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Private Equity Funds

Description scope of the subsector

What are Private Equity Funds?

Private Equity Funds (FCP) are closed-end collective investment funds that must allocate at least two thirds of their investors' contributions to the acquisition of assets or rights of economic content other than securities registered in the National Registry of Securities and Issuers (RNVE).

Since 2019, Colombia has an exclusive regulatory framework for this type of vehicles that promotes the creation of local funds. The national regulation and the adoption of international standards allow private equity funds to have a great investment potential. It should be noted that these funds are not a legal entity and have the attribute of not being subject to income tax.

Why invest in Private Equity Funds?

Colombia stands out in the region due to its geographical location and legal stability. Most of the sectors where the resources of Private Equity Funds are focused are infrastructure, energy and tourism, as well as technology and software, which contribute to project the country as an important destination for investors in the medium and long term. 

Additionally, within the framework of the Pacific Alliance and the Fund Passport, it is possible to access capital from member countries: Mexico, Colombia, Peru, and Chile. More information on this aspect can be found at Colcapital and Procolombia.

*Please note: for specific information on each sub-sector, please refer to the Pre-operational Licenses and Infrastructure Construction procedures.

The other procedures of the investment cycle - Business Creation, Real Estate Purchase, Migration, and Personnel Recruitment - are multi-sector and standard for all investment sub-sectors.

Formalities and administrative procedures to be carried out:

Here you can consult each of the steps and requirements for Infrastructure construction

1 - Apply for a Construction License

In case of executing a construction project, whether as new construction, expansion, remodeling, modification, adaptation, reconstruction, demolition or structural reinforcement, a prior permit issued by the urban curator's office or a similar authority in each municipality is required.
Requirements
Requirements

What do I need to apply for a Construction License?

  1. You need a copy of the certificate of freedom and tradition dated within 30 days of issuance

  2. You need a copy of the identity document of the person or of the Legal Representative

  3. Copy of the last year's property tax payment.

  4. It is necessary to have the relation of the address of the adjoining properties of the project

  5. It needs the copy of the architectural project labeled and signed by an architect with professional registration (the labeling refers to the basic information of the project as):

    • Project: Type of work to be built

    • Contains: Names and details of the plans contained in each floor to be built.

    • Owners: Names of the persons for whom the construction is to be carried out.

    • Address: Place or site where the construction is to be carried out 

    • Scale and date: The scale used in each plan and the date of completion of the plans.

    • Number of Floors

    • Name of the drafter of the project

    • Design is the name of the architect who designed the project to be built.

    • Calculation is the name of the engineer who supported the elaboration of the plans

  6. The architectural project must contain at least the following information:

    • Location.

    • Floor plans.

    • Elevations or cuts of the building in relation to the public or private road at a formal scale. When the project is located on sloping ground, the cuts must indicate the actual slope of the terrain.

    • Facades.

    • Roof plan: the plan showing the shape of the top of the buildings, i.e., the shape of the roof.

    • Area table: it refers to the information of the total square meters of a constructed surface and the division of the same ones in the different zones that compose it.

  7. It is necessary to process the National Single Format of review and information of projects before the Urban Curator's Office or responsible entity

  8. In case you act through an attorney-in-fact, you must present a special Power of Attorney duly granted before a notary or judge of the Republic.

Steps
Steps

What steps should I follow to apply for a Construction License?

  1. Verify that you comply with the requirements mentioned above

  2. Carry out the process virtually through the Construction One-Stop Shops at the Urban Curator's Office or the entity in charge in each region

Virtuality
Virtuality

Where can I go?

This process must be carried out before the Urban Curator's Office or the municipal entities. You can also obtain more information through the Ventanilla Única de la Construcción VUC (One-Stop Construction Shop)

Costs
Costs

What is the cost of this process?

The cost of the construction license depends on the location, the strata, the square meters, and the type of construction to be carried out on the property. 

