The formation and registration of a company in Colombia require selecting the appropriate legal structure, preparing the incorporation document, registering the company with the commercial registry and obtaining its Colombian Tax Identification Registry (Registro Único Tributario or RUT). Cárdenas Vega Asesores assists Colombian and foreign entrepreneurs throughout this process, from corporate planning to the company’s formal incorporation and registration.
Proper corporate formation makes it possible to establish from the outset the rules applicable to the partners or shareholders, the company’s management, its capital, decision-making procedures, the distribution of profits and the mechanisms for resolving potential disputes.
How to incorporate a company in Colombia
Several legal and commercial decisions must be made before filing an application to incorporate a company with the Chamber of Commerce having jurisdiction over the company’s principal place of business.
Although the specific requirements may vary depending on the nature of the business, the number of shareholders, the source of the capital and the company’s economic activities, the process generally involves the following stages:
- Company name search and selection
Before preparing the incorporation documents, it is necessary to verify that the proposed company or corporate name has not already been registered in the Colombian Business and Social Registry (Registro Único Empresarial y Social or RUES). The Chamber of Commerce may refuse to register a name that is identical to that of a previously registered merchant or commercial establishment.
The availability of a corporate name does not mean that the name may necessarily be used as a trademark. A corporate name identifies a legal entity, whereas a trademark distinguishes goods or services in the marketplace. Accordingly, when the name will also be used commercially, conducting a trademark clearance search before the Colombian Superintendency of Industry and Commerce is advisable.
- Identification of the company’s economic activities
The company’s principal and secondary activities must be identified, and the corresponding codes under the International Standard Industrial Classification of All Economic Activities (ISIC), known in Colombia as CIIU codes, must be selected. This information is used for the commercial registry, the RUT and other administrative or tax-related obligations.
- Selection of the corporate form
The partners or shareholders must select the legal form that best meets the characteristics of the business, its investment structure, liability regime, management arrangements and future financing requirements.
The corporate forms available in Colombia include the simplified stock company (Sociedad por Acciones Simplificada or SAS), the corporation (Sociedad Anónima or S.A.), the limited liability company (Sociedad de Responsabilidad Limitada or Ltda.), the general partnership and limited partnerships. A company incorporated abroad may also establish a branch office in Colombia.
- Preparation of the incorporation document and bylaws
The incorporation document must contain the information required for the selected corporate form. Among other matters, it must identify the partners or shareholders and specify the company’s name, registered office, business activities, term of existence, capital structure and management arrangements.
The bylaws may also regulate matters such as voting thresholds, restrictions on the transfer of shares or equity interests, special shareholder rights, grounds for exclusion, dispute resolution mechanisms and the rules applicable to the company’s potential dissolution and liquidation.
- Appointment of directors, officers and other corporate positions
The company must appoint its legal representatives and, where applicable, the members of its board of directors, statutory auditor and any other positions provided for in its bylaws. The appointees must expressly accept their appointments before they may be registered.
- Registration with the commercial registry
The incorporation document, bylaws, letters accepting the relevant appointments and all other required forms must be filed with the Chamber of Commerce having jurisdiction over the company’s principal place of business.
Upon registration of the incorporation document, the company becomes a legal entity separate from its partners or shareholders, subject to the exceptions established by law. The company and its commercial establishments must be enrolled in the commercial registry, and their registrations must be renewed annually within the legally prescribed period.
- Registration with the RUT and assignment of the NIT
As part of the formalization process, the company must be registered with the Colombian Tax Identification Registry administered by the Colombian National Tax and Customs Authority (Dirección de Impuestos y Aduanas Nacionales or DIAN). Coordination between the chambers of commerce and the DIAN makes it possible to obtain the company’s Tax Identification Number (Número de Identificación Tributaria or NIT) without completing the former separate pre-RUT procedure for companies subject to commercial registration.
- Registration of corporate books
Once the company has been incorporated, the corporate books required under Colombian law must be created and, where applicable, registered. These include the shareholders’ or partners’ registry and the minutes book of the company’s highest governing body.
Principal types of companies in Colombia
Simplified stock company
The simplified stock company (Sociedad por Acciones Simplificada or SAS) is a flexible corporate structure that may be incorporated by one or more natural persons or legal entities. As a general rule, it may be incorporated by means of a private document, except when assets whose transfer requires a public deed are contributed to the company.
