{"id":2693,"date":"2026-08-14T16:40:26","date_gmt":"2026-08-14T16:40:26","guid":{"rendered":"https:\/\/colombialegaledge.co\/?p=2693"},"modified":"2026-08-14T16:56:43","modified_gmt":"2026-08-14T16:56:43","slug":"safe-agreement-colombia","status":"publish","type":"post","link":"https:\/\/colombialegaledge.co\/es\/safe-agreement-colombia\/","title":{"rendered":"Investing in Colombia Through a SAFE: What Founders and Foreign Investors Should Know"},"content":{"rendered":"
\"Close-up<\/span>
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Investing in Colombia Through a SAFE: What Founders and Foreign Investors Should Know<\/h2>\n<\/div><\/div>\n\n\n\n

<\/p>\n\n\n\n

A founder in Colombia raising capital may receive an investment proposal that looks very familiar to anyone who has raised capital in Silicon Valley: an investor wants to put money into the company through a SAFE, or Simple Agreement for Future Equity<\/a><\/strong>.<\/p>\n\n\n\n

The document may be only a few pages long, and the investor may describe it as a standard instrument. The commercial arrangement may seem straightforward: the investor provides money now, and the investment converts into shares later.<\/p>\n\n\n\n

But there is an important question that should be answered before anyone signs or transfers funds:<\/p>\n\n\n\n

How does a SAFE actually work when the company receiving the investment is Colombian?<\/strong><\/p>\n\n\n\n

The answer is more nuanced than simply saying that SAFEs are either permitted or prohibited in Colombia.<\/p>\n\n\n\n

Colombian authorities have addressed SAFE agreements directly. Superintendencia de Sociedades has recognized that SAFE contracts can be validly entered into under the principle of private contractual autonomy, provided they comply with the legal requirements applicable to contracts and with the relevant corporate rules<\/strong>. Banco de la Rep\u00fablica has also issued specific guidance on the foreign exchange treatment of SAFE transactions involving Colombian residents and nonresidents.<\/p>\n\n\n\n

This means that a SAFE can be used in connection with a Colombian company, but using a SAFE in Colombia is not simply a matter of importing a foreign template and signing it<\/strong>.<\/p>\n\n\n\n

The contractual terms, corporate structure, foreign exchange treatment, accounting and eventual conversion into shares all need to work together.<\/p>\n\n\n\n

What is a SAFE agreement?<\/h2>\n\n\n\n

A SAFE is an early stage financing instrument through which an investor provides capital to a company in exchange for a contractual right to receive equity in the future, usually upon a specified financing or other triggering event.<\/p>\n\n\n\n

The investor does not normally become a shareholder when the SAFE is signed. Instead, the SAFE establishes the circumstances under which the investment will later convert into shares.<\/strong><\/p>\n\n\n\n

For example, imagine that a Colombian technology company receives USD $500,000 from a foreign investor under a SAFE.<\/p>\n\n\n\n

The company does not necessarily issue shares to the investor that day. Instead, the SAFE may provide that the investment converts when the company completes a future qualified financing.<\/p>\n\n\n\n

If the company subsequently raises a Series A round, the SAFE can convert according to its agreed terms. valuation cap<\/strong>, which sets a maximum company valuation for purposes of calculating the investor\u2019s conversion price; a discount<\/strong>, which allows the investor to convert at a lower price than investors in the future financing; or other mechanisms that determine how much equity the investor receives when the SAFE converts.<\/p>\n\n\n\n

The commercial appeal is obvious for an early stage company. The founders can obtain capital without necessarily having to agree on a full valuation immediately, while the investor receives contra<\/strong>ctual protection for making an earlier and riskier investment.<\/p>\n\n\n\n

Is a SAFE agreement valid in Colombia?<\/h2>\n\n\n\n

This is the first question most founders and foreign investors should ask.<\/p>\n\n\n\n

