Guide to invest in Bogota 2015

Transcription

GUÍA PARA INVERTIR EN BOGOTÁ
2015
Guide to
INVEST IN
BOGOTA
2015
1
GUIDE TO
INVEST IN
BOGOTA
2015
Original texts
Araújo Ibarra & Asociados
Editing
Invest in Bogota
Design and Layout
Invest in Bogota
2015
GUÍA PARA INVERTIR EN BOGOTÁ
2015
CONTENTS
4.
I. IMMIGRATION REGIME
7.
II. CREATING A COMPANY
29.
V. FOREIGN INVESTMENT IN
COLOMBIA
a. Countries whose citizens do not
require a temporary visitor’s visa.
b. Types of visas.
c. Visa application process.
d. Institutions where visa
applications can be filed.
e. Foreigner’s identity card.
f. Applicable legal framework.
15.
III BANKING RELATIONS
a. Types of corporate entities.
b. Procedure for establishing a
company and subsequent
activities.
c. Branch of a foreign company.
d. Investor assistance programs.
e. Related institutions.
f. Applicable legal framework.
19.
IV. TAX REGIME
a. Foreign investment registration.
b. Foreign exchange rights granted
by the registry of the investment.
c. Types of investment.
d. Types of foreign investment in
Colombia.
e. Kinds of Colombian investment in
foreign countries.
f. Principles of the foreign investment
regime.
g. Applicable legal framework.
38.
VII. VII. FOREIGN EXCHANGE
REGIME
a. Introduction to the Colombian
financial system.
b. Related entities.
c. Bank accounts.
d. References.
a. National taxes.
b. Departmental taxes.
c. Municipal taxes.
d. References.
a. Relevant concepts.
b. Sanctions.
c. Related entities.
d. Applicable legal framework.
33.
VI. INCENTIVES TO FOREIGN
INVESTMENT
a. Duty-free zones regime.
b. Fiscal incentives.
c. Plan Vallejo.
d. Applicable legal framework.
41.
VIII. PURCHASE AND LEASING
OF REAL ESTATE
a. General information on purchase
of real estate.
b. General information on leasing
of real estate.
48.
IX. LABOR REGIME
3
GUIDE TO INVEST IN BOGOTA
2015
IMMIGRATION REGIME
a.
COUNTRIES WHOSE CITIZENS DO NOT REQUIRE
A TEMPORARY VISITOR’S VISA
The starting point for people who intend to enter Colombia without wanting
to remain in the country but whose aim is to engage in sports or cultural
activities; seminars, conferences, symposiums or exhibitions; courses,
studies (that do not surpass an academic semester); medical treatment; job
interviews and the establishment of commercial or corporative contacts is to
verify whether they belong to a country whose citizens are not required to
have a temporary visitor’s visa.
I.
IMMIGRATION REGIME
This chapter describes the policies
laid down by the Ministry of Foreign
Relations, which regulate the entrance
and departure of foreigners visiting the
country. It lists the countries whose
citizens do not require a visitor’s visa to
enter Colombia, as well as the different
categories of current visas and the
procedures required for those who
wish to undertake a commercial or
business activity in the country.
One should bear in mind that in these cases there must be no working link
with Colombia and permission to enter the country is granted for up to 90
calendar days from the entry date on the immigration stamp in the passport,
within the same year.
At the time of publication of this Guide, the country whose
citizens do not require a visitor’s visa to enter Colombia are:
Andorra, Antigua and Barbuda, Argentina, Australia, Austria, Bahamas,
Barbados, Belgium, Belize, Bhutan, Bolivia, Brazil, Brunei Darussalam,
Canada, Chile, Costa Rica, Croatia, Cyprus Czech Republic, Denmark,
Dominica, Dominican Republic, Ecuador, El Salvador, Estonia, Fiji, Finland,
France, Germany, Granada, Greece, Guatemala, Guyana, Honduras, Hong
Kong, Hungary, Iceland, Indonesia, Ireland, Israel, Italy Jamaica, Japan,
Latvia, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Marshall
Islands, Mexico, Micronesia, Monaco, Netherlands, New Zealand, Norway,
Palau, Panama, Papua New Guinea, Paraguay, Peru, Philippines Poland,
Portugal, Romania, Russian Federation, Saint Kitts and Nevis, Saint Vincent
and the Grenadines, Samoa, San Marino, Singapore, Slovakia, Slovenia,
Solomon Islands, South Africa, South Korea, Spain, St. Lucia, Suriname,
Sweden, Switzerland, Taiwan, Trinidad and Tobago, Turkey, United Arab
Emirates, United Kingdom of Great Britain and Northern Ireland, Uruguay,
USA, Vatican City, Venezuela.
b.
TYPES OF VISAS
Depending on the interests of a foreign visitor to the country, there are
different classes of visas, which allow them to enter the country.
Table 1.1 shows the NE Business Visas that can be issued by the Ministry
of Foreign Relations.
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IMMIGRATION REGIME
For further information on the different classes of visas and the
rates charged at the time of application, one may consult the
official website of the Ministry of Foreign Relations
Table 1.1
Visa Categories
TYPE OF VISA
NE-1
Business Visa
DESCRIPTION
CONDITIONS
PRICE *
For individuals interested in
conducting commercial and
business activities, fostering
economic exchange, investing
and creating a company.
May be issued for up to three
(3) years for multiple entries
and for stays of up to one
hundred and eighty (180)
continuous or discontinuous
days per year.
NE-2
Business Visa
Individuals interested in
conducting business under the
context of Agreements and/or
Treaties (FTA and APPRI, Pacific
Alliance, etc.).
May be issued for up to four
(4) years for multiple reentries
and authorizes a stay of
up to two (2) continuous
or discontinuous years
throughout the period.
Study:
USD 50
Visa:
USD 220
NE-3
Business Visa
For heads or representatives
of a government foreign trade
desks to promote economic
or trade exchanges.
It may be issued for up to
four (4) years for multiple
reentries and authorizes
a stay of up to four (4)
continuous or discontinuous
years throughout the period.
Study:
USD 50
Visa:
USD 270
NE-4
Business Visa
For individuals who accredit
their status as: President or
higher management in a
multinational company, with
the purpose of investing and
establishing a company.
May be issued for up to five
(5) years for multiple
re-entries and for stays of
up to one hundred and
eighty (180) continuous or
discontinuous days per year.
Study:
USD 50
Visa:
USD 270
Study:
USD 50
Visa:
USD 370
* Price as of the date of publication of this guide.
The above visas, except for the NE-1 may have as beneficiaries the spouse,
permanent partner, parent and children under twenty-five (25) who are financially
dependent on the titleholder, with proof of the bond or relationship, or economic
dependence. When the son or daughter over twenty-five (25) is disabled and
unable to fend for her/himself, she/he will be holder of the visa as a beneficiary.
The occupation of such beneficiaries will be the home or as a student, no others
are authorized.
http://www.cancilleria.gov.co/services/colombia/visas
or the Colombian consulate nearest to where you live.
c.
VISA APPLICATION PROCESS
Visas are granted by the Colombian Ministry of Foreign Relations, either directly or
through Colombian consulates in other countries, although the first application
must be generally made outside of the country. The visa application must be
directly processed by the foreigner or the legal entity for whom the foreigner
works or his or her legal representative. It may also be handled by a proxy, who
must personally present her or himself at the respective office responsible for
issuing visas, with her or his identity document.
The general requirements for applying for a visa are as follows:
• Present passport or travel document, issued by an Authority or State
recognized by the Colombian Government, valid for at least one hundred
and eighty (180) days, in good condition and with at least two (2) blank pages.
Without prejudice to the provisions of current international treaties and
instruments, travel documents issued by the Organization of American States
(Organización de Estados Americanos – OEA), accepted by the Colombian
State, will be deemed valid.
• Attach copy of the main page of the valid passport with the personal data of
the bearer.
• Process the visa application electronically or personally before the issuing
office. In the case of artistic, sports or cultural groups, the visa application may
be processed by their representatives, specifying the data of each member of
the group.
• Attach the documents that accredit compliance with the specific requirements
according to the type of visa.
• Copy of the page of the passport that is stamped with the last stamp of entry
to or exit from Colombia, as applicable.
Once the visa is granted, it is indispensable for the foreigner to take note of the
privileges and restrictions of the same, which will govern her or his activities in
the country.
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IMMIGRATION REGIME
d.
The validity of the foreigner’s identity card is the same
as the term of the visa itself. Holders of a resident´s visa
must renew it every five (5) years.
INSTITUTIONS WHERE VISA APPLICATIONS CAN BE FILED
The entity at which the procedure is undertaken is the office for the Coordination
of Visas and Immigration of the Ministry of Foreign Relations, when the person
is in Colombia; when, on the contrary, the person is abroad, the procedure is
undertaken at the consulates or consular sections of Colombian embassies.
Contact entity: Ministry of Foreign Relations (Ministerio de Relaciones Exteriores)
– Office for the Coordination of Visas and Immigration (Coordinación de Visas
e Inmigración): Telephone: 57 (1) - 3814000.
More detailed information about the requirements, as well as the
application forms, may be found at the following websites:
www.cancilleria.gov.co
www.gobiernoenlinea.gov.co, “Trámites” (Processing) section.
e.
FOREIGNER’S IDENTITY CARD
The foreigner’s identity card (cédula de extranjería) is an identity document
granted to foreigners who hold a visa whose term is longer than three
(3) months and to their beneficiaries, except in the case of visitor’s and
preferential (diplomatic, official and services) visas. Once it is obtained, it
allows foreigners to enter into contracts, undertake banking operations and
transactions and engage in procedures with entities, among other privileges.
According to Article 53 of Decree 019 of 2012, all foreign citizens who are
holders of a visa, except for the holders of a preferential and visitor’s visa
must be registered in the Foreigners Registry through the National System
for the Registration of Foreign Citizens, included on the website of the
Colombian Special Migration Administrative Unit. This registration must be
carried out within 15 calendar days as of their date of entry into the country,
or as of the date on which the visa was issued, if obtained while within the
national territory. This proceeding will be a requirement for the issuing of
the Foreigner’s Identification, which shall be requested at the Centers for the
Facilitation of Migration Services nationwide.
f.
APPLICABLE LEGAL FRAMEWORK
• Decree 019 of 2012
• Resolution 113 of 2012
Links to relevant institutions
Government Online (Gobierno en línea) - Portal of the
Colombian State (Portal del Estado Colombiano):
www.gobiernoenlinea.gov.co, “Trámites” (Processing) section.
Minisitry of Foreign Affairs - Ministerio de Relaciones Exteriores:
Colombian Special Migration Administrative Unit:
www.migracioncolombia.gov.co
Warning
The information outlined in this chapter has been prepared on the
basis of the norms in effect at time of publication. However, they may be
modified by subsequent regulations. Thus, before applying for a visa, it is
recommended that the applicant verify the details of the visa requirements
and application with the government authorities, Colombian consulates
and specialists in the field.
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CREATING A COMPANY
a.
II.
CREATING A COMPANY
Bogota is one of the cities that
most facilitates the establishment of
a company, because, once its statues
are ready, all of the procedures for its
incorporation may be completed within
five (5) days. The following section gives
a general description of the most
frequent options for the creation of
a company by an investor, as well as
the procedure for its formalization.
TYPES OF CORPORATE ENTITIES
For the foreign investor who wishes to create a company in Bogota, there
are two alternatives: the investor may (i) establish a commercial company or
(ii) establish a branch of a foreign company.
The main and most frequent schemes for companies are described below,
followed by an outline of the requirements for the branches of foreign
companies, in accordance with the legal regime currently in force.
Commercial Companies
Five (5) kinds of companies mainly exist in Colombia. All of them are
created through a contract, which, once it is formalized, forms a legal entity
independent of its partners. These companies are:
•
•
•
•
•
General Partnership
Limited Partnership Company
Limited Liability Company
Incorporated Company
Simplified Shares Corporation
Table 2.1 indicates the main characteristics of each of the types of company.
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CREATING A COMPANY
Table 2.1
Types of Commercial Companies
GENERAL PARTNERSHIP
Description
Strictly speaking, it is a
company made up of
persons in which the
priority is trust amongst
the partners.
LIMITED PARTNERSHIP
Two kinds of partners
participate in this kind of
company: the acting and the
silent or sleeping partners.
The first, the acting or
managing partners, are
generally those who
administer and represent
the company but do
not necessarily provide
contributions of capital;
the second only provide
contributions of capital.
SIMPLIFIED SHARES
CORPORATION
INCORPORATED
COMPANY
LIMITED LIABILITY
COMPANY
This is a new kind of
company characterized by
its versatility and simplicity,
both when it is established
and when it functions.
In terms of liability, it has
the characteristics of the
incorporated company.
In this modality, the partners
only answer for the amount
of their capital contributions.
It has traditionally been one
of the schemes most widely
used for the development
of medium-sized and large
companies.
In this corporate scheme
the partners only answer for
the amount of their capital
contributions. However,
there is a possibility of an
agreement between all or
some of the partners by
virtue of which a greater
liability is imposed on them.
Company Name
Name followed by such
designations as “and
company”, “brothers”, “and
sons” or similar.
Name followed by such
designations as “and
company” and “S. en. C.”
(Spanish initials for Limited
Partnership).
The name must be followed
by the initials “S.A.S.”
(for Simplified Shares
Corporation, in Spanish).
Name followed by
the initials “S.A.” (for
Incorporated Company or
Corporation, in Spanish).
Name followed by the
abbreviation “Ltda” (Ltd., in
Spanish).
Incorporation
By public deed.
By public deed.
By private document
(bylaws), registered with the
commercial registry.
By public deed.
By public deed.
Joint and several and
unlimited.
For the acting partners it is
joint and unlimited. For the
sleeping partners it is limited
to the amount of their
respective contributions.
It is limited to the amount of
contributions, except in the
case of fraud.
Limited to the amount of
the contributions.
Limited to the amount of
the contributions, except
when there is an agreement
to assume greater liabilities.
Requires a minimum of
two (2) partners.
A minimum of one (1)
acting partner and (1)
sleeping partner.
May be established by one
or several individuals or legal
entities.
Requires a minimum of
five (5) partners.
A minimum of two (2)
persons and a maximum
of twenty-five (25).
As set forth in the deed of
incorporation.
incorporation.
As set forth in the deed
of incorporation; if not
specified, it may be
indefinite.
incorporation.
incorporation.
Liability
Number of
Partners
Duration
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CREATING A COMPANY
GENERAL PARTNERSHIP
Capital
Made up of the
contributions of the
partners in cash or kind.
LIMITED PARTNERSHIP
Made up of the
contributions of the
sleeping partners.
The collective or active
partners may also make
capital contributions without
their losing that status.
SIMPLIFIED SHARES
CORPORATION
Represented by shares. The
deed of incorporation must
indicate the authorized,
subscribed and paid-in
capital. Up to two (2) years
are allowed for payment.
The percentage or minimum
and maximum amount
of shares controlled by
a shareholder may be
established (variable capital
rules).
INCORPORATED
COMPANY
Made up of shares of
equal value. The deed of
incorporation must indicate
the authorized, subscribed
and paid-in capital.
