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2.1. Main Formation Requirements

SA and LLC

All types of corporations (except the SAS as explained below) shall be incorporated by means of a public deed registered before the Chamber of Commerce of the company’s principal domicile.

Pursuant to Colombian law, such public deed will need to include, at least, the basic information of the company, that is to say, among other things: identification of the shareholders or quota holders; type of corporation; name of the company; corporate purpose; capital composition; corporate bodies; term of incorporation; name of the legal representatives; appointment of the board of directors (if required); appointment of an statutory auditor (if required).

Furthermore, in order to register with the tax authorities, a bank account shall be opened in the name of the company. Colombia signed an IGA with the USA for the implementation of FATCA. Due to that, when opening the bank account, the shareholders of the new Colombian company would declare if they are USA persons according to the definition given on the IGA.

In case foreign corporations or physical persons wish to incorporate a company in Colombia, they will need to enclose to the bylaws the following documents:

  • In case it is a legal entity, certificate or document, issued by the competent authority of the origin country, stating the existence of the entity and the appointed legal representatives.
  • In case it is an individual, copy of the passport.
  • The above mentioned documents need to be legalized (or apostilled if the country is part of the Hague Convention of 1961). If they are issued in a language other than Spanish, they will need to be translated and then legalized by the Colombian Ministry of Foreign Affairs.

Simplified Stock Companies (SAS)

Shareholder(s) must execute the company’s incorporation document or bylaws by means of a private document (or public deed if the capital consists of contributions in kind of real estate property), containing at least: the name, identity and domicile of shareholders; the name of the company; corporate domicile; term of incorporation (if it is not established it will be understood to be indefinite); the corporate purpose, unless it is stated that the company may perform any commercial or civil activity; the authorized, issued and paid capital of the company; the type and number of shares that will be issued; and the corporate bodies.

Furthermore, in order to register with the tax authorities, a bank account shall be opened in the name of the company. As was mentioned above regarding SAs and LLCs, shareholders must declare if they are US persons in order to establish if FATCA is applicable.

In case foreign corporations or individuals wish to incorporate a company in Colombia, they will need to enclose to the bylaws the following documents:

  • In case it is a legal entity, certificate or document, issued by the competent authority of the country, stating the existence of the entity and the appointed legal representatives.
  • In case it is an individual, copy of the passport.
  • The above mentioned documents need to be legalized (or apostilled if the country is part of the Hague Convention of 1961). If they are issued in a language other than Spanish, they will need to be translated and then legalized by the Colombian Ministry of Foreign Affairs.

Local Branches (Sucursal) of Foreign Corporations

In order to setup a Branch of a Foreign Corporation in Colombia, it is necessary to formalize it, by means of a public deed before a public notary in the location chosen for the branch’s domicile in Colombia. The following documents have to be enclosed (authentic copies):

  • The creation document and/or the corporate bylaws of the foreign corporation;
  • The Resolution or Certification issued by the competent corporate body of the home office that decides to set the branch;
  • Documents that verify the existence of the foreign company (certificate of good standing) and the functions of its representatives.

All of these documents must be legalized or apostilled in the country of the home office. If they are issued in a language other than Spanish, they will need to be translated and then legalized by the Colombian Ministry of Foreign Affairs.

Please note that the Resolution or Certification mentioned above, by means of which the branch is established in Colombia, must contain at least the following information:

  • The business proposed to be developed, described in conformity with the requirements of Colombian law regarding the clarification and specification of the corporate purpose;
  • The capital assigned to the branch;
  • The place chosen as domicile;
  • The term of duration of the business in the country and the reasons for which it may be terminated;
  • The designation of a general agent, with one or more alternates, who will represent the company in all of the business activities that it intends to conduct in the country. Said agent will be deemed to be empowered to perform all acts in furtherance of the corporate purpose, and will have the judicial and extra-judicial representation for the company for all legal purposes (the parent company/head office will be responsible for determining whether or not such agents will have limitations on their authority);
  • The designation of the statutory auditor.

Furthermore, the public deed containing all of the above shall be registered before the Chamber of Commerce of the chosen domicile. A bank account shall be opened for the Branch in order to obtain the registry with the tax authorities.

Hybrid Entities – Joint Ventures and Trust-Fund Type Entities

Hybrid entities mentioned in 1.4.1 (a) (b) (c) and 1.4.2 (a) are private commercial agreements. This means that, in principle, their formation is achieved by entering into a contract that establishes the general terms and conditions that will regulate the respective entity.

However, in some cases certain formalities are to be fulfilled for these types of entities. For example:

  • Consortiums and Temporary Unions will need to obtain tax registries before Colombia’s tax authorities.
  • Trust Agreements will require in some cases their execution by public deed, particularly when the assets or goods transferred by the trustor or settlor are represented in real estate property.

Finally, in order to create an investment fund, a special application will need to be filed before the Finance Superintendence of Colombia. If the fund is a Private Equity Fund, an approval of this Superintendence is not required, being enough to register the Fund bylaws before that entity.