Colombia, the 3rd largest economy in South America and the 2nd most biodiverse planet worldwide, is very understandably becoming more and more of an attractive playground for potential investors. Between 2011 and 2016, Europe invested close to an estimated USD$30 billion in Colombian, with almost $5 billion in 2016 alone. What’s more is that Europe only represented 34% of Foreign Direct Investment (FDI) in Colombia during this period, displaying exactly the widespread nature of global interest in Colombia.
Incorporation process in Colombia
If you are an entrepreneur and you want to start your business incorporation process in Colombia, it is important that you take into account both the legal obligations to which you are subject and the protocols to be followed with the different public entities. Although the above sounds a little complex, our experts at LegalGenius™ want to share the step-by-step that you must follow so that your business or company meets all the requirements established by law.
Choose the name of your company
The name of your company or business is the initial form to identify yourself before the law and becomes the introduction of your activity to the public. To set it up you must enter the RUES or Registro Único Empresarial page and verify if the name you have planned is available in the database.
In case the name is already registered in the Chamber of Commerce, you must choose a new one that resembles what you need.
Register as an individual or company
All the tax implications and the different legal responsibilities established by law depend 100% on the nature of your company:
Individuals: It is part of a simplified regime and its accounting can be maintained in a fiscal book. If you are VAT responsible, that is, if you invoice VAT, your accounting must be kept by a CPA.
Company: They are all classified in corporations or public charitable foundations.
Once the business name is established, you must write the bylaws that will govern the relationship between the different representatives of the company; This document will become the backbone of business operations and roles, so its content should be reviewed by a professional attorney in order to avoid future disagreements.
Fill out the Pre-RUT
The Pre-RUT is a certificate that allows you to apply to receive the NIT or Tax Identification Number, which is used to carry out the registration of taxpayer data in Colombia. To acquire this certificate, it is necessary that you present the company’s bylaws, identification documents of the legal representatives to the Chamber of Commerce.
Once the Pre-RUT has been completed for the incorporation of your company in Colombia, you must make the registration. The registration tax value corresponds to 0.7% of the total amount. Keep in mind that the Chamber of Commerce will be in charge of analysing the company’s bylaws before approving the registration process.
Bank account set up
To register the final RUT before DIAN, you must open a bank account in the company’s name. Keep in mind that banks allow new businesses and companies to open a bank account, only if they have the registered name and the Pre-RUT has been completed.
Once you obtain the bank certificate, you must go to DIAN to process the company’s final RUT.
Present the final RUT to the Chamber of Commerce
This point is one of the most important in the process of incorporating companies in Colombia because with the presentation of the RUT before the Chamber of Commerce, the existence and legal representation of your company or business is verified and certified, which will allow you to gain official status.
Obtain the billing authorization
The billing authorization is a document that allows you to charge for the services provided, that is, the contracting activities and presentation of products or services; It is important that you know that you must request it electronically from DIAN.
Register the books at the Chamber of Commerce
By completing the registration, you will be able to receive all the tax benefits. Remember that the books of the shareholders and the minutes need to be books registered before the Chamber of Commerce. To guarantee the correct management of these documents, we recommend the advice of a professional accountant.
Make the registration in the Social Security system
Finally, one of the indispensable requirements for the registration of companies in Colombia and, above all, to start with the hiring of employees, is the registration in the Social Security system, this allows your company to guarantee coverage to its personnel against accidents, invalidity or health problems.
How we can help you
If you are considering forming a business or you need expert help with company registration in Colombia, LegalGenius™ is ready to assist you with its skilled team of lawyers, consultants and tax experts. We are committed to making the process as stress-free and streamlined as possible for you, and we will take care of all your document preparation and administrative tasks regarding the registration forms, payment of government fees, local address registration, banking support, etc., whilst always keeping your exact objectives and unique vision in mind throughout the process.
Please use our Company Formation Wizard if you would like to set up your registered company in Colombia or if you would like to know the costs involved prior to proceeding with our exceptional services. For other queries and special requests for complex or customised company formation services, please contact us at firstname.lastname@example.org