Colombia has one of the most favorable legal frameworks in Latin America for foreigners setting up companies. The Simplified Stock Company (SAS) — the most widely used corporate form in the country since 2008, when Law 1258 introduced it — lets a foreigner with a valid passport and an active RUT set up a single-shareholder company in one day, with share capital of one Colombian peso if desired, and with liability limited to the amount contributed. No Colombian partner is required. No investor visa is required to incorporate. No minimum capital is required.
The ease of incorporation, however, contrasts with the complexity of subsequent tax compliance. The DIAN — the National Tax and Customs Directorate — applies a tax regime that includes VAT, income tax, withholding tax, industry and commerce tax, and several other sector taxes. A foreigner who opens an SAS without accounting advice can accumulate unmet tax obligations that lead to penalties several times the original tax.
online via CCB / RUES
Law 1258 of 2008
on services
DIAN 2026
Step by step: setting up an SAS as a foreigner
- Get a RUT as an individual — The DIAN's Single Tax Registry identifies the person in the tax system. You get it on the portal dian.gov.co with your passport. If you already have a cédula de extranjería, the process is faster.
- Reserve the company name — On the portal of the relevant Chamber of Commerce (Bogotá: ccb.org.co; Medellín: camaramedellin.com.co). The reservation is free and valid for 30 days.
- Draft and sign the articles of incorporation — A private document setting out the company's name, corporate purpose, capital, legal representative and duration. An SAS does not require a notarized public deed.
- Register with the Chamber of Commerce — Registration generates the company's NIT. Cost: between COP 350,000 and 800,000 depending on the declared capital.
- Update the RUT with the company's NIT — The individual's RUT becomes separate from the company's RUT.
- Open a business bank account — Requires an active NIT, the legal representative's cédula de extranjería, and the incorporation documents.
The tax obligations most foreigners overlook
An active SAS in Colombia has these unavoidable tax obligations, whether or not it generates income in the period:
- VAT return — Bimonthly for companies under the ordinary regime. Not filing it generates penalties of 5% of the tax per month of delay.
- Withholding tax — Monthly if the company exceeds the liability thresholds. It requires withholding a percentage of payments to suppliers and paying it to the DIAN.
- Income tax return — Annual. The standard rate for legal entities is 35% of net taxable income.
- Industry and commerce tax (ICA) — Municipal. In Bogotá it ranges from 0.41% to 1.38% of gross income depending on the activity.
Frequently asked questions
Can a foreigner set up an SAS in Colombia?
Yes. The first step is to get a RUT as an individual on the DIAN portal with your passport; if you already have a cédula de extranjería, the procedure is faster.
What tax obligations does an SAS have even if it doesn't invoice?
An active SAS must meet its tax obligations even if it generates no income in the period, including the bimonthly VAT return under the ordinary regime.
What happens if I don't file the SAS's VAT return?
Not filing it generates penalties of 5% of the tax for each month of delay.