Business Startup Law in Colombia

The government of Colombia wholeheartedly encourages and supports foreign investments in the country. They have an emphatic plan that motivates the various institutions to aid entrepreneurs in any and every way they can to start new businesses. As a result, the business startup law in the country is also one of the most agile ones in the continent.

According to international rankings, Colombia ranks within the top three Latin American countries in the index of ease of doing business. This shows that the systems are not just there but are effective and efficient as well. 

Business Startup Law in Colombia
The-Expats-Law-Firm-Contact-Us
However, if you are interested in starting a business in Colombia, you need to know the local legal requirements.

Readers exploring What is Business Startup Law in Colombia? might also want to check out these related posts: How to Create a Colombian Corporation; Colombian Labor Contracts; Corporate Accounting in Colombia; How to Get Colombia Investors Visa; How to Setup a Colombian Corporation.

Related Topics of Interest for You:

How-to-Create-a-Colombian-Corporation
Colombia Tax Planning
Colombia Payroll Services
What is a Colombian SAS Corporation
Colombian Corporate Tax Filings
Colombia-Property-Title-Law

Steps to Start a Business in Colombia

The business startup law in Colombia, like any other country, has its legal requirements that one needs to fulfill before being able to initiate a business. It is best to hire a local legal expert who can advise and assist you and ensure your compliance with all the accounting and corporate laws. Here are the steps you need to take:

Power of Attorney

The first and foremost step you need to take is to draft and sign the Power of Attorney (POA) document. It appoints an organization or a person to manage your medical, financial, and property affairs if you ever become unable to do so. Next, suppose your legal representative and shareholders are not in the country. In that case, you must sign the bylaws and submit them to the Chamber of Commerce.

The government of Colombia requests additional documents from abroad relating to the foreign shareholders. Therefore, a Power of Attorney and the additional documents must be apostilled and legalized before a Public Notary before being sent to Colombia in physical form.

Company’s Name

The second step is to choose a name for your company and check its availability in the RUE or Single Business Register. They hold the public database for the government of Colombia. Your brand name might be different from the legal name of your company.

Legal Structure

The social and legal structure you choose for your company might call for additional and specific accounting and legal processes and documentation. You need to pick a social network that adheres to the economic activities and needs of your business. The most common legal structures in Colombia are the following three:

Sociedad por Acciones Simplificadas (SAS) (Simplified Shares Company)

For this type of company, you do not need to make corporate documents available for public view. In addition, this structure allows you an unlimited number of shareholders.

Foreign Company Branch

If there is a parent company in a foreign country, it is its branch in Colombia.

Sociedad Anonima (SA) (Corporation)

A corporation in Colombia is divided into equal value shares, and a negotiable title represents them.

Company Bylaws

Next, you need to draft the constitution of your company. It will contain all the bylaws that will regulate the company’s systems, processes, procedures, and operations. Additional information about the company is also featured in it, including:

=

The legal representatives and shareholders of the company

=

The number of shares the company will release

=

The total capital of the company and its details

=

The company’s economic activities that it will engage in

=

The functionality and work cycles of the company

Colombian-Business-Setup

Registration

In Colombia, company creation is regulated and overseen by its Chamber of Commerce. Therefore, all the documents prepared until now, including the Power of Attorney, company’s bylaws, details of the company’s activities, and information regarding the shareholders, need to be submitted to the Chamber of Commerce.

Registration

The chamber will evaluate the documents and ensure that the documentation complies with the company creation policies and business startup laws in Colombia. The agility of the official systems supporting business in Colombia is instilled by the fact that this process takes only 24 hours. After that, you receive approval (if there is no trouble in verification) and can initiate the operations for your business.

Tax Identification (NIT)

The next step for your business is to obtain a tax identification number. The entity responsible for assigning it to you in Colombia is the National Directorate of Taxes and Customs (DIAN). The Colombian authorities will identify all your accounting and relevant tax activities through this unique number. Keep in mind that you have to submit the company’s monthly and annual tax returns.

In most cases, however, you do not have to go to the National Directorate of Taxes and Customs office to generate the NIT. Instead, it gets assigned to you automatically and digitally once the Chamber of Commerce approves your registration.

Tax Identification (NIT)

Corporate Bank Account

The last step, but an important one, you need to take to finish the process and start your business in Colombia is to open a corporate bank account for your company’s financial transactions. You can choose from several banks operating in the country, offering different agreements and benefits for corporate accounts.

You need to take the certificate of registration issued to you by the Chamber of Commerce to the bank to prove your company’s existence. You will also need to show your tax certificate (NIT) and your legal representative’s identification number. 

After you deposit the opening balance amount into your account, you can start transacting on behalf of the business. Please note that some banks might have additional information or legal requirements for this step.

After this, you officially own a business in the country. You will continue getting supported by the Colombian government about your administrative processes throughout the life of your business. You can also perform many of the steps mentioned above and processes online. It is good to get a local, experienced accountant on board who can ensure that the business expenses get regularly registered and all the different types of taxes are paid and declared. Business startup law in Colombia is smooth and straightforward. These legal requirements are as little as they get in most countries.

Commercial Law in Colombia

Our Story

James Lindzey founded the  website ColombiaVisas.com, which is constantly updated with new information explaining visa resolutions, procedures, and laws in Colombia to expats. James has worked as a private investigator and paralegal in the United States through the 90s until he moved to Colombia in 2005. James arrived in Colombia in 2005 and started doing visas for expats, but currently works as Director of Legal Services for Visas by James, and Colombia Legal & Associates SAS since June of 2023.

Colombia Legal & Associates acquired the brand name Visas by James as it became a more familiar and easy way for foreigners to remember the business, than the previous Visas y Tramites Internacionales.

While MedellinLawyer.com focuses more on legal issues for expats, ColombiaVisas.com focuses more on visas, and holds the trademark Visas by James. ColombiaVisas.com is the oldest website and provider of visa information for expats in Colombia. We are proud to be the first and always on the cutting edge of providing interactive website content to our visitors.

In addition to our visa services our agency offers a full range of legal and accounting services to our clients. We are able to assist better in document collection services in the United States because of James previous legal experience in the United States.

Visited 1 times, 1 visit(s) today
Open chat
Hello!

Please let us know how we can help you!

If you give us your name and email we can send you more detailed information in English & Spanish if needed. Our other chat in the right corner of the screen can give you basic requirements, quotes and costs for services.

You can also send us email to: info@medellinattorney.com or call +1-305-767-2766, +57-313-390-7109, +57-301-337-1881, +57-604-444-6634 (landline).