Legal Obligations
Foreign Exchange
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COMPANIES
There are 3 main obligations:
1. Holders of Compensation Accounts
1.1.Report on transactions for Compensation Accounts
Holders of compensation accounts must report the transactions carried out through such accounts during the immediately preceding month, within the following month calendar, by transmitting, through the Foreign Exchange Information System, the Compensation Account Movement Report, on a consolidated basis.
The obligation to transmit this information monthly applies regardless of whether the account had any transactions, or whether the transactions carried out through the account correspond to those classified as mandatorily channeled through the foreign exchange market.
1.2. Foreign Exchange Exogenous Information
Holders of compensation accounts must submit, on a quarterly basis, to the DIAN (Colombian Tax and Customs Authority) the foreign exchange information required in connection with the transactions carried out through the compensation account, within the month following the quarter in which initial transactions, refunds and amendments of foreign exchange declarations were channeled; corrections, legalizations and new foreign exchange declarations generated by the annulment of foreign exchange declarations were filed, using Forms 1059, 1060, 1061, 1062, 1066 and 1067, as established in Resolution No. 000204 of 2025.
It is important to note that the DIAN issued Resolution No. 000230 of October 20, 2025, whereby the deadlines for the submission of foreign exchange exogenous information by the obligated parties were extended, to allow them to complete the IT developments required to comply with the technical specifications and conditions established by the DIAN for this reporting obligation.
2. International Investments
2.1. Made through transfer of funds
International investments must be registered with the Central Bank by the investors, their proxies, legal representatives, or the legal representatives of the companies receiving the investment. In the case of international investments made through transfer of funds, the foreign exchange declaration corresponding to their channeling through the foreign exchange market, filed with an authorized foreign exchange intermediary or transmitted directly through the Foreign Exchange Information System in the case of holders of compensation accounts, shall serve as the investment registration declaration.
2.2. Made through Modalities Other than transfer of funds
Direct foreign capital investments carried out pursuant to a lawful act, contract, or transaction, other than those made through transfer of funds, must be registered at any time by the investors, their proxies, legal representatives, or the legal representatives of the companies receiving the investment, by transmitting the International Investment Registration Declaration through the Foreign Exchange Information System.
Investments derived from corporate reorganization processes (mergers and spin-offs) must be registered at any time by the investors, their proxies, legal representatives, or the legal representatives of the companies receiving the investment, selecting “Corporate Reorganization” as the origin of the investment in the International Investment Registration Declaration transmitted through the Foreign Exchange Information System.
2.3. Advances for Future Capitalizations
Under foreign exchange regulations, advances for future capitalizations constitute passive external indebtedness and must be reported through the filing of the Report of External Credit Granted to Residents with a Foreign Exchange Market Intermediary, prior to the disbursement, using purpose code 43 – “Advances for Future Capitalizations.”
When the proceeds of the passive external indebtedness are fully or partially capitalized, the foreign capital investment must be registered through the Foreign Exchange Information System.
When the proceeds of the advance for future capitalizations are not fully or partially capitalized, the remittance abroad must be made through the foreign exchange market by filing a Foreign Exchange Declaration for External Indebtedness, using the applicable foreign exchange code.
2.4. Substitution, Cancellation and Capital Recomposition
The substitution, cancellation and capital recomposition of direct foreign capital investments must be reported to the Central Bank, through the Foreign Exchange Information System, within six (6) months following the date of the transaction.
a. Substitution: Substitution of a direct foreign capital investment refers to a change in the holders of the investment to other non-resident investors, as well as a change in the destination or in the company receiving the investment. This generally results in the partial or total cancellation of the initial registration and a new registration.
b. Cancellation: Cancellation of a direct foreign capital investment refers to the partial or total reduction or liquidation of an investment previously registered with the Central Bank.
c. Capital Recomposition: Amendments to the capital structure that result in an increase or decrease in the number of equity interests (shares, quotas, or other capital-representative interests) due to a change in their nominal value, without modifying the total capital value, must be reported by the legal representative of the recipient company to the Central Bank by means of a Special Request. As a result, the Central Bank will generate an International Investment Cancellation Declaration and an International Investment Registration Declaration through the Foreign Exchange Information System.
3. External Indebtedness
External loans granted to residents or by residents to non-residents must be reported to the Central Bank through a
Foreign Exchange Market Intermediary, either prior to or simultaneously with the disbursement of the loan, by filing the Report of External Credit Granted to Residents or the Report of External Credit Granted to Non-Residents, as applicable. Supporting documentation required for each type of transaction must also be submitted, and the intermediary bank will verify consistency with the reported information.
Foreign Exchange Market Intermediaries generally require a loan agreement executed between the parties, and in some cases, financial documentation of the non-resident borrower or lender.
BRANCHES OF FOREIGN COMPANIES
Updating equity accounts– Branches of special regime
In order to keep the information related to foreign investment in Branches of the special regime (activities in Oil and Mining) updated, it is required to report the updating of the equity accounts within the following six (6) months after fiscal year closing, i.e., June 30, 2026, through the online transfer of the Assets Reconciliation for the Special Regime, using the New System of Foreign Exchange Information.
