Medellín is a Colombian city that offers significant investment opportunities. Therefore, we will explore some of the reasons why it has become an attractive destination for setting up businesses and investing in the thriving technology ecosystem. Not surprisingly, in recent years, Medellin has officially established itself as Colombia’s first Scientific and Technological District and has established itself as a center of innovation and entrepreneurship in Latin America, attracting the attention of investors and entrepreneurs from all over the world.
Join us as we examine the advantages and opportunities offered by the City of Eternal Spring in the new technologies, innovation and startups sector.
In 2013, Medellín was awarded as the Most Innovative City in the World, a prestigious international recognition that placed it above cities like New York and Tel Aviv. In the following years, it became the epicenter of various initiatives, including Ruta N, the Fourth Industrial Revolution, the Orange Economy Summit, and the Valley of Software Center. Finally, in 2023, through Law 2286, Medellín became the first District of Science, Technology, and Innovation in the country.
As a Special District, Medellín enjoys benefits in terms of taxation, fiscal matters, and administration, thereby solidifying the entire metropolitan area of the Aburrá Valley as the new South American Silicon Valley.
Medellín is a City That has Embraced Culture, Creativity, and Innovation for its Development
For more than two decades, Medellín has embraced the concept of the Orange Economy, with its focus on innovation and urban transformation, as a key driver for its economic and social development. Through a series of public and private initiatives and projects, the city has successfully nurtured a conducive environment for sustainable economic growth, generating employment, fostering creativity, and enriching the cultural identity of the Region of Antioquia.
Medellin’s transformation in recent years is undeniable. From a city marked by social and economic challenges, it has evolved into a growing technological hub. This evolution demonstrates the city’s ability to adapt and its commitment to resilient change and continuous improvement.
From Fostering Creative Industries to Technological Boost and Entrepreneurship
Every year, Medellín allocates a significant portion of its budget to promoting priority sectors for its development, such as education and technological innovation, as well as fostering commerce, tourism, and local business growth. In this regard, the city hosts congresses, summits, and nationally and internationally renowned events, such as: Colombiamoda, Festival Internacional de Tango, La Feria de Las Flores, and the International Festival de Jazz, among others. These events not only attract domestic and international tourism but also drive foreign direct investment and stimulate the production and growth of local businesses
These joint efforts have proven to have a significant impact on socioeconomic development, generating employment, contributing to the growth of cultural and technological tourism, and strengthening the city’s international image.
Medellín has Succeeded in Involving All Sectors in its Development
The development model of Medellín has served as an example for other cities in Colombia and around the world. In this model, both the government and thriving private enterprises play a role: the government intervenes on one hand, and dynamic private companies needing continued growth and profitability on the other. Thus, both the public and private sectors constantly make efforts to drive the city’s economic, social, and technological development. This has ultimately led to an enhancement in the quality of life for all its inhabitants.
This approach has enabled the city to progress towards economic prosperity, while also progressively including the most vulnerable sectors of society in wealth generation. Where violence and criminal groups once dominated, now there are greater opportunities for the economically disadvantaged to succeed.
In 2023, the Medellín Municipality allocated over 22% of its budget to improving education. Moreover, the provision of scholarships for studying has been increased, and over 65,000 computers have been donated to children and young people from the poorest sectors of society.
Social investment includes the revaluation of public spaces and local culture. In some poor sectors, the Metrocable has arrived to facilitate the mobility of these people who live on high hills far from the city valley, also encouraging tourism.
Advantages Offered by Medellín for Technological Investment and Innovation
Medellin has some advantages that make it attractive for national and foreign investment, scientific research, innovation, technology and development of any kind of business, among the most important we have:
More Accessible Costs and Quality Colombian Talent
Compared to other global technological hubs, operational costs in Medellín are more accessible. From office rentals to salaries, the city offers a competitive advantage for emerging businesses. Additionally, Medellín boasts a highly educated and skilled population, ensuring access to quality human resources.
In general, there are no minimum amounts for opening businesses and investing in Medellín. Establishing companies in the city is relatively straightforward, and the average cost for registration and initial startup is around 5,000,000 COP (approximately 1,190 USD at an average exchange rate of 4200 COP per 1 USD). However, it’s important to note that this amount could vary if you need to hire lawyers, accountants, professionals, and advisors, as well as depending on the type of product or service you wish to offer, and of course, considering employee hiring, office rent, taxes, and other factors.
Colombian Visas for Investors and Entrepreneurs
However, if you are an expatriate and wish to obtain a long-stay residence visa, you will need to invest a minimum amount of one hundred (100) current legal minimum wages (approximately 27,619 USD) for the “Socio o Propietario Visa”, according to Article 75 of Resolution #5477 of 2022, and six hundred fifty (650) current legal minimum wages (approximately 179,523 USD) for a “Visa de Inversión”, as established in Article 79 of the same regulation.
There are other types of visas to which expatriates can apply within the categories of visitor or resident, for which it is recommended to consult with a Colombian lawyer specialized in immigration law, in order to choose the most appropriate option for the specific case.
An Innovation and Entrepreneurship Hub
One of Medellin’s strengths lies in its clear focus on creating spaces for collaboration and connections among various actors in the city. There are various public and private organizations that enhance the innovative, investment, and entrepreneurial ecosystem of Medellin. Among them, we have:
Cámara de Comercio de Medellín para Antioquia: Founded in 1904 to strengthen the growth and development of local businesses, working hand in hand with a group of 547 public and private allies, as well as 16 affiliated entities. It supports, accompanies, and leads significant projects and services for entrepreneurs that drive competitiveness, growth, access to new markets, and the improvement of business conditions in the region.
La Agencia de Cooperación e Inversión de Medellín y el Área Metropolitana (ACI Medellín): It was created in 2002 with the association between the Mayor’s Office of Medellín, Empresas Públicas de Medellín, Área Metropolitana del Valle de Aburrá and Empresas Varias de Medellín, to articulate relations and manage cooperation and investment processes in the City.
Corporación RUTA N: Founded in 2009 as a business center and is a public entity belonging to the Mayor’s Office of Medellín, UNE and EPM, its offices are located in the Sevilla neighborhood, aims to strengthen the entrepreneurial ecosystem in the city, providing support to startups and technology companies at different stages of growth, offering acceleration programs, collaborative work spaces and access to experts in various areas.
In addition to providing physical resources and services, RUTA N has become a meeting point for entrepreneurs, investors and industry leaders. Its focus on collaboration and connection between different players in the ecosystem has driven the creation of innovative solutions and the development of disruptive ideas.
Georgia Institute of Technology: Opened its doors in 2023 in Medellin, as the first innovation center in South America, seeking to promote innovation and entrepreneurship, being a collaborative effort that includes prestigious private companies, higher education institutions and organizations that promote the economic development of the city.
Centros del Valle del Software: The Mayor’s Office of Medellin has created spaces such as the Software District and the Software Valley, dedicated to promoting innovation and technological development. These places offer state-of-the-art infrastructure, equipped laboratories and a collaborative environment that fosters creativity and the growth of startups and technology companies.
Impact Hub: It is a global entrepreneurship network, whose franchise opened in Medellín in 2019, providing support through various training programs, boot camps, and mentorship initiatives aimed at strengthening the city’s entrepreneurs. Additionally, the institution organizes gatherings for incubation, acceleration, and networking with a focus on technology and the enhancement of startups.
Parque E: Founded in 2006 with the support of the Mayor’s Office of Medellín and the University of Antioquia, this initiative provides support to new entrepreneurs from structuring, through strengthening and projection, to achieve the acceleration of such projects, facilitating access to sources of financing.
Parque E is an incubator for technology-based companies in various areas such as Blockchain, life sciences, cybersecurity, EdTech, FinTech, social entrepreneurship with digital impact, smart cities, Industry 4.0, artificial intelligence, advanced materials, digital marketing, mechatronics, digital platform development, video game development, simulator development, hardware development, augmented reality, clean technologies, data analytics, research results, or the application of technology to improve current processes, among others, with high impact on the city.
SENA Innovation Hub: Located in the center of the city, it opened its doors in 2022 to strengthen innovation and entrepreneurship processes in the region. It has modern facilities and virtual reality and metaverse simulators.
El Distrito de Ciencia y Tecnología de Medellín offers incentives and tax exemptions: One of the most attractive advantages that Medellín offers to businesses is the exemption from industry and commerce taxes for those choosing to establish themselves in the city. This measure not only reduces the initial financial burden but also provides room for investment in the development and expansion of operations.
Similarly, according to Decree 1669 of 2019, there is a tax incentive for income tax exemption for seven years for companies belonging to the Orange Economy sector, meaning those engaged in creative and technologically value-added activities.
Prominent Technological Investments in Medellín
Various leading technology companies have already recognized the potential of Medellín and have invested in the city. From industry giants to promising startups, they have established operations here, contributing to the continuously expanding technological ecosystem. Some of these companies include:
FreshWorks Studio: Opens its software development and digital solution’s office in Medellín. This Canadian company, which began operations in Medellín in January 2022, now has over 100 members on its team from around the world. Over the next three years, they plan to have 250 people working to provide innovative solutions to various businesses.
Globant: This technology services and software development company also has operations in Medellín. Globant focuses on creating digital solutions for global clients.
MercadoLibre: Latin America’s e-commerce and financial services giant, MercadoLibre, also has offices in Medellín. The platform has been a key driver of e-commerce in the region.
Microsoft: This technological giant opened modern offices in the Milla de Oro Real Estate Complex of El Poblado in 2017 to strengthen the digital transformation of businesses in Medellín and promote telecommuting. The company has collaborated on government projects to facilitate access to educational centers and provide students with free licenses and courses in various Microsoft products, aiming to achieve the inclusion of diverse communities in these solutions.
Motorola: This company, a major mobile phone manufacturer, opened a Service Center in 2018 at the Premium Plaza Shopping Center in Medellín. The center provides express repairs, enhances its logistics, and offers post-sales support to its customers.
Rappi: One of Latin America’s best-known startups, Rappi, a home delivery and on-demand services platform, has a strong presence in Medellín. The company has contributed significantly to the development of the technology ecosystem in the city.
United Parcel Service (UPS): A global logistics leader established its presence in Medellín in 2016.
Conclusions
Medellín, a model of transformation and economic growth through innovation, technology and creativity, leverages its unique resources to become a hub for technological investment. Initiatives such as the District, El Valle del Software and tax incentives demonstrate the city’s commitment to fostering an innovation-friendly ecosystem.
The presence of technology leaders and institutions such as RUTA N demonstrates the city’s determination to become a center of technological development in Latin America.
The city’s ability to stop, adapt, overcome challenges and create opportunities in a technology-driven world is a testament to its potential.
Therefore, there are great opportunities for investment and the promotion of businesses focused on technological innovation, and Medellin’s search for a promising future that combines technology and creativity drives economic and social progress.
Questions, comments? Contact me today and I will be happy to discuss any of these issues further with you.
