On March 4, 2023, the free trade agreement between Guatemala and Israel will enter into force, which is expected to double trade and investment between the two nations.

The trade pact was negotiated by the government of Alejandro Giammattei

As one of the notable achievements of the government of past President Alejandro Giammattei, as part of its General Government Policy 2020-2024, this past September 2023, the Minister of Foreign Affairs, Mario Búcaro, and the Vice Minister of Integration and Foreign Trade, María Luisa Flores, in representation of the Minister of Economy, Dr. Janio Rosales, signed with Israeli economic authorities the Free Trade Agreement between Guatemala and Israel, which further strengthens the commercial and friendship ties that already unite the two nations.

In addition to Minister Búcaro and Vice Minister Flores, the Minister of Economy and Industry of Israel, Mrs. Orna Barbivai, and representatives of various productive and business sectors of Guatemala and Israel participated in the ceremony.

The free trade agreement between Guatemala and Israel contains:

• Increased market access
• Favorable rules of origin
• Streamlined customs procedures and trade facilitation
• Business-friendly sanitary and phytosanitary measures
• Decreased technical barriers to trade
• Strengthened commercial defense
• Expanded Intellectual property protection
• Efficient agreement administration
• Increased trade cooperation
• Expanded customs cooperation and mutual assistance
• More significant concessions on market access

Guatemala granted Israel access to the following agricultural products: seedlings, tomato powder, peanuts, olive oil, rapeseed oil, chocolates, bakery preparations (Matzá), prepared or preserved fruits and vegetables, almond paste, powders for baking and wines.

In industrial products, access was given to petroleum derivatives, perfumery and hygiene preparations, adhesives, agrochemical inputs, rubber manufactures, leather manufactures, miscellaneous manufactures, diamonds and precious stones, aluminum manufactures, agricultural instruments, laboratory apparatus, instruments musical instruments, wooden furniture, lighting devices, and toys.

Under the trade agreement between Guatemala and Israel, the latter country granted Guatemala access to the following agricultural products: beef, shrimp, flowers, fresh and frozen vegetables, frozen fruits, spices, soybean oil, sunflower oil, vegetable fats and oils, oil mixtures, confectionery goods, chocolates, bakery products, vegetable and fruit preparations including guacamole and ice cream.

In industrial products, Israel granted immediate (duty-free) access to all tariff sections of the industrial sector of chapters 25 to 97 of the Israeli Harmonized System.

Benefits expected from signing the TLC

A free trade agreement between Guatemala and Israel yields substantial economic advantages for both nations. Currently, bilateral trade between Guatemala and Israel stands at approximately $200 million annually, with Guatemala primarily exporting coffee, fruits, and vegetables to Israel. In contrast, Israel exports pharmaceuticals, technology, and machinery to Guatemala. Implementing the free trade agreement between Guatemala and Israel will eliminate tariff barriers, facilitating increased trade volumes and diversification of goods and services exchanged. This expansion in trade is poised to stimulate economic growth and job creation in both countries. Guatemala stands to benefit from access to advanced Israeli technology and pharmaceuticals, enhancing productivity and competitiveness in various sectors. Simultaneously, Israel gains access to high-quality Guatemalan agricultural products and can tap into Guatemala’s burgeoning consumer market. Consequently, the free trade agreement between Guatemala and Israel fosters mutual prosperity by leveraging each country’s comparative advantages, leading to sustainable economic development and job opportunities.

Additional important data

Negotiations of the free trade agreement between Guatemala and Israel began in July 2018 following the official visit of the President of Guatemala on the occasion of the transfer of the Guatemalan embassy to Jerusalem. Talks related to the accord concluded in April of 2023. To date, Guatemala has 13 trade agreements in force.

Since 2009, Guatemala has had an investment agreement with Israel that promotes and gives certainty to investments between both countries.

The FTA with Israel was signed in compliance with the General Government Policy 2020-2024, in agreement with the pillars of economy, competitiveness, and prosperity, which seeks among its strategic actions to generate instruments that promote the increase in Guatemalan exports to the world.

