Welcome to Colombia, a beacon of business innovation and a thriving destination for expats. Our guide provides essential insights about starting a business in Colombia, assisting foreigners in establishing their presence in the country navigating the complexities of Colombia’s entrepreneurial landscape.

How to start a business in Colombia as a Foreigner

Aspiring business owners will find a dynamic entrepreneurial environment across the country, complemented by affordable living. Whether in technology, hospitality, or other sectors, Colombia offers fertile ground for various business concepts to thrive. This blog explores how to start a business in Colombia. You’ll learn about making initial decisions, such as choosing to embark on your entrepreneurial journey alone or seeking assistance, and understanding Colombia’s legal framework for business incorporation. We’ll cover critical aspects of the business setup, including capital investment, necessary documentation, and other overviews.

Choosing Colombia: the perfect place to start a business as an expat

Colombia’s transformation into a thriving center for entrepreneurship presents a golden opportunity for expats looking to set up a business. This vibrant nation, leading the way in business innovation, offers many opportunities for the entrepreneurial community. Here’s why Colombia is an ideal location for your business venture:

Economic resilience and growth

Colombia’s strong business environment is a testament to its robust financial stability. The country offers a stable foundation for new companies, blending growth with sustainability.

Affordable operating costs

A key advantage for any Colombian business is affordability. Compared to other countries, Colombia offers lower living and operational expenses, enabling firms to allocate resources more effectively.

A great expat community

You’ll find a diverse and hospitable foreigner network, essential for building connections, facilitating collaborations, and enhancing the entrepreneurial ecosystem.

Strategic location

Colombia’s strategic location provides easy access to Latin American and North American markets, a significant benefit for businesses looking to expand their reach.

State-of-the-art infrastructure

Colombia’s infrastructure, including high-speed internet and technological services, is crucial for businesses in today’s digital era.

Quality of life

Colombia offers a lifestyle that combines urban convenience with natural beauty, contributing to an excellent quality of life. This balance is vital for entrepreneurs and their teams.

Government support

The Colombian government provides incentives for startups and foreign investors, further enhancing the appeal of starting a business here.

Access to skilled talent

With numerous universities and educational institutions, Colombia has a pool of talented professionals, ensuring businesses have access to a skilled workforce.

Thriving tech and innovation hub

Colombia is increasingly recognized as a center for technology and innovation, offering a dynamic environment for tech-based and creative startups.

If you choose Colombia for your business venture, you’re not just investing in a location; you’re becoming part of a region that values progress, innovation, and global connectivity. Whether starting from scratch or expanding an existing operation, Colombia presents an environment ripe for business success.

Bogotá, Medellin and Cartagena are the best cities to start a business in Colombia

Bogotá

As the business capital in Colombia, Bogotá is ideal for tech startups, finance, and service-based businesses.

Medellín

Known for its innovation and for be entrepreneur-friendly, it's great for manufacturing, textiles, and IT businesses.

Cartagena

Famous for tourism, the most profitable categories are hospitality, leisure, and cultural heritage projects.

Each city offers unique advantages and caters to different business needs, so aligning your business plan with these locations' specific characteristics is essential.

First steps to set up a business in Colombia: Solo or assisted?

When we decided to establish a business in Colombia, the initial decisions set the foundation for our venture. The first crucial step is choosing whether to navigate this process solo or with assistance. With the help of expatgroup.co, we gain insights into the business creation processes to make informed decisions.

Going Solo or Seeking Assistance

If you’re familiar with Colombian business laws and fluent in Spanish, handling the process independently might be a viable option. This involves managing tasks like business registration, obtaining a tax ID (RUT), and interacting with the Chamber of Commerce. However, seeking assistance can streamline the process, ensuring compliance with legal procedures and saving valuable time for those less acquainted with the local business landscape.

Going solo with your business

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Seeking assistance with your business

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Combining legal know-how and cultural insight

Understanding the local legal and business culture is crucial. Our Partnert expatgroup.co, highlights the importance of legal comprehension and cultural integration. It’s about adapting to the colombian business environment, building relationships, and aligning with local business practices.

Medellin Guru Business Creation Service

Statutes and shareholding composition
Initial accountant documents (Opening balance and financial statements)
NIT and business RUT
Company registration in the Chamber of Commerce
Capital injection and money legalization
Business visa

Whether you choose to go it alone or seek assistance, it’s essential to have a solid understanding of the local business environment and cultural nuances. By making informed decisions and carefully drafting your business plan, you can pave the way for success and integration in Medellin.

Creation of your Colombian Business

To complete the procedures online, you must have a citizenship or foreigner’s identification card (cédula de ciudadanía or cédula de extranjería); otherwise, you must fill out manual forms at any of the Chamber of Commerce offices.

If you or any company’s shareholders have another identity document, we recommend doing the process in person at the nearest Chamber of Commerce.

Registering in the Chamber of Commerce

Ensure you have all necessary documents ready, including your company’s “Estatutos” (business agreement), identification documents of all shareholders, and proof of business address. If you’re in Medellin, you can make the process in the Medellin Chamber of Commerce’s official website. By filling the RUES Form, you can start you registration process.

Obtaining your business RUT online

When registering your business, the Chamber of Commerce will automatically create and send the application to the National Tax Authority (Dirección de Impuestos Nacionales DIAN).

