Foreign investment: Branches vs. a New company

Which path to choose?
Currently, despite the fact that the economic reactivation has been slowed down by the
global economic recession, companies from all over the world still think of Colombia as a
destination to invest and expand their capital, a fact that has also been boosted by the
current cycle of devaluation of the peso. In this context and also due to other political,
economic and social elements that are emerging at this time, many new companies see an
attraction in incorporating in the country and bring their business here, but are in doubt in
reference to what type of company to create, today in Lopez & James we analyze what is
the most appropriate method of incorporation for new foreign investors.
Generally, the Simplified Joint Stock Company (SAS) model is always considered first, which
has as its main advantage its speed and the relatively simple procedure involved, which has
made it the most popular and recurrent type of incorporated company in Colombia.
However, for some investors this may not always be the best option.
For cases in which the investor needs to prove experience, as for example to apply to the
RUP, that is, the Single Registry of Bidders, in which companies apply to bid and work with
the State, a newly created SAS would not be a good alternative, since in general it would be
better to prove experience and some contracts already signed to make it more interesting
as an option.

It is in this scenario that branches come to the fore, which are defined as a commercial
establishment that belongs to a company already created, i.e., that cannot act
independently and functions as an extension of the legal entity already created abroad. For
the example we mentioned a moment ago of the Single Registry of Bidders, this type of
entity is ideal,since the branch is not a separate legal person and the experience and knowhow of the entity that creates it, i.e. the foreign company, are extended to the branch. In
that order of ideas, a company that wishes to establish itself in Colombia, but also wants to
make use of its experience and good name in an immediate manner, could consider creating
a branch to act as its representative in Colombian territory.

At López & James, we have the appropriate experience to advise you not only on the type
of model that bestsuitsthe foreign investor, but also on how to create it, from the collection
of documents to the application before any chamber of commerce in the national territory.
We also have offices, multidisciplinary and professional work teams, as well as allies around
the world, in addition, we are able to perform Due Diligence services for clients who wish
to know more about those companies in Colombia and the world with which they wish to
contract, our experience has allowed us to develop valuable allies, thus being able to guide
them to make contracts with the appropriate partners. Our team of legal, administrative,
tax and accounting consultants is ready to offer you advice through its virtual channels at
any time by e-mail at, or by calling
our landline in Bogota (601) 7498261. For more information, please visit

About the author:
Carlos Méndez is a lawyer graduated from Universidad Nacional de Colombia, he is part of
the team of Gestiones Empresariales López & James in Bogotá since 2018 and has
experience in civil, commercial and labor law. He specializes in international private law,
immigration and foreign trade matters.
Languages: Spanish, English and Japanese.
Bogotá D.C. December 7, 2022.