In conclusion, the Free Trade Agreement between Guatemala and Israel marks a significant milestone in strengthening economic ties and fostering mutual prosperity between the two nations. With comprehensive provisions covering market access, rules of origin, and trade cooperation, this agreement sets the stage for doubling trade and investment, unlocking new business opportunities, and enhancing competitiveness. By leveraging each other’s strengths and market potential, Guatemala and Israel stand poised to capitalize on a wide array of benefits, from expanded market access to technological innovation and job creation. This agreement underscores the importance of international cooperation and strategic partnerships in driving sustainable development and shared prosperity as a testament to the government’s commitment to promoting economic growth and prosperity.

Located along the western coast of South America, Chile stands as a beacon of stability and prosperity in the region. With its diverse economy and commitment to innovation, the country offers many opportunities to invest in Chile for foreign parties seeking lucrative ventures. In this comprehensive overview, we’ll delve into the main sectors of the Chilean economy, highlighting key players, statistics, and why the decision to invest in Chile is prudent.

Mining and Natural Resources

Chile’s mining industry is the cornerstone of its economy, contributing significantly to its GDP and export revenue. The country is the world’s leading producer of copper, accounting for over a third of global production. Major mining companies such as Codelco, Anglo American, and BHP operate in Chile, leveraging its rich mineral reserves.

Despite facing challenges like fluctuating commodity prices and environmental concerns, Chile’s mining sector remains robust, supported by favorable government policies and advanced mining technologies.

Among the other foreign mining companies operating in Chile are:

• Freeport-McMoRan: Headquartered in the United States, Freeport-McMoRan is a leading international mining company with copper, gold, and molybdenum assets. It has copper mining operations in Chile.
• Glencore: A diversified natural resources company based in Switzerland, Glencore is interested in metals and minerals, energy products, and agricultural commodities. Its Chilean operations include copper mining.
• Antofagasta plc: Based in Chile, Antofagasta is a copper mining company primarily located in northern Chile’s Antofagasta Region. It is listed on the London Stock Exchange.
• Barrick Gold Corporation: A Canadian company and one of the largest gold mining companies globally, Barrick Gold has a presence in Chile through its gold mining operations.
• Teck Resources Limited: Headquartered in Canada, Teck Resources is a diversified mining company interested in copper, zinc, coal, and energy. It has copper mining operations in Chile.

These are just a few examples of the major mining companies in Chile. The country’s mining industry attracts investment from domestic and foreign players, contributing significantly to its economy and global commodities markets.

Agriculture and Food Production

With its diverse climate and fertile soils, Chile is a powerhouse in agricultural production. The country is a leading exporter of fruits, vegetables, wine, and seafood. Prominent players in this sector include agricultural giants like Agrosuper, Hortifrut, and Concha y Toro.

Chile’s reputation for high-quality produce and adherence to strict food safety standards has made it a preferred supplier in international markets, driving export growth and attracting investment.

Among the foreign companies that have decided to invest in Chile are:

• Dole Food Company: Dole Food Company, based in the United States, is a global producer and distributor of fresh fruits and vegetables. It operates in Chile, where it grows and exports fruits such as bananas, pineapples, and berries.
• Del Monte Foods: Del Monte Foods, headquartered in the United States, is another major player in the global fruit and vegetable industry. It has operations in Chile that cultivate and export fruits like grapes, peaches, and plums.
• Chiquita Brands International: Chiquita Brands International, also based in the United States, is known for producing and distributing bananas and other fresh produce. It has operations in Chile, particularly in banana cultivation and export.
• Tropicana Products, Inc.: Tropicana Products, a subsidiary of PepsiCo, is a major producer of fruit juices and related products. While primarily based in the United States, Tropicana sources fruits from various countries, including Chile, for its juice production.
• Pilgrim’s Pride Corporation: Pilgrim’s Pride Corporation, headquartered in the United States, is one of the largest poultry producers in the world. It has operations in Chile involved in poultry farming and processing for domestic consumption and export.
• McCain Foods Limited: based in Canada, McCain Foods is a global leader in producing frozen potato products and other frozen foods. It operates in Chile, growing and processing potatoes to produce french fries and other potato-based products.
• Unilever: Unilever, a multinational consumer goods company based in the Netherlands and the United Kingdom, has a presence in Chile through its food and beverage division. It produces a range of food products for the Chilean market, including ice cream, sauces, and spreads.

These foreign companies have moved to invest in Chile and play a significant role in Chile’s agriculture and food production sector, contributing to the country’s export-oriented economy and global food supply chains.

Renewable Energy

Chile has emerged as a leader in renewable energy development in recent years, capitalizing on its abundant natural resources such as solar, wind, and geothermal power. The government’s commitment to sustainability and supportive policies have spurred investments in renewable energy projects.

Companies like Enel Green Power, Acciona, and Mainstream Renewable Power have decided to invest in Chile’s renewable energy sector, harnessing its vast potential and contributing to its energy transition.

Technology and Innovation

Chile’s burgeoning technology sector is gaining momentum, fueled by a young, talented workforce and government initiatives to promote innovation and entrepreneurship. Santiago, the capital city, has evolved into a regional hub for tech startups and venture capital investment.

Prominent players in Chile’s tech industry include companies like Cornershop, NotCo, and Despegar, which have garnered international recognition for their innovative products and services. The availability of skilled professionals and access to cutting-edge research facilities make Chile an attractive destination for tech investment.

Below is a listing of some of the foreign companies that participate in Chile’s tech industry:

• Google: Google, a subsidiary of Alphabet Inc., is a significant player in Chile’s tech industry, with operations focused on search, advertising, cloud computing, and other digital services. It has a considerable presence in Santiago, Chile’s capital, operating offices and engaging in various initiatives to support the local tech ecosystem.
• Microsoft: Microsoft Corporation, a multinational technology company based in the United States, has a strong presence in Chile’s tech sector. It provides various software products and services, including operating systems, productivity tools, cloud computing solutions, and enterprise software. Microsoft also collaborates with local businesses, educational institutions, and government agencies to promote digital literacy and innovation in Chile.
• IBM: International Business Machines Corporation (IBM), headquartered in the United States, is a leading provider of technology products, services, and solutions. In Chile, IBM offers consulting services, software development, IT infrastructure solutions, and cloud computing services to businesses and organizations across various industries.
• Amazon: Amazon.com, Inc., an American multinational technology company, has recently expanded its presence in Chile. The company operates e-commerce platforms, cloud computing services (Amazon Web Services), digital streaming services (Amazon Prime Video), and other tech-related businesses. Amazon’s investment in Chile includes infrastructure development, job creation, and support for local entrepreneurs and small businesses.
• Intel: Intel Corporation, a global semiconductor manufacturer headquartered in the United States, is actively involved in Chile’s tech industry. Intel produces microprocessors, integrated graphics solutions, and other hardware components used in computers, servers, and IoT devices. The company collaborates with local partners, universities, and research institutions to drive innovation and technology adoption in Chile.
• Cisco Systems: Cisco Systems, Inc., an American multinational technology conglomerate, is a leading provider of networking hardware, software, and services. In Chile, Cisco offers networking solutions, cybersecurity solutions, collaboration tools, and digital transformation services to businesses, government agencies, and service providers.
• Oracle: Oracle Corporation, based in the United States, is a significant player in Chile’s tech industry, particularly in the enterprise software and cloud computing sectors. Oracle provides database management systems, enterprise resource planning (ERP) software, customer relationship management (CRM) solutions, and other business applications to organizations of all sizes in Chile.

These foreign companies contribute to Chile’s tech ecosystem by driving innovation, providing access to cutting-edge technologies, creating job opportunities, and supporting the growth of local businesses and startups. Their presence enhances Chile’s competitiveness in the global digital economy and strengthens its position as a technology hub in Latin America.

Tourism and Hospitality

Chile’s stunning natural landscapes, including the Atacama Desert, Patagonia, and Easter Island, attract millions of tourists annually. The country’s hospitality sector has witnessed steady growth, with investments in hotels, resorts, and infrastructure to accommodate the influx of visitors.

Major hotel chains like Marriott International, Hilton Worldwide, and AccorHotels have a significant presence in Chile, catering to leisure and business travelers. The government’s focus on sustainable tourism practices ensures the industry’s long-term viability.

Workforce and Education

One of Chile’s greatest assets is its skilled and educated workforce. The country boasts a high literacy rate and a strong emphasis on education, with a well-developed system of universities, technical institutes, and vocational training programs.

Chile’s workforce is known for its adaptability, creativity, and strong work ethic, making it an ideal destination for companies seeking talented professionals across various sectors. Additionally, the government incentivizes businesses to invest in employee training and development, ensuring a continuous supply of skilled labor.

Why Invest in Chile?

Those who invest in Chile find that the country offers numerous benefits for foreign parties:

Stability and Transparency: Chile has a stable political environment, transparent regulatory framework, and respect for the rule of law, providing a secure investment climate.

