{"id":123696,"date":"2026-01-12T09:37:45","date_gmt":"2026-01-12T09:37:45","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=123696"},"modified":"2026-01-15T10:24:53","modified_gmt":"2026-01-15T10:24:53","slug":"colombia-investing-in","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/colombia-investing-in\/","title":{"rendered":"Colombia: Investing In"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-123696","comparative_guide","type-comparative_guide","status-publish","hentry","guides-investing-in","jurisdictions-colombia"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">DG&amp;A-Abogados<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/01\/dga-logo.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">DG&amp;A-Abogados<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/01\/dga-logo.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Investing In laws and regulations applicable in Colombia<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please briefly describe the current investment climate in the country and the average volume of foreign direct investments (by value in US dollars and by deal number) over the last three years.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In recent years, Colombia has undergone a restructuring in the composition of Foreign Direct Investment (FDI): foreign capital is increasingly directed toward non-mining\/energy sectors\u2014manufacturing, financial and business services, trade, and tourism\u2014rather than the historical predominance of oil and mining. According to the National Government, &#8220;In 2024, the country received a total of USD 14.234 billion in foreign direct investment, of which 75%, that is USD 10.645 billion, arrived in non-mining\/energy sectors, thus growing 3.4% relative to 2023, and its share in the total FDI was 14 percentage points higher compared to the same period, when it represented 61%.&#8221;<\/p>\n<p>The foregoing is explained by the policies adopted by the National Government that commenced its term in August 2022, which, together with a proposed industrialization policy, set the attraction of foreign investment for sustainable development as an objective, while simultaneously working on an energy transition. Thus, among the objectives pursued by the new governmental policies are:<\/p>\n<ul>\n<li>Limiting new hydrocarbon exploration contracts.<\/li>\n<li>Prioritizing renewable sources (solar, wind, hydrogen).<\/li>\n<li>Gradually reducing oil dependency.<\/li>\n<\/ul>\n<p>However, the global economic context (cost of capital, interest rates, international uncertainty) and internal factors (fiscal policy, regulations, changes in the business environment) generate volatility and uncertainty, which may stall medium- and long-term investment decisions, particularly in riskier sectors. Indeed, the perception of these policies may generate a sense of legal insecurity due to regulatory uncertainty and, consequently:<\/p>\n<ul>\n<li>Lack of clarity regarding the continuity of exploration.<\/li>\n<li>Legal insecurity regarding long-term oil policy.<\/li>\n<li>Risk regarding the future profitability of long-cycle projects.<\/li>\n<\/ul>\n<p>In summary, it could be stated, on a positive note, that the current investment climate is relatively attractive thanks to diversification and opportunities in emerging sectors, yet viewed with caution due to macroeconomic risks and regulations, such that the effect is the presence of a more selective FDI.<\/p>\n<p>Regarding the number or volume of operations\/projects registered recently there is no updated national consolidated public series from which a homogeneous &#8220;total number of FDI operations per year&#8221; can be concluded. Many data points are grouped by monetary flow, but not by project count.<\/p>\n<p>However, regarding the volume of FDI in recent years (2022\u20132024), figures from ProColombia indicate that an average of USD 16.2 billion was received annually, as follows:<\/p>\n<p>This means that the average FDI received in that period (2022-2024) stands at a figure close to USD 16.2 billion annually.<\/p>\n<p>If long-term projects and studies are reviewed, they indicate that between 2013 and recent years, Colombia has received an average of 122 &#8220;greenfield&#8221; projects per year. Therefore, although the exact number varies annually and depending on the source, it is possible to estimate that Colombia continues to receive on the order of 100 to 150 new or expanding FDI projects annually, combining &#8220;greenfield,&#8221; expansions, and reinvestments.<\/p>\n<p>An analysis of some figures may lead to the conclusion that the significant flows of 2022 and 2023 reflect a renewed post-pandemic investor interest, while the decline evidenced in 2024 may be attributed to an adjustment resulting from a risk reassessment, a global slowdown, or a lower appetite (whether by investors or due to state policies that disincentivize investment in traditional sectors, i.e., mining and oil).<\/p>\n<p>In fact, FDI has been shifting from the mining-energy sector to sectors that have consequently shown growth in the last three years, such as business services, manufacturing, trade, tourism, and renewable energies.<\/p>\n<p>Indeed, the reduction of FDI in the oil, gas, and mining sectors in Colombia is not an isolated phenomenon, since it responds to global energy market conditions, domestic regulatory changes, and a reconfiguration of investment priorities by both the Government and major international investors.<\/p>\n<p>Nevertheless, the continuity of dozens of new projects annually demonstrates that Colombia remains attractive as a destination for FDI, although the nature of said projects is shifting: they are more targeted, potentially of higher value-added, and less volatile.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the typical forms of Foreign Direct Investments (FDI) in the country: a) greenfield or brownfield projects to build new facilities by foreign companies, b) acquisition of businesses (in asset or stock transactions), c) acquisition of minority interests in existing companies, d) joint ventures, e) other?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Colombia, typical forms of Foreign Direct Investment (FDI) may include:<\/p>\n<ul>\n<li>Greenfield Projects: Through the incorporation of new companies with their own production abroad and investments in new facilities, or via brownfield projects through the expansion, modernization, or updating of existing productive facilities.<\/li>\n<li>Mergers and Acquisitions (M&amp;A): Through transactions with existing companies in Colombia.<\/li>\n<li>Minority Stakes: Through the acquisition of minority equity interests in existing local companies to partner with them without assuming full control.