Foreign Investment in Colombia

Over time in our consultancies, entrepreneurs and foreign investors always consult us about the best type of society for setting up a company in Colombia, on this, we should say that the choice of the right type of company depends on the scope that you want to give to the company, managing, flexibility in operations, and access to the benefits contemplated by law, must be checked before creating a company.

In Colombia there is the principle of equality for foreign and national investment, in which there can be no discrimination or preferential treatment towards any of them, however, there are economic sectors in which it is restricted basically by national security and the provision of waste not produced in the country.
The constitution of SAS (simplified stock companies) is the preferred corporate form, given its advantages; such as the formation by one or more natural or legal persons and in which the employer is not forced to create a board of directors and the freedom to establish its operation.

Foreign investors also make use of the SAS as an investment vehicle through the constitution of SAS subsidiaries, but they also open companies as a foreign branch, in which they can use the experience and financial strength of the parent company and in the mining sector energy, gain access to advantages that the exchange regime provides for them.

There are other types of companies that are formed as investment vehicles, but we will focus on the description of the most used.
SAS (simplified stock companies)
Branch of Foreign Company
Legal nature and responsibilities
It is a legal person different from its shareholders, whose liability goes up to the amount of the capital contribution, except in the case of fraud.
Establishment of commerce owned by the Headquarters, whose responsibilities in Colombia must be assumed.
Name, Validity and Purpose
The company name must be followed by the Sociedad Anonima Simplificada or S.A.S and its duration may be indefinite.
You must use the same name of the Headquarters followed by the expression Sucursal Colombia. Its duration cannot be indefinite and must be indicated in the constitution limited to that of the Parent.
Equity
The shareholders are free to subscribe and pay the equity in the conditions and proportions that they establish, within a maximum period of 2 years.
The equity must be paid at the time of its constitution, they can have a floating equity that can be increased or decreased without having to reform the statutes.
Auditor
According to the amounts established by law.
Is a must.
Administration
There is the freedom to structure the administration of the company, in the absence of it, the board or sole shareholder may exercise the functions.
They have the figure of General Agent, who fulfills the function of administrator and his representation in front of third parties.
Dissolution
Those established in the bylaws, decrease of the subscribed equity below 50%.
Those Established by the Principal, decrease below 50% of the assigned equity without it being reversed within the 18 months following the event.
Advantages

It owns shares with freedom of negotiation.

It allows to set up new companies or be part of them.

Under article 22 of Law 80 of 1993, the branch is allowed to prove the experience and financial capacity of the foreign company.

Exchange advantages on sales in foreign currency for the energy mining sector.

Capital investments from abroad must be registered in the respective form informing the Central Bank, this to be granted the quality of foreign investor, these operations can be carried out through intermediaries of the exchange market or directly to the BR by electronic means.

Before proceeding to the constitution of an investment vehicle, it is important to define the investment objective, thoroughly define the advantages and disadvantages that they represent with respect to each other, we can accompany you in this process.