GUIA_LEGAL_CHAPTER_3_CORPORATE REGULATIONS.pdf

TO DOING
BUSINESS IN
COLOMBIA
LEGAL
GUIDE

This document reflects the valid Colombian
legislation at the date of its development and it seeks
to provide general and basic information of the
Colombian law. This message does not represent or
replace legal counsel of a specific or particular
matter. Such legal counsel must be obtained from
specialized legal services. To that effect, we suggest
that you contact any of the law firms that can be
found in the Investor’s Services Directory located in
the webpage of ProColombia
LEGAL
GUIDE
TO DOING BUSINESS
IN COLOMBIA
www.procolombia.co

Corporate Law in Colombia enjoys great stability
by means of stable legislation that has
progressed continuously.
1.
2. Investors who wish to engage in permanent
business in Colombia must, as a general rule,
channel their investments through a legal vehicle
such as a subsidiary or branch of a foreign
company.
3. Colombia's’ commercial law is flexible and
modern with regard to subsidiaries. It allows the
creation of sole-shareholder investment vehicles,
whereby the liability of the sole shareholder is
limited to the amount of the corresponding
contribution
In order to carry out businesses in Colombia,
foreign investors do not need a local partner or
investor. With few exceptions, the entire equity
participation of a legal entity can be
foreign-owned and there are no legal restrictions
on its subsequent repatriation.
4.
The incorporation of a legal vehicle is, in general
terms, simple and expeditious, and does not
require prior government authorization, except
for special cases.
5.
Chapter 3
Five key aspects that an investor
should know about corporate
regulations in Colombia:
CORPORATE
REGULATIONS
02

In Colombia, constitutional principles such as the right of association, the right to equality, and the protection
of free enterprise and private initiative, enables the creation of entities that receive local and foreign
investments. This chapter summarizes some relevant legal aspects of the most commonly used types of legal
entities in Colombia.
3.1.
3.1.1.
The most frequently used vehicles to undertake
permanent activities in Colombia are commercial
companies and foreign company branches.
Commercial Companies
These types of vehicles create a separate legal entity
from that of its shareholders or partners. Commercial
companies most frequently used to channel investments
in Colombia are: (i) simplified stock companies (S.A.S.
by its acronym in Spanish); (ii) limited liability
companies; and (iii) corporations (S.A. by its acronym in
Spanish). In recent years, the S.A.S. has become the
legal vehicle of choice for the business community,
particularly because of its flexibility in terms of the
incorporation process, administration, and the ample
freedom its shareholders have to establish the terms and
conditions for its functioning and internal structure.
On the other hand, as a general rule, companies do not
require operating permits in Colombia. There are
exceptions for companies created to carry out certain
types of activities of interest to the State (for example,
financial, stock market, insurance, private security and
surveillance services with weapons, or any other activity
that involves the management, use and investment of
funds collected from the public), which require prior
authorization from the competent administrative
authorities for their incorporation and operation.
03
Common Legal Vehicles to Carry Out
Permanent Activities in Colombia
3.1.2.
Branches are ongoing entities opened in Colombia by a
foreign company for the development of its corporate
purpose. This is the reason why they do not have a legal
personality different from that of its main office, which is
equivalent to saying that the branch and the main office
are the same legal entity and, therefore, the branch does
not have any legal capacity superior to, or different from,
that of its main office, which is liable for all obligations
acquired through its branch in the country.
For these purposes, in addition to considering the
aforementioned activities, it is important to note that
Colombian legislation does not provide specific criteria,
nor a term of duration, in order to determine whether an
activity is permanent or not. Therefore, permanence
depends on the particular circumstances and
development of the activity in Colombia. Some examples
are: the nature or scope of the activity, the infrastructure
required in the country for its performance, the regularity
of the activity and the recruitment of personnel in
Colombia, among others.
Opening commercial establishments and/or business
offices in Colombia, even if these only provide
advisory services;
Participating as a contractor in the performance of
works or in the provision of services;
Participating in any form or activities aimed at the
management, use or investment of funds from private
savings;
Devoting itself to the extractive industry in any of its
branches or services;
Obtaining from the Colombian Government a
concession or that the concession has been assigned
to any title, or that in any way participates in the
exploitation of it;
The performance of its associate assemblies, boards of
directors, management or administration in the
national territory.
Branches
The Commercial Code establishes that for a foreign
company to undertake permanent activities in Colombia,
it must establish a branch with a domicile in the national
territory. Permanent activities (a concept different from
the notion of permanent establishment for tax purposes)
are by law in a non-exhaustive manner, as follows:

