Company Formation in Colombia

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Need to open a company or form a corporation in Colombia, but not sure where to start? Colombia Law Connection are here to help!


What are the different types of companies in Colombia that can be opened?

In Colombia, various legal entities can be established for business purposes. The choice will depend on the nature of the business, the number of partners or shareholders, tax considerations, and other specific needs. Here are some of the main types of companies:

Sociedad por Acciones Simplificada (SAS) - Simplified Stock Company:

  • Can be incorporated by one or multiple shareholders.
  • Shareholders have limited liability up to their capital contribution.
  • No minimum capital requirements.
  • Simplified process for incorporation and operation.

Example: An entrepreneur wants to launch a new tech startup in Colombia. She opts for the SAS structure because it offers flexibility and doesn't require a fixed number of shareholders or a high minimum capital.

Sociedad Anónima (SA) - Corporation:

  • Must have at least five shareholders.
  • Minimum capital required varies based on the type of activity.
  • Liability is limited to the amount of capital contributed.

Example: A group of investors plans to set up a large manufacturing plant in Bogotá. They decide to establish an SA due to its structure, which is suitable for larger businesses with multiple shareholders.

Sociedad de Responsabilidad Limitada (Ltda) - Limited Liability Company (LLC):

  • Formed by 2 to 25 partners.
  • Liability is limited to the capital contribution.

Example: Three friends want to open a boutique coffee shop in Medellín. They go for the Ltda structure as it aligns with their vision of having a closely-held business with shared responsibilities.

Sociedad Colectiva - General Partnership:

  • All partners have unlimited liability.

Example: Two family members decide to start a local crafts business together. Trusting each other completely and not concerned about taking on joint liability, they choose a Sociedad Colectiva.

Sociedad Comandita Simple (SCS) and Sociedad Comandita por Acciones (SCA) - Limited Partnership and Partnership by Shares:

  • Partnerships with two types of partners: active (unlimited liability) and silent (limited liability).

Example: An individual with a business idea but limited funds partners with an investor. The individual becomes the active partner in a SCS, managing daily operations, while the investor is a silent partner, only contributing capital.

Sucursal de Sociedad Extranjera - Branch of a Foreign Company:

  • A foreign company can establish a branch in Colombia.

Example: A European pharmaceutical firm wants to expand its operations in the Latin American market and decides to establish a branch in Colombia, using the Sucursal de Sociedad Extranjera structure.

Entidad Sin Ánimo de Lucro (ESAL) - Non-Profit Entity:

  • Used for social, educational, scientific, and other non-commercial purposes.

Example: A group of individuals wants to start an organization to promote environmental conservation in the Amazon region. They set up an ESAL to manage donations and drive their non-profit initiatives.


Can a foreigner open a company in Colombia without having a visa to live in the country?

Yes, a foreigner can establish a company in Colombia without having a visa to live in the country. Colombia has an open investment policy that encourages foreign investment. There are no specific nationality requirements for shareholders or directors of a Colombian company.

However, there are some key points to consider:

  • Company Establishment: While foreigners can establish a company without a resident visa, they may need to grant a power of attorney to a local representative if they are not in Colombia to sign documents or manage certain procedural aspects of the company's formation.
  • Operating in Colombia: If a foreigner plans to live in Colombia to manage the business or perform work-related tasks, then they will likely need an appropriate visa. For instance, an investor visa or a business owner visa might be relevant in such cases.
  • Bank Accounts: Opening a corporate bank account might require the foreign owner to have certain documentation. While a visa might not be required, some banks may ask for other documents that prove the individual's identity and connection to the company.
  • Taxation: Establishing a company in Colombia will also come with tax obligations. It's crucial to be aware of the taxation system, double-taxation agreements, and any specific responsibilities for foreign-owned entities.
  • Legal & Procedural Nuances: There might be certain procedural or legal nuances related to foreign ownership, so it's always recommended to work with a local attorney who specializes in business and commercial law.

While a visa isn't necessary to establish a company in Colombia, it becomes relevant if the foreigner intends to reside in or frequently travel to Colombia for business operations.


How can a foreigner operate a company in Colombia if they are overseas?

Operating a company in Colombia as a foreigner from overseas is feasible, especially with the advancements in technology that enable remote management. Here are some steps and considerations to help a foreigner operate a Colombian company from abroad:

Legal Representative: Appoint a local legal representative or "representante legal" in Colombia. This person will have the legal authority to act on behalf of the company for various legal and operational matters. This appointment is mandatory for companies in Colombia.

