Company Formation in Colombia
Fast-growing business hub · 2–4 weeks · NIT · Local director required
2-4 weeks
NIT
Required
Formation Process
Colombia is one of Latin America's most accessible markets for company formation. The SAS (Sociedad por Acciones Simplificada) can be incorporated via a private document — no notarization required — registered at the Chamber of Commerce, with NIT issuance from DIAN following automatically. A Colombian legal representative is required.
Formation Steps
- 1
Draft articles of incorporation (private document or notarized escritura pública for S.A./Ltda.)
- 2
Registration with the Cámara de Comercio (Chamber of Commerce) in the relevant city
- 3
NIT (tax ID) issuance from DIAN — assigned automatically on Chamber registration
- 4
Registration with the municipal industry-and-commerce tax office (ICA)
- 5
Appointment of a Colombian legal representative (Representante Legal)
Foreign Ownership
Foreign nationals can own 100% of a Colombian entity. The SAS structure is particularly well-suited for foreign ownership with minimal governance requirements. A Colombian national or foreign resident with a valid work visa must serve as Representante Legal. Foreign investment must be registered with the Central Bank (Banco de la República) via the Ventanilla Única portal to enable profit repatriation. Restrictions apply in broadcasting, aviation, and certain professional services.
Local Director: Required
Legal Entity Types
SAS (Sociedad por Acciones Simplificada)
Simplified stock corporation, the most popular and flexible structure for foreign companies due to its ease of formation and operational flexibility
Sociedad Anónima (S.A.)
Traditional stock corporation, used for larger enterprises or public companies
Branch Office
Extension of a foreign entity, requires approval and registration with the Chamber of Commerce
Accounting & Tax
All Colombian entities must register with DIAN and obtain a NIT before commencing operations. Colombia's tax calendar is structured around bi-monthly VAT cycles and annual corporate income tax, with mandatory electronic invoicing (factura electrónica) for all transactions.
NIT
The NIT (Número de Identificación Tributaria) is Colombia's tax identification number, issued by DIAN (Dirección de Impuestos y Aduanas Nacionales). It is required for all tax filings, business transactions, and regulatory compliance.
VAT / IVA
Colombia's VAT (IVA) is levied at a general rate of 19% on goods and services. Reduced rates of 5% apply to certain items (medicine, agricultural inputs). Some goods and services are exempt or zero-rated. Bi-monthly IVA declarations are filed electronically through the DIAN portal.
Corporate Tax
Colombia's corporate income tax rate is 35% on net taxable income (reduced from 33% in prior years as part of the 2022 tax reform). An income-based surcharge applies to financial sector entities. Monthly advance payments (retenciones) are withheld at source.
Compliance Requirements
Annual Obligations
Annual corporate income tax return (Declaración de Renta) filed with DIAN — deadline varies by NIT digit
Annual renewal of commercial registration with the Chamber of Commerce (usually March)
Annual ICA (industry-and-commerce tax) declaration filed with the municipal authority
Monthly Obligations
Bi-monthly IVA (VAT) declaration filed electronically with DIAN
Monthly withholding tax (retención en la fuente) declaration and payment
Electronic invoicing (factura electrónica) for all commercial transactions via DIAN-authorized systems
Monthly PILA (social security and payroll) contributions if employing staff
Payroll & Employment
Colombia's labor framework is governed by the Código Sustantivo del Trabajo (CST). Employers must budget for significant mandatory contributions in addition to base salary.
Mandatory benefits include 15 days paid vacation per year, severance (cesantías at 1 month salary/year), interest on severance (12% p.a.), service premium (prima de servicios — 1 month salary paid semi-annually), and transport allowance
Social security contributions: ~52% of gross salary total (employer: ~30%, employee: ~9%), covering health (EPS), pension (AFP), ARL (work-risk insurance), ICBF, SENA, and family compensation (Caja de Compensación)
PILA platform handles all social security and payroll contribution payments monthly — mandatory electronic submission
NavviPal coordinates payroll processing and CST compliance through vetted Colombian in-country partners. Contact our team before your first hire to understand your full employer cost structure.
Talk To An ExpertWhy Colombia
Colombia is Latin America's third-largest economy by GDP and one of the region's most dynamic business hubs, offering a strategic Pacific and Atlantic coastline, a growing tech ecosystem centered in Medellín and Bogotá, and one of the fastest formation processes in the region.
51M
Population
~B USD
GDP (2024 est.)
~1.6% p.a.
GDP Growth
2–4 weeks
Formation Time
Managing Your Entity with NavviPal
NavviPal's platform tracks your Colombian entity's NIT status, DIAN filing calendar, Chamber of Commerce renewal dates, and PILA contribution deadlines in one place.
Key Authorities
DIAN (Dirección de Impuestos y Aduanas Nacionales)
National tax and customs authority responsible for NIT issuance, tax compliance, and VAT administration
Local Director Requirement
Colombia requires companies to have a legal representative (Representante Legal) who must be a Colombian national or hold legal residency. NavviPal provides a qualified local legal representative who acts solely on your company's instructions with full indemnity protections.
Frequently Asked Questions
How long does company formation take in Colombia?
Company formation in Colombia typically takes 2-4 weeks—one of the fastest processes in Latin America. The SAS (Sociedad por Acciones Simplificada) structure can be incorporated via a private document (no notarization required), registered with the Chamber of Commerce, and receive a NIT from DIAN within days of registry filing.
Do I need a local director or legal representative in Colombia?
Yes. Colombian companies must appoint a legal representative (Representante Legal) who is a Colombian national or a foreigner with a valid Colombian visa permitting work activities. The Representante Legal is the primary contact for DIAN and the Chamber of Commerce, and signs on behalf of the company.
Can foreigners own 100% of a company in Colombia?
Yes, foreign nationals can own 100% of a Colombian entity. The SAS is particularly well-suited for foreign ownership. A Colombian legal representative is required, but foreign shareholders can hold the full economic interest. Foreign investment must be registered with the Central Bank (Banco de la República) to enable profit repatriation. Restrictions apply in broadcasting, aviation, and certain professional services.
What does it cost to form a company in Colombia?
Company formation in Colombia typically ranges from ,500 to ,000 USD for the core process—one of the more accessible markets in Latin America. Ongoing costs include accounting, bi-monthly VAT filings, and the legal representative. NavviPal provides transparent, itemized quotes—contact us for your specific scenario.
What is the NIT and why is it needed?
The NIT (Número de Identificación Tributaria) is Colombia's tax identification number, issued by DIAN. It is required for all business transactions, tax filings, banking, invoicing, and regulatory compliance in Colombia. The NIT is assigned automatically upon registration with the Chamber of Commerce.
What are the ongoing compliance obligations in Colombia?
Colombian entities must file bi-monthly VAT (IVA) declarations with DIAN, submit annual corporate income tax returns, renew annually with the Chamber of Commerce, maintain monthly accounting records, and file industry-and-commerce (ICA) tax with the local municipality. The SAS structure carries lighter governance requirements than a traditional S.A.
What documents are needed to incorporate in Colombia?
For a SAS: private articles of incorporation (no notarization required), apostilled copies of foreign shareholder identification, Chamber of Commerce registration, and NIT issuance from DIAN. A traditional S.A. or Ltda. requires additional notarization steps. A Colombian bank account is typically opened post-registration.
Ready to expand into Colombia?
NavviPal handles company formation, compliance, accounting, and tax obligations so you can focus on building your business.