Colombia has become one of Latin America's most attractive destinations for foreign investment, thanks to its growing middle class, strategic Pacific and Caribbean access, and improving business climate. But the legal and tax framework can feel overwhelming for anyone arriving from the US, Canada, UK, or Europe. This guide walks you through the entire process of incorporating a company in Colombia as a foreigner.
Why Choose an SAS?
The Sociedad por Acciones Simplificada (SAS) is by far the most popular legal entity for foreign entrepreneurs in Colombia. It offers:
- Limited liability protection for shareholders
- Flexible corporate governance rules
- No minimum capital requirement
- Can be formed by a single shareholder (including a foreign company)
- Fast registration — typically 5–10 business days
Step-by-Step Incorporation Process
- Choose your company name: Verify uniqueness in the RUES (Registro Único Empresarial y Social) database.
- Draft the articles of incorporation: Define shareholders, capital structure, corporate purpose, and governance.
- Authenticate documents: Foreign shareholders must have personal or corporate documents apostilled and translated into Spanish by a certified translator.
- Register at the Chamber of Commerce: File the articles at the Cámara de Comercio in the city where you'll operate.
- Obtain a NIT: Register with DIAN to receive your Tax Identification Number (NIT).
- Open a corporate bank account: Required to deposit initial capital and operate commercially.
- Register for IVA (if applicable): File as a responsable de IVA if your sales exceed the legal threshold.
- Register employees with social security: SENA, ICBF, Caja de Compensación if you hire local staff.
Documents You'll Need
- Passport (apostilled copy for non-resident founders)
- Foreign corporate documents (if parent company is a shareholder) — apostilled & translated
- Colombian cedula or cédula de extranjería (if you reside in Colombia)
- Proof of address in Colombia for the company's registered office
- Signed articles of incorporation (estatutos sociales)
Costs to Expect
- Chamber of Commerce registration fees: ~COP 500,000–1,500,000 (depending on capital)
- Certified translation services: ~USD 100–300
- Apostille / notarization costs in home country: varies
- Legal/accounting fees: varies by provider
Can I Form a Company Without Being in Colombia?
Yes! With a notarized power of attorney (poder notarial), a legal representative based in Colombia can complete the entire process on your behalf. This is a common arrangement for foreign investors who wish to operate remotely.
What About a Foreign Branch (Sucursal)?
If your parent company already exists and you want to expand into Colombia, you can register a Sucursal de Sociedad Extranjera. This is a branch of your foreign company — not a separate legal entity. Profits sent home are subject to an additional 20% remittance tax on top of corporate income tax, which makes branches less tax-efficient than an SAS in most scenarios.
Common Mistakes to Avoid
- Using non-certified translators (DIAN and Chamber of Commerce require sworn translators)
- Skipping the Formulario Cambiario when remitting capital from abroad
- Not registering for IVA when required, leading to retroactive penalties
- Choosing a corporate purpose that's too narrow and limiting future business activities