Colombia has grown in popularity among digital nomads and entrepreneurs due to its dynamic culture, breathtaking scenery, and reasonably priced cost of living. Colombia provides an excellent setting for starting a business and living the nomadic lifestyle, regardless of whether you’re a consultant, freelancer, or trying to develop a completely remote company. This article will take you step-by-step through the process of starting a remote business in Colombia, including information on the Digital Nomad Visa, legal requirements, and business registration.

1. Why Colombia?

Before diving into the practical aspects, let’s touch on why Colombia is an appealing option for remote business owners:

• Low Cost of Living: Colombia offers a more economical way of life while still offering top-notch cuisine, high-speed internet, and contemporary conveniences as compared to many North American or European nations.

• Great Infrastructure: Coworking spaces and dependable internet are available in major cities like Bogotá, Medellín, and Cali, making them perfect for remote work.

• Vibrant Expat Community: Colombia has become a hotspot for digital nomads, with a thriving community that makes it easier to network and connect with other entrepreneurs.

• Natural Beauty: Colombia offers a wide range of surroundings for anyone looking to mix work and play, from lush rainforests to stunning beaches.

2. Understand the Colombian Business Landscape

Colombia has several types of business entities, and you’ll need to choose one that fits your remote business model. The most common legal structures for small businesses include:

• Sole Proprietorship (Persona Natural): If you’re a solo entrepreneur, this is the simplest and most straightforward option. However, this structure doesn’t offer liability protection and can limit your ability to scale in the future.

• Corporation (Sociedad por Acciones Simplificada, SAS): This is one of the most popular types of business structures for foreigners and local entrepreneurs. It’s relatively easy to establish, offers liability protection, and provides flexibility in ownership and management.

•  Limited Liability Company (Sociedad Limitada, Ltda.): Another common option, but it requires more stringent management rules and involves a higher number of partners.

For digital nomads, the SAS is typically the most recommended structure due to its simplicity, liability protection, and flexibility in terms of business ownership.

3. Registering Your Remote Business in Colombia

To legally operate your remote business in Colombia, you must follow these steps:

Step 1: Obtain a Colombian Tax Identification Number (NIT)

You must register with DIAN (Dirección de Impuestos y Aduanas Nacionales), the Colombian tax administration, before you may open a business there. The NIT must invoice customers, pay taxes, and conduct business lawfully.

• If you are already in Colombia, you can visit one of DIAN’s offices or obtain your NIT online. Your passport and any other necessary identity documents are needed in order to register.

Step 2: Register Your Business Entity

You must formally register your business with the Colombian Chamber of Commerce (Cámara de Comercio) whether you’re beginning an SAS or another kind of business.

• Choosing a company name and checking its availability.
• Drafting the company’s bylaws (which will outline the company’s purpose, shareholders, and governance structure).
• Registering the business with the Chamber of Commerce, which may require a nominal fee depending on the location.

The Chamber of Commerce will issue you a Certificate of Existence and Legal Representation when you register. Signing contracts and opening bank accounts require this.

Step 3: Open a Colombian Business Bank Account

To handle transactions when your business is registered, you will require a local business bank account. Receiving payments and paying taxes will also require this. Foreign business owners can open accounts with some Colombian banks, though it may be easier if you have a Colombian partner or legal representation.

Tips for Opening a Bank Account:

• Bring your passport, proof of address, and business registration certificate.
• If you don’t speak Spanish, it’s helpful to have a translator, as many banks primarily serve Spanish-speaking customers.

Step 4: Tax Obligations and VAT

Colombian businesses must pay taxes on their income and sales. The key taxes you need to be aware of include:

• Income Tax (Renta): You will have to file income taxes every year, depending on the profits of your company.

• Value Added Tax (IVA): If your business is selling goods or services, you may need to charge VAT (IVA), which is typically around 19%. However, some services are exempt from VAT, so it's essential to understand your obligations.

Long-term headaches can be avoided by hiring a local accountant or tax expert who is knowledgeable with Colombian tax legislation.

4. Digital Nomad Visa for Colombia

You must make sure you have the appropriate visa if you intend to operate your remote business from Colombia. With the introduction of the Digital Nomad Visa, Colombia now permits remote workers to reside and work there for a maximum of two years. What you need know about this visa is as follows:

Requirements for the Digital Nomad Visa:

• Proof of Income: You must demonstrate that you make at least three times the Colombian minimum wage, which is roughly $600 USD (2.5 million Colombian pesos per month). This could come from your freelancing job or revenue from your remote firm.

• Employment proof: If you are employed by a company, you will have to present a contract or other evidence attesting to your remote work arrangement. If you own your own company, you will have to prove that it is a valid and successful enterprise.

• Health Insurance: Proof of private or governmental health insurance coverage is necessary. This guarantees your coverage while residing in Colombia.

• Application Process: The application can be done online or at a Colombian consulate in your home country. It typically takes a few weeks for approval.

Without the limitations of a tourist visa, the Digital Nomad Visa offers a simple way to live and work in Colombia for an extended period of time. For remote business owners who wish to relocate and take advantage of everything the nation has to offer, it’s a great choice.

5. Running Your Business as a Remote Entrepreneur

You can start running your firm as soon as it is registered. The primary benefit of being a digital nomad in Colombia is the harmony it provides between work and play. The following advice can help you run a profitable remote business while residing in Colombia:

• Leverage Coworking Spaces: There are more and more coworking spaces catering to digital nomads in cities like Medellín, Bogotá, and Cartagena. These areas provide networking possibilities, fast internet, and a friendly environment.

• Embrace the Time Zone: Colombia is well located for working with clients and partners in the United States, particularly those in East Coast time zones, as it is in the UTC-5 time zone.

• Networking: Make use of the nearby groups of digital nomads. You can get useful business contacts and collaboration opportunities by going to meetups and events in Colombia.

6. Maintaining Compliance and Scaling Your Remote Business

• Regular Tax Filings: To meet tax filing deadlines, make sure you get in touch with a Colombian accountant on a regular basis.

• Scaling: Once your company is up and running, you may want to think about growing it by bringing on local staff, working with other companies in the area, or even looking into markets outside of Colombia.

Conclusion

Colombia offers a thriving culture, robust internet infrastructure, and a friendly community, making it an exciting and reasonably priced location for remote business owners. If you know how to register your firm, get the Digital Nomad Visa, and abide by local laws, you can effectively start and run your remote business while taking advantage of everything this lovely nation has to offer. Colombia might be the ideal starting point for your entrepreneurial adventure, regardless of whether you’re a freelancer, small business owner, or digital nomad.