[ESTABLISHING A BUSINESS ENTITY IN COLOMBIA] 115
ESTABLISHING A BUSINESS ENTITY IN COLOMBIA ABOUT US G AMBOA , G ARCÍA & C ARDONA A BOGADOS is a Colombian firm created to offer legal consulting services to national and international clients that require the highest quality, efficiency, creativity and client proximity standards. Our partners are characterized by a close and long-term relationship with their clients and by the resolute commitment of personally coordinating the projects and issues that are entrusted to them. G AMBOA , G ARCÍA & C ARDONA A BOGADOS has a group of lawyers with national and international academic education, and wide experience in national and international law firms, real economy companies, financial institutions, and public agencies. Our local and foreign clients are leaders in diverse sectors of the economy, including the financial and insurance sector, oil and gas, automotive, agrochemical, communications, transport, defense and private surveillance, internet, information technology, large retail outlets, medical services, consulting and investment banking services, infrastructure, construction, mass market and entertainment.
desires to perform “Permanent Activities” in its territory, legal provisions require it to establish a branch or a subsidiary in Colombia (Article 471 of the Commercial Code). Colombian legal provisions do not provide general criteria for what should be understood as “Permanent Activities”, however article 474 of the Commercial Code contemplates a non-taxative list of activities that are considered as permanent, which are: 1. “Opening commercial establishments or business offices, even if they only provide technical or consulting services. 2. Intervene as a Contractor in the execution of works such as a construction or rendering of services. 3. Participate in any way in activities of management, use or investment of funds from private savings. 4. Engaging in the resource-extraction industry and/or any of its areas or services. 5. Obtain a concession from the Colombian Government, being assigned a concession or participate in the exploitation of one. 6. The conduction of shareholders' meetings, boards of directors, management or administration in the national territory”. The performance of any of the aforementioned activities usually implies the execution of other related activities such as hiring employees, owning or renting physical premises and other services, which suggests that there is an intention of conducting permanent activities in Colombia. This will result in the obligation to constitute a branch or a subsidiary company in Colombia. In both of these scenarios the local vehicle will necessarily have to observe Colombian provisions, which include
DOING BUSINESS IN COLOMBIA 1. Preliminary Considerations:
In Colombia, a foreign company is able to act and do business by itself, for example, by contracting with local entities or investing foreign currencies. Entering contracts, such as joint ventures, with local corporations or persons, depends on commercial negotiations, more than on legal requirements. Foreign investment, on the other hand, is subject to different regulations and to the Central Bank supervision and regulation (more information below). However, when a foreign company, not only has investments in Colombia, but also
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator