| Colombia: Integrity Scorecard Report > Sub-Category: Business Licensing and Regulation | ||
| Indicators | Score | |
| 67 | Are business licenses available to all citizens? | 81 |
| 68 | Are there transparent business regulatory requirements for basic health, environmental, and safety standards? | 100 |
| 69 | Does government effectively enforce basic health, environmental, and safety standards on businesses? | 50 |
Indicator and sub-Indicator Details
| 67 | Are business licenses available to all citizens? | |||||||
| 67a: In law, anyone may apply for a business license. | ||||||||
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Comments: According to article 333 of the Constitution, economic activities and private initiatives are free within the framework of the the general benefit and for its exercise nobody can request permission unless required by law. References: Constitución Política de Colombia 1991, art. 333
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| 67b: In law, a complaint mechanism exists if a business license request is denied. | ||||||||
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Comments: The appeal mechanisms for business licenses are the same used to appeal any other administrative decision. The mechanisms to appeal any administrative decision are reposition, appeal, nullity and reparation. Additionally, when citizens feel that they have used all available appeal mechanisms, they can use the Constitutional mechanisms created to protect basic rights. The Constitution uses three mechanisms to defend basic human rights: the "Accion de tutela" (resource to protect basic rights or tutelage) (art. 86) to protect individual rights when they have been wounded by action or omission of public authorities. These mechanisms have to be answered in 10 business days. The "Accion de cumplimiento" (art 87) is usually used as an appeal mechanism for "tutelas." "Acciones populares" (art. 88) focuses on the protection of collective rights. References: Constitucion Politica de 1991 art, 86, 87,88. Ley 393 de 1997 (acciones de cumplimiento) Ley 472 de 1998 (acciones populares) DECRETO 1 DE 1984 (enero 2) Diario Oficial No. 36.439, del 10 de enero de 1984 Por el cual se reforma el Código Contencioso Administrativo, art. 50 [ LINK ]
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| 67c: In practice, citizens can obtain any necessary business license (i.e. for a small import business) within a reasonable time period. | ||||||||
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Comments: The basic requirements to create a business can be met in 15 days and additional steps such as those referring to health care and pensions for employees can be met in about two months. It is estimated that business creation may take up to 60 days, and although it is still a long time, it is low compared to countries such as Spain. The Government is making efforts in trying to reduce time to create business in order to promote the creation of small enterprises. In 2002 the Government of Alvaro Uribe created a program for Public Administration Reform (PRAP) which included reforms to rationalize and simplify administrative procedures and reduce the time spent by citizens in obtaining those licenses. The PRAP allows citizens to make several procedures in the same place and at the same time. The reform had a special focus on external trade procedures and it has reduced the number of steps that businessmen have to conduct to obtain licenses, improving the conditions for investment and trade and reducing bribing options. A simple importing license can be obtained within a reasonable time period (five days) and the process can be checked online. However, according to a survey about perceptions on corruption made among entrepreneurs, about 24.2 percent of entrepreneurs surveyed report that they are frequently asked to pay bribes in order to expedite licensing procedures. References: Departamento Nacional de Planeación. www.dnp.gov.co STANDARDIZED COMPANY Legal Form: Sociedad de Responsabilidad Limitada (SRL) Minimum Capital Requirement: 0 City: Bogota [ LINK ] Confecámaras. 2004. Probidad III. Encuesta empresarial sobre corrupción y probidad en el sector público.Confecamaras. Solicitud de aprobación o modificación de Licencias de Importación. [ LINK ] Gomez, Liyis, Martinez, Joselin and Arzuza, Maria. 2006.Política pública y creación de empresas en Colombia. En: Pensamiento y Gestión no. 21. [ LINK ]
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| 67d: In practice, citizens can obtain any necessary business license (i.e. for a small import business) at a reasonable cost. | ||||||||
