LIENS

http://www.worldbank.org/ http://www.proexport.com.co http://www.state.gov/r/pa/ei/bgn/35754.htm

| FOREIGN DIRECT INVESTEMENT IN COLOMBIA |

FOREIGN DIRECT INVESTMENT IN COLOMBIA
Foreign direct investment counts a lot in the development of a country. It is not only a source of capital but also new opportunities for the country, new sources of employment but mainly it is a source of knowledge, skills and technology.
According to ProExport during the past five years, the Colombian economy grew by 4% per year. In 2008, Colombia’s GDP registered an increase of 2,5%, a positive growth during global recession. That is why, I consider important to take a look into the Colombia’s FDI history, the requirements investors need to do a capital investment and the legislation of FDI in Colombia.
This paper will explain some the policies used in Colombia in order to attract new FDI and also the impact of these investments in the last years.
DEFINITION OF FDI
FDI is generally defined as an investment made by a firm from a country named”home country” into another named “the host country” where the foreign investor owns at least 10% of the company in which the investment is made. Additionally, the investment involves a relationship between the investing firm and the affiliate where more aspects are involved such as decision making or technical guidance.
POLICIES OF FDI IN COLOMBIA
Colombia has passed through different phases concerning foreign direct investment: During the seventies, a phase of restrictions and protectionism. In the beginning of the nineties it went to a more opened market with FDI-friendly policies. Today, a third phase can be identified with tendencies towards creating the conditions for attracting high-quality FDI.
1 phase (1960’s to 1990): During this period, Colombia was following an import substitution industrialization strategy (ISI). This strategy’s objective is to come from local production of industrialized products. Foreign