How to Set Up a Nearshore CoE in Colombia

Setting up a nearshore Center of Excellence (CoE) in Colombia is no longer just a smart idea, it’s becoming a competitive necessity. Global companies are looking south for scalable tech talent, cost efficiencies, and operational resilience. Colombia has emerged as one of the top destinations in Latin America for building CoEs that deliver lasting value.

You’ll see why. Colombia is now home to more than 150,000 IT professionals, and the sector is growing at an annual rate of over 10% according to ProColombia. Add a strategic time zone alignment with North America and a supportive regulatory framework, and you get a strong foundation for innovation.

This article walks you through what a Nearshore CoE is, why Colombia is such a compelling choice, and the exact steps needed to establish one. You’ll also explore the BOT (Build, Operate, Transfer) model, technology infrastructure, talent strategies, and the future role of Colombia in the LATAM CoE landscape.

What Is a Nearshore Center of Excellence (CoE)?

A Nearshore Center of Excellence, or CoE, is a specialized hub where your business centralizes expertise, processes, and resources to drive innovation and operational efficiency. Unlike a traditional outsourcing arrangement, a CoE isn’t just about getting tasks done. It’s about building a dedicated team that develops best practices, scales capabilities, and improves performance across multiple business functions.

Nearshore means the center operates in a nearby country, usually within the same time zone or just a few hours apart. For North American companies, that often means locating in Latin America. The geographic closeness makes collaboration faster, reduces cultural barriers, and simplifies governance. Gartner research shows that nearshore models reduce project communication delays by up to 30%, a key reason many enterprises prefer them over offshore alternatives.

The CoE model typically focuses on specific areas like software development, data analytics, automation, or customer experience. By concentrating talent and expertise, you avoid duplication across departments and create a single source of excellence that the rest of the organization can leverage. According to Deloitte’s 2023 Global Shared Services survey, 56% of companies now use CoEs to drive digital transformation initiatives, highlighting their growing strategic importance.

For you, the value lies in predictability and scalability. A Nearshore CoE gives you a structure that balances cost efficiency with high-quality outcomes. Instead of short-term outsourcing, you gain a long-term capability that adapts as your business grows.

Why Colombia Is Emerging as a Nearshore Center of Excellence

1. Colombia’s Expanding Technology Workforce:

Colombia has built one of the most dynamic IT labor markets in Latin America. This steady pipeline ensures you can access specialized talent for areas like software engineering, cybersecurity, and data analytics without facing the severe shortages seen in North America.

2. Strategic Time Zone Alignment:

Colombia operates on GMT-5, the same as US Eastern Standard Time for most of the year. That means your teams can collaborate in real time without overnight delays. For companies running agile sprints, product launches, or high-frequency client interactions, this overlap reduces project friction and increases productivity.

3. Business-Friendly Policies and Investment Incentives:

The Colombian government actively supports the growth of technology-driven industries. Initiatives like the ICT Mission 2022 program and free-trade zones with tax benefits have encouraged international firms to establish operations. The World Bank’s Ease of Doing Business Index consistently ranks Colombia among the top reformers in Latin America for business regulations.

4. Robust Digital Infrastructure:

High-speed internet coverage has expanded rapidly. The Ministry of Information Technologies and Communications (MinTIC) reports that over 70% of households now have broadband access, a significant leap from just a decade ago. Major cities like Bogotá, Medellín, and Cali offer reliable connectivity and modern office spaces, making them prime locations for nearshore CoEs.

5. Competitive Costs Without Sacrificing Quality:

Labor costs in Colombia remain competitive compared with the US and Europe, but without the extreme wage differences of offshore markets in Asia. This balance allows you to optimize budgets while maintaining high-quality output. KPMG’s 2023 Global Services Location Index ranked Colombia as one of the most attractive nearshore destinations for its cost-to-talent ratio.

6. Growing Reputation for Innovation:

Colombia is no longer seen only as a source of affordable labor. Cities like Medellín have earned recognition as global hubs of innovation. In 2019, the World Economic Forum named Medellín the Latin American capital of innovation, reflecting its progress in smart city initiatives, AI adoption, and research and development (R&D) collaboration.