Limite liability company Corporation Simplified stock company Foreign company branch
Incorporation /
establishment
Number of
partners /
shareholders
Liabity of
partners
shareholders
Capital
By means of a public deed. By means of a public deed.
Usually by means of a private
document. Nonetheless, if the
contributions include assets
that, according to the
applicable law, require
public deed for its assignment
(i.e. real estate property),
incorporation must be
formalized by means of a
public deed.
Minimum two partners.
Maximum 25.
Partner contributions shall
be paid in full when the
company is incorporated
as well as when any
increase is agreed upon.
During the incorporation,
the shareholders must
subscribe at least 50% of
the authorized capital and
pay at least 1/3 of the
subscribed capital. The
remaining 2/3 must be
paid within a year.
The subscription and
payment of capital can be
made under the
conditions, in the
proportion and terms
which have been
established by the
shareholders. In any case,
shareholders have a term
of two years to pay for the
subscribed shares.
It is comprised by the
assigned capital and the
supplementary capital from
the investment.
Assigned capital must be fully
paid and its increase requires
authorization by the
respective body of the parent
company as well as an
amendment to the by-laws.
The increase of the
supplementary investment
does not require such
amendment and may be
made in cash from abroad.
Limited to the amount of the
capital contribution for any
obligation, unless the
bylaws stipulate a greater
responsibility for all or some
of the partners. Partners are
not liable for the payment of
any corporate liability, with
the exception of the
following cases:
A. Failure to comply with
labor or tax
obligations.
B. That the company is
not identified with the
acronym “Ltda”.
C. Overvaluation of
in-king contributions.
D. Capital stock has not
been paid in full.
E. Willful misconduct or
n e g l i g e n c e
deteriorating the
common pledge of
creditors.
Additionally, there may be
administrative liability of the
parent company for acts of
transnational corruption.
The shareholder’s liability is
limited, at the beginning, to
the amount of their
contributions, except in the
following cases:
A. Liability for
o u t s t a n d i n g
obligations of the
bankruptcy affiliate if
the actions by the
parent company gave
rise to the insolvency of
the affiliate.
B. Willful misconduct or
negligence deteriorate
the common pledge of
creditors.
C. Overvaluation of
in-kind contributions.
transnational corruption
The shareholders’ liability is
limited, at the beginning, to
the amount of their
contributions, except in
cases of fraud or abuse by
the company to the
detriment of third parties
(willful misconduct or
negligence deteriorating the
common pledge of
creditors).
The foreign main office is
liable for the assets and
liabilities of the Branch in
Colombia.
The foreign company and
the branch are liable for the
tax obligations of the
company.
foreign company for acts of
Minimum five shareholders,
none of which may have
95% or more of the
outstanding capital stocks of
the company.
Minimum one shareholder,
no maximum limitation
provided by law.
It is considered an extension
of the foreign company (they
are the same entity).
Consequently, the branch
itself has no partners or
shareholders.
Resolution from the main
office must be formalized by
means of a public deed.
For illustrative purposes, a comparative table of the main characteristics of the corporate vehicles that can be used by
investors in Colombia is presented below:
04

