Under the Exchange Law Statute, an external credit should comply with the following requirements:
- Only foreign financial institutions may lend money to Colombian residents. To enter into any credit the financial institution must be evidenced as such before the Central Bank.
- Under any 0 to 36 month term credit, the borrower must make a refundable deposit before the Central Bank for 50% of the credit. Any credit that exceeds 36 months is not subject to the deposit provided no more than 40% of the credit is amortized in the first 36 months.
- Before the disbursement, the borrower must obtain a Central Bank registration. The borrower must submit to the central bank a Spanish version of the agreement.
Under the new regulation, for a borrower external credit is taxed on the basis of the following formula: Libor interest rate plus devaluation rate deducted from the local interest rate (DTF). Based on the results of this formula, the tax tariff may range from 0% to 8%.
Luis E Nieto