Digital company or physical company: which is more profitable?

In the changing Colombian business landscape, many entrepreneurs face an essential dilemma: Should you bet on a digital company or a physical company? Although both options have advantages and challenges, the profitability criterion is one of the most analyzed. Today we explore this decision from a comprehensive perspective: costs, taxes, growth opportunities, market trends and, of course, real success stories in Colombia.

This article is intended for those who want to make informed decisions before moving forward with the business registration in Colombia. Whether you are considering opening an online store or renting commercial premises, here you will find key answers and a clear view of the factors that affect the profitability of your business in 2025.

What is meant by digital company and physical company?

 Physical company

A physical company is one that has a presence in a physical space such as an office, commercial premises or production plant. Its operation depends on direct contact with clients, suppliers and staff, and usually has high fixed costs such as rent, utilities, maintenance and in-person administrative staff.

Digital company

A digital company operates completely online. You can offer physical products through e-commerce or digital services such as consulting, education, technology, design, etc. Its structure is more flexible, allowing it to operate from anywhere with an internet connection.

Comparison: digital company vs. physical company

Next, we analyze the main aspects that impact profitability:

    1. Operation costs

Aspect	Physical Business	Digital Business
Rent	From $2,000,000 monthly for urban locations	Not applicable
Public services	Between $500,000 and $1,200,000 monthly	Minimal (only internet and electricity)
Hosting and Domain	Not applicable	Approximately $200,000 annually
Personal	Greater dependence on in-person staff	High automation possible
Facility Maintenance	High	Low or none

Conclusion: A digital company requires less monthly investment in infrastructure, which allows those resources to be redirected to marketing, product development or expansion.

2. Initial capital required

• Physical company: On average, opening a physical business in Colombia can require between $30 and $100 million pesos, including adaptations, furniture, initial merchandise and permits.
• Digital company: You can start with less than $10 million, including web design, branding, and basic digital tools.

Tip: There are special lines of credit for digital entrepreneurs in entities such as iNNpulsa and Bancoldex.

3. Profitability projections in Colombia (2025)

He e-commerce in Colombia has shown constant growth. According to the Colombian Chamber of Electronic Commerce, in 2024 online sales exceeded $60 billion pesos, with an annual growth of 19,6%. Sustained growth is expected by 2025, especially in sectors such as fashion, food, online education and financial services.

On the other hand, physical companies have regained momentum, but they continue to face greater logistical and cost challenges. However, sectors such as gastronomy and experiential retail maintain good margins in strategic areas.

4. Business scalability

The digital companies They allow you to scale quickly: you can sell to clients throughout the country (or even abroad) without having to open new physical offices.

Instead, a physical company requires investment proportional to growth: more premises, more staff, more inventory.

Real example #1
Digital store of organic products created by entrepreneurs in Medellín. They started on social networks, then with a Shopify store. Today they sell nationally and have alliances with Rappi.

Real example #2
Physical cafe in Bogotá, located in a university area. Although it started with a high rental cost, it managed to consolidate itself thanks to in-person events, local alliances and an active community.

5. Legal and tax aspects in Colombia for 2025

For both digital and physical companies, it is necessary to comply with the same basic steps to formalize:

Common requirements:

• Registration before the Chamber of Commerce.
• Registration in the DIAN and obtaining the NIT.
• Registration of the RUT (Simple, Common or Large Taxpayer Regime).
• Affiliation with social security if there are employees.

Key differences:

• The physical companies They must have approved land use, a firefighter certificate and comply with biosafety and health standards depending on the type of business.
• The digital companies They have greater flexibility and fewer license requirements, although they must comply with safety regulations. data protection (Law 1581 of 2012) and electronic commerce (Law 527 of 1999).

Important: If you are going to do business creation in Colombia, make sure you receive updated accounting and legal advice to avoid penalties.

Frequently asked questions (FAQ)

Can a digital company be formal in Colombia?

Yes, a digital company can be completely formal in Colombia and must comply with the same legal requirements as any other company. This includes registration with the Chamber of Commerce, registration with the DIAN, obtaining the NIT and choosing the tax regime that best suits your economic activity. You must also issue electronic invoicing and file taxes, depending on your income level and type of company.

Many digital entrepreneurs make the mistake of thinking that selling through social networks or platforms like WhatsApp or Instagram does not require formalization. However, if they generate income on a recurring basis, it is mandatory to legalize the activity. In addition, being formalized provides benefits such as access to business credit, participation in state calls and support for clients or suppliers.

In the case of companies that provide digital services (consulting, design, courses, etc.), they must also comply with the Law 1581 of 2012 on protection of personal data and keep your privacy notices updated. This guarantees transparency in the use of user data and reinforces trust in the brand.

What business is best to start with little money?

If your initial budget is limited, starting a digital business is usually a more profitable option. With low-cost tools like Shopify, WordPress, Canva and social networks, you can create an attractive brand and start selling without needing a physical location or large inventories. You can even use models like dropshipping or digital products, which do not require storage or complex logistics.

Digital marketing is also cheaper than traditional marketing. For example, you can segment ads in Meta or Google Ads with daily investments from $10,000 COP and obtain measurable results quickly. In addition, social networks allow you to validate your business idea without a significant initial investment.

However, this does not mean that physical businesses are unviable with little capital. There are models such as home businesses (bakery, sewing, workshops), temporary fairs or catalog sales that also require moderate investment. The key is to validate your market, minimize risks and scale gradually.

Does the profitability of a company depend on whether it is digital or physical?

Not necessarily. Profitability is more linked to the business model, operational efficiency and the value delivered to the customer, than to the physical or digital format. There are digital companies that fail to scale because they do not have a clear proposition or a healthy cost structure. Likewise, there are physical companies that achieve high margins due to their strategic location or the loyalty of their customers.

The most significant difference is in fixed costs. A digital company can operate with fewer recurring expenses, allowing it to have greater financial flexibility in the first months. However, it also faces challenges such as high competition on the internet, dependence on third-party platforms and the constant need to innovate.

In the case of physical companies, although they require more initial capital and face logistical risks, they can offer more solid in-person experiences, which generates closer relationships with the customer. Many successful businesses combine both worlds to take advantage of the best of each: online visibility and local presence.

Can I have a physical and digital company at the same time?

Yes, and in fact, it is one of the most recommended strategies today. This approach is known as hybrid or omnichannel model, and allows companies to maximize their reach. For example, a physical store can attract customers in its neighborhood or city, while its online store can fulfill orders nationally or internationally. This model also allows you to create more complete campaigns, integrate inventories, and offer delivery or pickup options.

Furthermore, combining both formats strengthens the brand. When a customer sees that a business has a presence on networks, a website, a physical location and well-structured contact channels, the perception of reliability increases. You can also take advantage of the premises as an experience point or showroom, and direct large sales to the digital channel, where service costs are reduced.

Of course, to operate successfully in both worlds it is key to have tools that help you synchronize processes: inventory software, CRM, ecommerce platforms and efficient logistics. Many companies that started out as only physical companies have made the digital leap with excellent results, and vice versa.

Conclusion: what is profitable is not the format, it is the strategy

have a digital company does not guarantee success, just as opening a physical location does not guarantee it either. True profitability is in how you manage your resources, how you analyze the market, how you adapt to the client and how much value you can deliver.

In Colombia, the growth of digital tools has democratized access to entrepreneurship. Today more than ever, anyone with a good idea and proper guidance can create their business, whether from a physical storefront or from an online store.

If you are in the process of planning your business, we invite you to explore our complete guide to business creation in Colombia. We help you formalize your business, understand your tax obligations and choose the best model according to your business idea.