00
Reserves
Social
Purpose
Term of
duration
Foreign
investment
Assigment of
shares / stock
Sale or assignment of the
limited partnership shares
implies that the company’s
bylaws must be amended.
Such an amendment must be
approved by the
shareholders assembly
following a right of first
refusal. The decision to sell
or assign shares must be
legalized by means of a
public deed duly registered
with the Chamber of
Commerce.
The mandatory legal reserve
is equivalent to 10% of the
annual net gains up to an
equivalent of 50% of the
company’s equity.
is equivalent to 10% of the
annual net gains up to an
equivalent of 50% of the
subscribed capital.
No legal reserve is
mandatory, unless otherwise
contemplated in the
company´s bylaws.
for a branch is equivalent to
10% of the annual net gains
up to an equivalent of 50%
of the assigned capital.
Shall be determined, and the
company’s legal capacity
will be restricted to activities
contemplated under such
social purpose.
Defined (with the possibility
to be extended by the
partners).
Investment of capital in
money is automatically
registered before the
Colombian Central Bank
when the corresponding
required information of the
exchange operation is
submitted by an exchange
market intermediary
(commercial bank), or
through a compensation
account registered before
the Colombian Central
Bank.
registered with the
when the corresponding
market intermediary
Bank.
registered with the
when corresponding
market intermediary
Bank.
registered with the
when corresponding
market intermediary
Bank. If the main office
forwards additional funds as
supplementary investment to
the assigned capital, such
foreign currency shall be
channeled through the
foreign exchange market.
Statutary
Auditor
Not required, except when
(i) the value of the gross
assets is equivalent to or
greater than 5,000 times the
current minimum legal
monthly wage1
, which is
equivalent to COP
$6.500.000.000 (approx.
USD 1.658.1632
), or (ii) the
gross income for the
Mandatory for stock
companies.
Not required, except when (i)
the value of the gross assets is
equivalent to or greater than
5,000 times the current
minimum legal monthly wage,
which is equivalent to COP
$6.500.000.v000 (approx.
USD 1.658.163), or (ii) the
gross income for the
immediately preceding year
are equivalent to or greater
Mandatory for branches
since its establishment.
to be extended by the
shareholders).
May be indefinite
company’s legal capacity
will be restricted to activities
contemplated under such
social purpose.
May be undetermined,
allowing the company to
perform any licit act of
commerce.
branch´s legal capacity will
be restricted to the main
office´s social purpose.
to be extended by the main
office depending on the term
of duration of such entity).
Initially, shares are freely
transferable, and no bylaw
reform is required for their
negotiation. Share
assignment may be carried
out by endorsing the
certificates and registering
them in the stock ledger. The
transfer of shares may be
limited by a lien in favor of
the company and the
shareholders at the time of
negotiation, if included in
the bylaws.
Initially, shares are freely
transferable, and no bylaws
reform is required for their
negotiation. Share
assignment may be carried
out by endorsing the
certificates and registering
them in the stock ledger.
Assignment can be limited to
up to ten years or can be
subject to authorization of a
shareholders’ meeting or to
preferential subscription
rights.
No aplica.
05
1
A minimum salary in 2024 is equivalent to COP 1,300,000.
2
The reference exchange rate used is USD 1 = COP 3.920

00
Dividends &
remittances
Board of
directors
If the foreign investment has
been duly registered with
Bank, the investor will have
foreign exchange rights to
pay dividends based on
real and reliable financial
statements.
The company is not
required to have a board of
directors. This body is
optional.
The board of directors is a
mandatory corporate body.
The company is not
required to have a board of
directors. This body is
optional.
Does not apply.
statements.
statements.
exchange rights to pay
profits based on real and
reliable financial statements.
06
than 3,000 times the current
minimum legal monthly wage,
which is equivalent to COP
$3.900.000.000 (approx.
USD 994.897).
immediately preceding year
are equivalent to or greater
than 3,000 times the current
minimum legal monthly
wage, which is equivalent to
COP $3.900.000.000
(approx. USD 994.897).

