How to use Colombia as your international holding

Those jurisdictions have not disappeared. But since 2019, Colombia has created its own alternative — one that almost no one is using yet.

It is called the Colombian Holding Companies regime (CHC, for its Spanish acronym). When properly structured, it can fundamentally change how a business group organizes its international expansion.

1. How the CHC regime works

Colombian holdings had a historical problem. When a Colombian company received dividends from abroad, it paid tax. When it sold a subsidiary, it paid tax. Compared with Panama — where a holding offered tax benefits but at a reputational cost — a Colombian holding offered legal certainty but a heavy tax burden. That made Colombia an unviable choice as an investment hub.

The CHC regime changes this equation. Rather than reducing taxes, it eliminates tax at the specific points where value is actually created.

A CHC in Colombia combines meaningful tax benefits with institutional backing: stronger defensibility before the DIAN (Colombia's tax authority), better perception from banks and investors, and access to a growing treaty network.

Colombia stops being merely a country where you operate. It becomes a country from which you structure.

2. Building a CHC: what it requires

The CHC regime is not for everyone. It demands real economic substance — not a paper structure. Formal requirements include:

• Ownership of at least 10% in a minimum of two foreign companies
• Holding those participations for at least 12 months
• At least 3 employees on payroll in Colombia
• Physical office presence in Colombia
• Effective management and decision-making from Colombia — demonstrable, not on paper

That last point is the most important. The DIAN applies an anti-abuse clause (Art. 869 of the Tax Code) to this regime. If the structure lacks genuine substance, the benefits can be denied entirely.

3. Timeline to activation

4. Key limitations to consider

Before structuring, consider these critical points:

• Real operating cost.Three employees mean payroll, social security, and administrative overhead. This must be weighed against projected tax savings.
• Not symmetrical for all shareholders.Foreign investors extract maximum efficiency from the CHC. Colombian-resident shareholders still pay personal income tax on distributed dividends — the CHC improves corporate structure, not personal taxation.
• Under regulatory scrutiny.The DIAN actively monitors this regime. Structures without genuine substance risk losing all benefits retroactively.