How to Register Foreign Investment in Colombia

It is not just about having the capital ready and knowing what to invest in in Colombia. Foreign companies or individuals who decide to come to the country to diversify or increase their income look for business opportunities in Colombia. However, they often do not know how to invest, that is, what steps they need to follow to operate under the established regulations and avoid any kind of inconvenience. In this process, understanding how the Foreign Investment Registration in Colombia works can facilitate compliance with the corresponding obligations.

First, all investments made by a non-resident and intended as capital contributions to a company or a branch of a foreign company must be registered with the Banco de la República as foreign investment.

These registrations are formal obligations and do not involve tax or fee payments for the transfer of capital. In addition to maintaining national statistics, their purpose is to guarantee investors' rights in the event of a transfer abroad of profits, investment proceeds, or proceeds from a divestment. This is because the Foreign Investment Registration enables the foreign exchange channel between the investor abroad and their investment in Colombia, both for bringing funds into the country and for their subsequent transfer abroad.

When dealing with foreign currency, the registration is carried out by channeling the funds through a foreign exchange market intermediary, generally a commercial bank, or through a compensation account.

In the most common case, international bank transfers, the investor or recipient of the investment must provide the foreign exchange market intermediary with the minimum information about the transaction so that it can file the corresponding report and the investment can be registered with the Banco de la República. In this way, foreign capital can enter the country following the established procedure.

The most significant innovation in recent years has been the implementation of the Foreign Exchange Information System. This system records information on investments reported by foreign exchange market intermediaries (IMCs) and holders of compensation accounts in investment transactions involving transfers of funds in foreign currencies.

As a result, a specific form is no longer required from IMCs, and each one is free to determine the most convenient way to collect the information. Even so, in practice, it is still common to find documents similar to those previously used when these forms were mandatory, such as the exchange declaration, to facilitate reporting to IMCs. In this context, the foreign investment declaration is part of the information that allows the transaction to be formally reported.

In the case of Compensation Accounts, that is, an account held by a Colombian resident in another market, in a currency other than the Colombian peso, and duly registered as such with the Banco de la República, the account holder must register the investment through periodic reports on the account's transactions in the Foreign Exchange Information System. These reports must indicate those transactions corresponding to direct investment, along with the minimum information about the transaction.

Holders of reported investments can also access the system and report changes related to the registrations, substitutions (that is, modifications to any element of the investment), or cancellations of investments registered in their name, especially in cases where there are no foreign currency movements.

This may occur, for example, when there are contributions in kind or corporate transactions that restructure company capital through exchanges of shares or equity interests.

To learn more about these topics, we invite you to visit Chapter 1, on the General Foreign Investment Regime, of ProColombia's Legal Guide for Doing Business in Colombia.

Investments in the share capital of Colombian companies, as well as in the assigned capital of branches of foreign companies, are considered direct foreign investment and must comply with this registration requirement. For those evaluating the alternatives available for making a foreign investment in Colombia, this is one of the main channels provided for under the established framework.

What types of companies are most commonly used in Colombia?

Understanding the types of companies in Colombia also makes it possible to identify the alternatives available for structuring an investment:

• Limited Liability Company
• Corporation
• Simplified Stock Company

Setting up a company is a common route when discussing foreign investment in Colombia, as it is not only about contributing capital but also about participating in both the benefits and the decisions made by the company. In this way, their presence in the country can be much more fruitful, and it will be easier to develop other types of businesses in the local market.

Branches of Foreign Companies in Colombia

This is another possible route for making a foreign investment in Colombia. It is a model used by companies established outside the country so that they can carry out activities on a permanent basis in Colombia and make investments in certain sectors of the economy.

The Foreign Company can use this alternative to establish a permanent presence in the country. Once established, the administrator of the branch of the foreign company will have the authority to legally represent it and will therefore be able to conduct business in Colombia.

Please note that the activities carried out by the branch are conducted on behalf of the parent company it represents, which means that the rights and obligations of the branch are the same as those of the parent company. Therefore, the foreign exchange market and the procedures associated with registration are among the aspects that a foreign company should consider when structuring its investment in Colombia.

To learn more about the legal framework and key aspects of establishing and developing a business in the country, we invite you to consult the 2026 Legal Guide for Doing Business in Colombia and discover the tools available to you for investing and growing in the Colombian market.