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DOING BUSINESS IN COLOMBIA

Since 2003, Healy Consultants Group PLC has assisted our Clients with business registration in Colombia. Our services include i) Colombia business registration ii) government license registration iii) Colombia corporate bank account opening services iv) employee recruitment v) visa strategies for foreign employees and vi) Colombia office rental solutions.

SummaryLLCFast solution LLCSLCFree zone LLCRepresentative officeBranch office
Also known asLtda.Fast solution LLCSASFTZOficina de representacionSucursal
Best use of company?All products and servicesClose a customer deal nowAll products and servicesManufacturing and export tradingMarketing & researchSpecific projects
How soon can you invoice Clients/sign sales contracts?6 weeks3 weeks2 months4 weeks6 weeks7 weeks
How soon can you hire staff?6 weeks3 weeks2 months4 weeks6 weeks7 weeks
How soon can you sign a lease agreement?6 weeks3 weeks2 months4 weeks6 weeks7 weeks
How long to supply corporate bank account numbers?3 months2 months3 months2 months3 months3 months
How long to supply company registration/tax numbers?6 weeks3 weeks2 months4 weeks6 weeks7 weeks
Corporate tax rate on annual net profits?34%34%34%20%0%34%
Limited liability entity?YesYesYesYesNoNo
Government incentives available?YesYesYesYesNoYes
Government approval required for foreign owners?NoNoNoNoNoNo
Resident legal representative required?YesYesYesNoYesYes
Minimum paid up share capital?US$1US$1US$1US$1nonenone
Can bid for government contracts?YesYesYesYesNoYes
Corporate bank account location?Standard CharteredBanco de BogotaBBVASantander BankBanco AV VillasDavivienda
Can secure trade finance?YesYesYesYesNoYes
VAT payable on sales to local customers?19%19%19%0%None19%
Average total business set up engagement costs?US$14,390US$42,150US$14,590US$17,740US$16,200US$17,200
Average total engagement period?4 months6 months5 months4 months4 months4 months

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Accounting and tax considerationsLLCFast solution LLCSLCFree zone LLCRepresentative officeBranch office
Statutory corporate tax payable?34%34%34%20%0%34%
Legally tax exempt if properly structured?NoNoNoNoN/ANo
Group HQ tax incentives?YesYesYesYesNoYes
Must file an annual tax return?YesYesYesYesNoYes
Must file annual financial statements?YesYesYesYesNoYes
Must appoint an auditor?NoNoNoNoNoYes
Access to double taxation treaties?YesYesYesYesNoYes
Withholding tax on payments to foreign shareholders?5%5%5%5%None5%
Company RegistrationLLCFast solution LLCSLCFree zone LLCRepresentative officeBranch office
Resident legal representative required?YesYesYesNoYesYes
Minimum number of shareholders/partners?2111Parent companyParent company
Maximum shareholding for foreigners?100%100%100%100%100%100%
Minimum statutory paid up share capital?US$1US$1US$1US$1nonenone
Legal reserve to be kept with government?YesYesNoNoYesYes
Shelf companies available?YesYesYesYesNoNo
Time to incorporate a new entity?6 weeks3 weeks2 months4 weeks6 weeks7 weeks
Can easily convert to a PLC?YesYesYesYesNoNo
Public register of shareholders and directors?YesYesYesYesYesYes
Can have preference shareholders?YesYesYesYesNoNo
Business ConsiderationsLLCFast solution LLCSLCFree zone LLCRepresentative officeBranch office
Good entity for trademark registration?YesYesYesYesNoYes
Can secure an import and export license?YesYesYesYesNoYes
Sponsorship by a local citizen required?No
Our Client needs to travel to Colombia for business set up?No
Temporary physical office solutions available?Yes
You need a local resident as bank signatory?No
Can be wholly foreign owned?Yes
The entity will likely be regulated by?Chamber of Commerce
Minimum number of directors/managers?1
Bi-monthly/quarterly VAT reporting to the government?Yes
Must sign an office lease agreement during incorporation?No
Shareholders & directors documents to be attested/translated?Yes
Each foreign director needs a personal income tax number?No
Foreign director needs a residence visa?No
Maximum number of staff allowed?No maximum number for any entity
Expatriate to local staff ratio?None
Can secure residence visa for business owner?Yes
Other useful information
What will be included in my customer sales invoice?Click link
This country has signed free trade agreements?Yes
This country is a member of WIPO/TRIPS?Yes
This country is a member of the ICSID?Yes
Average custom duties suffered?4.5%
Government foreign investment approval required?No
Average monthly office rental? (US$ per sq m)13-21
Minimum statutory monthly salary?US$246
Average monthly US$ salary for local skilled employees?1,400
US$ deposit interest rate? (1 year average)6.8%
Overseas remittance currency controls?Yes
Banking considerations
Multi-currency bank accounts available?Yes
Corporate visa debit cards available?Yes
Quality of e-banking platform?Good
Crowd funding available in this country?Yes

