04. Foreign Investment & Currency Exchange Regime

The exchange regime in Colombia governs all transactions with foreign countries involving the transfer of foreign currency or related securities. All foreign investments in Colombia are subject to and protected by the following principles:

• Equal Treatment: foreign investments receive the same treatment as those made by Colombian residents.
• Guarantee of Exchange Rights: foreign investments and investor rights are safeguarded regarding the conditions for reimbursement and repatriation of profits in effect at the time of registration.
• Non-Discrimination: regulations must not impose any discriminatory treatment or conditions against foreign investors under any circumstances.

It is important to note that certain transactions must be channeled through Foreign Exchange Market Intermediaries (IMCs in spanish) and/or clearing accounts; thus, they require registration with the Bank of the Republic. These transactions include:

• Foreign investments (all transactions between Colombia and other countries).
• Financial investments and investments in foreign assets.
• External indebtedness (both assets and liabilities).
• Import and export of goods.
• Derivative trading.
• Foreign currency guarantees.

The international investment regime distinguishes between two types of foreign capital investment based on the asset involved: (a) foreign direct investment and (b) foreign portfolio investment.

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