How to Legally Start a Company in Colombia: Step-by-Step Guide

Starting a business in Colombia is a straightforward process when you follow the proper legal steps. Below is a practical and updated guide on how to legally incorporate a company in Colombia while complying with all the requirements set by local authorities.

1. Choose the Right Legal Structure

The first step is to define which legal entity best fits your business. The most common company types in Colombia are:

  • Simplified Stock Company (S.A.S.) – the most flexible and widely used structure by entrepreneurs and small businesses. It allows a single shareholder and offers simplified management.
  • Corporation (S.A.) – ideal for larger companies with multiple shareholders.
  • Limited Liability Company (Ltda.) – limits each partner’s liability to the amount of their contribution.
  • Branch or subsidiary of a foreign company – available for foreign investors who want to operate in Colombia.

The S.A.S. is typically the most recommended option because of its simplicity and low administrative requirements.

2. Verify the Availability of the Company Name and Trademark

Before registering your company, make sure the name is available. This can be checked through the Unified Business Registry (RUE) at the local Chamber of Commerce.

If you want to protect your business name as a trademark, you can register it with the Superintendence of Industry and Commerce (SIC) to ensure exclusive nationwide use.

3. Draft the Incorporation Documents

Once the legal structure and company name are defined, the next step is to draft the bylaws or articles of incorporation. This document must include:

  • The company’s main business activity or purpose.
  • The share capital and contribution method.
  • The rights and obligations of shareholders or partners.
  • The management and legal representation structure.

If any shareholder or legal representative resides outside Colombia, they can issue a Power of Attorney (POA) to authorize a local representative to sign on their behalf.

4. Register the Company with the Chamber of Commerce

With all documents ready, submit them to the local Chamber of Commerce where the company will be based. The Chamber will:

  • Register the company in the Mercantile Registry.
  • Issue the Certificate of Incorporation and Legal Representation.
  • Register the company in the Unified Business and Social Registry (RUES).

This process officially establishes your company as a legal entity in Colombia.

5. Obtain the NIT from the DIAN

Next, register with the National Tax and Customs Directorate (DIAN) to obtain your Tax Identification Number (NIT) through the RUT (Unified Tax Registry).

During this process, the company’s tax responsibilities are defined (income tax, VAT, withholdings, etc.).

If the company will engage in import or export activities, additional registration with customs authorities may be required.

6. Open a Corporate Bank Account

With the Chamber of Commerce certificate and NIT obtained, you can open a corporate bank account in the company’s name.
Banks may request additional documents such as the bylaws, identification of the legal representative, and incorporation certificate.

7. Comply with Legal and Tax Obligations

Once incorporated, the company must fulfill several ongoing legal and tax obligations, including:

  • Registration with the local municipality for the Industry and Commerce Tax (ICA).
  • Maintaining proper accounting records in compliance with International Financial Reporting Standards (IFRS).
  • Appointing a Statutory Auditor (Revisor Fiscal) if the company exceeds certain income or asset thresholds.
  • Filing tax declarations regularly (income tax, VAT, withholdings).
  • Renewing the business registration (Matrícula Mercantil) annually within the first quarter of each year.

8. Register Foreign Investment (if applicable)

If shareholders are foreign or the capital is transferred from abroad, the company must:

  • Provide apostilled and officially translated incorporation documents of the parent company.
  • Register the foreign investment with the Central Bank of Colombia (Banco de la República) at the time of capital transfer.

This step ensures legal compliance and allows for future repatriation of profits.

9. Estimated Timeline

  • Processing time: typically 2 to 4 weeks, depending on document availability and the speed of review by authorities.
  • Minimum capital: there is no minimum capital requirement for most company types, including the S.A.S.

10. Practical Recommendations

  • Work with a local lawyer and accountant experienced in company incorporation.
  • Ensure all foreign documents are apostilled and officially translated before submission.
  • Clearly define the roles, contributions, and responsibilities of each shareholder from the beginning.
  • Keep your accounting and tax filings up to date to maintain good standing.
  • Renew the Mercantile Registry every year and maintain all legal and accounting records.
  • Take advantage of Law 2069 of 2020 (Entrepreneurship Law), which simplifies administrative procedures for startups and new businesses.

At ColombiaCorporate, we make it simple for you to establish your company in Colombia with confidence and full legal compliance. Our team of corporate, legal, and accounting experts guides you through every step, from choosing the right structure and preparing documents to registration with the Chamber of Commerce, DIAN, and banking setup. We handle the process efficiently, ensuring your company is legally incorporated and ready to operate without delays or costly mistakes. Whether you are a local entrepreneur or an international investor, we provide the personalized support you need to start and grow your business successfully in Colombia.

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