Doing a Football Deal in Colombia

Introduction

Continuing our series of “How to Complete a Football Transfer Anywhere in the World” this installment explores the unique dynamics of the football transfer market in South America, focusing on Colombia. It’s important to note that each country has its own employment laws, tax regulations, and various other legal aspects that agents must comprehend and adhere to. Furthermore, cultural disparities, club structures, budgets, salaries, league rules, and work permit restrictions collectively shape the landscape, making successful transfers contingent on navigating these complexities.

In this blog, we will focus on the process of executing a football transfer in Colombia, under the regulations set forth by the Federación Colombiana de Fútbol.

The Main Differences

The Colombian transfer system commands international attention due to the trend of top Colombian talents departing the domestic league at an early stage, contributing to Colombia’s status as one of the top ten exporting countries of football talent. Consequently, media buzz, coverage, and exposure surrounding the two Colombian transfer windows not only captivate local fans but also resonate on a global scale.

A noteworthy point to consider is that while Colombia employs its own currency, the Colombian Peso, international transactions within football employ US Dollars. On the other hand, local transactions are conducted in Colombian pesos.

[Figure 1: Top associations by number of incoming and outgoing transfers (2022). Source: FIFA Global Transfer Report 2022.]

A distinguishing feature that sets Colombia apart from other football markets globally, particularly in South America, is the stipulation that each club can include up to four (4) international players in their squad, four (4) in the starting lineup, and a maximum of three (3) foreign players on the field simultaneously. This distinction makes Liga BetPlay DIMAYOR, Colombia’s football league, notably stringent regarding foreign players compared to other CONMEBOL nations. This carries significance for agents seeking to import foreign talent and especially for foreign agents aiming to enter the Colombian market.

[Figure 2: Quota of foreign players in first division of CONMEBOL Countries (2023). Source: Jaime F. Macias 2023.]

Colombia’s unique market distinction becomes more evident when considering a recent study by the CIES Football Observatory, which positions Colombia as the sixth-largest exporting country, with 448 expatriates moving to other leagues. This ranking is surpassed only by Brazil and Argentina within the CONMEBOL region. This presents an enticing market opportunity, provided agents effectively navigate its intricacies for their benefit and that of their clients.

The Colombian football ecosystem and transfer structure relies heavily on local talent due to restrictions on foreign slots. Bigger clubs often maintain their own academies or „canteras,“ playing a pivotal role in nurturing their professional teams. The journey for young talents to join a professional team’s official academy involves scouting, development in satellite academies, and ultimately graduating to the main „cantera.“ This presents an avenue for agents to introduce emerging talents from smaller academies, often lacking resources for competitive tournaments. Agents can facilitate loaning these players to canteras for key tournaments to showcase their abilities, potentially leading to contracts with new teams or academies, enhancing players‘ development prospects. Given that players often hail from small towns or rural areas, this represents an opportunity they eagerly pursue.

Colombian players are renowned globally for their natural physicality and spirited determination, qualities that enable them to seamlessly adapt to top leagues. Certain clubs are structured to primarily export top talents. Agents need to factor this into their approach when seeking optimal opportunities for their clients based on their capabilities.

Broadcasting rights are privatized in Colombia, contributing significantly to clubs‘ revenue. Revenues stem from subscriber fees granting access to league games and broadcasting contracts between private entities and teams. However, revenue distribution isn’t uniform across all teams, unlike foreign markets. Colombian teams fall into categories A or B based on their tier and tenure. Category A clubs have been in the top tier for a substantial period, while category B clubs receive less funding. Agents should consider these nuances, as budgets and transfer capacities differ accordingly.

The Transfer System Structure

Colombia has two transfer windows annually—a two-month window from December to February and a shorter month-long window officially open from July to August. These periods allow clubs to register players for the upcoming season. An additional mid-season transfer window caters exclusively to „free agents,“ those who haven’t secured a new team after contract expiration. This 6-day window commences from September 4th to 9th.

Effective deal-making requires agents to engage in thorough discussions with clubs and clients outside or between transfer windows. Agreements are often reached in principle well before the official window opens. The subsequent finalization process encompasses medical assessments, media obligations, and contract signings during the designated time frame.

