If you’re a foreign entrepreneur exploring business opportunities in Latin America, you’ve likely asked yourself: what is a SAS? In Colombia, this business structure, known as Sociedad por Acciones Simplificada, has become the most popular choice among investors, thanks to its simplicity, flexibility, and legal advantages.
Understanding what is a SAS company in Colombia is important for anyone planning to open or expand a business in this dynamic market. In this article, we’ll explain what a SAS is, how it works, why it matters, and what legal steps are required to create one, especially from a foreign investment perspective.
What Is a SAS?
A SAS (Sociedad por Acciones Simplificada) is a type of business entity established under Law 1258 of 2008. It was specifically designed to offer a more agile and investor-friendly alternative to traditional corporate structures in Colombia.
Unlike a corporation (S.A.) or a limited liability company (Ltda.), a SAS company allows for flexible internal governance, fewer formal requirements, and easier share transfers. It’s especially well-suited for startups, joint ventures, and foreign investors who want operational freedom while maintaining legal security.
Key Features
- Limited liability: Shareholders are only responsible for the amount they invest.
- Single shareholder allowed: You can incorporate a SAS with just one person or entity.
- No minimum capital: There’s no legal requirement for a minimum investment.
- Customizable bylaws: The rules governing the company can be tailored to your needs.
Why Is the SAS Structure Important for Foreigners?
Many foreign investors are drawn to Colombia’s growing economy, but navigating its legal landscape can be challenging without expert guidance. Understanding what is a SAS company in Colombia helps investors make strategic decisions that avoid bureaucratic delays and costly legal mistakes. The SAS model offers:
- A clear legal framework, avoiding uncertainty.
- Efficient entry into the market, ideal for startups or expansions.
- Strong asset protection, essential when investing from abroad.
Legal Requirements for Forming a SAS Company in Colombia
1. Basic Requirements
To form a SAS company in Colombia, you’ll need to meet the following prerequisites:
- Company name reservation: Ensure the business name is unique and registered.
- Legal address in Colombia: A local address is mandatory for registration.
- At least one shareholder: This can be a natural person or a legal entity.
- Tax ID (NIT): Issued by the Colombian Tax Authority (DIAN).
2. Incorporation Process
Here are the main steps involved:
- Drafting the bylaws: These define the company’s purpose, governance, share structure, and more.
- Notarization: While not always required, having the bylaws notarized can provide added legal security.
- Chamber of Commerce registration: Once notarized, the documents must be registered to gain legal status.
- Tax registration: Register the company with DIAN to obtain its NIT and begin legal operations.
3. Required Documentation
- Identification documents (passport or national ID).
- Power of attorney (if using legal representatives).
- Certificate of legal existence (if a shareholder is a foreign entity).
- Colombian address and contact information.
Tip: It’s highly recommended to seek legal support for preparing the bylaws and managing document translations.
Benefits of a SAS Company for Foreign Investors
When exploring what is a SAS and why it’s the preferred business structure for many international entrepreneurs, it’s necessary to understand the strategic benefits it offers. These advantages make the SAS model attractive and practical for those looking to invest or operate in Colombia under a secure legal framework:
Flexibility in Management
One of the main reasons foreigners choose a SAS is governance flexibility. Shareholders can define the decision-making process, the roles of managers, and the terms for issuing or transferring shares without rigid legal templates.
Streamlined Ownership
A SAS allows 100% foreign ownership, and there’s no need for a Colombian partner or director. This is particularly valuable for investors seeking full control over their operations.
Tax Efficiency
Colombian SAS companies benefit from tax deferral on dividends, profits are only taxed when distributed. This gives companies more financial flexibility and better cash flow management.
Scalability
A SAS is ideal for growth. Whether you’re launching a tech startup or opening a regional office, the structure supports future expansions, new shareholders, and evolving business goals.
Common Mistakes When Forming a SAS in Colombia
- Overlooking Local Compliance: Failing to update registration or neglecting annual filings can lead to fines or suspension. Working with a firm ensures your obligations are met on time.
- Poorly Drafted Bylaws: Although flexibility is a benefit, unclear or overly complex bylaws can cause internal conflicts. Always draft them with legal precision.
- Ignoring Tax Rules: Misunderstanding Colombia’s tax obligations—such as VAT, withholding tax, or payroll contributions—can result in significant penalties. It’s crucial to involve a tax advisor from day one.
Now that you understand what is a SAS, you can see why it’s the most common and advantageous structure for foreign investors. Its flexibility, ease of incorporation, and legal protections make it an ideal choice for starting a business in Colombia.
Ready to Launch Your SAS Company in Colombia?
If you’re exploring what is a SAS and planning to establish your business in Colombia, Colombia Law Connection offers trusted legal support to simplify the process. Let our team guide you through every legal step with clarity and confidence.
