Company Formation in Colombia

In Colombia, the process of establishing a company has been streamlined, eliminating the need for legal counsel in some stages. However, investors should still carefully evaluate critical factors, including legal requirements, tax obligations, and corporate structures. Despite the simplification, retaining a lawyer or public accountant with expertise in Colombian regulations remains essential to ensure full compliance with all legal and fiscal obligations.

Steps for registering a Company in Colombia

The first step in establishing a company is selecting a corporate name or trade name and verifying its availability with the Chamber of Commerce. Accurate classification of the company’s economic activity is also crucial, as this determines how it will be recognized by governmental authorities.

In the case of establishing a foreign branch, apostilled and translated documents from the parent company—such as bylaws and notarized powers of attorney for local representatives—are required. Additionally, the company’s bylaws must define the relationship between partners, delineate responsibilities, and register the control structure, identifying the ultimate beneficial owners. These documents, along with the RUES form and other legal documents, must be submitted to the Chamber of Commerce for registration. The registration fee is calculated based on the assigned capital.

With the preliminary tax registration (PRE-RUT) issued by the Chamber of Commerce, you will need to open a corporate bank account and subsequently register the final RUT with the DIAN (Colombian Tax Authority).

Setting up a business in Bogota Colombia

It is important to register and maintain the Shareholders’ and Minutes Books with the Chamber of Commerce, as failure to do so may result in fines and loss of corporate benefits. If you plan to hire employees, registering the company with the Social Security system is mandatory.

For businesses operating from physical premises, additional permits may be necessary, such as approvals from the Fire Department, authorizations from the Health Department, District Planning, and music copyright licenses if applicable.

Finally, for company formation and to conduct sales, it is crucial to obtain an electronic invoicing resolution from DIAN. Ensuring compliance with this requirement is essential for meeting fiscal obligations and avoiding penalties, including fines or potential business closure.

Engaging legal or accounting professionals throughout this process is highly recommended to help you understand the long-term implications of each decision and to ensure the proper handling of financial statements and certificates required during the company formation process. Contact us for expert guidance.

Frequently Asked Questions (FAQ) About Starting a Business in Colombia

What are the steps to register a company?

The process involves selecting the appropriate corporate structure, registering the company with the Chamber of Commerce, obtaining the RUT (Unique Tax Registry), and complying with tax obligations. Our attorneys and accounting professionals will guide you through each stage to ensure everything is properly handled.

Is hiring a lawyer necessary for company formation in Colombia?

While the process has been simplified, retaining a lawyer specializing in Colombian law is strongly recommended. A lawyer ensures that the legal process is correctly executed, avoiding potential future issues.

How long does it take to establish a company in Colombia?

The timeframe varies depending on the type of company and the complexity of the process. However, with our expertise and efficient management, we typically complete the process within one to two weeks.

What documents are required to register a company with the Chamber of Commerce?

The required documents include the company bylaws, the RUES form, identification documents for the shareholders, and, in some cases, additional documents such as bank certifications and the final RUT.

What types of companies can I establish in Colombia?

In Colombia, you can choose from several corporate structures, including Simplified Joint Stock Companies (SAS), Limited Liability Companies (Ltda.), Corporations, Partnerships, Sole Proprietorships, and others. The best structure depends on your specific business goals and requirements.

What are the costs involved in setting up a company in Colombia?

The costs depend on the type of company and the services you require. Registration fees with the Chamber of Commerce are usually based on the company’s initial capital.

Is it mandatory to open a corporate bank account?

Yes, opening a corporate bank account is essential for managing the company’s finances and complying with legal billing and tax requirements.

What taxes must a newly established company pay?

Companies must register with DIAN and comply with various taxes, including income tax, value-added tax (VAT, if applicable), and local taxes such as the ICA, depending on the company's economic activity.

Do you offer post-incorporation services?

Yes, in addition to incorporation services, we provide ongoing legal and accounting advisory to ensure that your company remains compliant with all regulations and continues to operate profitably over time.

What type of corporate structure is most commonly recommended?

The Simplified Joint Stock Company (SAS) is one of the most common choices due to its flexibility in management and limited liability for shareholders. However, the choice of structure should be based on the specific needs and characteristics of your business.

What are a company’s obligations after incorporation?

After incorporation, companies must meet ongoing tax obligations, maintain accurate accounting records, file periodic tax returns, and keep corporate records up to date with the Chamber of Commerce and DIAN.

What role do accountants play in the company formation process?

Public accountants are vital in structuring your company’s financial operations from the start, ensuring compliance with tax regulations, and optimizing financial management. Our team of experienced accountants manages the entire accounting process, allowing you to focus on growing your business.