How to Start a Business in Colombia

Starting a business in Colombia may sound more complicated than it actually is, but the bureaucratic process involved can cause complexities or waste valuable time. If you have the right advisor, like H&CO, the process will be easier.

Colombia presents an exceptional investment opportunity, establishing itself as a prime destination for business. Its favorable business environment, skilled workforce, and robust potential for exports make it a standout choice. With attractive investment incentives, a strategic geographic location, and government exemptions from income tax for tourism projects and late-yield crops, Colombia is undeniably poised for growth and success.

We highly recommend our guide on Doing Business in Colombia.

What are the different business structures in Colombia?

As in all parts of the world, choosing the right legal structure will determine how your company will be taxed in the country and the responsibilities of each shareholder involved.  

1. S.A.S. This is the most common type of company, known in Spanish as a "Sociedad por Acciones Simplificadas". It is a simple and flexible organizational structure for both small and large businesses. The required number of partners is one or more individuals or legal entities.
2. S.A.: A limited company is a type of limited company that requires a minimum of five shareholders to exist. This business structure is ideal for structuring a large company.
3. E.U.: This type of business is one in which there is only one owner (sole proprietorship). The employer's liability is limited to the assets he or she contributes, unless the business is used to defraud the law or harm third parties, in which case liability falls on the owner's personal assets.

It's important to consult with Colombian professionals to guide you in the best choice based on your interests.

What do I need to know to start a business in Colombia?

As a foreigner, to start a business in Colombia, you need to clarify a few essential aspects:

Select the Legal Structure or company type for the organization

Choose the most appropriate legal structure for your business in Colombia. Consider options like SAS (Simplified Stock Company), SA (Stock Corporation), or EU (Sole Proprietorship) that align with your operational needs and liability requirements. Making the right choice is crucial for your success.

Draft the company bylaws

Create a comprehensive legal document that clearly outlines the rules, structure, and operations of your company, ensuring strict compliance with Colombian law.

Obtaining the NIT (Tax Identification Number, RUT)

The RUT is the Tax Identification Number (NIF, its acronym in Spanish) in Colombia. Register with the tax authorities to obtain your company's NIT, which is required for any tax procedure.

Register your company with the Chamber of Commerce

Officially register your company with the local Chamber of Commerce to legally operate and conduct commercial activities in Colombia.

Open a bank account

Opening a corporate bank account in the company's name will allow for financial transactions and ensure proper management of company funds.

Register the Foreign investment at Banco de la República

If foreign capital is involved, report the investment to the Central Bank of Colombia, Banco de la República, to comply with foreign investment regulations.

How much does it cost to register my company in Colombia?

Planning for your company registration costs ensures a smooth setup and helps you avoid unexpected financial challenges.

• Registration with the Chamber of Commerce: it can vary between COP 30,000 and 150,000.

• Creation of a limited company: Approximately 2.5 million Colombian pesos (COP).

• Other administrative costs and attorney fees.

How We Can Help Your Company Expand Globally

We specialize in helping companies successfully expand their operations across borders. With a presence in over 29 countries and a deep understanding of international tax, legal, and regulatory frameworks, we offer comprehensive support to businesses seeking global growth.

Our team can guide you through every step of your expansion into Colombia—from entity formation and tax registration to ongoing accounting, payroll, and legal compliance. We also provide strategic planning to ensure your operations align with both local regulations and global objectives.