After completing all the steps and registering your company, you’ll receive the DIAN’s official communication to your email with the RUT in PDF format.

Founding money to start your business in Colombia

Regarding funding, international transfers must comply with local regulations, reporting to the Banco de la República and working with banks capable of handling foreign exchange.

Other permits you will need regarding your business sector

Certain businesses may require additional permits to operate legally. These are sector-specific and can vary from environmental licenses to health and safety certifications. Understanding the particular requirements of your business sector is crucial to ensuring full compliance with Colombian laws. Legal counsel is often necessary to navigate these complexities.

The process for each of these permits usually involves submitting an application with the required documents, which can vary depending on the specific requirements of each permit and business sector.

Many other steps exist to start a business in Colombia. In Medellin Guru, we’re working hard to provide you with the best information and creating a Comprehensive Business Blog Series to tell you all the intricacies of this sector. However, all businesses are different. That’s why we created the Medellin Guru Business Creation Service, which you can acquire using the green button below.

Medellin Guru Business Creation Service

Statutes and shareholding composition
Initial accountant documents (Opening balance and financial statements)
NIT and business RUT
Company registration in the Chamber of Commerce
Capital injection and money legalization
Business visa

What do I need to know about Colombia's tax system?

Colombia’s tax system comprises national and local taxes, each with its regulations. At the national level, businesses are subject to corporate income tax, IVA (equivalent to VAT-value-added Tax), Retefuente (equivalent to withholding tax), and industry-specific taxes. At the district level, businesses must pay local taxes like ICA (Industry and Commerce Tax) and withhold ICA tax, among others. DIAN and the Finance Secretary (in every city) regulate these taxes.

Frequently Asked Questions (FAQs) about Start a Business in Colombia

Here is a list of seven frequently asked questions about business in Colombia.

Can a foreigner start a business in Colombia?

Yes, foreigners can start a business in Colombia by obtaining the requirements and running the process. Some of them are the, registration with the Chamber of Commerce, the tramit of the Tax ID (NIT), among others. Compliance with financial regulations for international transfers and obtaining sector-specific permits are also essential.

Is Colombia a good place to start a business?

Colombia is a good place to start a business thanks to its growing economy, diverse market opportunities, and government initiatives supporting entrepreneurship and foreign investment.

What are the best Colombian cities in which to start a business?

The best Colombian cities for setting up a business are Medellín, Bogotá, and Cartagena, each offering unique advantages tailored to different industries and business needs.

What type of business can I run in Colombia?

You can run diverse businesses, including manufacturing, textiles, and IT services, which thrive due to the nation’s innovation-friendly environment. The country also supports tech startups, finance, and service-based businesses, leveraging its substantial consumer market and business infrastructure.

Additionally, sectors like agribusiness, mining, cultural enterprises, import/export, logistics, and maritime industries are well-suited to the Colombian business landscape. Tourism-related businesses, particularly hospitality, leisure, and cultural heritage, are also highly profitable in Colombia. Each sector offers unique advantages and must align with the country’s market needs and characteristics.

What are the steps to start a business in Colombia?

To start a business in Colombia requires selecting a business structure and conducting market research to identify your niche. Key steps include registering with the Chamber of Commerce, get the RUT, obtaining necessary permits and documents, found and legalize your foreign investment, and ensuring tax compliance. Get advice here and open your business now!

Can a foreigner buy a business in Colombia?

Yes, foreigners can buy a business in Colombia. In fact, the Colombian government encourages foreign investment and offers incentives to foreign investors who establish businesses in the country. However, there are certain legal procedures and requirements that foreign investors must comply with to purchase a business in Colombia. It is recommended to seek assistance from a business consultant who can guide you through the process and ensure compliance with all legal requirements.

What business laws in Colombia do I need to understand to start a business?

To start a business in Colombia, it’s essential to understand key business laws that govern corporate activities, taxation, labor, and commercial transactions. These laws ensure legal compliance and guide various aspects of business operations.

Among others.

Medellin Guru's Comprehensive Visa and Passport Series

The Colombian visa changes that went into effect in October 2022 were significant. So, on the Medellin Guru site, we have a comprehensive series of visa articles that are kept up-to-date and should answer most visa questions. These articles include:

We have looked in detail at the nine most popular Colombian visas used by foreigners:

Also, we have looked in detail at three additional Colombian visas, which are less popular for foreigners:

Rentista visa (annuity visa) – for foreigners with a fixed income
Beneficiary visa – for relatives of visa holders
Expertise visa – for professionals

In addition, we have a guide to Colombia tourist visas and how to extend a tourist visa. Also, we have a guide to renewing U.S. passports in Colombia and a guide to obtaining a Colombian passport.

Furthermore, we provide information about travel insurance that meets the insurance requirement for Colombian visas. And we have a guide to how apply for a cedula extranjeria in Colombia and a guide to using notaries in Medellín and Colombia. Finally, Medellin Guru has partnered with a visa agency to offer Colombia visa services.

All of our Colombia visa articles are up to date (2023) and constantly receive updates in 2024.

The Botton Line: How to start a business in Colombia as a Foreigner

In Medellin Guru, we provide valuable information on the benefits of starting a business in Colombia and navigating the complexities of the country’s entrepreneurial ecosystem. These advantages include economic resilience, affordable operational expenses, a significant expat community, strategic location, state-of-the-art infrastructure, good quality of life, government support, and access to skilled talent.