PROCESS TO START BUSINESS IN COLOMBIA

01 – 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.

02 -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.

03 – Determine your economic activity

 
It is important to determine in the database the type of activity to which your company refers, for this,
you can check your CIIU economic activity classification through the website of the Chamber of
Commerce.
04 – Bylaws drafting 

 
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.

05 – 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.

06 – Registration 

 
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 analyzing the company’s bylaws before
approving the registration process.

07 – 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.

08 – 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.

09 – 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.

10 – 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.

11 – 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.

To take into account:

Download, fill out and organize all the documentation required

by the entities, such as:

RUES form

Bylaws

Legal representatives
ID copies.

Pre-RUT
 Mercantile
Pre-Registration.

There are many reasons for a foreign individual to create a company in Colombia.  The
most appropriate type of company for most foreigners is called a SAS (Sociedad
por Acciones Simplificadas).  For example your SAS may entitle you to a visa to work
or live in Colombia, there may be possible tax or other reasons to hold your real estate
in a SAS, and a SAS is also necessary for most business purposes you may wish to
carry out in Colombia.

10 steps for a foreigner to create a SAS in Colombia with the assistance of a lawyer.  

Foreign investors in Colombia interested in creating a SAS (like an LLC-USA/Ltd.

Company-Canada), you must perform the following 10 procedures and processes: 

1. EMPOWER A LAWYER: You must execute and deliver power (power of attorney) to
a legal Colombian representative or your attorney so that on your behalf, he/she can
sign the act of incorporation of the SAS (when a single shareholder) or the agreement
establishing SAS (with several shareholders), and perform all other signing procedures
related to this purpose. 

The power of attorney must be signed/authenticated at any notary of Colombia by

personally presenting the foreign investor (with their passport) in addition to the
attorney presenting their cedula and professional legal card/registration and paying the
sum of the amount of the act ($5.000-$10.000 pesos).  The notary signs the power of
attorney, and the document is recognized. 

COST:  $10.000 COP ($5 USD) in addition to your legal/advisory fees.  

2.  NAME QUERY: A query for the name of the SAS must be made prior to
registration.  You cannot have a company with the same name of an existing company
in Colombia.  It is done easily and immediately at the following
link:http://www.rues.org.co. 

COST:  $0 
3.  DEVELOPMENT OF STATUTES: The lawyer or attorney drafts statutes that will
govern the company, according to the interests of investors and Colombian law. The
most important thing the investor should consider is the number and details of
shareholders, names, nationalities, identification numbers, addresses, phone, email,
the amount of initial capital, the number and value of shares, identification legal
representative and powers, whether to limit those powers or not, the address of the
company, the phone company and the address of the commercial establishment (it
could be a home office to start). 

COST:  This process has a cost depending on the complexity of the SAS (could range
from $700.000 to $1.500.000+ COP to do properly, and takes about 3 to 5 days for
your lawyer to complete).

4. PREPARE THE LETTER OF ACCEPTANCE OF RESPONSIBILITIES - CAN BE

LEGAL REPRESENTATIVE, GENERAL MANAGER OR FINANCIAL AUDITOR:  The
legal representative (or your lawyer) must prepare written documents by which either
a) the legal representative of the SAS, b) the owner/general manager c) or the auditor
(not required) will accept positions of responsibility within the SAS.  These
appointments are vital, as are those who act on behalf of the society could make
commitments and decision on behalf of the SAS.  These documents must be signed by
those who accept the position of legal representative or manager, and financial auditor
(if necessary).   It can be done in conjunction with the statutes (see #3) in the same
letter, or in a separate document. 

COST: No cost other than those charged by your lawyer/advisors. 

5. COMPLETE THE “PRERUT” OF THE SAS WITH DIAN: Rut = Registro Unico
Tributario = Unique Tax Registration Number.  DIAN = The Colombian Tax Authority. 
A lawyer with power of attorney must process the pre-RUT of the SAS, which is the
document that the tax obligations of the company are tied to.  This process is finished
with the SAS being granted a “NIT” (Numero de Identificacion Tributaria) from DIAN
which is your Tax ID number.  At this stage of “Pre-RUT” the NIT is for the moment
only provisional.  This procedure can be performed completely online at the following
link:https://muisca.dian.gov.co/WebRutMuisca/DefInscripRutCamNatPortal.facesand
completing the forms, or can be performed directly at the offices of the DIAN, with the
assistance of onsite staff accompanied your lawyer. 