In 2024, the Superintendencia de Sociedades<\/strong> addressed SAFE agreements directly in Oficio 220 079754. The consultation specifically asked whether these contracts could be entered into under Colombian law.<\/p>\n\n\n\n

The Superintendencia explained that Colombian law recognizes the principle of private contractual autonomy. Parties can structure contracts according to their interests provided that the resulting agreement complies with the legal requirements for valid contracts and does not violate mandatory rules.<\/p>\n\n\n\n

On that basis, the Superintendencia concluded that SAFE contracts, understood as financing mechanisms for new companies, may be valid under Colombian law, provided that they satisfy the applicable legal requirements. It also emphasized that the contractual provisions must be consistent with the relevant corporate rules, including legal and statutory restrictions.<\/p>\n\n\n\n

This is an important distinction.<\/p>\n\n\n\n

There is no specific Colombian statute creating a legal instrument called a SAFE<\/strong>. The Superintendencia expressly noted that Colombian legislation does not contain specific regulation for SAFE contracts. Instead, their validity comes from general contractual principles, subject to the mandatory rules that apply to the transaction.<\/p>\n\n\n\n

So the answer is not that Colombia has adopted the SAFE as a formally regulated financing product.<\/p>\n\n\n\n

The better answer is that Colombian law can accommodate SAFE arrangements through contractual autonomy, but the transaction must be structured consistently with Colombian law<\/strong>.<\/p>\n\n\n\n

The Colombian SAS matters<\/h2>\n\n\n\n

Most startups using this type of financing in Colombia will operate through a sociedad por acciones simplificada<\/strong>, or SAS.<\/p>\n\n\n\n

The SAS is particularly relevant because the eventual result of a SAFE is usually the issuance of shares.<\/p>\n\n\n\n

Law 1258 of 2008 created the SAS and gives these companies significant flexibility in structuring their capital. The law allows different classes and series of shares, subject to the applicable legal requirements, and establishes rules governing authorized, subscribed and paid in capital.<\/p>\n\n\n\n

That flexibility can be useful when structuring an investment involving a SAFE.<\/p>\n\n\n\n

But a SAFE itself does not automatically issue Colombian shares.<\/p>\n\n\n\n

The parties need to think about what happens when the conversion event occurs<\/strong>.<\/p>\n\n\n\n

For example, if the SAFE provides that the investor will receive shares equivalent to a particular economic interest following a future financing, the company needs to be capable of issuing those shares under its corporate structure. The capitalization mechanics, share classes, rights attached to the shares and relevant corporate approvals need to be consistent with the company’s bylaws and Colombian corporate law.<\/p>\n\n\n\n

This is one reason a foreign SAFE template should not be treated as a complete substitute for Colombian corporate documentation.<\/p>\n\n\n\n

What happens when the investor is outside Colombia?<\/h2>\n\n\n\n

This is where the analysis becomes particularly important for international investors.<\/p>\n\n\n\n

Suppose a company incorporated in Colombia receives USD 500,000 from an investor based in the United States, Canada, Europe or another jurisdiction.<\/p>\n\n\n\n

The transaction is now not only a corporate matter. It also raises foreign exchange and international investment questions<\/strong>.<\/p>\n\n\n\n

The Banco de la Rep\u00fablica has specifically addressed SAFE agreements in this context.<\/p>\n\n\n\n

In a 2020 concept concerning a SAFE between a Colombian resident and a nonresident, the Banco de la Rep\u00fablica stated that, regardless of the contractual characterization of the SAFE, these agreements constitute a financing tool. Where the parties are a resident and a nonresident, the Banco de la Rep\u00fablica indicated that the foreign exchange rules applicable to external indebtedness should be considered. It also noted that SAFE investments do not accrue interest and do not have a maturity date.<\/strong><\/p>\n\n\n\n

This is a critical point for foreign investors.<\/p>\n\n\n\n

The fact that a SAFE is designed commercially as a future equity instrument does not mean that its foreign exchange treatment can simply be ignored.<\/strong><\/p>\n\n\n\n

