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Guide to Incorporating in Colombia

Incorporating a local company is an important step for companies who are serious about servicing the Colombian market. The issue is that many foreign companies do not know the intricacies of the incorporation process or the documentation that is required from the foreign shareholder. Delays with opening the local entity can create issues with on-boarding new staff, entering into commercial contracts, or opening the bank account.


  • Having employees or working in-country more than 183 days in one years means that a foreign companies is liable for taxes in Colombia. This means that full accounting records and a local tax number are needed.
  • Having a local company allows you to take advantage of the many double taxation agreements that Colombia has in place allowing companies to be more tax efficient when repatriating funds.


Within the Colombian legal context, there are different types of corporate entities which will have different possibilities and limitations depending on the one chosen.  The most common though is a Simplified Stock Company (or for its acronym, S.A.S.), since it is quite flexible and adaptable for foreign companies.


  • POWER OF ATTORNEY: Generally in Latin America, it would be necessary to present a power of attorney duly notarized and apostilled from the foreign shareholder. In the case of setting up a company in Colombia, the Colombian government has made it easier, only requiring a simple power of attorney. This is a huge time savings as the notary and apostle process can be quite complicated in some countries.
  • COMPANY SUMMARY OR CERTIFICATE OF GOOD STANDING: In the case that the shareholder will be a foreign company, it will be necessary to provide the certificates of existence of the company, issued by the government of origin.
  • IDENTITY OF SHAREHOLDERS: Among the different documents to incorporate, it will be necessary to provide documents that show the participants of the foreign company. In the case of foreigners, the passport can replace this step.


  • It is recommended that all the required documents, if they are in a language other than Spanish, be translated to avoid delays during the incorporation process.
  • Likewise, if in any case there are delays to the incorporation process when using a foreign company as the shareholder, the most advisable thing is to open the company using a natural persons as the shareholder and then later transfer the shares once the company is set up.


Once the different documents necessary to open the company are in Colombia, the process will consist of the following items:

  • COMPANY NAME: A name needs to be chosen. It is recommended to choose a name that has not been registered as a trademark. The name may be made up of letters, numbers, and/or signs. Lastly, the name of the company will end with the abbreviation for the type of company being incorporated. For example, if it is a Simplified Stock Company, the company will end with the initials S.A.S.
  • COMPANY BYLAWS: Bylaws will need to be drafted and approved by the shareholder.
  • CHAMBERS OF COMMERCE: A form provided by the Chambers of Commerce must be submitted providing information of the company and the people who will act as shareholders.
  • LIST OF FUNCTIONS: During the process of opening the company, the main and secondary commercial activities that the company will carry out must be established. For this step, the Colombian Chamber of Commerce establishes an extensive list for different activities and their corresponding codes.
  • PAYMENT OF INCORPORATION RIGHTS: The Chamber of Commerce will establish an amount to be paid in order to incorporate this company. Said amount will be taken from the amount that you wish to register as subscribed capital of the company. It is important to remember that there is no minimum or maximum amount of capital.


Once the process of incorporating a company has been completed, the Chambers of Commerce will carry out the process before the DIAN (Tax Office) to provide a Tax Identification Number for the new company.


  • The taxes and whether the company needs to be registered for IVA will depend on the commercial activities that were registered in the Chamber of Commerce. A company may have more than one line of commercial activities.
  • Once the NIT (Tax ID) has been obtained, the company can take steps to open the bank account for the newly registered company.


Once the company is constituted, the Chamber of Commerce will request the company to issue the shareholder book that will document the company corporate activities such as decisions made by the board or shareholder extraordinary meetings.


It generally takes 3 weeks once the documents arrive to Colombia to incorporate the company and receive a tax number. It then takes another 2 or 3 weeks to set up the bank account.

The process to open an account can be frustrating since Colombian banks will request many documents to prove who are the final shareholders. This is to protect the country’s banking system from money laundering and a part of the banks duties to ensure they know who their customers are.

Ax Legal works with our in-country partner López & James to ensure our clients can incorporate and operate in the most efficient way possible.

  • We provide legal, administrative, and accounting to help our clients operate in the most efficient way possible.
  • The result is that clients can operate with small in-country commercial teams while being supported with all their back office needs by a full team of experts for a fixed monthly fee.
  • Our clients appreciate this model since they can focus on the commercial aspects while ensuring their overhead if small and manageable.

Ax Legal is an advisory firm that works with foreign companies in Latin America. Our team of legal and commercial advisors have a distinguished track record of helping foreign technology and services companies to grow and operate in Latin America. Over the years, we have worked with starts up, mid-size businesses, and publicly listed companies. The one common factor that connects are clients is that they are leaders in their field, providing innovative technologies and services to the industrial sectors.

To better understand how we can support you in the Region, please contact Cody Mcfarlane at