How do I start a business in Colombia?

To start a business in Colombia, follow 7 steps: Obtain a RUT (Tax ID), Register at Chamber of Commerce, Obtain Commercial Registry Certificate, Register for Tax Obligations, Open Corporate Bank Account, Register with Social Security System, Obtain Industry Permits if Required. The process takes approximately 57 days and costs around $190 USD.

What types of business entities can I register in Colombia?

Colombia offers 4 entity types: Simplified Joint Stock Company (SAS) (min capital: $0, foreign ownership: 100%); Limited Liability Company (Ltda) (min capital: $0, foreign ownership: 100%); Stock Corporation (SA) (min capital: $0, foreign ownership: 100%); Branch of Foreign Company (min capital: $0, foreign ownership: 100%).

Can foreigners own a business in Colombia?

Yes, foreigners can own businesses in Colombia. Simplified Joint Stock Company (SAS) allows up to 100% foreign ownership. Limited Liability Company (Ltda) allows up to 100% foreign ownership. Stock Corporation (SA) allows up to 100% foreign ownership. Branch of Foreign Company allows up to 100% foreign ownership.

What is the minimum wage in Colombia?

The minimum wage in Colombia is $335/month (USD). Average monthly wage is approximately $700. Standard work week is 47 hours with 15 paid leave days per year.

How much does it cost to run a business in Colombia?

Estimated monthly overhead for a small business (5-10 employees) in Colombia is approximately $8000. Office rent averages $12/sqm/month. Skilled workers average $1200/month. Typical break-even: Tech 10 months, Services 8 months, Retail 12 months.

Countries ColombiaBusiness Guide

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Start a Business in Colombia

Complete guide: entity types, registration, costs, taxes, labor laws, and break-even analysis

~57 days

Setup Time

~$190

Setup Cost

35%

Corporate Tax

100%

Foreign Ownership

#67

Ease of Business

Entity Types

Entity	Min Capital	Foreign %	Liability	Min Shareholders	Best For
Simplified Joint Stock Company (SAS) Sociedad por Acciones Simplificada	None	100%	Limited	1	Most popular entity for startups and foreign investors - no minimum capital, single shareholder allowed, flexible bylaws
Limited Liability Company (Ltda) Sociedad de Responsabilidad Limitada	None	100%	Limited	2	Small to medium businesses with defined partners - partners jointly liable for labor obligations
Stock Corporation (SA) Sociedad Anonima	None	100%	Limited	5	Larger companies seeking to issue shares publicly or attract institutional investors
Branch of Foreign Company Sucursal de Sociedad Extranjera	None	100%	Unlimited	0	Foreign companies conducting permanent business operations in Colombia

Registration Steps

Obtain a RUT (Tax ID)

Apply for Registro Unico Tributario at DIAN - the national tax authority

1-3 days

Free

DIAN

File company bylaws (estatutos) and registration forms at the local Chamber of Commerce (Camara de Comercio)

1-3 days

~$80

Chamber of Commerce

Obtain Commercial Registry Certificate

Receive the Certificado de Existencia y Representacion Legal from the Chamber of Commerce

0-1 days

~$10

Chamber of Commerce

Complete RUT registration with DIAN for income tax, VAT, and withholding tax obligations

1-5 days

Free

DIAN

Open Corporate Bank Account

Open a business account at a Colombian bank (Bancolombia, Davivienda, Banco de Bogota)

3-10 days

Free

Commercial Bank

Enroll company and employees with health (EPS), pension (AFP), and occupational risk (ARL) providers

1-5 days

Free

EPS, AFP, ARL Providers

Obtain Industry Permits if Required

Apply for sector-specific permits from relevant regulatory authorities (INVIMA for food/pharma, ANM for mining)

7-30 days

~$100

Relevant Authority

Total Estimated

57 days max$190

Tax Framework

Corporate Income Tax35%

35% general rate. Free Trade Zone companies pay 20%. Mega-investment regime offers 27% for investments over 1.7M UVT (~USD 600M). Financial sector surcharge of 3%.

IVA19%

Personal Income Tax0-39%

Capital Gains Tax15%

Dividend Withholding15%

Tax Treaties18 countries

Tax Incentive Zones

117+ Free Trade Zones (Zonas Francas) with 20% CIT, duty-free imports of equipment and materials, no IVA on internal zone transactions

Labor Laws & Costs

$335/mo

Minimum Wage

$700/mo

Average Wage

47 hrs/week

Work Hours

15 days/year

Paid Leave

4.3 weeks/year

Severance

20.5% of salary

Employer Social Security

8% of salary

Employee Social Security

Required

Foreign Worker Permit

Foreign Worker Quota: Companies must have at least 80% Colombian workers for unskilled positions and 80% for specialized roles (waivable)

Visa & Immigration

M-Type Visa (Migrant)

For foreign investors, business owners, or executives. Requires proof of investment or employment contract. Valid up to 3 years.