Main obligations when incorporating a
legal vehicle in Colombia
3.2.1.
Commercial companies and branches must register in
the commercial registry kept by the Chamber of
Commerce of the city where is to be based.
In order to obtain the commercial registration, the
following documents have to be submitted: (i) the
company’s bylaws or the branches’ public deed; (ii)
other forms or documents requested by the Chamber of
Commerce may request; and (iii) the letters of
acceptance for the persons appointed as managers and
statutory auditors (in the event the company requires
one). The Chamber of Commerce also processes the
form that is issued for the application/registration in the
National Tax and Customs Office (DIAN) in which the
provisional registration is requested, for the “National
Tax Registry” (RUT per its acronym in Spanish).
This form contains the general data for the taxpayer, as
well as tax and customs responsibilities. Additionally, in
order to obtain the company’s registration, the
corresponding fees and taxes must be paid before the
Chamber of Commerce, following the approximated cost
described in this Chapter.
This registration must be renewed every year before
March 31.
Commercial Registration
3.2.2.
The appointment of directors, legal representatives, agents,
and statutory auditors, among others, must be registered
before the commercial registry kept by the Chamber of
Commerce of its domicile.
For such purposes, the document deciding the appointment
must be filed (in the case of general agents designated for
a branch, the document must be issued by the main office
and has to be duly apostilled or legalized before the
competent authority), with the letter of acceptance and a
copy of the appointed person’s identification document.
The managers of the company may be foreigners not
domiciled in Colombia, with few exceptions (i.e. utility
companies). The statutory auditors must be Colombian
public accountants.
By general rule, Colombian legislation does not require a
minimum capital contribution to incorporate commercial
companies or to register a branch. The capital contribution
is set by the shareholders or partners, with regard to the
Appointment of Directors/
Legal Representatives
3.2.4.
Payment of Capital and Registration of
the Foreign Investment
3.2.3.
The tax ID shall be obtained prior to the performance of
any commercial activity. As a general rule, it is obtained
automatically when the company or branch is registered
with the Chamber of Commerce. In the event that for any
reason the tax ID is not assigned to the company or
branch at the time of incorporation or establishment, the
procedure must be carried out directly with the tax
authority (DIAN) once the company or branch has been
incorporated or established and duly registered in the
Chamber of Commerce. Whenever said procedure is
undertaken directly before DIAN, an appointment must
be requested and presented before this entity, with a
copy of the identification document of the person who
will be filing the request before the DIAN, for which the
exhibition of the original identification card will be
required. If the person who files the request is an
attorney, a copy of the power of attorney must also be
presented and the original copy must be exhibited as
well. If the power of attorney is granted for a period that
exceeds six (6) months, a certificate of its state of being
in force is also requested by the authorities. In such case,
once the corresponding RUT has been obtained, the
company will receive the Tax Identification Number (NIT
per its acronym in Spanish), which will have to be
updated before the corresponding Chamber of
Commerce. It is important to bear in mind that the legal
representative of the company or branch, as well as their
substitutes, must in turn have a Single Tax Registry (RUT)
of their own and an electronic signature, regardless they
are not residents. The obtaining of the RUT for
nonresident legal representatives may be done online
with a copy of the identification document, and a power
of attorney granted by the legal representative. Such
power of attorney must be legalized before a notary and
apostilled or legalized before the Colombian Consul, for
its validity in Colombia. The foregoing does not imply
any type of tax liability in Colombia per se, but rather
seeks to demonstrate that the individual who is
represented by the company has the capacity to comply
with formal obligations and file tax returns on behalf of
the company being represented.
Registration under the National Tax
Registry (RUT in Spanish)
3.2.
07

3
Certified financial statements are those for which the legal representative and the accountant of the company declare that the contents of the financial statements have been
previously verified according to the regulations, and that said contents have been drawn directly from the company’s records.
4
Audited financial statements are certified financial statements that are accompanied by the auditor's professional judgment or of the independent accountant that elaborated
them, regarding the fact that all the information provided is in accordance with generally accepted auditing standards.
08
It is important to take into account that, in Colombia,
there is an obligation to register a situation of control
and/or corporate group within 30 business days
following the date of configuration of the situation of
control or corporate group. Such situation must be
registered by the controlling entity in the commercial
registry of the domicile of each of the related parties,
i.e., both the controlling and the subordinate, in order to
make such circumstance known to third parties.
3.2.5.
Registration of control situation and
corporate group
3.2.6.
Financial Statements
Foreign currency which is entering the country on behalf of
non-residents, and which is destined to become a capital
contribution for a company or a branch, must be registered
as a foreign investment with the Colombian Central Bank.
This will be done by submitting through intermediaries of
the exchange market (“IMC” by its acronym in Spanish)
duly authorized in Colombia for that purpose. The required
information for the operation (“Declaración de Cambio”)
submission of the minimum required information will be
sufficient to obtain the automatic registration of the foreign
investment.
In the case of branches, the transaction of funds from the
main office can be channeled as a capital supplementary
investment (ISCA per its acronym in Spanish) which is a
direct foreign investment. This type of investment must be
registered before the Central Bank, however, registration
before the Chamber of Commerce is not required.
For more detail, please consult the Foreign Exchange
Regime Chapter of the Legal Guide.
Commercial companies and branches must close their
books and issue certified3
and audited4
general purpose
financial statements at least once a year on December
31. For mergers, spin-offs and conversion or capital
reduction with effective reimbursement of capital
contributions, financial statements for special purposes
must be issued.
General -purpose financial statements are prepared at
the end of a specific period to provide information to
undetermined users who are interested in evaluating the
capacity of an economic entity to generate positive cash
flows. The financial statements include: the financial
situation, the income statement as well as other results for
the period (ORI per its acronym in Spanish), the
statement of changes in equity of the period, the
statement of changes and the cash flow statement.
The financial statements shall be deposited annually in
the Chamber of Commerce of the company´s domicile
within 30 days after being approved by the
shareholders' meeting or partners’ meeting as long as
subject to the will of one or more person(s). These persons can
be either individuals or legal entities, the latter being the
company in question’s parent or controlling company.
If the parent company exercises direct control over the
subordinate company, the latter is considered an affiliate; if on
the contrary, the parent company exercises control with the
assistance of the subordinate company or through it, that is,
indirectly, it is called a subsidiary. In this regard, it is important
to highlight the following:
According to commercial law, a control situation is understood
to exist when a company´s decision-making authority is
In order to determine the existence of a corporate group, in
addition to the relationship of subordination or control, all
entities which comprise the group must share a common
purpose and direction. The law establishes that a common
purpose and direction exist when the activities of all the
entities are designed to achieve an objective that is defined
by the parent or controlling company by virtue of the
direction that it exercises over the group, notwithstanding
the ability of each member to pursue its corporate purpose
individually.
The law recognizes that an entity may exercise control
over another entity without any capital participation in it.
Likewise, it is recognized that corporate control can be
exercised by individuals or non-corporate legal entities.
Nonetheless, the controlled company may only have a
corporate nature.
Additionally, it is recognized that corporate control can
be exercised by more than one person or entity.
3.2.
activities that the company plans to carry out in
Colombia. Depending on the legal vehicle to be
established, there are rules applicable at the time of
payment of the capital:
• For branches and limited liability companies, the
capital must be paid at the time of their incorporation.
• For corporations, at least one third of the value of each
stock paid at the time of incorporation as well as 50% of
that paid-in capital, must be paid. The outstanding
placed capital must be entirely paid within a year.
• With respect to the simplified stock companies S.A.S.,
there are no capital ratios that determine the proportions
by which shares must be paid at its incorporation,
however, the placed capital must be paid within a
maximum period of two (2) years.

