How to Incorporate a Company in Colombia? All you Need to Know

May 02, 2023

If you want to start a process of company incorporation in Colombia or trademark registration in Colombia, you have to know all the legal framework to constitute a solid business.

Types of Company Incorporation in Colombia

If you're a foreigner, and you want to expand or create a new business in Colombia, we can legally advise you. The process of opening a branch of a foreign company in Colombia is called incorporation.

In Colombia, there are different types of companies that can be constituted depending on the nature and objectives of the business. These are the most common types in the country:

Corporations (S.A)

Simplified Stock Company (S.A.S - Spanish Acronym) (the common one)

Limited Liability Company (LTDA) (are still used, but they have been replaced by the SAS)

Branch office of a foreign company.

Simplified Stock Companies (S.A.S)

SAS company incorporation is a choice for both local and foreign investors, no matter the size of the business to be undertaken. It is highly chosen by businesses in Colombia due to its basic scheme. This type of organization allows the company to be managed and administered without problems, with special attention on the will of the shareholders expressed through its primary source of regulation, the bylaws.

S.A.S has the flexibility of shares' negotiation and the payment of capital, which make it a favorable vehicle for the pursuit of incorporated joint ventures.

The liability of the shareholders in this type of entity is limited to the number of their capital contributions. Another characteristic is that shareholders of the S.A.S don't have obligations like labor or tax, however, they should be held liable before third parts, in case the company is used to abuse legal regulations.

The company incorporation of a S.A.S consists of a notarized private document registered in the Mercantile Registry of the Chamber of Commerce of the city where the company is to be based. If shareholders' contributions include assets that require a public deed for its transfer, the incorporation must be formalized by means of a notary public deed.

What is a branch of a foreign company?

Foreign companies that are looking to establish permanent legal activities in Colombia are allowed by the Colombian Commercial Code to open branches in the country.

The field of the business will be defined by the parent company, and it must assign at least one permanent resident in the country, of any nationality, as the company's legal representative in Colombia.

The branch and its home office are considered to be one and the same legal entity. Therefore, the branch has the same legal capacity than its home office, and it's illegal to make contracts between the home office and its branch in Colombia.

How is the Process of Company Incorporation in Colombia?

The company incorporation process of a company in Colombia must follow the next steps:

1. Constitute incorporation through a public deed or through a private document; This depends on the type of company that has been selected.
2. Manage the (pre-RUT) Format through the website of the Direction of National Taxes and Customs (DIAN).
3. Register the private constitution document or the public deed in the chamber of commerce located in the city where the company will have its principal domicile. This organization issues the certificate of existence and provisional representation.
4. Open a bank account.
5. Obtain the Single Tax Registry (RUT) at the DIAN.
6. Bring the copy of the RUT certificate to the Chamber of Commerce. After 24 hours, the certificate of existence and final legal representation have to be issued.
7. To activate the bank account, you must show the certificate of existence and final legal representation.

Do you need Company Incorporation Lawyers in Colombia?

As a foreign investor that is planning a company incorporation in Colombia, it is advisable for you to get help from experienced business and corporate law attorneys in Colombia. At AGT Attorneys, we take pride in offering you the most qualified attorneys with wide experience in foreign investment in the country.

Contact us at +57 3105706331 or fill out the form in our "contact us" section to learn more about our services. Remember to subscribe to our newsletter to stay up to date with the latest information in the legal field.

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