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Since the 1990s Colombia’s insurance sector has grown faster than overall GDP, driven by personal lines and social security. The industry recorded 11.3% growth in assets to end 2013 with $21.4bn, up from $19.2bn in 2012, while total written premiums reached $9.45bn, an 18% increase compared to the previous year, which had ended with $8bn. Investments held by the sector also rose from $13.7bn to $15.7bn. Almost two-thirds of the assets and three-quarters of the investments are held by the life insurance division. The market, comprised of 45 insurers, includes a number of global underwriters, with the sector split evenly between domestic and foreign firms. At 2.4%, Colombia’s insurance penetration remains low even by regional standards (compared to Chile’s 5% and Panama’s 4%), suggesting significant room for organic growth in the sector.

In recent years the Colombian Stock Exchange (Bolsa de Valores de Colombia, BVC) has made significant efforts to increase investment options and expand the capital markets, including the creation of the Colombian Global Market (Mercado Global Colombiano, MGC) and the derivatives market, incorporation into the Integrated Latin American Market (Mercado Integrado Latinoamericano, MILA), and the implementation of Colombia Capital, a programme focused on developing future issuers. The local capital markets are also gaining attraction abroad, with the participation of foreign investors in the stock market increasing significantly in the past two years, growing from 8% in 2011 to 20% in 2013. Positive reviews are likely to bring more capital flows and raise values. This chapter contains interviews with Juan Pablo Córdoba Garcés, President, Colombian Securities Exchange; and Carlos Raúl Yepes Jiménez, President, Bancolombia.

The past decade has seen the Colombian banking sector expand against a backdrop of economic growth, improved security and macroeconomic stability. An emerging middle class in need of financial services has fuelled the rise in banking penetration. Although accessing financing has often been a struggle for low-income households and micro-businesses, a fresh influx of microcredit and mobile banking is providing financial services to new segments of the population. Total assets of credit institutions reached $213.9bn by December 2013, growing 14.7% from the previous year. Though well-established Colombian groups continue to lead the market, recent merger and acquisition activity is changing the sector’s structure, bringing in new players. On the regulatory front, 2014 has been a transition year thus far, as Colombia’s financial system moves towards the adoption of International Financial Reporting Standards, scheduled to commence in 2015. This chapter features an interview with Luis Carlos Sarmiento Gutiérrez, CEO, Grupo Aval.

Despite the global vagaries of the mining business and potential volatility in hydrocarbons, a combination of economic liberalisation, free trade agreements and entry to a variety of trade blocs has assured steady growth for Colombia over the past few years. After expanding 6.6% in 2011 and 4% in 2012, Colombia’s economy experienced a slowdown during much of the first half of 2013, registering GDP growth of just 2.6% in the first quarter. Nonetheless, the sound performance of the construction sector, along with strong public investments, recovery in the hydrocarbons industry and restored consumer confidence, allowed Colombia to finish 2013 with solid growth of 4.7%. While the first quarter of 2014 displayed a slight slowdown, with GDP expanding by just 2.9%, large-scale investments in infrastructure point to continued growth in 2014, with the central bank forecasting GDP to expand by 5%. This chapter contains interviews with José Ángel Gurría, Secretary-General, Organisation for Economic Cooperation and Development (OECD); Enrique García Rodríguez, Executive President, CAF development bank of Latin America; and José Darío Uribe, Governor, Central Bank.

Focusing on corporate environment, foreign direct investment, tax and incentives, ownership, and competition law, this section examines the legal framework for operating businesses and investing in Malaysia. This chapter also features a viewpoint from Raphael Tay, Corporate and Practice Development Partner, Chooi & Company.