Colombia’s economy has been growing in a historic manner these last few years. A recently found political stability has helped the South American nation slowly start to fill its potential. This has led to the peso being one of the most reevaluated currencies in 2023.
Due to these political and economic changes that have been taking place over the past few years in the Colombian market, the quantity of foreign investment has grown rapidly. One of the best ways to form a company in Colombia is to establish a Simplified Shares Corporation, commonly known as an SAS. Here’s how you can create a SAS in Colombia.
SEE ALSO: Steps to Form a Branch in Colombia & SAS Corporation Colombia
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Company Formation in Colombia: SAS
The implementation of Law 1258 of 2008 made the SAS possible and facilitated the process of establishing such a corporation by simplifying the procedures previously needed.
The main change is that a company does not require a specific number of partners in order to create a SAS in Colombia.
This change propelled entrepreneurs and helped to transform the entrepreneurial landscape of the country by allowing individuals to engage in different activities and business endeavors.
Presently, the SAS model is used by the vast majority of foreign investors who want to establish a small or medium sized business.
Unlike other models such as the Anonymous Corporation (SA), create a SAS in Colombia does not require the individual to create a board of directors or have a minimum number of associates.
In addition, it is not only more flexible and economical but it also minimizes the risks of loss, as creditors cannot touch personal assets of the person under this scheme.
What are the benefits of doing business in Colombia?
Doing business in Colombia can offer several advantages for entrepreneurs and investors:
Strategic Location: Colombia’s geographical location in South America provides access to both Atlantic and Pacific markets. This can be advantageous for companies involved in international trade and logistics.
Natural Resources: Colombia is rich in natural resources, including oil, coal, minerals, and agricultural products. This resource base can provide opportunities for companies in various industries.
Economic Growth: Colombia has experienced steady economic growth over the past decade, which has contributed to the expansion of consumer markets and increased business opportunities.
Emerging Market: As an emerging market, Colombia offers the potential for high returns on investment, especially in sectors such as technology, renewable energy, and infrastructure development.
Free Trade Agreements: Colombia has negotiated free trade agreements with multiple countries, including the United States, Canada, and several Latin American nations. These agreements can provide businesses with preferential access to these markets.
Growing Middle Class: The growth of the middle class in Colombia has led to increased consumer demand for various products and services, creating opportunities for businesses to tap into this market.
Investment Incentives: The Colombian government has implemented various incentives to attract foreign investment. These incentives can include tax breaks, grants, and other benefits for companies that invest in specific sectors or regions.
Tourism Potential: Colombia’s natural beauty, cultural heritage, and diverse landscapes have the potential to attract tourists, contributing to opportunities in the hospitality, travel, and tourism sectors.
Skilled Workforce: Colombia has a well-educated and increasingly skilled workforce, particularly in fields like engineering, technology, and sciences. This can be advantageous for companies looking for qualified personnel.
Ease of Doing Business Improvements: The Colombian government has been working on improving the ease of doing business by streamlining administrative procedures and enhancing the overall business environment.
7 steps to create an SAS company in Colombia
- Step 1: Prepare and Sign a Power of Attorney (POA)
- Step 2: Defat the company bylaws of the SAS
- Step 3: Register the SAS company with local authorities
- Step 4: Obtain the company ID number (RUT) and tax ID number (NIT)
- Step 5: Proceed to open a corporate bank account
- Step 6: Nationalize funds in Colombia Deposit the required capital to activate the new bank account
Biz Latin Hub can assist you doing business in Latin America
At Biz Latin Hub Colombia, we understand the legal structures needed for your company to start operating immediately and we provide all the necessary know-how to help you choose the most suitable business structure according to your needs.
Our portfolio includes accounting & taxation, company formation, due diligence, hiring & PEO, and corporate legal services. Our unrivaled regional presence means we are ideally placed to support multi-jurisdiction market entries and cross-border operations.
Contact us today to find out more about how we can assist you.
If you found this article of interest, you may want to check out the rest of our coverage of this South American country. Or read about our team and expert authors.
The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
