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Taking profits out of Colombia: dividends, branch profits, capital reductions and sale proceeds, the exchange rights of a registered investor and the 20 percent dividend withholding

Argentina. For full detail on Argentina, go to The Argentine Thread.

Last verified: 2026-10-26 · Status: Stable

A registered foreign investor may remit abroad, in freely convertible currency, the verified net profits of each financial year and the proceeds of selling, liquidating or reducing the capital of its Colombian investment; the bank buys the dollars at a market rate and files an FX declaration under a specific numeral. Before the money leaves, the company withholds income tax on the dividend: 20 percent for foreign shareholders when profits were taxed at company level, and the 35 percent corporate rate first and then 20 percent on the rest when they were not; treaties can lower the rate. Exchange conditions for remittances cannot be changed to the detriment of a registered investor except temporarily when international reserves fall below three months of imports, and Colombia has no general income tax treaty with Argentina.

USD figures use the TRM (tasa representativa del mercado) of COP 3,158.43 per US dollar, valid 24 to 26 October 2026, from the official TRM series certified by the Superintendencia Financiera and published on the national open data portal. Amounts in UVT use the 2026 UVT of COP 52,374 (DIAN Resolución 000238 de 2025). Conversions are for orientation only.

Key facts

Right to remit verified net profits of a registered investment in freely convertible currency	Yes, through the FX market textDecreto 1068 de 2015 art. 2.17.2.2.3.1; Resolución Externa 1 de 2018 art. 55, as of 2026-10-26 · in force
Right to remit proceeds of sale, liquidation or capital reduction of a registered investment	Yes, through the FX market textDecreto 1068 de 2015 art. 2.17.2.2.3.1, as of 2026-10-26 · in force
Remittance conditions frozen at registration date	Yes, except temporarily if reserves fall below three months of imports textDecreto 1068 de 2015 art. 2.17.2.2.3.2, as of 2026-10-26 · in force
FX numeral for remitting dividends of direct investment	2074 codeDCIP-83 Annex 1, as of 2026-10-26 · in force
Withholding on dividends to foreign companies and non residents (profits taxed at company level)	20 %Estatuto Tributario art. 245, as of 2026-10-26 · in force
General corporate income tax rate	35 %Estatuto Tributario art. 240, as of 2026-10-26 · in force
Financial transactions tax (GMF) on account debits	0.4 %Estatuto Tributario art. 872, as of 2026-10-26 · in force
Income tax treaty with Argentina	None; only an air and maritime transport agreement (Ley 15 de 1970) textLey 15 de 1970, as of 2026-10-26 · in force

The rule

1. Once the investment is made and its registration declaration presented to Banco de la República, the foreign investor may (a) reinvest profits or keep undistributed profits with remittance rights in surplus, (b) capitalize sums with remittance rights, (c) remit abroad in freely convertible currency the verified net profits generated periodically, based on the year end balance sheet (or on the year end balance sheet and the contract governing the contribution for direct investment, or on the administrator's account closing for portfolio investment), and (d) remit abroad in freely convertible currency the proceeds of selling the investment in Colombia, liquidating the company or portfolio, or reducing its capital.Decreto 1068 de 2015 as replaced by Decreto 119 de 2017, Art. 2.17.2.2.3.1, 2015-05-26 official text · verified 2026-10-26

2. The conditions for repatriating the investment and remitting profits in force on the date the foreign investment was registered cannot be changed in a way that harms the investor, except temporarily when international reserves are below three months of imports. The rule is without prejudice to the powers of the Board of Banco de la República as monetary, exchange and credit authority.Decreto 1068 de 2015 as replaced by Decreto 119 de 2017, Art. 2.17.2.2.3.2 and art. 2.17.2.2.3.1 parágrafo, 2015-05-26 official text · verified 2026-10-26

3. Payments in freely convertible currency of the verified net profits of a registered foreign investment, and of the proceeds of its sale in Colombia, portfolio liquidation, company liquidation, capital reduction or reduction of the supplementary investment in a branch, must go through the FX market, after meeting the Código de Comercio requirements for each operation.Resolución Externa 1 de 2018 of the Board of Banco de la República, Art. 55, 2018-05-25 official text · verified 2026-10-26