LIMITED LIABILITY
COMPANY
Made up of shares or parts
of equal value. The entire
capital must be paid-in
when the company is
incorporated.
At least half of the
authorized capital must
be subscribed and at least
a third of the subscribed
capital must be subscribed.
Different kinds of shares
may also be authorized,
even those with multiple
votes.
Corporate Purpose
Administration
Must be limited to a series of
specific activities.
May be undefined, providing
that it is a legal commercial
activity.
Corresponds to each and
every one of the partners,
who may delegate it in
their fellow partners or
outsiders, subject to prior
authorization.
The responsibility of the
collective or acting partners,
or through their delegates.
As agreed in the bylaws.
Does not have to have a
board of directors.
Responsibility of the Board
of Directors, which is
elected by the General
Assembly. The Board,
in turn, elects a legal
representative.
Corresponds to each and
every partner, formed into
the board of partners.
However, these may
delegate it to a legal
representative.
Must have a statutory
auditor.
Must have a statutory
auditor.
When there is a single
shareholder, she or he may
exercise the faculties of the
General Assembly and Legal
Representative.
Does not require a statutory
auditor, except for a few
legal exceptions.
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CREATING A COMPANY
GENERAL PARTNERSHIP
LIMITED PARTNERSHIP
SIMPLIFIED SHARES
CORPORATION
INCORPORATED
COMPANY
Profits
Distributed in accordance
with the paid-in part of the
shares or part of the interest
of each associate, unless
the contract stipulates
otherwise. Profits may not
be distributed unless the
losses of previous financial
years have been covered.
Done in the form stipulated
in the contract between the
acting and sleeping partners.
Unless a different quorum
is agreed on, this is decreed
through a majority vote
of those present at the
meeting. There is no
minimum for the amount to
be distributed.
They are shared out in
proportion to the subscribed
shares, subject to the prior
decision of the General
Assembly. The minimum
amount to be distributed
is 50%.
Follows the rules for
corporations.
Dissolution
For general causes; also
due to (i) the death of
some of its partners; (ii) the
supervening incapacity of
some of its partners; (iii)
the opening of a procedure
for obligatory liquidation
of one of its partners; (iv)
the involuntary sale of
the interest of one of its
partners; the resignation or
justified retirement of one of
its partners; (v) resignation
or justified withdrawal of any
of its partners.
For general causes;
also due to (i) those
which apply to a general
partnership with respect to
its acting partners; (ii) the
disappearance of one of the
two categories of partners;
(iii) losses that reduce the
capital to a third or less.
For general causes; also due
to losses which reduce the
net worth to less than 50%
of the subscribed capital.
For general causes;
specifically when: (i) there
occur losses that reduce
the net worth to less than
50% of the subscribed
capital or (ii) 95% or more
of the subscribed shares are
concentrated in one person.
For general causes;
specifically due to (i) losses
that reduce the capital
to less than 50%; (ii) the
number of partners rises to
more than 25.
Supervision
LIMITED LIABILITY
COMPANY
All companies are subject to the inspection and, eventually, the vigilance and control of the Superintendence of Companies (Superintendencia de
Sociedades), with regard to compliance with certain requisites relating to their partners, revenues and assets, except when that responsibility has been
assigned to another Superintendence by reason of the corporate purpose to be developed.
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CREATING A COMPANY
Once the kind of company has been chosen, the investor must define details
for the drafting of the corresponding bylaws, such as its legal representation,
members of the board of directors and capital, taking into account the legal
requirements for such matters.
3
Registration with the Directorate of National Taxes
and Customs Agency (Dirección de Impuestos y
Aduanas Nacionales - DIAN) and obtaining of the
Single Tax Registration (Registro Único Tributario - RUT).
1 day
No cost.
4
Obtaining of Tax Identification Number
(Número de Identificación Tributaria - NIT)
issued by the DIAN.
1 day
No cost.
5
Buy and register the company’s books with
the Bogota Chamber of Commerce.
1 day
$11.200 (US $5,60).
6
Open a bank account.
1 day
No cost.
7
When resources are brought from abroad (foreign
currency), they must be registered with the Banco
de la República (Colombian Central Bank).
1 day
No cost.
b.
PROCEDURE FOR ESTABLISHING A COMPANY AND
SUBSEQUENT ACTIVITIES
Except in the case of a simplified shares corporation, the incorporation
of a company in Colombia requires a public deed. Table 2.2 gives a brief
description of the steps needed to formalize a company.
Table 2.2
Incorporation of a Company
NO.
PROCEDURE
DURATION
1
Formalize the company
bylaws by a public deed. In
the case of a simplified shares
corporation (SAS) one has only
to authenticate the signatures
on the private document
(bylaws) at a notary or a
Colombian consulate abroad.
1-2 days
Registration at the Chamber of
Commerce.
3 days*2
2
APPROXIMATE COSTS
The cost of the public deed 3 pesos
for every COP 1,000 (USD 0.50) *1 of
the subscribed capital of the company.
In the case of stock companies, it
is the authorized capital + 16% VAT.
(Resolution 0641 of 2015 of the
Superintendence of Notaries and
Registries).
In the case of companies to be
covered under Law 1429 of 2010, the
amount due will be as follows:
• 0.7% of the initial capital; in the case
of stock companies this will be of the
subscribed capital.
• COP 34,000 (USD 16.99) for
registration duties.
• COP 4,500 (USD 2.25) for the
registration form.
Should the company not wish to
be covered by Law 1429 of 2010,
in addition to the above, company
registration duties must be paid,
which amount depends on the assets
reported at the time of registration.
Source: Doing Business Colombia (2015) and the Bogota Chamber of Commerce.
When the partners or future shareholders are not present for the realization of
the abovementioned procedures whether, to establish a commercial company
or a branch of a foreign company, a written power-of-attorney*3 may be
prepared and granted to a third party to undertake such procedures. However,
certain procedures may come to require a personal appearance at the Chamber
of Commerce or a Notary Public, which is why it is important to examine the
procedure applicable in each case.
If the investor’s country is a party to The Hague convention for the notarization
of powers-of-attorney, the document must be apostilled and be accompanied
by a document issued by a notary public (or official in lieu thereof), which must
also be apostilled, which certifies the existence and legal representation of legal
entities. In the case of countries that are not parties to The Hague Convention
the document must also be issued by a notary public (or official acting in lieu
thereof) and submitted to the relevant Colombian Consulate in order for the
consular officer to certify the existence of the company and that it performs its
activities in accordance with its purpose and the laws of the respective country.
Documents granted in languages other than Spanish must be translated by an
official translator authorized in Colombia and authorized by the Colombian
Ministry of Foreign Affairs.*4
* 1 Exchange rate (TRM) of COP 2,000.68 per dollar.
* 2 Please note that these days may be extended if the Chamber of Commerce has any
observtions regarding the incorporation documents.
* 3 By means of the power-of-attorney one person authorizes another to undertake the
procdures before the corresponding authorities for the incorporation of the company.
To be valid the signatures of those granting in the presence of the notary public must be
authenticated. When granted abroad it must be apostilled to be valid.
* 4 Article 260 of the Code of Civil Procedure.
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CREATING A COMPANY
c.
Table 2.3
Requisites for a Branch of a Foreign Company
BRANCH OF A FOREIGN COMPANY
The other possibility open to an investor who wishes to create a company in
Bogota is through the creation of a branch of a foreign company. In this case,
the branch shares the same juridical nature as the parent company, thus the
branch is not treated as a company independent of the home office, since it
does not have a legal capacity different to that of its main company. It does
not have different partners or shareholders, but does have its own assigned
capital, defined corporate purpose and statutory auditors.
The branch of a foreign company is understood to be a business establishment
opened by the parent company for conducting permanent activities in
Colombian territory.
Incorporation
By public deed.
Company Name
Name of the parent company, followed by the word “Sucursal” (branch).
Liability
It is a business establishment; therefore it follows the destiny of the
parent company and the latter, in turn, assumes a direct responsibility
for the actions of its branch.
Duration
As indicated in the deed of incorporation.
Capital
The amount assigned by the parent company in the resolution that
authorizes its formation. It is understood that the entire amount must be
paid up when it is established.
Administration
A chief executive, with one or more deputies, designated by the parent
company in the act that establishes it. Must have a statutory auditor.
For that reason, when a foreign company undertakes permanent business
Corporate Purpose
Designated by the parent company in the act or resolution which
activities in the country, if it does not establish a subordinate company
creates the company.
of the home office, it must do it through a branch of a foreign company.*5
Profits
Follows the treatment laid down by the parent company.
Furthermore, Colombian legislation does not contemplate a specific criterion
Dissolution
Follows the same causes that apply to the main company, for being a
or a term of duration to establish whether or not an activity is permanent,
simple extension of it.
thus the concept of permanence will depend on the development by the
investor of its activities, the regularity, the infrastructure it requires and the
Procedure for incorporating a branch of a foreign company
hiring of personnel, among others.
Table 2.3 sets forth the main requirements for the branch of a foreign
company.
The procedure, length of time and cost are the same as those for the
establishment of a society found in Table 2.2 about the establishment of a
society. The difference lies in the documents which are subject to formalization
by public deed and subsequent registration with the corresponding entities,
which, in the case of a branch, are those laid down are those mentioned in a
previous section of this chapter.
Documents required to establish a branch of a foreign company
The establishment of a branch of a foreign company requires, in the first
place, a series of documents (see Table 2.4) so that one can subsequently
undertake the legal process for its establishment.
* 5 The Colombian Commercial Code (Article 474) defines activity or permanent business
as: (i) opening business establishments or offices; (ii) intervention as a contractor in the
execution of works or rendering of services; (iii) participating in activities whose purpose
is the management, use or investment of funds earned through private savings; (iv)
extractive industry in any of its branches or services; (v) obtaining a state concession or
participating in its exploitation; and (vi) the functioning of management and directing
bodies in the national territory.
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CREATING A COMPANY
Table 2.4
Business Attention Centers (Centros de Atención Empresarial - “CAE”)
Documents required for establishing a branch of a foreign company
NO.
This service, created by the Bogota Chamber of Commerce, makes it possible
to undertake, in a single place and single step, all of the procedures needed
to formalize a business.
DOCUMENT
1
Authenticated copy of the bylaws of the foreign company.
2
Authenticated copy of the document certifying the establishment of the foreign company.
3
Authenticated copy of the documents which accredit the existence of the foreign
company, and listing its legal representatives.
4
Authenticated copy of the document or resolution issued by the foreign company,
in which it agrees to the establishment of a branch in Colombia. This document
must contain:
• The name of the branch.
• The business activities which are meant to be developed.
• The amount of assigned capital and that which originates from other sources,
when it exists.
• The place chosen as the legal domicile of the branch.
• Length of the term of the business activities undertaken in the country and causes for
the termination of the same.
• Designation of the legal representative or general manager.
The above documents must be legalized with an apostille, so that they may be
subsequently formalized at a notary’s in Colombia, with the aim of incorporating
the conditions in a public deed, as explained in subsection B.
If the documents are written in a language other than Spanish, they must be duly
translated by a certified translator,*6 and must include the respective certification
of the apostille.
Once the corresponding public deed is obtained, one must proceed to obtain
the trade registration of the branch at the Bogota Chamber of Commerce for the
purposes of legalizing the branch of the foreign company in Colombia.
At the CAE one can access:
• Consultancy and guidance services
• Processing of documents
• Virtual access to related entities
• Links
Consult
www.ccb.org.co
e.
RELATED ENTITIES
Bogota Chamber of Commerce
In the process of creating companies in Bogota, the Bogota Chamber of
Commerce is responsible for registering the new companies or branches
and exercising control over existing ones (commercial register).
Consult
www.ccb.org.co
d.
INVESTOR ASSISTANCE PROGRAMS
“Crear Empresa” (Creating a Company)
This tool (internet portal) provides the investor or person who is interested in
creating a company with simple instructions on the procedures and steps that
must be followed to achieve that aim. It provides information on contacts as well
as the possibility of undertaking some of these procedures online.
Consult
www.crearempresa.com.co
* 6 A person who has passed the qualifying examination in the language, given by the
competent authority designated by the government, which in this case is the Colombian
Ministry of Foreign Affairs.
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CREATING A COMPANY
National Taxes and Customs Agency (DIAN)
f.
This is the entity which is concerned with guaranteeing the fiscal security of
the State through the administration and control of due compliance with tax,
customs and foreign exchange obligations, and the facilitation of foreign trade
operations in conditions of equity, transparency and legality. In the process of
creating companies, it is responsible for the tax registration of new companies
and assigning them a tax identification number as a requisite necessary for
their establishment.
Consult
www.dian.gov.co
Banco de la República
The Colombian Central Bank is responsible, among other functions, for
issuing, managing and controlling monetary movements in the country, as
well as issuing the country’s national currency, the Colombian peso. It also has
a role in the process of registering foreign investment, a subject that will be
covered in a subsequent chapter (Foreign investment in Colombia).
Consult
http://www.banrep.gov.co/
Superintendence of Companies
• Colombian Commercial Code. Second book, article 98 et seq.
• Law 222 of 1995. Available at: http://www.secretariasenado.gov.co/
• Decree 1192 of 2009. Available at: http://www.secretariasenado.gov.co/
• Resolution 0641 of 2015 of the Superintendence of Notaries and Registries.
Available at: http://www.supernotariado.gov.co
Warning
The information listed in this chapter has been prepared based on
current legislation; however, said information may be modified by later
amendments to the regulations. Therefore, it is highly recommended that
you check in advance with the different institutions involved, and with
specialists in the subject matter, to assess the contents of the documents
and proceedings that need to be followed for the incorporation and
establishment of a company in Colombia or a branch of a foreign
company, as well as the specific regulations by type of activity to be
carried out in the country.
The government entity through which the President of Colombia undertakes
the inspection, monitoring and control of commercial companies, and
exercises the powers provided by law related to other legal entities or natural
persons.
Consult
http://www.supersociedades.gov.co
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2015
BANKING RELATIONS
a.
INTRODUCTION TO THE COLOMBIAN FINANCIAL SYSTEM
The Colombian Financial System is regulated by and based on a model
of specialized banking. International transactions must be subject to the
Colombian exchange regime.
The Banco de la República is responsible for the activities of central banking,
such as the issuing of local currency, control of monetary circulation and the
administration of the legal reserves. It may also be the lender of last resort.
Thanks to the model of the specialized bank, the country has different kinds
of financial entities, in accordance with the kind of activity they carry out:
• Banks that carry out general activities.
• Financial corporations that undertake activities of corporate credit and
some investment banking activities.
• Commercial financial companies that finance the acquisition of consumer
goods through different mechanisms like financial leasing.
III.
BANKING RELATIONS
Foreign investment aimed at the Colombian financial system is permitted and
there is already an important presence of foreign banks. These investments
are regarded as deposits and are covered by a deposit insurance managed
by the Fund of Guarantees of Financial Institutions (Fondo de Garantías de
Instituciones Financieras - “Fogafin”), which is a Colombian state agency.
This insurance covers deposits of up to COP 20,000,000 (USD 9,997)*7 in
accordance with the terms set forth by the Colombian legislation.