COLOMBIAN NON-PROFIT ORGANIZATIONS
THERE ARE 3 MAIN DUTIES:
1. Holders of Compensation Accounts
1.1 Report on transactions for Compensation Accounts
Holders of compensation accounts must report the transactions carried out through such accounts during the immediately preceding month, within the following month calendar, by transmitting, through the Foreign Exchange Information System, the Compensation Account Movement Report, on a consolidated basis.
The obligation to transmit this information monthly applies regardless of whether the account had any transactions, or whether the transactions carried out through the account correspond to those classified as mandatorily channeled through the foreign exchange market.
1.2 Foreign Exchange Exogenous Information
Holders of compensation accounts must submit, on a quarterly basis, to the DIAN (Colombian Tax and Customs Authority) the foreign exchange information required in connection with the transactions carried out through the compensation account, within the month following the quarter in which initial transactions, refunds and amendments of foreign exchange declarations were channeled; corrections, legalizations and new foreign exchange declarations generated by the annulment of foreign exchange declarations were filed, using Forms 1059, 1060, 1061, 1062, 1066 and 1067, as established in Resolution No. 000204 of 2025.
It is important to note that the DIAN issued Resolution No. 000230 of October 20, 2025, whereby the deadlines for the submission of foreign exchange exogenous information by the obligated parties were extended, to allow them to complete the IT developments required to comply with the technical specifications and conditions established by the DIAN for this reporting obligation.
2. International Investments
2.1 Made through transfer of funds
International investments must be registered with the Central Bank by the investors, their proxies, legal representatives, or the legal representatives of the companies receiving the investment. In the case of international investments made through transfer of funds, the foreign exchange declaration corresponding to their channeling through the foreign exchange market, filed with an authorized foreign exchange intermediary or transmitted directly through the Foreign Exchange Information System in the case of holders of compensation accounts, shall serve as the investment registration declaration.
2.2 Made through Modalities Other than transfer of funds
Direct foreign capital investments carried out pursuant to a lawful act, contract, or transaction, other than those made through transfer of funds, must be registered at any time by the investors, their proxies, legal representatives, or the legal representatives of the companies receiving the investment, by transmitting the International Investment Registration Declaration through the Foreign Exchange Information System.
Investments derived from corporate reorganization processes (mergers and spin-offs) must be registered at any time by the investors, their proxies, legal representatives, or the legal representatives of the companies receiving the investment, selecting “Corporate Reorganization” as the origin of the investment in the International Investment Registration Declaration transmitted through the Foreign Exchange Information System.
2.3 Advances for Future Capitalizations
Under foreign exchange regulations, advances for future capitalizations constitute passive external indebtedness and must be reported through the filing of the Report of External Credit Granted to Residents with a Foreign Exchange Market Intermediary, prior to the disbursement, using purpose code 43 – “Advances for Future Capitalizations.”
When the proceeds of the passive external indebtedness are fully or partially capitalized, the foreign capital investment must be registered through the Foreign Exchange Information System.
When the proceeds of the advance for future capitalizations are not fully or partially capitalized, the remittance abroad must be made through the foreign exchange market by filing a Foreign Exchange Declaration for External Indebtedness, using the applicable foreign exchange code.
2.4 Substitution, Cancellation and Capital Recomposition
The substitution, cancellation and capital recomposition of direct foreign capital investments must be reported to the Central Bank, through the Foreign Exchange Information System, within six (6) months following the date of the transaction.
- Substitution: Substitution of a direct foreign capital investment refers to a change in the holders of the investment to other non-resident investors, as well as a change in the destination or in the company receiving the investment. This generally results in the partial or total cancellation of the initial registration and a new registration.
- Cancellation: Cancellation of a direct foreign capital investment refers to the partial or total reduction or liquidation of an investment previously registered with the Central Bank.
- Capital Recomposition: Amendments to the capital structure that result in an increase or decrease in the number of equity interests (shares, quotas, or other capital-representative interests) due to a change in their nominal value, without modifying the total capital value, must be reported by the legal representative of the recipient company to the Central Bank by means of a Special Request. As a result, the Central Bank will generate an International Investment Cancellation Declaration and an International Investment Registration Declaration through the Foreign Exchange Information System.
3. External Indebtedness
External loans granted to residents or by residents to non-residents must be reported to the Central Bank through a Foreign Exchange Market Intermediary, either prior to or simultaneously with the disbursement of the loan, by filing the Report of External Credit Granted to Residents or the Report of External Credit Granted to Non-Residents, as applicable. Supporting documentation required for each type of transaction must also be submitted, and the intermediary bank will verify consistency with the reported information.
Foreign Exchange Market Intermediaries generally require a loan agreement executed between the parties, and in some cases, financial documentation of the non-resident borrower or lender.
FOREIGN NON-PROFIT ORGANIZATIONS
Foreign non-profit entities are considered non-residents.
Accordingly, transfers made by such entities from abroad to their proxies in Colombia for the payment of obligations in the country may be voluntarily channeled through the foreign exchange market by filing a foreign exchange declaration for services, transfers and other concepts, using foreign exchange code 1601 – Other concepts.