The globalization of business and the growing export-oriented vision of Colombian companies—particularly in Antioquia—have underscored the importance of understanding and properly applying Colombia’s foreign exchange regulations.
In an academic session hosted by the Medellín Chamber of Commerce for Antioquia, Dr. Néstor Raúl Londoño S.—a lawyer specialized in Private Law and Doctor of Law from the University of Zaragoza—shared key insights to help make sense of this complex regulatory framework.
You can listen to the podcast (spanish) at the following link:
https://www.camaramedellin.com.co/quiero-un-servicio-para-mi-empresa/informacion-estudios-y-bases-de-datos/centro-de-conocimiento-societario/iii-podcast
What Is Foreign Exchange Law?
Foreign Exchange Law is the body of rules that governs transactions involving foreign currency, also known as foreign exchange. These regulations serve a crucial informational function: they allow the Banco de la República and the Colombian Government to collect key data for macroeconomic decision-making.
Who Can Carry Out Transactions in Foreign Currency?
The foreign exchange regime distinguishes between residents and non-residents—this classification is different from fiscal or immigration residency. In Colombia, there are at least five types of residency: civil, immigration, tax, electoral, and foreign exchange. For foreign exchange purposes, the following are considered residents:
Colombian nationals residing in the country.
Legal entities incorporated in Colombia.
Branches of foreign companies.
Foreign nationals who have stayed in Colombia for more than 183 days within a 365-day period.
Non-residents include individuals and entities located abroad, as well as foreign nationals who do not meet the above stay requirement.
Types of Foreign Exchange Transactions
Transactions between residents must generally be carried out in legal tender (Colombian pesos), with certain exceptions such as:
Credit card payments in foreign currency.
Purchase of international tickets or freight services.
Certain insurance and reinsurance policies.
Authorized use of offshore accounts.
Transactions between residents and non-residents must, as a general rule, be conducted in foreign currency, in accordance with the conditions set by the Banco de la República, which is the primary regulator of the foreign exchange system.
Regulatory and Oversight Authorities
The system is governed by a legal framework established under Law 9 of 1991, which introduced foreign exchange liberalization and defined the operations subject to regulation. The responsible authorities include:
Banco de la República: Regulates foreign exchange operations through External Resolution 1 of 2018 and Regulatory Circular DCIP-83.
Superintendency of Companies: Oversees foreign investment and external indebtedness.
Financial Superintendency: Supervises foreign exchange market intermediaries (banks, financial corporations, credit unions, and other authorized entities).
DIAN (Tax and Customs Authority): Has subsidiary jurisdiction over foreign trade and related operations.
Authorized Channels and Mechanisms
Residents in Colombia can carry out foreign exchange operations through:
Foreign exchange market intermediaries (IMC): Such as banks, financial corporations, credit unions, and payment service providers.
Compensation accounts: Offshore accounts registered with the Banco de la República used for regulated transactions. Their use is subject to monthly reporting to the central bank and quarterly reporting to the DIAN (currently suspended due to regulatory reform).
Regulated vs. Non-Regulated Transactions
The following are examples of regulated transactions:
Import and export of goods.
External debt.
International investments.
Foreign currency guarantees and endorsements.
Derivatives (forwards, swaps, futures).
Other transactions—such as payment for services, donations, tuition, personal expenses, and transfers between accounts held by the same owner—are not regulated and may be carried out more flexibly, even in cash, unless otherwise restricted.
Violations and Sanctions
Failure to comply with foreign exchange regulations may result in severe penalties. For example:
Unauthorized foreign currency transactions between residents: A fine of 100% of the transaction value for each party.
Failure to report compensation accounts: A fine of 25 UVT (tax units) per month of delay, up to a maximum of 200 UVT.
Failure to declare external debt: Penalties of up to 200% of the transaction value, depending on the severity and the competent authority’s assessment.
Conclusion
Colombia’s foreign exchange regime is technical and specialized, but essential for anyone engaging in international transactions. Correct classification of residency, the use of authorized channels, and compliance with reporting obligations are key to avoiding sanctions and operating legally. A sound understanding of this system not only mitigates legal and financial risks but also unlocks new business opportunities in a globalized environment.