The first step to registering a company in Colombia is to know all the types of companies available and the requirements for the formation of each one. It is currently one of the countries in Latin America with the most growth, however, registering a company in Colombia can be challenging.
After almost two years of the Covid-19 pandemic, it is expected that in 2022, Colombia’s economy will grow by around 4,3%. This makes it a very attractive and interesting country for many corporations and investors looking to expand their horizons and start operating there. Colombia is always looking to attract foreign investment. Therefore, it is constantly looking to simplify its processes to make it easier for companies considering expanding to Colombia.
In 2020, it became a member of the Organization for Economic Co-operation and Development (OECD) and it has since been able to standardize and adjust most of its processes to the OECD international standards.
Are you interested in setting up a company in Colombia? Here you’ll find a list of all steps you need to follow, to comply with the law.
Selecting the right type of company in Colombia is the first and one of the most important steps in order to open a business. There are some advantages and disadvantages to each type, but to choose one, it is necessary to think about the objectives and goals of the company, as well as the requirements.
It is also important to keep in mind what is the type of business the company is pursuing.
The 3 most common types of companies in Colombia are:
Simplified Shares Company or Sociedad por Acciones Simplificadas (S.A.S)
Corporation or Sociedad Anónima (S.A.)
Limited Liability Company or LLC
This is an important step to incorporate in Colombia. The RUE stands for Registro Único Empresarial and it is the Chamber of Commerce’s public database, This platform allows you to search for any other companies with the same name as yours. It is important to remember that the name of the company is not required to be the same as the name of the brand, product, or service offered to the market.
If your shareholders are not present in Colombia, a Power of Attorney will be required that allows your legal representative to carry out the process locally. This Power of Attorney has to be signed by the corresponding party.
Also, consider that for foreign shareholders, additional documentation will be required.
All documentation that comes from abroad must be duly legalized and apostilled (if applicable), and these hard-copy documents must be sent to Colombia. Finally, consider that documentation that is not in Spanish, will require translations to be accepted by the local agencies.
Although this step might sound cumbersome and time-consuming, it is a standard process to Register your company in Colombia. Nevertheless, there is another way in which you can incorporate it in Colombia without completing this step first. At the end of this article, be sure to ask us how.
The bylaws documentation allows for the constitution of the company in Colombia. This document is going to work as the backbone of the company and rule the way it is run. Consider this document has to include:
Company name
Legal Representative information
Share capital information
Company activities
Registered/ Legal address
Management structure
Extinction and liquidation details
Other general dispositions
This document requires the legal advice and signature of a lawyer in Colombia to make sure that it covers all required aspects. At the bottom of this article, you can learn how Easyco can help.
The DIAN (Directorate of National Taxes and Customs) is the government agency in charge of financial regulation and tax collection in Colombia. This agency is going to assign the company a pre-taxpayer ID or Pre RUT, which stands for Unified Tax Registry.
This information is required by all companies, in order to submit your company information to the corresponding Colombian Chamber of Commerce. This will allow you to properly incorporate your company in Colombia.
Once you have the name of the company and all the required documents, it’s time to register it with your corresponding Chamber of Commerce. This entity is responsible for the creation and regulation of all companies in Colombia.
When visiting the Chamber of Commerce, you need to bring the following requirements:
Original identification document of the legal representative of the company
Registro Único Tributario (RUT) information Form
Registro Único Empresarial y Social (RUES) Information Form
Other application forms available at the Chamber of Commerce location
Constitution document of your Colombian company
Consider that all of the forms have to be completed and signed by your legal representative. Afterward, the Colombian Chamber of Commerce will be the one responsible for revising and approving the registration of your company. Once approved, your company formation in Colombia is completed.
Once the company is officially registered, the official RUT will be assigned by the DIAN, as well as the NIT, which stands for ‘Número de Identificación Tributaria’ in Spanish. This number serves as an official identification number for the company.
This step will allow the company to be verified by the Chamber of Commerce to obtain official status. Consider that this number is necessary in order to open a bank account in the name of the company at any private bank in Colombia.
A crucial step to complete once your company is registered in Colombia is to register your company’s statutory books.
This is a requirement carried out in the Chamber of Commerce and as stipulated in Decree 019 of 2012, the official statutory company books that have to be registered by any company in commerce are:
Registry of Shareholders and owners of the company
Minutes and Shareholder Meetings
Depending on your company or association, other statutory books might be required
Non-compliance may result in sanctions from the regulatory agencies of companies, these are:
Financial Superintendence (Superintendencia Financiera)
Argentina
Bolivia
Brazil
Chile
Colombia
Ecuador
Paraguay
Peru
Uruguay
Belize
Costa rica
El salvador
Guatemala
Mexico
Nicaragua
Panama
Dominican Republic
Superintendency of Companies (Superintendencia de Sociedades)Superintendency of Industry and Commerce (Superintendencia de Industria y Comercio)Registration has to be completed within the timeline established by the law, otherwise surcharges and additional interests will be generated in your registry tax. This is the most effective method of control, organization and updating of the legal entity.Finally, It is important to choose the right bank according to the company’s needs. In Colombia, it is only possible to open a corporate bank account once the company is registered at the Chamber of Commerce. Furthermore, it must already have the Tax Identification Number assigned.
Each bank offers different types of accounts with many benefits depending on the agreement and goals of the company. We recommend that the bank offers good pricing structures for international transactions.
Also, it is important to consider that some banks may have foreign transaction restrictions for companies that have foreign shareholders. It is crucial to take this into account as part of your company establishment strategy, as identifying a bank that has flexible policies will determine when your new company can start its operations.
Colombia is in constant growth and always looking to simplify its processes for incorporation. However, registering a company in a Caribbean country can still be very challenging. To make sure you register your company in Colombia in the right way, you can get in touch with us, and our team of experts is going to make sure it complies with all Colombian laws.
At Easyco, we make company formation in Colombia easy; our team of corporate experts has vast experience helping companies and individuals register their business in Colombia, with a proven track record of success across all of our services. Easyco aims to tackle the complex company formation processes across LATAM and makes business registration easy by providing a hassle-free online company registration experience. Start your company in Colombia today!
Easyco also provides additional services to guarantee your company’s compliance, which include:
Appointment of legal representation,
Providing a registered office address
Handling tax and accounting
Hassle-free Payroll Services
Manage your Company bank account opening
Manage your Trademark Registration
Corporate Legal Services