5
Basic Legal Circular 100-000008 of July 12, 2022, of the Superintendency of Companies.
09
Bylaw amendments for companies incorporated by
means of a private document, such as S.A.S. companies,
are also carried out by means of private document. On
the other hand, bylaw amendments for companies
incorporated through public deeds must also be
formalized through a public deed. Under no
circumstance can an amendment involving the increase
of capital as a result of an asset contribution, one which
requires a transfer by means of a public deed, be done
through a private document.
The amendments to the incorporation documents of the
branches must be legalized, as they come from outside
the country. They must also be formalized in the notary of
the domicile of the branch and registered before the
Chamber of Commerce.
Profits are distributed based on true and reliable
year-end financial statements which are prepared in
accordance with generally accepted accounting
principles, after setting aside the legal, statutory and
occasional reserves. It is also necessary to set aside the
appropriations for the payment of taxes which is in
proportion to the paid portion of the value of stocks,
shares or equity stake of each partner or shareholder so
long as the bylaws do not provide otherwise. It must be
noted that for the S.A.S., the legal reserve is not
mandatory provided such reserve is not contemplated in
the company´s bylaws.
Clauses that deprive any shareholder or partner of full
participation in the profits will be disregarded.
For tax treatment of the distribution of dividends, please
refer to the Tax Regime Chapter.
3.3.1.
Bylaw Amendments
3.3.2.
Profits
The extinction of a company or a branch occurs as a
consequence of its dissolution and subsequent
liquidation. Therefore, the dissolution marks the initiation
of the liquidation process. This process ends with the
actual liquidation of the entity and the cancellation of the
commercial registration of the company.
Branches of foreign companies, as an extension of their
main office, depend on their main office to survive.
Because of this, they can be liquidated in accordance
with the causes that have been agreed on by the main
office for that case. These are also the general grounds
for the dissolution of Colombian commercial companies.
When the company or branch is in process of liquidation
it will have to include in its name the expression “in
liquidation”. If this is not done the company or branch
will have to respond to the damages that can be caused
for its omission. In the same sense, the company or
branch’s corporate purpose is restricted to the single
objective of liquidating the assets to pay any outstanding
liabilities.
Within the liquidating process, provided that, form and
time requirements are met, creditors are entitled to
present themselves to file their claims and obtain
payment of their credits in the order and with the priority
and preferences established by law.
Once the final liquidation statement is registered in the
commercial registry kept by the Chamber of Commerce,
the company must also file income tax returns for the
corresponding portion of the year, comply with other
3.3.3.
Dissolution and liquidation
Other considerations
the company is not obligated to submit them before the
Superintendence of Companies.
For tax control purposes, corporate groups that are
registered in the commercial registry of the Chambers of
Commerce must submit their consolidated financial
statements on magnetic media before the DIAN no later
than June 30 of each year.
Bylaw amendments do not require authorization from
state authorities, despite the following exceptions:
Amendments to bylaws associated with mergers,
spin-offs, or decrease in capital or premium with
cash reimbursement of contributions may require
the prior authorization of the Superintendence of
Companies, provided certain conditions are met5
,
otherwise it may require the authorization of the
corresponding supervisory entity.
The amendment consisting of the decrease in
capital with effective reimbursement of contributions
requires, in addition, the prior authorization of the
Ministry of Labor, if certain conditions are met.
In some cases which imply an economic
integration, the previous authorization or notice to
the Superintendence of Industry and Commerce
(antitrust authority) is required.
In some cases of voluntary liquidation, the prior
approval of the inventory by the Superintendence of
Companies is required.
3.3.

