For the purpose of this report, a business has been selected to be opened in the hospitality industry in Colombia. To open a business in the hospitality industry in Colombia, the legal concept and structure of business transactions needs to be analyse. The legal system in the country, including the law of contracts, torts, agency, employment and IP should be elaborated in order to have a proper understanding of the individual business system. The effective analysis of this part is the main purpose of this paper.
Colombia was selected to be the country to open the business because of its excellent connectivity with other countries because of its geographic position. The market place and scope is high as it is a developing country. The labour costs is fair and the legal system is not too rigid. For a travel, tourism or food and drinks business, Colombia is a country that offers high opportunity for the new businesses.
The scenario county selected for the purpose of this research is Colombia to analyse the business structure. To start a business in Colombia, the business is to be registered at the Chamber of Commerce, The Municipal Tax Authority and National Tax Office. It must deposit a capital within two years of incorporation to the Colombian Bank account. The employers and employees should be registered with Administrator of Professional Risks, Health Insurance Entity, Welfare Entity and others. To critically discuss the legal aspects of business in Colombia, the following perspectives should be explained:
The economic strength in Colombia has faced an increased growth over the past few years. The production growth rates in various industries has increased to up to 2 percent as estimated in the year 2013 (Heritage.org, 2018). The rapid development in the economic strength has helped Colombia to combat their economic problems.
The worldwide financial condition is influenced by the American countries. Colombia has no less role to play a role in it (Obstfeld, 2013). Monetary authorities of the country have a systematic response in the Federal Funds rate, which indicates that international monetary system has affected the national monetary policies in the country. Though it is a set of rules which is internationally agreed; it has a consequence on the monetary system of the countries (Borio, 2014).
Developing countries like Colombia face the largest economic growth. These countries are the closest to the developed countries in terms of the standard of living. The recent trends in international business is to trade with emerging markets to grow rapidly. The factors like economic stability, financial system and local culture influences the market for international business (Cavusgil, 2014). For the development of business, the pace of innovation can be played as an important component. The business in international markets experience an increased competition, as the developing countries have lower employment costs. For a hospitality industry in Colombia, the recent development in international business trends has resulted into a scope of expansion of the industries.
The telecommunication system in Columbia is well structured and developed in the business centres where the availability of services is comparatively high. The Government has taken steps to improve the condition of telecommunication in urban and rural areas by formulating some public programs and policies. The regulatory instruments are governed by the ICT law in the telecom sector. The convergence license and their rules is provided under the Convergence Decree.
Colombia has an ethnic diversity which is reflected in their varied culture. Despite the turbulent history of long armed conflict, their democratic security and economic policy has resulted into a growth in the confidence in the business sector (International.gc.ca, 2018). For running a successful business in Columbia, one must have the political and economic awareness as well as the business etiquette and culture in Colombia.
In Colombia there are scope for many variety of business as it is a developing country. Business can be recognised into various categories in Colombia, like: Corporations, Limited Liability Company, Limited Partnership, Branch of a foreign company, shares corporations. A corporation, to be incorporated, must have five shareholders (World Bank Group, 2013). While, in order to incorporate a limited liability company, there should be at least two partners who would be jointly and severally liable. The limited partnership requires one or more partners for managing the operations of the entity, and one or more silent or comanditarios partner whose liabilities shall be limited to their capital contributions. For a foreign company, which is willing to pursue permanent operations in the Colombia, must establish a branch office in Colombia (Simonse, 2014). The simplified shares corporations can be set up in Colombia with only one shareholder. For a Simplified shares corporation, it is not mandatory to have a board of directors.
Business ethics is the successful combination of ethical concerns and profits for business. In addition to profit maximization, the business must be legitimized before the society. The sustainable business practices, in correspondence with the legal or financial factors should be the ethical foundations for a business (Pandza & Ellwood, 2013). Social foundation of business comprises of an ethical standard to regulate the business activities. The social and ethical obligations are in exceed of legal duties.
Colombia is an excellent market place for making successful investment for business. Hospitality industry has a wide scope of investment in a developing countries like Colombia. The recent change business practices has opened up new interests in the business strategies to make investments. Investors has seen Colombia to be a stable place for doing business and the foreign direct investment has improved the business climate. According to the investment trends, one of the largest recipient of the Foreign Direct Investment of the Latin America is Colombia.