Power of Attorney: If you're not present in Colombia to sign certain documents or handle specific proceedings, you can grant a power of attorney ("poder" in Spanish) to a local individual or a legal firm. This allows them to act on your behalf for various legal matters.

Regulatory Compliance: Ensure your company remains compliant with local Colombian regulations and laws, especially those related to foreign business ownership and reporting. It's essential to be updated on changes in regulations, licenses, and permits.

Banking & Financial Management: Establish a corporate bank account in Colombia. While this is primarily for operational convenience, some banks may have specific legal requirements for foreigners. Ensure you are compliant with all banking and financial regulations, especially those related to foreign-owned entities.

Taxation: Adhere to Colombian tax obligations. This includes regular filings and payments based on the company's activities. Engage a local tax consultant or accountant who is familiar with the Colombian tax system and can ensure compliance.

Contractual Agreements: All contracts with employees, partners, suppliers, and clients should be legally sound and compliant with Colombian law. It's advisable to work with a local attorney when drafting and reviewing these contracts to ensure they are enforceable and protect the company's interests.

Data Protection & Privacy: Ensure your company is compliant with Colombian data protection laws, especially if you handle customer or client data.

To efficiently navigate these legal aspects, it's highly recommended to engage a local attorney who specializes in Colombian business and commercial law such as Colombia Law Connection. They can provide guidance tailored to your specific needs and ensure that the company remains compliant with all relevant laws and regulations.


What are the required documents to open a company in Colombia as a foreigner?

Opening a company in Colombia as a foreigner involves several legal steps and the submission of specific documents. Here's a general overview of the required documents:

  • Passport: A clear copy of the foreigner's valid passport. Some notaries or entities might also request an apostilled or legalized copy.
  • Foreign Investment Registration: Before making any initial capital contributions, foreigners must register the foreign investment with the Banco de la República (Central Bank). After making the capital contribution, the foreigner will receive a Certificate of Foreign Direct Investment.
  • Power of Attorney: If the foreign investor is not in Colombia to handle the incorporation proceedings directly, a power of attorney (duly apostilled or legalized) should be granted to a representative in Colombia.
  • Business Name Verification: Before registering a company, you need to ensure the chosen business name is available. This involves a name search and reservation with the local Chamber of Commerce.
  • Pre-incorporation Agreement (if applicable): This document outlines the initial agreement between partners or shareholders. It's not always mandatory but can be useful, especially if there are multiple investors involved.
  • Articles of Incorporation: This document specifies the nature of the business, its purpose, duration, capital structure, and other essential details. It must be registered with the Chamber of Commerce.
  • Registered Office Address: Proof of a physical address for the company's registered office in Colombia. This could be a rental agreement, utility bill, or other documentation proving the location of the business.
  • Tax Registration: After registering with the Chamber of Commerce, the company must obtain a Tax Identification Number (NIT) from the Dirección de Impuestos y Aduanas Nacionales (DIAN), which is the national tax authority.
  • Bank Account: While not a document for the company's incorporation, having a corporate bank account is a practical necessity. Banks may have their own specific requirements for foreigners, such as additional forms or proof of the source of funds.
  • Additional Sector-Specific Documents: Depending on the business's nature, there might be additional licenses, permits, or certifications required. For instance, a restaurant would need health and sanitation permits, while a tour operator might need specific tourism licenses.

This list provides a general overview, and the exact requirements may vary based on the type of company being established, changes in Colombian legislation, or specific circumstances of the foreign investor. Given the complexities involved, it's strongly advised to work with a Colombian attorney such as Colombia Law Connection who specializes in company formation and foreign investment. We can offer guidance tailored to the specific situation and ensure that all legal requirements are met.


Is there a minimum investment amount required to open a company in Colombia?

In Colombia, there is no fixed minimum investment amount established by law for foreigners or Colombians alike. However, there are some nuances:

Sociedad por Acciones Simplificada (SAS) - Simplified Stock Company: This is one of the most popular forms of businesses for both locals and foreigners. For the SAS, there is no specific minimum capital requirement. The shareholders can freely determine the amount.