10
applicable formal obligations and proceed to cancel the
RUT before the DIAN. Foreign investors must request the
cancelation of the foreign investment before the
Colombian Central Bank, and the cancelation of its
investor RUT before the DIAN (if the operations or
investments in Colombia will not continue).
It is important to bear in mind that if the prospective
partners or shareholders or the legal representative of
the main office cannot be in the country in order to attend
the incorporation procedures for the company or branch,
then they must grant a duly legalized written power of
attorney to an attorney in Colombia (the person who will
be appointed by the power of attorney, does not have to
be a lawyer).
To that effect, if the investor country is a signatory to The
Hague Convention, the documents issued outside the
country, which have to be notarized and legalized, may
be apostilled. If the country is not a part of The Hague
Convention, then the document will have to be legalized
before the Colombian consulate where the consular
office is.
For the incorporation of a simplified stock company in
Colombia, the following documents are required:
1. A document certifying the existence and validity of
the main office (if it is a company that is going to act as
founding shareholder), issued in the corresponding
country of origin.
2. The documents which evidence that whoever is
acting as authorized representative and signatory as
shareholder, has the powers to do so.
3. The Power of attorney of the shareholder granting
authority to register the company (if done through a
third party).
Note: documents issued abroad must also be aposti-
lled or legalized before the corresponding Colombian
consul for their validity in Colombia.
4. Letters of acceptance from individuals to be appoin-
ted as main and alternate legal representatives. (Do not
need to be apostilled).
Additionally, documents issued in a language other than
Spanish must be translated by an official translator
authorized in Colombia, duly registered with the
Colombian Ministry of Foreign Affairs.
3.4.2.
Simplified Stock Company (S.A.S.)
3.4.1.
General comments
Steps and Related Costs of Setting up the
Legal Vehicles
3.4.

3.4.3.
Corporations and Limited Liability Companies
No. Activity and/or document Costs for its implementation
1.
2.
3.
4.
5.
6.
Incorporation by means of a private document
with personal presentation before a public
notary by the attorney-in-fact or shareholder(s).
Request of the certificate of incorporation and
legal representation issued by the Chamber of
Commerce.
Registration of legal representatives before the
RUT and update of the company's RUT.
Registration of corporate books.
Record of the control situation.
COP $7.900 (approx. USD 2.01).
No charge
Notary fees are between approx. COP $17.800
and COP$ 40,000 ( approx. USD 4.54 and USD
10,25) + 19% VAT. depending on the numbers of
pages registred.
Registration of the private incorporation
document (bylaws) in the Chamber of
Commerce of the city where the company is to
be based, together with the registration forms.
Bylaws must be accompanied by all documents
required by the Chamber of Commerce.
Registration duties and taxes must be paid.
Up to 0.7% of the subscribed capital value of the
company (registration tax) + applicable fee in
accordance with the assets of the company
(matrícula mercantil) + COP $58.000 (approx.
USD 14,79) for registration fees.
Approx. COP $50.500 (approx. USD 12,88)
depending on the number of pages registred +
COP $7,000 for the white folder of the book
(approx. USD 1,7)
Approx COP $230,000 (approx. USD 58,67)
depending on the moment of the registry.
1.
2.
3.
Bylaws must be formalized by means of a public
deed.
Commerce.
COP $7.900 (approx. USD 2.01).
0.3% over the social capital or authorized capital
(notarial fees) + 19% VAT over notarial fees.
Registration of the public deed before the chamber
of commerce of the jurisdiction where the company
is to be based.
Bylaws must be accompanied by all documents
required by the Chamber of Commerce.
Registration duties and taxes must be paid.
Up to 0.7% of the authorized capital value of the
(matrícula mercantil) + COP $58.000 (approx.
USD 14,79) for registration fees.
11