Strategic Location: At the crossroads of Latin America and the Pacific Rim, Chile is a gateway to regional and international markets, offering access to over 4 billion consumers.

Diverse Economy: Chile’s economy is well-diversified, reducing reliance on any single sector and mitigating risks associated with market fluctuations.

Innovation Ecosystem: The country’s commitment to innovation and a vibrant startup ecosystem create opportunities for investment in cutting-edge technologies and disruptive business models.

Skilled Workforce: Chile’s highly educated workforce is a valuable asset for companies seeking talent in various fields, ensuring competitiveness and productivity.

In conclusion, Chile’s dynamic economy, rich natural resources, and skilled workforce make it an attractive destination for foreign investment. Whether in mining, agriculture, renewable energy, technology, or tourism, opportunities abound for those willing to seize them. Foreign parties can unlock a world of possibilities by investing in Chile and contributing to the country’s continued growth and prosperity.

The advance of China in the economy of Bolivia is becoming increasingly more assertive. This is not only due to loans that the Asian giant has made to the South American nation but also due to the growing Bolivian presence of Chinese companies in areas such as construction, mining, and now in the exploitation of lithium, in addition to the use of yuan.

China is Bolivia’s main bilateral creditor. The Bolivian debt to China as of May 31, 2023, was 1.4 billion dollars, according to the Central Bank of Bolivia (BCB).

The bilateral trade balance leans in favor of China, with a negative balance for Bolivia of 498 million dollars between January and May 2023, according to data from the National Institute of Statistics (INE).

The most prominent presence of China in the economy of Bolivia is currently in the area of construction, particularly roads because these works are financed with credits from that country, the Minister of Economy, Marcelo Montenegro, explained to the international press.

Mining sector participation

Chinese interests are also significantly involved in the Bolivian mining sector. This has been criticized, especially by the country’s opposition party, which has repeatedly denounced that Chinese companies operating in gold mining are camouflaged in local cooperatives. It is alleged that they are causing severe environmental damage. Most notably, this occurs in protected areas in the north of La Paz.

Now, China focuses on Bolivia’s economy on the exploitation of lithium. Recently, two Chinese companies have secured participation through agreements with the Government to apply their direct lithium extraction (EDL) technologies in the Bolivian salt flats.

One is the CATL BRUNP &MOC (CBC) consortium, which committed an investment of 1.4 billion dollars in the assembly of two EDL plants in the Coipasa salt flats in the Andean region of Oruro and Uyuni, in Potosí, where the majority of Bolivian lithium reserves are concentrated.

The second is Citic Guoan, which will invest 857 million dollars to install an EDL plant in Uyuni.

Strategic Ally

At the World Trade and Investment Promotion Summit of the Chinese Council for the Promotion of International Trade, the Bolivian president, Arce, highlighted the cooperation with China in the development of lithium and its role in trade and investments in Latin America at the end of May 2023.

The Arce Government, which has an ideological affinity with Chinese President Xi Jinping, recently began to promote the advancement of China in the economy of Bolivia and the use of yuan to carry out international transactions due to the lack of dollar reserves available in Bolivia since the end of February 2023.

Minister Montenegro reported that since March 2023, foreign trade transactions worth 278.8 million yuan (about 38.8 million dollars) have been carried out through the state-owned Banco Unión.

Montenegro stated that the figure is a good start and, although it does not mean that the dollar has already been replaced, there is a global trend towards that outcome.

In his opinion, “China will continue to have an important space” in the Bolivian economy, which will expand with the investments announced in lithium deposits.

Pros and Cons

The manager of the private Bolivian Institute of Foreign Trade (IBCE), Gary Rodríguez, recently stated that “there is no doubt that the advance of China in the economy of Bolivia has acquired increasing importance in the last ten years.” This circumstance is due to the “logic of expansion” of the Asian giant globally through finance and foreign trade.

In addition to being the main bilateral creditor, China is Bolivia’s “first foreign supplier.” In 2022, Bolivia purchased “almost 4,500 high-value-added products for just over $2.5 billion from China,” Rodriguez pointed out.

An advantage of opening the doors to the presence of China in the economy of Bolivia is “the possibility of activating production and export potential based on that megamarket, which is giving enormous returns to countries like Chile and Peru.” However, there is the risk of generating a “high dependence on a single country,” which, in addition, is the “second world power,” he added.