4. The outflow is declared to the bank with the FX declaration for international investments: numeral 2074 for profits, dividends and other returns of direct investment (excluding price gains), numeral 4560 for the remittance of direct investment and branch supplementary investment on sale, liquidation or reduction (including price gains), numeral 4571 for returns, profits and dividends of portfolio investment, and numeral 4635 to return the excess of pesos converted over the capital actually contributed. Dividends declared by a company may be remitted through the company's own compensation account, and the price paid by a resident buyer may be remitted through the buyer's compensation account, each acting as agent of the non resident.Circular Reglamentaria Externa DCIP-83 de 2023 (compiled), Annex 1 and ch. 8, Annex 1 (numerales 2074, 4560, 4571, 4635); num. 8.1, 2023-09-12 official text · verified 2026-10-26

5. Dividends paid to foreign companies and non resident individuals bear income tax at 20 percent, withheld at source on the gross payment. If the profits distributed would have been taxed in the hands of a Colombian company under the rules of articles 48 and 49 (that is, they exceed the profits taxed at company level), the corporate rate of article 240 applies first and the 20 percent then applies to the amount remaining.
Cost to do it: Withholding of 20 percent of the gross dividend; for a COP 1,000,000,000 dividend out of taxed profits, COP 200,000,000 (about US$63,323).
Example: COP 1,000,000,000 dividend out of taxed profits: withholding COP 200,000,000, net COP 800,000,000. / About US$316,613 gross, US$63,323 withheld, US$253,290 net before bank charges.Estatuto Tributario, art. 245 as amended by Ley 2010 de 2019 and Ley 2277 de 2022, Art. 245, inciso 1 and parágrafos 1 and 2, 2022-12-13 official text · verified 2026-10-26

6. The general corporate income tax rate for Colombian companies, permanent establishments and foreign entities filing returns is 35 percent; it is the rate applied first to distributions out of profits that were not taxed at company level.Estatuto Tributario, art. 240 as amended by Ley 2277 de 2022, Art. 240, inciso 1, 2022-12-13 official text · verified 2026-10-26

7. Transfers of currency between a foreign company and its Colombian branch are allowed only for assigned or supplementary capital, the reimbursement of profits and of assigned or supplementary capital, payments for reimbursable foreign trade in goods and payments for services under the tax rules. A foreign company may not lend to its own branch. Currency available to the branch in its current account with head office during the year in which profits arise may be registered as supplementary investment to assigned capital, which may never have a negative balance outside the hydrocarbons and mining special regime.Resolución Externa 1 de 2018; Decreto 1068 de 2015; DCIP-83, Res. Ext. 1 de 2018 art. 56; Decreto 1068 art. 2.17.2.2.1.3; DCIP-83 num. 7.2.1.5, 2018-05-25 official text · verified 2026-10-26

8. Withdrawals from current and savings accounts and other financial transactions that dispose of deposited funds are subject to the financial transactions tax (GMF) at 4 per thousand, so paying a remittance from a Colombian peso account generally bears GMF unless an exemption in the Estatuto Tributario applies.
Cost to do it: GMF of 0.4 percent of the amount debited: COP 3,200,000 (about US$1,013) on a COP 800,000,000 net dividend.Estatuto Tributario, art. 871 (Ley 633 de 2000) and art. 872 as amended by Ley 1819 de 2016, Art. 871 and art. 872, 2016-12-29 official text · verified 2026-10-26

9. Colombia's income tax treaties in force are with Spain, Chile, Switzerland, Canada, Mexico, Korea, India, Portugal, the Czech Republic, the United Kingdom, Italy, France and Japan, plus the Andean Community Decision 578. Treaties with Brazil, the Netherlands, Luxembourg, Uruguay and the United Arab Emirates are listed as not in force. With Argentina, Colombia only has an agreement on air and maritime transport companies (Ley 15 de 1970, in force since 22 March 1971), so dividends to an Argentine parent bear the domestic rate.DIAN list of international tax conventions; Ley 15 de 1970, Treaty list (status, entry into force and approving laws); Argentina agreement in force since 22 March 1971, 1971-03-22 official text · verified 2026-10-26

