Since 2003, Healy Consultants Group 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.

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Colombia business setup summary

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• Advantages of Colombia company registration

  

  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 3^rd largest population and the 4^th 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 3^rd 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 20%;
  5. Colombia has an extensive financial system consisting of highly sophisticated institutions including the commercial banks, dominating the economy. In 2009-2011, the Colombian government carried out a Financial market resilience and capital market development which i) changed the traditional banking structure of the economy, ii) enabled its economy to recover financially and iii) alleviated poverty.

• 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 35% ii) a 20% 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 20% 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 77 out of 111 jurisdictions according to the English proficiency index 2022. This means that entrepreneurs will find it difficult interacting with potential Clients or business partners;
  6. Colombia has been poorly ranked in the 91^th position (out of 180 countries) in the Corruption Perceptions Index 2022. This is largely due to a fall in its government efficiency along with numerous cases of corruption that are currently under investigation;
  7. Any foreign national who wishes to be appointed as bank signatory must travel to Colombia to a i) secure Colombian visa (cedula) and tax ID (RUT) and ii) be appointed as legal representative;
  8. Due to stringent anti-money laundering policies, initially Colombian banks will only open a Colombian Pesos (COP) account for our Client’s local company. A USD corporate bank account opening application will only be considered after reviewing the first 6-month transactions through the local pesos account. If our Client is required to have a USD account and cannot wait for 6 months, Healy Consultants Group will assist secure USD corporate account numbers with a Payment Service Provider or Exchange House;
  9. The foreign bank signatory to a Colombian corporate bank account must have a Colombian ID or work or residency visa (cedula) before being appointed as bank signatory to the bank account. If required, our fee to assist secure a Colombian ID will be US$3,950 and the estimated timeframe to obtain the same is 8 weeks. Alternatively, Healy Consultants can supply a passive nominee bank signatory for an additional monthly fee of US$550/month. If our Client requires active nominee bank signatory services additional, our fees will depend on the number and value of monthly transactions. Refer to this webpage for guidance (click link).