Before you send the money to Colombia you should make a plan with your attorney, to anticipate how the funds will be registered. One of the rules, to register the funds, is that the Foreign Exchange form must be filed with the central bank, Banco de la República, within a couple hours after the funds have been converted. This should mean that if the conversion was made in the morning, that same morning the forms should be submitted by you, duly signed, to your brokerage stock firm or to your bank.
Also, before you send the funds to Colombia, make sure to provide to your attorney with the following information:
Inform them if you are resident in Colombia, because if so, you are not allowed to register foreign investment. According to the law, if you have lived in Colombia for six months, continuously or not, within a period of twelve months, you are resident.
Pdf copy of your Passport
Your address in Colombia
Your telephone in Colombia
2. Be available to complete the process of the registration:
Once you have sold the dollars, you should be available until you confirm with your brockerage firm that the forms have been duly submitted.
3. The processing of the Exchange forms:
When you sell the dollars you will receive an email from your attorney, asking you how you will use the money, in order to know how the registration of the funds should be. Your response to that email will be the exclusive information that will serve the support to register these funds. Thus, you should not assume that your attorney knows how the funds should be registered, from previous information or other resources.
4. Legalization of the foreign investment:
The completion of the formal and legal process of the registration of foreign investment (Form No. 4) is the execution of the investment in the way that you registered how the investment would be completed. Thus, if you registered the investment to buy real estate, make sure that you meet these three criteria: a). Buy the real estate (within no more than three months). b). The title must to be in your personal name, not in the name of your company, nor in the name of your partner. c). The price on the title must be the same amount of the form No. 4 that you used to register this investment. This means that at one point in negotiation process of the purchasing a property you must set the price on the deed. This leaves you with two options; one is do not buy anything if the seller does not agree to sign the deed with the price of the registered foreign investment; and two, do not send the money until you have gotten an agreement with the seller.
If you register funds to set up a corporation or to make a capital contribution to a corporation already existing, the proper completion of your investment is to get the formal certification from the corporation that states that you are shareholder and that your shares and the amount of your shares match with the value that you have registered as foreign investment. If you are the sole shareholder of the company, you need to be certain that the Chamber of Commerce registers the increase of the capital. If by the time when you register the investment with the Form 4, the incorporation of the company is not complete, the registration of the funds will have been done with a specific code that later will have to be changed for the final form 4 to be filed with the Bank of the Republic.
If you register foreign investment on the stock market (portfolio), you need to know that the money has to remain in the stock market invested in Colombian corporations or stocks. If you decide to use that money for something else, then you need to change the registration of the funds.
5. Keep a proper file of the registration of your funds:
You should keep a very organized file of the documents that will support that you made a proper registration of the funds and the documents that prove that you invested your money in what you said that you were going to invest it in. Accordingly, this is the way how you should keep your files:
F4 (real estate) with the file number from Banrepública + the deed + the ownership certificate. The information on these documents has to match.
F4 (capital contribution to a corporation) with the file number from Banrepública + the certification from the company that shows your name as a shareholder and the amount of your share; if applicable, + the certificate from the Chamber of Commerce.
F4 (stock market) + the statement or any other document that shows the investment.
The Colombian Exchange Regime is very strict and the fines in this matter can be up to 200% of the registered funds. We take the proper steps to protect you but you must follow these guidelines to avoid any kind of issue with the Government. Keep in mind that if you change your investment, if you sell the real estate, if you sell your shares, if any time the situation changes with your investment, those changes will have to be noted and the proper steps has to be taken to notify the proper government agencies. Forgetting to do so could be a costly mistake.