Business entities in Colombia in 2023

Since 2003, Healy Consultants provides our Clients with the best corporate structures for business in Colombia. There are several ways of doing business in Colombia, the most common being the setting up of a simplified public limited company (SAS). Alternatively, entrepreneurs have an option of establishing a limited liability company (Ltda.) or a public limited company (SA). Foreign legal entities may also set up a branch office or a representative office.

The Colombia simplified limited company (SAS)

The Colombia SAS is the most preferred legal entity used by entrepreneurs setting up businesses in Colombia. A SAS requires only 1 director and shareholder who can either be an individual or a legal entity. The director and shareholder can be of any nationality and can reside in any country. A US$1 minimum paid-up share capital is also required to complete the incorporation process;
This entity is only required by law to appoint a statutory auditor if i) its total assets exceed US$1,655,000 or ii) its annual turnover exceeds US$994,000. The SAS must also appoint at least 1 legal representative who must be domiciled in Colombia.

The Colombia limited liability company (Ltda.)

The Colombia Ltda. requires at least 2 shareholders who can either be individuals or corporate bodies when being incorporated. A Ltda. must also appoint at least 2 directors of any nationality and who need not be resident in Colombia. A Colombia permanent resident must also be appointed as the company’s legal representative in Colombia;
Generally this entity is not required to appoint a statutory auditor unless either i) its assets exceed US$1,655,000 or ii) its annual turnover exceeds US$994,000.

The Colombia public limited company (SA)

The Colombia SA requires at least 5 shareholder who can either be individuals or corporate bodies to be incorporated. An SA must also appoint at least 6 directors who can be of any nationality and must not be resident in Colombia. A SA must appoint at least 1 Colombia permanent resident as the legal representative of the company. To incorporate an SA at least 33% of the proposed company’s capital must be paid in at incorporation;
The Colombia SA is required by law to appoint a statutory auditor.

The Colombia branch

The Colombian Commercial Code allows foreign companies looking to establish permanent legal activities in Colombia to open branches in Colombia. The scope of operations for a Branch office is defined by the parent company. The branch must appoint at least 1 Colombia permanent resident, of any nationality, to act as the company’s legal representative in Colombia. Additionally, the branch office must also appoint a statutory auditor. This entity suffers a higher corporate tax rate of 33%.

The Colombia representative office

A Colombia representative office is not considered a legal entity and is not allowed to conduct any profit making activities in Colombia. A rep office must appoint at least one legal representative who must be a Colombian resident. This entity only has the authority to carry out promotional activities and market products and services of the parent company within Colombia.

Comparison table between Colombia business entities

	LLC	PLC	SLC	Branch office	Rep office
Also known as	Ltda.	SA	SAS	sucursal	Oficina de representacion
How long to set the company up?	6 weeks	8 weeks	8 weeks	7 weeks	6 weeks
How long to open company bank account?	4 weeks	5 weeks	5 weeks	5 weeks	5 weeks
Legal liability?	Limited	Limited	Limited	Unlimited	Unlimited
Wholly foreign owned?	Yes	Yes	Yes	Yes	Yes
Minimum share capital?	US$1	US$1	US$1	US$1	US$1
File annual tax return?	Yes	Yes	Yes	Yes	No
Tax registration certificate required?	Yes	Yes	Yes	Yes	No
Recommended corporate bank account?	Standard Chartered	BBVA Colombia	Banco de Bogota	Santander Bank	Bancolombia
Does our Client need to travel?	No	No	No	No	No
Resident director required?	No	No	No	No	No
Resident shareholder required?	No	No	No	No	No
Minimum directors allowed?	2	6	1	1	1
Minimum shareholders?	2	5	1	1	1
Tax identification code (TIN) needed?	Yes	Yes	Yes	Yes	No
Colombia resident company secretary required?	No	No	No	No	No
Colombia resident legal representative required?	Yes	Yes	Yes	Yes	Yes
Corporate shareholders allowed?	Yes	Yes	Yes	Yes	Yes
Corporate director(s) allowed?	Yes	Yes	Yes	Yes	Yes
Colombia corporate tax rate?	35%	35%	35%	35%	0%
Annual financial statements required?	Yes	Yes	Yes	Yes	No
Statutory audit required?	No	Yes	No	Yes	No
Regulated by?	Bogota Chamber of Commerce	Bogota Chamber of Commerce	Bogota Chamber of Commerce	Bogota Chamber of Commerce	Bogota Chamber of Commerce
Allowed to issue sales invoices?	Yes	Yes	Yes	Yes	No
Allowed to sign contracts?	Yes	Yes	Yes	Yes	No
Allowed to import and export goods?	Yes	Yes	Yes	Yes	No
Can rent an office space in Colombia?	Yes	Yes	Yes	Yes	Yes
Can buy Colombia property?	Yes	Yes	Yes	Yes	No
Can own equity in other Colombia companies?	Yes	Yes	Yes	Yes	No
Total Colombia business setup costs in Yr. 1	US$13,390	US$15,390	US$13,772	US$17,200	US$15,200
Subsequent annual costs (incl. accounting and tax fee)	US$4,600	US$4,600	US$5,161	US$4,600	US$4,600
Sample engagement invoice	View invoice PDF	View invoice PDF	View invoice PDF	View invoice PDF	View invoice PDF