Dealing with Construction Permits in
Colombia
Listed below is detailed summary of the procedures, time and costs to build a warehouse —including obtaining necessary licenses and permits, completing required notifications and inspections and obtaining utility connections.
The information appearing on this page was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 183 economies. The most recent round of data collection for the project was completed in June 2011.
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Building a warehouse
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Estimated Warehouse Value:
COP 2,636,885,731
- City: Bogota
| No. |
Procedure |
Time to Complete |
Associated Costs |
| 1 |
File for and obtain construction license (licencia de construcción)
The previous Decree 1600 (2005) was revoked and replaced by Decree 564 (2006) and further updated with Decree 1272 (2009). All those regulations were finally compiled into Decree 1469 of 2010. Any license application must be accompanied by the following documents:
1. Certificate of free transferability (copy). The certificate’s date of issuance cannot be older than a month before the date of application.
2.Unique national format of application for a license (completed). This format was adopted by Resolution 0984, 2005, of the Ministry of Environment, Housing, and Territorial Development.
3. When the applicant for a license is a corporation, the existence and representation must be certified through the proper legal document. The certificate’s date of issuance cannot be older than a month before the date of application.
4. Power of attorney, when needed.
5. Payment receipt for real property tax of the plot for the past 5 years, stating the plot’s alphanumeric nomenclature or its identification. Whenever there is a payment agreement, the interested party will have to bring a certificate of fulfillment, issued by the Secretariat of Finance.
6. Plot location and identification plan.
7. List of the adjoining plots (the real property contiguous to the project).
8. Manifestation whether the project under consideration will be assigned as a social interest dwelling. Such evidence must be recorded within the act that resolves the license.
Article 21 of Decree 564 also establishes these additional documents for construction license applications:
- Copy of (a) the report of the structural calculations and the structural designs; and of (b) the reports of other nonstructural designs and of geotechnical and soil studies that determine the stability of the work, elaborated according to the norms in force at the moment of application, duly signed and labeled by professionals authorized for such purpose. These persons will be legally responsible for the designs and the information in them.
- Heliographic and magnetic copy of the architectural project, elaborated according to the architectural and urban planning norms in force at the moment of application, duly signed and labeled by a registered architect who will be legally responsible for the design and the information contained therein.
- If the application is presented to a different authority than issued the original license, the interested party will present the previous licenses.
Decree 1272 (2009) introduces risk based categories to determined the time to complete this process. The case study analyzed by Doing Business will be Category III (Medium complex between 500 sq meters and 2,000 sq meters) and should be approved by the Curator within 33 days (25 calendar days). However, if it requests additional documentation, such requests suspend the 33-day term until the requesting party presents the additional documents. In addition to the suspension of the terms explained above, the urban curator may extend the original 35-day term -only if correctly justified by written resolution- to up to 90 calendar days. If process has no delays the "silent is consent" rule will apply and license will be issued in 45 calendar days.
The cost to complete COP 13,146,493
The license cost is calculated by the formula below, defined in Article 118 of Decree 1469, 2010:
E = (Cf*i*m) + (Cv*i*j*m)
Where
Cf = fixed charge: COP 214,240 (40% of minimum salary)
Cv = variable charge, according to the use and area: COP 428,480 (80% of minimum salary).
i = use and socioeconomic stratification index, 4 (defined by Article 118).
m = town factor, according to market, 0.938 (for Bogotá, according to Article 119).
j = Ratio between expenses and square meters, given by the formula assigned in Paragraph 3, Article 118 . The variable j is calculated as 3.8/[0.12+(800/Q)], where Q is the total area in sq. m. Applying this formula, the "j" ratio is equal to 5.17.
Then, applying the formula to the aforementioned values, the cost of the license (E) would be the following:
E = (214,240 x 4 x 0.938) + (428,480 x 4 x 5.17 x 0.938) - No VAT included.
E = 803,828 + 8,311,586 = 9,115,414
Article 118 of Decree No. 1469, 2010, specifies that licenses may not be granted by the urban curator without the previous payment of any taxes caused by the license procedure. BuildCo must also pay the urban delimitation and occupation tax (impuesto de delineación urbana y ocupación) at the local bank. The fees and taxes must be deposited at a designated account held by the district authorities at any bank in Bogotá.
Direct costs are those related to materials, labor, and ancillary elements such as tools and so forth. Indirect costs relate to fees charged by the architects and the engineers and to ancillary payments related to such honoraria. It does not include costs for taxes, land acquisition, project financing, or utility surcharges.
