Colombia

Starting a Business in

Villavicencio - 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 from a retail store or from the Chamber of Commerce.
Limited liability company shall use the following four books:
1. Inventory and Balance Book: An inventory and general balance sheet must be made at the start of activities and at least once a year to have a clear and complete picture of the assets
2. Main Ledger: All transactions are entered in this book using the double entry system which allows for the monthly summary of all the account transactions
3. Journal - daily: Accounting transactions in chronological order are entered in this book, individually or summarized, for a maximum of one month
4. Minutes Book: It could be of two types: Minutes book of shareholders’ 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 persons designated as secretary and president of the meetings
Once the company or firm is registered, its owner or legal representative should submit and request the registration of the company’s books by means of a letter addressed to the Chamber of Commerce and fill out an application form. The first page of each book or sheet should be submitted labeled (marked) in pencil at the top with the name of the company and the intended use to be given to each book; they must also be numbered consecutively and contain no accounting records.
1 day COP 14,000 [4 books (COP 3,500 per book, COP 35 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

CAE, which started its operations at the Chamber of Commerce of Villavicencio since November of 2007, allows the following procedures to be completed in one step and at the same place:
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 (“Registro Único Tributario” or RUT) of the DIAN and obtain the Tax Identification Number (“Número de Identificación Tributaria” or NIT)
5. Register with the Municipal Treasury for payment of the Industry and Commerce Tax
The Chamber also sends a report of newly registered companies to certain entities such as the Fire Department and the secretariats of: Municipal Health, Finance, Government, Planning, and Environment, which then visit the companies to verify compliance with all the required standards according to the type of activity.
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. The employer is given consecutive pages, numbered, labeled, and ready for use, or the employer brings the pages numbered, marked and only pays COP $ 8,600 for each book registered. 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 rates to register a company and commercial establishment, certificates and application forms are national (Decree 393 of 2002) and correspond to the year 2009.
2 days COP 1,841,129 [COP 1,025,729: departmental registration tax (1% of the company’s initial capital); 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 public document on company constitution; COP 3,500: certificate of existence and legal representation; COP 34,400: cost to register the company’s books (COP 8,600 per 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 Obtain a land use certificate

The certificate can be obtained at no cost by submitting a written petition before the Municipal Planning Department. Alternatively, it can also be requested and obtained in less time from the urban curator by paying an additional fee of approximately COP 33,450.
7 days COP 33,540
5 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 8 November 2004, states that the self-assessment and payment of contributions to the Integrated Social Security System (“Sistema de Seguridad Social Integral“) and parafiscal contributions shall be completed by a single or integrated form and all employers shall make parafiscal contributions to the family compensation funds, the SENA, the ICBF, the ESAP, industrial schools, technical institutes, and contributions to integrated social security in the places determined by the administrative bodies within the calendar month following each work period.
1 day No cost
* 6 Affiliate the company to a Professional Risk Management Company (ARP)

The Professional Risk Management Company (ARP) insures against risks due to work accidents and disability due to professional illnesses. The company must affiliate its employees to a public or private ARP of its choice. The procedure for registration with the ARP takes a few minutes and involves the submission of the form, but coverage begins from the following day. Monthly payments are also made by means of the integrated form for social security contributions (PILA).
1 day No cost
* 7 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
* 8 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
* 9 Affiliate employees to a mandatory healthcare plan

The company is required to affiliate its employees to a Mandatory Health 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 the identity card of each employee, complete the form, attach a copy of the employment contract; when the employee has family, a copy of the civil registration of the children and of the identity card of the spouse or permanent companion must be attached.
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.
1 day No cost
* 10 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

Data snapshots