Guide for foreign entrepreneurs and companies
Doing business in Colombia.
What you need to set up a company, stay compliant with the tax authority, hire people and sell to the government in Colombia, explained in plain English by the lawyers and accountants who do it every day.
Setting up a company, step by step
Most foreign entrepreneurs operate through an S.A.S. (simplified joint-stock company). These are the usual steps.
Define the structure
Shareholders, capital, corporate purpose and who will be the legal representative. The S.A.S. limits each shareholder's liability to their contribution (Law 1258 of 2008).
Draft the bylaws
The S.A.S. can be created by private document, so the bylaws can be tailored to how you want to run the company.
Register with the Chamber of Commerce
The company is registered in the commercial registry of the city where it will be domiciled.
Get the RUT tax ID
The DIAN assigns the company its tax ID and defines its tax obligations from the start.
Bringing money from abroad?
Foreign investment generally has to be registered with the Banco de la República. See how money moves in and out of Colombia.
S.A.S. or branch of a foreign company?
These are the two most common ways for a foreign company to operate in Colombia. The right choice depends on how much risk you want the parent company to carry and how you plan to grow.
| S.A.S. | Branch of a foreign company | |
|---|---|---|
| Legal nature | A separate Colombian legal entity | An establishment of the foreign parent, not a separate entity |
| Liability | Limited to each shareholder's contribution | The parent company answers for the branch's obligations |
| Shareholders | One or more individuals or companies | Belongs entirely to the parent company |
| Corporate purpose | Can cover any lawful business activity | Must be defined and match the parent's activities |
| Statutory auditor | Only above legal size thresholds | Always required |
| Documents from abroad | Shareholder documents, legalized or apostilled | Parent company documents, legalized or apostilled, and a resolution to open the branch |
Most foreign entrepreneurs and mid-sized investors choose the S.A.S. for its flexibility and limited liability. We review your case before you decide.
Keeping your company in good standing
Setting up the company is only the start. Every Colombian company has corporate obligations each year, and missing them can lead to fines from the Superintendence of Companies of up to 200 monthly minimum wages.
Renew the commercial registration
Every year, within the first three months, with the Chamber of Commerce.
Hold the annual shareholders' meeting
To approve the financial statements and decide on profits, usually in the first quarter.
File the financial statements
Deposit them with the Chamber of Commerce after approval and report them to the Superintendence of Companies when required.
Report beneficial owners and AML policies
Companies must report their beneficial owners to the DIAN, and those above certain thresholds must run an anti-money laundering system (SAGRILAFT).
The taxes your company will deal with
Colombia has national taxes, collected by the DIAN, and municipal taxes, collected by each city. Which ones apply depends on your activity and size.
Income tax
An annual return on the company's profits, filed with the DIAN.
VAT (IVA)
Charged on taxable sales and services, with periodic returns.
Withholding tax
Your company withholds tax on certain payments and files monthly returns.
Municipal tax (ICA)
The industry and commerce tax, filed in each city where you operate.
Information reports
Annual reports to the DIAN on payments, income and third parties.
Electronic invoicing
Invoices are issued electronically under DIAN rules.
Missing a deadline usually means a penalty. That is why we keep your tax calendar and remind you before each filing. See our accounting and tax service.
Moving money in and out of Colombia
This is where foreign investors most often get surprised. Planning these flows from the start avoids double taxation and exchange penalties.
Registering your investment
Capital brought from abroad generally has to be channeled through the foreign exchange market and registered with the Banco de la República. That registration is what later lets you send profits and capital back home.
Paying your parent company or foreign suppliers
Payments abroad for services, royalties or management fees are usually subject to Colombian withholding tax. Under domestic law, technical services, consulting and software are generally taxed at 20%, and management fees at 33%. A tax treaty may reduce these rates.
Sending dividends to foreign shareholders
Dividends paid to foreign shareholders are subject to a dividend tax withheld in Colombia, on top of the company's income tax. Treaties and how profits are structured can change the final cost, so it is worth planning before the first distribution.
Colombia has signed double taxation treaties with several countries. We check whether one applies to you and what documents you need to use it.
Hiring in Colombia
An employee costs more than the agreed salary. Plan for these items from the first hire.
What you pay on top of salary
- Social security: pension, health and occupational risk insurance
- Payroll levies for family welfare and training institutions
- Mandatory benefits: service bonus, severance fund and its interest, and paid vacation
- Transport allowance and work clothing for lower salaries
- Surcharges for overtime, night work, Sundays and holidays
What protects you
Written employment contracts, internal work rules, an occupational health and safety system, and a clear procedure before any dismissal. Dismissal without just cause carries a severance set by the Labor Code.
Employee cost calculatorSeverance calculatorProtect your brand before you launch
A trademark registered in your home country does not protect you in Colombia. Rights are granted by the Superintendence of Industry and Commerce (SIC), and the first to file usually wins. Registering before you invest in signage, packaging and marketing avoids having to rebrand later.
How we do it
- Availability search before you commit to a name
- Filing with the SIC in the right classes
- Follow-up until the registration is granted
If a dispute comes up
Colombia offers several ways to resolve disputes, and the right one is often decided when the contract is signed.
Conciliation and settlement
Faster and cheaper; often a required first step before going to court.
Arbitration
Agreed in the contract. Colombia recognizes international arbitration and foreign arbitral awards.
Courts
Ordinary courts for commercial and corporate disputes; administrative courts for disputes with the DIAN and public entities.
Selling to the Colombian government
Public entities publish their tenders on SECOP II. To bid, companies usually need to be in the bidder registry (RUP) and meet legal, financial and technical requirements set in each tender.
Find the right tenders
Sofía, our AI assistant, checks SECOP II every day for your sector.
Read the fine print
A consultant checks each requirement against your company.
File a compliant bid
We prepare the documents and file only with your approval.
See how it works
Common questions from foreign clients
Can a foreigner own 100% of a Colombian S.A.S.?
An S.A.S. can be created by one or more natural or legal persons, and Colombian law does not require a local partner for it. Some regulated activities have special rules, so we confirm it for your case in the consultation.
Are documents in Spanish?
Yes. Filings with the Chamber of Commerce, the DIAN and public entities are in Spanish. We prepare them and explain each one to you in English.
Do I need to travel to Colombia?
We work remotely. Some steps may require signed documents from you; we tell you which ones and how to send them before we start.
How are your fees set?
A fixed fee in Colombian pesos, agreed in a written proposal before we start. The first 30-minute consultation is free.
This guide is general information and does not replace advice on your specific case.
Planning your move into Colombia?
Tell us about your project. Camila or Kevin will answer you in English, and the 30-minute consultation is free.