If you are thinking of setting up a company in Colombia, you will find several corporate structures to choose from. This article focuses specifically on the SAS corporation in Colombia. We provide information on what they are, their incorporation process and their advantages.
An SAS corporation in Colombia, known as a Sociedad por Acciones Simplificada, is a popular choice among entrepreneurs due to its simplified formation process and flexible operating framework. Incorporation involves meeting certain legal requirements and registering with the competent authorities. Once set up, SAS companies offer advantages such as limited liability protection and simplified administrative procedures. This makes them an attractive option for companies of all sizes.
Opening a SAS corporation in Colombia is an incredibly attractive option for investors looking at entering Latin America. Its GDP stood at USD$334.94 billion in 2022, with annual growth of 1.5%.
Colombia is geographically situated between North and South America, which positions it as a strategic location for investment. Furthermore, Colombia’s close partnership with the United States, a major economic power, has facilitated the growth of its economy and the attraction of foreign investment.
As a result of these factors, Colombia has become a leading destination for foreign direct investment (FDI) in the region. In 2023, Colombia attracted a total of $17.05 billion in FDI, a testament to the country’s appeal as an investment destination. It is a safe, tried, and tested economy for foreign investors and is an excellent place for expansion.
Colombia has FTAs with more than 60 countries in the Americas and Europe. It is also a founding member of the Pacific Alliance, a regional economic association with Chile, Mexico, and Peru.
What is an SAS Corporation in Colombia?
In 2008, the government created the Simplified Stock Company (SAS) to simplify company formation as a new legal structure that would attract business entrepreneurs.
Due to its versatility, the decision to incorporate an SAS is smart for companies that require a certain amount of flexibility for their financial and operational viability.
Many have opted to form an SAS in Colombia since its creation, contributing to the growth and economic development of the country.
How Do You Create a SAS Corporation in Colombia?
Incorporating an SAS is a straightforward process. It’s the most commonly used corporate structure in Colombia for both local entrepreneurs and foreign investors seeking opportunities abroad.
The process of setting up an SAS corporation in Colombia consist in 5 steps:
- Step 1 – Preparing and registering the articles of incorporation.
- Step 2 – Register the legal representative before the DIAN.
- Step 3 – Open a bank account.
- Step 4 – Obtain a RUT.
- Step 5 – Digital signature.
A single person can create an SAS, and there is no maximum limit to the number of shareholders. The incorporation documents are private. The entire process, including company formation, registering with the corresponding authorities, and opening a bank account, can be completed in just one week.
Only when assets are included as part of the capital or when ownership transfer is required does a notary public become involved. The simplified process also reduces associated transaction costs and government involvement.
1. Preparing and Registering the Articles of Incorporation
The process of incorporating an SAS in Colombia begins with the preparation and registration of the articles of incorporation. This document is crucial because it describes the purpose, structure and governance of the company. It is registered with the Chamber of Commerce, the official body that oversees business operations in Colombia.
2. Register the Legal Representative with DIAN
The next step is to register the company’s legal representative with the National Tax and Customs Directorate (DIAN). The legal representative acts on behalf of the company and is responsible for ensuring compliance with Colombian tax legislation.
3. Opening of Bank Account
A corporate bank account is essential for any company. It serves as the main channel for financial transactions. In Colombia, a company must open a bank account in its own name to effectively manage its finances.
Our recommendation: It is crucial to find a bank that fits your company’s needs. Banks such as Bancolombia, Scotiabank or Davivienda are excellent options for your company as they offer good international relationships.
4. Obtaining RUT
The Registro Único Tributario (RUT) is a key identification document for companies in Colombia. Obtaining the RUT is a fundamental step, since it allows the company to carry out activities subject to duties and taxes.
5. Digital signature
The last step to incorporate an SAS in Colombia is to acquire a digital signature. This electronic signature is used to authenticate digital documents and is a legal requirement for companies in Colombia. The creation process is simple and will allow you to streamline processes in the future.
Completing all the steps mentioned above can take between one and two weeks.
Benefits of an SAS Corporation in Colombia
One of the main benefits of this type of company is that there is no personal liability. Shareholders are only personally responsible for the money they invested if there is proof of fraud.
Another one of its benefits is that the investors can apply for a Migrant type of visa by fulfilling the capital requirements established by law.
What are the differences between an LTDA and a S.A.S. in Colombia?
| Incorporation | Established through an authenticated private document | Established through a public deed before a notary |
|---|---|---|
| Number of Shareholders | Can have a single shareholder (up to an unlimited number) | Must be incorporated with a minimum of two shareholders and a maximum of 25 shareholders |
| Liability | Shareholders are liable only up to the amount of their respective capital contributions | Shareholders are liable only up to the amount of their respective capital contributions |
| Capital | Capital is divided into shares of equal value, and the payment is not stipulated | Capital is divided into equal-value portions and must be fully paid at the time of the company’s incorporation |
Frequently Asked Questions About Forming a SAS in Colombia
1. Can a foreigner own an SAS in Colombia?
Yes, a business can be 100% foreign-owned by either legal persons (legal entities) or natural persons (individuals).
2. How long does it take to register an SAS in Colombia?
Registering a company in Colombia takes four weeks.
3. What does SAS stand for in Colombia?
S.A.S stands for Sociedad por acciones Simplificada in Spanish, which is similar to a joint stock company. This is a type of commercial company with legal personhood and assets independent from those of its owners. Shareholders are liable only up to the amount of the shares they subscribe to or acquire. Shareholders are not liable for labor, tax, or any other type of obligations incurred by the company beyond their contribution, except if the legal personhood of the company is declared unenforceable.
4. What type of business is an SAS in Colombia?
An SAS corporation in Colombia is a type of capital company that offers limited liability to its partners. This means that the partners are not personally liable for the debts or obligations of the company beyond their initial investments. The main risk for the partners is the possible loss of their initial investments, as well as any additional investments they may make in the company.
5. Are there any restrictions on foreign ownership of an SAS corporation in Colombia?
Colombian law allows 100% foreign ownership of SAS corporations, making them accessible to international investors seeking to establish a business presence in Colombia.
6. Can an SAS corporation in Colombia operate internationally?
Yes, an SAS corporation in Colombia has the flexibility to conduct business both domestically and internationally. However, they must comply with foreign regulations and legal requirements applicable to their operations in other countries.
More Information About Incorporating a Company in Colombia
Starting a company and getting a visa in Colombia can be difficult at first due to cultural differences and market complexities.
Biz Latin Hub offers tailored business services, including company formation, legal services, accounting/taxation services, and visa processing. Contact us now and see how we can assist you in registering your new company in Colombia.
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Watch our video below to find out why Colombia is a good destination for your investment!