The following can be an example for the calculation of the cost of the Construction License: COP$7,800,940 

Note: Information based on the tariff of the urban curator's office: 

Property with an area of 600 m2 

Construction coefficient= 2.61 

Fixed cost= COP$1.254.170 

Variable cost= COP$6.546.770 

Total= COP$7.800.940

Time
Time

How long does this process take?

The estimated time is 63 working days depending on whether it is necessary to make corrections and adjustments to the previously required documents. Or more days depending on the type of license required (new construction, expansion, remodeling, modification, adaptation, reconstruction, demolition, or structural reinforcement).

Regulations
Regulations

What regulations must I comply with?

Law 388 of 1997 (Art. 99, numeral 1 and 2). 

Sole Regulatory Decree 1077 of 2015 (Compiles Decree 1203 of 2017) (Art. 2.2.6.1.1.7) (Regulatory Decree).

2 - Make the payment of the delineation tax

The delineation tax is caused by the issuance of the construction license to carry out new construction, expansion, modification, adaptation or repair of real estate.
Requirements
Requirements

What do I need to pay the Delineation Tax?

  1. Consult on the web page or directly in the Mayors' Offices of the region, about the documents and forms that you must present to pay the delineation tax.

Steps
Steps

What are the steps to follow once I have all the documents?

  1. Complete the online form for the advance payment 

  2. Make the payment of the advance payment

  3. Once the work is completed, fill out the online form for the tax payment declaration or liquidation

  4. Make the tax payment  

Virtuality
Virtuality

Where can I go?

You can make the payment of this tax at the private financial institution of your preference and obtain more information at the Single Window for Construction - VUC

Costs
Costs

What is the cost of this procedure?

The cost may vary from one municipality to another. As an example, for the city of Bogota the cost is 3% of the construction budget. 

Time
Time

How long does this procedure take?

>1 working day

Regulations
Regulations

What regulations must I comply with?

Law 97 of 1913 (Art. 1) (Ordinary Law) 

Decree Law 1333 of 1986 (Art. 233) (Decree Law) 

Decree 352 of 2002 of the Mayor's Office of Bogota (Art. 72) (District Regulatory Decree). 

Agreement 352 OF 2008, of the Council of Bogota (Art. 2) (Administrative Act).

3 - Request the Electric Power Connection Service

With this request you can make the connection of the public electric energy service.
Requirements
Requirements

What do I need to request the electric connection?

  1. Present the Certificate of Freedom and Tradition of the property 

  2. Copy of the applicant's identification card 

  3. Copy of the electrician's registration and certificate. CONTE (National Council of Electrical Technicians) will give the respective certification to the technician to validate his competence in electrical matters. 

  4. Self-declaration or RETIE certification (Technical Regulation of Electrical Installations) the objective is to comply with process standards and safety parameters that guarantee the safety of people, animal, and plant life.

  5. Submit the electrical design

Steps
Steps

What steps to follow once you have all the documents?

  1. Make the service request to the supplier company 

  2. Obtain the internal wiring certification from a firm accredited by ONAC (National Accreditation Organization) or the Superintendence of Industry and Commerce (SIC) 

  3. Perform the inspection of external works, installation of meters and energy flow

Virtuality
Virtuality

Where can I go?

You can go to the regional electric utility company and get more information at the Single Window for Construction Procedures - VUC

Costs
Costs

What is the cost of this procedure?

COP$4.227.114 

Basis for cost estimation: 

Base costs to ENEL 

COP$1.600.000 - Certification of internal installations 

COP$2.627.114 - Inspection of external works

Time
Time

How long does this procedure take?

Between 45 and 60 working days

Regulations
Regulations

What regulations must I comply with?

Law 142 of 1994 (article 14, numeral 1425) (Ordinary Law)

Law 142 of 1994 (article 131) (Ordinary Law) 

Law 142 of 1994 (article 132) (Ordinary Law)

4 - Request the connection of aqueduct

With this process you can request the connection of the public water and sewage service.
Requirements
Requirements

What do I need to request a water and sewer connection?

