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How You Can Incorporate A Company in Colombia

If yu plan to incorporate a company in Colombia, you now have every reason to do so. The Colombian government has created investor confidence atmosphere for both local and foreign investors. But how do you go about incorporating your company in Colombia?

It’s now common knowledge that you must have a business name to incorporate your business. Your legal business name provides you with the opportunity to decide on the type of business structure to start. Now, to incorporate a company in Colombia, there are three legal structures namely: Limited company (Ltda), Joint-stock company and Simplified stock company.

The Colombian government has now streamlined how to incorporate a company through “Simplified Shares Corporation” (SAS). You can incorporate your company with the only shareholder with its equity exclusively independent of the shareholder’s equity. Majority of entrepreneurs prefer SAS as it provides 100 percent foreign ownership. Other business structures such as Branch office and Representative office are rarely considered as a legal entity in Colombia jurisdiction. Of course, before incorporating your company, you must have done name searching which may be through online (Camara de Comercio). Your business name and commercial trademark may be the same or otherwise.

 

Colombian Company Formation Requirements

Each municipality in Colombia has their own bylaws. And therefore, it’s imperative to research and familiarize with their bylaws. One of the steps you must follow is registering for a per-taxpayer (pre RUT) ID with the Registry of Commerce. This can be done online through their portal where one can access more information relating to starting a business.

The pre-taxpayer ID offers you an opportunity to open a bank account and deposit some nominal capital. When opening a bank account you’ll be required to present a certificate from the Chamber of Commerce, the Tax ID certificate (RUT), a legal representative’s copy of ID and a letter clarifying bank account management submitted at the Director of National Taxes and Customs (DIAN) office. It’s important to note that some banks may have other specific requirements for opening an account. The applicant will, therefore, be offered with an NIT (Tax ID number) to comply with the tax requirements. Remember that the legal representative required to open the bank account must be a Colombian national.

While you plan to incorporate a company in Colombia, you’ll need to familiarize with the laws concerning employees. If you plan to hire employees, you’ll need to register with the Family Compensation Fund, the Government Learning Service as well as Colombian Family Institute.

Similarly, not only will you be required to consider their health coverage but also the pension system. And so, you’ll be required to register for Pension Funds, registration with Administrator of Professional Risks (ARL) and the Severance Fund. These agencies offer your employees with workplace protection from illness and injury cases.

If you’re in Colombia whether local or foreigner a conducive environment for growth is abundant explaining why it’s boasting with foreign direct investment (FDI).

For more information and assistance in setting up a company in Colombia, please contact us, 3E Accounting will guide you through every step of setting up a company.