Fedesoft Urges Colombia to Woo Foreign Tech with Tax Cuts

Colombia’s software industry association, Fedesoft, is calling on the government to introduce tax incentives to attract foreign technology firms, pointing to the country’s massive talent pool as the primary asset.

In a recent interview with local financial news outlet Valora Analitik, Fedesoft’s Executive President Ximena Duque said that an influx of foreign investment could also serve as a powerful catalyst to reverse the country’s brain drain, persuading expatriate tech professionals to return home.

According to Fedesoft, Colombia’s technology sector has tripled in size since the COVID-19 pandemic and now accounts for 3.6% of the country’s gross domestic product (GDP). The industry currently comprises roughly 7,200 companies —primarily small and medium-sized enterprises— and employs more than 400,000 people.

Duque emphasized that targeted tax incentives are a proven playbook for regional growth, citing the economic success stories of Latin American peers Costa Rica and Uruguay.

“We are one of the countries that trains the most systems engineers in Latin America, and that has been key for many companies looking to establish themselves here,” Duque told Valora Analitik. “However, without adequate incentives, companies will continue to hire Colombian talent without necessarily investing from within the country.”

While there are no definitive official figures tracking the exact number of Colombian tech professionals working overseas, broader migration data highlights a significant diaspora. A 2021 study by the Harvard Kennedy School estimated that roughly 5 million Colombians— or close to 10% of the population— lived abroad.

By formalizing incentives, industry leaders hope to transition foreign companies from merely outsourcing remote Colombian talent to establishing a physical, tax-paying presence within the country.