Simplified Joint-Stock Company (SAS)
Sociedad por Acciones Simplificada
Company formation in Colombia
The SAS is best suited for: Tech startups and founders attracted to the Medellín ecosystem, Companies targeting Colombia's 51 million consumers, Single-founder businesses requiring maximum structural flexibility, Free Trade Zone industrial and service companies seeking 20% CT, Companies using Colombia as a hub for Andean South America, E-commerce and digital services businesses. Colombia applies a 35% corporate income tax on worldwide income of resident companies. Free Trade Zone (Zona Franca) companies pay 20% CT for qualifying industrial and service activities. VAT (IVA) is 19% standard, with 5% on certain goods and 0% on exports. Dividends to non-resident shareholders are subject to 20% withholding (7.5% to residents). The Industry and Commerce Tax (ICA) is a municipal tax at 0.2–1% on gross income — it varies by municipality and business activity. Capital gains are taxed at 15%. Colombia has a Controlled Foreign Corporation (CFC) regime and transfer pricing rules aligned with OECD standards.
- Tech startups and founders attracted to the Medellín ecosystem
- Companies targeting Colombia's 51 million consumers
- Single-founder businesses requiring maximum structural flexibility
- Free Trade Zone industrial and service companies seeking 20% CT
- Companies using Colombia as a hub for Andean South America
- E-commerce and digital services businesses
Key Facts
Step-by-Step Formation Process
Draft the Articles of Incorporation (Estatutos)
The SAS can be formed by private document — no notary required. The Articles of Incorporation (Estatutos) must include the company name (ending in "SAS"), registered address, business purpose (can be broad or unlimited), capital structure, shareholder details, and governance rules. The articles are highly customisable — the SAS law allows extensive flexibility in governance design.
Register with the Chamber of Commerce (Cámara de Comercio)
File the Articles of Incorporation, pre-RUT form, and identification documents with the local Cámara de Comercio. Colombia uses a single-window registration system (Ventanilla Única Empresarial) that simultaneously registers the company with the Chamber, obtains the NIT (tax ID), and registers with the municipal industry and commerce tax authority.
Obtain the RUT (tax registration) from DIAN
The Registro Único Tributario (RUT) is issued by DIAN (Dirección de Impuestos y Aduanas Nacionales). For most SAS formations, the pre-RUT obtained during Chamber registration is converted to the full RUT within days. The legal representative must update the RUT in person or electronically.
Open a corporate bank account
Open a corporate account at a Colombian bank (Bancolombia, Banco de Bogotá, Davivienda). The NIT and Chamber of Commerce registration certificate are required. Some banks allow account opening as part of the single-window process. Digital banks (Nequi Business, RappiPay) are emerging alternatives for smaller operations.
Register for electronic invoicing and complete compliance setup
Register with DIAN for electronic invoicing (facturación electrónica), which is mandatory for all businesses. Set up payroll if hiring employees, including registration with social security (EPS, AFP, ARL) and the parafiscal system (SENA, ICBF, Cajas de Compensación).
Required Documents
- Certified passport copy and proof of address of each shareholder
- Articles of Incorporation (Estatutos) — private document, no notary needed
- Pre-RUT form (Formulario de Registro Único Tributario)
- Power of Attorney if shareholder cannot appear in person (apostilled)
- Proof of registered office address in Colombia
- Foreign investment registration with the Central Bank (Banco de la República) for capital inflows
Cost Overview
Tax Treatment
Colombia applies a 35% corporate income tax on worldwide income of resident companies. Free Trade Zone (Zona Franca) companies pay 20% CT for qualifying industrial and service activities. VAT (IVA) is 19% standard, with 5% on certain goods and 0% on exports. Dividends to non-resident shareholders are subject to 20% withholding (7.5% to residents). The Industry and Commerce Tax (ICA) is a municipal tax at 0.2–1% on gross income — it varies by municipality and business activity. Capital gains are taxed at 15%. Colombia has a Controlled Foreign Corporation (CFC) regime and transfer pricing rules aligned with OECD standards.
Pros & Cons
- SAS is one of the most flexible corporate structures in Latin America — single shareholder, no minimum capital, highly customisable articles
- Formation in 3–5 days without a notary — fastest and simplest in the Andean region
- Free Trade Zones (Zonas Francas) offer 20% CT rate — significant savings versus the 35% standard rate
- Growing tech ecosystem in Medellín and Bogotá with international recognition
- OECD member since 2020 — signals institutional and regulatory maturity
- Pacific Alliance membership provides trade integration with Mexico, Peru, and Chile
- Capital can be paid over 2 years — no upfront capital injection required
- 35% corporate tax rate is among the highest in Latin America
- Industry and Commerce Tax (ICA) adds 0.2–1% on gross income at the municipal level — often overlooked
- 20% withholding tax on dividends to non-residents is significant
- Colombian peso (COP) has been volatile — currency risk is real
- Security considerations still apply outside major cities
- Complex payroll tax and social security system adds to employment costs
- Free Trade Zone benefits require minimum investment and job creation thresholds
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Get StartedThis content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.