Company Formation in Colombia

Steps for Set Up a Company in Colombia

Starting a business in Colombia entails a sequence of meticulously planned steps. Although the registration phase may be completed in as little as three business days, developing a robust framework and managing the unique complexities of your industry may require additional time. Below is an overview of the essential steps to effectively establish your company in Colombia.

Step 1: Choose a distinctive Business Name

Begin your incorporation process by deciding on a unique title for your venture or legal entity. Confirming that the name is available is essential to ensure it complies with legal guidelines and stands apart from existing entities.

Step 2: Classify Business Activity by ISIC Code

Utilize the International Standard Industrial Classification (ISIC) code to designate your company’s primary economic function. This classification not only clarifies your operational focus for regulatory bodies and potential clients but also plays a key role in determining the applicable tax category and compliance requirements. Accurately classifying your activity streamlines the registration process and supports targeted business strategies.

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: Draft Corporate Bylaws

Develop comprehensive governance documents that define the relationship among partners. These regulations detail the roles, duties, and obligations of the legal representative and can be formalized through either a public deed or a private document, depending on your company’s type.

Step 5: Register with the Chamber of Commerce

Submit the RUES (Unified Business Registry) form along with all required incorporation documents, including your corporate bylaws. Ensure you also provide control information to identify the company’s ultimate beneficiaries. For foreign branches, notarized and translated documents from the parent organization such as bylaws and powers of attorney for Colombian representatives are necessary. The registration fee is based on the assigned capital.

Step 6: Register with Tax Authorities

Ensure your business meets all fiscal requirements by registering with DIAN for national obligations and the relevant local treasury for municipal or district responsibilities.

Step 7: Open a Corporate Bank Account

Facilitate your business’s financial operations by opening a dedicated account. Providing the initial balance and the necessary documentation from the authorized representative will ensure a smooth account opening 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: Obtaining Operating Permits

For businesses with an establishment, securing the necessary permits is crucial for lawful operation. These authorizations may include clearance from the Fire Department, Health Department approval, local planning permits, and copyright permissions.

Engaging experienced legal and professional agents throughout the registration process is essential. Their expertise not only guides you through the long-term implications of every decision but also ensures that financial statements and mandatory certificates are handled with precision. This is especially important when considering foreign investment in Colombia, where understanding the market's unique advantages and nuances is key. For more detailed insights, please refer to our dedicated Foreign Investment page. Contact us for expert guidance, our team of attorneys and accounting professionals is ready to support you at every stage.

Company Formation in Colombia: Essential FAQs

What is the typical timeline for launching a business in Colombia?

The timeframe depends on the type of venture and the complexity of the process. With our efficient management, we usually complete the process within one to two weeks.

Which documents are needed for registration at the Chamber of Commerce?

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

Is necessary a lawyer during the formation process in Colombia?

While the process has been simplified, retaining a lawyer specializing in Colombian law is strongly recommended. This ensures the legal process is properly executed and helps avoid future complications.

What corporate structures are available in Colombia?

You can choose from several structures, including Simplified Joint Stock Companies (SAS), Limited Liability Companies (Ltda.), Corporations, Partnerships, Sole Proprietorships, and more. The best choice depends on your business goals and specific 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, beyond incorporation, we offer ongoing legal and accounting advisory services to ensure continuous compliance and optimal performance.

What ongoing responsibilities must a business maintain after incorporation?

After incorporation, businesses are required to fulfill ongoing tax obligations, maintain accurate accounting records, file periodic tax returns, and update corporate records with both the Chamber of Commerce and DIAN.

What role do accountants play in business formation process?

Expert public accountants are essential in establishing your company's financial framework from the very beginning. They provide all necessary registration certificates, ensure strict tax compliance, and streamline your financial management. With our team of seasoned professionals handling every aspect of your accounting process, you can focus confidently on growing your business.