Colombia is open for business. The government, despite what many people may think, are extremely pro-business and investment. The government welcomes foreign investment and has measures in place to ensure that foreigners are treated equally to locals when it comes to investing and doing business in the region.
The Colombian government allows 100% foreign ownership of both business and also property. So what does this mean? Well, as a foreign individual or company, you can own a local Colombia company. Additionally, as a foreigner, you can purchase Colombian property. For both of these options, foreign investors are then able to register their investment (either in a company – or in real-estate). Once this investment has been registered with the Central Bank of Colombia, the individual is able to apply for an investors visa.
There are (2) types of investors visas in Colombia:
- Migrant (M) Investors Visa
- Resident (R) Investors Visa
Depending on the type and value of your investment, you are able to apply for either an M or R investors visa.
Real Estate Investment
As mentioned, in Colombia, as a foreigner, 100% local real estate purchases are permitted. Then, through the purchasing of local property, you will be eligible to apply for an investors visa. In Colombia, there are (2) types of investors visa for property purchases: The path forward will depend on the value of the property:
- Migrant (M) property owner visa – with the minimum property value of at least 350 Colombian minimum salaries. This visa is valid for (3) years and does not allow you to work.
- Residential (R) property owner visa – with the minimum property value of at least 650 Colombia minimum salaries. This visa is valid for (5) years and does allow you to work.
It is important to note that in order to to be able to apply for this type of visa, you will need to bring in and register the foreign capital with the Central Bank of Colombia. Once this investment (the property purchase) has been registered, you may begin the visa application process with the Colombian immigration authority.
Property Due Diligence
In Colombia, before purchasing property, it is recommended to do a thorough property due diligence. A good property due diligence should include the following at a minimum:
- Confirmation that the property contract is valid.
- Identification if there are any liabilities on the property.
- Support in negotiating the terms and conditions of the contract.
- Identification that the property registry payment terms are clearly stated and in accordance with local Colombian law.
- Confirmation of the total purchase price of the property including government fees, charges, and taxes.
- Summary regarding property owner taxes (monthly and annual property taxes).
Additionally, a local lawyer can provide support with the actual property purchase and registration, which can include the following:
- Preparation of the powers of attorney to manage the property contract signing procedure before the Public Notary.
- Registration of the property contract with the Oficina de Instrumentos Públicos.
Incorporation of a Local Colombian Company
In Colombia, similar to that of a real estate purchase, 100% foreign business ownership is allowed, and a simplified share company (S.A.S) can be formed with (1) shareholder, either a natural or legal person. A good local legal partner can form this company on your behalf without the need for you to physically visit Colombia during the registration process – a great advantage for people and companies looking to start the process ASAP or are unable to travel to Colombia.
The Colombian company incorporation process is as follows:
- Create the company bylaws
- Register the company
- Register with the Colombia tax authority
- Obtain a company ID number
- Open a corporate bank account
Once your company is incorporated, and you have invested a value of at least 100 minimum Colombia salaries, you will be eligible to apply for the Colombian investor’s visa, also known as a ‘business owners’ visa. This visa will allow you to work and render services in Colombia for the company that you have invested in.
To be able to apply for this visa, you will need to bring in and register the foreign capital with the Central Bank of Colombia. Once this investment has been registered and recognized by the Central Bank of Colombia, you may begin the visa application process. A good immigration lawyer will be able to manage the entire visa application process on your behalf, saving you the somewhat complicated process of dealing with the immigration authority.
Once the company is incorporated, operational and registered with the local tax authority, it must meet some minimum statutory requirements:
- Appoint a legal representative – who must be a Colombian national or foreigner with a local visa.
- Have a fiscal address – located in Colombia.
- File monthly and annual tax declarations – with the national tax authority, called the ‘DIAN’.
Please note that this type of visa will become void if you are not present in Colombia for more than 6 months during the duration of your visa.
Local Support in Colombia
As is evident, investing in Colombia is a relatively straightforward process if you have the right local support. By investing in Colombia, in real estate, or in a local company which you are the owner of, you become eligible to apply for a Colombian investor visa.
Colombia, in addition to having an exciting business environment, is a wonderful place to reside. Foreigners from all over the globe are taking advantage of both the opportunities available in the region and the ease of obtaining residency through a local investment.
If you would like support on obtaining residency through an investment, don’t hesitate to reach out to the Biz Latin Hub group. This local legal and accounting firm has been helping foreigners to invest and operate in Colombia since 2014. Get in touch with Oliver at [email protected] for personalized advice.