Overview of Colombia's investment environment
Colombia is Latin America's third-largest economy, boasting stable growth and an increasingly robust investment environment. As a member of the Pacific Alliance, Colombia offers foreign investors a strategic gateway to the Latin American market, with investor protection levels exceeding even those in developed countries like the United States and Germany.
Key Benefits
- Stable economic growth: GDP has grown by more than 3% annually over the past decade, demonstrating strong economic resilience
- Comprehensive investment protection: a comprehensive legal system, with foreign investors enjoying national treatment
- Rich in natural resources: abundant reserves of oil, coal, gold and other mineral resources
- Strategic location: connecting Central America and South America, with both the Pacific and Atlantic coasts
- A significant demographic dividend: 50 million people, a young workforce with increasing educational attainment
China-Colombia economic and trade relations
China is Colombia's second-largest trading partner, and bilateral trade continues to grow. With the advancement of the Belt and Road Initiative, more and more Chinese companies are choosing to invest in Colombia, particularly in energy, infrastructure, and telecommunications. The prospects for China-Colombia cooperation are broad.
Comparison of Company Types
Colombia offers a variety of corporate forms for foreign investors. The most popular is the SAS (Simplified Stock Corporation), which combines flexibility and simplicity and is the preferred choice for most foreign investors:
| Compare Projects | Simplified Stock Corporation (SAS) | Limited Liability Company (Ltda.) | Joint Stock Company (SA) |
|---|---|---|---|
| Minimum number of shareholders | 1 person | 2-25 people | 5 people |
| Registered capital | No minimum requirement | No minimum requirement | No minimum requirement |
| Establishment time | 5-10 days | 10-15 days | 15-20 days |
| Management flexibility | Highest | Medium | Lower |
| Legal liability | Limited Liability | Limited Liability | Limited Liability |
| Applicable situations | Most foreign investment | Small joint ventures | Large enterprises, listed companies |
Recommendations
For Chinese investors planning long-term development in Colombia, we strongly recommend the SAS (Simplified Stock Company) format. SAS offers advantages such as ease of establishment, flexible management, and efficient decision-making, making it particularly suitable for foreign investors. For specific projects or temporary operations, a branch office may be considered.
Registration requirements
Basic Requirements
- Shareholder identity: natural persons or legal persons, no nationality restrictions
- Legal representative: must be a colombian resident or a foreigner holding a work visa
- Registered address: must have a physical office address in Colombia
- Company Name: availability check is required to ensure uniqueness
- Business scope: can engage in any legal business activities
Required documents
Foreign investors need to prepare the following documents to establish a Colombian company:
- Shareholder identification documents (passport or company certificate of existence)
- Power of attorney (if entrusting a local agent to handle the matter)
- Draft Articles of Association
- Shareholder resolution (if the shareholder is a company)
- Letter of acceptance of appointment by the legal representative
- Auditor's letter of acceptance of appointment (if required)
Note:All foreign documents must be apostille or legalized by the Colombian Consulate. Chinese documents must be notarized and apostilled.
Registration Process
Prepare power of attorney (1-2 days)
Draft and sign a power of attorney to the local legal representative
Company name search (1 day)
Confirm the availability of the selected company name
Drafting of company articles (1 day)
Lawyers drafting company charters in accordance with Colombian law
Notarized signing (1 day)
Sign the Articles of Association at a notary public
Chamber of Commerce registration (1-2 days)
Submit a registration application to the Chamber of Commerce and pay the fee
Tax ID application (1 day)
Obtain NIT tax number and register with DIAN tax bureau
Time and cost
Registration Time
- SAS simplified joint stock company: 5-10 working days
- Limited Liability Company: 10-15 working days
- Joint-stock company: 15-20 working days
- Branches: 15-20 working days
Cost Structure
Colombian company registration fees mainly include:
- Chamber of Commerce registration fee: calculated based on 0.7% of registered capital
- Notarization fee: approximately US$200-500
- Stamp duty: 0.3% of registered capital
- Document authentication fee: approximately US$300-600 per copy
- Notarization fees: determined by the scope and complexity of the service
Registered capital description
Colombian law does not require a minimum registered capital, but it is recommended to set a reasonable amount based on actual business needs. Registered capital can be paid in installments: a limited liability company must pay the full amount upon registration, while a joint-stock company must pay at least one-third of the subscribed capital and 50% of the paid-in capital.
Post-registration matters
After the company is successfully registered, the following important matters need to be completed:
1. Open a bank account
- Choosing the Right Colombian Commercial Bank
- Provide company registration certificate and NIT tax number
- The legal representative must be present in person to handle the matter
- Foreign exchange accounts require special application
2. Foreign investment registration
- Registration of foreign investments with the Central Bank of Colombia
- Through an authorized bank or foreign exchange intermediary
- Profits and capital can be remitted legally after registration
- Enjoy protection for foreign investors
3. Social security and labor registration
- Registering with the Integrated Social Security System
- Apply for an employer registration number
- Pay social security, medical care and pensions for employees
- Comply with Colombian labor laws
4. Accounting and compliance requirements
- Establishing books of accounts in compliance with Colombian accounting standards
- Monthly tax returns
- Annual financial statements must be audited (for large enterprises)
- Keep accounting records for at least 10 years
Taxation Points
Main taxes
- Corporate income tax: 32% (starting from 2020)
- Value Added Tax (IVA): 19%
- Financial transaction tax: 0.4% (bank transactions)
- Industrial and Commercial Tax (ICA): 0.2%-1.4% (depending on the city and industry)
- Dividend tax: 7.5% domestic, 10% foreign
Tax incentives
Colombia offers tax incentives to specific industries and regions:
- Free trade zone: Corporate income tax 20% (general enterprises 32%)
- Large investment projects: eligible for special tax rates
- Innovation and technology: Tax credits available for R&D spending
- Renewable energy: Investments can enjoy accelerated depreciation
Tax compliance reminders
Colombia's tax system is complex and has strict compliance requirements. We recommend hiring a local professional accountant to ensure the accuracy and timeliness of your tax returns. Shishi Lawyers can help you establish a comprehensive tax management system.