Doing Business In.. 2024 Comparisons

Colombia’s legal system follows the civil law tradition. The branches of government are the legislative, the executive and the judiciary. The ordinary judiciary structure is:

• the Corte Suprema de Justicia;
• the Tribunales Superiores de Distrito Judicial; and
• the Juzgados.

Foreign investments in Colombia do not require approval from the authorities. The country generally has a liberal approach to foreign investment, with a few exceptions. 

Foreign investment is not allowed in activities directly related to defence, national security, and the processing or disposal of toxic, dangerous or radioactive waste which is not generated in the country. Colombian companies can also be fully foreign owned, except for those in the national broadcast television sector, where foreign ownership is capped at 40%.

Although foreign investment is not subject to approval from governmental authorities, all investments made by non-residents in Colombia must be registered in a timely way with the Colombian Central Bank either directly or through the local financial institutions through which the funds are transferred.

To complete this process, foreign investors must register the investment by submitting a foreign exchange declaration (declaración de cambio).

The registration process requires the submission of certain information, such as the value of the investment, the number of shares or membership interests acquired and the destination of the investment. Depending on the type of investment, deadlines for registration will vary. Registering foreign investment ensures access, through the formal exchange market, to convertible currency to remit dividends and repatriate the investment.

Although foreign investment is not subject to approval from governmental authorities, all investments made by non-residents must be registered with the Colombian Central Bank. Failing to properly complete this registration may lead to penalties being imposed. Under the Colombian exchange regime, the Superintendencia de Sociedades has the authority to audit international investment records and impose sanctions for non-compliance. Although Decree 1746 of 1991 authorises penalties of up to 200%, the Superintendencia de Sociedades typically enforces penalties, which reflect the severity of the violation.

This section is not applicable in Colombia.

This section is not applicable in Colombia.

The most common form of legal entity in Colombia is the simplified stock corporation (S.A.S.) due to its flexible regime and the freedom its shareholders have to establish the terms and conditions for its functioning and internal governance structure. Corporations (sociedades anónimas or S.A.) and foreign company branches are vehicles that are also used.

Simplified Stock Company (S.A.S.)

Benefits and most common uses

The S.A.S. offers greater flexibility than other types of corporate vehicles in Colombia. Its incorporation process is simple, there are fewer administrative requirements, and shareholders have greater freedom to determine operational terms and internal structure. The S.A.S. is used for almost any business (except those that, by law, require a corporation). 

Incorporation process

An S.A.S. can be incorporated by a private document registered with the chamber of commerce or by public deed (if assets are being contributed to the company for its incorporation the simplified stock company must be incorporated by means of a public deed granted before a Colombian Notary Public).

Term

The term can be indefinite.

Number of partners/shareholders

An S.A.S. must have a minimum of one shareholder and there are no limits on how many shares they can hold. There is also no limit on the maximum number of shareholders.

Liability

Liability is limited to shareholder contributions, except in situations involving company fraud or abuse that harms third parties.

Capital requirements

Shareholders have a maximum term of two years from incorporation to pay for the subscribed shares.

Governance

The shareholders of an S.A.S. appoint managers responsible for the company to represent it before third parties (called legal representatives). Although the S.A.S may have a board of directors, it is not a requirement.

Other relevant matters

The S.A.S does not need a legal reserve, and a statutory auditor is only required if their profits are above 3,000 minimum monthly wages.

Corporation (S.A.)

Benefits and most common uses

A corporation or S.A. offers a more traditional structure. Their shares can be registered and traded on the national stock market. Banking institutions and listed companies must be corporations by law.

Incorporation process

An S.A. can only be incorporated by a public deed granted before a Colombian Notary Public and registered with the chamber of commerce. By-law amendments would have to be formalised by public deed.

Term

The term must be limited but may be extended by the shareholders.

Number of partners/shareholders

There must be a minimum of five shareholders in an S.A. Under Colombian law, no shareholder may have 95% or more of the outstanding capital of the corporation.

