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GOBIERNO DE COLOMBIA
2022
LEGAL GUIDE
TO DO BUSINESS IN

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CONTENT

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Introduction
Chapter No. 1
Chapter No. 2
Chapter No. 3
Chapter No. 4
Chapter No. 5
Chapter No. 6
Chapter No. 7
Chapter No. 8
Chapter No. 9
Chapter No. 10
Chapter No. 11
Chapter No. 12
Chapter No. 13
Protection to foreign investment..................................7
ForeignExchangeRegime........................................23
Corporate Regulations............................................43
ForeignTradeAndCustoms......................................81
LaborRegime.......................................................107
ImmigrationRegime..............................................143
ColombianTaxRegime..........................................163
ColombianEnvironmentalRegime...........................209
Energy Market....................................................233
Intellectual Property...............................................239
RealEstate...........................................................265
Government Procurement......................................279
Accounting Regulations For Companies...................317

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INTRODUCTION
Colombia is a democratic country, with
a privileged and strategic location
in Latin America. It is rich in natural
resources and is at present time, one of
the main investment destinations in the
region, mainly because of its commercial
opportunities and its legal stability despite
of the tough scenario of the worldwide
pandemic.
Colombia has one of the top progresses,
not only economic but also cultural, in
investment and development, compared
to the rest of the region.
In the last decade, Colombia’s GDP growth
rate has exceeded the world average,
and in recent years the country has shown
great economic stability, mainly using
sensible economic policies in connection
with challenging situations, which have
managed to maintain low inflation levels.
Even, the principal risk rating agencies
have maintained Colombia in stable
confidence indices.
ProColombia in association with Posse
Herrera Ruiz have prepared this Legal
Guide to do Business in Colombia (the
“Guide”) to provide foreign investors
guidelines on the main legal aspects. The
content of this document was prepared
and updated in March 15, 2022, based
entirely on the current information and
legislation.
Warning
The purpose of this document is purely
informative. The Guide is not intended

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to provide legal advice. Therefore, those
using this Guide shall not be entitled to
bring any claim or action against Posse
Herrera Ruiz or ProColombia, their
respective directors, officers, employees,
agents, advisors or consultants arising
from any expense or cost incurred into
or for any commitment or promise made
based on the information contained in this
Guide. Neither shall they be entitled to
indemnifications from Posse Herrera Ruiz
nor ProColombia, for decisions made
based on the contents or the information
provided in this Guide.
We strongly advise that investors and
in general readers who make use of the
Guide, consult their own legal advisors
and professional consultants regarding
investment in Colombia.
On the figures on this Guide
The figures used on this Guide have been
determined as follows: (i) the figures
expressed in US dollars have been
calculated using an exchange rate of COP
3.747 = USD 1; and (ii) for those based
on the current minimum legal monthly
wage (MLMW) in Colombia, the MLMW
for the year 2022 is COP $1.000.000
(approx. USD 267).
The foreign exchange rate changes daily
with the supply and demand for currency
and the MLMW is adjusted at the end of
every calendar year (December) for the
following year.
We hope that this Guide will be of great
use for your investment in Colombia.

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ACCOUNTING
REGULATIONS FOR
COMPANIES
CHAPTER

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ACCOUNTING
REGULATIONS
FOR COMPANIES
Seven aspects investors should know
about accounting regulations applicable
to companies in Colombia:
1. In Colombia, companies and other
entities that carry out commercial
activities shall carry the accountability
according to the international
accountability standards in force in
the country, which are based on the
International Financial Reporting
Standards (IFRS1
) issued by the
International Accounting Standards
Board (IASB). Though the Colombian
accountability standards are based on
the IFRS, some IFRS provisions are not
applicable in Colombia.
2. Within the local accountability
standards, there are three types of
those: (i) The technical framework for
Group 1 based in the IFRS, which is
applicable to big companies, financial
and insurance sector institutions; (ii)
technical framework for Group 2, based
on the IFRS for Small and Medium-Sized
Entities (SMEs), which in general terms
applies to those companies that do not
belong to Group 1 nor Group 3; and
(iii) the technical framework for Group
3, which applies to micro-businesses
which are usually companies with only
one business establishment, with less
than 10 employees and a ratio based
in assets and income (Decree 2420,
2015).
3. By he end of each corporate
year, on December 31st, companies
shall cut their accounts to so prepare
and disclose their general financial
statements, duly certified (Signed
by a Public Accountant and Legal
Representative). Those statements
will be disclosed together with the
corresponding professional opinion,
if it exists, or if the company has the
liability to have it. (Art. 34 of Law
222/1995).
4. Managers, as part of their end
of year rendering of accounts to the
highest corporate body, must submit
those general financial statements.
These are usually used to support some
of its decisions and are mandatory to
dispose of the results of the period
and/or the cumulative earnings. (Art.
151 of the Commerce Code).
5.Fortaxpurposes:accordingtotheTax
Code the accounting figures under the
technical accountability standards, are
the starting point for the determination
of equity, liabilities, assets, income,
expenses and deductions related to the
income tax. Notwithstanding, the tax
regulation establishes some exceptions
to the accounting figures, for instance,
fair value adjustments, provisions and
equity method do not generate income,
costs or deductions in income tax.
1
Accounting standards issued by the International Accounting Standards Board (IASB)

