PEO in Colombia & Employer of Record | INS Global
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PEO in Colombia

Hire Globally, Pay Locally, Expand Effortlessly

If you’re looking to expand into the Colombian market, INS Global offers both PEO (Professional Employer Organization) and EOR (Employer of Record) services to assist you with setting up quickly and without the red tape and hassle that international expansion typically involves.   

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A PEO, similar to a global EOR, allows you to transfer or hire employees in other countries without setting up a legal presence. A PEO streamlines and accelerates the recruitment and hiring process. It can also help manage your HR and payroll needs, ensuring that your company is taken care of with full legal compliance and professionalism. 

Want to have a Team in Colombia TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

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PEO in Colombia - Summary

The Advantages of Partnering with a PEO

Regulatory Assurance

A PEOs legal experts have an in-depth understanding of local laws and regulations. They will keep you from making any time-consuming or hazardous mistakes. 

Decrease Set Up Time and Costs

With traditional company incorporation, you may be looking at several months to a year before your company is up and running. A PEO can save you thousands of dollars and allow you to start operations within just a few days. 

Less Time Spent on Management

Instead of wasting hours on managing your staff and HR services, youll be able to focus on achieving your company goals. At the same time, a PEO handles all of your other needs.   

Rapid Market Access

Streamline your costs into a single simple monthly fee and join your target market in a fraction of the time it would take otherwise. 

Streamline and Optimize Your Company Structure

Your company can operate efficiently and securely by having all your HR needs met with just one point of contact 

Why Partner with a PEO Instead of Company Incorporation?

Global expansion does not come without its risk and complications; in a foreign market, even the smallest mistakes can result in having to pay high penalties and fees. Partnering with a PEO or EOR decreases the probability of errors. It makes sure that your transition process is fast, efficient, and legally secure.  

A PEO:
  • Reduces required set up time 
  • Minimizes the need for a lot of management time 
  • Saves on expenses and overhead costs 
  • Brings better security with full legal compliance  
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Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.

5/5

How Does INS Global's PEO in Colombia Work?

  1. We meet with you to understand your specific needs and make a tailor-made action plan 
  2. Our PEO provides the required legal structure through which you can bring your employees into Colombia. 
  3. We handle everything related to hiring and HR services for your staff. 
  4. Your employees can begin operations on schedule, and your company can progress towards global expansion success.   

A global PEO vs. EOR services: What's the Difference?

While they are often mentioned together and perform similar functions, a PEO and an EOR are not precisely the same.  

  • Both PEOs and EORs are third-party companies that provide HR services to employees of other companies. However, an EOR can also legally hire and be responsible for the employees of other companies. 
  • Contracts are formed differently with these services. The contract is between the PEO provider and the client company in a PEO agreement. In an EOR agreement, contracts are arranged by the client company but are made directly between the provider and the employee. 

INS Global offers both PEO and global EOR services in Colombia so that you can have the best services available.  

Labor Law in Colombia

Employment Contracts in Colombia

Written employment contracts are not mandatory, but certain contract provisions such as apprenticeships, probation periods, and fixed-term duration are required to be in writing, making written contracts a preferable practice.  

Any salary or compensation amounts should be in the local currency of the Colombian peso. Fixed-term contracts cannot go beyond three years. 

For indefinite term contracts, the maximum probation period is two months; for fixed-term contracts, one to three years.   

Colombia has a government-mandated minimum monthly wage; as of 2022, it is 1 million Colombian pesos. 

Work Hours and Overtime in Colombia

The maximum number of work hours per week is 48. Overtime hours cannot be more than two hours daily and twelve hours a week. Any work during night hours, from 10 p.m. to 6 a.m., must be paid 35% more than the regular wage. 

Overtime hours are compensated at 25% more for daytime work and 75% for overtime night hours. If overtime hours occur during public holidays or on Sundays, the employees must be compensated at 200% of their regular wages. 

Employees in Colombia are also entitled to a 13-month salary, paid in two parts: one on the last day of June and the second within the first twenty days of December. 

Holidays and Annual Leave

There are 18 days of national holiday in Colombia 

Annual paid leave in Colombia is 15 days after one year of employment. Employees are required to take a minimum of six vacation days annually. Upon agreement, an employee can accrue their vacation days for up to two years.  

Sick Leave in Colombia

Employees who have made social security payments for a minimum of four weeks are eligible for 180 days of sick leave compensated at two-thirds of their salary. The employer must pay for the first two days; social security covers the amount from the third day.   

Should an employee’s illness or injury result from work, they are entitled to 100% of their salary in compensation for the duration of their recovery.   

Maternity and Paternity Leave in Colombia

The state covers maternity leave; as of 2021, the duration has been extended to 18 weeks. Paternity leave is two weeks, and mothers may share the last six weeks of maternity leave with their partners. 

Otherwise, paid paternity leave is eight days. 

Bereavement leave following the death of an immediate or extended family member is five days.  

Tax Law and Social Security Contributions in Colombia

As of January 1st, 2022, corporate tax has been raised to 35%. 

Personal income rates in Columbia are comparatively high and may go as high as 39% on taxable income 

Both employers and employees in Colombia are expected to contribute toward social welfare, health care, and pension.  

For health care, employers are required to pay 8.5% of the monthly salary; for pension, 12%. Employers also need to pay 0.522-6.96% towards work injury insurance. 

The current VAT rate is 19%. 

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FAQs

No, it is necessary to use a local entity abroad to comply with each country labor law.

Foreign companies can either set up a local entity in each country or use the services a local PEO (Professional Employment Organization) to hire the staff on-site directly.

The employer of record is the legal entity liable for the staff employed in a specific country. In practice, a foreign company can either open a subsidiary to become the employer of record of its abroad employees or use a PEO to act as the employer of record.

Liabilities may vary from country to country and include all the staff management responsibilities: labor contract issues, payroll management, and tax compliance, social security management, expenses claim declaration, hiring and termination
procedures, etc.

In general, 1-month is necessary to have an employee based out abroad using an existing PEO as the employe of record. When incorporating a new subsidiary to be the employer of record, the delay varies from 4-12 months.

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