Liability

Shareholder liability is limited to the amount of their contributions. However, in cases of fraudulent actions, overvaluations of contributions in kind and wilful misconduct or actions of a parent company giving rise to the bankruptcy of an affiliate, the liability of shareholders could be extended.

Capital requirements

At the moment of incorporation, shareholders have to subscribe to at least 50% of the authorised capital and make an initial payment of at least one-third. The balance must be paid within one year from the date of incorporation.

Governance

An S.A. must have a board of directors. This must consist of at least three members and their alternates, and a legal representative.

Other relevant matters

An S.A. must have a legal reserve and statutory auditor.

Foreign Company Branch

Benefits and most common uses

Branches are a great alternative for foreign companies that want to have a permanent presence in Colombia. A branch office is an extension of the company’s home office and is not a separate legal entity. Branches are widely used by investors in the hydrocarbons sector.

Incorporation process

The home office issues a resolution which is formalised in a public deed granted before a Colombian Notary Public and registered with the chamber of commerce.

Term

The term is limited to the duration of the home office but can be extended as long as it is within the duration of the home office.

Number of partners/shareholders

The branch is not a separate entity to the foreign company. The foreign company is therefore the sole owner.

Liability

As it is not a separate entity from the foreign company, the home office is liable for the assets and liabilities of the branches. They are jointly and severally liable for tax obligations.

Capital requirements

The allocated capital must be fully paid, and any increase in capital requires an amendment to the by-laws along with authorisation by the foreign company’s competent corporate body. However, increasing supplementary investment does not need a by-law amendment and can be made in cash from abroad.

Governance

Branches do not have any separate governance bodies from their home office. A legal representative/general agent acts on behalf of the company.

Other relevant matters

A branch must have a legal reserve and statutory auditor.

Once the shareholders identify the type of corporate vehicle that suits their needs best, the incorporation process is generally simple and expeditious. The incorporation of corporations and branches does not require authorisation from governmental authorities as a rule. However, there are specific cases where authorisation from governmental authorities will be required.

Companies and branches must be registered in the commercial registry kept by the corresponding chamber of commerce of the municipality where it is to be domiciled. 

For purposes of incorporating a corporate vehicle in Colombia, the following main steps must be completed: 

• An incorporation document must be prepared containing the company’s by-laws and the names of the shareholders and identification documents. If the shareholders are foreign entities, apostille identification documents are needed. Depending on the type of vehicle, this may be completed through a private document or a public deed.
• The new entity must be registered with the corresponding chamber of commerce of the municipality where it is to be domiciled, by filling out the Registro Único Empresarial y Social (RUES) form.
• The new entity must be registered with the tax authorities by completing the form to obtain a tax identification number (NIT). The chamber of commerce also handles the processing of the national tax registry (RUT) used for registering entities with the Tax and Customs National Authority (DIAN). The RUT includes general taxpayer information, along with tax and customs obligations. To obtain this registration, the requisite fees and taxes must be paid to the chamber of commerce.
• Acceptance letters for the positions of legal representative, substitutes, and board members must be obtained, if these appointments are made in the incorporation document, along with copies of the documents for the appointed positions.

These documents must be filed with the chamber of commerce. Once all documentation is submitted, the registration process with the chamber of commerce often takes between one and two weeks.

Companies are required to report changes in management to the chamber of commerce within a month of the change being completed. Any amendments to the company’s name, legal address or social activity must be registered. Any changes in capital, whether increases or decreases, must also be reported to the chamber of commerce.