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Comments: Basic licenses such as obtaining a tax identification number can be acquired for free. Registration before the Chamber of Commerce requires 0.7 percent of capital in registration tax plus COP 341,000 for trade registration + COP 21,000 fixed fee + COP 21,000 registration fee for each company book + COP 2,900 for the registration form (about US$250). Specific licenses such as sanitary registries may impose a financial burden, for example licenses for food and alcoholic beverages may vary between approximately US$750 and US$1,500. A simple importing license can be available at a reasonable cost (starting at about US$15). In 2003 the Government started the Program for Public Administration Reform (PRAP) and within the program simplified some licensing processes, thus reducing costs for entrepreneurs. At the same time the restructuring process of some institutions started with the PRAP could have increased the costs of some licenses because payments for licenses became part of the budget for institutions such as the INVIMA (the sanitary inspection agency). In sum, although costs for business creation can be still high in Colombia, they are low compared to countries such as Spain, and the government is trying to reduce costs in order to promote the creation of small enterprises. References: www.dnp.gov.co www.invima.gov.co STANDARDIZED COMPANY Legal Form: Sociedad de Responsabilidad Limitada (SRL) Minimum Capital Requirement: 0 City: Bogota [ LINK ] Confecámaras. 2004. Probidad III. Encuesta empresarial sobre corrupción y probidad en el sector público.Confecamaras. Solicitud de aprobación o modificación de Licencias de Importación. [ LINK ] Gomez, Liyis, Martinez, Joselin and Arzuza, Maria. 2006.Política pública y creación de empresas en Colombia. En: Pensamiento y Gestión no. 21. [ LINK ]
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| 68 | Are there transparent business regulatory requirements for basic health, environmental, and safety standards? | |||||||
| 68a: In law, basic business regulatory requirements for meeting public health standards are transparent and publicly available. | ||||||||
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Comments: According to the Decree 1290 of 1994 the INVIMA (an autonomous public establishment) is in charge of sanitary control and quality control of food, pharmaceuticals, biological products, makeup products, medical surgical instruments and equipment and all individuals who can have an impact on public and individual health. Regulatory requirements can be found at the INVIMA´s Web page. However, there are weaknesses in the articulation of the INVIMA responsibilities at the local and regional levels, so even though information is public, it can be difficult for citizens to understand regulatory requirements. The INVIMA issues sanitary registries and importation registries. References: INVIMa. [ LINK ] DECRETO 1290 DE 1994 (junio 22) Diario Oficial No. 41.406 del 24 de junio de 1994 Por el cual se precisan las funciones del Instituto Nacional de Vigilancia de Medicamentos y Alimentos -INVIMA- y se establece su organización básica. [ LINK ]
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| 68b: In law, basic business regulatory requirements for meeting public environmental standards are transparent and publicly available. | ||||||||
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Comments: According to Law 99 of 1993, the Ministry of Environment is responsible for determining the minimal standards and general regulations regarding mining, transportation and industrial activities, or any activity which can directly or indirectly generate environmental damages. It is the responsibility of the Ministry to define and regulate the administrative instruments to prevent and control environmental damage. Thus, basic regulatory requirements are public and can be found on the Web page of the Ministry of Environment, Housing and Development, however sometimes it can be difficult for common citizens to understand the appropriate regulations or to find them, given the complex universe of regulations. References: LEY 99 DE 1993 (Diciembre 22) Diario Oficial No. 41.146, de 22 de diciembre de 1993 "Por la cual se crea el Ministerio del Medio Ambiente, se reordena el Sector Público encargado de la gestión y conservación del medio ambiente y los recursos naturales renovables, se organiza el Sistema Nacional Ambiental, SINA y se dictan otras disposiciones". [ LINK ]
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| 68c: In law, basic business regulatory requirements for meeting public safety standards are transparent and publicly available. | ||||||||
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Comments: There are different safety regulations depending on the type of business or industry. There are clear regulations for public safety in transportation services. To operate transportation services, it is necessary to obtain a license through the DIMAR (for maritime transportation) and the AEROCIVIL (for aerial transportation). To obtain these licenses, it is necessary to meet financial and public safety standards. For businesses that are open to the public and in the case of public shows, a certification of public safety from the Firemen Body is required. Basic regulatory requirements are public and can be found on the Web pages of the Ministry of Transportation, the Chambers of Commerce and the Superintendencies of Industry and Commerce, Public Services and Health. However sometimes it can be difficult for common citizens to find or understand the appropriate regulations, given the complex universe of regulations. References: LEY 105 DE 1993 (diciembre 30) Diario Oficial No. 41.158, de 30 de diciembre de 1993 "Por la cual se dictan disposiciones básicas sobre el transporte, se redistribuyen competencias y recursos entre la Nación y las Entidades Territoriales, se reglamenta la planeación en el sector transporte y se dictan otras disposiciones." Art. 2 LEY 336 DE 1996 (diciembre 20) Diario Oficial No. 42.948, de 28 de diciembre de 1996 ESTATUTO GENERAL DE TRANSPORTE. Art. 12