Regarding the use of the yuan, Rodríguez considered that as long as the United States “is the world power that it is and the Federal Reserve is independent, the dollar will continue to be the world currency par excellence.”

In his opinion, paying Bolivian imports with yuan would be interesting to help reduce the demand for dollars in the country and “decompress the pressure that exists today on the exchange rate, and that is giving rise to a parallel market with a more expensive dollar.

In conclusion, the increasing presence of China in Bolivia’s economy is undeniable, marked by significant investments, bilateral trade relations, and the utilization of the yuan in international transactions. While this partnership offers economic growth and development opportunities, it also raises concerns about dependency and environmental impact. The strategic alignment between Bolivia and China’s governments underscores this relationship’s significance, particularly in construction, mining, and lithium exploitation sectors. As Bolivia navigates this evolving economic landscape, balancing the benefits and challenges of its engagement with China will be crucial for sustainable development and long-term prosperity.

Joe Novitzki
Head of Sales and Business Development
Ongresso
joe.novitzki@ongresso.com

LATAM FDI: Welcome to another episode of the LATAM FDI podcast. Today, Joe Novitski is with us. Joe is in Medellin, Colombia, and he is the head of business development for a company called Ongresso. Joe, I’m not going to say much more. I will let you introduce yourself and briefly introduce your company to begin discussing doing business in Medellin.

Joe Novitzki: Steve, thanks a lot for having me. I’m happy to be here. A little bit about me: I’m originally from the Minneapolis, Minnesota, area. Back in 2015, I got an idea about helping connect US businesses to Latin America. Four years later, that became a reality after traveling through the region and founding a company called Ongresso. We help US and European businesses expand to the region. I’ve spent a few years working in sales and business development, specifically with US companies looking to enter the region with an interest in doing business in Medellin. So Ongresso is a company specializing in international expansion, specifically focusing on the Latin American region. We help companies expand their presence to Latin America and then within the region if they’re already there.

LATAM FDI: Joe, we’ll look at your company and its service offerings more in-depth and specifically toward the end of this podcast. But first, let’s concentrate on giving our audience some information. What is important for them to know about doing business in Medellin, and what does Medellin have to offer? So, the first question that I have for you is a question about the strategic geographical location of the city and how that makes Medellin a hub for business and trade.

Joe Novitzki: Yeah, this is, I think this is a big issue, actually, the geographical location. I’d start by referencing the country of Colombia as a whole and just some of the advantages that all of the major cities will enjoy within the country. Some of those things are like, we’ve seen many companies from the US and Europe set up nearshoring teams and BPO operations across Bogota, Medellin, Cali, and Baranquilla. Those are for a couple of main reasons primarily related to that geographical location. One is proximity to the US. There are flights to Miami that are just three to three and a half hours almost directly north, which makes it really easily accessible for some of those corporate visits, maybe some training sessions, transfer of equipment for teams, or even incentive trips for employees who get to go visit the US. Then the second thing is being within the same region are those shared time zones that make communication between the US and Colombian teams very easy during those business hours. This is opposed to some of those outsourced teams you see in the Philippines or India, which makes the communication aspect tricky. So, Colombia falls into either the eastern time zone or the central time zone, depending on daylight savings, and it can be a really convenient place to do business.

Regarding imports and exports, Colombia has major ports on both the Pacific, with the port of Buenaventura and then also on the Caribbean side, with Cartagena and Barranquilla. Those major shipping lanes make it easily accessible for imports and exports. Also, being centrally located within Latin America, it is a great hub to access any other region’s other countries. From Mexico up north down to Chile and Argentina in the southern cone, it can be a really good place to establish a hub for trade. Now, specifically, regarding doing business in Medellin, I’d say one of the things, due to a number of factors, it is actually the top exporting region in all of Colombia. And so geographical location and infrastructure are among some of the positive factors. But the biggest geographical draws aside from that access to major ports and land transportation routes are one. It has very fertile land, providing a base for its strong agricultural sector. Medellin actually has a really massive flower industry, making Colombia the world’s second-largest exporter of flowers, only behind the Netherlands. Then, as many people already know, it’s very popular for its coffee.