Private companies are required by Colombian law to fulfil the following main periodic obligations:

• Companies and commercial establishments must renew their commercial registration (matrícula mercantil) with the chamber of commerce by March 31st each year.
• If the company is under permanent supervision or control by the Superintendencia de Sociedades, or if the company has received a special request for information, it has to submit the financial statements along with their notes, management report, statutory auditor’s report, and other required documents to the Superintendencia de Sociedades. In addition, controlling companies must provide, in respect of their controlled subsidiaries, consolidated financial statements to the Superintendencia de Sociedades.
• If under permanent supervision or control by the Superintendencia de Sociedades, the company has to submit the business practices report as of December 31 the previous year.
• The financial statements, notes and report must be filed with the chamber of commerce, unless these have already been submitted to the Superintendencia de Sociedades.
• The ultimate beneficial owner (UBO) of the company must be registered in the single registry of ultimate beneficial owners administered by the Colombian tax authority. The UBO must be an individual person. Identifying the ultimate parent company alone is not sufficient to meet Colombian regulatory requirements.

Companies are operated and managed according to the rules set out in their by-laws, except for foreign company branches, which must follow the rules established in the by-laws of the home office. Except as set out below, there is freedom to establish the conditions for the operation and management of local vehicles.

Legal entities must appoint at least one legal representative, who is an authorised officer and is empowered to act on behalf of the company. Except for simplified stock corporations, all other entities are obliged to appoint an alternative to the legal representative as well. The legal representative is usually appointed by the board of directors and in the event the company does not have a board of directors, the legal representative is appointed by the shareholders. The by-laws may establish limits to the powers of the legal representative by means of including events in which the legal representative may require prior authorisation of the shareholders or the board of directors to carry out or perform certain actions (eg, entering into contracts exceeding a certain amount). 

Simplified stock corporations (S.A.S.) are not required to have a board of directors. However, for corporations (S.A.), a board of directors is mandatory and must be composed of at least three members, with their alternates. Decisions taken by the board of directors and by the shareholders must be approved according to the majority rules set out in the company’s by-laws, and both shareholder and board decisions must be recorded in minutes, which must also be incorporated into the corresponding company’s minutes ledger.

A foreign branch does not have any separate governance bodies from its home office. Instead, a legal representative or general agent acts on behalf of the company, suggesting more centralised control from the parent company.

Shareholders of corporations (S.A.) and simplified stock corporations (S.A.S.) are only liable up to the amount of their respective contributions. However, it is possible to pierce the corporate veil if the company is used to defraud the law or to the detriment of third parties. In these cases, the shareholders and administrators who have carried out, participated in, or facilitated the fraudulent acts are liable too. However, piercing the corporate veil involves a high burden of proof, and the specialist company court rarely finds sufficient evidence to do so.

The business judgement rule applies to administrators and usually does not interfere with the normal course of business of administrators or companies. However, the law establishes certain duties for administrators that they need to uphold, with the most important ones being acting with loyalty, diligence, and in the interest of the company. If shareholders consider that an administrator has not acted accordingly, they can commence a corporate action for liability (acción social por responsabilidad), and an administrator who has breached their duties can be liable for the damages caused to the company.

Even though Colombia follows a civil law system, consistent case law can also be binding precedents on the parties to a dispute. Employment relationships are governed by the law, by the employment contracts, by the collective bargaining agreements (where applicable) and, in some cases by consistent case law (where not expressly regulated by law).

Employment agreements in Colombia can be agreed verbally. Although not required by law, for evidence purposes it is advisable to formalise the terms of the employment relationship in writing and ensure the written agreement contains certain minimum information (eg, initiation date, type of contract and events of termination for cause). Some provisions are only valid if agreed in writing, such as:

• trial period;
• the characterisation of salary as being “integral”; and
• fixed-term duration of the employment agreement.

The ordinary working hours are those agreed by the parties, or in the absence of an agreement, the legal maximum established which is currently 47 hours per week (which is being gradually reduced so that, by 15 July 2026, it will be 42 hours).

Overtime work is that exceeding the ordinary working hours of the company and, in all cases, that exceeding the legal maximum working hours. Daily or nightly overtime work may never exceed two hours a day and 12 hours a week. The employer must have authorisation from the Ministry of Labour for employees to work overtime. Overtime work, daily or nightly, must be remunerated as follows:

• Daily overtime work (between 6.01am and 9pm): 25% over the value of daily ordinary work.
• Nightly overtime work (between 9.01pm and 6am): 75% over the value of daily ordinary work.
• Regular night work: 35% over the value of daily ordinary work.

