Colombia’s Holding Company Regime Offers Tax Exemptions

After a first attempt failed because of procedural defects, Colombia introduced a special tax rule for some holding companies in late 2019. The system grants qualified companies special tax exemptions, particularly for some dividends received from foreign entities and some capital gains arising from the sale of shares in foreign entities. While some details still need to be ironed out and the regime observed in practice — a process that has been complicated by the emergence of the COVID-19 pandemic — the exemption system is one of several attempts by the Colombian government to make the country an attractive foreign investment destination and ensure employment opportunities for the Colombian people