  1. Page number of the real estate registration 

  2. Copy of the legal representative's identity document

Steps
Steps

What steps to follow once you have all the documents?

  1. Gather the documents mentioned above

  2. Make the connection request 

  3. Make the payment that will be charged on the service bill

Virtuality
Virtuality

Where can I go?

In person you can go to the Aqueduct Service Company in the region where the company is located and obtain information about the process on the web or by telephone.

Costs
Costs

What is the cost of this process?

Variable cost depending on the location and appraisal made by the company. Base information according to the procedure guide of ACUEDUCTO de Bogotá

Time
Time

How long does this process take?

5 working days

Regulations
Regulations

What regulations must I comply with?

Law 142 of 1994 (article 14, numeral 14.22) (Ordinary Law). 

Law 142 of 1994 (article131) (Ordinary Law) 

Law 142 of 1994 (article132) (Ordinary Law)

5 - Request Gas Connection

With this process you can request the connection of the public service of fuel gas - natural gas.
Requirements
Requirements

What do I need to request the Gas connection?

  1. Real estate registration page number 

  2. Copy of the legal representative's identity document

Steps
Steps

What steps to follow once you have all the documents?

  1. Gather the documents mentioned above 

  2. Make the connection request 

  3. Connection inspection by a firm authorized by the utility company.

  4. Make the payment that will be charged in the service invoice

Virtuality
Virtuality

Where can I go?

You can go to the regional gas service company; however, you can obtain more information about the process on the web or by phone.

Costs
Costs

What is the cost of this procedure?

The cost may vary depending on the characteristics of the installation.

Example of cost for Gas installation in a home 

COP$148.427 + VAT (Value Added Tax)

Time
Time

How long does this procedure take?

The time will depend on the characteristics of the requested service (New connection, Gas pipeline, Installation, location of the project, among others)

Regulations
Regulations

What regulations must I comply with?

Law 142 of 1994. Whereby the regime of domiciliary public utilities is established, and other provisions are issued (article 14. numeral 14.28) (Ordinary Law). 

Law 142 of 1994. Whereby the regime of domiciliary public utilities is established, and other provisions are enacted (article 131) (Ordinary Law). 

Law 142 of 1994. Whereby the regime of domiciliary public utilities is established, and other provisions are enacted (article 132) (Ordinary Law)

6 - Request the authorization of occupation of the property

The Property Occupancy Authorization. It is the act by means of which the competent authority to exercise the urban and subsequent control of the work certifies through a detailed act the full compliance of: 

  1. That the works in the property were advanced in accordance with what was approved in the Construction license.

  2. That the works of adequacy to the seismic resistance norms and/or to the urban and architectural norms contemplated in the act of recognition of the building, were advanced in conformity.

Requirements
Requirements

What do I need to request authorization to occupy the property?

You must submit a letter requesting such authorization.

Steps
Steps

What steps to follow once I have all the documents?

  1. Gather the documents and comply with the requirements established by the procedure 

  2. File the required document

Virtuality
Virtuality

Where can I go?

This procedure must be carried out in person at the Municipality of the Region, and you can obtain information about the process on the web through the Single Window for Construction Procedures or by telephone.

Costs
Costs

What is the cost of this procedure?

No cost

Time
Time

How long does this procedure take?

On average this process takes 21 working days

Regulations
Regulations

What regulations must I comply with?

Sole Regulatory Decree 1077 of 2015. (Amended by Decree 1203 of 2017, Article 11) (Article 2.2.6.1.2.3.6) (Regulatory Decree). 

Sole Regulatory Decree 1077 of 2015. (Amended by Decree 1203 of 2017, Article 13) (Article 2.2.6.1.4.1) (Regulatory Decree). 

Decree 1469 of 2010 (Article 39) (Regulatory Decree)

Decree 1203 of 2017