COLOMBIA Law and Practice Contributed by: Jaime Trujillo, Juan David Velasco, Natalia Ponce de León and Angelica Navarro, Baker McKenzie S.A.S.
3.2 Incorporation Process Once the shareholders identify the type of corporate vehicle that best suits their needs, the incorporation process is generally simple and expeditious. The incorporation of corporations and branches does not require authorisation from governmental authorities, as a rule. However, there are specific cases where authorisation from governmental authorities would be required. Companies and branches must be registered in the commercial registry kept by the corresponding cham - ber of commerce of the municipality where it is to be domiciled. For purposes of incorporating a corporate vehicle in Colombia, the following main steps must be com - pleted. • An incorporation document must be prepared containing the company’s by-laws and the names of the shareholders and identification documents. If the shareholders are foreign entities, apostille iden - tification documents are needed. Depending on the type of vehicle, this may be completed through a private document or a public deed. • The new entity must be registered with the cor - responding chamber of commerce of the munici - pality where it is to be domiciled, by filling out the Registro Único Empresarial y Social (RUES) form. • The new entity must be registered with the tax authorities by completing the form to obtain a tax identification number (NIT). The chamber of com - merce also handles the processing of the national tax registry (RUT) used for registering entities with the Tax and Customs National Authority (DIAN). The RUT includes general taxpayer information, along with tax and customs obligations. To obtain this registration, the requisite fees and taxes must be paid to the chamber of commerce. • Acceptance letters for the positions of legal repre - sentatives, substitutes and board members must be obtained, if these appointments are made in the incorporation document, along with copies of the ID documents for the appointed positions. These documents must be filed with the chamber of commerce. Once all documentation is submitted, the
Foreign Company Branch Benefits and most common uses
Branches are a great alternative for foreign companies that want to have a permanent presence in Colombia. A branch office is an extension of the company’s home office and is not a separate legal entity. Branches are widely used by investors in the hydrocarbons sector. Incorporation process The home office issues a resolution, which is formal - ised in a public deed granted before a Colombian notary public and registered with the chamber of commerce. Term The term is limited to the duration of the home office, but can be extended as long as it is within the duration of the home office. Number of partners/shareholders The branch is not a separate entity from the foreign company. The foreign company is therefore the sole owner. Liability As it is not a separate entity from the foreign company, the home office is liable for the assets and liabilities of the branches. They are jointly and severally liable for tax obligations. Capital requirements The allocated capital must be fully paid, and any increase in capital requires an amendment to the by- laws approved by the foreign company’s competent corporate body. However, increasing supplementary investment does not need a by-law amendment and can be made in cash from abroad. Governance Branches do not have any separate governance bod - ies from their home office. A legal representative/gen - eral agent acts on behalf of the company. Other relevant matters A branch must have a legal reserve and statutory audi - tor.
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