Setting up a company in Colombia as a foreigner

Starting a business in Colombia as a foreigner offers several benefits, both for the business owner and the country.

It's not surprising that many foreign entrepreneurs seek to establish businesses in other countries, especially in Latin America.

The rapid economic growth in these countries presents a significant opportunity for business growth and expansion.

With this in mind, Colombia has facilitated the process of establishing foreign companies, streamlining procedures while maintaining regulatory compliance. For more information on different visa types and immigration procedures, consult our complete guide on Colombia Migration: Understanding Visa Types.

This article explains how to start a business in Colombia as a foreigner and what to consider during the process.

Key Aspects of Starting a Business in Colombia as a Foreigner

Before starting a business in Colombia as a foreigner, you must consider three key aspects that will influence the entire process:

• Defining your immigration status.
• Choosing the type of company to create.
• Legalizing foreign investment.

Each aspect is explained below.

Defining Your Immigration Status

Generally, any national of a country can legally establish a business in the country where they are located.

However, as a foreigner, you must have the correct immigration permits to start a business in Colombia.

You will need a valid Type M visa for business partners or owners and a foreign identity card (cédula de extranjería), which is obtained once you have the Type M visa, to carry out the procedures in your own name.

To learn more about the Type M visa for business partners or owners, read our blog here.

Choosing the Type of Company to Create

Once you have defined your immigration status, the next step is to choose the type of company to create in Colombia.

In Colombia, there are several types of companies: Sociedad Anónima (S.A.), Sociedad por Acciones Simplificadas (S.A.S.), and Sociedad de Responsabilidad Limitada (LTDA.).

We recommend creating an S.A.S. because the process is simple and allows you to start a business in Colombia quickly.

To learn about the benefits of establishing your company as an S.A.S. and the creation process, we invite you to read our blog here.

The steps to follow are:

1. Consult and select the company name.
2. Prepare the necessary documents.
3. Register the company.
4. Open a savings account.
5. Obtain the definitive mercantile registry.
6. Obtain billing resolution and digital signature.

Legalizing Foreign Investment

As part of the S.A.S. company creation process, you must open a savings account to deposit the funds the company will use.

To prevent money laundering, only Colombian nationals or individuals with a foreign identity card (cédula de extranjería) can open a bank account in our country.

Therefore, you may need to travel to Colombia to complete this procedure. However, you can also authorize a lawyer to act as your representative.

Once the account is open and the money is deposited, it must be legalized with the Banco de la República (Banrep) within three months of the money entering Colombia.

In Summary

Starting a business in Colombia as a foreigner is entirely feasible, provided you meet the requirements mentioned in this blog.

While this process can be done independently, it is advisable to seek guidance from lawyers specializing in immigration law and business creation.

This also represents an advantage, as some procedures require the entrepreneur's presence (such as obtaining the RUT and opening a bank account), and having a lawyer in Colombia helps avoid this travel.

If you are interested in starting a business in Colombia as a foreigner, Servicio Legal can help.

Contact us, and we will advise you throughout the process.