Excessive regulatory barriers are affecting economic growth.

Currently, there are several factors affecting the sustained and more robust growth of the Colombian economy. According to market projections, this year is expected to end at levels between 2.5% and 2.6% GDP growth, an indicator that is being limited by macroeconomic variables such as productivity, inflation, unemployment, and investment, among others.

(Read: Government will remove electricity surcharge exemptions from several sectors: what are they? ).

According to a report by Corficolombiana's research team, excessive regulatory barriers are adding to the current situation that has the economy clinging to consumption, primarily according to the most recent GDP data.

This is mainly due to the fact that this condition limits business dynamism, reduces competition, and distorts the efficient allocation of resources.

"We found a direct relationship between regulatory quality indices and GDP per capita, demonstrating that countries with a more efficient business environment generate higher incomes for their populations," the firm noted.

From macro to micro

According to the analysis, when taking the figures into a micro-level view, on average a company in Colombia must dedicate 2,620 hours per year to administrative procedures, equivalent to the work of more than one full-time employee.

And given the prevalence of microenterprises in the country, this situation is occurring with firms with 10 or fewer employees, which means they dedicate nearly 15% of their employees exclusively to these activities.

(See: How the Windpeshi project, Ecopetrol's first wind farm, is progressing ).

"The complexity of doing business in Colombia is due to the lack of coordination between the entities in charge of business procedures, the high administrative and bureaucratic costs and time required to create and operate companies, and the operational difficulties in completing these procedures, among other factors," the document states.

Added to this are logistics and infrastructure gaps and high export costs, making it difficult for Colombian companies to integrate into international markets.

For example, according to the Private Competitiveness Council, between 2010 and 2022, only 5% of companies registered in the country carried out export activities, and of these, only 11% exported on a recurring basis.

“Complex regulation has clear effects on investment: a lack of clarity in standards creates uncertainty, while excessive bureaucracy increases compliance costs and reduces the profitability of projects, making them less attractive to investors,” the report highlights.

According to Confecámaras (National Chamber of Commerce), 297,475 new companies were created in 2024, representing a 2.8% drop compared to 2023 and a 4.2% drop compared to 2022. At the same time, the five-year survival rate is just 33.5%, and business mobility is limited to 18%.

(Also: The financial crisis persists: EPK decides to file for judicial liquidation .)

Furthermore, the business environment is identified as the main obstacle to the sustainability of companies. Likewise, the survey "The Voice of Business in Colombia," conducted by the Universidad del Rosario, reveals that 58% of business owners consider Colombia to be one of the most difficult countries in which to start and grow a business.

Along the same lines, the World Bank, through its Global Governance Indicators, measures regulatory quality, understood as the State's capacity to design and implement policies that promote the private sector.

The international organization's study highlighted that, in 2014, Colombia achieved its highest score ever on this indicator . However, it was low in absolute terms and has steadily deteriorated since then, now ranking below countries like Chile and Peru .

Added to this is the TMF Group's 2025 Business Complexity Index, which ranks Colombia as the fifth most complex country in the world for entrepreneurship and operations. The combination of political instability, entrenched bureaucracy, and in-person procedures continues to hamper business activity, reducing competitiveness compared to other countries in the region.

According to information from the World Bank, Colombia is second only to Mexico in having the most complex business environment in Latin America, due to its strict rules and regulations.

Brazil ranks just one place behind Colombia, with tax and accounting complexities that hamper business operations. In contrast, Chile stands out as one of the most favorable countries for doing business in Latin America, thanks to its superior performance in cross-border operations.

Bureaucracy and lack of coordination

Another point highlighted by the Corficolombiana research team is that one of the main causes of these deficiencies is the lack of coordination between the entities responsible for business procedures. Currently, the creation and operation of companies involves multiple institutions that operate in a fragmented manner .

According to the OECD, the number of procedures and cost of company formation in Colombia is almost double the average of its peers. Added to this is the lack of a single, clear, and accessible repository of current regulations, which forces companies to turn to multiple, disconnected sources.

(Here: Businessmen and industrialists reject recent threats against mayors and governors ).

“This institutional fragmentation, without interoperability mechanisms, exacerbates regulatory complexity and reinforces the inefficiencies noted by Mejía (2020). Added to this is the fact that regulatory costs in Colombia remain high; according to the DNP (National Development Agency), the marginal costs of operating formally during the first year are equivalent to approximately 5% of a microenterprise's gross profit. Furthermore, Colombia and Brazil are the only LAC5 countries that require annual renewal of commercial registrations, with fees set by each Chamber of Commerce, which increases costs compared to other countries in the region,” the study added.

Regarding business creation, the World Bank indicates that the average time in Colombia is 11 days, with procedures still required in person, such as the notarization of the articles of incorporation .

This contrasts with Chile, where the process takes less than 24 hours and is entirely virtual, or Mexico and Peru, where it is completed in 8 and 9 days, respectively. Only Brazil lags behind, at 17 days.

LEIDY JULIETH RUIZ CLAVIJO, Portfolio Journalist