The purpose of the Fogafin deposit insurance is to guarantee the account
balances that the financial institutions registered with the Fund are responsible
for, when those institutions are subject to an administrative forced liquidation.
A guarantee is provided to the savers and depositors in the form of a total or
at least partial restitution of the deposited sum, in accordance with the law.
* 7 TRM exchange rate of COP 2,000.68 per US dollar.
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BANKING RELATIONS
b.
c.
RELATED ENTITIES
BANK ACCOUNTS
The Board of Directors of the Banco de la República
It is indispensable to open a bank account when establishing a company
in the country, in order to receive the capital contributions paid in to the
company. Opening a bank account is also necessary for carrying out the
great majority of the company’s administrative activities, such as paying
workers and suppliers, making tax payments, and in general, most financial
operations.
The authority that regulates monetary, exchange and credit matters. It should
be noted that, as opposed to other countries, this entity is not responsible for
the regulation of the financial system, which, in the case of Colombia, is the
responsibility of the National Government and the Financial Superintendence.
Consult
www.banrep.gov.co
Types of bank accounts
Checking Account
The Financial Superintendence
Acts as a control and regulation agent and its functions are to rigorously
monitor the financial system and sanction any violation of the norms in
force, which may be sanctions originating from complaints by clients of the
financial entities.
This may only be opened in the country through local banking establishments.
Its purpose is to integrate the handling of payments made by an individual or
legal entity. However, it is also possible to make deposits. This kind of account
does not usually pay interest, but it does offer many payment system options.
It is worth noting the following characteristics of a checking account:
Financial Institutions Guarantees Fund (Fogafin)
• It is the only way to write a check in Colombia.
• It may be a joint or collective account; likewise the account holder may
authorize a third party to write checks.
• The bank may debit the holder’s obligations to the bank from such
an account, except when the holder of the checking account has
stipulated otherwise.
• The funds belonging to this account may be seized.
• It offers the possibility of bank overdrafts, a mechanism of short-term credit.
The entity responsible for protecting the trust of depositors and creditors of
the financial system, on the basis of the preservation of the equilibrium and
equity of the economy. Its functions are to organize, develop and administer
the deposits insurance system.
It should be noted that there are limitations on the funds that foreigners
who do not have an established residence in the country may put into their
accounts and on the destination of their transactions.
Consult
www.superfinanciera.gov.co
Consult
www.fogafin.gov.co
16
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BANKING RELATIONS
Savings Account
This kind of account is a banking service that aims to encourage savings by
their clients. It is meant for individuals; however, small businesses may make
use of this service, since their payment needs are less complex than those of
large companies.
• Information about the first wire transfer sent to Colombia, along with an
estimate of the frequency of the realization of such transfers.
• Business references.
It should be noted that while some banks allow banking accounts to be
opened with a foreign passport, most require a Colombian identity document
(foreigner’s ID card - cédula de extranjería).
The main characteristics of savings accounts are as follow:
• They pay interest.
• They allow general access to payment systems.
• They allow for the possibility of having joint or collective accounts.
• As opposed to checking accounts, the bank is not allowed to debit the
account holder’s obligations to the bank from her or his account, unless the
two parties have agreed otherwise.
• Funds in these accounts up to COP 29,748,348 (Circular No. 88 of October 7,
2013 of the Superintendence of Finance - amount current through
September 30, 2015 [approximately US$ 14,869]) cannot be seized through
judicial action if the beneficiary is a private individual. The aforementioned
limit is subject to periodic adjustments by the Colombian authorities.
• Regarded as a mechanism of savings and not a mechanism for the granting
of credit.
• It is not possible to write checks with this type of account.
Requirements for opening a bank account
The requisites for opening of an account may vary from one financial entity
to another. In general, however, they are as follows:
• A request for general information about the partners or shareholders of
a company.
• Information about the activities the company is going to carry out.
• Information about the source of the funds.
Control mechanisms
Colombian bank accounts are controlled by means of the following
mechanisms:
• Establishment of joint bank accounts.
• An agreement with the bank on conditions of use, for example, the need for
a given signature to gain access to the funds in an account.
• An agreement on restrictions with the bank which establishes limits on the
amount of funds in the account to which certain signatories may have access.
d.
REFERENCES
• Banco de la República:
www.banrep.gov.co
• Superintendencia Financiera:
www.superfinanciera.gov.co
• Asociación Bancaria y de Entidades Financieras de Colombia:
www.asobancaria.com
• Fondo de Garantías de Instituciones Financieras (Fogafin):
www.fogafin.gov.co
In addition, the following is usually required:
• Tax Identification Number (NIT).
• Information about the shareholders or partners of the company.
• Information about the source of the funds pertaining to the establishment
of the capital of the company.
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BANKING RELATIONS
Warning
The information listed in this Chapter has been prepared based on current
regulations which may, however, be modified by subsequent regulations.
Furthermore, it is based on a sampling of the internal policies from
different banks and financial institutions. The above notwithstanding, each
bank or financial institution is free to establish additional requirements in
accordance with the autonomy of its corporate policies and with how
familiar they are with handling international transactions. Therefore, it is
advisable to previously assess the conditions and service portfolio offered
by each institution in the Colombian financial market, as this allows for a
better choosing of the institution and the products that adapt to the needs
of the interested party and as they may have correspondent relationships
with the investor’s banking institutions abroad.
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TAX REGIME
a.
NATIONAL TAXES
The main national taxes applicable to companies and individuals in Colombia
are set forth below.
1. Income tax
a. Concept of income tax and tax on occasional earnings
Income and complementary taxes tax the earnings or profits obtained by
taxpayers that cause their assets to increase and derive from their ordinary
activities. For its part, the tax on occasional earnings is a levy on other kinds
of income that are not regarded as ordinary ones for taxpayers.*8
b. Taxpayers
IV.
TAX REGIME
The Colombian tax regime basically
has three (3) kinds of taxes: national,
departmental and municipal.
Income tax payers may be individuals or legal entities; in either case they are
taxed on income earned from Colombian or foreign sources. Colombian
companies*9 and Colombian individuals residing in Colombia are taxed on
their income (income and occasional earnings) of both Colombian and foreign
source.
For their part, foreign companies and entities located in Colombia are only taxed
on their income and occasional earnings from a Colombian source, regardless
of whether they perceive such income and occasional earnings directly or
through branches or permanent establishments located in the country.
Double taxation does not exist in Colombia; therefore, once the company has
paid the corresponding income tax, the partners do not have to pay income tax
on the distribution of profits.
* 8 Among the incomes which make up occasional earnings are the profit from the
alienation of fixed assets held for more than two years; earnings from inheritances, legacies
and donations; and earnings from lotteries, prizes and bets, among others.
* 9 For fiscal purposes, the definition of national pertains to those companies and institutions
which, during the corresponding fiscal year or period, have had their effective administration
site within the national territory. Also considered as national, for fiscal purposes, are those
companies and institutions that comply with any of the following conditions: 1. Having their
main place of business in the territory of Colombia; or 2. Have been established in Colombia,
in accordance with the laws in effect in the country.
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TAX REGIME
c. Income from a Colombian source
In Colombia there is a system of “advance payment” through withholding at
source which is discounted from the annual tax payable. This should be taken
into account by investors, both for their expectations of income and when
the time comes to undertake payments to third parties and suppliers.
Revenue that gives rise to Colombian-sourced income is:
• That which derives from the exploitation of material and intangible goods
within the country.
• The provision of services within Colombian territory, and even the provision
of technical or consultancy services abroad.
• That which derives from the alienation of material goods or intangible goods
that are in the country when they are alienated.
f. Taxable base for calculation of income tax
The taxable base for calculation of income tax is determined in two ways:
(i) by the ordinary system and (ii) by the presumptive income system.
(i) Ordinary system
d. Revenue that is not regarded as being Colombian-sourced
Income that is not regarded as having a Colombian source, and is thus not
subject to income tax, is:
• Income obtained from foreign indebtedness and the interest that this foreign
indebtedness generates.
• Income derived from technical services for the repair and maintenance of
equipment provided abroad.
e. Frequency and rate of income tax
The income tax and the tax on occasional earnings have an annual frequency
and the rate is 25% and 10% of the ordinary or extraordinary income of the
taxpayer, respectively.
Temporarily, Article 240 of the Tax Code is modified by Law 1739
of 2014, increasing the income tax rate for foreign companies
and institutions whose income is not attributable to a branch or
permanent establishment, as follows:
YEAR
RATE
2015
39%
2016
40%
2017
42%
2018
43%
In the ordinary system, the taxable base is made up of the taxable liquid
income (renta líquida gravable), which is determined by adding all the ordinary
and extraordinary income received in the year or tax year, which is likely to
produce an increase in net assets when it is received and which has not been
expressly excepted from taxation, and subtracting all the rebates, deductions
and discounts to obtain the net income.
In turn, when applicable, costs attributable to such income are subtracted to
obtain the gross income. The relevant deductions are subtracted from the
gross income to obtain the liquid income, thus obtaining the liquid income
over which the rates laid down in the law are applied.
(ii) Presumptive income system
For the purposes of income tax, the presumptive income comes into effect,
given that the tax norms assume that the assets of the taxpayers have
generated a minimum profitability.
In Colombia, the presumptive income applicable from the second year of
a company’s existence in Colombia onwards, is 3% of the net assets of the
taxpayer, counted from the last day of the immediately preceding tax year.
In general terms, to determine the tax a taxpayer is responsible for, the
taxable liquid income should be regarded as the largest of the following two
amounts: ordinary income (the company’s gross incomes, less costs and
allowable deductions), and the presumptive income.
20
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TAX REGIME
g. Revenue that does not constitute income or occasional earnings
b. Chargeable event
For the purposes of determining the taxable liquid income, there is revenue
which, by law, is not considered income or occasional earnings, among
which are to be found: profits from the alienation of shares, capitalizations
over which partners or shareholders are not taxed, shares and dividends,
insurance indemnifications for damage insurance, employer contributions to
pension and severance funds, among others.
The chargeable event for Income Tax for Equity (Impuesto sobre la Renta para
la Equidad - CREE) is when obtaining income that increases the taxpayer’s
equity in the taxable year or period.
Income tax deductions and exemptions are listed in Chapter VI.
c. Taxpayers
Legal entities and the like that are taxpayers and who declare income and
complementary taxes, as well as foreign companies and entities who are
taxpayers and who declare income tax over their nationally-sourced revenue,
i.e., obtained through branches and permanent establishments.
h. Double-taxation treaties
d. Tax base
Colombia is negotiating international treaties to avoid double taxation and
prevent tax evasion by income and wealth tax, particularly in cross-border
operations.
There are currently general double-taxation treaties in place between
Colombia and Spain, Canada, Mexico, Chile, Switzerland, India and South
Korea, and for certain activities related to air and sea transport there are
agreements with Argentina, Germany, Brazil, Venezuela, Italy, USA and France.
Furthermore, Decision 578 of 2004 of the Andean Community implemented
the regime to avoid double taxation and avoid tax evasion among member
countries (Bolivia, Ecuador and Peru).
Will be calculated by taking total gross income of the taxpayer that may
increase the equity achieved in the tax year, without including occasional
profits. From this total the following must be deducted: rebates, discounts,
revenue that does not constitute income, costs and deductions expressly
indicated in the Law and certain exempted income.
Without prejudice to the foregoing the taxable base for calculating the tax
may not be less than 3% of the taxpayer’s liquid equity on the last day of the
prior tax year.
e. Frequency and Rate
On the other hand, agreements with Portugal and the Czech Republic have
been signed and are pending implementation. Additionally, the UK, France,
Japan, Holland, Belgium and the USA are among the countries with which
Colombia is currently negotiating double-taxation treaties.
2. Income Tax for Equity (Impuesto sobre la Renta para la Equidad - CREE)
a. Concept
Income Tax for Equity (Impuesto sobre la Renta para la Equidad - CREE) entered
into force on January 1, 2013 as the contribution of Colombian companies
and foreign companies (through branches and permanent establishments)
and legal parties and the like that are responsible for the payment of income
tax, for the benefit of workers, job generation and social investment.
The frequency of the Income Tax for Equity (CREE) is yearly and the rate is 9%
calculated over the tax base.
f. Exemptions
As a consideration for the CREE, taxpayers declaring this tax who contract
more than two (2) workers do not have to pay the payroll taxes in favor of the
National Apprenticeship Service (Servicio Nacional de Aprendizaje - SENA),
the Colombian Institute of Family Welfare (Instituto Colombiano de Bienestar
Familiar - ICBF) and the contributions to the social security health system of
workers who earn up to ten (10) current monthly legal minimum salaries.
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TAX REGIME
g. Withholding at source
3. Wealth tax
All CREE taxpayers are deemed self-tax-withholders. The self-withholding
rate is between 0.4% and 1.6% of the payment or account credit and is
determined by the main activity of the taxpayer making the self-withholding,
according to the list of activities published by the Government.
a. Concept
CREE taxpayers who become so during the year must during that same
year file their withholdings every four months regardless of the partial gross
income during the tax year.
b. Chargeable event
h. Income tax for equity (CREE) surtax
Law 1739 of 2014 creates the Income Tax for Equity (CREE) surtax for tax
periods 2015, 2016, 2017 and 2018 to be paid by the taxpayers indicated in
Article 20 of Law 1607 of 2012 (payers of Income Tax for Equity CREE).
Users qualified and authorized to operate in offshore free zones shall not pay
this Income Tax for Equity (CREE) activity surtax.
Law 1739 of 2014 created a new tax on equity, known as the ‘wealth tax’ for
the tax years 2015, 2016, 2017 and 2018, which taxes possession of same.
The chargeable event for wealth tax is the possession of same as of January
1, 2015 in an amount equal to or greater than COP 1,000,000,000 (USD
499,830). For the effects of this charge, the concept of wealth is equivalent
to the total gross equity of the taxpayer held on the same date, less the
taxpayer’s debts current at such same date.
c. Taxpayers
The following are liable:
• Individuals, illiquid estates, legal entities and de facto companies, income and
complementary taxpayers.
The tax base subject to taxing is that which exceeds
COP 800,000,000 (USD 399,864)*10 and the surtax
rates of Income Tax for Equity (CREE) are:
YEAR
RATE
2015
5%
2016
6%
2017
8%
2018
9%
• Individuals, national or foreign, who do not reside in the country, in respect
of their wealth in the country owned directly or indirectly through permanent
establishments in the country, with the exceptions provided for in international
treaties and domestic law.
• Foreign companies and entities in respect of their wealth in the country owned
directly or indirectly through branches or permanent establishments in the
country, with the exceptions provided for in international treaties and domestic
law.
• Illiquid estates of predecessors in title without residence in the country at the
time of their death in respect of their wealth possessed in the country.
An advance payment must be made of 100% of the value of the surtax,
calculated over the CREE taxable base of the immediately preceding year.
* 10 TRM exchange rate of COP 2,000.68 per dollar.
