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Types of Companies

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The most common company types used by foreign investors are:

  • Limited liability companies
  • Corporations
  • Simplified stock companies

The Steps to incorporate a company in Colombia:

  • Formalization of the company bylaws by means of public deed before the notary
  • In the case of the simplified stock companies (Sociedades por Acciones Simplificadas - SAS) the bylaws can be made by a private document.
  • Filling out the Format N° 1648, this can be found online at DIAN´s web site.
  • Registration in the Chamber of Commerce who issues the provisional certificate of existence and legal representation which will include the note "This tax identification number is only valid to request the opening of a bank account".
  • Opening a bank account. Note: The bank account is opened but blocked until the certificate of incumbency and the definitive RUT are submitted.
  • Formalization of the tax identification number before the DIAN.
  • Submit the copy of the tax identification number certificate before the Chamber of Commerce. The definitive certificate of existence and legal representation is issued in 24 hours.
  • Activation of the bank account. The definitive certificate of existence and legal representation must be submitted.

 

Corporate_Regulations.pdf 306.24 KB

Creating a Simplified Stock Corporation

STEP 1 – Required Documentation

  1. Certificates of Existence and Legal Representation of the holding company issued by the appropriate foreign official or authority. In case of a natural person, a copy of the passport is necessary.
  2. Power authorizing an attorney or a natural person to act on behalf of the principal.
  3. Define the bylaws of the type of company which will be established.

STEP 2 – Company’s Private Document of Incorporation

This step consists in the preparation and submission to a Public Notary Office which will authenticate the private document of incorporation (articles of incorporation) containing the company's by-laws. Such a document must be signed by each of the founding shareholders, personally or by proxy.

However, it is important to take into account that if any of the founding shareholders is a company, the documentation must include an original Certificate of Existence and Legal Representation recently issued by the Chamber of Commerce, showing that the person who will sign the articles of incorporation is duly authorized to do so.

Company’s Bylaws:

  1. Name, identification number and address of the shareholders.
  2. Company’s name, followed by “sociedad por acciones simplificada”; or the acronym S.A.S.;
  3. The principal address of the Company and branches, if any.
  4. Terms of company’s duration, in any. If a term is not expressed, it is understood that is indefinite.
  5. A clear and complete statement of the main activities, unless it is expressed that the company may conduct any business. If nothing is expressed, it is understood that the company may conduct any lawful activity.
  6. The authorized, outstanding and paid-up capital, the kind, number and par value of the stocks, as well as the way and term to be paid.
  7. Management organization and name, identification number and the powers of the managers. A legal representative has to be designated.

* Authentication by each shareholder is about USD $0,63.

STEP 3 – Foreigners Taxpayer’s Identification Number (NIT) or Persons Tax Registry (RUT) issue:

  1. Certificates of Existence and Legal Representation of the holding company issued by the appropriate foreign official or authority. In case of a natural person, a copy of the passport must be sent.
  2. Power authorizing an attorney or a natural person to act on behalf of the principal.

Once the company's articles of incorporation are formalized through a public deed, it is necessary to register the company before the National Tax and Customs Office (DIAN). The document resulting from this prior registration is known as a "pre-RUT". This document is requested via Internet, through the following procedure:

  1. Log on to DIAN's web page
  2. Go to the RUT request link ("solicitud de RUT").
  3. Go to the RUT inscription-new merchants link ("inscripción RUT - nuevos comerciantes") for businesses that still do not have a NIT and which require a business registration.
  4. Complete the information required by the form.
  5. Print two forms: Once printed, the two forms must be signed by the company's legal representative. The legal representative must personally appear before a Public Notary.

The original of this Pre-RUT document, signed personally before a Public Notary by the company's legal representative or proxy must be attached to the documents to be submitted in order to register the company with the Chamber of Commerce of the city where the company will be domiciled.

STEP 4 - Obtain letters of acceptance of the positions for the company or branch:>

Acceptance letters must be obtained for the position of the persons designated in the bylaws, such as the legal representative and its deputy, the main and deputy members of the board of directors and the tax inspector and its deputy, as determined. These letters should include the full name of the person accepting the position, title, document type and identification number of the person and his signature.

STEP 5 - Registration at the Chamber of Commerce

The private document of incorporation, letters of acceptance, the NIT for foreign investors, and the additional form for tax purposes (RUT and NIT if any) indicating the taxes which the company is subject, must be registered at the the Chamber of Commerce of the main domicile of the company. As well, a commercial license registration form should be filled out. The Chamber of Commerce shall issue a certificate of existence and legal representation of the company.

The registration at the Chamber of Commerce is subject to payment of a registration tax of 0.7% according to the amount of capital of the company. The commercial license registration rights will be subject to a fee between USD $13.5 and USD $669 depending on company’s capital.