Sociedad Anónima (SA) - Corporation: For SA companies, there are capital requirements, but they aren't based on a fixed sum. Instead, they relate to having a minimum of five shareholders and the ability to distribute the capital into shares.

Foreign Investment Registration: While there's no minimum amount set for establishing a company, if you're planning to register your investment as foreign capital (which can offer certain benefits), there might be a minimum amount established by the Banco de la República (Central Bank) for the purpose of this registration. It's essential to check the current regulations with the Central Bank or consult with a local attorney.

Sector-Specific Requirements: Depending on the industry or sector in which the company operates, there might be specific capital or investment requirements. This is particularly true for regulated industries like finance, insurance, or telecommunications.

Operational Practicalities: While the law might not mandate a minimum capital requirement for certain company types, it's crucial to ensure that the initial capital is sufficient for the company's intended operations, covering startup costs, operational expenses, and other foreseeable liabilities.

It's always recommended to consult with a local attorney or business consultant such as Colombia Law Connection when establishing a company in Colombia. We can provide up-to-date information on any potential changes to regulations, guide you through the incorporation process, and ensure that you meet all legal requirements.


Does the company have to be registered with the DIAN or other government entity in Colombia before it can operate?

Yes, in Colombia, after incorporating a company, you must register it with several government entities, including the DIAN (Dirección de Impuestos y Aduanas Nacionales), which is the country's national tax and customs authority. Here's a breakdown of the registration process:

Chamber of Commerce: Before you can operate, the company needs to be registered with the local Chamber of Commerce (Cámara de Comercio). This registration includes details about the company, its purpose, shareholders, legal representatives, and other essential information.

DIAN - Tax Registration: After registering with the Chamber of Commerce, the next step is to obtain a Tax Identification Number (NIT - Número de Identificación Tributaria) from the DIAN. The NIT is essential for all tax-related matters, including invoicing, filing tax returns, and other fiscal obligations.

Municipal Permits: Depending on the location and nature of the business, you may also need to obtain licenses or permits from the local municipality. This can include health permits, zoning permits, or operational licenses.

Sector-Specific Registrations: Depending on the type of business, there might be other government entities or regulatory bodies you'll need to register with. For instance, if you're in the financial sector, the Superintendencia Financiera (Financial Superintendency) might be relevant. Similarly, businesses in the health sector might require accreditation or registration with health authorities.

Employer Registration: If your company is going to hire employees, you'll also need to register with various entities related to labor and social security, including health insurance, pension funds, and workers' compensation systems.

Foreign Investment Registration: If the capital for the company is coming from abroad, the foreign investment should be registered with the Banco de la República (Central Bank) to ensure the right to remit profits abroad and repatriate capital if needed.

Without these registrations, especially with the Chamber of Commerce and DIAN, a company would not be legally recognized and could face significant penalties or legal complications.


Why partner with Colombia Law Connection for my company formation in Colombia?

Setting up and operating a business in Colombia can be both an exciting and complex endeavor. With Colombia Law Connection by your side, you're not just hiring a law firm; you're partnering with a dedicated team who speaks your language and understands your perspective. Here's how we can support you:

Expert Guidance on Company Formation: As you venture into Colombia's vibrant business environment, our team will provide step-by-step guidance on selecting the best type of company for your needs, be it an S.A.S., S.A., or any other legal structure.

Comprehensive Legal Documentation: From drafting articles of incorporation to shareholder agreements, we ensure all your documents are accurately prepared and compliant with Colombian law.

Streamlined Registration Process: With our knowledge of local procedures and networks, we help expedite business registration with the Chamber of Commerce, ensuring you're operational in the shortest time possible.

Regulatory and Compliance Advisory: Colombia's legal and business landscape can be intricate. We'll keep you updated on local regulations, helping you maintain compliance and avoid costly penalties.

Liaison with Local Authorities: No need to navigate the maze of government departments and officials. We'll act as your representative, ensuring smooth interactions with tax offices, municipal agencies, and other regulatory bodies.

Customized Solutions: Every business is unique, and our services are tailored to fit your specific needs. Whether you're a solo entrepreneur or representing a multinational corporation, we've got you covered.

Transparent Communication: As native English speakers, we eliminate the language barrier. Our team provides clear explanations and timely updates, ensuring you're always in the loop.

Cultural Insight: Beyond just legal guidance, we offer insights into Colombia's business culture. Our expertise ensures you navigate not only the legalities but also the subtle cultural nuances crucial for successful integration.