Generally, Colombia is an employment at will jurisdiction, as an employment agreement may be terminated by a unilateral decision of either of the parties, with or without just cause. It can also be terminated by mutual consent, by the termination of the fixed-term agreed upon or by failure to extend the probation period.

The employee must be notified in writing of the termination of employment.

In some cases, the employer must give the employee advance notice of no less than 15 days. These include where the employer terminates the employment agreement due to poor job performance and recognition of a retirement pension if the employee is still providing services. Apart from those cases, employment law does not require advance notice for the termination of employment contracts, except in the case of non-renewal of fixed-term contracts. Notice of non-renewal of a fixed-term contract must be provided at least 30 calendar days in advance of the date of the expiration term. If it is not, the contract will be automatically renewed.

Employers must pay employees amounts due immediately upon termination (eg, salaries, outstanding vacations, accrued social benefits, outstanding commissions, and any other labour benefit owed). The exact amounts vary depending on the agreed salary structure (eg, integral salary or ordinary salary plus mandatory benefits structure) and the termination scenario (eg, dismissal for cause, mutual consent or resignation).

Unilateral termination without cause will give rise to the payment of statutory severance. The formula to calculate the statutory severance upon unilateral termination without cause depends on the employee’s monthly salary, whether the labour contract is for a fixed or indefinite period of duration, and the actual time of duration of the employment.

For indefinite-term contracts, the legal severance for dismissal is as follows:

• For employees who earn less than ten minimum legal monthly salaries (for 2024, COP13 million or USD3,250), the severance is equivalent to 30 days of salary for the first year of service and 20 additional days of salary for each additional year of service, proportionally per fraction.
• For employees who earn ten minimum legal monthly salaries or more, the severance is equivalent to 20 days of salary for the first year of service and 15 additional days of salary for each additional year of service and proportionally per fraction.
• For employees who had more than ten years of service as of 27 December 2002, the severance is equivalent to 45 days salary for the first year of service and 40 additional days of salary for each year subsequent to the first and proportionally for fractions of the year.
• For employees who had ten years of service or more as of 31 December 1990 and are entitled to reinstatement, the severance is equivalent to 45 days salary for the first year of service and 30 additional days of salary for each year subsequent to the first and proportionally for fractions of the year.

For agreements entered into under a fixed period or for the duration of a specific job or activity, the severance is equivalent to the salaries corresponding to the unexpired period of the contract, but in the case of contracts for the duration of the job the indemnity cannot be less than 15 days salary.

Under Colombian law, a collective dismissal occurs when an employer unilaterally and without cause terminates the employment agreements of a certain percentage of its employees within a period of six consecutive months, without the required authorisation from the Ministry of Labour. These percentages, which are established by law, vary depending on the size of the company’s workforce.

To proceed with a collective dismissal, the employer must obtain prior authorisation from the Ministry of Labour. The Ministry, at its discretion, can approve or reject this request. In practice, the Ministry is often reluctant to grant such authorisation, typically taking more than 12 months to review the request and possibly denying it. If the authorisation is not granted, the employer may be ordered to pay severance to the affected employees.

In Colombia, works councils/employee representative bodies, as such, do not exist. However, employees have the right to form or join unions.

A union must have at least 25 members to be formed. To become part of a union, employees must be at least 14 years old and perform employment-related activities under special conditions. These requirements must be certified at an initial constitution meeting and executed with the intention to become unionised employees, at which time the employees will sign a foundation minute. The foundation minute is one of the requirements that must be fulfilled to register the union with the Ministry of Labour.

