Colombian Labor Contracts
If you are a foreigner living in Colombia, then you may be wondering about Colombian labor contracts before hiring anyone. It wont be very long before you realize that labor law here are much different than in many other countries (for example, the U.S.) Most foreigners aresuprised to find that even simple jobs such as maids have rights to liquidation payments. It is your responsibility as an employeer to make sure health & workers insurance, pension, uniforms andtransportation are all paid for or you face substantial monetary penalties/fines. The labor ministry and court system generally favor employees when there is a lack of written documentation so it is critical that you follow domestic labor laws and have a signed contract with an employee. Liquidation payments are required by law and range from 20% to 50% of the employees salary depending on various factors.
Running a company in Colombia requires that you are familiar with the various types of Colombian labor contracts you may enter into in order to avoid a costly situation when employees exit or terminate their relationship with you. Some employees will take advantage of those who are not familiar with Colombian labor laws in Colombia (often Americans or other foreigners). For example, an independent worker will agree to a higher hourly rate in exchange for not paying their benefits, but upon termination will claim they are also entitled to back pay for benefits.
Looking for more on Colombian Labor Contracts? Here are similar topics: How to Get Colombia Investors Visa; Corporate Accounting in Colombia; What is Business Startup Law in Colombia?; How to Create a Colombian Corporation; Medellin Virtual Office.
Our legal staff can assist you with drafting a contract which provides you with the necessary legal protection, combined with professional payroll services.
Types of Colombian Labor Contracts:
Replacement of Personnel (replacement of employee out on maternity sick leave)
Seasonal Job (high season employment)
Traditional part-time employment
Project Specific (construction, professional services)
Traditional fixed term full-time employment
Independent Contractor (a professional who can work independently)
Related Legal Services Offered by Colombia Legal & Accounting SAS:
Certified labor cost projections
Labor Court Disputes
Labor liquidation negotiations
Work visas for foreigners
Human resource services
Workers rights
Frequently Asked Questions (FAQ)
How to setup a Colombian business remotely?
You can start the business from abroad using a power of attorney. Our firm will handle the paperwork, registrations, and filings on your behalf.
Do I need a visa to start a business in Colombia?
Not initially. You can create a company on a tourist visa, but opening a bank account and running operations may require a Migrant Visa or Investor Visa.
Can a foreigner own 100% of a Colombian company?
Yes. There's no legal requirement for a Colombian partner or representative. Foreigners can have full ownership rights.
How long does it take to open a business in Colombia?
Usually between 5 business days to 3 weeks depending on documentation and whether the owner is present in Colombia.
What is the easiest legal structure to use?
A Colombian SAS Corporation is the most flexible structure. It allows for single-person ownership, low startup costs, and limited liability.
Final Thoughts: Should You Open a SAS in Colombia?
Learning how to setup a Colombian business is the first step toward achieving your entrepreneurial goals in Latin America. With the right legal team, the process can be fast, secure, and fully compliant with local laws.
📞 Contact Colombia Legal & Associates and Visas by James today to start your business in Colombia the right way.
🌐 Visit www.colombiavisas.com or call us at +57-313-390-7109 to schedule your consultation.
Other Related Services We Offer:
Real Estate in Colombia
Colombia Power of Attorney
Colombian Import – Export
