How to incorporate a branch in Colombia?

March 21, 2023

The branch of a foreign company in Colombia refers to businesses or companies domiciled and created abroad, which upon their incorporation and compliance with all requirements in Colombia, may exercise their permanent economic activities. Hence, they are subject to Colombian regulations and laws, as well as its Code of Commerce, judges and courts.

A branch of a foreign company is a commercial establishment opened in Colombia by a foreign company domiciled abroad. The Colombian Code of Commerce establishes the regulatory provisions on branches of foreign companies in the national territory, from article 469 onwards.

If your business is successful in your country, and you wish to establish a branch in Colombia, this article will provide you with the necessary information to do so safely. We will address the requirements needed, legal recommendations and other relevant information for you to expand your business to other territories.

How to create a branch of a foreign company in Colombia?

In order to initiate the process of establishing a branch of a foreign company, a resolution or act must be executed in which it is agreed to establish permanent activities in Colombia. The aforementioned document must contain and describe the following information:

1. The business proposed to be developed, taking into account and adjusting to the requirements of Colombian regulations in relation to the clarity of the corporate purpose.
2. The amount of capital assigned to the branch by the parent company.
3. The domicile chosen.
4. The term established for the duration of the business in the country and the grounds for its termination.
5. The designation of a general representative, with the necessary alternates, to act as legal representative in all the business to be carried out in Colombia.
6. The designation of the statutory auditor, a person who must have a permanent residence in the national territory.

What are Permanent Activities in Colombia?

It is important to note that foreign companies wishing to undertake permanent business in Colombia must necessarily establish a foreign branch in the country.

Therefore, at the time of understanding the nature of permanent activities, the meaning of this concept must be thoroughly contemplated, since not every activity that initially appears to be permanent, is permanent. Accordingly, the activity that the branch wants to develop must be thoroughly analyzed to determine whether it meets the essential requirements of the notion of permanence.

According to Art. 474 of the Colombia's Commercial Code, the so-called permanent activities are:

• To open within the national territory, commercial establishments or business offices, even if these are only of a technical or advisory nature.
• To intervene as a contractor in the execution of works or in the rendering of services.
• Participate in any form of activities whose purpose is the management, use, or investment of funds from private savings.
• Engage in the extractive industry in any of its branches or services.
• To obtain from the Colombian State a concession or that this has been assigned to it under any title, or that in any way participates in the exploitation of the same.
• The operation of its associates' assemblies, boards of directors, management, or administration in the national territory.

Additionally, it is essential to bear in mind that when a foreign company can undertake permanent business in Colombia, it will be required to notarize these documents in a notary's office of the chosen domicile:

Authentic copies of the document of its foundation, copies of its bylaws, the resolution or act that agreed the establishment, and the documents that prove the existence of the company and the legal capacity of its representatives.

At AGT Attorneys, our specialized lawyers in Commercial Law and Corporate Governance will help you determine whether your business model and the commercial activities you wish to undertake in Colombia are permanent activities.

In that sense, we will provide you with high quality advice to establish and incorporate a branch of your foreign company in Colombia, complying with all the legal requirements and pertinent legal documentation. We are committed to your business.

To contact us and start your business incorporation process, you can fill out this Contact Form or contact an advisor through our WhatsApp number: +57 310 5706331.

What are the requirements to incorporate a branch of a foreign company in Colombia?

To continue with the incorporation of the branch, the following legal documents are required to incorporate the company in Colombia:

• Incorporation document of the foreign company.
• Certificate of existence and legal representation, which accredits the existence of the foreign company, social organs and faculties of its legal representatives.
• Resolution issued by the competent body approving the opening of the branch in Colombia, including name, activities, assigned capital, domicile, duration, powers of the representatives and statutory auditor.
• Single Business Registration Form.
• Registration form in the Single Tax Registry.

Do you want to incorporate a Foreign Company Branch in Colombia?

With the correct compliance of each of the stages, the incorporation of a foreign branch in Colombia will be successful. In order to obtain a more clear understanding of the procedures required to incorporate a branch, you can seek for legal advice from specialized lawyers. Personalized advice from experienced attorneys on Incorporation Law in Colombia, will be key on the establishment of a branch in the country.

It is important to highlight that, the representation of a lawyer allows you to carry out some stages of the incorporation, that if done without a lawyer, would require you or someone from your company to be physically in Colombia.

Our commercial lawyers in Bogotá will provide you with specialized legal advice to incorporate your foreign company branch, complying with all the legal requirements set forth in the Colombian commercial regulations. Likewise, we will take care of any other necessary procedure for the beginning of commercial activities, such as, the opening of a bank account for a foreign company in Colombia.

In this way, you will be able to start your commercial activities in the country efficiently and safely.

Write to us on our Contact Form, schedule your legal appointment with our lawyers through the following link or contact us at +57 310 5706331. We will be happy to assist you!

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