22
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TAX REGIME
d. Tax base and rate
4. VAT Value-Added Tax (Impuesto al valor agregado - IVA)
The tax base is constituted as follows: for legal entities, the value of liquid
assets (gross assets less liabilities) held at January 1, 2015, 2016 and 2017 and
for individuals that which is possessed at January 1. 2015, 2016, 2017 and 2018,
determined in accordance with the provisions of Title II of Book I of the Tax
Code, less the exclusions expressly provided for in the tax law, including the net
asset value of shares, quotas or interests in domestic companies owned directly
or through commercial trusts or mutual funds, and also the first 12,200 Tax Units
(Unidades de Valor Tributario – UVT) (COP 345,003,800 [USD 172,443]) of the
equity value of the house or apartment for individuals, among others.
a. Concept
As for the rate, progressive marginal rates are ordered, depending on the amount
of equity, and decrease progressively in the following taxable periods.
b. Frequency and rate
Fees for legal entities range as follows:
YEAR
RATE
2015
Between 0.20% and 1.15%
2016
Between 0.15% and 1%
2017
Between 0.05% and 0.40%
The rates for individuals range between 0.125% and 1.50% for the four fiscal years.
The entities established after January 1, 2015 will not be subject to this tax.
The wealth tax is not deductible from income and complementary tax or CREE
(including surtax). Nor it is compensable with any other tax.
VAT must be paid in the case of the following transactions or events:
• The sale of movable goods which are not expressly excluded from the tax.
• The provision of services in Colombia.
• The import of movable goods that have not been expressly excluded from
the tax.
• The circulation, sale or operation of betting or gambling games.
The general rate is 16%, nevertheless, there are some differential rates for
certain articles that vary between 5% and 10% according to the product.
Some examples of this are some foodstuffs defined by law, lodging and some
automobiles, among others.
c. Those liable
Those liable to the tax authority in Colombia for collecting and paying the tax
are those who undertake any of the activities that give rise to same, even when
it is the final consumer who actually pays it. In line with this arrangement, those
who are liable for the tax are storeowners, the providers of services that are not
excluded from the tax and certain importers.
Exemption from the sales tax is given to, among others, personal movable goods
that are exported, export services (falling within the parameters established by
the regulations) and the sale of certain machinery and equipment specified in
the norms currently in force.
d. Discountable taxes
Discountable taxes form an integral part of VAT, since at each stage of
production or commercialization it is possible to discount the tax already
paid in the previous one.
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TAX REGIME
5. National Consumption Tax
a. Concept
In force as of January 1, 2013, and is charged on the provision or sale of the
following services or goods, to end consumers or on their import by endconsumers:
• The provision of mobile phone services.
• The sale of some non-real-estate assets, either imported or produced
domestically.
• The sale of food and beverages prepared in restaurants, cafes, self-service
restaurants, ice cream parlors, fruit stores, pastry shops and bakeries.
This tax will be caused at the time of nationalizing the good imported by the endconsumer, upon material delivery of the asset, provision of the service or the
issuing of the bill, sales ticket, invoice or equivalent document by the responsible
party to the end consumer.
This tax does not cause sales (value-added) tax (VAT).
b. Responsible parties
The parties responsible for the payment of the consumption tax are the
providers of the mobile phone services, the sellers of food and beverages,
importers as end-users, sellers of goods subject to consumption tax and the
professional dealers in the sale of used vehicles.
c. Discountable taxes
National consumption tax is an income-tax-deductible cost for the buyer
as a greater value of the acquired goods or services. However, it does not
generate deductible taxes on sales tax (IVA).
d. Rate
6. Levy on financial movements
(Gravamen a los Movimientos Financieros - GMF)
a. Concept
The “GMF” is assessed on financial transactions that make use of resources
deposited in checking or savings accounts in any financial entity established
in Colombia, as well as in any deposit account of the Banco de la República
and cashiers’ checks.
Transfers between the checking accounts of a single account holder in the
same credit establishment, as well as certain other financial transactions and
certain stock market operations are exempted from this levy.
This tax rate is COP 4 per COP 1,000 (4 x 1,000).
However, according to Law 1739 of 2014
the tax will be progressively eliminated as follows:
YEAR
RATE
2019
COP $3 per $1.000
2020
COP $2 per $1.000
2021
COP $1 per $1.000
This tax is collected through a withholding tax which is the responsibility of
the Banco de la República and other entities, overseen by the Superintendent
of Finance (Superintendencia Financiera) or of the Cooperatives Sector
(Economía Solidaria), in which the respective checking account, savings
account, deposit account, collective portfolio is held or where accountable
movements are undertaken that represent the transfer or disposal of
resources.
• The mobile phone service is taxed at a rate of 4% over the full service amount.
• Sale of goods such as automobiles, pick-up trucks, certain motorcycles, yachts
and other boats are taxed at a rate of between 8% and 16%.
• Restaurants, bars, taverns, discos and establishments providing restaurant and
bar services are taxed at a rate of 8% over any consumption.
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TAX REGIME
7. National Tax on Gasoline and Diesel
(Aceite Combustible Para Motores - ACPM)
a. Concept
The national tax on gasoline and diesel is caused on the sale, withdrawal,
importation for own consumption, importation for sale or temporary
admission for inward processing.
The tax is levied on sales made by producers on the date of issue of the
invoice; on producers’ withdrawals for own consumption, on the withdrawal
date; on imports, on the date that the gasoline or diesel is nationalized or on
the date of submission of the declaration of temporary admission for inwards
processing.
8. Stamp Tax
a. Concept
Stamp tax is levied on public deeds or private documents in which a public
entity, a legal entity or that with a similar status, or an individual, acts as grantor,
*11
acceptant or subscriber, and it applies when the following circumstances occur:
(i) They are issued or accepted within the country and even abroad.
(ii) They are executed or create obligations in Colombian territory.
(iii) They evidence the establishment, existence, modification or extinction of
obligations, and likewise their extension or assignment.
(iv) They correspond to an amount greater than 6,000 tax value units (“UVT”).
b. Responsible parties
b. Those subject to the tax
The taxpayer subject to this tax is the purchaser of gasoline or diesel from the
producer or the importer; the producer, when withdrawals are made for its
own consumption; and the importer when, upon prior nationalization, it makes
withdrawals for its own consumption. In the case of temporary admission for
inwards processing, the taxpayer is the respective authorized importer.
Public entities that are not expressly excluded, individuals and legal entities or
those with a similar status.
c. Frequency and rate
Article 72 of Law 1111, of 2006, established a gradual reduction of the tax
stamp until it reaches a rate of 0% in the year 2010, though this reduction did
not apply to all the occurrences that give rise to the tax.
c. Rate
2015 rates, according to DIAN Resolution No. 000014 of February 12,
2015 are:
• The national tax on regular gasoline will be assessed at COP 1,136.62 per gallon.
• On premium gasoline it will be COP 1,643.18 per gallon.
• On diesel (ACPM) it will be COP 1,136.62 per gallon.
In previous years the rate was 0.5% and in 2010 the rate was 0%, except
in certain circumstances, among which are checks that must be paid in
Colombia, registered and bearer bonds, and certificates of deposit, among
others.
This tax will be adjusted on February 1,
each year, according to the previous year’s inflation.
* 11 The individuals on whom the tax is levied are those who have the status of businessmenand
in the immediately preceding year had a gross income of at least 30,000 UVT (tax units).
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TAX REGIME
b.
DEPARTMENTAL TAXES
Following is a general description of the main departmental taxes applicable to
companies and individuals in Colombia.
9. Registry tax
10. Tax on lottery winners
This tax is applicable to lottery winnings and is known as the winner’s tax.
This tax is equivalent to 17% of lottery winnings, and said amount shall be
withheld directly by the lotteries and paid to the corresponding departmental
institutions.
a. Concept
11. Tax on alcoholic beverages
The inscription of documents containing acts, rulings, contracts or legal
business to which individuals are parties or beneficiaries or which by law
must be registered with the chambers of commerce or the offices for the
registration of public instruments, is subject to the registration tax. Documents
subject to registry tax are not subject to stamp tax.
The event that triggers this tax is the consumption of liquor, wines, appetizers,
beers, and beer-based drinks, in the departments’ jurisdiction.
The tax base is defined by the level of alcohol percentage or cubic centimeters
in the product, as set forth by the regulations, and the taxpayers responsible for
them are the producers, importers and, jointly, the distributors.
b. Rates
c.
• The acts, contracts or legal business with amounts subject to registration with
the Public Documents Registry are subject to a rate of between 0.5% and 1% of
the amount of the act.
• The acts, contracts or legal business with amounts subject to registration with
the Chambers of Commerce, other than those involving the establishment
with, and/or the increase in the premium for the issuing of stock or shares in
companies, are subject to a rate of between 0.3% and 0.7%.
• The acts, contracts or legal business with amounts subject to registration
with the Chambers of Commerce involving the establishment with, and/or the
increase in the premium for the issuing of stock or shares in companies, are
subject to a rate of between 0.1% and 0.3%.
• The acts, contracts or legal business without amounts subject to registration
with the Offices for the Registration of Public Instruments or the Chambers of
Commerce the rate of between 0.5% and 1% of the value of the act between
two (2) and four (4) current daily legal minimum salaries.
MUNICIPAL TAXES
On overview of the main municipal or district taxes applicable to companies
and individuals in Bogota follows.
12. Industry, commerce and advertising tax (“ICA”)
a. Concept
The “ICA” is a municipal tax that is levied on every (i) industrial, (ii) commercial
or (iii) services activity undertaken in the jurisdiction of the Capital District of
Bogota. These are activities that may be undertaken, directly or indirectly, by
individuals, legal entities or de facto companies.
This tax arises from the direct or indirect exercise or performance of any
industrial, commercial or services activity, whether done permanently
or occasionally, and on a given property with or without a commercial
establishment.
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TAX REGIME
b. Tax base, rate and frequency
14. Motor vehicle tax
The industry and commerce tax is liquidated on the basis of the taxpayer’s net
bimonthly income. The tax is paid annually.
a. Concept
In Bogota the rates vary between 4.14 per thousand and 13.8 per thousand,
depending on the activity.
The motor vehicle tax is a tax on the ownership or possession of vehicles
registered in the Capital District of Bogotá.
b. Tax base, rate and frequency
100% of the paid value of this tax is deductible on the company’s income tax
declaration; always providing it is related to its economic activity.
13. Unified property tax
The basis for assessing the tax is the commercial evaluation that the Ministry of
Transport establishes annually by Resolution. In Bogota the applicable rates vary
between 1.5% and 3.5% of the commercial value of the vehicle.
The unified property tax is levied on real estate located in the Capital District
of Bogota.
The tax is generated annually, on the first of January of each year; in the case of
new vehicles, the tax is generated on the date on which the request is made to
register the vehicle, which shall be equal to the date of the bill of sale or the date
on the registration request.
b. Tax base and those liable
c. Parties liable
The basis of assessment for this tax is made up of the cadastral valuation that
is current at the time the tax is caused, adjusted by the consumer price index,
for properties or real estate located in urban, suburban or rural areas, with or
without buildings on them.
The owner or possessor of the assessed vehicles licensed in the Capital
District of Bogota, including public transport vehicles.
The owners, possessors or exploiters of property are liable for the tax. Thus,
as opposed to other countries, the real estate tax is not transferred to the
tenant of the property.
a. Concept
a. Concept
c. Rate and frequency
The rate of the property tax in Bogota is between 2 per thousand and 33 per
thousand and is paid annually. Rates applicable to non-urbanized urbanizable
lots, and to non-built urbanized lots shall not exceed 33 per thousand.
15. Urban demarcation tax
The urban demarcation tax is levied on the execution of civil works or
buildings which have been granted and notified of a construction license
for any of the following modalities: new works, enlargement, adjustment,
modification, restoration, structural reinforcement, demolition and enclosing
of new buildings.
100% of the paid value of this tax is deductible from the company’s declaration
of income tax, always providing that it is related to the company’s economic
activity.
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TAX REGIME
The basis of assessment for the liquidation of the urban demarcation tax in
the Capital District is the total amount of the works or construction budget.
The capital gains tax varies between 30% and 50% of the higher square meter
value of the property or building subject to the benefit.
Two forms must be presented to file the urban demarcation tax: the first (the
initial declaration) is submitted before beginning the work, and the applicable
rate is 2.6% of the value of the work or construction budget; the second (the
final declaration) is presented when the work is finished, and the rate is 3% of
the executed value of the work or construction. The paid value of the initial
declaration is regarded as an advance on the tax and is discounted from the
value of the tax to be paid on the final declaration.
d.
16. Capital gains tax
a. Concept
The purpose of surplus value is that public entities, through the surplus value
tax, benefit from increases in land 35 values (real estate valuation).
Grounds that give rise to capital gains participation arising from urban
development in the Capital District of Bogota, include the specific
authorizations to give property a more profitable use, or increase the
exploitation of land to allow for more building on it, in accordance with
the formal stipulation of the Territorial Zoning Plan (Plan de Ordenamiento
Territorial –“POT”) or the instruments that derive from same, in the following
cases:
• The incorporation of rural land into land used for urban expansion.
• The establishment or modification of the regime or zoning regulations for
land use.
• The authorization to make greater use of the land that is built on, either by
raising the occupational index or the construction index, or both of these at
the same time.
• When public works are executed that are considered to be “infrastructure
macro-projects”, as defined by the Territorial Zoning Plan and/or the
instruments that derive from it, where the “valuation” contribution has not
been used to finance them.
REFERENCES
• National Taxes and Customs Agency (Dirección de Impuestos y Aduanas
Nacionales -DIAN):
www.dian.gov.co
• Government of Cundinamarca:
www.cundinamarca.gov.co
• Office of the Mayor of Bogota:
www.bogota.gov.co
• Bogota Treasury Secretary (Secretaría de Hacienda):
www.shd.gov.co
• For further information on double-taxation treaties, visit:
http://www.dian.gov.co/dian/15serviciosnsf
d7f3eee255a0ca1e05256ef6008028eb
f06a01dc14b8e9810525798f004ea2ef?OpenDocument
http://www.cancilleria.gov.co/footer/juridicainternacional/tratados/doble
Warning
The information listed in this chapter has been prepared based on
current regulations; however these may be amended by subsequent
regulations. Therefore, it is advisable to first check with the different
institutions and specialists involved, and the documents, requirements
and procedures to be followed in Colombian tax matters, as well as
the specific regulations for each type of tax.
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FOREIGN INVESTMENT IN COLOMBIA
Table 5.1
Concepts of foreign investment
TERM
Foreign investment
Direct or portfolio investment of foreign capital made in
Colombian territory (including duty-free zones) by non-residents
in Colombia. Credits and operations that imply indebtedness do
not constitute foreign investment.
Residents in Colombia
(i) Individuals who live in the national territory; (ii) foreign
individuals who stay in Colombia for more than six (6)
continuous or discontinuous months in a period of twelve
(12) months; (iii) legal entities domiciled in Colombia; and (iv)
branches of foreign companies established in Colombia.
V.
FOREIGN INVESTMENT
IN COLOMBIA
This chapter describes the general foreign
investment regime in Colombia, according
to the regulations applicable to this matter,
and indicates the applicable principles, the
obligations that apply to the foreign investor
in Colombia and the kinds of investment that
are allowed, along with the mechanisms and
alternatives for undertaking such investments.