Step	Profits taxed at company level	Profits not taxed at company level
Gross dividend	COP 1,000,000,000 (US$316,613)	COP 1,000,000,000 (US$316,613)
Corporate rate first (art. 245 par. 1)	Not applicable	35%: COP 350,000,000 (US$110,815)
Dividend withholding 20%	COP 200,000,000 (US$63,323)	COP 130,000,000 (US$41,160)
Net remitted before GMF and bank charges	COP 800,000,000 (US$253,290)	COP 520,000,000 (US$164,639)
Effective tax on the dividend	20%	48%

From a COP 1,000,000,000 dividend to a foreign parent with no treaty (Estatuto Tributario art. 240, 245, 872). USD at the TRM of COP 3,158.43.

Flow	Numeral
Dividends and profits of direct investment	2074
Sale, liquidation or capital reduction of direct investment; reduction of branch supplementary investment	4560
Portfolio returns, dividends and liquidation	4571
Return of pesos converted in excess of the capital contributed	4635
Return of an investment never completed (deposit first, currently 0%)	4565

Which FX numeral to use when money leaves (DCIP-83 Annex 1)

Worked example

A German parent owns 100 percent of a Colombian SAS whose shareholders approve a COP 1,000,000,000 dividend out of profits that paid corporate tax. The SAS withholds COP 200,000,000 (art. 245) and files the withholding return; Germany has no income tax treaty in force with Colombia on the DIAN list, so the domestic rate applies.
The SAS buys dollars with the remaining COP 800,000,000 through its bank, giving the FX declaration under numeral 2074 and identifying the registered investor; at the TRM of COP 3,158.43 that is about US$253,290. GMF of about COP 3,200,000 applies if the pesos are debited from a Colombian account without an exemption.
If the same dividend came from profits that were never taxed at company level (for example accounting profits above taxable income), 35 percent applies first and then 20 percent on the remainder: COP 480,000,000 in total, leaving COP 520,000,000 (about US$164,639).
An Argentine parent would face the same domestic 20 percent: there is no income tax treaty between Colombia and Argentina. For the Argentine side of such flows see The Argentine Thread.

Step by step

1. Confirm the investment is registered with Banco de la República under the right investor and receiving company; unregistered capital has no exchange rights.
2. Close the financial year, approve the accounts at the shareholders' meeting and declare the dividend under the Código de Comercio and the bylaws.
3. Compute the taxed and untaxed portions under Estatuto Tributario articles 48 and 49 and withhold 20 percent (or 35 percent then 20 percent); apply a treaty rate only with the residence certificate and treaty conditions met.
4. File and pay the monthly withholding return for the month of payment or accrual.
5. Ask the bank to buy the currency and give it the FX declaration for international investments under numeral 2074 (or 4560 for sale, liquidation or capital reduction proceeds).
6. For a branch, remit profits through the branch accounts as reimbursement of profits; keep the head office current account and supplementary investment reconciled.
7. Keep the minutes, tax returns and FX declarations for the full limitation period of exchange sanctions.

Common traps

Remitting before the investment is registered or after a substitution that was never registered: the new holder has no exchange rights until the registration is in the Sistema de Información Cambiaria (Decreto 1068 art. 2.17.2.2.3.1 and art. 2.17.2.5.1.1).
Assuming 20 percent is always the final cost. Distributions out of profits not taxed at company level bear 35 percent first and 20 percent on the rest, an effective 48 percent (Estatuto Tributario art. 245 par. 1).
Using numeral 2074 for a sale or capital reduction, or 4560 for a dividend. Numeral 2074 excludes price gains and 4560 includes them; a wrong numeral is a wrong FX declaration, fined under the exchange rules.
Funding a branch with a loan from its head office. Credit between a foreign company and its own Colombian branch is not an authorized transfer; send supplementary capital instead (Res. Ext. 1 de 2018 art. 56; DCIP-83 num. 7.2.1.5).
Relying on a treaty listed as signed but not in force. Brazil, the Netherlands, Luxembourg, Uruguay and the United Arab Emirates appear on the DIAN list as not in force.

Sources

Related: Colombia country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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