<\/li>\n<li>Joint Ventures: Creating associations between a foreign company and a local company for projects requiring the sharing of risks and technical know-how.<\/li>\n<\/ul>\n<p>Furthermore, other forms of foreign investment may exist, such as franchises, licensing agreements, strategic alliances, or the incorporation of subsidiaries<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are foreign investors allowed to own 100% of a domestic company or business? If not, what is the maximum percentage that a foreign investor can own?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, in Colombia, foreign investors are permitted to own 100% of a domestic company or business. A foreign entity or individual may be a shareholder of a Colombian corporation in any percentage, whether majority or minority.<br \/>\nHowever, there are certain fields with specific restrictions or limitations, such as:<\/p>\n<ul>\n<li>The processing, disposal, and discarding of toxic, hazardous, or radioactive waste not produced within the country.<\/li>\n<li>National defense and security activities.<\/li>\n<li>Concessionary companies for broadcast television services, which may not have foreign investment exceeding 40% of the concessionaire&#8217;s total capital stock.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are foreign investors allowed to invest and hold the same class of stock or other equity securities as domestic shareholders? Is it true for both public and private companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, in Colombia, foreign investors may hold the same class of stock or equity participation as national shareholders, on the understanding that foreign investors are subject to the same rights and obligations as national investors. This applies to both public and private companies.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are domestic businesses organized and managed through domestic companies or primarily offshore companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Colombia, domestic businesses are generally organized and managed through domestic companies incorporated and registered within the country.<br \/>\nA foreign business wishing to operate in Colombia must seek the local legal vehicle that is most suitable for its operation, whether through:<\/p>\n<ol>\n<li>The incorporation of a national company under one of the types of commercial entities offered in Colombia; or<\/li>\n<li>The opening of a foreign branch (\u201c<em>sucursal de sociedad extranjera<\/em>\u201d), which operates pursuant to the decisions of the parent company.<\/li>\n<\/ol>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the forms of domestic companies? Briefly describe the differences.   Which form is preferred by domestic shareholders? Which form is preferred by foreign investors\/shareholders? What are the reasons for foreign shareholders preferring one form over the other?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The following chart describes the main characteristics of the different forms of domestic companies:<\/p>\n<table>\n<tbody>\n<tr>\n<td><\/td>\n<td>Empresa Unipersonal &#8211; (Sole Owner Enterprise)<\/td>\n<td>Limitada &#8211; (Limited Liability Company)<\/td>\n<td>Sociedad An\u00f3nima (S.A.) &#8211; (Corporation)<\/td>\n<td>Sociedad por Acciones Simplificada (S.A.S.) &#8211; (Simplified Corporation)<\/td>\n<td>Sucursal de Sociedad Extranjera &#8211; (Branch Office)<\/td>\n<\/tr>\n<tr>\n<td>Partners<\/td>\n<td>One (1) entrepreneur which can be an individual or a legal entity<\/td>\n<td>Incorporated and operated with at least two (2)<\/td>\n<td>Must have at least five (5) shareholders. No shareholder may own 95% or more of the total number of shares<\/td>\n<td>May have one (1) or more shareholders which can be an individual or a legal entity.<\/td>\n<td>The branch office is a business unit of the foreign corporation, technically it is not a new legal entity<\/td>\n<\/tr>\n<tr>\n<td>Liability<\/td>\n<td>The entrepreneur is liable up to the amount of the capital<\/td>\n<td>The partners are liable for the debts of the company up to the amount of their contribution. The partners are jointly liable for company taxes in proportion to their contribution to the company and the length of time the contribution was made during the tax year. This joint liability does not extend to penalties, interest or inflation adjustments.<\/td>\n<td>The shareholders are liable for the debts of the corporation, up to the amount of their contribution.<\/td>\n<td>The shareholder(s) is\/are liable for the debts of the corporation, up to the amount of their contribution.<\/td>\n<td>The foreign company is jointly liable for the debts of the branch office<\/td>\n<\/tr>\n<tr>\n<td>Legal Representation &amp; Mandatory Appointments<\/td>\n<td>The manager is the legal representative<\/td>\n<td>Limited liability companies are directed and managed by the board of partners, with each partner having as many votes as shares in the company. In all cases, the board of partners may appoint a legal representative to run the company.<\/td>\n<td>Corporations are directed and managed by a legal representative, the board of directors, and the general shareholders assembly.<\/td>\n<td>Directed and managed by a legal representative. A board of directors is optional and may have one (1) or more members, and the general shareholders assembly.<\/td>\n<td>There is an appointment of a general representative (\u201cMandatario General\u201d) of the foreign company to manage the branch and the mandatory appointment of a fiscal auditor.<\/td>\n<\/tr>\n<tr>\n<td>Capital<\/td>\n<td>The capital must be paid in full when the enterprise is incorporated<\/td>\n<td>The company\u2019s capital must be paid in full when the company is incorporated and must be divided into shares of equal value.<\/td>\n<td>At the time of incorporation, at least 50% of the authorized capital must be issued and at least 33% of the issued capital must be paid. The remaining capital must be paid within the following year of the incorporation. Corporations may be financed through the issue and sale of common stock, non-voting preferential stock, or ordinary bonds, compulsory convertible bonds or voluntarily convertible bonds.<\/td>\n<td>At the time of incorporation, at least 50% of the authorized capital must be issued, and at least 33% of the issued capital must be paid. The remaining capital must be paid within the following two (2) years of the incorporation. Corporations may be financed through the issue and sale of common stock, non-voting preferential stock, ordinary bonds, compulsory convertible bonds or voluntarily convertible bonds.