While Colombian football clubs are professionalized, they don’t uniformly adhere to transfer strategies. Some rely on their academies to supply the first team with players, while others might focus on signing young high-potential individuals to improve their tournament standings. This diversity provides opportunities for emerging talents to garner playing time and experience before exploring foreign leagues. Agents need to comprehend each club’s dynamics to identify the most suitable fit for their clients, enhancing the chances of successful deals.

Agents should familiarize themselves with each club’s transfer operations. Clubs adopt varied hierarchical structures for transfers, often involving roles such as Head of Recruitment, Technical Director, and Sporting Director. Notably, President, Chief Scouts, and club owners also influence transfer decisions. The transfer team, comprising scouts, analysts, and legal experts, can be extensive. It’s imperative for agents to establish connections with individuals holding decision-making authority within clubs, regardless of tier, to increase the likelihood of successful deals.

Financial and Payment Details

Understanding the financial landscape within Colombia’s two professional divisions is crucial for agents aiming to successfully close deals. When it comes to executing a local transfer in Colombia, the optimal window is the winter transfer period. This is due to its duration and the teams‘ preparations for the upcoming season. The Colombian top-tier league, Liga Betplay DIMAYOR, features two tournaments annually. The first one commences in January and concludes in June, while the second starts in July and ends in December.

However, the most financially rewarding transfers for agents facilitating the overseas move of local talent usually occur during the summer transfer window. This period holds great importance in Europe, attracting top talents from various regions.

Footballers in Colombia typically operate under two contract types: the employment contract and the commercial contract. The employment contract covers health and social security contributions, while the commercial contract addresses bonuses and advertising payments. It’s noteworthy that the employment contract must adhere to the unique format standardized by COLFUTBOL. Furthermore, the labor relationships of professional football players in Colombia are governed by the Labor Code known as „Código Sustantivo del Trabajo.“

Taxes paid by professional footballers in Colombia can vary based on factors like income, contractual status, and tax regulations. Generally, players are subject to a 35% income tax (renta) and social security contributions. Agents must fully comprehend these factors, as they play a pivotal role in clients‘ decisions regarding different markets. Moreover, in Colombia, payments for professional footballers, in general, are not as substantial as in other countries, given the country’s financial system and the devaluation of the Colombian peso against the US dollar. To illustrate, an average professional football player in Colombia earns approximately 5 million Colombian pesos, which equates to around $1,225 USD.

Transactions and deals within Colombia are typically conducted in Colombian pesos. However, international transactions must be carried out in US dollars. When finalizing a transaction in Colombia, it’s advisable for agents to seek external guidance from specialists well-informed in Colombian contractual and employment regulations. This step ensures contractual integrity, avoiding unforeseen issues that could potentially impact both agents and their clients.

Visa Requirements

As previously mentioned, Liga Betplay DIMAYOR enforces regulations for foreign players, allowing a maximum of four non-Colombian players in each team. Visa requirements for foreign players in Colombia can vary, but they generally encompass documents such as an employment contract with a Colombian team, medical tests, criminal background checks, and other elements that substantiate the authenticity and necessity of the player’s stay in the country for sports-related purposes.

Additional Points to Note

The Colombian football league exhibit a highly competitive level of play, passionate fan base, and opportunities for skills development. The league’s vibrant atmosphere, rich football history and potential for exposure make it a desirable destination for both players and agents.

Summary

In essence, just like in football markets worldwide, there are various factors at play that influence the success of sealing a deal in Colombia. The extent of an agent’s understanding and expertise about the region significantly enhances the likelihood of navigating the necessary pathways to finalize a successful transaction.

Furthermore, it’s important to highlight that Colombia attracts a multitude of agents. To optimize their deal-making prospects and mitigate potential challenges, foreign agents often collaborate with local counterparts or engage the services of an attorney with local insights. This alliance proves beneficial as it capitalizes on their comprehensive grasp of the market intricacies, ultimately serving the best interests of the agent and their client.