3.4.4.
Foreign Company Branch
For the registration of a branch in Colombia, the
following documents are required in order to be included
in the public deed:
1. The incorporation documents and the bylaws of the
main office
2. The documents that provide evidence of the existen-
ce and validity of the main office issued in the country
of origin by the corresponding authority.
3. The documents which evidence that whoever is
acting on behalf of the main office, has the power to do
so.
4. The resolution by which the decision of opening a
branch in Colombia was made, which must be issued
by the corresponding organ of the main office, and
must include at least:
All documents issued abroad must also be apostilled or
legalized before the corresponding Colombian consul
for their validity in Colombia.
Additionally, documents issued in a language other than
Spanish must be translated by an official translator
authorized in Colombia, duly registered with the
Colombian Ministry of Foreign Affairs.
4.
5.
6.
Record of the control situation. Approx COP $230,000 (approx. USD 58,67)
depending on the moment of the registry.
No charge.
Registration of corporate books.
Approx. COP $50,500 (approx. USD 12,88)
depending on the number of pages registred +
COP $7,000 for the white folder of the book
(approx. USD 1,78)
The name of the branch (which must be related to the
main office, following the criteria of the Superintendence
of Companies)
The corporate purpose to be developed in Colombia.
The assigned capital and funds originated in other
sources, if any.
The domicile of the branch.
The term of duration in the country and the grounds
for termination.
The appointment of general agents, with one or more
alternates, to represent the branch in the performance
of the business in Colombia.
The appointment of a statutory auditor, who must be
a Colombian accountant.
12

No. Actividad y/o documento Costos legales de implementación
1.
2.
3.
The bylaws of the main office and any other
document required by the Colombian Code of
Commerce must be formalized by means of a
public deed.
Commerce.
COP $7,900 (approx. USD 2.01).
4.
No charge.
5.
Record of the control situation. Approx COP $230,000 (approx. 58,67) depending
on the moment of the registry.
0.3% over the assigned capital to the branch
(notarial fees) + 19% VAT over such notarial fees.
Registration in the Chamber of Commerce of the
public deed indicated above.
Up to 0.7% of the assigned capital value of the
(matrícula mercantil) + COP $58,000 (approx.
USD 14,79) (registration fees).
Time for the incorporation / establishment of Legal Vehicles in Colombia
As a result of the procedures and requirements necessary for the incorporation of the different vehicles analyzed above,
please find below an estimate of the time required for the incorporation of such vehicles. The days are expressed in
working days.
3.5.
-Completion and legalization of corporate documents: (i) power of attorney for incorporation; (ii) bylaws of the subsidiary or
affiliate; or (iii) resolution to open a branch office.
Previous
procedures
-Receipt of corporate documents for the incorporation or opening of the company or branch.
Day 0
-Signature of the private document and/or public deed of incorporation or opening of the company or branch.
-Registration before the Chamber of Commerce of the private document or public deed of incorporation / establishment of the
company or branch.
-Registration of appointments (legal representative, members of the board of directors, statutory auditor, as applicable)
-Obtaining the Certificate of Existence and Legal Representation (CERL) of the company or branch.
-As of this date, the company / branch has full legal capacity to make registrations, enter into contracts, etc.
-Registration of corporate books.
-Registration of the legal representatives in the RUT.
-Channeling of foreign currency corresponding to the foreign contribution. Automatic registration of the foreign investment
before the Central Bank.
Day 2
Day 6
Day 10
Days
15-20
13