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2
The monthly minimum wage for 2022 is COP $1.000.0006.
3
See in “Annex: Regulatory Decrees” of this chapter, the complete list of the regulatory decrees
issued in development of said Law 1314/2009.
6. In Colombia, International auditing
standards were also adopted, which
apply to those who carry out auditing
and Statutory Auditor work (Decree
2420, 2015).
7. Finally, there is an institution known
as the Statutory Auditor, exercised
by a Public Accountant and that has
additional liabilities to the audit of
financial statements, for example, it
must certify some tax returns, review
and report possible irregularities that
occur in the operation of the company
and/or in the development of their
businesses, ensure that the assets of the
company are preserved. Companies
that have more than 5.000 monthly
minimum wages2
, or gross assets of
3.000 monthly minimum wages will
have the liability to have an Statutory
Auditor, although it could also be
appointed voluntarily by any company.
13.1 General Rules
Law 1314 established that companies
must apply to financial information
international standards of global
acceptance.Incometaxregulationsreferto
the accounting bases, nevertheless, there
is an independence between accounting
regulation, tax regulation and other legal
rules alien to accounting issues. Thus, with
the purpose that financial information in
Colombia reflects the economic essence
of transactions.
On the other hand, the development of
law 1314 has issued accounting and
assurance engagement regulations that
are contained in Unification Decree
2420/2015, alongside other decrees
adding to it or amending it3
.
Every year, the accounting standards in
Colombia are updated with some of the
changes established by the IASB for IFRS.
The changes established by the IASB will
only be applicable in Colombia until they
enter the Colombian accounting system
through the issuance of a government
decree.
13.2 Accounting Frameworks
applicable in Colombia
As indicated above, companies and other
entities in Colombia, in general, will apply
one of the three accounting frameworks
applicable in the country: the IFRS, the
IFRS for SMEs, and another accounting
framework for micro-enterprises.
In addition to these frameworks,
Regulatory Decree 2101/2016 provided
a special technical framework applicable
to companies and entities that have

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initiated their liquidation proceedings,
or for those under threat of liquidation
(meaning, under the terms of the relevant
accounting framework, entities that do
not meet the going concern hypothesis)
this framework is known as Accounting
Framework for entities that do not meet
the hypothesis of going concern.
To identify which of the accounting
frameworks mentioned above is
applicable to a company or entity, it
must evaluate compliance with certain
characteristics and/or parameters
established by the regulations mentioned
above and inform it during the company’s
incorporation.
13.3 IFRS effective in Colombia to
the date
To date, the IFRS Full in Spanish, issued
until January 1st, 2020 by the IASB,4
and
the IFRS for SMEs, in Spanish in their 2015
version5
, were put into force in Colombia
through the regulations indicated above.
The foregoing allows anticipating that the
IFRS which is in Full force and applicable
in Colombia will have a delay before the
standards issued by the IASB to date,
aspect that may generate differences
between the financial statements of a
period issued by the entities in Colombia
and the financial statements of the
same period issued by entities of other
jurisdictions.
13.4 Financial reporting to the
surveillance and control entities.
Annually, the entities under the inspection,
surveillance, and control of relevant
supervising entities must disclose to
those entities their separate, individual
and consolidated financial statements,
prepared based on the IFRS. This report
must be made between the months of
April and May of each year
4
Regulatory Decree 938/2021, amending and adding the URD 2420/2015
5
Regulatory Decree 2496/2015, amending and adding the URD 2420/2015

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NORM SUBJECT
Decree 3567, 2011
Whereby provisions are issued regard-
ing the organization and operation of
the Technical Council of Public Account-
ing.
Decree 3048, 2011
Whereby the Intersectoral Commission
on Accounting, Financial Information
and Information Assurance Standards
is created.
Decree 2706, 2012
By which Law 1314, 2009 on the regu-
latory technical framework of financial
information for micro-enterprises is reg-
ulated.
Decree 2784, 2012
By which Law 1314, 2009 on the tech-
nical regulatory framework for finan-
cial information preparers that make up
Group 1 is regulated.
External Circular 115-00000, 2012
Process of Convergence of Accounting
and Financial Reporting Standards with
International Standards.
Circular Letter 01, 2013
Implementation plan of the financial
reporting standards (NIF) for Group 1
supervised entities.
Decree 1851, 2013
By which Law 1314, 2009 on the tech-
nical regulatory framework for finan-
cial information preparers classified in
literal a) of paragraph a) of Article 1 of
Decree 2784, 2012 and that are part
of Group 1 is regulated.
Regulatory framework

