How to Register Foreign Direct Investment in Colombia

Having capital ready and knowing where to invest in Colombia is only part of the process.

Foreign companies and individuals looking to enter the country to diversify or increase their income are often interested in exploring business opportunities in Colombia. However, they may not always know how to invest, in other words, what steps they need to follow to operate in compliance with local regulations and avoid potential issues along the way. Understanding how foreign investment reporting works in Colombia can make it easier to meet the relevant requirements.

First, any investment made by a non-resident as a capital contribution to a Colombian company or a branch of a foreign company must be registered with the Colombian central bank, Banco de la República, as a foreign investment.

These registrations are formal requirements and do not involve taxes or fees for transferring the capital. In addition to providing information for national statistics, their purpose is to safeguard investors' rights in the event that investment proceeds, profits, or the proceeds from a divestment are sent abroad.

This is because foreign investment registration enables access to the foreign exchange market between the investor abroad and their investment in Colombia, both for bringing funds into the country and for subsequently transferring them out.

When the investment is made in foreign currency, registration takes place by channeling the funds through a foreign exchange market intermediary, generally a commercial bank, or through a compensation account.

In the most common scenario, international bank transfers, the investor or the recipient of the investment must provide the foreign exchange market intermediary with the minimum information required to process the transaction.

The intermediary can then submit the corresponding report, allowing the investment to be registered with Banco de la República. This enables foreign capital to enter the country in accordance with the established procedure.

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

As a result, IMCs are no longer required to use a specific form, and each intermediary is free to determine the most appropriate way to collect the necessary information. Even so, documents similar to those previously used when these forms were mandatory, such as the foreign exchange declaration, are still commonly used in practice to facilitate foreign investment reporting to IMCs.

In this context, the FDI Declaration is part of the information used to formalize the transaction report.

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 with 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 identify transactions related to the direct investment, along with the minimum information required for the transaction.

Holders of registered investments can also access the system to report changes related to their registrations, substitutions, meaning modifications to any element of the investment, or cancellations of investments in their name, particularly in cases where there are no foreign currency movements.

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

For more information on these matters, we invite you to consult Chapter 1, on the General Foreign Investment Regime, of ProColombia's Legal Guide for Doing Business in Colombia.

Investments in the equity of Colombian companies, as well as in the assigned capital of branches of foreign companies, are considered foreign direct investment and must comply with this registration requirement.

For investors assessing the alternatives available for making a foreign direct investment in Colombia, this is one of the main avenues provided under the applicable foreign investment regime.

What types of companies are most commonly used in Colombia?

Understanding the different types of companies available in Colombia can also help identify the alternatives for structuring an investment and is an important consideration when exploring how to start a business in Colombia as a foreigner:

• Limited Liability Company
• Corporation
• Simplified Stock Company

Setting up a company is a common route for foreign investment in Colombia, since the process involves more than simply contributing capital. It also allows investors to participate in both the benefits and decisions made by the company. This can help you establish a more productive presence in the country and make it easier to develop other types of business activities in the local market.

Branches of Foreign Companies in Colombia

This is another option for making a foreign direct investment in Colombia. It is a structure used by companies established outside the country that want to carry out activities on a permanent basis in Colombia and make investments in certain sectors of the economy.

A foreign company can use this alternative to establish a permanent presence in the country. Once the branch has been established, its manager will have the authority to legally represent the branch and conduct business in Colombia.

Keep in mind that the activities carried out by the branch are conducted on behalf of the parent company it represents. This means that the branch's rights and obligations are the same as those of the parent company.

For this reason, the foreign exchange market and the procedures associated with investment registration are among the key aspects a foreign company should consider when structuring its investment in Colombia, in accordance with the applicable foreign direct investment regulations.

For more information on the legal framework and key considerations for 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 help you invest and grow in the Colombian market.