Step No. 1 Appoint a Legal Representative in Colombia
In order to have someone in the country represent the interests of individuals or companies outside the national territory, it is most advisable to appoint an attorney in Colombia. The power of attorney is the most frequently used option.
The power of attorney is a contract regulated by both the Civil Code and the Code of Commerce, as follows. It is defined by article 2142 of the Civil Code as “a contract whereby a person entrusts the management of one or more businesses to another one who handles them at the risk and expense of the former. The person granting the power of attorney is called the principal or constituent, and the person accepting it is the attorney, the attorney in fact or, in general terms, the attorney.”
Furthermore, the Code of Commerce describes it under article 1262 as “a contract whereby a party agrees to enter into or to perform one or more business acts on account of another.” The powers bestowed upon the attorney must be clearly described in the contract, which may be verbal or written.
For further details, we recommend that you contact a law firm, which you may find in our Legal Services Directory:
Step No. 2 Incorporate your company in Colombia
For the steps to incorporate a company in Colombia.
In order to have someone in the country represent the interests of individuals or companies outside the national territory, it is most advisable to appoint an attorney in Colombia. The power of attorney is the most frequently used option.
The power of attorney is a contract regulated by both the Civil Code and the Code of Commerce, as follows. It is defined by article 2142 of the Civil Code as “a contract whereby a person entrusts the management of one or more businesses to another one who handles them at the risk and expense of the former. The person granting the power of attorney is called the principal or constituent, and the person accepting it is the attorney, the attorney in fact or, in general terms, the attorney.”
Furthermore, the Code of Commerce describes it under article 1262 as “a contract whereby a party agrees to enter into or to perform one or more business acts on account of another.” The powers bestowed upon the attorney must be clearly described in the contract, which may be verbal or written.
For further details, we recommend that you contact a law firm, which you may find in our Legal Services Directory:
Step No. 2 Incorporate your company in Colombia
For the steps to incorporate a company in Colombia.
Step No. 3 Open a bank account in Colombia
For information about financial institutions in Colombia, visit the Financial Superintendency’s website.
Following are the requirements normally established by banks to open checking accounts in Colombia:
• The account must be opened by the company’s legal representative in Colombia.
• Certificate of Existence and Legal Representation issued by the Chamber of Commerce
• Company’s articles of incorporation
• A photocopy of the Legal Representative’s passport / Colombian-issued I.D.
Step No. 4 Funnel your investment through the foreign exchange market
Incoming foreign currency must be funneled through the Foreign Exchange Market Intermediaries. These are commercial banks, mortgage banks, finance corporations, Financiera Energética Nacional -FEN-, Banco de Comercio Exterior de Colombia S.A. -BANCOLDEX-, finance cooperatives, stock exchange brokers and foreign exchange bureaus.
Step No. 5 Register the investment with your bank, on the foreign exchange report form (Form No. 4)
Investments in foreign currency are registered by submitting the foreign exchange report for international investments (Form No. 4) before any of the Colombian foreign exchange market intermediaries.
Form No. 4 must show the number of stock or the interest share paid in each operation (In the case of branches of foreign companies, the information on stock or interest share acquired does not apply). It is understood that the operation is performed for the price of the stock or the interest share being acquired, including the contribution placement premium. If payment is to be made by installments, only the number of stock or the share interest paid in each operation must be registered.
1. Recommendations to complete Form No 4:
When completing the form, use the instruction manual shown on the Central Bank’s web page.
• The account must be opened by the company’s legal representative in Colombia.
• Certificate of Existence and Legal Representation issued by the Chamber of Commerce
• Company’s articles of incorporation
• A photocopy of the Legal Representative’s passport / Colombian-issued I.D.
Step No. 4 Funnel your investment through the foreign exchange market
Incoming foreign currency must be funneled through the Foreign Exchange Market Intermediaries. These are commercial banks, mortgage banks, finance corporations, Financiera Energética Nacional -FEN-, Banco de Comercio Exterior de Colombia S.A. -BANCOLDEX-, finance cooperatives, stock exchange brokers and foreign exchange bureaus.
Step No. 5 Register the investment with your bank, on the foreign exchange report form (Form No. 4)
Investments in foreign currency are registered by submitting the foreign exchange report for international investments (Form No. 4) before any of the Colombian foreign exchange market intermediaries.
Form No. 4 must show the number of stock or the interest share paid in each operation (In the case of branches of foreign companies, the information on stock or interest share acquired does not apply). It is understood that the operation is performed for the price of the stock or the interest share being acquired, including the contribution placement premium. If payment is to be made by installments, only the number of stock or the share interest paid in each operation must be registered.
1. Recommendations to complete Form No 4:
When completing the form, use the instruction manual shown on the Central Bank’s web page.
The Codes assigned by the Central Bank to the Foreign Exchange Market Representatives are in this website.
Investors are allowed to revise the information entered in Form No. 4 within 15 days following the initial submission date.
Step No. 5 Suppliers can be paid from foreign accounts held by the Colombian company. Clearing Accounts
Clearing Checking Accounts are checking accounts in foreign currency, opened by residents in Colombia in banks located abroad. They are the mechanism used to funnel foreign currency operations through the foreign exchange market.
1. Registration of a Clearing Checking Account
Investors are allowed to revise the information entered in Form No. 4 within 15 days following the initial submission date.
Step No. 5 Suppliers can be paid from foreign accounts held by the Colombian company. Clearing Accounts
Clearing Checking Accounts are checking accounts in foreign currency, opened by residents in Colombia in banks located abroad. They are the mechanism used to funnel foreign currency operations through the foreign exchange market.
1. Registration of a Clearing Checking Account
Clearing Checking Accounts must be registered in the name of the company incorporated in Colombia. This procedure is carried out with the Colombia Central Bank -Banco de la República- by completing Form No. 9 “Registration of a Clearing Checking Account” within the first month after the account is opened, or within one month following the first operation in the foreign exchange market.
2. Recommendations to complete Form No 9:
When completing the form, use the instruction manual shown on the Central Bank’s web page.
Step No. 6 Repatriate your profits without paying taxes
Foreign investors whose investment is registered with the Colombian Central Bank are entitled to repatriate dividends, reinvest their profits in the country, and repatriate their investment upon selling or liquidating it in the country. Capital outflows must be reported by checking the foreign currency outflow option in the foreign exchange report for international investments (Form No. 4) to be submitted to the foreign exchange market intermediaries.
1. Recommendations to complete Form No 4 (egreso de divisas):
When completing the form, use the instruction manual shown on the Central Bank’s web page.