Unions are authorised to enter into collective bargaining agreements on behalf of the affiliated employees. In addition to the provisions agreed upon between the parties, the collective bargaining agreement must indicate the company or establishment, industry and trades covered thereby, the place or places where it is to govern, the date on which it takes effect, its duration, the causes and methods of its renewal and termination, and the responsibility for non-performance. Irrespective of the kind of union or the number of affiliates working for an employer, negotiation is held by each union within an entity.

An employee may belong to more than one union, and unions of the same or different nature may coexist in the same company. Employers must recognise the right of association of employees and unions.

Employees are subject to payment of income tax, at rates that depend on the employee’s total income and/or compensation earned during the corresponding fiscal year and that range from 0% to 39% of the employee’s taxable income.

Employers are required to withhold the applicable income tax when the salary is paid to the corresponding employee.

Both the employee and employer must make contributions to the social security system. For the healthcare system, a contribution of 12.5% of the employee’s base salary must be made, of which the employee contributes 4% and the employer 8.5%. For the pensions system, a contribution of 16% of the employee’s salary must be made, of which the employee contributes 4% and the employer contributes 12%.

Employers must also make mandatory contributions to certain private and public entities that provide services to the community related to welfare, education and children’s rights (locally referred as parafiscales) which collectively amount to 9% of the employee’s salary.

The main taxes applicable to companies and the current applicable rates are as follows:

Corporate Income Tax (CIT)

The general CIT rate for 2024 is 35%. This tax is imposed on the total income (generated or not in Colombia) of the Colombian company (ie, companies incorporated in Colombia, domiciled in Colombia or having their place of effective management in Colombia) and on the income of foreign non-resident companies generated in Colombia. An additional surcharge ranging from 5% to 15% is applicable to companies in the hydrocarbons and mining sectors. Industrial users of a free trade zone (FTZ) are subject to a special CIT rate of 20%. Since the 2023 fiscal year, local companies are subject to a minimum effective tax rate of 15% of accounting profits. If the tax liability calculated on net taxable income results in an effective tax rate lower than 15% of accounting profits, the taxpayer must increase the tax liability until it reaches the minimum.

Capital Gains Tax

In Colombia, a company must pay capital gains tax when it sells fixed assets held for two years or more or upon liquidation if the company was incorporated for a term of two years or longer, at a rate of 15%.

Withholding Tax (WHT)

The WHT system is a general mechanism of advance tax collection. All corporate entities are required to collect or withhold taxes from payments made to third parties. The WHT collection agents must collect the applicable WHT amounts and every month deposit the withheld amounts to the tax authority, file monthly WHT returns and issue WHT certificates to the withheld third parties. The withheld third parties, who are also subject to CIT declaration/payment, may credit the withheld taxes in their annual CIT return. The WHT rates vary depending on the nature of the payment. The general WHT rate on payments made to foreign non-residents is 20%.

Value Added Tax (VAT)

The standard VAT rate in Colombia is 19% of the invoiced amount. This tax is applicable to:

• the sale of movable assets;
• the provision of services in Colombia or from abroad (if the beneficiary is located in Colombia); and
• the import of assets or goods that have not been expressly excluded. Certain services are exempt from VAT, such as medical services, educational services, internet connectivity, and in some cases, energy, gas, and water utilities.

Industry and Commerce Tax

This is a municipal tax applicable to all individuals, legal entities and de facto companies who carry out industrial, commercial or service activities within the jurisdiction of the relevant municipality. The rates vary from 0.2% to 0.7% calculated over the gross income for industrial activities and 0.2% to 1.6% calculated over the gross income for commercial and services activities.

