Colombia is located in South America and it is bordered by the Caribbean and the Pacific Ocean, Peru, Panama, Ecuador, Venezuela, and Brazil. Colombia is a Republic and declared its independence from Spain in 1810 when it became the Republic of Gran Colombia. Problems that the country has suffered in the past with drug trafficking are diminished after the recent no tolerance policy that the government has implemented.
There are approximately 45 million people living in the country though the size of the country means that it is not densely populated. The geography of Colombia varies from grassy prairies in the east as well as jungles and rainforests. The north of Colombia sees the longest range of mountains which are called the Eastern Cordillera. They stretch from the north of the country towards the Venezuelan border.
Personal income tax (impuesto de renta) rates in Colombia range from 10% to 35% depending upon the level of income that you are on. The first 1090 pesos of income is considered to be tax free. Expats with residency status will find that for the first five years of their stay in the country they will only be taxed monies they earn in the country though after the five year deadline has passed they will have to pay taxes on all income, regardless of its country of origin. So those retiring to Colombia will not have to pay tax on their pension from the country of origin for the first five years but once the deadline is passed will need to submit the details to the Colombian tax office. It is also advisable to check the situation in your home country, as you may be required to pay taxes there too if there is no agreement in place with Colombia to avoid double charges.
Colombia has some tax treaties in place but these are mainly with other South American countries. If you are in a position where you are being charged tax in another country on income earned there then you may be able to offset that amount against what you would have to pay in Colombia.
Those that have the status of a non-resident will only need to pay taxes on those monies which have been earned within Colombia. A non-resident is someone who only spends short periods of time in the country and a resident is one who spends more than six months of the tax year living in the country.
Visa, Residency & Immigration Laws
For many visitors a short stay visa is not required if you wish to remain in Colombia for less than 90 days, though this will depend upon your country of origin. Those from Europe or the USA will not need a visa. If you are in doubt then a complete list of exempt countries can be obtained from the website of the Colombian government.
When applying for any type of visa you will need to ensure that your passport has at least six months left to run. Visas can be issued more quickly for residents of some countries than others. For example, a British citizen applying for a visa can expect to receive one within five days of application. For those of other countries the process can take as long as 15 days. If you are in any doubt it is better to apply for the visa with plenty of time allowed before you travel.
Other requirements for applying for a visa include return tickets (for short stay visas), proof of funds to cover the cost of your visit, the fee for processing the visa application, letter from the relevant company if the visit is for business and proof of address. Visa fees will vary on the type. A short stay tourist visa costs the equivalent of £30, while a temporary working visa can cost as much as £160.
One of the first tips for foreign purchasers when buying is to ensure that you know the area you wish to buy in thoroughly. No reputable estate agent would recommend that you purchase a property in an area with which you are unfamiliar. All estate agents will have a wide variety of properties available in different areas. Have several viewings before you make an offer to ensure that it is suitable for you.
In Colombia it is a generally accepted fact that many properties on the market are overpriced. There is always room for negotiation and it is recommended that you make a fairly low offer to begin with, but the bargaining process may take a few weeks. It is also important that you have finance for the purchase in place before you begin looking. It is unlikely that a newcomer to Colombia will be able to secure a mortgage through a Colombian bank so if you need a mortgage it is a good idea to arrange one through a bank in your home country.
Many people in Colombia do not use a lawyer when they buy a property but it is important to ensure that you have proper legal advice when you do so as there may be commitments and benefits that are available to you as a foreign investor.
Retiring in Colombia
The retirement age in Colombia is 57 for women and 62 for men. For citizens of the country there are several schemes that can pay out an old age pension, but these are dependent upon a minimum number of contributions and there are some sectors of the community that do not have access to these schemes.
Expats who have been resident in the country for many years and who have the status of a permanent resident may be able to pay into one of these schemes to guarantee a pension for retiring. This will depend upon which sector you have been working in and the contributions that you have made.
Those who are eligible for a pension from their country of origin may find that they are able to claim it even while living in Colombia. This will depend upon the country and the reciprocal agreements that they have in place with the Colombian government. It is advisable to check with the Pension department in your home country to ensure that you will be able to have it paid to you abroad. Some countries may not be able to transfer the monies for you, in which case it could be paid into a bank account in your home country for you to transfer yourself.