3 weeks

Processing time

$250

Estimated cost

Investor Visa (M-Type)

Investor

Minimum investment of 100 monthly minimum wages (~USD 33,500) in a Colombian company. Grants 3-year residency.

Digital Nomad Visa (V-Type)

Remote Work

For remote workers earning at least 3x Colombian minimum wage (~USD 1,005/month). Valid 2 years. Cannot work for Colombian companies.

Work Permit Process: Employer submits visa application through Cancilleria (Ministry of Foreign Affairs) online portal. Work permit is part of the visa.

Business Environment

#67/190

Ease of Business Rank

7 days

Starting a Business

15 days

Registering Property

1288 days

Enforcing Contracts

39/100

Corruption Perception

73%

Internet Penetration

COP

Currency

UTC-5

Time Zone

GoodCould be betterHover a dot for the threshold and source. Sources: World Bank, Transparency International, ITU.

Spanish

Investment Zones & Provinces

Bogota Free Trade Zone

Free Zone

Bogota

Incentives

20% corporate tax rate (vs 35%)No customs duties on importsNo IVA on zone-internal transactionsStreamlined customs procedures

Key Sectors

ManufacturingLogisticsTechnologyPharmaceuticals

Ruta N - Medellin Innovation District

Tech Hub

Medellin

Incentives

10-year property tax exemption for tech companiesFree co-working spacesStartup accelerator programsAccess to city innovation fund

Key Sectors

SoftwareAIFintechHealthtechCreative Industries

Pacific Free Trade Zone

Free Zone

Cali, Valle del Cauca

Incentives

20% CIT rateDuty-free importsStrategic Pacific coast accessLower labor costs than Bogota

Key Sectors

AgribusinessManufacturingLogisticsBPO

30-40% lower than Bogota

Break-Even Analysis

Retail (months)

F&B (months)

Tech (months)

Manufacturing (months)

Services (months)

Typical Operating Costs in Colombia

Per-person or per-unit costs. Multiply by your team size for total estimates.

Office Rent	$12	per sqm/month
Skilled Worker Salary	$1,200	per 1 worker/month
Unskilled Worker Salary	$400	per 1 worker/month
Electricity	$0.14	per kWh
Business Internet	$25	per 1 connection/month
Est. Monthly Overhead (5-10 staff)	$8,000	total/month

Sources: World Bank Open Data, ILO, Numbeo Cost of Living Index, local government publications. Salaries reflect market averages and may vary by city, industry, and experience level. Last updated 2025.

Break-Even Calculator

Total Investment (USD)

Monthly Revenue (USD)

Monthly Costs (USD)

Tax rate applied: 35% (corporate rate)

months to break even

$4,550

monthly net profit

109.2%

annual ROI

$138,000

total cost to break even

Break-even progressFast recovery

Next Steps

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Key Considerations for Foreign Investors

SAS (Sociedad por Acciones Simplificada) is the preferred entity - single shareholder, no minimum capital, flexible bylaws

117+ Free Trade Zones offer 20% CIT (vs 35%) with duty-free imports - significant tax savings for qualifying businesses

Digital Nomad Visa requires only ~USD 1,005/month income - one of the lowest thresholds in Latin America

Standard corporate tax at 35% is among the highest in the region - Free Trade Zone structure is almost essential for cost optimization

Medellin has emerged as a top tech hub in Latin America with strong infrastructure and government support through Ruta N

Contract enforcement is slow (1,288 days average) - include arbitration clauses in all commercial agreements

Same time zone as US Eastern (UTC-5) makes Colombia attractive for nearshoring and real-time collaboration

Last updated: 2025-Q4

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Start a Business in Colombia

Entity Types

Registration Steps

Tax Framework

Labor Laws & Costs

Visa & Immigration

Business Environment

Investment Zones & Provinces

Break-Even Analysis

Next Steps

Legal & Registration

Financial & Tax

Operational

Immigration & Visas

Key Considerations for Foreign Investors

Start a Business in Colombia

Entity Types

Registration Steps

Tax Framework

Labor Laws & Costs

Visa & Immigration

Business Environment

Investment Zones & Provinces

Break-Even Analysis

Next Steps

Legal & Registration

Financial & Tax

Operational

Immigration & Visas

Key Considerations for Foreign Investors