2008 and 2011.

As Secretary of Economic Development of Cundinamarca, he led and consolidated the Entrepreneurship Fund, and promoted the growth of Regional Entrepreneurship Centers (CREA) throughout Cundinamarca, which were in charge of promoting new companies and producing new sources of employment.

González Garnica has a law degree with a focus on procedural law from Universidad Libre. He also obtained another specialization in public economic law from Universidad Sergio Arboleda. He is currently pursuing a master’s degree in Communication and Governance at The George Washington University.