Establishing a subsidiary in Colombia is one way to grow your company in the region. However, following all Colombia subsidiary laws is important to stay compliant. The entire subsidiary setup process can take months, leaving employees you want to hire to search for different positions.
Instead, G-P offers a better way. We reduce this months-long process and help you get your company operating in a matter of minutes.
How to establish a Colombia subsidiary
While commercial law in Colombia is often considered flexible, establishing a subsidiary still involves several steps. A minimum of 2 partners must incorporate a limited liability company, which is a common form of entity in Columbia. This type of subsidiary is governed and operated by a board of partners. All partners must participate in the management of the limited liability company. However, partners can designate a manager.
Statutory auditors, which must be local, are required if the company exceeds a certain amount of assets determined by law. The corporate and accounting books should be kept in the company’s domicile.
Colombia subsidiary laws
Subsidiary laws might vary by country, and you need to know these laws before you begin. Each step of the process can take anywhere from days to weeks, and any mistakes will only extend the process further. Colombia subsidiary laws mandate:
- No investment capital is required. However, before the incorporation can commence, partners must indicate the amount of their contributions to the company and pay the capital at the time of the incorporation.
- You do not need a Board of Directors. Instead, you can have partners and the General Manager make decisions.
- There is a registration fee to incorporate.
Colombia subsidiary law is not found in one place. Instead, you must follow a variety of rules and regulations. You’ll need to examine each of these rules before you open your subsidiary.
Benefits of establishing a Colombia subsidiary
Establishing a subsidiary in Colombia offers numerous benefits. Although the process is lengthy, you can eventually grow your company to a new location and serve a broader base of customers. With a subsidiary, there is limited liability between the subsidiary and the parent company. The subsidiary can also operate under a degree of autonomy from the parent company, allowing you to create your own workplace culture that fits the overall business culture of Colombia.
Other important considerations
To establish a subsidiary, companies will first need to understand Colombia subsidiary laws fully. Colombia subsidiary law says companies will likely need to register their international currency as a global investment. Companies can do this by filling out the applicable form with the Colombian Central Bank.
Companies might need to register any other international investments with the Central Bank. They will have to update the Central Bank on their international direct investment registration every year, even if they are not obligated to submit any financial statements.
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