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| 69 | Does government effectively enforce basic health, environmental, and safety standards on businesses? | |||||||
| 69a: In practice, business inspections by government officials to ensure public health standards are being met are carried out in a uniform and even-handed manner. | ||||||||
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Comments: In the past ten years the INVIMA (the sanitary inspection agency) has demonstrated increasing efficiency in its procedures and more expedited licensing processes and inspections. However, according to an analysis made by the PRAP (Program for Public Administration Reform) on the INVIMA (the sanitary inspection agency), citizens had little faith in the institution because it lacks appropriate staff and resources to conduct its mission. According to the recent Index of Transparency in public institutions made by the Corporation Transparency for Colombia, the INVIMA has one of the highest transparency scores Although this score does not reflect the actual cases or levels of bribing that may occur within an institution, it gives an idea of how likely it is that certain procedures and how the availability of information may hinder or promote corruption. Currently, some of the processes that can be requested to the INVIMA are free and accessible online. Others are not free but also can be initiated through online systems. Although there is no specific information on public health inspections, according to a survey on perceptions of corruption made among entrepreneurs 24.2 percent of entrepreneurs surveyed report that they are frequently asked to pay bribes in order to expedite licensing procedures. The lack of clarity, the dispersion and lack of specificity of the rules governing business requirements may hinder an expedited process for inspecting public health standards. References: En defensa del Invima. 9/22/2004. [ LINK ] INSTITUTO NACIONAL DE VIGILANCIA DE MEDICAMENTOS Y ALIMENTOS INVIMA ESTUDIO TECNICO REDISEÑO INSTITUCIONAL BOGOTA, D. C. 2003 Corporación Transparencia por Colombia. 2006. Indice de Transparencia Nacional Entidades Públicas Nacionales. Bogotá Gomez, Liyis, Martinez, Joselin and Arzuza, Maria. 2006.Política pública y creación de empresas en Colombia. En: Pensamiento y Gestión no. 21. [ LINK ]
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| 69b: In practice, business inspections by government officials to ensure public environmental standards are being met are carried out in a uniform and even-handed manner. | ||||||||
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Comments: The control of public environmental standards is better at the national than at the local level. In 2003, the Ministry of Environment was fused with the Housing and Development Ministry, the result has been more general efficiency as testified by the improvement in transparency scores obtained by the Ministry of Environment, Housing and Development between 2003 and 2005. At the local level the situation is different, as the agencies with the highest responsibility at the local level to control environmental standards (Autonomous regional corporations) are perceived as widely corrupt. According to the recent Index of Transparency in public institutions made by the Corporation Transparency for Colombia, most autonomous regional corporations which have responsibilities on public health standards at the regional levels have medium to low scores in transparency and thus are declared to have a medium to high corruption risk. The Ministry of Environment has a moderate corruption risk. References: Corporación Transparencia por Colombia. 2006. Indice de Transparencia Nacional Entidades Públicas Nacionales. Bogotá
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| 69c: In practice, business inspections by government officials to ensure public safety standards are being met are carried out in a uniform and even-handed manner. | ||||||||
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Comments: There are no available reports on substantial irregularities in the application of public safety regulations. In general, levels of petty corruption have decreased in Colombia in recent years, and the Government has designed programs directed to reduce bribing options in administrative procedures. In 2002 the Government of Alvaro Uribe created a program for Public Administration Reform (PRAP) which included reforms to rationalize and simplify administrative procedures and reduce the time spent by citizens in obtaining those licenses. The PRAP allows citizens to make several procedures in the same place and at the same time. The reform has reduced the number of steps that businessmen have to conduct to obtain licenses, improving the conditions for investment and trade and reducing bribing options. According to a survey about perceptions on corruption made among entrepreneurs, about 24.2 percent of entrepreneurs surveyed report that they are frequently asked to pay bribes in order to expedite licensing procedures. References: Interview with Juan Fernando Zarama. Program for Public Administration Reform PRAP.June 2005. Bogotá Confecámaras. 2004. Probidad III. Encuesta empresarial sobre corrupción y probidad en el sector público.Confecamaras.
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