The Republic of Colombia is an independent state in South America, washed by the waters of the Pacific Ocean. Colombia’s closest neighbors by land and sea are Ecuador, Costa Rica, Haiti, Jamaica, Peru, Venezuela, Panama, and Brazil. The country owns territories in Central America.
Key sectors of the economy: mining (oil, coal, nickel, precious stones), agriculture, mechanical engineering, light industry, energy, food industry (vegetables, fruits, rice).
The capital of the state is Bogota. The largest cities are Cali, Medellin, and Cartagena. The population is over 50 million people. The state language is Spanish. The currency is the Colombian peso (COP).
Colombia is a member of the Pacific Alliance, OAS, WTO, and other world organizations.
Key Benefits of Company Formation in Columbia
Colombia was ranked 15th in protecting minority investors in 2021 and third in ease of obtaining loans.
The main reasons for registering a company in Colombia will be the following:
- Dynamic economic growth (4th in Latin America);
- Developed banking sector;
- Free trade zone between Colombia, Ecuador, and Venezuela;
- More than 5 DTA agreements with Latin American and European countries;
- Positive attitude towards foreign investment;
- Loyal taxation;
- Ample opportunities for the development of small and medium-sized businesses.
- If you decide to register a company in Colombia in 2021, then pay special attention to these business niches: the textile and footwear industry, transport, mining, chemical industry, and tourism.
Today, when it is increasingly difficult to conduct business through an offshore company at the international level and the international requirements for maintaining financial statements are becoming more stringent, opening a corporation in Canada would be the right decision. A company registered in British Columbia can become an agent of your offshore company in Canada, which will represent the interests of its own business in concluding transactions and conducting transactions with business partners. That is, a company, for example, from Belize or Nevis in the international arena acts as a Canadian company, which indicates that it belongs to a highly taxable and respected jurisdiction in the world – Canada.
As a result, when doing business, your offshore company will not appear in transactions in any way, and will not attract the attention of international tax regulators. At the same time, the British Columbia company will be a legal shield and cover for your offshore company from a tax-free or low-tax country. When using a Canadian company in conjunction with an offshore company in international activities, income tax payment must be made in the jurisdiction where the parent offshore company is registered.
In the future, if you intend to immigrate to Canada, then the registration of a Canadian company will play into your hands, and will partially simplify the migration procedure for obtaining residency in Canada. In addition to the above, I would like to highlight the following advantages of a Canadian company:
- This is a legal entity registered in a jurisdiction with a high international reputation. As a result, we can confidently call such a company a highly prestigious structure.
- Corporation shareholders, as well as appointed directors and officers in charge, can be residents of any country
- To register a company in British Columbia, it is enough to have one shareholder, who can also be the president of the company, director, financial director, and secretary in one person. That is, the law allows one person to combine all the vacancies in the corporation administration.
- It is required to issue and pay at least one share of the company. If desired, it can cost one dollar
- There are no restrictions on the volume of issue of shares of the corporation.
Main types of business
If you want to open a company in Colombia remotely, then you must first decide on a suitable OPF. In Colombia, you can register the following types of companies:
- Limited Liability Company (S.A.S.)
- Representative office/branch of a foreign company (R.O./B.)
The most convenient and easy-to-manage form of economic activity in the Republic, which is preferred by many foreign entrepreneurs, is an analog of a limited liability company, therefore, opening a company in Colombia remotely like this OPF is the best option.
Registration requirements
If you are going to register a company in Colombia, then in advance, you will need to fulfill these conditions of the Regulator:
- Selection of a unique company name;
- The number of directors/shareholders – from 1 or more (individuals and companies of any residence);
- Authorized capital – not less than 500,000
- Mandatory presence of a secretary with resident status;
- Information about shareholders and directors is entered in an open register and disclosed to the local agent;
- Mandatory filing of annual financial statements, as well as audits.
Features of the tax system
If you intend to open a company in Colombia, then it will not be superfluous to familiarize yourself with the peculiarities of the taxation of this country. Resident companies (national companies) are subject to worldwide income tax. Foreign non-resident companies are taxed only on income from Colombian sources. At the moment, the following taxes apply in Colombia:
- Income tax rate – 33% (may be reduced to 32% (2020) and 31% (2021);
- Capital gains tax – 10%;
- Reduced rate for qualified enterprises in FTZ – 20%;
- The minimum income tax is 1.5% of the net profit.