Colombia offers the following tax incentives to local and foreign companies:

• Double taxation treaties: Colombia has entered into an extensive network of double taxation treaties.
• Foreign tax credit applicable to all Colombian companies: foreign income taxes may be credited by Colombian companies against their local CIT liability, subject to certain limitations.
• Corporate income tax exemptions: the following income generated locally by a Colombian company is exempt from CIT:
1. income obtained from eco-tourism services;
2. income related to the sale of social interest or priority housing, provided that the taxpayer obtains the corresponding governmental permit; and
3. income of companies incorporated in the departments of La Guajira, Norte de Santander, and Arauca (ZESE) until 2024 will have a five-year CIT exemption.
• Tax credit applicable to certain investments: a 30% tax credit is available for investments made in certain scientific and/or technological projects or in professional training projects of governmental, public or private institutions.
• Special CIT rate for free trade zones: these are geographically delimited areas in the Colombian territory that have a special tax and customs regime. Companies that have this status can access tax benefits such as the application of a preferential (lower) income tax rate, 0% VAT and tariffs on foreign goods and 0% VAT on domestic goods, among others.
• Tax benefits for investments in non-conventional energy sources: tax incentives exist to encourage the generation of energy frm clean and renewable sources. The following are the main tax incentives:
1. income from the sale of electric power generated from wind, biomass or agricultural waste is exempt from CIT, provided the seller issues and negotiates greenhouse gas reduction certificates;
2. income tax deduction of 50% of the value of the investment made in energy generation projects from non-conventional sources;
3. VAT exemption on the acquisition of goods and services necessary for the development of non-conventional energy projects;
4. exemption from payment of import duties on machinery, equipment, materials and inputs necessary for the production of energy from non-conventional sources; and
5. accelerated depreciation incentive for machinery, equipment and civil works necessary for the development of non-conventional energy generation projects.

Tax consolidation is not allowed in Colombia.

Thin capitalisation rules (when the level of debt of a company is much greater than its equity capital) are applicable in Colombia based on the following:

• Debt-to-equity ratio: for income tax purposes, a taxpayer generally may not deduct interest paid on loans that are acquired, directly or indirectly, from related parties and exceed a 2:1 debt-to-equity ratio, considering the taxpayer’s net equity on December 31 in the preceding year.
• Loans from third parties: loans from third parties, where a related party acts as guarantor or provides a guaranty, participates in a back-to-back operation, or substantially acts as a creditor in any other transaction, are subject to the thin capitalisation limitation.

Transfer pricing rules are applicable in Colombia. 

The following are some of the key anti-evasion rules applicable in Colombia:

• Indirect sales: Colombia has an indirect transfer regime. The regime taxes the indirect disposal of assets located in Colombia, through the transfer, by any means, of shares, participations or rights in foreign entities, as if the Colombian underlying assets were directly transferred. Secondary legislation clarifies the tax basis calculation and withholding tax obligations on indirect transfers.
• General anti-abuse rule: this rule grants DIAN the power to recharacterise operations that have no business purpose. This encompasses transactions that are artificial, have no economic or commercial purpose or are aimed at obtaining a tax advantage. The burden of proof for this purpose is on DIAN.
• Limitation on benefits rule: Colombia has an anti-abuse clause that contains a limitation on benefits rule, whereby only one tax benefit can be applied to a single economic event. Otherwise, a taxpayer will lose the higher benefit applied.

Any transaction (shares or asset purchase, acquisition of IP rights, etc) that meets the requirements below is subject to pre-merger control by the Superintendencia de Industria y Comercio (SIC):

• The transaction entails a change of control over the target company, assets, rights or business line. “Control” is defined in antitrust law as the possibility of influencing another company’s corporate policies and commercial strategies or disposing of key assets. Minority shareholdings may grant control under this definition in certain circumstances.
• The parties to the transaction (eg, buyer and seller) are active in Colombia either in the same economic activity (horizontal overlap) or on different levels of the same value chain (vertical overlap).
• The parties had, for the fiscal year immediately preceding the transaction, operating income or total assets in excess of the value set yearly by the SIC. For 2024, this is COP77.2 billion or USD18 million.

If these conditions are met, a filing with the SIC will be required. The type of filing will depend on the parties’ combined market share. If market shares in all relevant markets are below 20%, a short-form notification is available. If the combined share in at least one relevant market is equal to or exceeds 20%, a full filing (or pre-assessment request) will be required.

