Notes when setting up a company in Colombia

Colombia, with its improving economic potential and stability, is becoming an attractive destination for international investors and entrepreneurs. However, laying the foundation for a business here requires a deep understanding of the local business environment. Viet An Law will note some information for you when establishing a company in Colombia through the article below.

Note when setting up a company in Colombia without a visa

One of the factors that attract foreign investors when considering the Colombian market is the establishment of a business entity that does not necessarily have a visa to reside in the country. Colombia’s legal policy is designed to facilitate international investment flows, whereby, there are no nationality barriers for the founding members, shareholders or board members of a business entity established here. Foreign investors can carry out the procedures for registering and establishing a company even if they are not physically present in Colombian territory. In this case, authorizing a local legal representative becomes an optimal option. This representative will take care of completing administrative, legal procedures and other necessary stages on behalf of the investor.

For individuals with foreign nationality who intend to live and are directly involved in the management and operation of their business activities in the territory of Colombia, applying for a suitable visa is an essential legal requirement. The types of visas that are commonly issued to this person include:

• Investor Visa: This is a visa for individuals who make significant investments in a business entity in Colombia. This investment can take various forms, including capital contribution to an existing or newly established company, or other forms of investment recognized by Colombian law. Obtaining this visa allows the investor to legally reside in Colombia to monitor and manage his investments.
• Business Owner Visa: This type of visa is issued to entrepreneurs who are directly involved in the management and operation of the business activities of the company they own or have shares in Colombia. To be eligible for this type of visa, applicants need to demonstrate their active role in the management and development of the business in the country this.

Notes on Tax Issues when setting up a company in Colombia

Foreign-invested enterprises operating in Colombia must comply with the country’s current legal system and tax regulations. Here are some important tax-related issues that foreign investors should pay special attention to:

• Corporate Tax Obligations: Business entities, regardless of the source of capital, must comply with the tax regulations issued by the Colombian government. This includes determining and paying corporate taxes in accordance with the law. Understanding the applicable taxes such as corporate income tax, value-added tax, tax rates and tax deadlines is crucial to avoid legal and financial risks.
• Double Taxation Treaties: To avoid a situation where an income is taxed twice (in both Colombia and the investor’s country), foreign investors should check whether their country and Colombia have signed a double taxation avoidance agreement. These agreements often clearly stipulate the right to tax different types of income, helping to minimize the tax burden on international investors.
• Compliance with Colombian Business Laws: Every business operating in Colombia must strictly comply with the provisions of local business laws. This includes the full fulfillment of financial reporting obligations, periodic business reports, as well as compliance with labor regulations, occupational safety and other relevant standards. Mastering and properly applying these regulations is necessary to ensure the legality and reputation of the business.