How to Start a Company in Colombia
What types of companies can be created in Colombia and how this process works?
In Colombia, creating a company is related to the process of creating a corporation, whether they are: corporations (SA, sociedad anónima), joint-stock companies (SAS, sociedad por acciones simplificada), limited liability companies (Ltda.), or limited partnerships or partnerships limited by shares.
Joint-stock companies (SAS, sociedad por acciones simplificadas) are the most popular types of corporate structures in Colombia compared to other corporate structures due to the flexibility they offer. Their advantages include:
- They may be incorporated through a private document, signed by a notary public.
- They may consist of one or more shareholders.
- Their shares are freely negotiable.
- They are managed by shareholder meetings.
To incorporate a company, you must obtain the general documents, register the company with the Chamber of Commerce, start the registration procedure with the National Tax and Customs Administration (DIAN) and open a bank account in Colombia with the corresponding channeling of funds.
Another option available to foreign investors is to incorporate a foreign branch, which has the benefit of being exempt from income tax or asset tax. These branches are incorporated almost exactly the same as Colombian companies and have the following requirements:
- The documentation on the foreign company must be obtained and translated properly.
- The branch must be registered at the Chamber of Commerce and the registration procedure with the DIAN must be started.
- A Colombian bank account must be opened with the respective channeling of funds.
Keep in mind
- If a business group is established, the parent company must make a record of this in a private document which must be registered at the respective commercial registry.
- The law provides penalties for the late registration of the business group’s status.
- Procedures with the DIAN can be conducted online without the need to go to an office, for which a Tax Identification Number (NIT) assigned by the Chamber of Commerce is needed.
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