Colombia has been one of the fastest-growing economies in South America, which makes it the best country to keep in mind if you’re looking to expand your business! The incorporation process is quite simple compared to other countries in the region, and the government is also constantly working to make Colombia the perfect destination for business owners, investors, and entrepreneurs from all around the world!
There are many types of companies and legal structures to choose from, but it’s always important to remember that it has to cater to the needs of the business. The right choice also depends on the number of employees, shareholders or partners, and assets of the company.
These are the types of Companies in Colombia. In this article, we’ll explain the characteristics of each one as well as its benefits, and specific requirements.
Sociedades de Responsabilidad Limitada (SRL)
Sociedades por Acciones Simplificadas (SAS)
Corporaciones or Sociedades Anónimas (SA)
Branch Office of a Foreign Company
What are the most common and used types of companies in Colombia? What is the minimum share capital? How to register a company?
Obtain an NIT, which is the company’s tax identification number
Open a corporate bank account at a local bank in Colombia
Sociedad de Responsabilidad Limitada (SRL)
An SRL in Colombia is similar to an LLC. In this type of company, the amount of capital contribution limits the partner’s liability, unless stipulated by the company’s bylaws. Regarding the payment of debts and legal responsibilities, no partners are not liable.
No board of directors is required
At the moment of incorporation it’s necessary to have a minimum of 2 partners, but no more than 25
The contribution of the partners must be fully paid at the beginning of the registration process
Needs a public deed for the incorporation, but if you wish the documents to stay private you need to comply with these requirements:
If the company has 10 or fewer employees
If the assets of the company are lower than 500 times the minimum monthly wage in Colombia (approximately USD$ 140,000)
The company’s social purpose must be defined and with that limit the company’s commercial activities
Sociedad por Acciones Simplificadas (SAS)
For large and small businesses in Colombia, the most popular and common type of legal entity is SAS. In Colombia, a SAS, compared to the other types of legal structures, has been praised by investors for its flexibility, specifically with the fast and easy incorporation process and the large freedom afforded to shareholders to establish their own terms and conditions.
One of the larger advantages of a Simplified Stock Company (SAS), is the ability to make the articles of incorporation a private document. In addition, the company has the ability to participate in almost any business activity because the social purpose can be left undefined.
These are some of the characteristics that make a SAS attractive and flexible:
Needs a minimum of 1 shareholder
Doesn’t require a board of directors
The amount of the company’s equity is equivalent to the limited liability
Corporations or Sociedad Anónima (SA)
If there’s a big number of shareholders involved in the company, a Corporation (SA) is the best option. Under this legal structure, the shareholder’s liability is limited only to the amount of the shareholders’ equity, unless fraud is committed.
These are some important points to keep in mind when considering a corporation:
There is a minimum requirement of 5 shareholders and they cannot be in possession of more than 95% of the outstanding capital stocks.
Needs to have a defined social purpose
Needs a board of directors
It usually is incorporated by a public deed just like the SRL, but at the same time if you want to keep the documents private you will need the following requirements:
The company has 10 or fewer employees
The assets of the company are lower than 500 times the minimum monthly wage in Colombia (approximately USD$ 140,000)
Branch Office of a Foreign Company
If a company has its head office in another country, branching could be another option and that’s because in Colombia the legislation recognizes foreign branch offices as an extension of the parent company. However, they are both viewed as the same legal entity.
The following documentation is required to establish Foreign Branch Office in Colombia:
Certificate of Incorporation of the parent company
Colombia is in constant growth and always looking to simplify its processes for incorporation. However, registering a company in LATAM can still be very challenging. To make sure you register your company in the right way, you can get in touch with us, and our team of experts is going to make sure it complies with all Colombian laws, and help you chose the all the types of companies in Colombia.
At Easyco, we make company formation in Colombia easy; our team of corporate experts has vast experience helping companies and individuals register their business in Colombia, with a proven track record of success across all of our services. Easyco aims to tackle the complex company formation processes across LATAM and makes business registration easy by providing a hassle-free online company registration experience. Start your company in Colombia today!
Easyco also provides additional services to guarantee your company’s compliance, which include: