Colombia

Starting a Business in

Colombia

Listed below is a detailed summary of the bureaucratic and legal hurdles an entrepreneur must overcome in order to incorporate and register a new firm, along with their associated time and set-up costs.  It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income (GNI).

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.

  • Standardized Company

  • Legal Form: Sociedad por Acciones Simplificada (SAS)
  • City: Bogota

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No. Procedure Time to Complete Associated Costs
1 Purchase corporate and accounting books

The applicant can select the corporate and accounting book format and the store location. Although the books can also be obtained or ordered from the Chamber of Commerce via the Internet, the general practice is to acquire them before visiting the Chamber of Commerce.
1 day COP 40,000 (5 books for COP 8000 to purchase each book)
2 Register with the Registry of Commerce, obtain the "certificate of existence and legal representation"; register the company books and register with the National Tax Office (DIAN) at the Chamber of Commerce

The new Law 1429 of 2010 and decree 545 of 2011 introduced a new progressive fee schedule in which new companies are exempted from paying certain fees during their first years in operation. For example, the "matricula comercial" is no longer payable at registration.

Ley 1258 of 2009 introduced a new type of company - the SAS (Sociedad por Acciones Simplificada ). An SAS is incorpoarted by the parties through a private document (or by attorney, if that is the case) that is submitted to the Chamber of Commerce. There is no need for a public deed. As an exception for this rule, if the procedure supposes the transference of real property, it is mandatory to set up the company by public deed (Notary Public).

Since May 2008, applicants can go on-line to register all the above at portal www.crearempresa.com.co
The portal provides access to information and speeds up business start up.

 2 days 0.7% of capital registration tax + COP 27.000 fix fee + COP 3.600 for the registration form + COP 45.000 registration books fee
3 Open a bank account and deposit the nominal capital

To open an account at a branch of a commercial bank, the owner encloses the certificate of existence and legal representation, the TIN document, and a photocopy of the certificate of citizenship of the legal representative. A savings account may be opened in minutes, but a checking account could take 3 or more business days for the bank to verify the company information, due to the compliance and revision requirements stemming from money-laundering prevention laws and regulations. Depending on the bank, a minimum initial deposit of about COP 500,000 is required.
1 day no charge
4 Register company with the Family Compensation Fund (Caja de Compensación Familiar), the Governmental Learning Service (Servicio Nacional de Aprendizaje, SENA) and the Colombian Family Institute (Instituto Colombiano de Bienestar Familiar, ICBF)

Decree 3667 of 2004 created a unified form to self-assess and pay social security and payroll contribution. And be advised that the unified form can be submitted electronically but not in person to the Governmental Learning Service (Servicio Nacional de Aprendizaje, or SENA), the Colombian Family Institute (Instituto Colombiano de Bienestar Familiar, or ICBF), the Family Compensation Fund (Caja de Compensación Familiar), and the school of public administration (Escuela Superior de Administración Pública, ESAP). This unified form may be submitted electronically or in person. The time to register varies from 2 days to 3 weeks, depending on the family compensation fund chosen.
The term for payment of the monthly contributions to the Family Compensation Fund expires within the first thirteen business days of each month depending on the last number of the Tax Identification Number (TIN) of the company.
10 days no charge
* 5 Register company with the Administrator of Professional Risks (ARP)

The company must submit a form listing its affiliation and its employees to an administrator of professional risks (ARP), private or public (Instituto de Seguros Sociales, ISS), which covers workplace injury and professional illness. The employer chooses the ARP to which it affiliates all employees and pays the monthly contributions. Coverage begins 24 hours after submitting the form. Before affiliating employees, some administrators of professional risks request that they attend a short course.

 1 day, simultaneous with procedure 4 no charge
* 6 Register employer and employees for pension with the Social Security System – ISS

The company must affiliate itself with with the pension system. The company must then submit a form that indicates employee affiliation to the pension system (affiliation either to the public pension fund through the Social Security System (ISS) or to a private pension and compensation fund). The employer cannot choose the pension fund on behalf of the employee. Each employee has the right to choose between the public or private pension fund, and the company must complete the respective submissions to the pension funds.

Recently, the creation of a new tool allows online pre-enrollment, which is accessed through the ISS webpage, http://www.iss.gov.co/.
1-3 days, simultaneous with procedure 5 no charge
* 7 Register employees with a private pension fund

The process to register an employee with a private pension fund is the same as with the public pension fund (the ISS), but a private fund representative visits the company and completes the registration quickly.
1 day, simultaneous with procedure 6 no charge
* 8 Register employees for health coverage (public)

To register employees for health coverage, the company must submit a form that indicates the affiliation of its employees to the national health system (Plan Obligatorio de Salud, POS), be it through the public entity (EPS-ISS) or through a private "promoter of health" (EPS). Each employee has the right to choose a provider , and the company is obliged to submit the respective form to the provider designated by the employee. Normally, each company must make its submissions to at least one provider.

In practice, it usually takes longer than assumed here, because the providers normally do not accept affiliations immediately. The process of acceptance varies depending on the provider and the history of the employee. The employer is obligated to complete and present different forms, enclosing the documents requested by each entity (which may vary), including evidence of affiliation to the pension fund and the administrator of professional risks, as well as a deposition before a notary public for the affiliation of beneficiaries (some entities request these documents).
6 days, simultaneous with procedure 6 no charge
* 9 Register employees with a severance fund

The company is required to present a form that indicates employee affiliation to the severance fund. Each employee has the right to freely choose the severance fund. Consequently, the company is obliged to complete the respective submission to the severance fund requested by the employee. Although 1 day is typically required to affiliate an employee to a severance fund, the time frame may vary depending on the number of entities chosen by the employees. The employer must deposit the employee’s severance payment annually before February 15th.
1 day, simultaneous with procedure 6 no charge
* Takes place simultaneously with another procedure.
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