This commercial license must be renewed annually at the Chamber of Commerce, which is subject to the same fee of registration.

* Currency: USD 1 = COP 2,000. Values for 2010.

STEP 6 - Record the company's books at the Chamber of Commerce.

Every company must have corporate and accounting books. Among the books to be recorded are the following:

  1. Shareholders Record Book.
  2. Shareholder or Partner Meetings Minute Book.
  3. Board of Directors Minute Book.
  4. Company’s Journal.
  5. Ledger Balance.
  6. Inventory Book.

* Registry for each book is USD 4.5. Currency: USD 1 = COP 2,000. Values for 2010.

STEP 7 - Open a bank account:

Every company must open an account at a bank. This account will be the depositary of the cash sent by investors.

For more information on financial institutions in Colombia, visit the website of the Superintendencia Financiera.

STEP 8 - Foreign Investment Registration with the Central Bank.

Once the investment is done, i.e. once the capital is allocated to cover the company’s capital or every subsequent increase of capital, a registration of foreign investment must be made with the Central Bank. For detailed information on this procedure see the link of how to register your investment.

For more information on the procedure on creating a company and its costs visit the following links or contact with:

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This section describes relevant aspects in the process of establishing your company in Colombia:

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Limited Liability Partnership or Corporation Creation

STEP 1– Required Documentation

  1. Certificates of Existence and Legal Representation of the holding company issued by the competent foreign official or authority. In case of a natural person, a copy of the passport must be sent.
  2. Power authorizing an attorney or a natural person to act on behalf of the principal.
  3. Define the bylaws of the type of company which will be established.

STEP 2 – Company’s Public Deed of Incorporation

This step consists of the preparation and submission to a Public Notary Office a draft public deed (articles of incorporation) containing the company's by-laws. Such a public deed must be signed by each of the founding shareholders, personally or by proxy.

However, it is important to take into account that if any of the founding shareholders is a company, the documentation must include an original Certificate of Existence and Legal Representation recently issued by the Chamber of Commerce, showing that the person who will sign the articles of incorporation is duly authorized to do so.

Company’s Bylaws or articles of incorporation:

  1. Name and address of the shareholders or partners.
  2. Kind of company that is created and its name.
  3. Business Main Address of the Company and branches, if any.
  4. Company’s Purpose.
  5. Company's capital and par value of stocks/shares.
  6. Name of company’s legal representative and its deputy, including its powers and limitations. When the company intended to provide or manage a public service or an activity declared by the Government as a national security matter, the representative shall be a citizen of Colombia.
  7. Names of the board members (at least three) and its deputies, including their obligations.
  8. Name of the tax inspector and a deputy. The law authorizes the designation of an auditing firm which shall designate the person who will perform as the tax inspector and his deputy.
  9. Term of company’s duration and causes of early dissolution.
  10. The time and mode of convening and establishment of the shareholders or partners meeting in regular or special sessions, as well as how to deliberate and decide on matters within its competence.
  11. The dates to prepare the financial reports.
  12. The breakdown of the company’s profits distribution, indicating the reserves to be made.
  13. The way to shut down the company once dissolved.
  14. The way in which the shareholders or partners and managers will solve any dispute between.

STEP 3 – Foreigners Taxpayer’s Identification Number (NIT) or Persons Tax Registry (RUT) issue:

  1. Certificates of Existence and Legal Representation of the holding company issued by the competent foreign official or authority. In case of a natural person, a copy of the passport must be sent.
  2. Power authorizing an attorney or a natural person to act on behalf of the principal.

Once the company's articles of incorporation are formalized through a public deed, it is necessary to register the company before the National Tax and Customs Office (DIAN). The document from this registration is known as a "pre-RUT". This document is requested via Internet, through the following procedure:

  1. Log on to DIAN's web page.
  2. Go to the RUT request link ("solicitud de RUT").
  3. Go to the RUT inscription-new merchants link ("inscripción RUT - nuevos comerciantes") for businesses that still do not have a NIT and which require a business registration.
  4. Complete the information required on the form.
  5. Print two forms: Once printed, the two forms must be signed by the company's legal representative. The legal representative must personally appear before a Public Notary.

The original of this Pre-RUT document, signed personally before a Public Notary by the company's legal representative or proxy must be attached to the documents to be submitted in order to register the company with the Chamber of Commerce in the city where the company will be based.

STEP 4 - Obtain letters of acceptance of the positions for the company:

Acceptance letters must be obtained for the position of the persons designated in the bylaws, such as the legal representative and the deputy, the main and deputy members of the board of directors and the tax inspector and its deputy, as determined. These letters should include the full name of the person accepting the position, title, document type and identification number of the person and his signature.