<\/td>\n<td>The resolution or act establishing the branch must denote the amount of assigned capital to the Branch<\/td>\n<\/tr>\n<tr>\n<td>Formalities<\/td>\n<td>Incorporated by a Private document to be registered before the Chamber of Commerce, except if assets given as capital require a public deed for its transfer and therefore, must first go to the Public Notary<\/td>\n<td>The public deed and acceptance letters from the legal representative or manager, the members of the Board of Partners must be registered with the Chamber of Commerce of the company\u2019s domicile. The commercial books must be registered with the Chamber of Commerce of the company\u2019s domicile. A tax identification number, NIT, must be obtained. A regular bank account must be opened on the name of the company to deposit the investor\u2019s contribution.<\/td>\n<td>The public deed and acceptance letters from the legal representative or manager, the members of the Board of Directors and the external auditor must be registered with the Chamber of Commerce of the company\u2019s domicile. The commercial books must be registered with the Chamber of Commerce of the company\u2019s domicile. A tax identification number, NIT, must be obtained. A regular bank account must be opened on the name of the company to deposit the investor\u2019s contribution.<\/td>\n<td>Incorporated by a Private document to be registered before the Chamber of Commerce, except if assets given as capital require a public deed for its transfer and therefore, document must be legalized by way of a public deed. External auditor is optional but if chosen, must be registered in the local chamber of commerce. If a board of directors is designated, members must also be registered in the local Chamber of Commerce. The commercial books must be registered with the Chamber of Commerce of the company\u2019s domicile. A tax identification number, NIT, must be obtained. A regular bank account must be opened on the name of the company to deposit the investor\u2019s contribution.<\/td>\n<td>To establish a branch, certificates of good standing and legal representation of the foreign company must be registered, along with the resolution or act verifying the company\u2019s decision to establish a branch in Colombia. This is done by registering the incorporation public deed with the Chamber of Commerce of the chosen domicile in Colombia.<\/td>\n<\/tr>\n<tr>\n<td>Foreign Capital<\/td>\n<td>The foreign investment must be registered with the Central Bank within three months after the investment is made. The bank may extend this period for an additional three months, upon request.<\/td>\n<td>The foreign investment must be registered with the Central Bank within three months after the investment is made. The bank may extend this period for an additional three months, upon request.<\/td>\n<td>The foreign investment must be registered with the Central Bank within three months after the investment is made. The bank may extend this period for an additional three months, upon request.<\/td>\n<td>The foreign investment must be registered with the Central Bank within three months after the investment is made. The bank may extend this period for an additional three months, upon request.<\/td>\n<td>The foreign investment must be registered with the Central Bank within three months after the investment is made. The bank may extend this period for an additional three months, upon request. The supplementary capital to the assigned capital sent to the branch office should be registered during the first three months of the next Fiscal Year.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h4>o Which form is preferred by domestic shareholders?<\/h4>\n<p>The Simplified Stock Company (S.A.S.) is the overwhelming preference for domestic investors, accounting for over 95% of new incorporations in Colombia, according to the Colombian Confederation of Chambers of Commerce.<\/p>\n<h4>o Which form is preferred by foreign investors\/shareholders?<\/h4>\n<p>The Simplified Stock Company (S.A.S.) is also the preferred vehicle for foreign investors.<\/p>\n<p>While the Branch of a Foreign Company (\u201cSucursal\u201d) is sometimes used for specific sectors (like oil &amp; gas or temporary infrastructure contracts) to leverage the parent company&#8217;s experience, the S.A.S. remains the standard choice for general investment.<\/p>\n<p><strong>What are the reasons for foreign shareholders preferring one form over the other?<\/strong><\/p>\n<p>Foreign shareholders prefer the S.A.S. over traditional forms (such as the S.A. or Ltda.) primarily due to its contractual freedom and administrative efficiency. Key reasons include the following:<\/p>\n<ul>\n<li>It allows for a 100% foreign-owned subsidiary with a single shareholder (unlike the S.A. which requires 5, or Ltda. which requires 2).<\/li>\n<li>It can be created via a private document, avoiding the costs and formalities of a Public Deed at a Notary (unless real estate is contributed).<\/li>\n<li>It does not require a Board of Directors (\u201cJunta Directiva\u201d), allowing the foreign parent company to control the subsidiary directly through a single Legal Representative.<\/li>\n<li>It allows shareholders to defer the payment of capital for up to two (2) years.<\/li>\n<li>The company\u2019s term can be indefinite.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the requirements for forming a company? Which governmental entities have to give approvals? What is the process for forming\/incorporating a domestic company? What is a required capitalization for forming\/incorporating a company? How long does it take to form a domestic company? How many shareholders is the company required to have? Is the list of shareholders publicly available?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Colombia, requirements depend on the corporate vehicle that is chosen. However the Simplified Stock Company (\u201cSociedad por Acciones Simplificada \u2013 S.A.S.\u201d) is the most used for foreign investment due to its legal flexibility. Generally, the requirements are: company bylaws; at least one shareholder; company registration before the Chamber of Commercer; and obtaining a Tax ID (\u201cRegistro \u00danico Tributario \u2013 RUT\u201d).<\/p>\n<h4>o Which governmental entities have to give approvals?<\/h4>\n<p>Generally, there is no prior governmental approval to incorporate a standard commercial company as Colombia operates under a registration regime, rather than one that issues authorizations. Incorporation documents are reviewed and registered by the Chamber of Commerce.<\/p>\n<p>However, if a company operates in regulated economic sectors, like a financial institutions, insurance company, private security or health services, prior authorization or subsequent licensing from Superintendencies (e.g. Superintendence of Finance) or even Ministries will be required.<\/p>\n<h4>o What is the process for forming\/incorporating a domestic company?<\/h4>\n<p>In Colombia, this is a streamlined process that can be often completed through digital means. The standard steps are the following:<\/p>\n<ol>\n<li>Drafting bylaws: Creating the incorporation document.