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Developing property in Colombia can be challenging.  Foreign clients have to contend with unfamiliar legal requirements, less than reputable construction companies and the often arbitrary and inconsistent decisions of local regulatory/municipal agencies.

For over 10 years Langon has provided legal assistance to foreign clients interested in developing commercial as well as residential properties in the local Colombian market.  Our Real Estate Practice Group provides comprehensive assistance in the following areas of law:

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  • Preliminary Legal Analysis:

Analyzing ideal corporate structures for the relevant investment vehicle(s) and in connection with the development of the subject lot.

  • Tax Analysis:

Analyzing tax implications for both the investment vehicle(s) and the property development project.

  • Subject Lot Due Diligence:

Reviewing all relevant documentation and information as part of a standard due diligence process including, but not limited to, the property certificate (the “Certificado de Tradición y Libertad”), the property deed (the “Escritura Pública”), tax bills (including the “Impuesto Predial” and the “Impuesto de Valorización”) and other legal documentation.

  • Formal Title Analysis:

Drafting and finalizing a formal written legal opinion that outlines the findings of the due diligence process and identifies any title defects, mortgages, past due tax obligations, easements and other issues.

  • Property Purchase:

Comprehensive assistance in connection with the purchase of the property including, but not limited to, negotiating terms of sale, drafting relevant Promise to Purchase and Sale Agreement (the so-called “Promesa de Compraventa”) and related documentation, resolving any title defects, coordinating with third-party surveyors/inspectors/appraisers and executing public deed transferring title.

  • Construction Agreements:

Negotiating and drafting pre-construction agreements, construction contracts (“Contratos de Construcción”), and related amendments.

  • Service Agreements:

Negotiating and drafting Service Agreements, Employment Agreements (“Contratos Laborales”), Independent Contractor Agreements (“Contratos de Prestación de Servicios”) and related legal documentation with construction companies, sub-contractors, professional service providers and site workers.

  • Construction Permits:

Submitting required permit and license applications with relevant regulatory and municipal agencies (“Curaduría”) and managing ongoing obligations.

  • Title to New Units:

Submitting required legal documentation to local regulatory and municipal agencies (“Curaduría”) in connection with the subdivision of units prior to sale/lease.

  • Sales/Lease Agreements:

Drafting standard sales/lease documentation in anticipation of the sale or lease of individual units on developed property.

  • Sales Assistance:

Completing all relevant legal processes to ensure transfer of title to unit purchaser.

  • Property Administrator:

Negotiating and drafting appropriate legal agreements with property administrator (“Administrador de la propiedad”) for developed property.

  • Homeowner Associations:

Drafting homeowner association bylaws and policies (“Reglamento de Propiedad Horizontal”); organizing applicable public deeds (“protocolización”), and managing official meetings and other obligations.

  • Dispute Resolution:

Managing all ongoing legal inquiries and disputes involving regulatory and municipal agencies, project vendors/professionals/partners as well as unit purchasers/lessors.

Corporate Structure

At a minimum, the S.A.S. form requires a shareholder and a legal representative. A board of directors is not required. An auditor may be required depending on the size of the company or the specific industry.

Legal Representative

Unlike other countries, the title of “legal representative” is crucial in a Colombian company. A legal representative will have complete access to the company’s books and bank accounts and will be able to bind the company when signing legal agreements. Keep in mind that the legal representative should be someone who is based in Colombia as legal representatives will need to sign documentation on a regular basis. This is why many foreign investors grant legal representation status to their local legal counsel or local manager.

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Corporate Flexibility

The S.A.S. form has a great deal of flexibility: (i) one person may own all the ownership interests in the S.A.S.; (ii) the same person can be sole shareholder, legal representative and manager; (iii) allows for the creation of a preferred stock structure; (iv) business may have a perpetual existence; (v) no obligation to maintain a reserve on its books (as is the case with other legal forms); (vi) no obligation to pay a minimum dividend (as is the case with other legal forms); (vii) no need to register a public deed in connection with its registration (as is the case with other legal forms); and (viii) allows for private mediation/arbitration for disputes between shareholders.

Registration Process

Registration via (i) written bylaws that are signed and notarized under Colombian law or (ii) written bylaws that are signed at the local chamber of commerce. Registration valid only after company is listed on the business registry (“Registro Mercantil”) of the local chamber of commerce.

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Company Name

You will have a great deal of flexibility when choosing the name of your company, though there are certain limitations. For example, the name of your company cannot be similar to the name of another company already registered. In addition, you cannot use certain names that are considered against “the public interest.” At the end of the name you need to include “sociedad por acciones simplificada” or the more traditional “S.A.S.”

Business Purpose

To register a S.A.S. you will need to specify at least one purpose for the company, though you can also add that it may conduct any business that is allowed under Colombian law.

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Limited Liability

The S.A.S. form grants shareholders broad limited liability. Note that the corporate veil may be pierced due to actual fraud and/or failure to maintain corporate formalities.

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Corporate Structure

At a minimum, the S.A.S. form requires a shareholder and a legal representative. A board of directors is not required. An auditor may be required depending on the size of the company or the specific industry.

Legal Representative

Unlike other countries, the title of “legal representative” is crucial in a Colombian company. A legal representative will have complete access to the company’s books and bank accounts and will be able to bind the company when signing legal agreements. Keep in mind that the legal representative should be someone who is based in Colombia as legal representatives will need to sign documentation on a regular basis. This is why many foreign investors grant legal representation status to their local legal counsel or local manager.

^
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^
^

Corporate Flexibility

The S.A.S. form has a great deal of flexibility: (i) one person may own all the ownership interests in the S.A.S.; (ii) the same person can be sole shareholder, legal representative and manager; (iii) allows for the creation of a preferred stock structure; (iv) business may have a perpetual existence; (v) no obligation to maintain a reserve on its books (as is the case with other legal forms); (vi) no obligation to pay a minimum dividend (as is the case with other legal forms); (vii) no need to register a public deed in connection with its registration (as is the case with other legal forms); and (viii) allows for private mediation/arbitration for disputes between shareholders.

Registration Process

Registration via (i) written bylaws that are signed and notarized under Colombian law or (ii) written bylaws that are signed at the local chamber of commerce. Registration valid only after company is listed on the business registry (“Registro Mercantil”) of the local chamber of commerce.

^
^
^
^

Company Name

You will have a great deal of flexibility when choosing the name of your company, though there are certain limitations. For example, the name of your company cannot be similar to the name of another company already registered. In addition, you cannot use certain names that are considered against “the public interest.” At the end of the name you need to include “sociedad por acciones simplificada” or the more traditional “S.A.S.”

Business Purpose

To register a S.A.S. you will need to specify at least one purpose for the company, though you can also add that it may conduct any business that is allowed under Colombian law.

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Learning Center

Limited Liability

The S.A.S. form grants shareholders broad limited liability. Note that the corporate veil may be pierced due to actual fraud and/or failure to maintain corporate formalities.

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