Joint Ventures

As per SIC precedent, joint ventures (JVs) are economic integrations (fulfilling the first criteria above) if they:

• are permanent or long-lasting;
• involve the joint development of a non-complementary activity of the parties; and
• are fully functional in terms of financial and administrative capacity.

If the JV meets these requirements and additionally meets the local overlap and thresholds test, it will be subject to pre-merger control.

For short-form notifications, the SIC has ten business days from the date the required information is filed to review it and issue a letter acknowledging the notification’s proper filing and deeming the transaction approved.

For full filings, the SIC has a preliminary phase (Phase 1) that lasts 30 business days from the date the required information is filed. During this phase, the SIC can either approve the transaction or escalate to a more detailed review. In Phase 1, the SIC also posts a notice on its website to inform third parties about the transaction, giving them ten business days to submit any relevant information.

Phase 2 lasts for three months from the date the required information is submitted. In this phase, the SIC requests additional information from other authorities, competitors, clients and suppliers to perform its market analysis. If the SIC issues a request for further information (RFI) to the parties during Phase 2, this resets the three-month period, but only the first RFI has this effect; subsequent RFIs do not alter the duration.

Colombian competition law generally prohibits anti-competitive conduct, such as price fixing, bid rigging and market allocation, among others.

Antitrust laws apply to any market agent, whether domestic or foreign, whose conduct has or may have an effect, whether total or partial, in any market in Colombia.

Penalties for engaging in anti-competitive agreements can be up to 100,000 minimum monthly wages (approximately COP130 billion or approximately USD30 million) for companies, and up to 2,000 minimum monthly wages (approximately COP2.6 billion or approximately USD650,000) for individuals, including corporate officers and employees, who executed, authorised or tolerated the conduct.

Colombian competition law generally prohibits anti-competitive behaviour (ie, behaviour that is restrictive regardless of the existence of a dominant position) and abuses of dominance (eg, tying, discrimination and market access obstruction, among others).

Penalties for engaging in unilateral conduct, including acts or abuses of dominance, can be as high as 100,000 minimum monthly wages (approximately COP130 billion or approximately USD30 million) for companies, and up to 2,000 minimum monthly wages (approximately COP2.6 billion or approximately USD650,000) for individuals, including corporate officers and employees, who executed, authorised or tolerated the conduct.

A patent is an exclusive right granted to an inventor over their invention. In Colombia, the patent protection period lasts for 20 years from the filing date, and it cannot be renewed.

The registration process begins with the submission of the application to the SIC, along with the required registration fees. Following this, the office carries out formal and substantive examinations to ensure compliance with legal requirements and to assess the invention’s novelty, inventive step and industrial applicability. If all criteria are satisfied, the patent is granted.

Enforcement of patent rights may involve cease and desist letters and conducting mediation hearings as out-of-court remedies. Judicial remedies include filing for injunctions, ordering seizures and pursuing infringement lawsuits, which enable the patent holder to seek monetary compensation for damages.

A trade mark identifies goods or services and can be categorised into types such as word, stylised and figurative trade marks. Protection is valid for ten years from the registration date and can be renewed indefinitely every subsequent ten years.

The registration process involves filing an application with the Trademark Office, paying the required fees, and undergoing a formal examination. Following this, the trade mark is published to allow for opposition. If no oppositions arise or they are resolved, a substantive examination takes place. The Office then issues a resolution granting or denying the registration of the trade mark.

Enforcement activities for trade marks include issuing cease and desist letters and holding mediation hearings as out-of-court remedies. Judicial remedies include filing for injunctions, seizures and infringement actions, through which the owner can seek monetary compensation for damages.

Industrial design protects the ornamental aspects of a product, focusing on its aesthetic appearance rather than its technical or functional features. The protection for industrial designs lasts for ten years from the filing date and cannot be renewed.

The registration process for industrial designs begins with filing an application and paying the required fees. This is followed by a formal examination and publication of the design for opposition purposes. After the opposition period, a substantive examination takes place, which results in a resolution either granting or denying the registration of the design.