The Colombian foreign exchange regime looks at the actual structure of the transaction and the parties involved.<\/p>\n\n\n\n

That means the question is not merely whether the document says “future equity.” The parties need to determine how the funds enter Colombia and what reporting, registration or other foreign exchange requirements apply to the specific structure.<\/p>\n\n\n\n

Foreign investment and SAFE conversion are not necessarily the same thing<\/h2>\n\n\n\n

Another issue that often causes confusion is the difference between the initial SAFE investment and the eventual foreign equity investment.<\/p>\n\n\n\n

The Banco de la Rep\u00fablica defines foreign direct investment as an investment by a nonresident in assets such as participations in the capital of a Colombian resident company. Its current guidance also explains how foreign investments are registered depending on whether the relevant foreign currency is channeled through the Colombian foreign exchange market.<\/p>\n\n\n\n

A SAFE can therefore create a timing and characterization question.<\/p>\n\n\n\n

At the moment the foreign investor transfers money, the investor may hold contractual rights under the SAFE rather than shares in the Colombian company.<\/p>\n\n\n\n

Later, when the SAFE converts, the investor may acquire an actual equity participation in the Colombian company.<\/p>\n\n\n\n

The legal and foreign exchange treatment of those stages should be analyzed separately.<\/p>\n\n\n\n

This is particularly important because the registration of a foreign investment can provide important rights to the investor, including the ability to remit abroad certain proceeds associated with the investment, subject to the applicable rules.<\/p>\n\n\n\n

The practical lesson is simple: do not wait until the SAFE converts to start thinking about the foreign exchange consequences of the transaction.<\/strong><\/p>\n\n\n\n

The structure should be mapped from the initial transfer of funds through eventual conversion and, if relevant, the eventual sale or repatriation of the investment.<\/p>\n\n\n\n

How should a SAFE be treated for accounting and tax purposes?<\/h2>\n\n\n\n

This is another area where it is dangerous to assume that the international label automatically determines the Colombian treatment.<\/p>\n\n\n\n

In 2024, the Consejo T\u00e9cnico de la Contadur\u00eda P\u00fablica considered a consultation involving a Colombian company and a SAFE. The CTCP explained that SAFEs are financial instruments commonly used in startup financing, but their accounting treatment under Colombian financial reporting standards requires analysis of the particular terms and circumstances of the agreement. It specifically stated that a SAFE is not automatically classified as either equity or debt simply because it carries that label.<\/strong><\/p>\n\n\n\n

The DIAN has taken a similar approach from the tax perspective.<\/p>\n\n\n\n

In Concepto 3454 of 2024, the DIAN explained that the tax treatment of a SAFE must be considered in connection with the accounting treatment required under the applicable framework. It also noted that Colombian law does not contain a specific definition of SAFE agreements and that the particular characteristics and accounting recognition of the agreement matter when determining whether it should be treated as debt or equity for tax purposes.<\/p>\n\n\n\n

This is an important warning for both founders and investors.<\/p>\n\n\n\n

It is tempting to say:<\/p>\n\n\n\n

“A SAFE is not debt, so it must be equity.”<\/strong><\/p>\n\n\n\n

That conclusion is too simplistic in Colombia.<\/p>\n\n\n\n

The actual contractual terms matter.<\/p>\n\n\n\n

The accounting analysis matters.<\/p>\n\n\n\n

And the tax consequences follow the applicable Colombian rules rather than the terminology chosen by the parties.<\/p>\n\n\n\n

What should happen when the SAFE converts?<\/h2>\n\n\n\n

A SAFE is ultimately designed to connect an initial investment with a future capitalization.<\/p>\n\n\n\n

Suppose a Colombian SAS receives USD 1 million through one or more SAFE agreements. Two years later, the company completes a priced financing.<\/p>\n\n\n\n

The conversion of the SAFE needs to be implemented through the company’s corporate structure.<\/p>\n\n\n\n

This means the company and its advisers should be able to answer questions such as:<\/p>\n\n\n\n