A foreign portfolio investment can be done through any of the following assets:
Securities registered in the National Registry of Securities and Issuers - RNVE or listed in the Foreign Securities Quotation Systems.
Through the participation in collective investment funds as referred to in Part 3 of Decree 2555 of 2010.
Through the participation in negotiable certificates of deposit programs representing securities.
Foreign investment in Colombia is governed by the principle of universality: in principle, foreign investment can be made in all sectors of the economy except for the following cases:
Processing and disposal of toxic, hazardous or radioactive waste, not produced in the country and, defense and national security activities.
Concessionary companies of open television services, which may not have foreign investment of more than 40% of the total capital stock of the concessionaire.
Investments in the financial sector require authorization from the Superintendence of Finance.
Investments in hydrocarbons and mining as well as portfolio investments are subject to a special regime.
No. Foreign investment in Colombia may be developed without any type of authorization except for the sectors of defense and national security activities; processing, disposal, and elimination of toxic, dangerous or radioactive waste not produced in the country; and concessionary companies of open television services, which may not have foreign investment higher than 40% of the total capital stock of the concessionaire. Investments in the financial sector require authorization from the Superintendence of Finance. Investments in hydrocarbons and mining as well as portfolio investments are subject to a special regime.
Yes, it is mandatory to register foreign investment. All investments made by a foreigner in Colombia, including foreign currency that enters the country by individuals who are not Colombian residents, and that are destined as capital contributions for a company, or a branch of a foreign company must be registered before the Bank of the Republic under the figure of foreign investment.
Investors or their attorneys-in-fact must submit to the Bank of the Republic, directly or through the entities determined by it, a registration statement of: (i) the initial or additional investments; (ii) changes in the holders, in the destination or in the company receiving the investment and, (iii) the cancellation of the investments.
In the case of foreign currency, the registration is by channeling the money through an intermediary in the exchange market or through a clearing account. In addition, the Foreign Exchange Declaration for International Investments - Form 4 available at the website of the Bank of the Republic. https://www.banrep.gov.co/sites/default/files/paginas/instr420031201.pdf
For the case of corporate reorganizations abroad, Form 11A must be completed, available at the website of the Bank of the Republic. https://www.banrep.gov.co/es/contenidos/reglamentaci-n/f-formulario-no-11a-declaracion-registro-inversiones-internacionales
According to Decree 119 of 2017, the verification function in charge of the Bank of the Republic was eliminated, and it was established that the information declared in the registry is provided under oath; additionally, the possibility was given to submit the registration, corrections, updates, changes and cancellations at any time, by the legal representative of the company receiving foreign investments in Colombia.
No. Foreign investment in Colombia receives the same treatment as domestic investment. No special treatment or the imposition of discriminatory or more favorable conditions to foreign investors is allowed.
The registration of a foreign investment, regardless of its modality, provides the holder with the following exchange benefits:
Send abroad the proven net profits generated by the investment periodically.
Reinvest profits or retain in the surplus the undistributed profits entitled to draw.
Capitalize the amounts entitled to be drawn, as a result of obligations derived from the investment.
Send abroad the amounts received as a result of the disposal of the investment within the country or the liquidation of the company or portfolio, or the reduction of its capital.
The conditions for the reimbursement of the investment and the remittance of profits legally in force at the date of registration of the foreign capital investment may not be changed in a manner that adversely affects the investor, except temporarily when the international reserves are less than three (3) months of imports.
Fiscal or tax incentives are special tax treatments available to certain types of companies, investors and/or taxpayers. Their main objective is to promote the arrival of investment projects in the country, as well as to provide facilities for national investment projects.
Tariff incentives are measures to support imports. Among them are the free trade zone regime and the Vallejo Plan, among others. These systems offer incentives such as tariff and VAT reductions or exemptions for the import of raw materials, equipment and machinery to be used in projects for the production of goods or services mainly destined for foreign markets in the case of the Vallejo Plan, while products or services from free trade zones may be entirely destined for the domestic market.
These tax incentives promote investments in science, technology, and innovation (STI), in creative and technological industries (orange economy), as well as in other sectors of the economy - agribusiness, automotive and metalworking, hospitality and tourism, logistics, real estate, energy, and chemicals and life sciences.
For more details on the legal and tax incentives offered by the country, please visit the Invest in Colombia page - at the following link: https://investincolombia.com.co/es/como-invertir/incentivos-para-invertir-en-colombia/incentivos-tributarios
For more details on the incentives offered by the country for the installation and operation of Free Trade Zones, please visit the Invest in Colombia page - at the following link: https://investincolombia.com.co/es/regimen-de-zonas-francas-en-colombia
Single income tax rate of 20% for industrial users of goods, industrial users of services and operators. Exceptions are made for commercial users who are taxed at the general rate (35%) for the year 2022.
Customs duties (VAT and tariffs) are not levied or paid for goods that are introduced from abroad to the free trade zones, nor for raw materials, inputs and finished goods that are sold from the national customs territory to industrial users of the Free Trade Zone.
Exports made from Free Trade Zone to third countries benefit from the International Trade Agreements negotiated by Colombia.
It allows the industrial users of goods and/or services to keep in their facilities the raw materials, inputs, parts, products in process or finished products of the production process, transformation or assembly of goods proper of the economic activity or activities for which they have been qualified or authorized or recognized.
For more information on the requirements to access the different forms of Free Trade Zones, please visit http://zonasfrancas.mincit.gov.co/
This program allows the import of goods such as capital goods, raw materials, inputs and spare parts with total or partial exemption or suspension of import duties and taxes. The granting of such benefits will be subject to the fulfillment of export commitments of final goods or services acquired by the holder of the special program.
Free Trade Zones are "Geographically delimited areas within the national territory, where industrial activities of goods and services or commercial activities are developed, under special tax, customs and foreign trade regulations"
Goods entering these zones are considered outside the national customs territory for import and export tax purposes.
To date, Colombia has 17 trade agreements, including free trade agreements and partial scope agreements: CAN (1973, 1994), Panama and Chile (1993), Caricom and Mexico (1995), Cuba (2001), Mercosur (2005), Northern Triangle (2009), EFTA and Canada (2011), USA and Venezuela (2012), European Union (2013) and Korea, Costa Rica, Pacific Alliance (2016) and Israel (2020) (Graph 2). Trade agreements give investors access to a market of more than 1.5 billion consumers.
Due to its privileged geographical location and the network of treaties, Colombia has the advantage of facilitating maritime and air logistics for access to markets in the Americas, Asia, and Europe, making the country a destination that favors foreign and domestic investment.
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