Company registration in Colombia

Colombia is one of the largest economies in Latin America. It attracts investors with a high level of political stability. Starting a company in Colombia is profitable due to the state’s financial incentives and skilled labor. The country is considered one of the most business-friendly in the region. Foreigners can set up a company in Bogota or any other city in Colombia and take advantage of its convenient geographical location and attractive business conditions.

Advantages of registering a company in Colombia

• the possibility of creating companies with 100% foreign participation (except for certain types of activities);
• absence of minimum charter capital requirements;
• availability of free trade zones;
• ease of obtaining bank loans;
• availability of tax incentives to attract foreign capital.

Main forms of legal presence and doing business

An entrepreneur can buy a company in Colombia or register a new organization in these legal forms:

• general partnership ;
• limited partnership;
• limited liability company;
• corporation;
• simplified joint stock company;
• trust;
• branch office;
• representative office of a foreign company.

Company registration procedure

• Choose a unique company name by checking it in the Unified Business Register (Registro Único Empresarial – RUE);
• Obtain a Pre-RUT certificate, which allows the founder to register as a taxpayer in the future;
• Register a company in Colombia with the Chamber of Commerce and Industry;
• Obtain a unique company identification number (Número de Identificación Tributaria – NIT) from the Directorate of National Taxes and Customs (Dirección de Impuestos y Aduanas Nacionales – DIAN);
• Register the articles of association with the Chamber of Commerce and Industry;
• Open a bank account;
• Register with the social security system;
• Obtain the necessary permits and licenses to run the business.

Legislation and regulatory environment

Colombia’s legal system is based on civil law. The main normative acts that regulate the business sphere are the Law on Entrepreneurship and the Commercial Code.

A unique state body under the Ministry of Trade, Industry, and Tourism’s control supervises the organizations’ activities.

All private companies and branches of foreign companies in Colombia must prepare and submit annual financial statements.

Tax system

If there are no exemptions or special conditions, the company in Colombia will be taxed at these general rates:

• corporate tax – 35%;
• PIT – 39%;
• VAT – 19%;
• dividend tax – 0-20%;
• capital gains tax – 15%.

Taxation of non-residents depends on whether they have a branch or a permanent establishment in the country.

Opening a company in Colombia in the Free Trade Zone is advantageous for some activities. Here it is possible to reduce the income tax rate to 20%. VAT is not withheld from goods imported into the Free Trade Zone. Investments in construction are also subject to a particular method of taxation.

Open a business in Colombia: how Prifinance lawyers can assist

It would be difficult for an investor to set up a company in Colombia with perfect knowledge of its laws. For a successful business, it is necessary to understand the specifics of different legal forms and nuances of local taxation. Prifinance lawyers will advise on all key issues and help to buy a business in Colombia. We also assist clients in opening bank accounts, obtaining business visas, and providing accounting services for the company.