FINTECH IN COLOMBIA

The Fintech activity in Colombia, is gaining an important market and regulations started to be
issued approximately 3 years ago, however this regulation is focused on those companies that
intend to perform activities of a bank, or that somehow intend to capture or handle money from the
public. Companies that only lend money -online- can operate without major requirements, because
in Colombia there is freedom of enterprise. Obviously they must adopt one of the corporate forms
provided for, in the Colombian legislation, being the most convenient the SAS corresponding to a
Simplified Stock/Shares Societies, which may be constituted by one or several natural or legal
persons, who will only be responsible up to the amount of their respective contributions.

¿Can foreigners be partners in Simplified Stock/ Shares Societies?

Yes, they can. The law does not establish restrictions in this regard. International investors residing
outside the country may also be members of a SAS (Article 2 of Decree 2080 of 2000, whereby the
General Investment regime of foreign capital in Colombia and Colombian capital abroad is issued).
If a foreign company acquires the majority of the shares in a Simplified Stock/Shares Society
domiciled in our territory, it is called direct foreign investment. Thus, the international investor who
resides outside the country and that constitutes a company for simplified actions in Colombia
directly, or through his representative, enjoys the same legal treatment as nationals residing in
Colombia.

The most prominent companies currently in Colombia in this field, are: Rapicredit, Credissimo,
Lineru, Kredicity and Credyty, all constituted as Simplified Stock/Shares Societies, which are not,
neither develop banking activities, nor collection or intermediation of resources, they are entities
supervised by the Superintendence of Societies and the Superintendence of Industry and
Commerce, NOT by the Financial Superintendence of Colombia -SFC-, and therefore do NOT
require of a permit / license to operate from the SFC, to begin the operation in Colombia.

Of the above mentioned companies, Credissimo corresponds to a foreign company whose main
office is in Bulgaria, incorporated in Colombia as a SAS, and as mentioned in the article of “La
Republica” (Colombia's first economic newspaper, in attachment), for this Fintech company it’s
entering into operation in regulatory terms was not difficult, since constituting a SAS is relatively
simple; The point lies more in knowing the structure of ClickCash to determine the documents that
are required, the type of shareholders (if natural person or legal entity), the number of partners,
the source of resources, among others. As this type of operation corresponds to a direct foreign
investment, it must be channeled through the exchange market intermediaries (Banks), and must
be registered with the Bank of the Republic -BR- of Colombia according to the established formats,
for which Foreign capital investors must appoint an attorney in Colombia in accordance with the
terms set forth in Colombian legislation, to carry out the procedures. Foreign investment must be
registered at the BR by the investor or his agent in accordance with the procedures established in
DCIN 83, which generates the rights and obligations provided in the investment rules and in any
case, this does not clear the origin of the resources.

What is the maximum or minimum amount that a non-resident in Colombia can invest?

The international investment regime does not indicate minimum or maximum amounts related to
foreign investment in Colombia to be made by non-residents. The foregoing must be understood
without prejudice to the provisions of the regulations applicable to the development of certain
activities in Colombia, such as financial, insurance, stock market, among others, which usually do
require of the existence of a minimum capital to carry out such activities. in the country.

How to create / form a S.A.S company in Colombia?

1. Choose Company Name:

It is necessary to check in the RUES if the name of your company is available. Once this has been
done you can continue your process.

2. Required Documents:

It is important to have the necessary and appropriate documents to be able to form your company
in a legal way.



 Private document confirming the constitution of the company



 Certificate of existence: Must be issued by the competent official of the company's domicile



 Photocopy of ID / Passport of the person who is constituted as legal representative



 Grant the power to a lawyer or a natural person to act on behalf of the investor.



 The statutes of the company to be constituted must be defined



 Obtain the RUT (Single Tax Registry)




 Have the unique business form

3. Company registration:

For the creation of an S.A.S company in Colombia, registration in the Chamber of Commerce is
necessary. It is very important to make sure you have all the necessary documents mentioned
above in order to make this registration.

4. Get an account:

A bank account must be created in the name of the company. For this you must have the
documents required by the bank you have chosen.
5. Obtaining RUT:

In order to obtain the definitive RUT (Unique Tax Registry), the legal representative's card,
commercial register, is necessary.

6. Registration at the DIAN:

Once the company is registered with the Chamber of Commerce, the legal representative must be
registered at the DIAN (Taxes) to be legally recognized and authorized to sign the taxes.

7. Digital signature:

When creating a company in Colombia, a digital signature is commonly used. This is a legal way to
process documents electronically, facilitating the process and reducing costs.

How much is it worth constituting a SAS?

Alike to other companies, the cost of setting up a SAS company depends on the subscribed capital
and assets. For this there are some tables in the chambers of commerce.

What taxes should they pay? and what does it depend on?

- SAS companies are responsible for the income tax and its supplements, which are paid annually.
currently they pay 33% for income tax.

The minimum staff required to start the SAS constitution project in Colombia for online credit
operations, in my opinion is the following:

CEO / SALES MANAGER COLOMBIA: to start the commercial management (aimed at achieving
strategic alliances that allow the creation of a broad network for the collection of payments), and to
assume the Legal Representation in Colombia.

ACCOUNTANT: Required to sign the opening balance, and able to carry out the registry on behalf
tax entities, and of course to start the accounting of the company.

LAWYER: To carry out the entire legal process of constitution and registration of the SAS in
Colombia.

These people could initially be linked through service providers contracts as advisors. Once the
company is constituted, some other positions will surely be required for the entity entry into
operation and also to review the form of work contracts to the company already constituted of the
complete staff, but this depends on the business model of the company. But to start, these three
positions are what I consider indispensable.

SOME ARTICLES OF INTEREST:

https://www.dinero.com/tecnologia/articulo/fintech-como-salir-de-la-informalidad/279682
https://www.larepublica.co/finanzas/plataforma-de-creditos-online-credissimo-aterriza-en-el-
pais-con-dos-tipos-de-servicios-2807011