Colombia has become the default nearshoring base for US business — same time zone, deep bilingual talent, lower cost. This is the practical 2026 playbook: the structure to use, the setup, the tax reality (there is no US–Colombia treaty), and the hiring rules.
The nearshoring shift is real: US firms are pulling operations back from Asia to the Americas, and Colombia is the clearest winner. The appeal is not a tax break — Colombia is not low-tax — it is proximity, talent and time zone, the things that make a remote team actually work.
Colombia runs on US Eastern/Central hours — real-time collaboration for support, software and shared services, not an overnight hand-off.
Bogotá, Medellín and Barranquilla supply engineers, designers and English-speaking professionals at a fraction of US cost.
Equal treatment for foreign investors by law, free-trade-zone incentives, and guaranteed repatriation once capital is registered.
For most US companies that will hire a team or bill locally, a Colombian SAS subsidiary is the right answer — a clean, limited-liability entity the US parent owns 100%. Contractors suit a first toe in the water; a branch extends the US entity but drags its liability along. The choice drives everything downstream, so it is worth getting right before you file.
| Option | Best when | Watch for |
|---|---|---|
| Colombian SAS subsidiary | You hire, invoice or hold assets in Colombia | Full local compliance; a resident legal representative |
| Contractors (no entity) | A few individual contractors, short term | Misclassification risk; no local presence or protection |
| Branch (Sucursal) | Extending an existing US entity directly | Head-office liability; heavier reporting |
| US LLC only | Serving Colombia remotely, no local staff | No Colombian standing; cannot employ locally |
Much of this runs in parallel, so a straightforward SAS is live in two to four weeks. The two steps a US parent must not skip are the resident legal representative and the Banco de la República capital registration — the second is what protects your ability to take money back out.
By-laws (documento privado) registered at the Cámara de Comercio, with a resident legal representative and a Colombian address.
The DIAN issues the NIT in the same filing; then the electronic-invoicing habilitation so the company can bill.
The US parent’s investment is declared to the Banco de la República — the key to repatriating profit later.
A corporate account at a Colombian bank, with source-of-funds and the parent’s documents.
Electronic payroll and mandatory benefits set up before the first hire.
The subsidiary invoices, hires and remits — under a transfer-pricing policy with the US parent.
Here is the part US founders underestimate. There is no US–Colombia income tax treaty — the IRS treaty list does not include Colombia. So the usual treaty comfort (reduced withholding, tie-breakers) does not exist. Americans rely instead on the foreign tax credit to offset Colombian tax against US tax, within limits.
Colombian side
Corporate income tax 35%; dividends to a non-resident (US) parent are taxed at 20%; VAT 19% on local sales.
US side — no treaty
No treaty relief; the foreign tax credit is the main tool to avoid double tax, and it is capped, not a full refund of Colombian tax.
Parent-sub pricing
Transactions between the US parent and the Colombian SAS must be at arm’s length — a transfer-pricing policy and documentation are expected.
US anti-deferral
A foreign subsidiary can trigger GILTI or Subpart F for the US owner; a check-the-box election changes how the SAS is seen for US tax. Model this with a US advisor.
This is general information for planning, not US or Colombian tax advice. The no-treaty position and the foreign tax credit interact with your US entity type and income — we coordinate with your US CPA so neither side is a surprise.
Colombia is where you hire, so employment is the other half of the job. Local labour law is protective, and getting it right from day one is cheaper than fixing it later.
Employees carry benefits
Social security, severance (cesantías), a statutory bonus (prima) and more — budget roughly a third above gross salary.
Electronic payroll is mandatory
Payroll is reported electronically to the DIAN; mistakes can cost you the deductibility of the expense.
Contractors have limits
Individual contractors work for short, genuine arrangements; a full-time “contractor” doing employee work is a misclassification risk.
The SAS lets you do it right
With a local entity you employ compliantly, sponsor visas and build a real team — the point of nearshoring.
No. As of 2026 the IRS treaty list does not include Colombia, so there is no bilateral income tax treaty. US owners rely on the foreign tax credit, not treaty relief, to mitigate double taxation.
Usually a Colombian SAS — a simplified stock company the US parent can own 100%, with one shareholder, no minimum capital and limited liability. Contractors or a branch fit narrower cases.
Typically two to four weeks for the SAS, NIT and bank account, which can largely run in parallel. The capital registration with the Banco de la República is done alongside.
Colombia taxes the subsidiary at 35% and dividends to the US parent at 20%. On the US side, with no treaty, the foreign tax credit is the main relief, and GILTI/Subpart F and transfer pricing must be modelled.
For a few genuine, short-term contractors, yes — but a full-time team of “contractors” doing employee work is a misclassification risk under Colombian law. A SAS lets you employ compliantly.
Yes, provided the inbound investment was registered with the Banco de la República. Dividends to the US parent carry the 20% Colombian dividend tax, planned alongside the US foreign tax credit.
The full guide to the SAS, NIT, DIAN and nearshoring setup.
Compare Brazil, Argentina, Chile, Peru, Ecuador and Colombia.
Tell us what your US company is building and who you’ll hire. We’ll set up the SAS, the representative and the capital registration — and coordinate with your US CPA.
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