An SAS allows its bylaws to be tailored to the shareholders’ requirements and does not require a board of directors unless the shareholders voluntarily establish one. In principle, the shareholders’ liability is limited to the amount of their contributions, subject to the exceptions established by law.
Corporation
A corporation (Sociedad Anónima or S.A.) divides its capital into shares and is subject to a more extensively regulated corporate structure. Its governing bodies include a general shareholders’ meeting, a board of directors and a legal representative. This structure may be appropriate for projects involving a significant number of investors or more complex corporate arrangements.
Limited liability company
In a limited liability company (Sociedad de Responsabilidad Limitada or Ltda.), the capital is divided into equity interests and, as a general rule, the partners’ liability is limited to the value of their contributions. The admission of new partners and the transfer of equity interests are subject to formalities that differ from those applicable to an SAS.
Branch office of a foreign company
A company domiciled abroad may establish a branch office to conduct permanent business activities in Colombia. A branch office is not a legal entity separate from its foreign parent company. Its structure and liability therefore differ from those of a Colombian subsidiary.
Company formation involving foreign shareholders
Foreign natural persons and legal entities may participate as shareholders or partners in Colombian companies. They will generally be required to submit documents evidencing their existence, legal representation and identity, duly legalized or apostilled when issued abroad.
When a document is written in a language other than Spanish, an official translation may be required. The manner in which the powers of attorney required to complete the incorporation process and represent the foreign investor in Colombia will also need to be determined.
Registration of foreign investment
Foreign capital invested in a Colombian company is subject to Colombia’s international investment regime and the foreign exchange regulations administered by the Central Bank of Colombia (Banco de la República).
The applicable registration procedure depends on the form of the investment. When an investment is made through foreign currency channeled through the foreign exchange market, registration may occur upon transmission of the corresponding foreign exchange information. Other forms of investment may require the relevant declaration or information to be filed directly through the Foreign Exchange Information System.
Proper registration of the investment enables the investor to exercise the foreign exchange rights recognized under Colombian law, including the right to remit profits abroad and repatriate the invested capital, subject to the applicable regulations.
Documents required to form a company in Colombia
The required documents depend on the selected corporate form, the company’s capital structure and the characteristics of its shareholders or partners. They may generally include:
- Identification documents of the partners, shareholders, directors and officers
- The incorporation document and corporate bylaws
- Letters accepting the relevant corporate appointments
- Commercial registry forms
- Information concerning the company’s economic activities and CIIU codes
- Powers of attorney granted to the representatives handling the incorporation process
- Corporate documents of shareholders or partners that are legal entities
- Apostilled or legalized documents and official translations, where applicable
Company formation and registration services
Cárdenas Vega Asesores provides comprehensive legal advice concerning the incorporation of companies in Colombia, including:
- Analysis and selection of the appropriate corporate form
- Corporate name availability searches
- Identification of economic activities and CIIU codes
- Preparation of the incorporation document and corporate bylaws
- Preparation of powers of attorney and corporate documents
- Registration of the company with the Chamber of Commerce
- Assistance with RUT registration and the assignment of the NIT
- Registration of legal representatives, boards of directors and statutory auditors
- Registration of corporate books
- Establishment of branch offices of foreign companies
- Advice concerning the registration of international investments
Frequently asked questions about company formation in Colombia
Can a foreign company incorporate a company in Colombia?
Yes. A foreign legal entity may participate as a shareholder or partner in a Colombian company. It must provide the documents evidencing its existence and legal representation and comply with the formalities applicable to documents issued abroad.
Is a Colombian partner or shareholder required?
No. A Colombian company may be wholly owned by foreign natural persons or legal entities. An SAS may also be incorporated with a single shareholder.
Does registering a corporate name protect it as a trademark?
No. Registration of a corporate name with the commercial registry and registration of a trademark are separate legal procedures. If the name will be used to identify goods or services, its registration as a trademark before the Colombian Superintendency of Industry and Commerce should be considered.
How long does it take to incorporate a company?
The time required depends on the selected corporate form, the preparation of the documents, the availability of the proposed name, the participation of foreign shareholders, any apostille or translation requirements and the Chamber of Commerce’s review. There is therefore no single timeframe applicable to every case.
Must a company renew its commercial registration?
Yes. A company and its commercial establishments must renew their commercial registrations annually within the period established by Colombian law.