Colombia

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DOING BUSINESS

 


Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

Henceforth, the Colombian government grants helps to foreign investors allowing them to repatriate profits, to reduce tax rates, to reduce customs duties and to benefit from better establishment infrastructures. Furthermore, the government set up three different free trade zones: industrial of goods and services, industrial of tourist and technological services.
The first one, favours the industrial development of goods and services meant in priority for abroad. It is composed of 10 zones, 6 of which are administered by public institutions and 4 of which by the private sector. They are located in Carthagena, Barranquilla, Palmaseca and Buenaventura both in rionegro (Medellin), in the Candelaria (Carthagena), in Ciudadela industrial del Pacifico (Cali) and in Bogota.
The second one ensures the promotion of services allowances, meant for foreign tourism, and to national tourism, in large (Hotels welcoming, travel agencies, ...) It is composed of 2 zones, in Baru (Cartagena) and in Pozos Colorados (Santa Marta)
The third and last one favours the developmen of technology-oriented companies, which activities can be scientific research, innovation projects including new technologies.
COINVERTIR (Invest in Colombia Corporation) is an investment promotion agency providing assistance and support for investors.

 

Legal forms of companies

Form Number of partners/shareholders Minimum and/or maximum capital Liability Registration fee Release of financial documents
La Sociedad de Responsabilidad is a Private Limited Company. Minimum 2 partners. Maximum 20 partners. No minimum capital. Liability is limited to the amount contributed. They vary depending on the amount of the capital subscribed. No
La Sociedad Anonima is a Public Limited Company. Minimum 5 partners. No minimum capital.
NB: 50% must be subscribed and at least 1/3 of the value of each share must be released. The remainder (2/3) must be paid the following year.
Liability is limited to the amount contributed. They vary depending on the amount of the capital subscribed. Yes
La Sociedad en Commandita por acciones (SCA) is a partnership limited by shares. Two types of partners: the active partners and the sleeping partners. No minimum capital. Liability of active partners is unlimited. Liability of sleeping partners is limited to the amount contributed. They vary depending on the amount of the capital subscribed. N/A
La Sociedad en commandita simple (SCS) is a limited partnership. Two types of partners: the active partners and the sleeping partners. No minimum capital. Liability of active partners is unlimited. Liability of sleeping partners is limited to the amount contributed. They vary depending on the amount of the capital subscribed. No

Registration and licensing procedures
In order to set up a company in Colombia, first, it is necessary to contact a notary to establish a protocol. Then, the protocol must be registered with the Chamber of Commerce and Industry. A tax identification number, provided by the Colombian customs authorities (NIT), is required as well as a current account in which contributions will be deposited via an international bank. Finally, the investment will be registered with the International Technical Division of the Banco de la Republica.

Foreign exchange control
The Colombian currency, the Peso, is completely convertible in the country. It can be exchanged for foreign currencies with banks authorized by the Central Bank of Colombia. Local transactions in foreign currencies are forbidden. Furthermore, Colombian banks do not allow the opening of an account in foreign currencies.
The Colombian regulation allows the right to transfer profits and capital with no limitation or period of time as long as the investment is registered by the Central Bank.

Regulations concerning equity investment
Majority holding of capital of a local company is authorized in Colombia, except within the oil sector.  


Foreign Direct Investment inflows in Colombia

FDI inflows 2003 2004 2005 World rank (*)
2005
FDI inflows (USD million) 1 758 3 117 10 192 37/141
Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.

 

Last modified in 2006 - ongoing update
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