<\/li>\n<li>Registration: Filing the bylaws and supporting documents with the local Chamber of Commerce.<\/li>\n<li>Finalizing the company\u2019s Tax ID: Completing the formalities with the Tax Authority (\u201cDirecci\u00f3n de Impuestos y Aduanas Nacionales \u2013 DIAN\u201d) to obtain a definitive tax ID and its corresponding digital signature.<\/li>\n<li>Bank account opening: Operning a corporate bank account in a Colombian commercial bank.<\/li>\n<li>Foreign investment registration: This is a step for foreign investors. Funds must be channeled through the foreign exchange market, and the investment must be registered with the Colombian Central Bank (\u201cBanco de la Rep\u00fablica\u201d), typically under Form No. 4.<\/li>\n<\/ol>\n<h4>o What is a required capitalization for forming\/incorporating a company?<\/h4>\n<p>For the S.A.S. and the Limited Liability (\u201cSociedad Limitada \u2013 Ltda.\u201d), there is no minimum capital requirement. The shareholders can incorporate the company with any amount they consider appropriate for the business operation.<br \/>\nRegarding the payment terms for an S.A.S., the following must be considered:<\/p>\n<ul>\n<li>Authorized Capital: The theoretical limit established in the bylaws.<\/li>\n<li>Subscribed Capital: The portion shareholders have committed to pay.<\/li>\n<li>Paid-in Capital: The amount that has effectively been paid. In an S.A.S., shareholders have up to two (2) years to pay the subscribed capital.<\/li>\n<\/ul>\n<h4>o How long does it take to form a domestic company?<\/h4>\n<p>The formal registration with the Chamber of Commerce is very efficient, typically taking between 1 to 5 business days, depending on whether the process is done online or in person.<\/p>\n<p>However, investors should budged additional time (2 to 4 weeks) for compliance procedures required by Colombian banks to open the corporate bank account, which is necessary to monetize the foreign currency and to register the foreign investment.<\/p>\n<h4>o How many shareholders is the company required to have?<\/h4>\n<p>For a Simplified Stock Company (S.A.S.) there is a minimum of one (1) shareholder and no maximum limit. This single shareholder capability makes is the preferred vehicle for holding structures.<\/p>\n<p>For a Corporation (\u201cSociedad An\u00f3nima \u2013 S.A.\u201d) there is a minimum of five (5) shareholders.<\/p>\n<p>For a Limited Liability Company (\u201cLtda\u201d) there is a minimum of two (2) and a maximum of twenty-five (25) partners.<\/p>\n<h4>o Is the list of shareholders publicly available?<\/h4>\n<p>It will depend on the corporate vehicle that is chosen.<\/p>\n<p>For Stock Companies (\u201cS.A.S.\u201d and \u201cS.A.\u201d), generally no, the shareholders\u2019 ledger is a private company book. A Certificate of Existence and Legal Representation issued by the Chamber of Commerce identifies the officers (Legal Representatives, Board Members) and statutory auditors but does not list current shareholders.<\/p>\n<p>For Limited Liability Companies (\u201cLtda.\u201d), yes, the partners\u2019 names and their ownership percentages are recorded in the public commercial registry.<\/p>\n<p>Note: While not public to the general population, companies must report the Ultimate Beneficial Owners (UBO) to the Tax Authority (\u201cDIAN\u201d) through the Registry of Ultimate Beneficial Owners (\u201cRegistro \u00danico de Beneficiarios Finales \u2013 RUB\u201d).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the requirements and necessary governmental approvals for a foreign investor acquiring shares in a private company? What about for an acquisition of assets?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For the acquisition of shares, the following is the most efficient method.<\/p>\n<p><strong>Approvals:<\/strong> Usually, no prior governmental approval is required. Nevertheless there are two exceptions (1) if the transaction results in a business combination exceeding certain financial thresholds (assets or operating income) and market share conditions, it must be notified to and approved by the Superintendence of Industry and Commerce (\u201cSuperintendencia de Industria y Comercio \u2013 SIC\u201d) prior to closing; and (2) acquisitions in financial, insurance, or health sectores may require approval from the relevant Superintendence.<\/p>\n<p><strong>\u2022 Requirements.<\/strong><\/p>\n<p>A. Private agreement: A Share Purchase Agreement (SPA)<\/p>\n<p>B. Corporate record: The transfer is perfected upon registration in the company\u2019s stock ledger (\u201cLibro de accionistas\u201d). No public deed or Chamber of Commercer registration is needed for the transfer itself (unless there is a bylaws reform).<\/p>\n<p>C. Foreign exchange: The foreign investor must register the investment with the Colombian Central Bank. If acquiring from another foreigner, it is called a Substitution of Investment (\u201cSustituci\u00f3n de Inversi\u00f3n Extranjera\u201d); if acquiring from a local, it is a new registration.<\/p>\n<p>For the acquisition of assets, there is a more formal process as each asset class follows its own transfer rules.<\/p>\n<p>A. Approvals: Similater to share deals, antitrust approval through the Superintendence of Industry and Commerce (SIC) applies if the assets constitute a functional line of business or a going concern and thresholds are met.<\/p>\n<p>B. Requirements.<\/p>\n<p>i. For Real Estate: Requires a Public Deed before a Notary and registration with the Public Instruments Registry Office.<\/p>\n<p>ii. Commercial Establishment (\u201cEstablecimiento de comercio\u201d): If acquiring the ongoing business as a whole (Block sale), the transfer deed must be registered with the Chamber of Commerce.<\/p>\n<p>iii. Creditor protection: In a block sale of a commercial establishment, the buyer and seller remain jointly and severally liable for the business\u2019s obligations for two months following the registration.<\/p>\n<p>iv. Tax: VAT and other local taxes may apply to the transfer of specific assets, unlike share transfers which are generally VAT exempt.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does a foreign investor need approval to acquire shares in a public company on a domestic stock market? What about acquiring shares of a public company in a direct (private) transaction from another shareholder?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For acquisitions on the stock market, generally, there is no prior governmental approval for foreign investor to acquire shares of a listed company, provided the acquisition does not trigger a mandatory tender offer threshold.<\/p>\n<p>Within a foreign portfolio investment, the investor must appoint a local administrator (typically through a trust company or stockbroker) to manage the tax and foreign exchange compliance.