The World Discovers Colombia

There's no question that Colombia is undergoing a process of international discovery. Foreign interest in the country is rising by every metric available: tourism, foreign residents, international investment, market access...the list goes on. There's a window of opportunity in Colombia that more and more people are becoming aware of.

​​​​​​​This newfound attention is undeniably a good thing for the country. With it comes foreign investment, tourists with fistfuls of cash, infrastructure development, and many other benefits. The prospect of a more international Colombia certainly has its critics, but in general the trend will strengthen the country.

In spite of growing international interest, many people across the world know very little about Colombia. The common knowledge about the country remains limited to Pablo Escobar and, occasionally, the invasive wild hippos that are running amok in the area surrounding his former estate.

But Colombia is so much more. Geographically, the country is bisected by the triple mountain ranges of the Andes, creating an uncommon topographical variety that boosts the country’s potential for economic diversification. The country is divided into five separate regions: the Andes mountains, the Pacific coast, the Caribbean coast, the Orinoquía basin and grasslands, and the Amazon rainforest.

This unique combination of climates and landscapes is a leading factor in the tourism surge that Colombia is currently experiencing. Simply put, it’s an astonishingly beautiful country, and people travel from all over the world to see it. Statistics from ProColombia, Colombia’s tourism and foreign investment promotion agency, show that tourist visits to the country increased 145% from 2021 to 2022.

Some of Colombia’s recent tourist boom came from an unexpected place - the Disney film Encanto, which has grossed over $250 million since its release in 2021. Highlighting Colombia's lush environments and vibrant culture, the film brought a fresh, colorful perspective on the country to viewers around the world, and the effect on the country’s reputation has been tangible. For their part, the Colombians themselves are quite fond of it.

Another factor that can’t be brushed aside is the highly favorable exchange rate for tourists, especially those from North America and Europe. Although it has fallen significantly since its peak of roughly $5,000 Colombian pesos to the dollar in November of last year (more on that in coming articles), the increased purchasing power has definitely been a factor in the increase in foreign capital flocking to the country.

How Will The Country Change?

It’s easy to see why foreign interest in Colombia is increasing. But the repercussions of these interests are a bit more difficult to predict.

First of all, more foreigners means more money, and with that money comes economic growth. Many economic sectors have already been affected by this cash influx, especially the services sector, but the boom of foreign cash is also boosting tech, manufacturing, and, of course, agriculture.

As it happens, this aligns very well with the policy positions of the current Colombian president, Gustavo Petro. Although many in the business world were skeptical about the ascendency of such a left-leaning figure, Petro’s government thus far has been reassuringly pragmatic. Like his predecessor Ivan Duque, Petro has continued to encourage foreign investment, and his implementation of a digital nomad visa has attracted no shortage of expats and foreign nationals.

Of course, not everyone in Colombia is happy with this new tide of digital nomads. Especially in major cities like Medellín and Bogotá, locals are concerned about rising costs of living, especially due to the increase in short-term rentals. Rent increases due to the larger presence of foreigners, combined with global inflationary pressure, is placing a major strain on urban working-class Colombians.

But digital nomads aren’t the only foreigners coming into the country. Also arriving en masse are investors seeking arbitrage opportunities in an up-and-coming locale. Although the bulk of these investors are concentrated in the major tourist cities like Medellín, Bogotá, and Cartagena, some of the more intrepid have ventured out into other areas, especially the famous coffee-producing regions of Quindío, Risaralda, Caldas, and Valle del Cauca.

Like any developing country, Colombia can make good use of long-term foreign investment - especially when it comes to productive land use. One of president Petro’s major priorities is to increase the amount of productive land used for agriculture by offering tax breaks and raising taxes on those who hold land without putting it to any sort of productive use.

Of course, ‘productive use’ can have a wide variety of criteria, but the most common is agriculture. Expect the growth of Colombia’s agriculture sector to outpace many other industries as the country moves forward.

All in all, Colombia is a country that is entering the international spotlight as a target for foreign investment, both from institutions and retail investors. It’s not hard to see why - the country is teeming with natural resources, a rapidly developing tech sector, and broadening free trade agreements with larger economies. But for many, the issue isn’t why to invest in Colombia - it’s how.

The Farmfolio team conducting land assessment

The Investing Public and Colombia

Taking your money overseas can be an intimidating prospect for first-timers. But for those who can exit their comfort zones, the rewards are considerable. As we have previously discussed, the phenomenon of de-dollarization will necessitate international diversification for many, and will especially reward those who hold assets that can generate income in a foreign currency.

One of the most commonly targeted markets is residential real estate within the major urban centers. And while this can be a lucrative option, there are many hoops to jump through when it comes to transferring funds, taking title, taxation, moving funds back to their country of origin, and other factors. In addition, the scramble to buy up properties in places like Medellín and Bogotá has created an inflated market, while aggrieving the locals to boot.

For us, farmland in Colombia is a much better way to gain exposure to this rising emerging market. Firstly, there’s the exquisite quality of the land itself, which features temperate, stable climates year-round and rich volcanic soils that are ideal for growing just about anything. That’s not to mention the rising tide of foreign interest in Colombia, which is quickly reaching boom proportions.

But accessing farmland assets anywhere is a daunting task, and that's doubly true in Colombia. There are cultural idiosyncrasies, geographical understanding, and legal frameworks to manage, to say nothing of the language barrier. It's not impossible, but acquiring farmland in a place like Colombia is no easy feat.

That's where we come in. We've created an integrated process for identifying, vetting, and purchasing farmland in Colombia that can grant you access to turn-key opportunities with very little hassle. Learn how Farmfolio’s extensive due diligence process can help you access Colombian farmland by booking a one-on-one session with us using the link below. We can help you get started on your path to owning farmland in this spectacular future agricultural powerhouse.