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HOW TO START A BUSINESS IN COLOMBIA

Starting a business in Colombia is a great goal that can be very rewarding in the end. Before you can profit, there are important steps to follow if you want to start running a business in Colombia.

I. SEVERAL WAYS TO START YOUR BUSINESS

You can use any of the following legal vehicles to start doing business: (i) simplified stock corporation (S.A.S.); (ii) limited liability company; and (iii) corporation (S.A.). These are known as trading companies.

II. CHOOSING SAS

The best and easiest way to get started is to establish a SAS, sometimes abbreviated as SSC or Simplified Stock Corporation. SAS is the most favorable business start-up because it is flexible with respect to the incorporation process. It is also flexible in terms of the great amount of freedom its shareholders have to create the terms and conditions for its operation, internal structure and management.
The Code of Commerce establishes that in order to create or incorporate a SAS, it must register its bylaws with the chamber of commerce for the corresponding domicile. There is also a permanent activity concept requirement that must be met. Unlike the notion of permanent establishment, this concept includes that the following activities must occur in the following manner:
(1) Open commercial establishments and/or commercial offices in Colombia, even if they only provide advisory services;
(2) Participate as a contractor in the execution of works or provision of services;
(3) Engage in any form or activity directed to the management, use or investment of private savings funds;
(4) To engage in the extractive industry in any of its branches or services;
(5) Obtain from the Colombian government a concession or that the concession has been assigned to any title, or that in any way participates in the exploitation of the concession;
(6) The performance of its associated assemblies, boards of directors, management or administration in the national territory.
You may wonder when you are supposed to complete these activities, but the answer is not concrete. Colombian law does not provide start-up entrepreneurs with specific deadlines or criteria to determine whether an activity is permanent. In order for the requirements of the activity to be met, its basis for perpetuity depends on the development of the activity in Colombia, such as: (1) the nature or scope of the activity; (2) the necessary infrastructure in the country for its performance; (3) its regularity; (4) the hiring of personnel in Colombia; (5) and other necessary parties.

III. INCORPORATING YOUR TRADING COMPANY

To incorporate a commercial company, you must obtain a public deed and legalize it before a notary public or a notarized private document. The method you choose will depend on the legal vehicle chosen by the investor.

IV. REGISTRATION OF YOUR CORPORATION

After incorporating your business, you must have the corporation registered. To register your business, the company’s bylaws, or for any public deed, must be submitted along with other documents requested by the Chamber of Commerce. There must also be a form issued for the application and registration at the DIAN (National Tax and Customs Office) where the provisional registration is requested for the RUT (National Tax Registry) to be processed by the Chamber of Commerce. In addition, another requirement for a company to register is to pay all fees and taxes to the Chamber of Commerce after receiving an estimated cost.

V. GOOD LUCK

Now that you have all the knowledge you need to start your business, there’s no stopping you. May your business prosper in the great country of Colombia.
 
Author: lawyer at Cuadro Legal
 
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