<\/p>\n<p>For a mandatory tender offer, if the investor intends to acquire 25% or more of the voting shares of a listed company (or if a current shareholder holding over 25% intends to increase their stake by more thatn 5%), they must launch a public tender offer (\u201cOferta p\u00fablica de adquisici\u00f3n \u2013 OPA\u201d). This offer requires prior authorization from the Superintendence of Finance (SFC).<\/p>\n<p>Also, if the acquisition grants control or significant influence and meets the financial thresholds, it requires pre-clearance from the Superintendence of Industry and Commerce (SIC).<\/p>\n<p>For direct transactions (private), generally, no, there is no governmental approval. Colombian securities regulation adheres to the \u201cConcentration principle\u201d, which mandates that the purchase and sale of shares listed on the stock exchange must be executed through the transactional systems of the Colombian Stock Exchanges (\u201cBolsa de Valores de Colombia \u2013 BVC\u201d) and through a licensed stockbroker.<\/p>\n<p>The following are exceptions to the above in very specific scenarios:<\/p>\n<ul>\n<li>Transfers between the same beneficial owner.<\/li>\n<li>Inheritance or liquidation of marital societies.<\/li>\n<li>Mergers or spin-offs.<\/li>\n<li>Payment in kind (\u201cDaci\u00f3n en pago\u201d).<\/li>\n<\/ul>\n<p>A direct private sale between two independent parties to acquire a listed company\u2019s shares is generally prohibited if it bypasses the stock exchange mechanism. Even large block sales negotiated privately must typically be executed and recorded through the exchange systems (often as \u201ccross operations\u201d), subject to price bandwidth restrictions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a requirement for a mandatory tender offer if an investor acquired a certain percentage of shares of a public company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, Colombia has a strict mandatory tender offer (\u201cOferta p\u00fablica de adquisici\u00f3n \u2013 OPA\u201d) regime, primarily governed by National Decree 2555 of 2010.<\/p>\n<p>A mandatory OPA is triggered in the following scenarios:<\/p>\n<p>A. Beneficial Ownership Threshold (25%): Any investor who intends to acquire beneficial ownership of 25% or more of the outstanding voting shares of a listed company must launch an OPA. This applies whether the acquisition is made directly or indirectly through related parties.<\/p>\n<p>B. Subsequent acquisitions: If an investor already holds 25% or more of the voting shares and intends to increase their participation by more than 5%, a new OPA is required for that additional percentage.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the approval process for building a new facility in the country (in a greenfield or brownfield project)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The process is decentralized, handled by Urban Curators (\u201cCuradores Urbanos\u201d) in major cities or Municipal Planning Offices elsewhere.<br \/>\nPrior to licensing, investors must obtain:<\/p>\n<ol>\n<li>Land Use Certificate (\u201cUso de Suelo\u201d) to confirm zoning compliance.<\/li>\n<li>Utility Availability Letter (\u201cDisponibilidad de Servicios\u201d) from local providers (water, energy).<\/li>\n<\/ol>\n<p>Licensing Process:<\/p>\n<ul>\n<li>Greenfield: Requires an Urbanization License (for land development\/roads) followed by a Construction License for &#8220;New Work\u201d (\u201cObra Nueva\u201d).<\/li>\n<li>Brownfield: Requires a Construction License under modalities such as Adaptation (change of use), Expansion, or Structural Reinforcement (seismic compliance).<\/li>\n<\/ul>\n<p>While full environmental licenses are rare for standard facilities, specific permits (emissions, discharge) from Regional Autonomous Corporations (CAR) are often required. The statutory approval time is 45 business days, though complex projects practically take 3\u20136 months.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can an investor do a transaction in the country in any currency or only in domestic currency? a) Is there an approval requirement (e.g. through Central Bank or another governmental agency) to use foreign currency in the country to pay: i. in an acquisition, or, ii. to pay to contractors, or, iii. to pay salaries of employees? b) Is there a limit on the amount of foreign currency in any transaction or series of related transactions? i. Is there an approval requirement and a limit on how much foreign currency a foreign investor can transfer into the country? ii. Is there an approval requirement and a limit on how much domestic currency a foreign investor can buy in the country? iii. Can an investor buy domestic currency outside of the country and transfer it into the country to pay for an acquisition or to third parties for goods or services or to pay salaries of employees?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Transactions between Colombian residents (including foreign-owned subsidiaries) must generally be executed in Colombian legal currency (Pesos).<\/p>\n<p>Exceptions: Payment in foreign currency is permitted only if:<\/p>\n<ol>\n<li>Funds are channeled through a Compensation Account (\u201cCuenta de Compensaci\u00f3n\u201d) registered with the Central Bank;<\/li>\n<li>The transaction qualifies as a designated Foreign Exchange Operation; or<\/li>\n<li>The entity operates in the Oil, Gas, or Mining sectors (special regime using self-generated currency).<\/li>\n<\/ol>\n<p>Settlement: Obligations denominated in foreign currency that do not fall under these exceptions must be settled in Pesos at the applicable market exchange rate (\u201cTasa representativa de mercado \u2013 TRM\u201d).<\/p>\n<h4>o Is there an approval requirement (e.g. through Central Bank or another governmental agency) to use foreign currency in the country to pay:<\/h4>\n<p><strong>in an acquisition, or<\/strong><\/p>\n<p>No, prior approval is not required. Colombia&#8217;s foreign exchange regime is based on the freedom of currency negotiation.<\/p>\n<p>However, for acquisitions by non-residents, the payment constitutes a foreign capital investment and must be:<\/p>\n<ol>\n<li>Channeled through the foreign exchange market (via a local Intermediary or a registered Offshore Compensation Account).<\/li>\n<li>Reported via an Exchange Declaration (\u201cDeclaraci\u00f3n de Cambi\u201do) for automatic registration purposes, but this is a reporting obligation, not an authorization request.<\/li>\n<\/ol>\n<p><strong>to pay to contractors, or<\/strong><\/p>\n<p>Payment to contractors generally implies that the payer is conducting permanent activities in Colombia. In these cases, foreign companies must operate through a company or a branch (sucursal) incorporated in the country, which is obliged to conduct its transactions with other Colombian parties in Colombian legal currency. Therefore, payments to resident contractors must be made in Pesos, barring the exceptions previously mentioned.