COST:  The processing of this form has no cost (other than legal fees charged by your
lawyer) and can be processed immediately. However, involvement from an accountant
may be necessary at this stage depending on the complexity of the SAS and could
incur fees as a result. 

6. COMPLETE THE “RUES” FORMS: RUES = Registro Unico Empresial y Social. 

These forms are purchased at the Camera de Comercio (Chamber of Commerce) in
the amount of $4.300 each x2, and will contain all the information about the SAS and
must be signed by the legal representative or attorney of the shareholder(s) of the
SAS. This procedure can be performed immediately, knowing all the information with
no additional costs other than the forms themselves. 

COST:  $8.600 COP in addition to legal/professional fees. 

7. SUBMIT TO THE CHAMBER OF COMMERCE THE FOLLOWING: THE

STATUTES, THE LETTERS OF ACCEPTANCE, 2x RUES FORMS, THE PRE-RUT,
POWER OF ATTORNEY, AND COPY OF THE CERTIFICATE OF LEGAL
REPRESENTATIVE:  All these documents must be presented in person by the legal
representative (and/or your lawyer) to the Chamber of Commerce. This registration
has a cost that must be paid at the time of registration and will carry fees depending on
the assets/capital that the SAS will be started with.  For example, a company with
assets of $75 million pesos, pays for this process the sum of $887.000 COP. (but
remember institutions can change fees) If everything has been done correctly the SAS
will be created within 48 hours or the file will be returned back to the legal
representative to fulfill any other requirements if necessary. 

COST:  Fixed costs from the Chamber of Commerce will vary in addition to
legal/professional fees. 
8. OPEN A BANK ACCOUNT IN THE NAME OF THE SAS:  Must be done at a
Colombian bank by the shareholder(s), or by the legal representative of the
shareholder(s), by delivering to the bank the Certificate of Existence and
Representation (Certificado de Existencia y Representacion) issued by the Chamber of
Commerce.  You must also deliver a “balance inicial” (a letter describing the initial
financial state of the SAS) prepared by an accountant, the professional card and
number of your accountant, a photocopy of the identity card of the legal representative
or shareholder(s), pre-RUT and NIT, and a minimum initial amount of $300,000 in the
case of Bancolombia.  You can process this immediately and open the account in the
same day. 

COST:  The only additional fees will be monthly corporate banking fees charged by
Bancolombia and the professional fees of your accountant for the “balance inicial”
($200.000-$500.000 depending on complexity of the SAS) and your lawyer fees. 

9. DELIVERY OF BANK CERTIFICATION TO DIAN:  At this point you request this

letter from your bank stating the existence of your banking relationship and associated
account numbers and deliver this to DIAN within 15 days (max).  If you fail to complete
this in time you will need to apply for another RUT/NIT from DIAN and return to step
#5.  There is no fixed cost to the process but it should be done in person at the offices
of the DIAN by your lawyer and you will receive confirmation immediately if the process
has been done correctly because the pre-RUT now becomes a RUT. 

10. REGISTER THE RUT WITH THE CHAMBER OF COMMERCE:  Your lawyer or
legal representative will now register the definitive RUT/NIT with the Chamber at no
cost and with immediate confirmation.

(Total average time to complete this entire process is 7-10 working days.)

Congratulations you are now officially the owner of a Colombian company which can
be used to carry out a wide variety of business activities in Colombia and can also
serve for a range of visa/immigration purposes. 
It would be my pleasure to assist you with your legal necessities in Colombia, please
contact me at any time for more information and references from past clients.

Diana Correa
University of Medellín
Profesional card No 207774 del C. S. J.
C.C. No.43´149.754 DE MEDELLIN
Cel-phone number 3013664065
Email. dclegalbusinessgroup@gmail.com