How Petro’s election may affect Colombian visa requirements
On June 19, 2022, Colombians elected Gustavo Petro as the country’s first avowedly leftist President. For many expats and foreign visitors, this historic election raises questions about the future of tourism, investment, and living as an expat in Colombia. Though many of the big changes that may occur can only be speculated on at this point, one specific area which will likely see a change is in the financial threshold requirements for Colombian visas.
What is a Colombian Visa Financial Threshold Requirement?
In order to qualify for a Colombian visa, the Cancillería (Colombian immigration authority) lays out certain requirements that must be met. For certain visas, there is a financial threshold requirement, meaning that a foreigner must prove that they a) earn a certain amount of money, b) hold funds or assets worth a certain amount, or c) invest a certain amount of money in the country, in order to qualify for the visa.
How are these Financial Threshold Requirements determined?
By statute, these visa financial threshold requirements are not set out as a fixed number (i.e. 400,000 COP to qualify) but instead are expressed as a multiple of the country’s Salario Minimo - the national monthly minimum wage.
For example, to qualify for a Colombian Retirement (M) Visa, a foreigner must prove they receive monthly retirement income worth at least 3 Salarios Minimos. As of the date of publication, the Salario Minimo was 1,000,000 COP. So an expat retiree must earn 3,000,000 COP in retirement income each month to qualify.
But, because these thresholds are tied to the Salario Minimo, any change to the Colombian minimum wage impacts the amount of income, assets, or investments an applicant needs to qualify for a Colombian visa. This is true even if the change to the Salario Minino was done without any intention of affecting the visa regime in Colombia.
Gustavo Petro will increase the Salario Minimo
Gustavo Petro was elected on a platform of across-the-board social reform, including an increase in the minimum wage. And though some of his other reform plans may be hampered by the political opposition, due to the particularities of the Colombian political system, Petro will almost assuredly be able to increase the Salario Minimo in December 2022, and probably by an unprecedented amount (He advocated for an 18% to 19.5% increase in 2021, and would probably increase it more this year due to inflation).
Effect of an increased Salario Minimo on Visa Applications
Whether this probable minimum wage increase is good or bad for the Colombian people is beyond the scope of this article. But it does mean that visa applicants in Colombia must be aware that the financial threshold requirements will probably increase for them in December 2022.
For example, a Real Estate Investment (R) Visa applicant must show they have invested at least 650 Salarios Minimos in Colombian property to qualify. Currently, this means purchasing a 650,000,000 COP home. But if the Salario Minimo increases by 20% in December 2022, the investment required will rise to 780,000,000 COP.
Likewise, the real monetary value of the 10 Salarios Minimos of passive income required for the Rentista visa would jump from 10,000,000 COP per month today to 12,000,000 COP per month.
Affected Visas
Visas that include Salario Minimo thresholds include:
Employment (M) Visa - show an average of 100 Salarios Minimos in your bank account over the last 6 months
Real Estate Investment (M) Visa - invest 350 Salarios Minimos in Colombian property
Real Estate Investment (R) Visa - invest 650 Salarios Minimos in Colombian property
Business Investment (M) Visa - invest 100 Salarios Minimos in a Colombian business
Retirement (M) Visa - show monthly retirement income worth at least 3 Salarios Minimos
Rentista (Passive Income) (M) Visa - show monthly passive income worth at least 10 Salarios Minimos
Steps a Colombian Visa Applicant should take
For applicants who currently meet the financial threshold requirement of a Colombian visa but may fall below the threshold if the Salario Minimo increases, it is imperative that they file before the change occurs.
This is especially critical in the case of those applying for a visa based on an investment in Colombian real estate or a Colombian business. Buying a property or business is sometimes a long, convoluted process and it is essential that the process be completed before any change in the Salario Minimo occurs.
The real danger is that a once-qualifying property (i.e. 650,000,000 COP) will suddenly not qualify the applicant for a visa (i.e. Real Estate Investment (R) Visa) if the financial threshold goes up (i.e. 780,000,000 COP). This can occur EVEN IF the sale process began BEFORE the change in the financial threshold occurred. Meaning the foreigner would be forced to go through with the purchase but would not receive a qualifying visa.
For investment visa applicants, the safe course of action in the next few months may be to invest in a property or business which is more valuable than the current financial thresholds require in order to give yourself a buffer in case the thresholds increase during your purchase.
Other Considerations
A potentially mitigating factor to the increase in the financial threshold requirements is currency fluctuation, i.e. if the US dollar, Euro, or other foreign currencies, rise in relation to the Colombian peso. This is only at an individual level and only if income is earned abroad, but a stronger foreign currency means that, for the applicant, a rise in a visa financial threshold is less drastic in real money terms than if the foreign currency had stayed static. But currency fluctuation is nearly impossible to predict and should not be relied upon when planning a visa strategy.
Final Thoughts
Gustavo Petro’s election means that there will most likely be a substantial increase in the Colombian Salario Minimo in December 2022, which will inadvertently increase the financial threshold requirements on many Colombian visas. Potential visa applicants need to be aware of this coming change and plan according. This is especially true of Investment visa applicants who are in danger of finding the property or business they are purchasing no longer qualifies them for a visa.
For help navigating this changing Colombian visa landscape, do not hesitate to contact us at Restrepo Legal.