There’s a lot of coffee here in Medellin and the state of Antioquia region, and Colombia is the fourth largest exporter in the world of coffee. Having lived here in Medellin, I’d like to mention that we’re close to the equator.  You might think it would be pretty hot and humid, but it has a pretty Goldilocks climate at almost 5000ft above sea level. This makes it an attractive place to live and do business in Medellin. The temperatures lately, on average, have been highs of 80 during the day and lows of the 60s at night. It has earned its nickname of the city of Eternal Spring, and it attracts a lot of talent interested in doing business in Colombia.

LATAM FDI: Speaking specifically about doing business in Medellin, as we continue here, what incentives does the city offer in terms of establishing enterprises? What does the government of Medellin do to encourage companies like yours to set up operations?

Joe Novitzki: Yeah, such a good question. There have been historical plans that have come and gone periodically. One of them, with the former mayor, Daniel Quintero, set up a policy encouraging technology companies to do business in Medellin. We’ve seen this particular scheme in several initiatives over the years. Still, it has a progressive tax scheme that says the first year of operation, no income tax liability whatsoever, and then the next year, 80%, 60%, and 40% off. This gives you a soft landing to get your business up and running. Aside from that, a progressive tax scheme in the surrounding municipalities offers those same tax breaks on certain types of property, industry, and commerce investments. Businesses have to meet certain criteria and whatnot. But again, the tax exemption can be as much as 100% in the first years of operation to get businesses up and running. Aside from that, there are the free trade zones, which offer tax incentives on sales, duties, and income tax, and then also free trade agreements that connect Colombia to roughly 60 countries.

LATAM FDI: How do local infrastructure and the network it has for doing business in Medellin contribute to the ease of operating for companies working in the city?

Joe Novitzki: A number of things come to mind, one being a project that I suppose I personally have benefited from over the years of living here. But Medellin’s international airport is actually just outside the city in a city called Rio Negro. Historically, there were only mountain passes as the access roads. About five years ago, they opened the tunnel of the Orient, which cut the time it takes to get to and from the airport. Travel time to the free trade zone that is out there has been cut in half. Access to the airport has become much easier for individuals and businesses. Another project that’s currently going on right now is that they’re constructing a new port out at the coast of the Antioquia, the state that Medellin is in. They’re constructing a port out there called the Port of Antioquia. Also, a highway system will accompany that to better connect the land and port out to Medellin and then to Antioquia as a whole. That’s scheduled to be completed in 2025. I hope it runs on schedule, but that’s something that we should see in the next year or two.

Aside from that, I would also say that another thing that promotes doing business in Medellin is that it has a convention center with a pretty large capacity. It hosts several large international conventions yearly, including Colombia Moda, the largest fashion show in all of LATAM. There’s also Expo Belleza for the beauty industry and Expo Agro Futuro, which is a very big agricultural trade show. Those are just a few examples, but I think ten to 15 major expos come through each year, making it a destination for networking, doing business in Medellin, and creating new connections. Finally, Medellin, located in a mountain valley, has little room to expand its road networks. That being the case, it still has a pretty solid public transportation system to get people around the city. It has an above-ground metro line that runs the entire valley length, and some feeder lines connect to buses. There’s a tram that connects to it, and then there are even gondolas that run up the side of the mountain. For those businesses that need to be close to public transport,  there are access lines to get workers into an office and whatnot; it provides that infrastructure.

LATAM FDI: I’ve read about and know from a couple of people involved that Medellin has become a very attractive place for digital nomads. Can you tell our listeners a little bit about that phenomenon?

Joe Novitzki: Yes. With digital nomads, again, I think that it began just with people hearing travel bloggers talking about the nice environment, the nightlife, and the other expats who have come here. It’s really easy to meet and connect with other digital nomads and people who are on that kind of like-minded path and want to share experiences with others who are going through the same things that they are. On top of that, again, I mentioned the weather and the climate. It’s a beautiful place to pass through. Another thing that happened just a couple of years ago was the creation of digital nomad visas. Before, people would have to only up to 180 days a year in Colombia, and you’d have to break that up every 90 days. You can stay up to two years, depending on how long they grant you. A number of reasons have made it very attractive to do business in Medellin as a digital nomad location.

LATAM FDI: It looks like they’ve taken some measures to attract technologically adept people to Medellin. Can you tell me about specific things that perhaps the government has done to encourage technological advancement in research and development in the city?

