Bucaramanga Competes for Attention Among Colombia’s Second-Tier Cities

Among the perks Santander department offers investors are advice on business development, no-cost talent seeking services and an employee training institution.

Santander's Zona Franca, or free trade zone, located in Bucaramanga's metropolitan area.

Bucaramanga is one of Colombia’s secondary cities that is striving to attract investment among outsourcing companies, touting its talent pool, tax incentives and nurturing of new arrivals.

The city, whose metropolitan area has a population of around 1.2 million, is capital of the north-central Santander department, and the Santander Zona Franca (ZFS), or free trade zone, lies within its metropolitan area, and which is home to the Santander Offshoring and Outsourcing Park.

The 52-acre complex houses services centers, as well as logistics and manufacturing hubs, and to which business process outsourcing (BPO) companies such as contact center operators as well as software developers are beginning to turn their attention, seeking to reap the advantages offered.

Incentives to investment

Companies setting up shop in the ZFS enjoy tariff-free import and export of goods and are exempt from paying customs duty on imported machinery and infrastructure, and zero VAT, instead of the regular 19% rate, on raw materials of finished goods brought into the ZFS from other parts of Colombia, and which the department’s investment promotion agency Invest in Santander claims can translate into a 30% reduction in set-up costs.

Once installed, businesses pay 20% corporate taxes instead of the standard 37%, enjoy a 10-year exemption on local municipal taxes, and are eligible to receive a number of services to facilitate business, which include a dedicated support team offering advice on business development, no-cost talent seeking services, an employee training institution offering free, on-site education, as well as assistance with procuring real estate.

“The ZFS is optimized to create the perfect environment in which specialists can achieve maximum performance,” Astrid Granados Suárez, director of Invest in Santander, told Nearshore Americas. “This means providing top-quality telecommunications, but especially a focus on people and human services.”

Among the 54 companies already installed in the ZFS are call center operators Majorel, which was the first large company to set up operations there, and Accedo, which was the first English-speaking company to move in, and which have a combined workforce of around 630 personnel.

Costa Rican software developer Cecropia, which serves clients in the US healthcare sector, Colombian software company Guarumo, and Chinese robotics developer Uditech, are also present.

The complex also houses Colombian knowledge process outsourcing company Ecosi, as well as shared service center operators Sonseis and Frimac, which offer administrative services such as accounting and human resources.

Astrid Granados, director of Invest in Santander.

“We are dedicated to the premise that employees work at their best when conditions are right, and we work hard to provide those conditions,” Granados said.

“This means everything from providing institutional completeness in terms of banking, dining, education, and relaxation facilities. It is also about providing a safe and physically attractive place to work and move about.”

Companies installed on site are supported by the local business consultancy, Centro de Consultoría Empresarial, and the Business Alliance for Secure Commerce (BASC).

“We have worked with the main business associations and local authorities to establish common strategies in aspects regarding the human resource training, tax benefits, corporate support programs, to offer entrepreneurs the best business atmosphere and the institutional backup they require for the successful development of their businesses,” Granados said.

The ZFS was commended in 2018 for its training and personnel development as part of FDI magazine’s ‘Zones of the Year’ awards.

Sign up for our Nearshore Americas newsletter:

A major economic driver

Santander has clocked up the strongest economic growth among Colombia’s 32 departments, or provinces, with 4.4% in 2018, and which is above that of Bogotá, and it is the country’s fourth-largest regional economy, while Bucaramanga is listed as among the top four most competitive cities in the country by the Inter-American Development Bank, according to Bucaramanga’s Chamber of Commerce.

The service sector makes the largest contribution to the local economy, with 29.3%, and which is the fifth-largest sector at a national level.

Around 2,000 students graduate annually with technical and technology degrees, giving Santander the highest proportion of technology graduates in Colombia, with 17 higher education institutes offering graduate and post-graduate study, with a heavy focus on engineering and science, and the department has one of the highest rates of new business generation, according to the chamber.

Santander is ranked second nationally, after Bogotá, for its educational standards, according to the Education Ministry. Bucaramanga is also considered one of Colombia’s safest cities.

The contenders

Other Colombian secondary cities that are seeing an influx of arrivals are Montería, in Córdoba department, home to a joint impact sourcing project by Grupo Konecta and Bancolombia, and Pereira, capital of Risaralda, where BPO and customer experience management company Atento has operations.

Manizales, capital of Caldas department, has been a BPO hub for several years, with the sector becoming the city’s largest private sector employer in 2015, and Medellín, capital of Antioquia, is also on companies’ radar, and where software developer Gorilla Logic recently set up operations.

“Medellín is becoming a hub for nearshore, companies from Argentina, Costa Rica and Mexico are moving a considerable footprint to Medellín,” Mario Merino, nearshore director at Gorilla Logic, told Nearshore Americas. “Beyond the hype, it means that there is value there. We can’t all have made the same mistake.”

 

Tags

JOIN THE CONVERSATION

JOIN THE CONVERSATION