Before creating your business in Colombia its important for you to know that the is a flexible type of company that was create in 2008 by the Law 1258 of 2008 called SAS Sociedad por Acciones Simplificada or Colombian Simplified Stock Company. This type of company can be created by a private document and does not require any type of further legalizations.
We have come across 10 important characteristics of the SAS in Colombia that could guide you why we believe its beneficial to create a SAS in Colombia:
- CUSTOMIZE YOUR BUSINESS
The SAS is so flexible that the shareholders can basically define all the structure of the company. You can define if you want to be the sole member of the company, the term of duration, and if your prefer to create different types of shares. Basically, the shareholders can define the structure and organization of the company in the bylaws according to their needs.
- SEPARATION OF ASSETS
When you create a SAS, you are establishing a new entity that is legally separate from your owner assets. This separation provides a type of protection to the owner which can only be liable for the amount of money they have invested. Separating yourself from the investment can be beneficial and it gives you space to make legal and tax planning.
- SELF REGULATION OF SHARES NEGOTIATION
The SAS gives the shareholders the possibility to restrict the shares negotiability and to stipulate the terms of the negotiation of the shares. The most common term is the subscription right which obliges the shareholder that is going to offer its shares to offer them first to the company and the current shareholders before offering them to external parties, this gives the shareholders the opportunity to decide if they want new shareholders into the company.
If your desire is to apply for a visa in Colombia, the Colombian migration law gives the opportunity to foreign shareholders to apply for a Migrant VISA which can be valid for three years if you invest more than 100 Colombian minimum wages in a company in Colombia. Chancellery is being very demanding regarding this type of visa since they will require the company to have employees, contracts and regular movements of a real company.
- BANK ACCOUNT
Once you have an incorporated company in Colombia you are allowed to open a bank account that can facilitate your finance management per month.
- SOLE SHAREHOLDER
The SAS can be created by only one shareholder who can be a natural or a corporation. Creating a SAS where the owner is an LLC can be beneficial when you do not want to own as a natural person shares in Colombia.
The last tax reform brought by the Law 1943 of 2018 incorporated a change for corporate taxes, a progressive reduction in the income tax will be made in the following 4 years. Currently, the income tax is 33%, this will decrease until 2022 where the percentage will be of 30%.
- NO TRADE STOCKS
Nevertheless, it is important to indicate that even though the SAS has a lot of flexibilities it also some restrictions, for instance, the shares of the SAS cannot be traded in the stock market as it has been established in Article 4, Law 1258 2008. This does not affect the company but if you are thinking about creating a company in Colombia to trade in in the market this might not be the right choice for you.
The SAS allows for a simplified organic structure, where there is no obligation to create a board for directors. The law allows the SAS to have one or more managers to conduct the day-to-day affairs of the corporation. There is also no obligation to appoint a fiscal auditor, with an accountant will be enough unless the corporation surpasses certain thresholds.
- UNRESTRICTED PURPOSE CLAUSE
As a default rule, the law allows for the SAS to be set up for any lawful purpose, commonly the shareholders indicate in the bylaws what type of purpose the SAS will have, however, there is always the possibility to indicate that the SAS can have any lawful purpose.
- OBLIGATIONS FOR THE SAS
As per any company, a SAS has different obligations, there must be an Annual General Meeting where there is a presentation of financial statements, bookkeeping, corporate books and the regular organization of any company.
In conclusion, SAS has been notably accepted by the business community since its legal creation in 2008, particularly because of its flexibility in terms of the incorporation process, and the freedom of the shareholders to establish the terms and conditions for its organization.
If you desire to know more information, do not hesitate to contact us.