Establishing A Business Entity In Colombia (Updated)


1. Preliminary Considerations:

In Colombia, a foreign company is able to act and do business by itself, for example, by contracting with local entities or investing foreign currencies. Entering contracts, such as joint ventures, with local corporations or persons, depends on commercial negotiations, more than on legal requirements. Foreign investment, on the other hand, is subject to different regulations and to the Central Bank supervision and regulation (more information below). However, when a foreign company, not only has investments in Colombia, but also desires to perform “Permanent Activities” in its territory, legal provisions require it to establish a branch or a subsidiary in Colombia (Article 471 of the Commercial Code). Colombian legal provisions do not provide general criteria for what should be understood as “Permanent Activities”, however article 474 of the Commercial Code contemplates a non-taxative list of activities that are considered as permanent, which are:

1. “Opening commercial establishments or business offices, even if they only provide technical or consulting services.

2. Intervene as a Contractor in the execution of works such as a construction or rendering of services.

3. Participate in any way in activities of management, use or investment of funds from private savings...

Please see full Chapter below for more information.

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