When we think of Colombia, the first impressions are surely beautiful, untamed nature, Colombian coffee, and its people's hospitality. Starting a business in such a wonderful environment can prove to be quite an enjoyable experience.
In the following article, we will explain how to become self-employed in this country of fast economic and business growth.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Registration process for self-employed in Colombia
First of all, you have to register with the DIAN (Colombian Tax and Revenue Department). You will obtain RUT (Registro Único Tributario), a tax registry, and your business will be added to the tax system, giving you a unique tax number. In Colombia, RUT is enough to prove your business legitimacy. Still, you can optionally register with the Camara de Comercio (The Chamber of Commerce), a public entity that regulates the creation of new companies from a legal perspective, but that registration process isn't necessary.
Registration of a natural person (persona natural) in Colombia
The term "natural person" refers to a living human being with certain rights and responsibilities under the law. By contrast, a "legal person" is a group of people considered by law to be acting as a single individual.
The registration process for a natural person (persona natural) in Colombia is very simple and can be done online. You can find all the information on the official Camara de Comercio website in Spanish, but we'll explain the whole process in English below.
To register, you will need the following documents:
- Original ID
- Form of the RUT
- Forms available at the CCB headquarters
- Single Business and Social Registration Form (RUES)
After getting all the documents, you can finish the registration on this link.
Registration of a legal person (persona jurídica) in Colombia- Empresa Unipersonal
The term "legal person" is used to describe an individual, company, or other entity with legal rights and is subject to obligations. The legal person always needs a real person to present it.
There are many company types in Colombia, and your first step should be to choose the type you want to register your work with. Registering a sole proprietorship (Empresa Unipersonal) would be a good starting setup.
Firstly, you will need to obtain the following documents (same as the one for a natural person):
- Original ID
- Form of the RUT
- Forms available at the CCB headquarters
- Single Business and Social Registration Form (RUES)
Keep in mind that these forms must be filled out completely and signed by the natural person or a legal representative.
Verify that the name registered in the RUT form is identical to the one registered in the Single Business and Social Registration Form (RUES) and the additional registration form with other entities.
Check that the telephone number registered in the RUT form is identical to the one registered in the RUES form and to the additional registration form with other entities.
All the forms are also available at the different CCB Business Headquarters.
Additionally, you may be asked to provide the total area m² and the cadastral file number of the property where you operate or will operate.
RUT registration process
The procedure of getting this unique tax registry is quite straightforward. It can be done online, on the official DIAN website (under 'solicitud inscripción RUT- Tipo inscripción – Cámara de Comercio'). After applying for pre-RUT, you will have to open a bank account if you don't have one yet. This RUT form will contain your Colombian Tax ID number known as a Número de Identificacíon de Tributaria (NIT). You will have to take your bank certificate to the DIAN along with a copy of your ID. After you get the NIT, you have to take it to the Cámara de Comercio and update your registration with the definitive tax number.
If you are a self-employed, you can register as a natural person (persona natural) or as a legal entity (persona jurídica). This will affect your level of responsibility if your business goes under and the way you get taxed.
Make sure you find the type of company that works best for you. For more information about the different types of companies, get advice from a lawyer or consultant, or go to the Cámara de Comercio or visit its webpage.
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Taxation system for sole proprietors in Colombia
First, you need to know that the Colombian government establishes deadlines for filing income tax returns. Filing deadlines range from August to October. The exact deadline depends on the last two digits of your Colombian tax ID.
The tax registration process is as follow:
Step 1: Get the RUT and the NIT (explained in the text above)
Step 2: Log in here, using your NIT number and identification number
Step 3: File the relevant forms.
Step 4: Once your tax return is completed, you can pay your taxes via e-billing. You may also take the filled forms to any bank to pay the tax due. If you do not owe any taxes, the bank will stamp your form and process it without payment.
Business taxes in Colombia
- Income Tax (impuesto de renta): The Colombian government annually taxes the utilities the company created within a calendar year. Income tax depends only on your annual income. Colombia income tax rates are progressive up to 39%.
