Foreign Direct Investment and Tax Structure in Colombia

As the globalization of the world economy proceeds apace, Colombia must cope with an increasingly competitive international economic environment. The need to compete for highly mobile international capital is an essential component of the fiscal landscape in all countries in today's global economy, especially those which, like Colombia, depend on foreign direct investment (FDI). This paper focuses on the effects of the tax system in Colombia on FDI. However, tax policy is far from the only factor affecting the foreign direct investment decisions of multinational corporations. Accordingly, before proceeding to a detailed analysis of tax structure and FDI, several of these alternative factors will be discussed.