Steps to Set Up a Nearshore CoE in Colombia

1. Define Strategic Objectives:

Before launching a Center of Excellence in Colombia, establish clear goals. Decide whether the CoE will focus on software development, data science, automation, or customer experience. Gartner research highlights that companies with documented CoE objectives are 40% more likely to achieve measurable ROI compared with those that skip this step. A defined scope ensures alignment with the wider business strategy.

2. Select the Right Colombian City:

Different cities offer different advantages. Bogotá provides access to the largest talent pool, Medellín has earned recognition as an innovation hub, and Cali is gaining attention for cost efficiencies. According to Invest in Bogotá, the capital alone hosts more than 65% of Colombia’s IT companies, making location a key decision factor in setting up a CoE.

3. Establish the Legal and Compliance Framework:

Colombia’s regulatory environment is favorable, but you still need to understand labor laws, tax incentives, and intellectual property protections. The World Bank’s Doing Business Report consistently places Colombia among the region’s top performers in contract enforcement and investor protection. Working with local legal expertise reduces risks during setup.

4. Build the Organizational Structure:

Define leadership roles, governance models, and reporting lines early. A CoE should not function as an isolated unit but rather as a collaborative hub that shares expertise across departments. Deloitte’s Global Shared Services survey shows that 56% of organizations integrating CoEs report higher efficiency from cross-functional alignment.

5. Recruit and Develop Local Talent:

Talent acquisition is one of the most critical steps. Colombia produces over 13,000 engineering graduates annually, according to the Ministry of Education, creating a robust talent pipeline. Combine recruitment with structured training programs to ensure your teams adopt company-specific processes and standards.

6. Implement the Right Technology Infrastructure:

Reliable infrastructure is non-negotiable. Ensure your CoE has access to secure cloud platforms, collaboration tools, and strong cybersecurity frameworks. MinTIC reports that 70% of Colombian households have broadband access, and major cities benefit from growing investments in data centers, providing a stable foundation for digital operations.

7. Monitor, Measure, and Scale:

Setting up is only the beginning. Define KPIs to measure productivity, innovation, and cost savings. Regular performance reviews and process audits keep operations aligned with original goals. According to PwC, 65% of organizations that track CoE metrics report improved decision-making across their global operations.

Leveraging the BOT Model for a Colombian CoE

Understanding the BOT Approach.

The Build-Operate-Transfer (BOT) model allows you to establish a nearshore Center of Excellence in Colombia with reduced risk. In this structure, a local partner builds and operates the CoE during the initial phase, while you retain the option to assume full ownership later.

The Build Phase in Colombia.

During the build stage, the local partner sets up legal entities, hires staff, and establishes office space or remote operations. ProColombia data shows that foreign companies setting up via structured models like BOT reduce administrative costs by up to 25%, thanks to streamlined legal and HR processes.

The Operate Phase and Knowledge Transfer.

The operate stage focuses on running day-to-day activities, embedding processes, and transferring knowledge. You can align your CoE’s culture and practices without the immediate overhead of managing all operations yourself.

The Transfer Phase for Long-Term Control.

Once operations stabilize, you can take full ownership of the Colombian CoE. This final stage ensures continuity of talent, processes, and infrastructure while giving you full control of strategic decision-making. The transfer typically occurs within two to three years, depending on complexity and organizational readiness.

When BOT Makes the Most Sense in Colombia.

The BOT model is especially effective if your organization wants rapid market entry, lacks immediate local expertise, or prefers to test the waters before committing to full-scale operations. Colombia’s growing tech workforce and government-backed incentives make it one of the most favorable environments for implementing this approach in Latin America.

Ready to Set Up a Nearshore CoE in Colombia?

Colombia has positioned itself as one of Latin America’s most reliable destinations for building Nearshore Centers of Excellence, offering the right mix of skilled talent, cost efficiency, and government-backed support.

At BOT LATAM, we help companies turn that opportunity into a structured reality. From navigating Colombia’s legal frameworks to sourcing top-tier talent and implementing models like Build-Operate-Transfer, our expertise ensures you can establish and expand a CoE with confidence. By combining regional knowledge with proven recruitment processes, we enable organizations to accelerate setup, reduce risk, and maximize long-term value. Ready to start your own? Contact us to schedule a FREE consultation!