DEFINITION
Thus, the notion of residency in the immigration regime is not
the same as that which applies to foreign investment and taxes.
Investor of foreign
capital
Individuals or legal entities that are holders of direct or portfolio
foreign investment.
a.
REGISTRATION OF FOREIGN INVESTMENT
The Colombian Statute on International Investments (Decree 2080, of
2000 and its amendments) lays down the obligation to register the initial
or additional capital investments made in Colombia with the Banco de la
República. This registration, undertaken by the foreign investor, grants the
investor the exchange rights conferred by Colombian law.
In accordance with the above, the registration of the foreign investment is
undertaken:
• With the Banco de la República through an authorized foreign exchange
intermediary or through a compensation account.
• By the foreign investor, her/his attorney or the person who represents her or
his interests.
In turn, the deadlines and conditions for registering the foreign investment
depend on whether it is a direct or portfolio investment, and the form in
which it is undertaken.
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In principle, the registration of the foreign investment is done automatically
through the presentation of what is known as the currency exchange
declaration for international investments (declaración de cambio por inversiones
internacionales), Form No. 4 of the Banco de la República, before:
• Foreign exchange broker, or
• Through compensation accounts.
For cases when the registration is not automatic, one must submit the
registration application, along with supporting documents, to the Banco de la
República (Form 11 of the Banco de la República – Article 7.2.1.2. of Circular
DCIN 83).
Cancellation of the registration of foreign investments must be carried out
before Banco de la República within twelve (12) days counted as of the date
on which the investment is cancelled, in the following cases:
• The partial or total liquidation of the investment, reduction of capital,
repurchase of shares or the sale of real estate.
• Whenever it is determined by the corresponding oversight body that, when
channeling the funds they were declared as foreign investments, but such
foreign capital was not actually invested in the country, the Banco de la
República will proceed to cancel such registration. (Article 7.2.1.4. of Circular
DCIN 83 of Banco de la República).
The holder of the foreign investment who negotiates or sells the investment must
file a corresponding income tax declaration and complementary documents,
along with the liquidation and payment of the tax caused by the respective
operation. The income tax declaration and complementary documents is
obligatory in all cases, for every transaction or sale of investment.
b.
FOREIGN EXCHANGE RIGHTS GRANTED BY
• Capitalization of the amounts with transfer rights, resulting from the obligations
derived from the investment.
• Remittance abroad in freely-convertible currency of the proven net earnings
periodically generated by the investments, based on the balance sheets of the
end of each financial year or based on the latter and the minute or contract
that governs the contribution in the case of direct investment, or based on
the account cut-off of the respective administrator in the case of portfolio
investment.
• Remittance abroad in freely-convertible currency of the sums received as a
result of the alienation of the investment in the country or of the liquidation of
the company or portfolio or the reduction of capital.
c.
TYPES OF INVESTMENT
The following types of foreign investment may be made in Colombia:
• The import of freely-convertible currency for investments in domestic currency.
• The import of tangible assets such as machinery, equipment or other physical
assets contributed to a company’s capital as non-reimbursable imports; similarly,
assets brought into a Free-Trade Zone that are contributed to the capital of a
company located in such a zone.
• Contributions-in-kind to a company’s capital consisting of intangibles such as
technological contributions, trademarks and patents, in the terms set forth in
the Commercial Code.
• Resources in domestic currency eligible to be remitted to the offshore capital
investor, resulting from currency exchange operations mandatorily directed
through the exchange market, that are used for direct or portfolio investments,
as well as royalties derived from duly registered contracts.
• Resources in domestic currency resulting from local credit operations carried
out with credit institutions for the purchase of stocks through the public stock
exchange.
THE REGISTRATION OF THE INVESTMENT
Registration of the foreign investment grants the investor the following
foreign exchange rights:
• Reinvestment of profits or withholding as profits the undistributed earnings
with transfer rights.
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d.
e.
TYPES OF FOREIGN INVESTMENT IN COLOMBIA
KINDS OF COLOMBIAN OFFSHORE INVESTMENT
The types of foreign investment are those covered by the Colombian
regime on the matter, and are outlined in Table 5.2.
Colombian offshore investment can take one of the forms shown in Table 5.3.
Table 5.2
Types of Foreign Investment
TYPE OF INVESTMENT
Direct
Portfolio Investments
DESCRIPTION
i) Purchase of participations, shares, corporate quotas,
contributions representing the capital of a company or
mandatory convertible bonds.
ii) Purchase of rights or interests in fiduciary businesses
entered into with trust companies that are subject to the
inspection and oversight of the Financial Superintendent of
Colombia, whose purpose is not a portfolio investment.
iii) Purchase of real estate directly or through fiduciary
businesses, or as a result of a real-estate securitization
process or construction projects.
iv) Investor contributions through acts or agreements, such
as collaborations, concessions, administration services,
licenses or those implying transfer of technology, when
this does not represent an interest in a company and the
income generated for its title-holder depends on the
company profits.
v) Investment supplementary to the assigned capital of
branches.
vi) Investments in the private equity funds referred to in
Title 14, Volume I, Part 3 of Decree 2555 of 2010 or the
regulations that modify or substitute same.
Table 5.3
Kinds of Colombian Offshore Investment
TYPE OF INVESTMENT
DESCRIPTION
Direct
These are made by residents in Colombia in the capital of an
offshore company. Their movements must be registered with
the Banco de la República, using Form No. 4.
Financial or in Offshore
Assets
This kind of investment, which may be made through the foreign
exchange or free market, includes:
• The purchase of securities issued offshore or assets located
offshore.
• The purchase of private foreign debt, public foreign debt or
foreign public debt bonds or securities.
• Transfers offshore deriving from offerings to Colombian
residents of securities issued by foreign companies or
governments, or guaranteed by the latter, authorized by the
Financial Superintendence.
A portfolio investment is that which is made on securities
registered into the national securities and issuances registry,
RNVE, the participation in collective portfolios, as well as in
securities listed in the foreign securities trading systems.
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f.
g.
PRINCIPLES OF THE FOREIGN INVESTMENT REGIME
The principles that regulate foreign investment in Colombia are outlined in
Table 5.4.
• Constitution of 1991 (Article 189, Number 11)
• Law 9 of 1991 (Article 15)
• Decree 1746 of 1991
• Law 31 of 1992 (Article 59)
• Decree 1735 of 1993
• Decree 2080 of 2000
• Decree 4120 of 2004
• Decree 4800 of 2010
• Decree 2245 of 2011
• External Regulatory Circular DCIN 83 modified: www.banrep.gov.co
• External Resolution No. 8 of 2000 of the Board of Directors of Banco de la
República modified: www.banrep.gov.co
Table 5.4
Principles of Foreign Investment
PRINCIPLE
DEFINITION
Equal Treatment
Foreign and national investment receives the same treatment.
Foreign investment receives neither a more favorable nor a
discriminatory treatment.
Universality
Foreign investment is authorized without limits in all sectors of
the economy, except for:
• Defense and national security activities.
• Processing, disposal and discarding of toxic, hazardous or
radioactive waste, not generated in the country.
Automaticity
Foreign investment requires a prior authorization or recognition
by ministries or superintendences, when they are under the
special regimes of the following sectors:
• Mining.
• Hydrocarbons.
• Financial.
Stability
Except when the foreign reserves are lower than the equivalent
of three (3) months of imports, the conditions in force on the
date of registering the investment may not be modified at the
time of the (i) reimbursement; and/or (ii) remittance of profits in
a way that unfavorably affects the investor.
Warning
The information listed in this chapter has been prepared based
on current regulations; however these may be amended by
subsequent regulations. Therefore, it is advisable to first check
with the different institutions and specialists involved, the
contents of the documents and procedures that must be met
vis-à-vis the foreign investment regime applicable in Colombia.
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INCENTIVES TO FOREIGN INVESTMENT
a.
FREE ZONES REGIME
1. Concept and Advantages
Free zones are delimited areas in Colombian territory where industrial
activities involving goods and services or commercial activities are carried
out and governed by special tax, customs and foreign trade regulations.
They offer the following main incentives:
VI.
INCENTIVES TO FOREIGN
INVESTMENT
In order to promote foreign investment
in Colombia, the Government provides
a series of incentives to investors.
• A 15% income tax rate, applicable to exclusive production activity within the
Free Zone for industrial users new or existing goods and services and Free Zone
operators established in Free Zones declared prior to Law 1607 of 2012. Not
applicable for commercial use.
• For industrial users of goods and services and Free Zone operator users
established in new free zones either requested or declared (permanent - single
- company) after the entry into effect of Law 1607 of 2012, a nominal income
tax rate equivalent to 24% (15% of income tax, plus 9% CREE). May also be
subject to CREE supertax.
• The introduction from abroad, into a Free Zone of materials and equipment,
without custom payments being caused (VAT and customs duties).
• VAT exemption for goods required for the performance of their corporate
purpose, introduced from elsewhere in the national territory into the Free Zone.
• Exports from the Free Zone to other countries that benefit from international
*12
trade agreements negotiated by Colombia.
• Possibility of selling goods and services to the national territory without quotas
or restrictions prior nationalization of the merchandize and payment of the
respective customs duties.
* 12 However, to be sure, this is a point that must be reviewed on a case-by-case basis,
as per each treaty.
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2. Types of Free Zones
3. Procedure for Establishing a Free Zone
There are three main types of free zones:
To win approval for permanent and special Free Zones, the applicant must
take the following steps:
• Permanent
• Special or single-company
• Transitory
a. Permanent Free Zones
Where a number of companies (users) carry out their industrial, commercial
or services activities within a certain area. It resembles an industrial park.
b. Special or Single-Company Permanent Free Zone
One where, independently of the geographical area where it is located, a single
company (industrial user) has the possibility of protecting its activities with the
benefits of the Free Zone. These are projects with strong economic and social
impact on the country. It is permitted for the following activities, among others:
• Goods
• Services
• Health services
• Agro-industrial projects
• Port operators
• Reconversion of existing companies
c. Transitory Free Zones
The kind authorized to hold international trade fairs, exhibitions, congresses
and seminars that are important for the country’s economy and international
trade.
• Prepare the Master Development Plan (master plan), feasibility studies, and
when necessary, request a prior opinion on the project area from the DIAN.
• Present the Master Plan and feasibility studies to the Technical Secretary of the
Intersectoral Commission on Free Zones.
• Review, analysis and report by the Technical Secretary on the Master Plan and
the feasibility opinion.
• Evaluation of the Intersectoral Commission on Free Zones.
• Issuing of the opinion on the feasibility of the Free Zone and decision on the
Master Plan.
• The interested legal entity submits an application for the Declaration of the Free
Zone to the DIAN.
• DIAN verifies compliance with the requisites.
• A resolution is issued declaring or denying the establishment of the Free Zone.
4. Procedure for Qualifying as a User of a Permanent Free Zone
In general terms, the following procedure must be observed:
a. Incorporate a new legal entity or branch of the foreign company.
b. Submit a written application to the user that operates the zone,
including:
• The résumés of the following persons: Legal representative and deputy,
members of the board of directors and partners (except those from
incorporated companies or limited partnership companies, or simplified stock
companies).
• A description of the project to be developed.
• A financial and economic feasibility study of the project.
• The composition or probable composition of the capital behind the project,
indicating whether its origin is Colombian or foreign.
• When applicable, a favorable opinion on the environmental impact of the
project from the competent agency.
• In addition, other requirements must be met involving documentation and
certificates which, according to the activity, may have to be submitted.
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5. The Types of Users of the Permanent Duty-Free Zones are:
a. User operator: The legal entity responsible for running and administering
the Free Zone and examining the qualifications of the users that install
themselves there.
b. Industrial user of goods: Manufactures, produces, transforms or assembles
goods by processing raw materials or semi-finished products within the
respective Free Zone.
c. Industrial user of services: Provides services within or from the area
authorized as a Free Zone in order to carry out the following activities,
among others: logistics; transport; distribution; telecommunications;
scientific and technological research; medical and dental care; cleaning
and quality testing, auditing, consultancy, maintenance and repairs,
technical support.
d. Commercial user: Warehouses, trades, conserves and commercializes
within the respective Free Zone. May occupy up to 5% of the total area
of the Free Zone.
6. Specific Requisites of Investment and Employment for Access to
a Free Zone
Table 6.1
Requisites for Industrial Users
of a Permanent Free Zone
TOTAL ASSETS
INVESTMENT
DIRECT JOBS
Investment of < 500 SMLMV (< USD 161,032) .
None
None
Investment between 500 SMLMV and
< 5,000 SMLMV (USD 161,032 < USD 1,610,327).
None
20
Investment between 5,000 SMLMV and
< 30,000 SMLMV (USD 1,610,327
< USD 9,661,965).
5,000 SMLMV
(USD 1,610,327)
30
Investment > 30,000 SMLMV
(> USD 9,661,965).
11,500 SMLMV
(USD 3,703,753)
50
*13
*14
Table 6.2
Requisites for a Permanent Special Free Zone for Goods
DIRECT JOBS
INVESTMENT
Minimum investment of 150,000
SMLMV (USD 48,309,825).
150
Table 6.3
Requisites for a Permanent Special Free Zone for Services
DIRECT JOBS
INVESTMENT
Between 10,000 SMLMV (USD 3,220,655)
and < 46,000 SMLMV (USD 14,815,013).
500
Between 46,000 SMLMV (USD 14,815,013)
and < 92,000 SMLMV (USD 29,630,026).
350
Over 92,000 SMLMV
(USD 29,630,026).
150
In the case of permanent special Free Zones for health, the above requisites
must be complied with, but 50% of the jobs may be outsourced. A national
and international accreditation procedure also has to be completed.
Table 6.4
Requisites for a Permanent Special Free Zone for Agro Industry
INVESTMENT
NUMBER OF JOBS
SMLMV (USD 24,154,912).
500 direct
or associated
Table 6.5
Requisites for a Permanent Special
Free Zone for Port Operators
INVESTMENT USD$
NUMBER OF JOBS
SMLMV (USD 48,309,825).
20 direct and
50 indirect
* 13 SMLMV stands for current monthly legal minimum salary (Salario Mínimo Legal Mensual
Vigente) and corresponds to a sum that is adjusted annually. For 2015, the SMLMV is COP 644.350.
* 14 TRM exchange rate of COP 2,000.68 per USD.
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Table 6.6
Requisites for Converting Existing Operations
CURRENT LIQUID ASSETS OF 150,000 SMLMV
(USD 48,309,825).
INVESTMENT OF 692,000 SMLMV (USD 222,869,324)
IN THE FIVE (5) YEARS FOLLOWING INCORPORATION
DOUBLING OF TAXABLE LIQUID INCOME IN THREE (3)
CONSECUTIVE YEARS.
b.
TAX INCENTIVES
Among the tax incentives that Colombian regulations provide to attract
foreign investment, the following should be highlighted:
a. Income tax exemptions and deductions
• In Science and Technology 175% of the value of the investment made in
research, technological development and innovation can be deducted,
provided this does not exceed 40% of the net income determined before
subtracting the value of the investment.
• 100% of the value of a donation, in accordance with legal requirements,
provided it does not exceed 30% of net income, determined before
subtracting the value of the donation.