Enforcement of industrial design rights may involve sending cease and desist letters and conducting mediation hearings as out-of-court remedies. Judicial remedies include filing for injunctions, seizures and infringement actions, allowing the owner to seek monetary compensation for damages incurred due to the infringement.

Copyright protects the original expression of artistic, scientific or literary works. It encompasses both moral and economic rights, with moral rights protected indefinitely and economic rights protected for the lifetime of the author plus 80 years from the work’s creation.

In Colombia, registering works with the National Copyright Office (Dirección Nacional de Derecho de Autor) has declaratory effects but not constitutive effects. However, it is advisable to register works to establish evidence of ownership.

Enforcement of copyright involves activities such as cease and desist letters and conducting mediation hearings as out-of-court remedies. Judicial options include filing for injunctions, seizures and infringement actions, allowing the owner to seek monetary compensation for damages caused by the infringement.

Other protected IP rights include trade secrets, which can be enforced via unfair competition actions. Trade secrets encompass undisclosed information usable in productive, industrial or commercial activities, capable of transmission to third parties.

Software is safeguarded under copyright law in Colombia and follows similar procedures.

Law 1581 of 2012 is the primary regulation governing data protection in Colombia. It adopts a consent-based approach for the processing of personal data concerning Colombian data subjects. It covers various important matters, including:

• requirements for valid consent for the processing of personal data;
• special treatment and protection of sensitive personal data;
• rights of data subjects regarding their personal data;
• transmission and transfer of personal data to third parties;
• obligations imposed on data controllers and processors; and
• penalties for violations of the data protection regulations.

Additionally, Decree 1377 of 2013 supplements these provisions by imposing additional obligations related to the minimum content requirements for privacy policies, notices, data transmission and transfer agreements, and specifications for international data transfers.

The SIC has consistently ruled that Colombian data protection laws apply to any company that processes personal data in Colombia. According to the definition of “processing” in Law 1581 of 2012, which includes data collection, any company, whether local or foreign, that collects or processes personal data from Colombian residents is subject to the provisions and obligations of Colombian data protection law.

In several cases, the SIC has explicitly stated that even the act of collecting data through cookies from web or mobile browsers falls under the scope of Colombian data protection regulations. Therefore, any foreign entity engaged in online data collection from Colombian individuals must comply with local data protection laws.

The data protection authority in Colombia is the SIC.

International Trade Reform

A new bill modifying the Colombian customs statute was recently approved and will introduce significant changes. These include requiring all import declarations to be submitted within 48 hours prior to the arrival of goods and a revised definition of “different goods”, which could lead to potential seizures due to tariff classification errors during customs control. A thorough review of tariff subheadings and diligent verification are therefore recommended to ensure accurate classification.

Labour Reform

The current administration submitted a labour reform package to Congress. In general terms, the package proposes the following changes.

• The general rule applicable to employment contracts would be for them to be indefinite term agreements, with fixed-term contracts being the exception.
• A requirement for apprentices to be hired under fixed-term employment contracts.
• The formalisation of scenarios of reinforced labour stability, incorporating them into the law rather than relying on case rulings as has been the practice to date.
• An increase in severance payments for wrongful termination of employment contracts by the employer.
• A defined day shift from 6am to 7pm and a night shift from 7pm to 6am.
• Regulations for special work categories including agricultural workers, migrants, and sportsmen and women.
• Measures aimed at promoting equity and reducing gaps.

The package of reforms must be discussed in four debates before Congress (two in the Senate and two in the House of Representatives). It was approved in the first debate on 18 June 2024.

Intellectual Property 

Bill No 059 of 2023-128 was filed before the Senate. It proposes establishing public policy guidelines for the development, use and implementation of artificial intelligence.

This important bill can serve as a starting point for a serious multisectoral debate that allows an analysis of the need for a specific law to regulate AI technologies.