Joe Novitzki: Yeah, absolutely. The first thing that comes to mind is an initiative introduced by President Duque in 2017. It was called the Orange Economy, a policy he launched to foster investment in the creative and cultural sectors and technology. This was another initiative that offered a soft landing or starting point for businesses that met certain criteria. Some of those technological companies would receive land and, again, have the tax benefit of no income tax for five years and then certain VAT exemptions as well. And then even access to seed capital in some cases, depending on what type of project they were trying to get up and running. That policy has since expired, but in its place, others have arisen. For example, there’s one that came up, I want to say, a few years ago, the regulatory sandbox, and that specifically relates to the fintech sector. And so essentially, it’s just a framework that encourages fintech businesses to enter the market, to test and develop their new products and services. This happens while the government supervises and develops needed regulations simultaneously and keeps an eye on the financial consumers, ensuring that they’re not getting hurt by some of the new products and services being tested.

Aside from that, many tech companies have shown up to be doing business in Medellin as well. Because of the human capital available that is available here, companies come. Medellin is home to over 30 universities. The stream of talent for companies to hire is pretty constant, and a lot of solid talent is available. Then finally, last but certainly not least is Ruta N, a government corporation that aims to drive investment and development in the specific areas of science, technology, and innovation. The organization has really played an integral role in creating Medellin’s rich business environment, especially in those areas. So, along with ProColombia, the National Investment Agency, and ACI Medellin, which is the local investment agency, Ruta N has done a great job launching programs that attract talent, capital, and international businesses to the city, offering things like financing assistance. They help recruit and train skilled workers if companies looking at doing business in Medellin can’t find them. They’ll provide physical office space at favorable rates as well. Many different things are going on that have attracted tech talent and companies.

LATAM FDI: We talked a little bit about Colombia as a whole and Medellin specifically. Let’s look a little bit at what Ongresso can do for companies that want to do business in the region. Can you give us a little bit of information with regard to that as well?

Joe Novitzki: Regarding the types of companies that Ongresso looks to serve, our client base is basically Western-based companies, US and European companies, that are looking to expand their presence to or within the region. We focus on two main client profiles. Those are, number one, the companies looking to establish nearshoring or outsourcing operations to access their teams or clients in the US and provide service there. For those companies looking at doing business in Medellin and the region, we recruit and help them find talent, hiring that talent as their employer of record in the countries where we have our own legal entities. If they reach a critical point or companies who just want to get started with the company right off the bat, we will do the company formation. We’ll run their taxes, accounting, legal, payroll, all of that back office work and so that they can focus on their core activities training their people, and then we’ll take care of the rest. The second profile that we typically work with is those companies that want to sell their products or services on the local markets. These are companies that typically need information and market research.

They need to know who their competitors are, the price points for their products or services, and the history of the markets there, and then determine if they want to enter. If they do, a lot of the time, they’ll need to find a distributor. Then, we’ll do a partner search for them. We’ll set up the site visit and arrange those meetings so that they can take over the negotiations from there. And then, while we don’t offer these services in particular services in-house, we also have partners who provide assistance with sanitary registrations, title holders, and things like that. Importer of record for those companies that are medical device companies or pharmaceutical or agricultural companies that need that. Our partner network can take care of those clients as well.

LATAM FDI: Joe, we’ve gone over some pretty good information in a short period of time. One thing that we find as a result of doing these podcasts is that listeners approach us with questions about the topic we’ve discussed. What we like to do in that case is point people to those that we do the podcasts with for information. So, is there any way that people can contact you if they have any questions resulting from having heard what we’ve discussed?

Joe Novitzki: Yeah, absolutely. I’d say the best place to find out more about Ongresso and what we do is on our website, which is www.ongresso.com. The other place is you can also reach me by email, which is my name: joe.novitzki@ongresso.com. I’d say those are the two places.

LATAM FDI: Joe, one thing that we find that people like, too, is a link to a LinkedIn profile. Do you have one we can link to and put it on our page for the podcast?

Joe Novitzki: Yeah, of course. I’ll send that over to you.

LATAM FDI: Okay, so we’ll have Joe’s email address and a link to his website. We’ll have a link to his profile. Joe, I want to thank you for joining me today. And we want to wish you the best of luck with your company, and I hope that you enjoy that wonderful, perpetual springtime weather in Medellin.

Joe Novitzski: Awesome. Well, thanks to all the listeners for tuning in. And Steve, I really appreciate you having me on your show to talk about doing business in Medellin. Let’s definitely keep in touch.