Countries › Colombia › Guide › 15. Exiting › Closing the Colombian branch of a foreign company: terminating business in Colombia, reducing assigned capital, profit remittances, the going concern duty and the Banco de la República registration

Closing the Colombian branch of a foreign company: terminating business in Colombia, reducing assigned capital, profit remittances, the going concern duty and the Banco de la República registration

Last verified: 2026-10-27 · Status: Stable

A branch is not a separate company, so the foreign company closes it by deciding to terminate its business in Colombia and liquidating the branch under the rules for joint stock companies. Branch profits sent to the head office are dividends for tax purposes and can only be remitted on year end results, reducing assigned capital needs Superintendencia de Sociedades authorization, and the going concern dissolution duty also applies to branches. At the end the assigned capital registration at Banco de la República is cancelled and the branch's RUT is closed.

USD figures use the TRM (tasa representativa del mercado) of COP 3,157.94 per US dollar valid 27 October 2026, from the official TRM series certified by the Superintendencia Financiera and published on datos.gov.co. Conversions are for orientation only.

Key facts

Tax on branch profit transfers to the foreign head office (dividend rate)	20 %ET art. 30 num. 2 and art. 245, as of 2026-10-27 · in force
Branch equity below this share of assigned capital must be reported to Supersociedades	50 %Decreto 1074 art. 2.2.2.1.2.2 num. 2, as of 2026-10-27 · in force
Maximum liabilities to assets ratio for reactivating a branch in liquidation	70 %Ley 1429 de 2010 art. 29, as of 2026-10-27 · in force

The rule

1. Foreign companies are subject to the rules for Colombian companies in what the foreign company title does not cover. When the operating permit is revoked the company must liquidate its business in Colombia following, as applicable, the Código de Comercio rules for liquidating joint stock companies; foreign persons with permanent business in Colombia are subject to the insolvency regimes.Código de Comercio (Decreto 410 de 1971), Art. 492, 495 and 497, 1971-03-27 official text · verified 2026-10-27

2. Failing the going concern hypothesis is a dissolution cause and the managers' duties to stop new operations and call the owners apply equally to branches of foreign companies; the old Código de Comercio art. 490 on branch capital losses was repealed. The foreign company owning a branch may, at any time after liquidation starts and before remainders are distributed, agree to reactivate the branch if external liabilities do not exceed 70 percent of assets.Ley 2069 de 2020; Ley 1429 de 2010, Ley 2069 art. 4 parágrafos 1 and 2; Ley 1429 art. 29, 2020-12-31 official text · verified 2026-10-27

3. Branch managers must obtain Superintendencia de Sociedades authorization to reduce the assigned capital (not needed to reduce supplementary investment to assigned capital), report when branch equity falls below 50 percent of assigned capital because of losses, and report any supervision cause within a month. Supersociedades must approve the inventory of supervised branches whose assets do not cover external liabilities or that carry pension liabilities when they terminate business in Colombia.Decreto 1074 de 2015 (compiling Decreto 2300 de 2008), Art. 2.2.2.1.2.2 and 2.2.2.1.3.1, 2015-05-26 official text · verified 2026-10-27

4. Branch profits are settled on the year end balance sheet, so the branch cannot advance or remit sums to the head office on account of future profits. For tax, transfers of Colombian source profits of branches and permanent establishments to related foreign companies are dividends, taxed at 20 percent for foreign companies.Código de Comercio; Estatuto Tributario (art. 30 modified by Ley 1819 de 2016; art. 245 by Ley 2277 de 2022), Código de Comercio art. 496; ET art. 30 num. 2 and art. 245, 2022-12-13 official text · verified 2026-10-27

5. Assigned capital of branches is registered as foreign direct investment, and its cancellation follows the general procedure through the Sistema de Información Cambiaria; reducing supplementary investment to assigned capital does not require a cancellation filing. Branches in hydrocarbons and mining follow the special regime registration rules.Circular DCIP-83 of Banco de la República, Num. 7.2.1.3.1 and num. 7.2.1.4 lit. b, 2026-08-25 official text · verified 2026-10-27

6. RUT cancellation may be requested on cessation of activities through a permanent establishment in Colombia, and DIAN may also cancel it of its own motion on that ground, after verifying that all obligations are met.Decreto 1625 de 2016 (art. 1.6.1.2.18 modified by Decreto 678 de 2022 art. 14), Art. 1.6.1.2.18 num. 1 lit. g, num. 2 lit. e and parágrafo, 2022-05-02 official text · verified 2026-10-27

Worked example

A US company closes its Bogotá branch: the board abroad resolves to terminate business in Colombia and appoints a liquidator; the resolution is registered at the chamber of commerce; the branch pays employees and creditors, files its final returns, pays dividend tax of 20 percent on taxed profits remitted, cancels the assigned capital registration and closes the RUT.

Step by step

Adopt the head office resolution to terminate business in Colombia and appoint a liquidator; register it at the chamber of commerce.
Notify DIAN within 10 days of the cause; follow the joint stock company liquidation steps.
Ask Supersociedades for authorization if reducing assigned capital before closure, or for inventory approval if the branch is supervised with a deficit or pension liabilities.
Remit only year end profits, with dividend tax withheld.
Cancel the foreign investment registration and request RUT cancellation.

Common traps

A branch cannot send advances on future profits to the head office.
Reducing assigned capital without Supersociedades authorization is not allowed; only supplementary investment reductions are free.
The going concern duty and personal liability of managers apply to branch managers too.
The head office is the same legal person as the branch, so branch debts are its debts.

Sources

← Judicial liquidation of an insolvent Colombian company: when it opens, what it does to contracts and managers, the simplified track for small debtors and the controller's liabilityPersonal liability when exiting Colombia: managers, liquidators, statutory auditors, shareholders and the foreign parent →