Author: Camilo Bretón
As a foreigner, forming a company in Colombia is an extremely attractive business plan. With a strong/stable economy and a newly elected ‘foreigner-friendly’, the attractiveness of the region for foreigners is increasing by the day. Unknown to many, in Colombia, a foreigner can incorporate and own a local company. Then, by virtue of being a business owner, can apply for a visa.
The following article explains the process of both forming a company in Colombia and the process of obtaining a Colombian visa as a foreign business owner.
Types of Companies in Colombia
The (3) most common types of legal entities in Colombia are as follow:
- Limited Liability Company (S.R.L) –
- Associates are legally responsible for the amount of capital invested.
- Composed by a minimum of 2 associates (and a maximum of 25).
- Associates have special faculties such as: deciding upon the removal and inclusion of other associates, deciding upon a manager and evaluating the performance of their workers.
- Corporations (S.A) –
- Corporations can loan and borrow money, sue and be sued, hire employees, have assets and pay taxes.
- Neither the capital nor the debt of the company can be traced back to the shareholder unless they become collectively accountable.
- Members of a corporation decide upon the actions of the corporation through a majority vote.
- Simplified Stock/Share Companies (S.A.S) – Most common type of company in Colombia due to the versatility and flexibility they offer.
- Simplified Stock Companies can be formed with (1) shareholder; a natural or legal person.
- It is conformed by a number of partners who are liable only for the amount of capital invested.
- S.A.S companies are regulated by self written statutes, thus offering autonomy while deciding the guidelines by which the company will work.
Once you have decided on the legal entity structure of your choice, you can begin with the company incorporation process.
Company Formation/Incorporation Process
Though the company formation/incorporation process in Colombia is straightforward, foreigners face cultural, language and procedure barriers. It is recommended that foreigners (especially those based outside of Colombia) work with a local partner during the set-up stage of their operations to ensure smooth sailing. See below some of the key stages in the incorporation process:
- Selection of a local lawyer – You must submit a Power of Attorney in order to grant all necessary faculties a local lawyer needs to incorporate the company on your behalf (if you are not physically present in Colombia).
- Fill in the corporation document – This document includes the name of the company, social subjects, capital, legal representation, share and acquisition of shares and other necessary information.
- Registration with the ‘Camara de Comercio’ – The company must be registered with the Colombia ‘Camara de Comercio’.
- Tax ID number – Once registered, the company will be granted a tax ID number by DIAN (local Colombia tax authorities).
Form a Company and Obtain a Visa
Foreigners can start a business in Colombia and then use this legal entity to sponsor their visa. Below we explain the requirements for the different types of visas available to foreign business owners.
Colombia Migrant ‘M’ Visa:
All foreign business owners, following the company formation, can apply for a Migrant (M) visa which is sponsored by the newly formed legal entity. The most common migrant visas are:
- Colombian Investment Visas
- Colombian Working Visas
Colombian Investment Visa:
In order to apply for an ‘M’ type Investment Visa, the solicitant must present the company’s tax ID number (NIT), business name and headquarters. Additionally, the owner must have invested a value of at least ‘100 minimum salaries’ in the company.
Colombian Working Visa:
Foreigners who own a business in Colombia, yet they have not met with the minimum required amount of capital required to obtain an investment visa have the option to obtain an ‘M’ working visa. In order to do this, the business owner must entail himself a working position within the company and he/she must have a working contract. The foreigner can then sponsor his/her working visa using the local company.
Do You Need Help Forming a Company and Obtaining a Visa in Colombia?
Interested in working and living in Colombia? Have a business plan and need on-ground support? At Biz Latin Hub, we have professional lawyers specialized in corporate and immigration law, who can support you in Colombia. Contact our CEO, Mr Craig Dempsey at [email protected] to see how we can be of assistance.
Colombia is one of the most attractive commercial jurisdictions in LATAM. Watch the short video below to find out more.