• 100% of the value of investments in control and improvement of the
environment, provided it does not exceed 20% of the net income determined
before subtracting the value of the investment.
• 100% of the value of the wages paid to workers are deductible as long as the
employer is in good standing with the payment of payroll taxes (ICBF, SENA,
Family Allowance).
• 100% of the contributions made to the Colombian Family Welfare Institute
(ICBF), the National Learning Service (SENA) and payments made as family
allowance, where applicable.
• Industry and commerce tax, tax on signs and billboards and property tax, that
has actually been paid during the taxable year or period is 100% deductible a
long as they have a causal link with the taxpayer’s economic activity.
• As of fiscal year 2013, fifty percent (50%) of the tax on financial transactions
actually paid by taxpayers during the respective fiscal year will be deductible.
b. Income that is Exempt for Particular Industries
In the following events, among others, income will be deemed tax-exempt.
Nevertheless, they will be subject to CREE and super-tax if applicable:
• Publishing companies devoted to the publishing of books, magazines,
pamphlets or collectible scientific or cultural series are exempt until the
year 2033.
• The payment of the principal, interest, commissions and other items
related to foreign public credit and the like them are exempt from any kind
of Colombian tax, tariff, contribution and levy, always providing that it is paid
to persons who do not reside or are domiciled in the country.
• The sale of electrical energy generated on the basis of wind, biomass or
agricultural waste but only by the generating companies is exempt for a
period of fifteen (15) years, as of the coming into force of Law 788 of 2002,
always providing that the established requirements are met.
• The provision of river transport services with vessels and barges of shallow
draught is exempt for a period of fifteen (15) years, as of the coming into
force of Law 788 of 2002.
• Hotel services provided by new hotels which are built within the fifteen (15)
year period as of the coming into force of Law 788 of 2002 are exempt for a
period of thirty (30) years.
• Hotel services provided by hotels that are remodeled or enlarged within
the fifteen (15) year period following the coming into force of Law 788
of 2002 are exempt for a period of thirty (30) years, for the percentage of
the remodeled and/or enlarged work represented in the fiscal cost of the
remodeled or enlarged building.
• Ecotourism services certified by the Ministry of the Environment or
responsible authority according to the regulations issued to such effect, for
a period of twenty (20) years following the passing of Law 788 of 2002.
• The exploitation of new forestry plantations, and new sawmills directly
associated with the exploitation.
• New medicinal and software products, produced in Colombia and
supported by new patents registered with the competent authority,
provided they have a high content of Colombian scientific and
technological research certified by Colciencias or the equivalent institution,
for a term of five (5) years, counted as of January 2013.
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c.
PLAN VALLEJO
Plan Vallejo is a non-territorial export promotion tool that grants exemptions
from customs duties in exchange for exports. Some of the categories covered
by the Vallejo Plan are: raw materials, the replenishment of raw materials,
capital goods for the agricultural sector, capital goods and spare parts for the
services sector.
a. Plan Vallejo for Raw Materials for the Export of Goods
• The complete suspension of customs charges (duties and VAT), with a
commitment to export 100% of production.
b. Plan Vallejo for Capital Goods and Spare Parts (Exclusively for the
Agro-Industrial Sector)
• The complete suspension of customs duties and deferral of VAT, for the
provision of exportable services. The mandatory commitment is to export
a minimum of 70% of production (Article 173, subsection (c) of Decree
Law 444 of 1967).
c. Plan Vallejo for Services
• The Vallejo Plan for Services (PVSS) is a foreign trade tool whereby
companies that export services, including consortia and temporary
alliances, may apply to the National Taxes and Customs Agency
(DIAN) for an authorization to import capital goods and spare
parts (the latter only for air transport services), with a total or partial
suspension of customs duties and the deferral of VAT payment, in
exchange for the export of services.
One must comply with a commitment to export a minimum of 1.5 times the
FOB value of the capital goods whose import is authorized.
The export of the following services may benefit from this tool:
• Teaching services.
• Social and health services.
• Tourism services and those related to travel.
• Construction services and related engineering services.
• Transport services.
d.
• Colombian Constitution
• Decree Law 444 of 1967
• Decree 2685 of 1999
• Law 1004 of 2005
• Decree 4051 of 2007
• Tax Code
• Customs Code
Warning
The information outlined in this chapter has been prepared based
on the existing rules; however, it can be modified by subsequent
regulation. Therefore, it is recommendable to first check with the
different entities involved and specialists in the field, particularly for
the issues of tax incentives and the Plan Vallejo, in order to avoid
confusion and ensure compliance with all legal requirements.
It should be noted that the procedure for a declaration of
Free Zone and qualification of the Free Zone user requires the
preparation of complex technical and legal documents, therefore
it is recommendable to seek advice from an expert in this matter in
order to successfully apply for the benefits of this regime.
• Services provided to companies such as those in informatics services and
related services, research and development services, the development,
generation, transmission and distribution of electrical energy, and packaging
services.
• Communications services.
• Distribution services.
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FOREIGN EXCHANGE REGIME
a.
RELEVANT CONCEPTS
For a better understanding of the Foreign Exchange Regime that applies in
Colombia, Table 7.1 explains some of the most relevant terms used in the subject.
Table 7.1
Relevant Concepts in the Foreign Exchange Regime
TERM
VII.
FOREIGN EXCHANGE
REGIME
DEFINITION
Exchange Market
The market made up of foreign currencies that must be channeled
through intermediaries in the exchange market or clearing accounts.*15
Free Market
The market made up of foreign currencies that do not have to be
transferred or negotiated through the exchange market. The foreign
currencies that form part of the free market are those that Colombian
residents receive for the kinds of operations that do not have to be
channeled through the exchange market.
Exchange Market
Operations
The following operations must be channeled through the
exchange market: (i) the import and export of goods; (ii) foreign
debt operations; (iii) foreign capital investments in Colombia; (iv)
investments of Colombian capital abroad; (v) a number of financial
investments in securities issued abroad or investments in assets
located abroad; (vi) collateral and guarantees in foreign currencies;
and (vii) derivatives operations.
* 15 A clearing account (cuenta de compensación) is a current account opened by an
individual or a legal entity with a foreign financial entity, through which one channels flows
of currency arising from foreign exchange operations which have to be channelled through
the exchange market, as well as freely-held currency that one wishes to voluntarily handle
through the intermediation of the exchange market.
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TERM
DEFINITION
Exchange Market
Traders
Entities authorized to channel currencies for: (i) exchange market
operations and (ii) operations that are voluntarily channeled by that
market:
The following are traders on the exchange market:
• Commercial and mortgage banks.
• Financial corporations.
• Commercial financing companies.
• The Colombian Foreign Trade Bank (Banco de Comercio Exterior de
Colombia - Bancoldex).
• Financial cooperatives.
• Stockbroker companies.
• Currency exchange brokerages and special financial services
companies (External Resolution No. 11 of September 25, 2009 of the
Board of Directors of Banco de la República).
Exchange
Declaration
This is a form issued by the Banco de la República which documents and
formalizes exchange operations that must be conducted through the
exchange market.
It is submitted by the interested party to: (a) the exchange market
traders, if the exchange declaration is presented through them, or (b)
electronically, to the Banco de la República, when it is done through
clearing accounts.
Current and Special
Clearing Accounts
Current clearing accounts: Current accounts in foreign currency held
abroad and registered with the Banco de la República. Through clearing
accounts one may pay or receive sums from (i) imports; (ii) exports; (iii)
foreign investment in Colombia; (iv) profits; (v) foreign credits; (vi) capital
and interest; and (vii) free market obligations.
Special clearing accounts: Of restricted use, these current accounts
allow, exceptionally, for the payment of obligations in foreign currency
among Colombian residents who are not subject to any of the special
exchange regimes.
Because of the above conditions, it is recommended, among other things,
that the investor:
• Makes sure of the proper channeling and registration of exchange
operations.
• Has estimates of the working capital the company in Colombia will
need to meet the legal requirements regarding possible sources of
additional capital.
• Ensure that there is a complete congruence between the documents
that support the import/export operations, and those that document
the transference of foreign currency deriving from the same.
• Keep an adequate record in case operations become foreign debt and
thus must be reported.
b.
SANCTIONS
The following authorities are responsible for controlling and sanctioning
foreign exchange operations:
The Superintendence of Companies (Superintendencia de Sociedades) for
operations of:
• Foreign investment.
• Foreign indebtedness for the working capital handled by companies
in general.
The Directorate of National Taxes and Customs (DIAN) for:
• Foreign trade operations.
• Foreign debt deriving from foreign trade operations.
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c.
Warning
RELATED ENTITIES
Financial Superintendence
The administrative agency responsible for overseeing the provision of public
credit services. Acts as a control and regulation entity.
Website
www.superfinanciera.gov.co.
The information outlined in this chapter has been prepared based on
the existing regulations; however, it may be modified by subsequent
regulations. Therefore, it is recommendable to first check with the
different entities involved and specialists in the field the content of the
documents and procedures to be met under the foreign exchange
regime applicable in Colombia.
Colombian Foreign Trade Bank
(Banco de Comercio Exterior de Colombia - Bancoldex)
An intermediary in the exchange market, it is a legally authorized credit
establishment linked to the Colombian Ministry of Trade, Industry and Tourism
(Article 21 of Law 7, of 1991). It is a second-tier bank, that is, it does not grant
financing directly to the public, but channels credit through other institutions
of the financial system. Its main purpose is to finance working capital and
fixed asset requirements for viable projects or companies of all sizes and in
all sectors of the Colombian economy, with the exception of the agriculture
and stock-rearing sector.
Website
www.bancoldex.com
d.
• Constitution of 1991 (Articles 150, 189, 371, 372 and 373).
• Law 9 of 1991 (Article 15).
• Law 31 of 1992 (Article 59).
• Decrees 1735 and 2520 of 1993.
• Decree 2245 of 2011.
• External Regulatory Circular DCIN 83 (modified).
• External Resolution No. 8 de 2000 of the Board of Directors of
Banco de la República (modified).
Website
www.senado.gov.co, section Consulta de leyes.
International Exchange Regime: Statute of International Exchange (Circular
8, of 2000) and Manual of International Exchange (Regulatory Circular DCIN
83). Available at: www.banrep.gov.co
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PURCHASE AND LEASING OF REAL ESTATE
a.
GENERAL INFORMATION ON THE PURCHASE OF REAL ESTATE
The process for a foreigner’s buying real estate is no different from that of a
Colombian, except for the foreigner’s need to present documentation that
she or he legally resides in the country.
Step 1.
Preliminary Stage
For the purposes of verifying the ownership of the property and the seller’s
capacity to enter into a contract and establish the state of the property, and
whether it is occupied or not, it is advisable to make an initial visit to the
property.
VIII.
PURCHASE AND LEASING
OF REAL ESTATE
Likewise, one should ask for the ownership history and no-lien certificate
(certificado de libertad y tradición) at the office of the Public Deeds Registry,
in order to make the respective study of title. It is indispensable to consult
a recently issued certificate (one that has been in force for no longer than
fifteen (15) days.
Finally, one should confirm that the regulations on land use, in regard to
zoning, and the conditions of the property itself allow one to undertake the
activities for which it will be acquired.
Step 2.
Promise of Sale Contract
Once you are sure that the property is free of liens and in good condition,
proceed to draft the promise of sale contract between the two parties.
This document should include:
• Information about the buyer and seller.
• Description and location of the property.
• Price and form of payment.
• Date and manner of transfer.
• Date and signing of the deed.
• A certificate of good standing (paz y salvo), attesting that there are no
outstanding charges for public services, administration fees and taxes.
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• An ownership history and no-lien certificate (certificado de tradición
y libertad).
• Conditions for the payment of the expenses occasioned by the contract
and its registration.
• Domiciles where the parties are to be notified.
• Signatures, authenticated by a notary public.
The promise of sale contract has no cost whatsoever (unless it is granted by
public deed) and one usually pays an amount of money, as a deposit (arras),
when signing it. This is normally between ten percent (10%) and twenty
percent (20%) of the total value of the property at the parties’ discretion.
There are three types of deposits:
• Waiver deposit (arras de desistimiento): This allows the buyer to renounce
the acquisition before signing the deed, losing only the amount given as a
deposit. The seller may also renounce the transaction, returning twice the
amount the seller has received. The advantage of this procedure is that
the buyer does not risk all of the agreed price in the event of unforeseen
developments.
• Confirmatory deposit (arras confirmatorias): This implies that the sale and
purchase agreement is definitively concluded, without any of the parties’
being able to unilaterally withdraw, at the risk of losing the price of the
property and not just the amount handed over as a deposit.
• Penalty confirmatory deposit: Where the amount delivered is considered
as an advanced settlement of damages; it plays the role of a penal clause; in
this kind of warranty deposit, damages are paid in advance on account of a
default or breach, as opposed to a penalty clause.
Step 3.
Public Deed
Once the private stage is concluded the agreement must be formalized by
a public deed. The parties must go before a notary public and examine the
draft of the deed drawn up the officials of the notary before proceeding to
its signing.
For the drawing up and subsequent signing of the deed, the following
documents must be attached:
• A good-standing certificate of property and valuation tax.
• A good-standing certificate of administrative quotas (if the property is subject
to a horizontal property, i.e., condominium, regime)*16
.
• Photocopies of the identity documents of the parties.
• If the purchase is subject to a mortgage, a form is required that provides
information about the credit granted by the financial entity and the
certification of the entity by the Chamber of Commerce.
The deed generates payment of the notary duties equivalent to 3 per every
COP 1,000 (USD 0.50)*17 of the value of the operation; this value is normally
paid equally between the parties (Resolution 0641 of 2015 of the Superintendence of Notaries and Registries). There are also other expenses associated
with the operation that will be described below.
Once the documentation is complete, the parties must simultaneously sign
the respective memorandum (minuta), after reading all the pages, so that
no modifications may be made to it afterwards. A period of two months is
granted for the registration of the deed, after which interests on arrears are
charged. For that reason, it is recommended that the deed be registered as
soon as it is signed by the parties.
It is important to verify that all the information in the document is truthful,
especially that related to the area and price of the property. Likewise, one
should request from the seller a copy of the most recent receipt for the
payment of public services, property tax, valuation and administration.
* 16 The legal system that regulates compliance with the norms for horizontal property
in a building or building complex that is or is subsequently established.
* 17 TRM exchange rate of COP 2,000.68 per Dollar.
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Step 4.
Registration
2.
The final step in the purchase of a property is to register the public deed at
the Registry Office for Public Deeds (Oficina de Registro de Instrumentos
Públicos). Once the deed has been formalized at the notary public, one
percent (1%) of the sale price must be paid at the liquidation counters.
The rental contract for urban housing may be verbal or written. In either case, the
parties must reach an agreement on at least the following points:
Form of the rental contract
Once they have the receipt for the registration tax, the parties must go to the
registry office corresponding to the locality where the property stands, where
they must pay the registration fees, which correspond to 0.5% of the sales
price and another 0.5% of the mortgage, if applicable.
The registration procedure takes between eight (8) and thirty (30) days,
following the submission of the documents and depending on the office and
the city where the operation has been registered.