STEP 5 - Registration at the Chamber of Commerce

The public deed of incorporation, letters of acceptance, the NIT for foreign investors, and the additional form for tax purposes (RUT and NIT if any) indicating the taxes which the company is subject, must be registered at the the Chamber of Commerce of the main domicile of the company. As well, a commercial license registration form should be filled out. The Chamber of Commerce shall issue a certificate of existence and legal representation of the company.

The registration at the Chamber of Commerce is subject to a payment of a registration tax of 0.7% according to the amount of capital of the company. The commercial license registration rights will be subject to a fee between USD$13.5 and USD$669 depending company’s capital.

This commercial license must be renewed annually at the Chamber of Commerce, which is subject to the same fee of registration.

* Currency: USD 1 = COP 2,000. Values for 2010.

STEP 6 - Register the company's books at the Chamber of Commerce.

Every company must have corporate and accounting books. Among the books to be recorded are the following:

  1. Shareholders Record Book.
  2. Shareholder or Partner Meetings Minute Book.
  3. Board of Directors Minute Book.
  4. Company’s Journal.
  5. Ledger Balance.
  6. Inventory Book.

* Registry for each book is USD $4.5. Currency: USD 1 = COP 2,000. Values for 2010.

STEP 7 - Open a bank account:

Every company must open an account at a bank. This account will be the depositary of the cash sent by investors.

For more information on financial institutions in Colombia, visit the website of the Superintendencia Financiera.

STEP 8 - Foreign Investment Registration with the Central Bank.

Once the investment is done, i.e. once the appropriate capital is allocated to cover the company’s capital or every subsequent increase of capital, a registration of foreign investment must be made with the Central Bank. For detailed information on this procedure see the link of how to register your investment.

For more information on the procedure on creating a company and its costs visit the following links or contact with:

img-construir-sucursal-banner

These are the steps to start up a foreign company branch:

Step 1: Documents required to establish the branch of a foreign company:

Establish foreign company branch

  • Certificate of incorporation and legal representation of the parent company issued by the competent authority of the country of incorporation. In case of a natural person, a copy of the passport must be provided.
  • Power of attorney authorizing a representative to act on behalf of the parent company.
  • Bylaws of the parent company.
  • Resolution from the relevant organ of the parent company authorizing the opening of its branch in Colombia, indicating at least the following information:
    • Main business purpose of the branch
    • The amount of capital allocated to the branch
    • Address
    • Duration
    • The grounds for termination of the business.
    • The appointment of a legal representative and powers
    • The appointment of an auditor.

The aforementioned documents must have the legalization process established according to Colombian legislation, which consists of the following:

  • The authentication thereof by a public notary, which certifies the legal representation, authenticity of the document and the existence of the Company.
  • The validation of the document by the Colombian consul.
  • The acknowledgement of the Ministry of Foreign Affairs of Colombia.
  • The translation of these documents into Spanish when and where necessary, by an official translator certified in Colombia.
  • The above steps do not apply if the country is a member of the Hague Convention, in which case the documents only require notarization and "Apostille". It is possible that translation is required in some cases.

Step 2: Formalize a public document:

All the aforementioned documents will be required for this step. The public deed must be signed by the representative of the foreign company in Colombia.

The notary fee for signing the public deed is 2.7 and 3.0 per every thousand COP of the assigned capital value.


Step 3: Acceptance letters of the representatives of the branch:

Letters of acceptance must be obtained from the representatives approved in the bylaws of the company, such as the legal representative and his/her deputy. Such letters should include the full name of the person accepting the position, title, document, identification number and signature.

Step 4: Get a Unique Tax Registry (RUT-Registro Unico Tributario for its acronym in Spanish)

This procedure may be done personally or through a representative at the Tax Office, in order to obtain the NIT (Taxpayer Identification Number) of the branch.
The bylaws, letters of acceptance, and additional forms for tax purposes (RUT and NIT if any) must be filled out indicating the taxes to which the company is subject to and must be registered with the Chamber of Commerce assigned to the address where the branch is located.
Registry in the Chamber of Commerce is subject to payment of registration tax, equivalent to 0.7% of the amount of capital allocated to the branch. This registration must be renewed annually in the Chamber of Commerce. Fees are determinate on the following link.


Step 5: File the Company’s Ledgers and other corporate books at the Chamber of Commerce

Every branch must have accounting books, including:

  • Daily Journal Entries
  • Balance sheet

Step 6: Open an bank account at the bank of your choice

Every new branch must open a bank account. Investors will deposit the capital in this account.

For further information on Colombia’s financial entities, please visit the Financial Superintendencewhich is the regulatory entitiy of the financial system.


Step 7: Register the foreign investment with the Central Bank

Once the investment is made, that is, once the initial capital assigned is registered by the company, any subsequent capital increases must be registered with the Central Bank (Banco de la República). The registry process varies according to the destination of the funds. For further information on this process, visit the hyperlink of how to register an investment.

Corporate_Regulations.pdf

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