Colombia

Starting a Business in

Medellín - Colombia

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.

The information appearing on this page was collected as part of the Doing Business subnational project in Colombia. Download this Doing Business report or explore other cities and topics.

No. Procedure Time to Complete Associated Costs
1 Purchase the company books

The company’s books can be purchased at a commercial establishment or from the Chamber of Commerce.
Limited liability companies shall use the following four books:
1. Inventory and balance sheet book: An inventory and a general balance must be made when initiating activities and at least once per year to get to know in a clear and concise manner the state of company’s assets and liabilities
2. Ledger book: In this book the operations of the accounts are entered using the double entry system; this allows the company to summarize on a monthly basis all its operations for each account
3. Cash Book - daily: In this book the accounting operations are entered in chronological order, either individually or by summaries not to exceed one month
4. Minutes Book: It could be of two types: Minutes book of shareholder’s meetings and minutes’ book of the Board of Directors. The first must be kept by all companies, the second only by those companies that have a board of directors. The minutes of the meetings must be recorded in chronological order, and signed by the persons designated as secretary president
Once the company has been registered, its owner, or legal representative must present and request the registry of the commerce books through a letter addressed to the Chamber of Commerce, and fill in the respective application form; the duly numbered book or pages must be presented. The first page in each book or set of pages should be labeled in pencil in the upper side with the name of the company and function given to each book; the pages must be consecutively numbered and have no accounting entries.
1 day COP 24,000 [4 books (COP 6,000 per book, COP 60 per page, 100 pages per book)]
2 Register the company in the Mercantile Registry, obtain the certificate of existence and legal representation, register the company’s books and register with the National Tax Authority (DIAN) at the Business Services Center (CAE) of the Chamber of Commerce

The CAE located at the Chamber of Commerce of Medellín makes it possible to complete the following procedures simultaneously at a single location:
1. Register the company and the commercial establishment (if applicable) at the Mercantile Registry
2. Obtain a copy of the certificate of existence and legal representation
3. Register the company’s books
4. Register the company in the Unified Tax Registry (RUT) of the DIAN and obtain the Tax Identification Number (NIT)
5. Registration of Industry and Commerce
6. Notification of the opening of a business to the correspondent office at the Department of Municipal Planning
7. Payment of departmental income of Antioquia
The company’s books are submitted to the Chamber of Commerce for the pages to be subscribed and numbered. A form requesting the books is filled out and the amount is paid directly at the cashier booth. If the company completes the company establishment procedure using the website www.crearempresa.com.co, it may at the same time request registration of the books, without having to wait for the company to be registered first. The registration for the payment of industry and commerce tax is also done immediately at the CAE.
When the company is incorporated by means of a private document, the Chamber of Commerce verifies the signatures contained in the document to prevent potential frauds.
The rates to register a company and commercial establishment, certificates, and application forms are national (Decree 393 of 2002) and correspond to 2009.
The duration of this procedure was reduced because there is more efficiency on the part of the CAE’s personnel.
4 days COP 1,657,963 [COP 718,010: departmental registration tax (0.7% of the company’s initial capital); COP 51,286: departmental pro-development stamp duty (0.05% of initial capital); COP 66,267: departmental tax for appointment of legal representative; COP 665,000: commercial license (133.92% of the legal minimum monthly wage); COP 83,000: commercial establishment fee; COP 3,500: registration form; COP 26,000: registration at the Chamber of Commerce and registration of the document of incorporation; COP 3,500: certificate of existence and legal representation; COP 7,000: assigned company’s registry number; COP 34,400: cost of registering the company’s books (COP 8,600 each book)]
3 Open a bank account

The company needs to open an account at a commercial bank in order to operate. Opening a savings account only takes a few minutes, but opening a checking account may take up to three days, because the bank is required to verify the applicant’s data before approving the account. Each financial entity may have its own additional requirements for opening an account, such as a minimum deposit amount. In general, a checking account can be opened with a minimum deposit of COP 100,000, and a savings account can be opened with the equivalent of one legal monthly minimum wage, which is currently COP 496,900.
1 day No cost
4 Register the company with a family compensation fund (caja de compensación familiar), the National Training Service (SENA) and the Colombian Family Welfare institute (ICBF)

Once it is registered, the company must pay these payroll-based contributions within the first eight days of each month. The contribution is then distributed internally between SENA and ICBF. The registration procedure at a family compensation fund only takes a few minutes, but the request is subject to evaluation for approval or rejection.
The documents that must be submitted include: registration form, certificate of existence and legal representation issued by the Chamber of Commerce, photocopy of the legal representative’s identification card and the payroll list, with copies of the employees’ identification cards and documentation related to their children.
Decree 3667 of November 8, 2004, establishes that self-liquidation and payment of the contribution to the Comprehensive Social Security System and parafiscal contributions must be carried out through a sole comprehensive form, and all employers must effect the payment of parafiscal contributions to the family compensation funds, the SENA, the ICBF, and ESAP, industrial schools and technical institutes, and the contributions to the Comprehensive Social Security in the locations determined by the administrating entities, within a calendar month following the worked period.
6 days No cost
* 5 Affiliate the company to an Occupational Risk Management Company (ARP)

The Occupational Risk Management Company (ARP) insures against risks due to work accidents and disability due to occupational illnesses. The company must affiliate its employees to a public or private ARP of its choice. The registration procedure before the ARP takes a few minutes and consists of the presentation of the form but the coverage begins as of the next day. Monthly payments are made through the Comprehensive Form of Liquidation and Contributions of Social Security (PILA).
1 day No cost
* 6 Affiliate employees to the public pensions system

The company must affiliate its employees to a pension fund, which may be either the government’s Social Security Institute (ISS) or a private pension fund. Employees may select the fund of their choice. The application process to the ISS takes one day and is completed once the appropriate form is submitted. An agent from the public pension fund may visit the company and complete the registration procedure.
1 day No cost
* 7 Affiliate employees to a private pension fund

When employees select a private fund, a representative of the fund will generally visit the company to assist in filling out the forms and expediting the registration process.
1 day No cost
* 8 Affiliate employees to a mandatory healthcare plan

The company is required to affiliate its employees to a Mandatory Healthcare Plan (POS) through a Healthcare Promotion Entity (EPS). Each employee has the right to select the EPS of his or her choice, and companies are required to register the employee at the selected EPS. The employee registration process varies depending on the EPS and the employee’s records.
The EPS representative visits the company’s facilities, obtains the information required for affiliation and submits the request to the EPS. Requirements: copy of the identity card of each employee, fill out the form, copy of work contract; when the employee has family, copy of the civil registration of the children and identity card of the spouse or life partner.
In August of 2008, a new EPS named Nueva EPS S.A. was created as a result of the exceptional transfer of the affiliates of the public-sector EPS ISS, in the framework of Decree 055 of 2007. Nueva EPS was established as a healthcare promotion entity under the contributive regime by means of Resolution 371 of April 3, 2008 of the National Health Superintendence.
2 days No cost
* 9 Affiliate employees to a severance fund

Each employee is free to select the severance fund of his or her choice. The company submits the documents for affiliation and must deposit every year –on February 14th– payment of each employee’s severance entitlement.
1 day No cost
* Takes place simultaneously with another procedure.
Subnational Data

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