14
Merger control
Colombian competitive governance establishes that
corporate integration or concentration processes that
fulfill certain obligations must be reported before the
Superintendence of Industry and Commerce (SIC) which
is the national authority on this matter.
The term “corporate integration” includes mergers,
acquisitions, partnerships, cooperation agreements, joint
ventures, and/or any other type of agreement or
transaction in which one company takes control6
of
another, thereby eliminating competition through the
consolidation of two market players into one.
i. If the involved companies have a joint relevant
market share lower than 20%, the operation is
automatically authorized, however, it must be
informed to the SIC before carrying it out. The
authority may require further information on the
parties to determine if the relevant market share is
lower than 20%;
ii. When the companies jointly considered having a
relevant market share higher than 20%, the
operation requires a previous authorization to be
completed.
When referring to horizontal integrations, the “relevant
market” will be that in which all the companies involved
in the operation offer products and/or services.
Alternatively, when referring to vertical integrations, the
“relevant market” will be that in which the companies
involved in the operation are part of the same chain of
value and offer their products and/or services.
Therefore, the relevant market involves both the market of
the products/services as well as the geographical market
involved in the operation. One operation may affect one
or more relevant markets, either because there are
several product markets or because there are more
affected geographical markets7
.
Failure to submitting a transaction to merger control
proceedings, when there is a duty to do so, or closing a
transaction before the expiration of the term for the SIC
to issue a decision, is considered a violation of the
Colombian Regime for the Protection of Free
Competition. Therefore, the following sanctions may be
imposed:
a) Reversion of the proposed transaction (Art. 13, Law
1340 of 2009)n de la operación (Art. 13, Ley 1340 de
2009)
b) Economic penalties against the parties. (Art. 25, Law
1340 of 2009)
c) Economic sanctions against natural persons who
collaborate, facilitate, authorize, promote, encourage,
execute, or tolerate the Transaction’s closing. (Art. 26,
law 1340 of 2009).
Corporate integrations must be reported before the SIC,
if the following conditions are met:
ii. Subjective conditions:
Depending on the market share of the involved compa-
nies, the operation must be either informed to the SIC or
authorization must be requested as follows:
ii. Objective conditions:
a) If the companies involved in the operation perform
the same activity (horizontal integration) or;
b) If the companies involved in the operation are part
of the same value chain (vertical integration).
a) If the companies that fulfill any of the subjective
conditions had, together or individually considered,
operating incomes exceeding 1.641.044,99 Tax
Value Units (UVT) (for the year 2024,
COP$77,235,782,454.35; approximately USD
$19.703.005,72) in the fiscal year prior to the
proposed transaction.
b. If the companies that fulfill any of the subjective
conditions had, together or individually considered,
total assets exceeding 1,641,044.99 Tax Value
Units (UVT) (for the year 2024,
COP$77,235,782,454.35; approximately USD
$19.703.005,72) in the fiscal year prior to the
proposed transaction.
3.6.
6
Article 45 of Decree 2153 of 1992 defines control as: "The possibility of directly or indirectly influencing corporate policy, the initiation or termination of the company's
activity, the variation of the activity to which the company is dedicated or the disposition of assets or rights essential for the development of the company's activity." In
consequence, transactions that do not involve the acquisition of a majority interest in a competing company, but that allow the exercise of control must be reported to the SIC.
7
Guide for Corporate Integrations by the Superintendence of Industry and Commerce.

00
REGULATION SUBJECT
General and specific regulation on corporations and foreign
company branch.
Code of Commerce
Amends the Code of Commerce in matters pertaining to
corporations and regulates aspects such as spin-offs, corporate
groups, duties of managers, preferred stocks with dividends
and without voting rights, majority required for the stock
corporation and one-person business.
Law 222 of 1995
Whereby the Corporate Insolvency Regime is established in the
Republic of Colombia and
Whereby provisions for the elimination and reform of
procedures in the public administration are set forth.
Foreign investment in Colombia.
Law 1116 of 2006
Regulatory Circular DCIN 83 issued by
the Colombian Central Bank - Chapter 7
Law establishing rules relating to the protection of competition.
Law 1340 of 2009
Law on formalization of employment and job creation.
Law 1429 of 2010
Decree 19 of 2012
Whereby regulation in tax matters are set forth.
Law 1607 of 2012
Whereby the Colombian tax code and Law 1607 is modified.
Whereby the provision for the protection of the data
privacy is issued.
Law establishing rules on the liability of legal entities for
acts of transnational corruption and other provisions.
General regulations on merger processes, capital
decreases, among other corporate matters.
Circular Basica Juridica 100-000008 of July 12,
2022 of the Superintendence of Companies.
Law 1739 of 2014
Statutory Law 1581 of 2012
Law 1778 of 2016
Regulatory Framework
15

Address:
Phone:
Web page:
Calle 70 Bis #4 - 41, Bogotá, D.C. Colombia
+57 (601) 346 2011
https:/
/www.bu.com.co/es
16

GUIA_LEGAL_CHAPTER_3_CORPORATE REGULATIONS.pdf

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