On registering the deed one must ask for a non-encumbrance certificate
(certificado de libertad), in order to verify that the property has been correctly
registered.
If you have any other doubt about the process, consult the
website of the Superintendence of Notaries and Registries:
www.supernotariado.gov.co
b.
GENERAL INFORMATION ON THE LEASING OF REAL ESTATE
1.
Definition of renting
Law 820, of 2003, defines the renting of urban housing as “a contract whereby
the two parties enter into a reciprocal obligation; one to grant the enjoyment
of an urban property totally or partly meant for housing, and the other to pay
a determined price for this use”.
• The name and identification of the contracting parties.
• Identification of the property subject to the contract.
• Identification of the part of the property that is rented, when applicable, as
well as the areas and services shared with the other occupants of the property.
• Price and form of payment.
• Description of the public domestic and similar or additional services.
• Term of the contract.
• Designation of the contracting party responsible for the payment of the
public services of the property subject to the contract.
The lessee must make sure that the lessor is the real owner of the property,
failing which, that such lessor has sufficient faculties to sub-lease. During the
negotiating process, it is customary to ask for references and guarantees,
whether directly or through specialized real estate agencies.
3.
Obligations of the lessor
The following are the obligations of the lessor:
• To hand over the property given in rental to the lessee in a good condition
of service, safety and cleanliness and place at lessee’s disposal the public
domestic and similar and additional services agreed to on the agreed-on
date or the moment when the contract is signed.
• To maintain the public domestic and similar or additional services in a
good condition for the purpose agreed to in the contract.
• When the rental contract for urban housing is a written one, the lessor
must provide the lessee or co-debtor, as applicable, with a copy of the
same with the original signatures. This obligation must be met within a
maximum term of ten (10) days following the date of the signing of the
contract.
• In the case of housing subject to a horizontal property (condominium)
regime, the lessor must provide the lessee with a copy of the building
regulations.
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4.
Obligations of the Lessee
The following are the obligations of the lessee:
• Pay the price of the rental within the term stipulated in the contract, at the
rented property or at an agreed place.
• Take care of the property and the things received in rental. In the case of
damages or deterioration other than that caused by normal wear and tear,
and which may be attributable to poor use or the lessee’s fault, the lessee,
shall on her or his own account timely undertake the needed repairs or
replacements.
• Pay for the public domestic and related or additional services on time, as well
as ordinary expenses when they arise, in accordance with the stipulations of
the contract.
• Comply with the norms laid down in the condominium regulations and
those that the government decrees for the protection of the rights of all the
neighbors.
• In the case of shared housing or boarding houses, the lessee is also obliged to
care for areas and services of common use and to undertake, on her or his
own account, the needed repairs or replacements when attributable to the
lessee or her/his dependents.
5.
Subletting and Assignment
The lessee does not have the right to assign the rental or to sublet it, unless
she or he has the express authorization of the lessor. When such assignment
is expressly authorized by the lessor, the restitution and other obligations
arising from the rental contract must be required of the assignee by the lessor.
6.
Rental
The monthly rental price is fixed by the parties in legal tender but may not
exceed one percent (1%) of the commercial value of the property or of the
part that is given in rental. This is commonly known as the ‘rental rate’ (canon
de arrendamiento). The monthly price of the rate stipulated by the parties
may be set in any foreign coin or currency, payable in Colombian legal tender
at the representative market exchange rate (TRM) on the date on which the
obligation was contracted, unless the parties have agreed to a different date
or referential exchange rate.
After twelve (12) months of the contract’s operation under the same price, the
lessor may increase the rent by a percentage that may be no higher than one
hundred percent (100%) of the increase in the consumer price index (Índice
de Precios al Consumidor - IPC) for the immediately preceding calendar
year. When this increase is chosen, the lessor must inform the lessee of the
increase and the date on which it comes into effect.
7.
Termination of the Rental Contract
A rental contract may be terminated by mutual consent, or by the lessor or
the lessee, in accordance with the following:
a. Termination by Mutual Consent. The parties may, at any time and by
mutual agreement, terminate the contract for urban housing.
b. Termination by the Lessor. The following reasons allow the lessor to
unilaterally request the termination of the contract:
• Lessee’s failure to pay the rent and the adjustments within the term stipulated
in the contract.
• Failure to pay the public services which leads to the disconnection or loss
of the service, or failure to pay the common expenses for which the lessee is
responsible.
• Lessee’s total or partial subletting of the property, assignment of the contract
or enjoyment of the property or change of the property’s use without the
express authorization of the lessor.
• Lessee’s repeated incursion into conduct that affects the peace of the
neighbors, or use of the property for activities that are criminal or imply
violations of the law, duly confirmed by the police authorities.
• Making improvements, changes or enlargements of the property, without
the express authorization of the lessor or the total or partial destruction of the
property or rented area by the lessee.
• Lessee’s violation of the norms of the respective horizontal property
(condominium) regulations, when the housing is subject to such regime.
• Whenever the owner or possessor of the property needs to occupy it for their
own residence, for a term of no less than one (1) year.
• During the extensions, prior written notice to the lessee through authorized
postal service, with no less than three (3) months’ notice, and payment of a
penalty equivalent to three (3) months’ rent.
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• The lessor may unilaterally terminate the rental agreement on the date of
expiry of the initial term, or of any of its extensions, arguing any of the special
causes for restitution, upon prior written notice given through authorized
postal service no less than three (3) months prior to the aforementioned
termination date:
- Whenever the owner or possessor of the property needs to occupy it for
their own residence, for a term of no less than one (1) year.
- When the building has to be demolished to make way for a new
construction, or when it has to be vacated for independent repair works.
- When the property has to be surrendered in compliance with the
obligations in a purchase and sale contract.
- The simple wish to terminate the contract, provided the rental agreement
has been ongoing for at least four (4) years. In such case the lessor shall
indemnify the lessee with an amount equivalent to one point five (1.5)
months of rental.
In any of the first three cases, the lessor must accompany the written notice
with a document certifying that it has set up an escrow amount either in a
bank account or through a guarantee with a legally-recognized insurance
company, on behalf of the lessee, for an amount equivalent to six (6) months
of the current lease, in order to guarantee compliance with the cause invoked
within the six (6) months following the date of restitution.
c. Termination by the Lessee. The lessee may unilaterally terminate the rental
contract within the initial term or its extensions, subject to prior written notice
sent to the lessor by registered post no less than three (3) months before the
intended vacancy and on the payment of a compensation equivalent to the
price of three (3) months of rent. The following reasons allow the lessee to
unilaterally ask for the termination of the contract:
• Suspension of the provision of public services to the property by the
premeditated action of the lessor or because the lessor is in arrears with
the payments for which she or he is responsible. In these cases, the lessee
may choose to assume the cost of re-establishing the service and
discount it from the payments that correspond to her or him as lessee.
• Lessor’s repeated incursion into activities that gravely affect the full
enjoyment of the rented property by the lessee, duly confirmed by the
police authorities.
• Lessor’s failure to honor the rights granted to the lessee by law or under
the contract.
For further information please consult the horizontal real estate
association of the city where the property is located or do it
through the Colombian Federation of Real Estate Associations
(Federación de Lonjas de Colombia) at:
www.fedelonjas.org.co
www.lonjadebogota.org.co
The procedure whereby a foreigner rents a property does not differ much
from the one that applies to a Colombian citizen. In addition, the tenant must
present some kind of guarantee that she or he will not leave the country
before the contracts ends, as well as documents which show that she or he
is a legal resident.
8.
Procedure for Renting a Property
Step 1.
Where does one Look for a Property?
The first thing to do is look for the property one wishes to rent. For this
purpose, there are the property rental sections of the classified ads in the
newspapers, which one may consult by buying the newspaper or looking at
them on the Internet. Newspapers and magazines that offer these classified
ads are to be found all over the country. Some examples of classified ads are
the following:
• Metro Cuadrado Magazine
www.metrocuadrado.com
• Finca Raíz Guide
www.fincaraiz.com.co
There are also online portals exclusively dedicated to such classified ads,
which may be consulted at websites such as the following:
• Metro Cuadrado
• Clasificados Colombia
clasificados.colombia.com
• Adoos
www.adoos.com
• La Guía Clasificados
www.laguiaclasificados.com.co
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You can also simply visit the neighborhoods that most appeal to you and
look for rental notices posted in the places you like, noting down the phone
numbers and calling to find out the details.
a. Zones
The cost of renting a property in Bogota depends on the stratum of the
neighborhood where it is located. There are six (6) strata, shown in Table 8.1.
Table 8.1
Strata
1
Very low
2Low
3
Moderately low
4Medium
5
c. Types of Rental
Through a real estate agent: This method is the most common insofar as a
third party who is an expert on the subject advises the interested party. The
real estate agent will inform the interested party when it locates a property
that suits her or his needs. The cost of this type of rental is normally higher,
since it covers the work and mediation done by the real estate agency.
Directly: This method of renting is undertaken directly between the interested
parties and one does not have to pay an intermediary. Although the same
documents are usually required, the interested party is able to deal directly
with the lessor, thus allowing for more flexibility.
Step 2.
Requirements
a. Worker
Medium high
6High
Services such as electricity, gas, water, etc.
Increase according to the property’s classification.
A map detailing the city’s strata can be found at the website
of the District Zoning Office (Secretaría Distrital de Planeación):
www.sdp.gov.co
In addition to the above, these zones also have norms that restrict land use
therefore the lessee must determine beforehand if the activity that she or he
plans to develop is allowed in that zone and that specific property.
b. Classification of Property
Property may be classified according to its price, neighborhood, area, size,
number of rooms, number of bathrooms, age and whether it is furnished
or unfurnished. There may be other kinds of classification, but these are the
most common.
The original of an employment certificate that includes basic information
about the post, salary and length of the contract. If one has other sources of
income, documents should be attached that accredit them.
b. Independent Worker
Demonstrate income, attaching documents that accredit same, such as an
income tax statement, employment certificate or payment stub.
c. Pensioner or Retiree
The person must present the pension or retirement certificate or the stubs of
the payment receipts. If the person has other sources of income, they should
be accredited.
d. Legal Entity
• Certificate of incorporation and legal representation, issued no more than
three months beforehand.
• Financial statements for the latest accounting period, certified by a public
accountant.
• Photocopy of the most recent income tax statement, when available.
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e. Guarantee
Most real estate agencies and even owners of properties that are directly
rented normally ask for additional requisites as a guarantee. This normally
means that the prospective lessees must present letters of approval from one
or several guarantors (fiadores), along with a photocopy of the deeds of their
properties.
The joint debtors/guarantors must accredit income that is more than twice
the value of the rental rate. These persons must attach bank statements
for the past three (3) months if the monthly rental rate is higher than COP
700,000 (USD 349.9).
The guarantors must accredit ownership of property.
f. Deposit
Asking for a deposit is very common. This generally amounts to at least a
month’s rent and thus covers any damage that might occur to the property
and guarantees that it is returned in the same state as it was found when the
lessee entered it. The total value is returned at the end of the contract and
any needed repairs are deducted from that sum.
g. Commission
This refers to the payment made to the real estate agency for its services,
although it varies from agency to agency. Some ask for the payment of a
number of months of rent, and others earn a monthly commission on the
rental rate but these costs are usually assumed by the lessor.
Step 4.
Monthly Payment
The payment of the monthly rate or rental is done in the first few days of the
month, generally during the first fortnight. The payment has two parts: the
rent itself, plus a monthly administration payment if subject to the Horizontal
Property Regime. The latter may or may not be included in the rent and it is
important to determine this beforehand.
References:
• Law 820 of 2013
• Colombian Civil Code
• Superintendence of Notaries and Registries
www.supernotariado.gov.co
• District Zoning Agency
www.sdp.gov.co
• Metro Cuadrado
• Finca Raíz
www.fincaraiz.com
Warning
The information in this Chapter has been prepared based
on current regulations; however, these may be modified by subsequent
regulations so it is important to check the requirements for the purchase
or lease of property in which you are interested with the authorities
and specialists in the matter.
Step 3.
Selection Process
After presenting the documentation and meeting all of the established
requisites, the real estate agency studies the case, and after comparing it with
that of others who wish to rent the property, makes a decision and informs
the interested party.
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LABOR REGIME
Definition of the Work Contract
An agreement whereby a person commits to providing certain personal
services to another (an individual or a legal entity), under continual
subordination, carrying out orders and instructions and in exchange for a
remuneration or salary. This contract is signed between the worker and the
employer.
To be able to sign a work contract, it is necessary to be older than eighteen
(18). Minors require the authorization of the Ministry of Social Protection and
of their legal guardians.
IX.
Types of Work Contract
LABOR REGIME
In Colombia, labor relations are governed
by the Constitution, international
treaties and agreements, and the Labor
Code (Código Sustantivo del Trabajo).
In broad terms, one may speak of two
major branches of labor law, which
are individual and collective law. The
first regulates the relations between
the employer and his workers, and
the second the relations between the
employer and workers’ associations,
whether or not they are trade unions.
According to their duration, work contracts may be classified as shown in
Table 9.1.
Table 9.1
Duration of Work Contracts
TYPE OF CONTRACT
DURATION
Fixed-term contract.
No longer than three (3) years. It may be extended indefinitely
if the parties so wish. Must be in writing.
Contract for the duration
of the work or job for
which the worker is hired.
Its duration is proportional to the duration of the job of work
in question.
Casual or temporary
contract.
No more than one (1) month.
Undefined-term
contract.
Duration is undefined.
Work contracts may also be classified as verbal or written; for them to be
valid does not require any special format, unless otherwise provided.
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LABOR REGIME
Trial Period
Mandatory Rest Days
The trial period may not exceed two (2) months. It corresponds to the initial
stage of the work contract where the employer is able to evaluate the worker’s
capacities and the worker, in turn, is able to evaluate the working conditions.
During this period either of the parties can terminate the contract without
compensation in favor of the other party.
Mandatory Rest Days include:
Working Day
The working day is that which is agreed to by the parties, which in no case
may exceed the legal maximum of forty-eight (48) hours per week, (which
may be distributed either from Monday to Friday or from Monday to Saturday).
The working day covers the period between 6 a.m. and 10 p.m. Anything else
is understood to be night work.
There are some workers to whom the legal maximum does not apply, namely,
those (a) who work in an executive or managerial position or have positions
of special trust; (b) who engage in discontinuous or intermittent activities; (c)
who simply guard, when they reside in the work place and (d) who engage in
domestic service.
Work done outside of the normal working day must be paid for as
supplementary work or overtime.
a. Paid Rest on Sundays and Holidays
Sundays and holidays are regarded as mandatory paid days of rest. That is, as
a general rule, the worker must not provide her or his services on those days,
and in any event, has the right to receive the ordinary salary corresponding
to them.
If the worker occasionally works on Sundays, she/he must be paid the salary
plus 75% of the hourly rate. If the worker does this periodically, she/he must
also be granted a remunerated rest day per week.
b. Paid Annual Vacations
Every worker, without exception, has the right to fifteen (15) working days of
paid vacations per year of work. At a minimum, the worker should have six
(6) extra days of vacations for each year of service. The additional days may
be accumulated for up to two (2) years. However, in cases when the worker
renders her/his services in a place other than her/his family residence, the
worker may accumulate them for a maximum period of four (4) years.
