Employer of Record
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Employer of Record

Employer of Record (EOR) and PEO in Colombia

Colombia, officially the Republic of Colombia, is a country in South America with an insular region in North America. Colombia is a member of major global and regional organizations including the UN, the WTO, the OECD, the OAS, the Pacific Alliance and the Andean Community. It is also a NATO Global Partner. Its diversified economy is the third-largest in South America, with macroeconomic stability and favorable long-term growth prospects.

The Gross Domestic Product in Colombia in 2021 is 314.32$ USD Billion. The GDP value of Colombia represents 0.24% of the world economy.

Thus far, many media outlets have declared Colombia as a viable and booming technology hub, ranking as the 4th country with the highest number of internet users in Latin America. The young minds in Colombia are brimming with fresh ideas and skill sets. As proof of the National Service of Learning (SENA) offers free education and technical training, Colombia has been named the 2nd largest educated and growing workforce in the region. All of this makes Colombia an ideal destination for businesses to expand into and hire talent.

While hiring and building a team in Colombia can be expensive and time-consuming, partnering with an Employer of Record Colombia (EOR) or a professional Employer Organization Colombia (PEO) platform takes care of all the legal formalities in the country, enabling you to hire talent, run business operations and conduct end-to-end employment activities without opening an entity or a subsidiary.

What is Employer of Record (EOR) in Colombia?

An Employer of Record (EOR), sometimes referred to as Professional Employer Organization (PEO), is an external platform that conducts all end-to-end employment procedures on behalf of the organization. An EOR ensures that you’re compliant with all the labor laws and regulations of the country, protecting you from fines and penalties. Organizations looking to tap new markets, hire and pay talent, run business operations and expand into Colombia without opening a local entity can partner with an EOR.

How an Employer of Record (EOR) Colombia platform works

An Employer of Record Colombia, acts as a platform for global businesses of all sizes to gain rapid market entry, hire employees and contractors, process cross-border payroll and run business operations without setting up an entity or a subsidiary. An EOR ensures that you stay compliant with all the labor laws and regulations at all ends of the employment cycle, protecting your organization from fines, penalties and lawsuits. The Employer of Record also handles onboarding of talent, benefits administration, immigration and visa sponsorship. Employer of Record services include:

  • Hiring and onboarding talent
  • Payroll management — processing fast and accurate payments to employees and contractors in their currency of choice
  • Drafting and maintaining locally compliant employment contracts
  • Tax filing and complying with tax regulations
  • Offering and administering comprehensive statutory benefits
  • Ensuring compliance with Colombian employment laws and tax regulations

Benefits of an Employer of Record in Colombia

Building a team without a subsidiary

Organizations looking to expand into Colombia or hire talent in the country must establish a local entity or a subsidiary. However, setting up an entity is time-consuming, expensive and requires government approval. To avoid such hassle, partnering with an EOR platform is a feasible option for businesses to hire talent, run business operations and process payroll in compliance with Colombia’s employment laws and regulations without setting up a subsidiary.

Effective payroll management

Processing payroll for a globally-distributed team can be tedious and time-consuming. Any minor errors or inefficiency while handling payroll can result in critical outcomes for the business such as discontent among employees, lawsuits, fines, penalties, etc. To keep away from such catastrophes, partnering with an EOR helps you handle all the complexities in processing cross-border payroll by making prompt and accurate payments for your entire team in the currency of choice.

Local laws compliance

Like any other country, Colombia has its employment laws and regulations for its workers. It’s vital that any business looking to hire or operate in Colombia adhere to the labor laws to avoid any expensive fines, penalties and lawsuits resulting in loss of reputation. While understanding complex laws can be strenuous, an EOR helps businesses to be informed about the evolving employment laws and stay compliant with them throughout.

Save time, money and resources

Setting up an entity or a subsidiary in Colombia costs a lot of money and time as it involves securing an office space, hiring a team, administering activities and acquiring government approval. These are tedious factors and non-feasible for businesses looking to expand their business or hire in the country. With an Employer of Record, it’s easy for organizations to seamlessly hire talent and tap new markets at a fraction of the cost.

Skuad — an Employer of Record in Colombia

An Employer of Record provides numerous advantages for businesses looking to hire, build a team and expand their operations in Colombia. Considering the complexities of setting up an entity and understanding the employment laws, partnering with a suitable EOR is a feasible option for organizations. Moreover, an Employer of Record (EOR) Colombia or a Professional Employer Organization (PEO) Colombia platform like Skuad serves as a legal advisor to ensure that companies do not encounter any issues while conducting business operations or employment activities in Colombia.

To know more about Skuad, book a demo today.

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