Company Formation in Colombia
Steps for Set Up a Company in Colombia
Step 1: Start by selecting a Business Name
To register a company, choosing a business name or legal entity name and confirm its availability is crucial. This ensures your chosen name is unique and meets regulatory standards.
Step 2: Classify Business Activity by ISIC Code
Identifying your company’s economic activity accurately using the ISIC (International Standard Industrial Classification) code helps clearly define your business to both state authorities and potential clients.
Step 3: Determine the Optimal Business Structure
Each type of legal structure offers unique advantages and obligations depending on your business size and goals. Selecting the right structure to set up a business impacts responsibilities, legal standing, and tax and financial considerations.
Step 4: Establish the Corporate Bylaws
The bylaws govern the relationship between partners, detailing duties, obligations, and the responsibilities of the legal representative. These bylaws can be formalized through a public deed or private document, depending on the company type to incorporate.
Step 5: Register with the Chamber of Commerce
Complete the RUES (Unified Business Registry) form, including the bylaws and required documents to incorporate a company. Additionally, it is required to register any control information that identifies the company’s ultimate beneficiaries. For foreign branch registration, notarized and translated documents from the parent company, including bylaws and powers of attorney for Colombian representatives, are required for the incorporation process. The registration fee is calculated based on the assigned capital.
Step 6: Register with Tax Authorities
Registering with DIAN (for national tax obligations) and with local treasury departments (for municipal or district taxes) ensures your company complies with all tax obligations at both the national and local levels.
Step 7: Open a Corporate Bank Account
To support the financial operations when setting up a business, it’s important to open a corporate bank account. Providing an opening balance and the required documentation from the legal representative will facilitate this process.
Step 8: Register Official Corporate Books
Registering the Shareholders' Book and the Minutes Book with the Chamber of Commerce is a required process; failure to complete this may lead to fines and loss of evidentiary rights.
Step 9: Registering and Obtaining Operating Permits
For businesses with a physical location, registering for and complying with specific permits is essential to legally operate. These permits, include Fire Department clearance, Health Department approval, District or Municipal Planning permits, and Copyright permissions.
Engaging legal or accounting professionals throughout register 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, Our attorneys and accounting professionals will guide you through each stage to ensure everything is properly handled.
Frequently Asked Questions (FAQ) About Starting a Business in Colombia
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.
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.
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 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.