A foreign shareholder can take profits out of Colombia as dividends, provided the investment was properly registered, the shareholders have approved a profit distribution, the applicable tax has been withheld, and the transfer abroad goes through the Colombian exchange market. Dividends paid to non-resident shareholders are generally subject to withholding tax, commonly cited at 20%, a rate that can change when a double taxation treaty applies. Confirm current rates with your accountant before distributing.
For a founder who already runs a business elsewhere, this is usually the question that decides whether Colombia makes financial sense: how much of the profit actually reaches you, and how. This guide explains the conditions, the sequence, the tax logic and the mistakes that block a transfer.
The Four Conditions for a Clean Transfer
| Requirement | Why it matters | Who handles it |
| The foreign investment is registered | Registration protects the right to remit proven net profits abroad | The investor and the receiving company, through the bank |
| The company has distributable profits approved by the shareholders | A dividend is a corporate decision, not a withdrawal | The shareholders’ meeting and the company’s accountant |
| The applicable tax is withheld and paid | Colombian tax rules apply to dividends paid to non-residents | The company and its tax advisor |
| The transfer goes through the exchange market | The bank identifies and reports the operation | The company and its bank |
If any of the four is missing, the transfer can be delayed or blocked. The first one is the most often overlooked, which is why we explain it separately in How Foreign Investment Is Registered in Colombia.
Step-by-Step: Sending Profits Abroad
1. Verify your registration. Download the extract of your registered investment and confirm it matches your corporate records.
2. Close the period and approve the financial statements. The shareholders’ meeting approves the financial statements and decides how profits are distributed, following the bylaws and Colombian corporate law.
3. Determine the tax treatment with your accountant. Check the withholding rate for your country of residence, including whether a double taxation treaty applies.
4. Declare, withhold and pay. The company declares the dividend, withholds the applicable tax and pays the net amount.
5. Transfer through an authorized intermediary. The bank identifies the operation and reports it to the central bank.
6. Keep the records. Keep the shareholder decision, the withholding documentation and the bank confirmation. Ask your home-country tax advisor whether you can use them to claim credit for the tax paid in Colombia.
How Dividends to Foreign Shareholders Are Taxed
Tax summaries describe the current framework, after the 2022 tax reform, in these terms:
● The standard corporate income tax rate in Colombia is 35%.
● Dividends paid to non-resident companies and non-resident individuals are generally subject to a 20% withholding tax.
● The withholding rate can vary where a double taxation treaty between Colombia and the shareholder’s country applies.
● Profits distributed that were not taxed at the corporate level are treated differently: the corporate rate applies first, and the dividend withholding then applies to the amount that remains.
The last point is where founders get surprised. The following table is illustrative only, based on the commonly cited rates above. It does not replace a calculation by your tax advisor.
| Attribute | Profit taxed at corporate level | Profit not taxed at corporate level |
| Profit distributed (illustrative) | 100 | 100 |
| Corporate income tax | Already paid by the company | 35 |
| Amount subject to dividend withholding | 100 | 65 |
| Dividend withholding at 20% | 20 | 13 |
| Net amount to the shareholder | 80 | 52 |
Rates and treatment depend on the shareholder’s residence, the treaty network and the nature of the distributed profits, and they have changed in recent years. Always confirm before you distribute.
Other Ways Value Leaves the Company
Dividends are not the only operation the investment registration covers.
| Operation | What the registration covers | Planning note |
| Dividends from net proven profits | The right to remit net proven profits abroad | Requires approved distributable profits and tax withholding |
| Sale of shares, liquidation or capital reduction | The right to remit the amounts received | Tax treatment differs from dividends, so plan with your advisor |
| Reinvesting or retaining profits | The right to reinvest or retain profits in the company’s equity | Keeps the capital in Colombia and defers a distribution decision |
What Goes Wrong
| Issue | How to avoid it |
| The investment was not registered or was not channeled correctly | Verify your registration extract before planning any distribution |
| Profits distributed without a shareholder decision | Formalize the decision in the corporate records first |
| The treaty rate is assumed instead of confirmed | Have your accountant confirm the applicable rate for your country of residence |
| Tax treatment of untaxed profits not considered | Model the effective cost before approving the distribution |
| Missing documentation at the bank | Prepare the decision, financial statements and withholding documents before requesting the transfer |
Plan Repatriation Before You Choose Your Structure
The way you hold your Colombian business affects how profits move and what they cost to move. An SAS and a branch office follow different mechanics for distributing profits, which is one of the reasons we cover them side by side in SAS vs. Branch Office in Colombia. Before you incorporate, settle these questions:
● In which country is each shareholder resident, and is there a treaty with Colombia?
● Do you expect to distribute profits regularly or reinvest them?
● Will the capital contribution be made in currency or in kind?
● Who will approve distributions and who will sign the bank documents?
Several of these decisions are also among the avoidable errors in 10 Mistakes Foreign Entrepreneurs Make When Registering a Company in Colombia.
Frequently Asked Questions
Can a foreign shareholder withdraw all the profits of a Colombian company?
The registered investor has the right to remit proven net profits abroad. The amount available depends on the profits the company can distribute, the shareholders’ decision and the tax withheld.
Do I need a registered investment to send dividends abroad?
Registration is what safeguards the right to remit profits abroad, so you should confirm it before planning a distribution. The process is explained in our guide on how foreign investment is registered.
Is the withholding rate the same for foreign individuals and foreign companies?
Tax summaries describe the same general 20% rate for non-resident companies and individuals, with possible variations under a double taxation treaty. Confirm the rate that applies to your situation.
Does a double taxation treaty reduce the tax?
It can change the applicable rate, depending on the treaty between Colombia and the shareholder’s country. Your accountant should review the treaty text before you distribute.
How long does a transfer abroad take?
There is no fixed timeframe. It depends on the bank, on how complete your documentation is, and on whether your investment registration is in order.
Does this work the same way for a branch of a foreign company?
No. A branch follows different mechanics, and the tax effects differ from those of an SAS. Review the comparison in SAS vs. Branch Office in Colombia and confirm the details with your tax advisor.
Plan Your Colombian Structure With the Exit in Mind
The cost and speed of getting profits out depend on decisions made at incorporation, not at distribution time. Start Colombia’s legal and accounting team structures the company, the capital contribution and the distribution plan together, so repatriation does not become a surprise.