<\/p>\n<p><strong>to pay salaries of employees?<\/strong><\/p>\n<p>As with payments to contractors, the payment of salaries may indicate that the employer is conducting permanent activities in Colombia. In these events, it is required that foreign investors operate through a company incorporated in the country, which must conduct its operations with other local parties in Colombian currency<\/p>\n<h4>\u00a0Is there a limit on the amount of foreign currency in any transaction or series of related transactions?<\/h4>\n<p>There is no general limit established in foreign exchange regulations regarding the amount of foreign currency in a transaction or series of transactions. In Colombia, the foreign exchange regime is governed by the freedom of currency negotiation and the free convertibility of currency.<\/p>\n<p><strong>Is there an approval requirement and a limit on how much foreign currency a foreign investor can transfer into the country?<\/strong><\/p>\n<p>There is no approval requirement nor a specific limit regarding the amount of foreign currency an investor may transfer into the country. If the inflow is made in cash, a corresponding declaration must be submitted in accordance with the law.<\/p>\n<p><strong>Is there an approval requirement and a limit on how much domestic currency a foreign investor can buy in the country?<\/strong><\/p>\n<p>No, there is not a requirement nor a limit.<\/p>\n<p><strong>Can an investor buy domestic currency outside of the country and transfer it into the country to pay for an acquisition or to third parties for goods or services or to pay salaries of employees?<\/strong><\/p>\n<p>It is not possible to acquire &#8216;Colombian Pesos&#8217; abroad to subsequently transfer them to the country for the purpose of paying for acquisitions, goods, services, or salaries. The Colombian Peso is not a currency of free international circulation, nor can it be held in bank accounts outside the country (offshore). For this reason, foreign investors typically send foreign currency to their entities in Colombia, which perform the conversion to Pesos within the national territory to effect payments and conduct their activities.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there approval requirements for a foreign investor for transferring domestic currency or foreign currency out of the country? Whose approval is required? How long does it take to get the approval? Are there limitations on the amount of foreign or domestic currency that can be transferred out of the country? Is the approval required for each transfer or can it be granted for all future transfers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, in Colombia there is no requirement for government approval to transfer money out of the country. It is not necessary to request permission from an official to do so.<\/p>\n<h4>o Whose approval is required?<\/h4>\n<p>From no entity whatsoever. The system is one of registration, not authorization. Any person may transfer funds abroad provided they comply with the reporting requirements to the Central Bank (\u201cBanco de la Rep\u00fablica\u201d).<\/p>\n<h4>o How long does it take to get the approval?<\/h4>\n<p>It is immediate. The procedure is executed at the very moment the transfer is ordered through a Foreign Exchange Market Intermediary (\u201cIntermediario del Mercado Cambiario \u2013 IMC\u201d), typically a bank. It is only necessary to complete a form.<\/p>\n<h4>o Are there limitations on the amount of foreign or domestic currency that can be transferred out of the country?<\/h4>\n<p>No. One may transfer any amount required.<\/p>\n<h4>o Is the approval required for each transfer or can it be granted for all future transfers?<\/h4>\n<p>As this is a reporting requirement rather than an approval, the form must be submitted each time a transfer is made. There is no single permit, form, or registration for all future remittances. Each operation must be reported individually.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a tax or duty on foreign currency conversion?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The act of exchanging currency does not bear a direct tax; however, the financial operation enabling it is heavily taxed. If, to convert Pesos to Dollars, funds must be transferred from one bank account to another, that action immediately triggers the GMF (Financial Movements Tax or 4&#215;1000).<\/p>\n<p>Additionally, if the purpose of the conversion is to make a payment abroad, income tax applies via withholding at source<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a tax or duty on bringing foreign or domestic currency into the country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As such, there is no tax or tariff for transferring money into the country. However, the inflow of foreign currency may trigger tax liabilities depending on the nature of the funds, under the worldwide income principle.<\/p>\n<p>If the transferred funds correspond to income or gain (such as fees, sales, or profits), they are subject to income tax, which must be added to the taxable base for tax calculation purposes. On the other hand, if the funds enter as an external credit (loan) to finance imports or exports, they could be exempt from income tax under certain conditions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a difference in tax treatment between acquisition of assets or shares (e.g. a stamp duty)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, particularly regarding the application of Stamp Tax.<\/p>\n<p>For the acquisition of shares, Stamp Tax accrues if the value of the private document exceeds 6,000 UVT. If the operation exceeds this limit and the parties meet the income or net worth requirements, the tax must be paid on the value of the contract. It is important to clarify that the rate of this tax shall be reduced to 0% as of January 1, 2026.<\/p>\n<p>In contrast, for the acquisition of real estate, the tax only accrues if the value of the property is equal to or greater than 20,000 UVT. Furthermore, the calculation is progressive: the first 20,000 UVT have a 0% rate, and the tax is paid only on the value exceeding that amount.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">When is a stamp duty required to be paid?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The time of payment depends on the type of document and whether the contract value is fixed or variable, but it operates primarily through the withholding at source mechanism.<\/p>\n<p>The general rule is that the obligation arises immediately upon signing, accepting, or issuing the document. If the contract has a determined value, the tax is calculated and withheld from that instant. The withholding agent deducts the value and declares it to the Tax Authority (DIAN).