How to Invest in Colombia as a Foreigner: Legal Guide 2026

Colombia has a legal framework that allows foreigners and non-residents to participate in its economy — whether by incorporating a company, acquiring stakes in an existing one, or investing in assets. But the fact that it's possible doesn't mean it's simple, and not all cases work the same way.

Investing without understanding Colombia's legal framework is the most common cause of problems we see at Breuk: capital brought in without the corresponding foreign exchange registration, legal representatives without clear contracts, corporate structures that don't fit the business, or tax consequences no one anticipated.

This guide presents the general landscape so you understand the key elements — and know which questions to ask before taking the first step.

Note: this article is for informational purposes and does not replace legal advice. Each investment has its own particularities. Regulatory data corresponds to the framework in effect at the date of publication; verify with a lawyer before applying to your specific case.

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Colombia does have a favorable framework for foreign investment

Law 9 of 1991 and the International Investment Statute (Decree 1068 of 2015) establish the general conditions for foreign direct investment (FDI) in Colombia. In general terms, the framework seeks to grant foreign investors conditions similar to those of nationals — with sector-specific exceptions that apply to each activity.

That said, "favorable framework" doesn't mean absence of requirements. Registration obligations, sectoral restrictions, and the tax regime exist and must be considered from the start.

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What activities can a foreigner participate in?

The answer depends on the sector and type of activity. In general terms, most economic activities in Colombia are open to foreign participation. However, some sectors have specific regulatory requirements — authorizations, licenses, participation limits — that vary by activity.

Some examples of sectors with particular conditions: media, private security, financial activities (banks, insurers, funds), and activities subject to environmental or land-use permits.

Before defining the investment structure, it's worth verifying whether the sector has a special regime that applies to the specific case. In some activities, the regime doesn't restrict foreign participation but does impose additional conditions that affect operations.

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The 3 most common ways to invest in Colombia as a foreigner

Option 1 — Incorporate a company in Colombia

The most common form and the one that gives the most direct control. A SAS (Simplified Stock Company) is the most widely used vehicle due to its flexibility:

• Can be incorporated by private document in most cases
• No minimum number of shareholders required — can be single-shareholder
• Offers limited liability for shareholders
• Allows flexible share structures

A foreigner can be the sole shareholder of a Colombian SAS. The key consideration is the legal representative figure: the person who acts on behalf of the company before third parties, entities, and authorities. Depending on the investor's immigration status, this can be the investor themselves or a designated third party with proper contracts.

Other corporate forms exist (S.R.L., branch of a foreign company, representative office) with different implications for liability, taxation, and operational flexibility. The choice between them matters and shouldn't be made by default.

Option 2 — Acquire a stake in an existing company

You can buy shares or quotas from an already-incorporated Colombian company. This requires, among other things:

• Legal due diligence of the target company
• Share or quota purchase agreement
• Shareholder registry update
• Foreign exchange registration if the capital comes from abroad

The key difference from incorporating from scratch: you acquire the company's legal history — including liabilities, pending litigation, labor obligations, or contingencies that aren't always visible without proper review.

Option 3 — Asset investment

It's also possible to invest directly in assets without incorporating a company: real estate, Colombian securities, participation in private equity funds, among others.

Each asset type has its own tax regime and registration obligations. Real estate investment, for example, involves annual property tax and potentially occasional gains tax at the time of sale. In all cases, the origin of the capital and how it entered the country determines the foreign exchange obligations.

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Foreign exchange registration: the most commonly skipped step

If the capital you'll invest in Colombia comes from abroad, there's a key obligation: declare and channel that investment through the foreign exchange market and, depending on the case, register it with the Banco de la República.

Why does it matter? The foreign exchange registration is what proves the legal origin of the capital and what enables the subsequent repatriation of profits or the capital itself. Without that registration, recovering the funds abroad can become complicated or impossible.

The specific forms, deadlines, and procedures depend on the type of operation and the channel through which the capital entered. That's why it's important to handle this process with someone who knows Colombia's foreign exchange regime.

Practical rule: if the money you're going to invest came from an account abroad, talk to a lawyer or accountant before moving it. The timing and form in which the capital enters determine the foreign exchange obligations.

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Tax considerations: what you need to know

The taxation of a foreign investment in Colombia depends on several factors: the vehicle used (company, direct asset, portfolio), the type of income it generates, whether the investor has physical presence in the country, and the double taxation regime that applies based on their country of tax residence.

If you incorporate a company in Colombia

The company pays income tax in Colombia like any national company. Profits distributed as dividends abroad have withholding tax, whose rate depends on whether the profits already paid tax at the company level — the "taxed dividends" and "non-taxed dividends" mechanism of the Tax Code.

If you're a non-resident partner without physical presence

Colombian-source income may be subject to withholding as "payments abroad." The rate varies by type of income (services, royalties, returns, dividends).

Double taxation treaties

Colombia has active treaties with several countries that allow avoiding or reducing double taxation. If you're a tax resident of one of those countries, a reduced rate may apply — but the benefit depends on the type of income and the specific treaty. To know if it applies to your case, the safest approach is to review it with a specialist before structuring the investment.

Taxation is the area where the most differences can exist between apparently similar cases. Making structure decisions based on other people's cases without verifying your own conditions is not advisable.

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The most common mistakes we see at Breuk

1. Not completing the foreign exchange registration at the time of investing

The company can operate well for years, until the foreign partner wants to repatriate profits or capital and discovers they can't prove the origin of the investment.

2. Legal representative without contracts documenting the relationship

Appointing a trusted Colombian as legal representative without a contract that clearly defines their functions and powers is a real risk. If the relationship deteriorates, the representative has legal authority over the company.

3. No shareholder agreement when there are Colombian partners

The SAS bylaws regulate the structure. Shareholder agreements regulate what happens in practice: how decisions are made, what happens if a partner wants to exit, how disagreements are resolved. They are different documents and both matter.

4. Ignoring foreign exchange obligations in contracts with abroad

If you pay foreign suppliers or receive payments from international clients, there are channeling obligations through Colombia's foreign exchange market. They're not complex, but omitting them creates problems.

5. Choosing the corporate structure by default, not by design

SAS, S.R.L., branch of a foreign company, representative office — each vehicle has different implications. Choosing the SAS because "it's what everyone uses" without evaluating whether it's the right option can create operational or tax restrictions that are difficult to correct later.

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Where to start?

Before moving capital or signing any document, four questions help define the right structure:

1. What type of investment? — operating company, stake in an existing one, assets, portfolio
2. Does the capital come from abroad? — determines foreign exchange obligations
3. Will there be active operations in Colombia or is it a passive investment? — changes the tax analysis and optimal structure
4. What is the investor's country of tax residence? — there may be an applicable double taxation treaty

With those answers clear, the structure analysis becomes concrete. Without them, the process drags and mistakes accumulate.

At Breuk we accompany foreign investors from structure definition through incorporation, foreign exchange registration, and the contracts that protect their position. If you have a project in mind, let's talk.

Last updated: June 2026. This article is for informational purposes and does not replace individualized legal advice. The tax and foreign exchange regulatory framework may change; verify information with a professional before making investment decisions.