Colombia

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Country Knowledge

Our local member provided the following preliminary information about doing business in this country.
Please contact the firm for more information and obtain professional advice in each country concerned.
Our local member will be happy to help you proceed with your business!

General information

Languages :

  • Spanish

Population : 51 049 000

Currency: Colombian pesos

Current Exchange Rate to USD: $ 4.818,62

Standard corporate income tax rate:

35%

Main tax incentives:

1. Investments or donations, directly or indirectly, in projects classified as technological research and development
2. New hotel projects
3. Renewable electrical energy
3. Housing projects
3. Free trade zone
3. Megainvestments
3. 0% duty for the importation of capital goods and raw materials not produced in the country
3. Forest plantations

Other incentives:

No

Standard dividend withholding tax rates:

20% - Depends on existence of treaty

Branch taxation:

35% - Depends on existence of treaty

Standard Interest withholding tax:

15% - 20%

Interest expense deduction rules:

Unlimited, except for loans with economic associates. "Without prejudice to the other requirements and conditions established in this Statute for the origin of the deduction, when the debts that generate interest are contracted, directly or indirectly, in favor of national or foreign economic associates, the taxpayers of the income tax and supplementary payments may only deduct interest generated from such debts as long as the average total amount thereof, during the corresponding taxable year, does not exceed the result of multiplying by two (2) the net worth of the taxpayer determined as of December 31 of the immediately preceding taxable year.

Standard royalty withholding tax rate:

20% - Depends on existence of treaty

Laws and government

Common law: No

Civil law: Yes

Religious: No

Other infos about legal system :

No

Federal / national only?: Yes

State / provincial too?: Yes

Data privacy rules?:

Yes

Data security rules?:

Yes

Standards & Tax treaties

Number of tax treaties: Treaties to Eliminate Double Taxation Income Tax (19), Agreements for the Exchange of Tax Information in Tax Matters (4) and Agreements to Eliminate Double Taxation of Air and Maritime Navigation Companies (9)

OECD MLI treaty signatory?: YES

Type of tax: VAT

Taxes on foreign products?: Import tariff 0% - 40%

Taxes on foreign services?: 35% - Depends on existence of agreement

Typical time and cost to incorporate a local private company: Without considering the time and cost of permits or authorizations to operate or to manufacture or market the products, 0.7% of the valuation must be paid in money, as is the case for the incorporation of companies, capital increases, and sales of commercial establishments, among other acts. Depending on the complexity of the constitution, legal advice can cost between USD 1,000 and 10,000, and the time can range from one week to one month.

Typical time and cost to register a branch of a foreign company: Without considering the time and cost of permits or authorizations to operate or to manufacture or market the products, 0.7% of the valuation must be paid in money, as is the case for the incorporation of companies, capital increases, and sales of commercial establishments, among other acts. Depending on the complexity of the constitution, legal advice can cost between USD 1,000 and 10,000, and the time can range from one week to one month.

Typical business/tax/other issues in the country:

There are municipal taxes whose rate ranges from 0.2% to 2%. Applies property tax, vehicle, notices, and boards. In 2022, the Tax Reform was approved, which eliminated benefits and incentives for high-salary employees, as well as corporations.

The information provided on this website is intended for general informational purposes only and should not be construed as professional advice. While our members make every effort to ensure the accuracy and reliability of the information presented, we cannot guarantee its completeness, timeliness, or suitability for any particular purpose.

We strongly recommend that you seek professional advice from a qualified expert in the relevant field before making any decisions or taking any actions based on the information provided on this website. Your reliance on any information presented on this website is at your own risk.

Please note that the information on this website is subject to change without notice, and we assume no responsibility or liability for any errors or omissions in the content. By accessing and using this website, you agree to release us from any and all claims, liabilities, and damages arising from your use of the information provided herein.

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