Four ways to sell in Colombia, and what each one makes you liable for

The first page of results for this question is company formation marketing. Every one of those firms answers yes, incorporate, because incorporating is what they sell. For a European industrial or consumer goods company shipping its first containers to Colombia, the answer is usually no, and the interesting part is where exactly the line sits.

Route one: export to a Colombian buyer

You sell to a Colombian company that buys for resale and imports in its own name. No Colombian entity, no NIT, no filings, no permanent establishment.

The constraint is on the other side. The importer of record must be registered with DIAN, hold a NIT, and have the import activity recorded in its RUT under the customs regime in Decreto 1165 de 2019. A foreign company without a Colombian presence cannot do that, so somebody local always imports. In this route it is your customer, which is clean, because they own the goods and the risk.

Route two: appoint a distributor

Commercially very different, legally similar, with one large Colombian wrinkle. Your distributor imports, holds the customer relationships and, for regulated products, holds the sanitary registration: see your distributor holds the INVIMA registration.

The wrinkle is that Colombia, unlike Mexico, has a statutory agency regime with a compensation formula, and courts will look past the label on the contract to what the relationship actually is. That is set out in what it costs to end a Colombian distribution agreement and it is the single most consequential legal difference between the two markets.

Route three: a branch, the sucursal

Here is where Colombian law is more prescriptive than most European companies expect. Under articles 471 to 474 of the Codigo de Comercio, a foreign company that carries on permanent activities in Colombia must establish a branch, and article 474 enumerates what counts as permanent activity. The list includes things like opening commercial establishments or offices in Colombia, participating as a contractor in works or services, and intervening in the management or administration of Colombian companies.

This is not a tax rule. It is a corporate law obligation, supervised by the Superintendencia de Sociedades, and it exists independently of whether you have a permanent establishment for tax purposes. A European company that puts an office and a country manager into Bogota while insisting it has no Colombian presence is arguing against article 474.

A branch has a NIT, can import, is taxed on its Colombian-source income, and does not limit the parent's liability. That last point is why it is rarely the right answer.

Route four: an SAS

The sociedad por acciones simplificada, created by Ley 1258 de 2008, is the default vehicle. One shareholder is enough, there is no minimum capital, the corporate governance is flexible, and it can be incorporated by private document rather than public deed in most cases. It is a genuinely good instrument and it is why almost every foreign entry into Colombia ends up as an SAS.

It brings the full compliance set: monthly and annual tax filings, electronic invoicing, payroll and social security from the first employee, and the exchange control registration described below.

Two costs people underestimate. The revisor fiscal, a statutory auditor, becomes mandatory once a company crosses asset or revenue thresholds expressed in minimum monthly salaries, which are restated each January. It is a recurring professional fee, not a filing. And registering the foreign investment: if you capitalise a Colombian company and do not register the investment with the Banco de la Republica, you do not acquire the exchange market right to remit profits or repatriate capital. That is covered in skip Formulario 11 and you cannot legally take profits out.

The tax line: permanent establishment

Separately from the corporate law question, articles 20-1 and 20-2 of the Estatuto Tributario define a permanent establishment and tax non-residents on income attributable to it. A fixed place of business through which the foreign company carries on all or part of its activity creates one. So does acting through a person, other than an independent agent, who habitually exercises authority to conclude contracts on the company's behalf.

The overlap with the corporate rule is substantial but not identical, and the practical trap is assuming one answers the other. You can have an article 474 obligation to register a branch without an obvious tax presence, and you can create a permanent establishment through a dependent agent without opening an office.

Where we would put the line

No entity if you are exporting to independent Colombian buyers or to a distributor who buys and resells, you have no office or staff in Colombia, and your people visit rather than reside.

An entity, and specifically an SAS, once any of the following is true: you open a place of business, you employ someone in Colombia who sells rather than supports, you want to hold your own sanitary registrations, or you need to be your own importer.

A branch if a Colombian counterparty or a public tender specifically requires it, which happens in some contracting contexts, and otherwise not.

For the sequencing question of whether Colombia deserves this at all yet, see market entry or expansion, and for where to put the entity once you decide, Colombia is three markets.

Common questions

Can I sell in Colombia without a local company?

Yes, by exporting to a Colombian importer of record who holds a NIT with the import activity registered in its RUT. You cannot import in your own name, and you must stay clear of the permanent activities listed in article 474 of the Codigo de Comercio, which trigger an obligation to register a branch.

What are permanent activities under Colombian law?

Article 474 of the Codigo de Comercio lists them, and they include opening commercial establishments or offices in Colombia, participating as a contractor in works or the provision of services, and intervening in the management of Colombian companies. Carrying on any of them obliges a foreign company to establish a branch, regardless of the tax analysis.

Branch or SAS in Colombia?

An SAS for almost all European entrants. It gives limited liability, allows a single shareholder with no minimum capital, and has flexible governance under Ley 1258 de 2008. A branch carries comparable administration without the liability shield, and is mainly used where a counterparty or a tender requires the foreign company itself to contract.

Does a sales agent create a permanent establishment in Colombia?

They can. Article 20-1 of the Estatuto Tributario treats a person other than an independent agent who habitually exercises authority to conclude contracts on the foreign company's behalf as creating a permanent establishment, alongside the fixed place of business test.