Press the link headings below to read detailed, relevant, up to date information.

  • Advantages of Colombia company registration

      Business registration services in Colombia

    1. It is possible to register a Colombia simplified limited company (SAS) with only one shareholder and one director. Both can be of any nationality and do not need to be resident of Colombia. The minimum paid-up capital required is only US$1 and our Clients do not need to travel to complete the engagement;
    2. Entrepreneurs starting a company in Colombia will benefit from a large domestic markets and opportunities to sell their products abroad because:
      • With approximately 47 million inhabitants, the republic of Colombia has the 3rd largest population and the 4th largest economy in Latin America after Brazil, Mexico and Argentina. Colombia also offers entrepreneurs access to 5 major commercial hubs: Bogota, Cali, Barranquilla, Cartagena and Medellin;
      • Entrepreneurs starting a new business in Colombia will find an increased amount of opportunities, as the country experienced strong and encouraging economic growth in recent years. For instance, the annual GDP growth rate in 2014 was 4.6%. Learn more about the growth opportunity in Colombia on Healy Consultants’ blog;
      • The republic of Colombia has signed several Free Trade Agreements (FTAs) with different countries including Canada, USA, Mexico and the EU;
      • Colombia has the advantage of having two coastlines, in Caribbean Sea and the Pacific Ocean. This is greatly beneficial to the shipping industry and businesses engaged in import/export activities;

    3. Due to improvements in trade, tax and investment freedom, Colombia now ranks as the 3rd freest economy out of 29 South and Central American economies;
    4. Colombia currently boasts over 100 Free Trade Zones (FTZs), the most competitive FTZs in Latin America with a reduced corporate tax rate of 15%;
  • Disadvantages of Colombia company registration

    1. Our Clients forming a company in Colombia will face the following difficulties during start-up phase:
      • In order to incorporate a Colombia business entity, foreigners are required to appoint at least one Colombia permanent resident as the legal representative of the company in the country. If required, Healy Consultants will provide nominee services for this position;
      • Incorporating a company in Colombia is complex and time consuming, marred with government corruption and bureaucracy and can take up to four months to successfully complete;
      • Getting electricity for a new establishment in Colombia is quite expensive and time consuming. Entrepreneurs should expect to pay at least US$35,000 and wait for up to 4 months for a new electric connection;

    2. Our Clients running a Colombian business will pay a high level of tax because:
      • Colombia companies are subject to i) a corporate tax at the rate of up to 25% ii) a 33% withholding tax on dividends distributed abroad (branch office only) and iii) VAT of 16% on sales in the country;
      • Even companies established in the Colombia Free Trade Zones are subject to a 15% corporate tax;

    3. Trading across borders in Colombia can be very costly to entrepreneurs. Exporting a single container can cost an average of US$2,355 while importing costs US$2,470. Additionally it takes an average 14 days to successfully import or export a container;
    4. The legal system in Colombia is quite inefficient and weak. Enforcing a legal contract may take more than 3 years in the courts;
    5. Colombia has a very low proficiency in English, placed at position 42 out of 63 jurisdictions according to the English proficiency index 2015. This means that entrepreneurs will find it difficult interacting with potential Clients or business partners.

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Contact us

For additional information on our company registration services in Colombia, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi
Guide to invest in Colombia free trade zone banco central de colombia Colombia's Minister of Trade, Industry and Tourism Colombia's Ministry of Foreign Affairs - visa application