Starting a Business in Colombia : Guide
Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Colombia. 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.
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Register with the Registry of Commerce and with the National Tax Office (DIAN) at the Chamber of Commerce. | 2 days | 0.7% of capital registration tax + COP 30.000 fix fee + COP 4.000 for the registration form |
| 2 | Open a bank account and deposit the nominal capital | 1 day | no charge |
| 3 | 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) | 10 days | no charge |
| * 4 | Register company with the Administrator of Professional Risks (ARP) | 1 day, simultaneous with procedure 4 | no charge |
| * 5 | Register employer and employees for pension with Social Security – ISS | 1-3 days, simultaneous with procedure 5 | no charge |
| * 6 | Register employees with a private pension fund | 1 day, simultaneous with procedure 6 | no charge |
| * 7 | Register employees for health coverage (public) | 6 days, simultaneous with procedure 6 | no charge |
| * 8 | Register employees with a severance fund | 1 day, simultaneous with procedure 6 | no charge |