Remuneration
Flexible working day: The flexible working day corresponds to an agreement
between the worker and employer to organize successive work shifts every
day of the week, which do not surpass six (6) hours per day and thirty-six
(36) hours per week, without the payment of a bonus for working at night,
Sundays or holidays.
Likewise, there may be an agreement that the daily shift be flexible in such
a way that forty-eight (48) hours are completed weekly, distributed over a
maximum of six (6) days where the number of daily hours worked must be
within a range of four (4) to ten (10), without overtime for extra work, taking
into account that the hours worked must not surpass forty-eight (48) hours
per week and that these are worked during the daytime.
The salary is the compensation paid to the worker in exchange for the provision
of personal services to the employer. Currently (2015) the minimum wage
amount (Salario Mínimo Legal Mensual Vigente - SMLMV) is COP 644,350 or
*18
USD 322.06, plus a transport allowance estimated at COP 74,000 or USD 37.
The salary includes two types of compensation:
• The ordinary remuneration, which may be fixed or variable.
• The extraordinary remuneration, which is made up of extra pay, the value of
supplementary work or overtime, the value of work on mandatory holidays,
percentages of sales and commissions, habitual travel expenses meant for
the food and lodging of the worker and in general any occasional or habitual
payment made as a direct consideration for the worker’s work. Certain sums
may be agreed that do not form part of the salary (exclusions).
* 18 TRM exchange rate of COP 2,000.68 per Dollar.
49
2015
LABOR REGIME
Table 9.2
Types of Salary
TYPES OF SALARY
DESCRIPTION
Ordinary
Remunerates ordinary work. There is a minimum monthly legal
wage in force (SMLMV) which is defined by the government at the
end of each year.
Comprehensive
(Integral)
The manner of remunerating the worker periodically,
compensating not only the ordinary work, but at the same time
advancing the value of social benefits, surcharges and other labor
benefits, except vacations. In no case may the comprehensive
salary be less than ten (10) current minimum legal monthly salaries
plus the benefits factor to be paid by the company, which shall
not be less than 30% of such sum.
Indemnities
These payments arise from any non-compliance on the part of the worker
with regard to the employer’s legal or conventional obligations, or for any
lack of knowledge of the duties imposed by the Labor Law. Table 9.4 shows
the most common kinds of indemnities.
Table 9.4
Indemnity for Terminating the Contract without Just Cause
TYPE OF CONTRACT
INDEMNITY
Fixed Term
Equivalent to the remaining time of the term agreed on.
For the Duration of a Given
Job or Piece of Work
Equivalent to the period remaining until the termination of the
said job or piece of work, with a minimum of fifteen (15) days.
Undefined Term
a. Workers with a salary of less than ten (10) SMLMV. If the worker
has less than one (1) year of continuous services, she or he will be
paid thirty (30) days’ salary. If the worker has one (1) or more years
of continuous service, she or he will be paid twenty (20) days’
salary, in addition to the thirty (30) basic days, for each of the years
of services following the first one and proportional to the fraction
of the year.
Social Benefits
The social benefits set forth in Table 9.3 must be paid by the employer to all
workers who earn an ordinary salary.
Table 9.3
Social Benefits
CONCEPT
Severance Subsidy
FREQUENCY
OF PAYMENT
Annual
DESCRIPTION
One (1) monthly salary for each year of service
or proportionally for the fraction of a year. It
must be paid into a severance fund no later
than February 14 of the following year, or if not,
paid directly to the worker when the contract
terminates.
Severance Interest
Annual
12% of the value of the annual severance
payment or proportional to the fraction of
the year. Paid directly to the worker.
Services Bonus
Six-monthly
15 days salary for each half-year of employment
or proportional to the fraction
of the year, paid in June and December.
Transport Subsidy
Monthly
COP 74,000 (USD 37) for the year 2015 payable
to all workers earning up to two (2) SMLMV.
Work Clothing And
Footwear
Every 4
months
Payable to workers who earn up to two (2)
SMLMV.
b. Workers with a wage equal to or greater than ten (10) SMLMV.
If the worker has less than one (1) year of continuous service, she
or he will be paid twenty (20) days’ salary. If the worker has one (1)
or more years of continuous service, she or he will be paid fifteen
(15) days’ salary, in addition to the twenty (20) basic days, for each
year of service following the first one and proportional to the
fraction of the year.
If the worker has not been paid the amounts corresponding to the salary or
the social benefits in the due manner and time on the date when the labor
contract terminates, this worker will have the right to be indemnified with
one (1) day of salary for each day of non-compliance for the first twenty-four
(24) months.
Contributions to the Social Security System
All employers must affiliate their workers to the General Social Security
System, discount the amounts established by law from their salaries and
contribute a percentage calculated on the basis of the worker’s salary in
order to complete the contributions required by law (see Table 9.5).
50
2015
LABOR REGIME
Table 9.5
Contributions to the Social Security System
TYPE OF
OBLIGATION
Contribution to the
General Pension System
(Maximum Contribution
Base is Twenty-Five (25)
SMLMV).
FREQUENCY
OF PAYMENT
Monthly
PERCENTAGE
16% of the monthly salary of the worker, of
which the employer pays 12% and the worker
the remaining 4%.
Workers who earn more than four (4) SMLMV
must pay an additional 1% into the solidarity
fund.
Workers with incomes equal to or higher
than sixteen (16) SMLMV have an additional
contribution over their payment base income,
as follows:
16-17 SMLMV – 0.2%
17-18 SMLMV – 0.4%
18-19 SMLMV – 0.6%
19-20 SMLMV – 0. 8%
20-25 SMLMV – 1.0%
Foreigners who continue to contribute to the
Pension Systems of their country of origin are
not obliged to do so in Colombia.
Contribution to the
Monthly
Social Security System
for Health (Maximum
Payment Base is
Twenty-Five (25) SMLMV).
12.5% of the worker’s monthly salary, of which
the employer pays 8.5% and the worker the
remaining 4%.
Contribution to the
Professional Risks
System (Maximum
Payment Base is Twenty
(20) SMLMV).
The percentage is between 0.348% and 8.7%
according to the company’s level of risk. The
employer covers the whole of the cost.
Monthly
Colombia has bilateral agreements with a number
of countries (Chile, Argentina and Spain) to validate
the time paid into the Pensions System, so that the
worker may benefit from the respective legislation of
her/his home country.
Payroll Taxes
Payments made by the employer with more than one (1) employee to the
institutions and in the percentages indicated in Table 9.6.
Table 9.6
Payroll Taxes
INSTITUTION
PERCENTAGE
Colombian Institute of
Family Welfare (Instituto
Colombiano de
Bienestar Familiar ICBF).
3% of the monthly salary payroll.
National Apprenticeship Service (Servicio
Nacional de Aprendizaje
- SENA).
Family Compensation
Funds (Cajas de
Compensación Familiar)
Note: As a consideration for the CREE, CREE taxpayers who hire more than
two (2) workers do not have to pay the payroll tax in favor of the National
Apprenticeship Service (SENA), the Colombian Institute of Family Welfare
(ICBF) and the contributions to the social security system of health over the
salaries of employees earning up to ten (10) SMLMV.
51
2015
LABOR REGIME
Leaves of Absence
b. Hygiene and industrial safety
Table 9.7 shows the legal leaves of absence to which the workers are entitled.
Any company that employs ten (10) or more permanent workers must adopt
Special Hygiene and Safety Regulations.
Table 9.7
Maternity, Paternity and Mourning Leaves
TYPE OF LEAVE
Maternity
Paternity
Mourning
DESCRIPTION
Workers who are pregnant have the right to a leave of twelve
(14) weeks, which may begin two (2) weeks before the date
foreseen for the birth; however, it is mandatory to begin the leave
one (1) week before the foreseen birth date. The leave is paid
for by the Social Security System for Health. A worker in these
circumstances may not be fired for any reason, except if there is a
just cause previously certified by a Labor Inspector.
The husband or permanent partner has the right to a leave of
eight (8) days (Ruling C-174 of 2009 of the Constitutional Court).
The husband or permanent partner must have made payments
to the Social Security System during the pregnancy period (Ruling
C-633 of 2009 of the Constitutional Court).
In the case of the decease of the spouse, or permanent partner, or
a relative up to the second level of consanguinity, first of affinity
and first civil, the worker has the right to a paid mourning leave of
five (5) working days, regardless of the kind of labor contract or
employment.
Regulations
Employers are obliged to issue the following regulations:
a. Work
The work regulations are a set of norms that determine the conditions that
shall be observed by the employer and its workers in the rendering of the
service. Any company that employs more than five (5) permanent workers
in commercial enterprises, or more than ten (10) in industrial enterprises, or
more than twenty (20) in agricultural, stock-raising or forestry enterprises, is
obliged to adopt work regulations.
c. Harassment in the workplace
Employers must include within their internal work regulations stipulations
that protect and warn against any assault on human dignity in workplace
relations.
Other Types of Hiring
a) Hiring of foreign workers
There is no regulation in Colombia that limits the contracting of foreign
workers.
However, the business owner interested in hiring foreign workers must
take into account that this new worker must have a temporary worker’s
visa, or respective permit. It should be noted that there are professions in
Colombia that are regulated, and therefore the visa process will require the
prior obtaining of an authorization by the corresponding professional or
technical association. Among the regulated professions are engineering,
architecture, some types of administration, geology and some assistants of
the above, and some technical professions. The effective term of this visa
will be the same as the permit.
Non-regulated professions require a validation of title with the Colombian
National Education Ministry.
In terms of entry into the country, the foreign worker must have a worker’s
visa if so required. Workers from countries that are members of the Andean
*19
Community of Nations (CAN) do require a work visa.
The foreign worker will be covered by all applicable norms in effect and,
specifically, the labor, social security and fiscal regulations.
* 19 Bolivia, Colombia, Ecuador and Peru.
52
2015
LABOR REGIME
For further information:
Collective Rights: Relations between the Employer and Union Organizations
• Ministry of Foreign Affairs - Ministerio de Relaciones Exteriores de Colombia:
• Ministry of Education - Ministerio de Educación Nacional de Colombia:
www.mineducacion.gov.co
• Colombian College of Engineers -Consejo Profesional Nacional de Ingeniería:
www.copnia.gov.co
• Colombian College of Geologists - Consejo Profesional de Geología:
www.cpgcolombia.org
• Colombian College of Petroleum Engineers - Consejo Profesional de
Ingenieros de Petróleos: www.cpip.org.co
• Colombian College of Transport and Highway Engineers Consejo Profesional de Ingeniería de Transporte y Vías de Colombia:
www.cpitvc.com
• Colombian College of Architects and Ancillary Professions Consejo Profesional Nacional de Arquitectura y sus Profesiones Auxiliares
de Colombia:
www.cpnaa.gov.co/cpnaa
Another aspect of labor law is that which regulates the relations between the
employer and union organizations, as well as matters related to collective hiring,
the defense of common interests and collective work disputes. It seeks to
establish mechanisms for guaranteeing the workers’ rights to form associations
and strike, as well as the right to form trade unions, and engage in collective
hiring and negotiations.
a. Right to Join Unions
This right seeks to protect both the creation and development of union
organizations and to guarantee their use by the workers to defend their interests.
b. Union
This refers to the worker’s organization that is legally established to guarantee,
improve and strengthen their common rights with regard to their employers. It
also unites the workers in defense of the individual and collective rights of its
affiliates. Table 9.8 explains how unions are classified by the law.
b. Apprenticeship Contracts
The apprenticeship contact, also known as “business practice” (práctica
empresarial), is a special form of contracting labor, whereby an individual
receives technical training in an authorized training establishment, endorsed by a
company that sponsors that training and also provides the means by which that
person acquires a complete professional training. This contract does not imply
subordination, and its duration must not exceed two (2) years. Living expenses
may be paid but this does not imply salary remuneration under this contract. It
must be evidenced in writing.
Table 9.8
Classification of Unions
CLASSIFICATION
Company
Made up of individuals with different professions or skills who
provide their services in the same company.
Industry
Made up of individuals who have different professions but belong
to the same industry or perform the same economic activity.
Guild
Made of individuals who practice the same trade.
c. Temporary Services Companies
Temporary services companies (Empresas de Servicios Temporales - EST) are
entities that third parties may hire to find them temporary personnel who help
them to undertake certain activities. These personnel is directly contracted by the
temporary services company, which is responsible for the employer’s fulfillment
of its obligations to the workers.
DESCRIPTION
This may benefit the third party that contracts the EST, insofar as the it can
exercise its rights to oversee the workers but is not directly responsible for its
main obligations as an employer.
53
2015
LABOR REGIME
c. Labor Agreements, Pacts, Contracts, Collective Negotiations and Strikes
Warning
Table 9.9 describes the characteristics of the labor agreements, pacts,
collective negotiations and strikes.
The Colombian Labor System is governed by complex and detailed
regulations primarily aimed at protecting workers’ rights. Therefore,
the advice of experts in such matters is recommended to avoid
confusion with other personnel hiring methods, such as the contract
for the provision of services, and thus ensure compliance with all legal
requirements in this area and avoid the imposition of fines or penalties
that generate significant cost overruns for foreign investment.
Table 9.9
Labor Agreements, Pacts, Contracts,
Collective Negotiations and Strikes
NAME
DESCRIPTION
Collective Work
Agreement
An agreement made between one or more employers or
employer’s associations or one or several unions or workers
federations, to establish the conditions governing the work
contracts when they are in force.
Collective Pact
A pact signed between the employer and non-unionized workers,
to establish the conditions governing their labor relations.
Union Contract
A contract entered into by a union or several employers, or several
unions with several employers, for the provision of services or the
performance of a job of work.
Collective Bargaining
An undertaking agreed to between employers and workers to
discuss demands made in petitions regarding the improvement
of working and employment conditions.
Strike
The collective, temporary and peaceful suspension of work
carried out by the workers of an establishment or company, for
economic and professional purposes, to demand compliance
with previously established procedures.
Going on strike is only legitimate when these workers are
employees of a private sector employer and do not carry out
activities considered to be public by the law.
54
LABOR REGIME
2015
GUIDE TO
INVEST IN
BOGOTA
2015
Invest in Bogota, the investment promotion agency for Bogota and
Cundinamarca, a public-private initiative of the Bogota Chamber of
Commerce and the Capital District.
Our mission is to support the investor who is exploring opportunities in
Bogota and Cundinamarca.
In 2009 we were qualified by the World Bank as the best investment
promotion agency of a developing country.
We have a multidisciplinary team with broad knowledge of different
economic sectors which allows us to attend potential investors with
value-added information and advice.
We offer investors, totally free of cost and subject to
total confidentiality, specialized services for each
step of their investment process.
Should you need support, please don’t hesitate to contact us.
Email
[email protected]
PBX: +57 (1) 742-3030
Fax: +57 (1) 742-3050
Address
Carrera 7 No. 71-21,
Torre B, Suite 407,
Bogota, Colombia.
55
LABOR REGIME
2015
56

Guide to invest in Bogota 2015

Transcription

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