Originally from:
Doing Business in Colombia - 2nd Edition - Hardcover
Doing Business in Colombia - 2nd Edition - Electronic
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Chapter 5
Regulation of Foreign Investment and
the Foreign Exchange Market
The legal definition of foreign investment includes all capital
investment originated abroad—whether direct or though portfolios—made
in Colombian territory, including duty free zones, by individuals or entities
not residing in Colombia.
A foreign capital investor is any individual or legal entity owner of a
portfolio or any direct foreign investment. Investors from other member
countries of the Andean Community (CAN) are considered local investors
for business classification purposes. Credits and other indebtedness related
transactions do not constitute foreign investment under the Colombian
foreign exchange regime.
It is presumed that anyone appearing as a foreign investor in the
registration forms submitted to the Banco de la Republica (Central Bank) is
not a resident in Colombia. However, it is necessary to maintain documents
proving such non-resident status in Colombia.
For foreign exchange purposes, it is understood that a resident of
Colombia is any natural person residing in the national territory, legal
entities domiciled in Colombia, the branches of foreign companies
established in the country and foreign nationals who stay uninterruptedly in
the country for more than six months or interruptedly for 12 months.
I. LEGAL FRAMEWORK
Regulations concerning foreign investment are established in a series of
instruments: The Political Constitution, Articles 150(19), 371 and 372; Law
9 of 1991; Decree 2080 of 2000 and subsequent amending decrees: Decree
1844 of 2003, Decree 4210 of 2004, Decree 1866 of 2005, Decree 2466 of
2007 and Decree 1888 of 2008. Finally, we must also mention Law 963 of
2005, also known as the “Law of legal stability for foreign investors in
Colombia”. At a supranational level we have Decision 291 of the Andean
Community, which entitles and subjects foreign investors to the same rights
and the same obligations as domestic investors and also establishes the right
of free remittance of proven net earnings and the creation of Andean
Multinational Companies (EMAs).
About the Firm:
Cavelier Abogados, a Colombian law firm established in 1953 that combines experience and innovation and stands out as a leading advisor in Latin America in several fields of the law. Using the most modern legal infrastructure and technology, the firm offers clients a strategic partnership for business development with legal services in Colombia and overseas countries. The strength of Cavelier Abogados lies in its Intellectual Property Law and Business Law areas, but the firm is also strong in Corporate Law, Financial Law, Foreign Investment Law, Tax Law and Mining and Hydrocarbons Law. Besides occupying prominent places in the top rankings of law publishers, the firm employs several university professors and authors of books on the practice areas of the firm. Cavelier Abogados also has a network of 469 correspondents in 143 countries. It was also one of the first Colombian law firms to have its own Code of Ethics, which contains higher standards of conduct compared to local legislation. The firm uses a multidisciplinary approach to find creative, prudent and value generating business solutions that optimize clients' return on investment while minimizing risks.
Contributors Include:
Natalia Tobón-Franco; lawyer from Universidad de los Andes (Bogota, Colombia); L.L.M. in Intellectual Property Law from Franklin Pierce Law Center (New Hampshire, U.S.A.); professor and author of several books and articles on Copyright Law, Freedom of Speech and Entertainment Law; associate at Cavelier Abogados.
Eduardo Varela-Pezzano; lawyer and specialist in Intellectual Property Law from Universidad del Rosario (Bogota, Colombia); L.L.M. candidate on Technology & Intellectual Property Law from the University of Liverpool (Liverpool, U.K.); Intellectual Property Law professor at Universidad del Rosario and author of several books and articles on Freedom of Speech, Patent, Trademark, Copyright and Entertainment Law; associate at Cavelier Abogados.
