Foreign investment is done either through direct investment or portfolio investment brought from another country and invested by non residents in any part of Colombia, including free trade zones.
Colombian legislation establishes two types of foreign investment: direct foreign investment and portfolio investment.
1. FOREIGN DIRECT INVESTMENT
Foreign Direct Investment includes:
All forms of contributions to, and participation in, a company’s capital.
Direct investment in autonomous equities managed by a trust to create or develop a company or to purchase, sell or manage holdings in companies not registered with the National Registry of Securities and Brokers.
The acquisition of real estate, investment in real estate securitizations or investment in real estate funds.
Contributions in kind to company’s capital, consisting of intangible assets such as technology transfer, collaboration, concessions, management and licensed services contracts. The contributions must not have participation in the capital stock of the enterprise and the revenues of the investment depend on the profits of the enterprise.
Initial or additional investment in the assigned capital of a branch of a foreign company.
The acquisition of shares in private equity funds
2. FOREIGN PORTFOLIO INVESTMENT
Foreign portfolio investment is the foreign capital investment that a foreign fund makes in shares, mandatory convertible bonds and other securities negotiable on the capital market. Generally, funds may acquire shares in public offerings under the same rules as local investors.
3. FOREIGN INVESTMENT REGISTRATION
All investment from abroad, regardless it´s type or form, must be registered with the Central Bank before the foreign investor can exercise foreign exchange rights.
Once the investment is registered, the registration holder is entitled to:
• Remit abroad proven net profits that an investment periodically generates.
• Reinvest profits or retain them as surplus undistributed profits.
• Capitalize amounts with remittance rights.
• Remit abroad income received from the selling of an investment in the country, from liquidating the company or portfolio, or from reducing capital.
4. FOREIGN EXCHANGE MARKET
The foreign exchange market is comprised of all foreign currency channeled through exchange market intermediaries or foreign currency current accounts. Foreign currency voluntarily channeled through the exchange market is also part of the market.
Foreign currency generated by or required for any transaction on the exchange market must be channeled through authorized intermediaries or foreign currency current accounts.
The following transactions must be carried out on the foreign exchange market.
Merchandise import and export.
Foreign loans, including related financial costs, secured by residents of Colombia.
Foreign capital investments in Colombia and related yields.
Colombian capital investments abroad and related yields.
Financial investments in securities issued abroad, investments in assets located abroad and related yields, unless the investment is made with foreign currency from transactions that are not required to be channeled through the exchange market.
Endorsements and warranty bonds in foreign currency.
Derivative transactions and peso/foreign currency transactions.
 Foreign Investment Regime | [Foreign Investment Regime] | 68 Kb | 01/07/09 14:33 |