Political Constitution of Colombia empowers foreigners and nationals with the same rights and guarantees. Being situated at the nexus between the north countries and continents, and having an access to both the Atlantic and Pacific Oceans, the market opportunities in Columbia has a diversified and exportable offers. It has one of the productive labour forces and offers export logistics. It is also considered as the third friendliest countries in the world for conducting business. Hospitality industries like travel, tourism, restaurants experience a high competition in Colombia. It is a centre of attraction for tourist, which makes the travel industries to face competition, resulting into a competition in the foods and beverage industries as well.
Opening a new business is always amount to threat. Competition is one of the main risk factor in Colombia to operate a business in hospitality industry (Moncada, 2013). The investment may be exposed to threat in such a high competitive market. For a foods and beverages or travelling industry, safety may be one of the main components of pitfalls.
|
Legal structures: The business in hospitality industries have to follow the rules and legislations. The growing rate of travel and restaurants industries has resulted into new legal structures of these business which requires incorporations in various ways. Different structure has been set for companies, limited liability corporations, partnerships and sole industries. |
Contracts These industries has lot to deal with the contractual laws and obligations. Contracts are used as a measure to gain legal protections. The Legal Stability Contract between the Government and the investors ensure the investment is not adversely affected by any subsequent changes in the laws, rules or regulations that are already existing. In Colombia, if an employment contract is executed, it will be governed by the law of Colombia, regardless of any choices made.
|
|
Agency: The occupational safety and health administration agency assures every workers a health and safe working conditions. The business in hospitality industries should comply with the safety practices. As the travel and tourism industries mainly deals with law of agency, the commercial rules of agency agreement should be followed. The Commercial agency agreements are dealt in the Commercial Code as a kind of mandate contract. |
Employment Law: Employment relationships are regulated by Labour Code, Labour Code Reform (Law 50 of 1990), and law to Support Employment (Law 789 of 2002). Law 1780 of 2016 is beneficial for these businesses as it promotes young employment and entrepreneurship. |
|
Intellectual Property: The investors are protected under the intellectual property law. They are entitled to get trademark registration. Decision 486 of 2000 of the CAN protects the trade names, slogans, emblems as well as the new creations. |
Law of Torts: The violation in the law of torts in this industry enables the person affected to initiate administrative or judicial proceedings. |
After analysing the various business structure for operating business in hospitality industry in Colombia, the findings of the research is that such a business has a high scope in a developing country and would face a growth if it is opened maintaining the legal parameters.
For the purpose of this new business the Colombia and International Conventions on the Protection of Foreign Investments, the Agreement on Cooperation and Facilitation of Investments between Colombia and Brazil, Colombia-Mexico Free Trade Agreement, Columbia-Chile Free Trade Agreement are required to be follow, which regulates the conduct of this business.
Conclusion
Lastly, it can be said that there is mix chances of success of this business as there are various factors that has an impact over the operation. The challenges can be overcome by following the legal regulations and restrictions.
References
Borio, C. (2014). The international monetary and financial system: its Achilles heel and what to do about it.
Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International business. Pearson Australia.
Heritage.org. (2018). Retrieved from https://www.heritage.org/index/country/colombia
International.gc.ca (2018). [online] International.gc.ca. Available at: https://www.international.gc.ca/cil-cai/country_insights-apercus_pays/ci-ic_co.aspx?lang=eng [Accessed 25 Oct. 2018].
Moncada, E. (2013). Business and the politics of urban violence in Colombia. Studies in Comparative International Development, 48(3), 308-330.
Obstfeld, M. (2013). The international monetary system: living with asymmetry. In Globalization in an age of crisis: Multilateral economic cooperation in the twenty-first century(pp. 301-336). University of Chicago Press.
Pandza, K., & Ellwood, P. (2013). Strategic and ethical foundations for responsible innovation. Research Policy, 42(5), 1112-1125.
Schneider, F., & Hametner, B. (2014). The shadow economy in Colombia: size and effects on economic growth. Peace Economics, Peace Science and Public Policy, 20(2), 293-325.
Simonse, L. (2014). Modeling business models. Design Issues, 30(4), 67-82.
World Bank Group. (2013). Doing business 2014: Understanding regulations for small and medium-size enterprises (Vol. 11). World Bank Publications.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download