Colombia’s efforts towards political stabilisation and sound macroeconomic policy have enabled the country to boost its economic development and enhance its investment climate. As a result, foreign direct investment (FDI) inflows have increased rapidly, also benefiting from the commodity price boom. After a temporary decline in 2009-10 due to the world economic crisis, Colombia’s FDI inflows are expected to reach a record level in 2011. The surge in Colombia’s FDI outflows reflects a more general trend shared with other Latin American countries, which have become an important source of FDI abroad, notably within the region.Privatisation, which is open without any limitations to foreign investors, has led to a significant increase in the weight of the private sector, which today accounts for 85% of GDP. According to the National Development Plan for 2010-14, FDI annual inflows are forecast to exceed USD 13 billion in 2014. However, rather than simply increasing the amount of FDI, the government’s objective is to enhance the qualitative role of FDI in the country’s development, notably its contribution to job creation and infrastructure improvement.

The principle of non-discrimination and equal treatment of foreign investors is embodied in Colombia’s Constitution. National treatment and most-favoured nation status with respect to investment are referred to in recent free trade agreements signed or negotiated by Colombia.Colombia does not apply any trans-sectoral exceptions under the OECD National Treatment instrument. Sectoral limitations on foreign ownership concern television broadcasting and fisheries. Several measures applied by Colombia qualify for notification as measures reported for transparency under the OECD National Treatment instrument. For national security reasons, foreign investment is prohibited in the following areas: land ownership in border areas, manufacturing, possession and use of chemicals, biological and nuclear weapons and trade with these products, and foreign presence in private security and surveillance services. Colombia also imposes some conditions on corporate organisation and key personnel in maritime transport, newspapers and radio broadcasting. Public monopolies apply in production, import, export distribution and sale of liquors and for games of chance and gambling.As a result of Colombia’s limited number of statutory restrictions on foreign direct investment in the meaning of the OECD investment instruments, the country’s score under the OECD FDI Regulatory Restrictiveness Index is below both the OECD average and the average of non-OECD countries for which the Index is available.

The concept of responsible business conduct is relatively new in Colombia. While there is no comprehensive national policy in place regarding corporate responsibility, the government has taken a range of initiatives to improve business conduct in areas covered by the OECD Guidelines for Multinational Enterprises, consistent with adhering countries’ commitment to good public policies, pursuant to paragraph 9 of the Guidelines’ Preface. Business associations and civil society organisations are also developing tools to raise awareness and provide guidance to companies on responsible business conduct. Recent surveys show that an increasing number of companies is taking measures related to corporate responsibility, mainly in the areas of labour and environment.

In addition to legal provisions, a number of policy areas have an important impact on the investment climate, such as investment policy, investment promotion and facilitation, trade policy and infrastructure development. The Colombian government has made great progress in improving the country’s business environment over the past years, as reflected in the good rankings in the World Bank’s 2011 Doing Business report. The government is determined to continue its efforts in this area and has included enhancement of the investment framework among the key objectives of the National Development Plan for 2010-14. Colombian legislation does not impose conflicting requirements on multinational enterprises established in the country and accords with the Conflicting Requirements instrument of the OECD Declaration on International Investment and Multinational Enterprises.

The government of Colombia is determined to ensure that economic growth and environmental protection are mutually supportive. To this end, it is strengthening the institutional capacity of environmental authorities, enhancing the framework for investment in support of green growth, and putting in place green investment incentives. Biodiversity being one of the main natural assets of Colombia, the government has developed a framework to both protect and derive economic benefits from it. The government is currently developing a Low Carbon Development Strategy, with the objective of, inter alia, promoting economic growth in sectors associated with lower greenhouse gas emissions. The Strategy also seeks to draw on international financing options, including market mechanisms to attract resources that facilitate low-carbon development; promote the transfer of clean technologies; and enhance Colombia’s competitiveness in a global economy increasingly influenced by carbon-intensity standards. A range of incentives is available to companies that voluntarily make investments to improve their environmental performance.