<\/p>\n<p>Conversely, if the transaction is effected via Public Deed, the tax accrues and is paid at the Notary&#8217;s office at the moment the document is formalized as a Public Deed.<\/p>\n<p>However, if the contract does not have a determined price from the outset, the tax is not paid upfront. Instead, it is paid each time a payment or credit to account (\u201cabono en cuenta\u201d) is made. It is a progressive payment throughout the life of the contract.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are shares in private domestic companies easily transferable? Can the shares be held outside of the home jurisdiction? What approval does a foreign investor need to transfer shares to another foreign or domestic shareholder? Are changes in shareholding publicly reported or publicly available?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Equity interests in private companies may be transferred without difficulty, although their transmission is subject both to the legal rules applicable to the specific corporate type and to the restrictions and procedures provided for in the company&#8217;s bylaws. These provisions may include rights of first refusal (\u201cderechos de preferencia\u201d) in favor of existing partners, internal approval requirements, or specific registration formalities.<\/p>\n<h4>o Can the shares be held outside of the home jurisdiction?<\/h4>\n<p>In Colombia, shares may be owned by individuals or entities domiciled outside the country.<\/p>\n<h4>o What approval does a foreign investor need to transfer shares to another foreign or domestic shareholder?<\/h4>\n<p>A foreign investor does not need special approval to transfer their shares to another investor, whether foreign or national. They must solely comply with the regulations of the corporate type and applicable bylaw provisions, such as rights of first refusal or internal authorizations.<br \/>\nAdditionally, it must be noted that there are sectors expressly restricted by law, such as national defense and security, the handling of imported toxic waste, media, and private security services, wherein foreign participation is limited<\/p>\n<h4>o Are changes in shareholding publicly reported or publicly available?<\/h4>\n<p>Changes in shareholding composition are not reported nor are they publicly accessible, as they are only recorded in the Shareholders&#8217; Ledger (\u201cLibro de Accionistas\u201d), which is not public. In special cases, such as companies listed on the stock exchange or regulated sectors, disclosure obligations before competent authorities exist. Likewise, control authorities may make certain requests based on the law to verify compliance with applicable regulations<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a mandatory FDI filing? With which agency is it required to be made? How long does it take to obtain an FDI approval? Under what circumstances is the mandatory FDI filing required to be made? If a mandatory filing is not required, can a transaction be reviewed by a governmental authority and be blocked? If a transaction is outside of the home jurisdiction (e.g. a global transaction where shares of a foreign incorporated parent company are being bought by another foreign company, but the parent company that\u2019s been acquired has a subsidiary in your jurisdiction), could such a transaction trigger a mandatory FDI filing in your jurisdiction? Can a governmental authority in such a transaction prohibit the indirect transfer of control of the subsidiary?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. In Colombia, there is a mandatory registration of Foreign Direct Investment (FDI) with the Central Bank. It is not a permit, but a necessary procedure to exercise foreign exchange rights. Once registered, the investment allows the investor to reinvest or remit profits, repatriate capital, and enjoy equal treatment compared to national investors<\/p>\n<h4>o With which agency is it required to be made?<\/h4>\n<p>The registration of Foreign Direct Investment is mandatory before the Central Bank.<\/p>\n<h4>o How long does it take to obtain an FDI approval?<\/h4>\n<p>There is no defined timeframe for approval because it is not a prior approval but a registration. (Note: While there is no waiting period for approval, there are strict regulatory deadlines to register the funds after they enter the country to avoid fines).<\/p>\n<h4>o Under what circumstances is the mandatory FDI filing required to be made?<\/h4>\n<p>The registration of Foreign Direct Investment is mandatory when a non-resident acquires assets in Colombia. All investment in foreign currency must be channeled through authorized intermediaries or compensation accounts and reported to the Central Bank. Exchange market intermediaries include, for example, banks, financial corporations, and financing companies, among others.<\/p>\n<h4>o If a mandatory filing is not required, can a transaction be reviewed by a governmental authority and be blocked?<\/h4>\n<p>Yes. Even if there is no mandatory procedure applied to the transaction, authorities may review it if it infringes relevant norms. This occurs, for example, when the operation generates anti-competitive or monopoly effects, involves regulated activities without prior authorization (such as financial activities), or breaches essential legal requirements<\/p>\n<h4>o If a transaction is outside of the home jurisdiction (e.g. a global transaction where shares of a foreign incorporated parent company are being bought by another foreign company, but the parent company that\u2019s been acquired has a subsidiary in your jurisdiction, could such a transaction trigger a mandatory FDI filing in your jurisdiction?<\/h4>\n<p>If the company acquired abroad is not a direct shareholder of the Colombian subsidiary, the obligation to register FDI before the Central Bank does not arise. However, that operation may generate corporate obligations, such as the update of the &#8216;Situation of Control&#8217; before Colombian agencies.<br \/>\n\uf0d8 Can a governmental authority in such a transaction prohibit the indirect transfer of control of the subsidiary?<br \/>\nColombian authorities may prohibit or condition the indirect transfer of control when the operation affects free competition, involves regulated sectors requiring prior authorization, or breaches legal obligations<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are typical exit transactions for foreign companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The most common exit strategies for foreign companies in Colombia are the liquidation of the company or branch, a merger with a foreign company that absorbs the Colombian company, and the total or partial sale of the Colombian company&#8217;s equity participation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do private companies prefer to pursue an IPO? i. on a domestic stock market, or ii. on a foreign stock market? iii. If foreign, which one?