By partnering with Colombia Law Connection, you're ensuring a seamless transition into Colombia's business world. We pride ourselves on bridging the gap between your goals and Colombia's vast opportunities. Trust in our expertise, and let's achieve your Colombian business dreams together.


What is the step by step process to open a company in Colombia?

Registering a company in Colombia involves several steps, which can be detailed as follows:

Step 1: Define the Business Structure

  • Choose a Legal Structure: Common structures include the Sociedad Anónima (S.A.), Sociedad por Acciones Simplificada (S.A.S.), and Sociedad de Responsabilidad Limitada (Ltda.).
  • Considerations: Factors like the number of shareholders, capital requirements, and management structure will influence your choice.

Step 2: Conduct a Name Search and Reservation

  • Name Search: Check with the Colombian Chamber of Commerce for the availability of your desired business name.
  • Reservation: Once a unique name is found, reserve it. This reservation typically holds for a few months.

Step 3: Draft and Notarize Company Bylaws

  • Draft Bylaws: Prepare the bylaws of the company, detailing the business purpose, shareholders, management, and operational rules.
  • Notarization: Get these bylaws notarized at a local notary office.

Step 4: Register with the Chamber of Commerce

  • Registration Application: Submit the notarized bylaws and other required documents, such as identification of shareholders and legal representatives, to the Chamber of Commerce.
  • Fees: Pay the registration fee, which varies based on the company's initial capital.

Step 5: Obtain a Tax Identification Number (NIT)

  • Register with DIAN: Apply for a NIT at the Colombian Tax Office (DIAN).
  • Documentation: Provide the company bylaws, a copy of the Chamber of Commerce registration, and identification of the legal representative.

Step 6: Open a Corporate Bank Account

  • Choose a Bank: Select a bank and open a corporate bank account.
  • Deposit Initial Capital: Deposit the initial capital as stated in the bylaws.

Step 7: Register for Social Security and Parafiscal Payments

  • Registration: Enroll your company in the social security system, including health insurance, pensions, and professional risk.
  • Employee Considerations: If you have employees, ensure their registration in these systems as well.

Step 8: Obtain Required Permits and Licenses

  • Industry-Specific Licenses: Depending on your business type, additional permits may be required (e.g., health permit, environmental license).
  • Local Regulations: Check with local authorities for any specific permits related to your location or business activity.

Step 9: Set Up Accounting and Tax Reporting

  • Hire an Accountant: It's advisable to hire a local accountant familiar with Colombian tax laws.
  • Tax Compliance: Ensure compliance with Colombian accounting standards and tax reporting requirements.

Step 10: Periodic Updates and Renewals

  • Renew Registrations: Annually renew your business registration with the Chamber of Commerce.
  • Update Information: Keep all company information, such as address and legal representative details, current with the Chamber of Commerce and DIAN.

We are here to help

Frequently asked questions about registering a company in Colombia

? What are the legal requirements for opening a company in Colombia?

? How do I choose the right business entity for my company in Colombia?

? What is the process for registering a company in Colombia?

? What are the tax implications for a foreigner starting a business in Colombia?

? Are there any specific permits or licenses required to operate a business in Colombia?

? What is the minimum investment required to start a business in Colombia?

? How can I hire employees for my company in Colombia?


Having your required documentation legalized outside of Colombia

If you are outside of Colombia while making an application, you may be required to have documents apostilled or legalised. For assistance with having documents legalised in your country for use in Colombia, visit one of the Colombian embassies below to find consulates in your area. If your country is not listed below, visit to see if there are options available in your country.

United States - Embassy in Washington, D.C.


Phone: +1 202 387 8338

China - Embassy in Beijing


Phone: +86 10 6532 3377

Russia - Embassy in Moscow


Phone: +7 495 797 8519

Canada - Embassy in Ottawa


Phone: +1 613 230 3760

Brazil - Embassy in Brasília


Phone: +55 61 3214 8900

Australia - Embassy in Canberra


Phone: +61 2 6273 2090

India - Embassy in New Delhi


Phone: +91 11 4320 2100

Germany - Embassy in Berlin


Phone: +49 30 2639630

France - Embassy in Paris


Phone: +33 1 42 65 46 08

United Kingdom - Embassy in London


Phone: +44 20 7589 9177


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