Take A Look At The Things You Need To Do In Order To Register Foreign Business In Colombia
Because it is commended for its strong economic force, many businessmen are seeking to register foreign business in Colombia. There are three types of legal entity structures in Colombia – a corporation, a limited liability partnership, and a branch office of a foreign company. This article will focus on the third legal entity, the branch office of a foreign company. These branch offices, even though established under regulations of a different country, still needs to abide by the Colombian corporation rules. In order to ensure 100% legal compliance, most foreign companies would work with a local group as to avoid or minimize future complications.
To start, there are four major steps a businessman must take in order to register foreign business in Colombia:
- The parent company needs to create an act which authorizes the opening of the branch. This act must contain all the bylaws (Escritura Publica) of the branch office.
- The act needs to be registered with the Public Notary (Notario), and will usually take two to three days with costs based on the assigned capital value.
- The branch will then be required to register to the Directory of Taxes and National Customs of Colombia (DIAN). In this step, the foreign company will secure a Unique Registration Number or RUT, which is a document that contains the foreign company’s Tax ID number (NIT), with an extensive data on the taxpayer. This process may be completed personally or through a representative at the Tax Office.
- The last step in order to register foreign business in Colombia is that the foreign branch would need to be registered to the Colombian Chamber of Commerce. Upon registration, here are the documents needed or requirements:
- Certificate of incorporation of the parent company;
- Power of an attorney authorizing the branch representative to act on behalf of the parent company;
- Bylaws of the parent company
- Resolution from the parent company authorizing the opening of its branch in Colombia, indicating the:
- Main business purpose/activity of the branch
- Amount of the capital allocated to the branch
- Legal address of the branch
- Appointment of a legal representative of the branch – must include their full name, title, identification number, and signature
- Appointment of an auditor
- Tax compliance forms – must include the taxes the company is subjected to
- Company ledgers and corporate books – balance sheets, daily journal entries, minutes of the meeting
However, it is still important to note that this registration is only valid for a year, and needs to be renewed annually.
In addition to the steps to register a foreign business in Colombia, it is also important for foreign branches to open a new Colombian bank account. This bank may be a bank of their own choosing. Along with opening a bank, foreign investments such as increases in the capital must also be registered with Colombia’s Central Bank, Banco de la Republica. The duration of the registration process may vary, and is usually dependent on the origin of the funds.