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Colombia, it is not common for private companies to conduct an &#8216;IPO&#8217; due to the size of the local market. In practice, private sale to investors or capital funds is the most used option.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do M&amp;A\/Investment\/JV agreements typically provide for dispute resolution in domestic courts or through international arbitration?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>International Arbitration is typically preferred, particularly in cross-border contexts, while domestic courts are increasingly less favored for these transactions.<\/p>\n<p>Arbitration is the dominant forum due to:<\/p>\n<ul>\n<li>Neutrality: Avoiding perceived bias in local courts.<\/li>\n<li>Confidentiality: Keeping sensitive business data private.<\/li>\n<li>Enforceability: Easier execution of awards globally.<\/li>\n<li>Expertise &amp; Control: The ability to select specialized arbitrators and define procedural rules (e.g., evidence discovery).<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How long does a typical contract dispute case take in domestic courts for a final resolution?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Domestic Courts: Approximately 1,288 days (nearly 3.5 years), according to World Bank data (2018).<\/p>\n<p>Due to this significant delay and judicial congestion in the Ordinary Jurisdiction, parties frequently opt for Arbitration, which reduces the resolution time to approximately 500 days.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are domestic courts reliable in enforcing foreign investors rights under agreements and under the law?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Although Colombia possesses legal frameworks such as Free Trade Agreements (FTAs) and Bilateral Investment Treaties (BITs) wherein the rights of foreign investors are protected, in practice, investors prefer to resort to other alternative mechanisms, such as International Arbitration, to enforce their rights rather than to Colombian courts.<\/p>\n<p>Therefore, while domestic courts are a valid option, the existence of international arbitration as the preferred mechanism indicates a perception of risk or limitation regarding the reliability of the Colombian judicial system for the protection of foreign investments.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there instances of abuse of foreign investors? How are cases of investor abuse handled?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>While Colombia generally affords equal treatment to investors, disputes have occurred, primarily driven by regulatory changes or administrative decisions rather than systemic abuse. Between 2016 and March 2023, only 21 international claims were filed by foreign investors.<\/p>\n<p>Investors typically resolve these disputes through:<\/p>\n<ol>\n<li>Negotiation: Seeking amicable solutions with the State before escalating.<\/li>\n<li>International Arbitration: If treaty protections (for example, Fair and Equitable Treatment) are violated, investors file claims before tribunals like ICSID, pursuant to applicable Free Trade Agreements (FTAs) or Bilateral Investment Treaties (BITs).<\/li>\n<\/ol>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are international arbitral awards recognized and enforced in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Colombia is a State Party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Likewise, Colombian legislation establishes that to recognize an international award, it is necessary to verify compliance with three requirements:<\/p>\n<ol>\n<li>File the request before the competent authority, whether the Supreme Court of Justice (Corte Suprema de Justicia) or the Council of State (Consejo de Estado), depending on the subject matter of the award.<\/li>\n<li>Submit a copy and the original of the award; the authority may require its translation into Spanish if it was drafted in another language.<\/li>\n<li>Ensure no grounds exist to deny recognition as provided in Article V of the New York Convention.<\/li>\n<\/ol>\n<p>Once the procedure for recognition (Exequatur) is completed, the awards may be enforced after the corresponding Court has recognized them. The time for recognition may take up to 10 months, and for its enforceability, both at the national and foreign levels, it may last from 1 to 3 years.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there foreign investment protection treaties in place between your country and major other countries?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>To date, Colombia has eight Bilateral Investment Treaties (BITs) and nine Free Trade Agreements (FTAs) in force. The FTAs, which are &#8216;trade agreements&#8217;, include an investment chapter that incorporates ISDS (Investor-State Dispute Settlement). Both the BITs and the provisions of said investment chapters within the FTAs may be utilized by foreign investors to protect their investment.<\/p>\n<p>Colombia&#8217;s BITs currently in force are the following:<\/p>\n<table>\n<tbody>\n<tr>\n<td>BIT with<\/td>\n<td>Effective Date<\/td>\n<\/tr>\n<tr>\n<td>Peru<\/td>\n<td>December 30, 2010<\/td>\n<\/tr>\n<tr>\n<td>Spain<\/td>\n<td>September 22, 2007<\/td>\n<\/tr>\n<tr>\n<td>Switzerland<\/td>\n<td>October 6, 2010<\/td>\n<\/tr>\n<tr>\n<td>India<\/td>\n<td>July 12, 2012<\/td>\n<\/tr>\n<tr>\n<td>China<\/td>\n<td>July 2, 2013<\/td>\n<\/tr>\n<tr>\n<td>France<\/td>\n<td>October 12, 2020<\/td>\n<\/tr>\n<tr>\n<td>Japan<\/td>\n<td>September 11, 2015<\/td>\n<\/tr>\n<tr>\n<td>Great Britain<\/td>\n<td>October 10, 2014<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Trade Agreements with investment protection chapters:<\/p>\n<table>\n<tbody>\n<tr>\n<td>Trade Agreement<\/td>\n<td>Effective Date<\/td>\n<\/tr>\n<tr>\n<td>FTA with Israel<\/td>\n<td>2020<\/td>\n<\/tr>\n<tr>\n<td>Pacific Alliance<\/td>\n<td>2016<\/td>\n<\/tr>\n<tr>\n<td>FTA with Costa Rica<\/td>\n<td>2016<\/td>\n<\/tr>\n<tr>\n<td>FTA with South Korea<\/td>\n<td>2016<\/td>\n<\/tr>\n<tr>\n<td>FTA with the U.S. of America<\/td>\n<td>2012<\/td>\n<\/tr>\n<tr>\n<td>FTA with Canada<\/td>\n<td>2011<\/td>\n<\/tr>\n<tr>\n<td>FTA with El Salvador, Guatemala &amp; Honduras<\/td>\n<td>2010<\/td>\n<\/tr>\n<tr>\n<td>FTA with Chile<\/td>\n<td>2009<\/td>\n<\/tr>\n<tr>\n<td>FTA with Mexico &amp; Venezuela<\/td>\n<td>1995<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">7852<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/123696","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=123696"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}