Options for registering companies in Colombia
Colombia is a key economy in South America, attracting foreign investment with a modern corporate structure and the flexible SAS. The general corporate tax rate is 35%, but this is reduced for entities operating in free zones.
Colombia offers international companies the following legal structures for establishing a local presence:
Simplified stock corporation (Sociedad por Acciones Simplificada - SAS)
- Colombian SAS is the most popular and flexible entity for foreign investors since its creation in 2008.
- It can be formed with a minimum of one shareholder (natural person or legal entity), allowing for 100% foreign ownership.
- Shareholders benefit from limited liability up to the amount of their capital contribution.
- The structure allows for highly flexible governance defined in the company's bylaws.
- It must appoint a legal representative (representante legal).
Corporation (Sociedad Anónima - SA)
- Colombian corporation is the traditional corporate structure used by large enterprises and financial institutions.
- Requires a minimum of five shareholders and has a complex and rigid governance structure.
- Liability is limited to the capital contributed by shareholders.
- The appointment of a board of directors and a statutory auditor (revisor fiscal) is mandatory.
- The capital amount required is variable. At least one-third of the subscribed capital must be paid up at the time of incorporation.
Branch office of a foreign company (Sucursal de Sociedad Extranjera)
- The branch is a permanent establishment and an extension of the foreign parent company, lacking separate legal personality.
- It is fully permitted to carry out commercial activities and generate revenue in Colombia.
- The foreign parent company retains full and unlimited liability for all the branch's operations and debts in Colombia.
- Requires a mandatory assigned capital and the appointment of a legal representative who must reside in Colombia.
- Must register with the Colombian Chamber of Commerce via a public deed.
Free zone company (Zona Franca - ZF)
- Companies that establish as industrial users of goods or services within designated Colombian free zones benefit from a special tax and customs regime.
- Subject to a corporate income tax rate of 20% when certain conditions are met.
- Exempt from VAT and tariffs on foreign goods introduced into the free zone.
- The company must meet specific investment and employment requirements defined by the free zone regulations.
To help you choose the right structure, we have created an ‘at a glance’ summary table for the common company types that outlines key differences in formation processes, requirements and timelines. It serves as a valuable resource for foreign companies looking to setup or expand a business in Colombia.
Comparison of the common types of companies in Colombia
Information verified against RUES (Single Business Registry), Colombia