According to Decrees 1272 of 2009 and 1469 of 2010, in cities with more than 500,000 inhabitants, the presentation of documents by a license applicant which contain information available through virtual or remote inquiry is no longer necessary. Urban curators must check by these means the information at the time of filing of the application. This is why the following documents are no longer required to be obtain by the entreperneur:
-Legal representation certificate (Certificado de Exsitencia y Representación Legal)
- Certificate of free transferability (Certificado de libertad y tradición)
- Proof of municipal tax payment (Paz y salvo de impuesto predial)
Agency: Curaduría Urbana (urban curator)
|
33 days
|
COP 9,115,415
|
| * 2 |
Pay variable charges and tax on Urban Delineation (Impuesto de Delineación Urbana) at the bank
The fees and taxes must be deposited at a designated account held by the district authorities at any bank in Bogotá. Urban delimitation and occupation tax for the warehouse amounts (calculated at a rate of 2.6% over the Minimum building direct completion costs).
Minimum building direct completion costs (MBDCC)* - estimated by DANE (National Statistics Department): COP 804,212/sq. m. (only direct costs) x 1300.6 sq. m. = COP 828,482,200 x 2.6%=COP 27,194,911
* MBDCC in 2009 was 637,000 but it was updated by DANE in January 2011 to 804,212 (details in Resolucion 0087 Jan 31 2011)
This a one time payment. Direct costs are those related to materials, labor, and ancillary elements such as tools and so forth. Indirect costs relate to fees charged by the architects and engineers and to ancillary payments for such honoraria. It does not include costs for taxes, land acquisition, project financing, and utility surcharges.
The fees and taxes must be deposited at a designated account held by the district authorities at any bank in Bogotá. This tax is payable once the license has been approved, and it is a precondition for the delivery of the approved license. If at the end of the construction the actual costs surpass the estimated ones, BuildCo must pay an additional 3% on the difference.
Agency: Commercial Bank
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1 day
|
COP 27,194,911
|
| 3 |
Request water connection approval from EAAB
The owner of the plot (or A representative) must request a water connection by providing Bogotá’s public water utility (Empresa de Acueducto y Alcantarillado de Bogotá, EAAB) with copies of the following documents:
- Nomenclature certificate (boletín de nomenclatura) of the plot where the warehouse will be located.
- Certificate of free transferability of the plot.
- Authorization of the plot owner for the installation service request, if the owner is not requesting the service directly.
- Description of the warehouse purpose (whether commercial or industrial).
According to Resolution 1281 from August 2008 the cost is: COP 1,123,520 for connection fee and COP 699,120 to install the meters and COP 22,660 for meter verification. EAAB has 21 points of service at the different service centers that the local government has established throughout Bogotá.
Agency: Empresa de Acueducto y Alcantarillado de Bogotá (EAAB)
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10 days
|
COP 1,845,300
|
| * 4 |
Receive water inspection from EAAB
EAAB undertakes supervision, control, and evaluation of construction according to regulations. It takes place during the whole construction process.
Agency: Empresa de Acueducto y Alcantarillado de Bogotá (EAAB)
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1 day
|
no charge
|
| * 5 |
Obtain water connection from EAAB
EAAB undertakes the final inspection.
Agency: Empresa de Acueducto y Alcantarillado de Bogotá (EAAB)
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10 days
|
no charge
|
| * 6 |
Receive inspection from authorized contractor
No later than 20 days after requesting the connection, Codensa must send a service agent that will review the construction and estimate the connection costs.
Agency: Codensa S.A. ESP
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1 day
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no charge
|
| * 7 |
Request and obtain telephone connection
The line may be requested by phone or in person at any of the points of service. In both cases, the party requesting the installation must provide its citizen's identification number (número de cédula), the information on the exact plot location, and the stratus of the place where the plot is located.
Agency: Telefónica Telecom
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4 days
|
COP 200,000
|
| 8 |
Receive final inspection by Mayor’s office
Through its agents, the mayor’s office (Alcaldía Distrital) is the entity in charge of monitoring and controlling construction projects in Bogotá. This is true also of municipal major's offices nationwide for construction projects developed within their jurisdictions. The inspections are carried out to confirm that the construction is being completed according to the construction license.
Agency: Mayor’s office (Alcaldía Distrital)
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1 day
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no charge
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* Takes place simultaneously with another procedure.