New Entity Set Up & Incorporation in Colombia
A Simplified Joint-Stock Company (S.A.S.) entity is the preferred investment vehicle for foreign investors as well as local investors, mainly due to its flexibility regarding its incorporation procedure and functionality. It is modeled after the French société par actions simplifiée; it has its annual statements controlled by an independent body, and the annual summary and balance sheet are published.
The head of a S.A.S. entity is its general manager who usually also is its legal representative. However, this type of entity, unlike a corporation in the US, does not need to have a board of directors. The general manager is responsible for the operation of the company. A S.A.S. entity in France and in Colombia is similar to a limited liability company under United States law, as the Delaware limited liability company was the model used by the French government, and then the Colombian government.
One or more individuals (Colombian or foreign shareholder(s)) can set up and create this type of entity. As shareholders, they will be liable up to the amount of their contributions. To set up a S.A.S. entity in Colombia, its appointed legal representative must submit an application to one of the 57 local chamber of commerce at the city where the newly created company will have its principal business address. The expression “S.A.S.” must follow the name of this type of entity.
A S.A.S. entity in Colombia must have a legal representative —usually the general manager— who usually has at least one substitute legal representative in case of absence. The day-to-day operations of the corporation are entrusted to the general manager, who must always act within the powers granted in the bylaws. Colombian law assumes that the general manager is authorized to legally represent the corporation and to act on behalf of the corporation in any and all acts within the scope of the corporate purpose of the corporation, with no limitation whatsoever, except for the limitations expressly provided for in the bylaws. This person must be a Colombian national domiciled in the national territory.
The general manager/legal representative, who can be different from the shareholder(s), will be responsible for signing all legal documents, contracts, authorize the payment of taxes, and other legally binding tasks.
S.A.S. shareholders are personally liable only if there is legal fraud. There is no personal liability for corporate actions, including labor and tax issues. This form of entity requires no paid-in capital at the time of formation and allows a two-year window to fund the entity. The simplified process reduces associated transaction costs and government involvement.
Read more about how to do business in Colombia by downloading the 2018 Doing Business in Colombia guide. Download here.
Our ENTITYREADY™ offering includes,
Registered office address for one year. Per Colombian law, a S.A.S. entity shall as from the date of its registration, have a legal registered office address in Colombia, to which all official government communications and notices may be addressed.
Name search (ensures there are no existing entities using your desired name).
Trademark search (applicable in case you are interested in registering your mark).
ISIC code search (International Standard Industrial Classification for all economic activities).
Determination of paid up share capital, number of shares, names and number of shareholders, legal representative, substitute legal representative (optional).
Completion of incorporation documents (state form, tax ID form, and bylaws). The bylaws will include: legal name of the company, name of its Colombian-domiciled legal representative, constitution of the board of directors (if applicable), activities the company will be performing, capital structure, management structure, corporate governance, causes of termination of the entity, etc. We will use our standard and generally-used template for your bylaws. If you have a complex ownership structure we might get our lawyer involved to check the document and explain to you some of the implications.
Signature and notarization of the official form and incorporation documents.
State filing of official form and incorporation documents.
Processing of payment of official chamber of commerce submission fee and taxes (about USD 100; excluded from price below).
Request for the newly issued company certificate of status.
Application for a tax ID (aka RUT in Colombia) at Colombia's tax authority (DIAN).
Duration (approx.): Five to ten business days after submission at a local chamber of commerce.
Deliverables: Certificate of status (aka as “certificado de existencia y representación legal” in Colombia), tax ID certificate (aka RUT in Colombia), bank account number.
50% payable upon receipt of invoice, and remaining 50% payable upon completion of activity.
Limited to incorporating and creating one (1) S.A.S. entity in Colombia.
We can also facilitate the creation of the initial company financial statements (a local licensed accountant must create it, sign it, and attach a copy of his/her license), and open a local bank account (requires the initial financial statements). This service is available for an additional fee.
In case customer requires an amendment of the bylaws of a S.A.S. entity already created, mandatory filings of company books, corporate minutes, financial statements, and any other post-creating filing mandated by Colombian law, we will invoice customer for this activities at our standard hourly rate at the time of the amendment plus any government-imposed fees and taxes.
When applicable, we will add a 20% administrative fee to third-party pass-through payments. When applicable, we will add a 16% sales tax charge to third-party pass-through expenses.
Pricing does not include sales tax or any other government-imposed tax applicable to the invoice(s) that will be generated to customer as a result of this offering.
Excludes official chamber of commerce submission fees and taxes of about USD 100 depending on the assets of the entity.
You must apostille or legalize all documents granted abroad through diplomatic means at the country of origin. You must translate all documents drafted in a language other than Spanish. A certified translator by Colombia's Ministry of Foreign Affairs must translate to Spanish, stamp, and sign all foreign legal documents. If customers requires it, we will translate documents into Colombian Spanish and will invoiced them based on the total number of words in Spanish at our standard translation rate at the time of invoicing.
Excludes filing of the government required annual report/renewal, registered office address fee, annual accounting and income tax filing.
Per Colombian law, a S.A.S. entity shall as from the date of its registration, have a legal registered office address in Colombia, to which all official government communications and notices may be addressed. To comply with this requirement, our Colombian office will be the registered office address for your company. This address will be used to receive government correspondence including i) tax letters ii) notice of the legal annual return; and iii) all government communications.
Per Colombian law, there is no minimum share capital for a new S.A.S. entity. It is mandatory to appoint a company auditor if the company assets are higher than USD 1,410,000 or the annual revenues are higher than USD 846,000.
Depending on your business sector, the Colombian Government may require a special regulatory license to carry on your business in the country. We will assist you in securing license approval and there may be additional engagement fees. However, the Government enjoys ultimate power of approval of company registration and business licenses.
Per the Colombia Company Act, a S.A.S. entity must have at least one legal representative who is a Colombian national domiciled in Colombia. We can provide nominee passive legal representative services; our annual fee for this is USD12,000. If you require additional nominee services such as one corporate nominee shareholder, our fee is USD 2,100 per year. A passive legal representative's actions are limited to signing any documents that you instruct to sign. If you require an active legal representative role that involves actions beyond signing documents that you instruct to sign, then additional fees may incur. You will pre-approve any additional actions and fees related to legal representation-related activities that you instruct your legal representative to carry out on your behalf.
If you require us to become your sole in-country shareholder, our fee is USD 6,000 per year. Being the sole shareholder of your company exposes us to reputation, litigation and financial risk.
Monthly, quarterly and mid-year government tax obligations may include monthly and quarterly payroll reporting, sales tax return filing. We can complete on your behalf this government reporting requirement for a monthly fee that will be determined according to the level of complexity of your operation. This will include bookkeeping, receive monthly invoices, label monthly bank statement transactions, preparation and submission of sales tax returns, and submission of monthly employee payroll reporting (if applicable).
Pricing excludes active management of your new entity in Colombia. For an additional fee, we can actively manage your new entity and carry out essential business activities such hiring personnel, receive payments, pay invoices, and other activities that you instruct us to perform.
Pricing excludes travel-related expenses (e.g., airfare, lodging, ground transportation, meals).
Pricing excludes expenses related to submission to a chamber of commerce outside of the one located in Barranquilla, Atlántico, Colombia. If customer requires submission to a chamber of commerce in a different city, then customer will pay for the travel-related expenses related to the offering. Customer must pre-approve in writing all travel related expenses that arise before our' staff incurs an expense.
Pricing excludes registration of foreign investment to fund the new S.A.S. entity at Colombia's Central Bank.
Opening bank account (requires the initial financial statements in the step above).