Colombia joint venture requirements
A US business or individual entering a joint venture in Colombia navigates two legal systems simultaneously. On the Colombian side, the venture must comply with the Código de Comercio (Decree 410 of 1971), foreign investment regulations administered by the Banco de la República, and the corporate registration requirements of the Superintendencia de Sociedades. On the US side, the venture implicates Foreign Corrupt Practices Act (FCPA) compliance, OFAC sanctions screening (as of 2026, Colombia is not subject to comprehensive US sanctions), and US tax reporting for foreign entities. Law Offices of SRIS, P.C. assists clients with the US-law dimensions of Colombian joint ventures and collaborates with Colombia-admitted Of Counsel on the Colombian-law side. Reach us at (888) 437-7747.
Joint venture structures recognized under Colombian law
Colombian commercial law provides several legal forms for joint ventures, each with distinct implications for liability, taxation, and governance. The principal structures are the consorcio (consortium), the unión temporal (temporary union), the cuentas en participación (participation account), and a corporate joint venture formed through a Colombian entity such as a Sociedad por Acciones Simplificada (SAS) under Ley 1258 of 2008. Each structure carries a different allocation of risk between the parties. A consortium does not create a separate legal personality; each member retains independent liability unless the contract provides otherwise. A temporary union imposes joint and several liability on all members for the obligations of the venture. A participation account is a silent-partnership arrangement in which one party (the gestor) contracts in its own name while silent partners contribute capital but remain undisclosed to third parties. The SAS, by contrast, is a separate legal entity with limited liability for its shareholders and is the most common vehicle for long-term joint ventures in Colombia because of its flexibility in governance and capital structure.
The choice among these structures depends on the commercial objectives of the parties, the duration of the venture, the allocation of risk the parties are willing to accept, and the regulatory framework of the industry involved. Certain sectors in Colombia — including hydrocarbons, mining, financial services, and telecommunications — impose additional requirements on foreign participation that may affect the choice of joint venture vehicle. A US party should also evaluate the US tax classification of the chosen Colombian structure, as the entity may be treated as a corporation, partnership, or disregarded entity for US federal income tax purposes, with corresponding differences in reporting obligations under the Internal Revenue Code.
How Mr. Sris and the sriscounsel Of Counsel network assist with Colombian joint ventures
Mr. Sris handles the US-law aspects of the transaction, including FCPA compliance, OFAC sanctions screening, and the US tax treatment of the foreign entity. Eric Duport Jaramillo, the firm’s Of Counsel for Colombia matters — Mr. Duport Jaramillo is admitted to practice law in Colombia; he is not admitted to practice law in the United States, and his practice with Law Offices of SRIS, P.C. is limited to Colombian law and to serving as a liaison for international clients with US-licensed attorneys at the firm — addresses the Colombian-law dimensions, including corporate formation with the Cámara de Comercio, foreign-investment registration with the Banco de la República, and the negotiation of the joint venture agreement under Colombian contract law. Where a matter has a US-law dimension and a Colombian-law dimension, the firm handles the US-law side and the Colombia-admitted Of Counsel handles the Colombian-law side, with each attorney operating strictly within the jurisdiction of their licensure.
The FCPA analysis is particularly important for US parties entering Colombian joint ventures. The FCPA’s anti-bribery provisions, codified at 15 U.S.C. §§ 78dd-1 through 78dd-3, apply to US issuers, US domestic concerns, and certain foreign persons acting in US territory. A US company that enters a Colombian joint venture must assess whether its Colombian partner, its employees, or its agents may be considered foreign officials under the FCPA — a determination that has significant implications for the venture’s compliance obligations. The firm advises on the design of compliance programs, due diligence on Colombian counterparties, and the negotiation of contractual representations and warranties addressing anti-corruption compliance.
About Mr. Sris and the sriscounsel Of Counsel network
Mr. Sris, Owner and Founder of Law Offices of SRIS, P.C., is admitted to practice law in Virginia, Maryland, the District of Columbia, New Jersey, and New York. He founded the firm in 1997 and has built a cross-border practice serving international clients with US legal needs. Mr. Sris testified before the Virginia House Courts of Justice Committee in support of 2019 HB 635 (chief patron Del. David Bulova). His Of Counsel network includes attorneys admitted in foreign jurisdictions who collaborate with the firm on matters involving foreign law, each operating within the scope of their own licensure.
Eric Duport Jaramillo serves as Of Counsel for Colombia matters — Mr. Duport Jaramillo is admitted to practice law in Colombia; he is not admitted to practice law in the United States, and his practice is limited to Colombian law and liaison services for clients working with the firm’s US-licensed attorneys. A former Minister Counselor at the Embassy of Colombia to the European Union and former Executive President of the Pereira Chamber of Commerce, Mr. Duport Jaramillo holds his law degree from Pontificia Universidad Javeriana and is fluent in Spanish, English, and French. Clients may schedule a consultation at our location in Pereira, Colombia (by appointment only).
Frequently asked questions
What is the most common joint venture structure used by foreign investors in Colombia?
The Sociedad por Acciones Simplificada (SAS) is the most widely used vehicle for foreign joint ventures in Colombia because it combines limited liability with maximum flexibility in governance and capitalization. Created by Ley 1258 of 2008, the SAS can be formed by a single shareholder or multiple shareholders, does not require a minimum capital amount set by statute, and permits the parties to tailor governance provisions in the bylaws rather than adhere to a rigid statutory template. A foreign company may hold shares in a Colombian SAS directly, subject to registration of the foreign investment with the Banco de la República. The SAS is also the preferred structure because it can be incorporated relatively quickly through the Cámara de Comercio using standardized forms, and it supports a wide range of commercial activities.
Does a US party need a Colombian-licensed attorney to form a joint venture in Colombia?
Yes, a US party must engage a Colombian-licensed attorney to form a joint venture in Colombia because the incorporation process, registration with the Cámara de Comercio, and compliance with Colombian corporate law require a licensed Colombian attorney. The US-licensed attorney at Law Offices of SRIS, P.C. can handle the US-law dimensions of the transaction, but the Colombian legal formalities are the exclusive domain of Colombian-licensed counsel. Our firm collaborates with Mr. Duport Jaramillo, who is admitted in Colombia, to provide seamless coordination between US and Colombian legal requirements.