Why it matters

For a company entering Colombia, the first local executive contract is often the first agreement that really matters, and it is usually drafted from a global template. Several Colombian rules cannot be contracted out of, and some changed with Law 2466 of 2025, the recent labor reform. The clauses that most often cause disputes are those that were valid at headquarters but have no effect in Colombia.

The underlying decision: what kind of relationship

If the executive works personally, under subordination and for pay, there is an employment contract whatever the document is called, and Colombian law presumes that every personal work relationship is one (Labor Code, articles 23 and 24). After Law 2466 of 2025, an indefinite-term contract is the general rule; fixed-term contracts must be in writing and may not exceed four years including renewals (articles 46 and 47).

Executives in management, trust or handling positions are excluded from the maximum working-hours rules (article 162), and those performing management functions act as the employer’s representatives towards other employees (article 32). They remain covered by the rest of Colombian employment protection.

Clauses that prevent disputes

Pay, variable compensation and incentives

Salary is everything the employee receives as direct consideration for the work, including habitual bonuses and commissions (article 127). The parties may expressly agree that certain benefits are not salary (article 128), but for social security purposes such payments may not exceed 40% of total remuneration (Law 1393 of 2010, article 30). An annual performance bonus must therefore be drafted carefully: its conditions, frequency and nature determine whether it enters the base for benefits, severance and contributions.

For executives earning more than 10 monthly minimum wages, the parties may agree in writing on an “integral salary” that includes in advance all benefits and surcharges except vacation; it may not be lower than 10 minimum wages plus a benefits factor of at least 30% (article 132). Equity and long-term incentive plans offered by a foreign parent should be reviewed for their Colombian employment, tax and corporate treatment before they are granted.

Confidentiality and intellectual property

Employees must not disclose, without authorization, confidential information about their work or information whose disclosure could harm the employer (article 58, number 2). The contract should specify what is confidential, how it is protected, what is returned at termination and how long the duty lasts afterwards. For works created under an employment contract, the employer is presumed to acquire the economic rights to the extent needed for its ordinary activities at the time of creation, unless otherwise agreed, provided the contract is in writing (Law 23 of 1982, article 20, as amended by Law 1450 of 2011, article 28). Because the presumption has limits, the contract should expressly cover inventions, software and other creations.

Exclusivity during employment, and the post-employment non-compete problem

Exclusivity can be agreed for the duration of the employment (article 26). After termination, the position is different and often surprises foreign employers: under Colombian law, a clause by which an employee undertakes not to work in a given activity or for the employer’s competitors after the contract ends has no effect at all (article 44), and the historical exception for certain technical workers was struck down. A standard post-employment non-compete copied from another jurisdiction gives a false sense of protection.

Real protection comes from well-drafted confidentiality, intellectual property and return-of-information clauses and, where the executive is also a shareholder or sells an interest, from non-compete covenants in shareholder or purchase agreements, which are assessed under different rules and must be reasonable in scope, territory and duration.

Probation and targets

A probation period must be agreed in writing and may not exceed two months; for fixed-term contracts under one year it may not exceed one fifth of the term (articles 77 and 78). Targets and metrics should be written down from day one: they are the objective basis for evaluation and variable pay.

Termination

If the employer terminates an indefinite-term contract without just cause, statutory severance applies. For employees earning 10 or more minimum wages it equals 20 days’ salary for the first year of service plus 15 days for each additional year, pro rata; for fixed-term contracts, the salary for the remaining term (article 64). Any additional exit payment should state clearly how it relates to statutory severance.

Conversely, an executive on an indefinite-term contract may resign with 30 days’ notice, and Law 2466 of 2025 prohibits agreeing on any penalty for failing to give it (article 47). An orderly handover has to be built through incentives and succession planning, not through penalties the law no longer allows.

Foreign executives

A foreign executive needs a visa that allows work in Colombia (Ministry of Foreign Affairs Resolution 5477 of 2022), and the employer must report the start and end of the engagement to Migración Colombia through its foreign nationals reporting system (SIRE). Governing law, currency and the benefits carried over from another group entity should be settled in the offer.

What to review before signing

• The type and term of the contract under the rules in force after Law 2466 of 2025.

• The pay structure (fixed, variable, integral and incentives) and its effect on benefits and contributions.

• Confidentiality, intellectual property, exclusivity and return-of-information clauses, with no reliance on a post-employment non-compete.

• The conditions and cost of a possible termination.

• For foreign executives, immigration status and the employer’s reporting duties.

Conclusion

An executive’s contract is the first governance tool for a critical position. Drafting it under Colombian rules rather than an imported template protects the company and gives the executive clear rules from the first day. Our Employment team advises on these engagements; when a hire happens in the middle of a restructuring, read it together with what to review before reorganizing a business in Colombia.

Sources and legal references

• Labor Code (Código Sustantivo del Trabajo), articles 23, 24, 26, 32, 44, 46, 47, 58, 64, 77, 78, 127, 128, 132 and 162, as amended by Law 2466 of 2025.

• Law 1393 of 2010, article 30.

• Law 23 of 1982, article 20, as amended by Law 1450 of 2011, article 28.

• Ministry of Foreign Affairs Resolution 5477 of 2022 (visas).

This content is for general information and is not legal advice on any specific matter. Rules verified as of 25 September 2026.