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NORM SUBJECT
Decree 3019, 2013
Whereby the Financial Information
Normative Technical Framework for
Micro-companies, annexed to Decree
2706, 2012 is amended.
Decree 3022, 2013
By which Law 1314, 2009 on the
technical regulatory framework for the
financial information preparers that
make up Group 2 is regulated.
Decree 3023, 2013
By which the financial information reg-
ulatory technical framework for finan-
cial information preparers comprising
Group 1 contained in the annex to De-
cree 2784, 2012 is partially amended.
Decree 3024, 2013
Whereby Decree 2784, 2012 is amend-
ed and other provisions are issued.
Decree 2129, 2014
Whereby a new term is established for
the financial information preparers that
make up Group 2 to comply with the
provisions of paragraph 4 of Article 3 of
Decree 3022, 2013.
Decree 2267, 2014
Whereby Decrees 1851 and 3022,
2013 are partially amended and other
provisions are issued.
Decree 2548, 2014
Whereby Articles 4 of Law 1314, 2009,
165 of Law 1607, 2012, 773 and 774
of the National Tax Code are regulated.
Decree 302, 2015
Whereby Law 1314, 2009 on the tech-
nical regulatory framework for informa-
tion assurance standards is regulated.

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NORM SUBJECT
Unique Regulatory Decree (DUR)
2420, 2015
Compiles the regulatory decrees of Law
1314 of 2009 with respect to IFRS and
NIF, Decrees 2706 of 2012, 2784 of
2012, 3022 of 2013 and 302 of 2015.
Decree 2496, 2015
Whereby DUR 2420, 2015 is amended,
withrespecttotheaccountingframeworks
applicable by the entities of Groups 1
and 2 and other provisions are issued.
Decree 2101, 2016
Whereby a Title 5, called Financial Re-
porting Standards for entities that do not
meet the going concern assumption, is
added to Part 1 of Book 1 of DUR 2420,
2015 and other provisions are issued.
Decree 2131, 2016
Whereby DUR 2420, 2015 is amend-
ed, with respect to the accounting frame-
works applicable to Group 1 and 2 enti-
ties and other provisions are issued.
Decree 2132, 2016
Whereby the technical regulatory
framework of the information assurance
standards is partially modified, provid-
ed for in article 1.2.1.1.1, of book 1
part 2 title 1, of DUR 2420, 2015 and
other provisions are issued.
Decree 2170, 2017
Whereby the technical accounting
frameworks of the entities of Groups
1 and 2 and of information assurance
are partially modified.

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Decree 2483, 2018
Whereby the technical frameworks of
the Financial Reporting Standards IFRS
for Group 1 and the Financial Report-
ing Standards, IFRS for SMEs, Group
2, annexed to DUR 2420, 2015, are
compiled and updated, and other pro-
visions are issued.
Decree 2270, 2019
Whereby the technical frameworks
of the Financial Reporting Standards
for Group 1 and the Information As-
surance Standards are compiled and
updated, an Annex No. 6 is added
to DUR 2420, 2015, and other provi-
sions are issued.
Law 2069, 2020
By which the cause of dissolution due
to losses is eliminated and the cause of
dissolution due to non-compliance with
the going concern hypothesis is includ-
ed, in accordance with the conceptual
framework of the IFRS.
Decree 560, 2020
The going concern hypothesis is tempo-
rarily suspended as a cause for corpo-
rate dissolution for 24 months from the
date of issuance of Decree 560 dated
April 15th
, 2020.
Decree 938, 2021
IAS 1, 16, 37, 39 and 4, and IFRS
1,3,4,7,9 and 16 of the technical an-
nexes of the Financial Reporting Stan-
dards for Group 1, applicable in Co-
lombia, are modified.

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Mariana Posse
mariana.posse@phrlegal.com
Daniel Posse
daniel.posse@phrlegal.com
Jaime Herrera
Jaime.herrera@phrlegal.com
Juan Guillermo Ruiz
juanguillermo.ruiz@phrlegal.com
Alejandro Turbay
alejandro.turbay@phrlegal.com
Álvaro José Rodríguez
alvaro.rodriguez@phrlegal.com
Andrés Montoya
andres.montoya@phrlegal.com
Carolina Posada
carolina.posada@phrlegal.com
Cristina Vásquez
cristina.vasquez@phrlegal.com
Ernesto Cavelier
ernesto.cavelier@phrlegal.com
Gabriel Sánchez
gabriel.sanchez@phrlegal.com
Helena Camargo
helena.camargo@phrlegal.com
Jaime Cubillos
jaime.cubillos@phrlegal.com
Jaime Enrique Gómez
jaime.gomez@phrlegal.com
Jorge De Los Rios
jorge.delosrios@phrlegal.com
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josealejandro.torres@phrlegal.com
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Juan Pablo Bonilla
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Mariana Sánchez
mariana.sanchez@phrlegal.com
Natalia Escobar
natalia.escobar@phrlegal.com
Oscar Tutasaura
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Pablo Sierra
pablo.sierra@phrlegal.com
Vicente Umaña
vicente.umana@phrlegal.com
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Services / Areas of practice
• Agribusiness
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and data protection
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investigations
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• Insolvency
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• Labour and immigration
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development
• Mergers and acquisitions
• Energy and natural resources
• Private clients
• Real estate
• Tax
• White-collar crime
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2022