The 9 steps to starting business in Colombia
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1. Purchase corporate and accounting books – these can be purchased from most office supplies stores and it is recommended that you do so before visiting the Chamber of Commerce.
2. Register with the Registry of Commerce – obtain your Certificate of Existence and Legal Representation, register the company books and company register with the National Tax Office (DIAN) at the Chamber of Commerce
3. Open a bank account and deposit the nominal capital – to open an account at a branch of a commercial bank, you will need the public deed, the certificate of existence and legal representation, the TIN document, and a photocopy of the certificate of citizenship of the legal representative. A savings account may be opened in minutes, but a checking account could take 3 or more business days for the bank to verify the company information, due to the compliance and revision requirements stemming from money-laundering prevention laws and regulations
4. Register company with the Family Compensation Fund, the Governmental Learning Service and the Colombian Family Institute – Decree 3667 of 2004 created a unified form to self-assess and pay social security and payroll contribution that can be submitted electronically or in person to the Governmental Learning Service, the Colombian Family Institute, the Family Compensation Fund, and the school of public administration. The time to register varies from 2 days to 3 weeks, depending on the family compensation fund chosen.
The term for payment of the monthly contributions to the Family Compensation Fund expires within the first thirteen business days of each month depending on the last number of the Tax Identification Number (TIN) of the company. The same rule applies to the Government Learning Service and the Colombian Family Institute.
5. Register company with the Administrator of Professional Risks – the company must submit a form listing its affiliation and its employees to an administrator of professional risks (ARP by its Spanish initials), private or public, which covers workplace injury and professional illness. The employer chooses the ARP to which it affiliates all employees and pays the monthly contributions. Coverage begins 24 hours after submitting the form. Before affiliating employees, some administrators of professional risks request that they attend a short course.
6. Register employer and employees for pension with the Social Security System – the company must affiliate itself with the pension system. Then, the company must submit a form that indicates employee affiliation to the pension system (affiliation either to the public pension fund through the Social Security System (ISS) or to a private pension and compensation fund). The employer cannot choose the pension fund on behalf of the employee. Each employee has the right to choose between the public or private pension fund, and the company must complete the respective submissions to the pension funds.
7. Register employees with a private pension fund – the process to register an employee with a private pension fund is the same as with the public pension fund (the ISS), but a private fund representative visits the company and completes the registration quickly.
8. Register employees for health coverage (public) – to register employees for health coverage, the company must submit a form that indicates the affiliation of its employees to the national health system, be it through the public entity or through a private “promoter of health.” Each employee has the right to choose a provider, and the company is obliged to submit the respective form to the provider designated by the employee. Normally, each company must make its submissions to at least one provider.
The amount of time that it takes to due this varies because the providers normally do not accept affiliations immediately. The process of acceptance varies depending on the provider and the history of the employee. The employer is obligated to complete and present different forms, enclosing the documents requested by each entity (which may vary), including evidence of affiliation to the pension fund and the administrator of professional risks, as well as a deposition before a notary public for the affiliation of beneficiaries (some entities request these documents).
9. Register employees with a severance fund – the company is required to present a form that indicates employee affiliation to a severance fund. Each employee has the right to freely choose the severance fund. Consequently, the company is obliged to complete the respective submission to the severance fund requested by the employee. Although 1 day is typically required to affiliate an employee to a severance fund, the time frame may vary depending on the number of entities chosen by the employees. The employer must deposit the employee’s severance payment annually before February 15th.