Colombia - Establishing an OfficeColombia - Establishing an Office
There are three common forms of organizing your business in Colombia: a corporation, a limited liability partnership, and a branch or subsidiary of a foreign corporation. U.S. firms should obtain legal and tax related advice from a Colombian law firm or accounting firm. The U.S. Commercial Service’s Business Service Providers webpage provides a list of Colombian attorneys.
A branch office of a foreign corporation must operate under the rules applicable to Colombian corporations. Its liability is limited to assigned capital and it must be registered with a Notary Public in its place of domicile. The following documents must be registered with the Notary Public:
1. Certificate of existence and legal representation of the parent company, issued by the competent authority of the country of incorporation. In case of a natural person, a copy of the passport must be provided.
2. Power of attorney authorizing a representative to act on behalf of the parent company.
3. Bylaws of the parent company.
4. Resolution from the company in the United States authorizing the opening of its branch in Colombia.
The previous documents must have the legalization process established according to Colombian legislation. Be sure to check with the Colombian Embassy in Washington, DC about whether specific documents originating in the United States require an apostille from the Colombian Consulate or Embassy to validate their use in Colombia.
Companies should follow these additional steps, at a minimum, when establishing a business in Colombia:
I. Formalize a public document:
All the aforementioned documents will be required for this step. Prepare company bylaws (Escritura Pública) and register the entity with a Notary Public, (Notario) stating the purpose of the firm, capital, legal representative, etc. This step takes two to three days and costs approximately 0.0027 percent of the amount of capital being registered. A 16 percent Value-Added Tax (VAT) will be charged. The public deed must be signed by the representative of the foreign company in Colombia.
II. Acceptance letters of the representatives of the branch:
Letters of acceptance must be obtained from the representatives approved in the bylaws of the company, such as the legal representative and his/her deputy. Such letters should include the full name of the person accepting the position, title, document, identification number and signature.
III. Get a Unique Tax Registry (RUT- Registo Unico Tributario):
This procedure may be done personally or through a representative at the Tax Office, in order to obtain the NIT (Taxpayer Identification Number) of the branch. The bylaws, letters of acceptance, and additional forms for tax purposes (RUT and NIT if any) must be filled out indicating the taxes to which the company is subject to and must be registered with the Chamber of Commerce assigned to the address where the branch is located. Registry in the Chamber of Commerce is subject to payment of registration tax, equivalent to 0.7 percent of the amount of capital allocated to the branch. This registration must be renewed annually at the Chamber of Commerce.
IV. File the Company’s Ledgers and other corporate books at the Chamber of Commerce:
All companies (including branches of foreign companies domiciled in Colombia) must register themselves and their accounting books, including: daily journal entries, balance sheet, meeting minutes, and other required documents by law in the Commercial Register of the Chamber of Commerce in the cities where they are located.
Please check the current cost to register the books at Bogotá’s Chamber of Commerce website.
V. Open an account at the bank of your choice:
Every new branch must open a bank account. Investors will deposit the capital in this account.
VI. Register the foreign investment with the Central Bank:
Once the investment is made, that is, once the initial capital assigned is registered by the company, any subsequent capital increases must be registered with the Central Bank (Banco de la República). The registry process varies according to the destination of the funds.
Colombia Business Registration