In Colombia, all foreign portfolio investments generate foreign exchange-type of rights, including additional investments, capitalizations, reinvestments, remittances of earnings and capital reimbursement. Such investments must be registered with the Central Bank as a necessary condition for the foreign portfolio investor to be able to exercise the foreign exchange rights conferred by law.

Depending on whether the investment qualifies as foreign direct investment or foreign portfolio investment, the registration requirements differ. In the case of foreign portfolio investment, registration occurs automatically once the foreign exchange declaration is transmitted to the Central Bank by the local administrator of the foreign portfolio investor through the financial institution via which the transfer of funds is made.

The investor is entitled to exercise the following foreign exchange rights:

• Remit abroad the proven net earnings periodically generated by its investments.
• Reinvest earnings or retain undistributed earnings in surplus with foreign exchange remittance rights.
• Capitalize amounts with foreign exchange remittance rights arising from obligations derived from the investment.
• Remit abroad the proceeds received from the sale of the investment within the country, or from the liquidation of the company or portfolio, or from a reduction of its capital.

In compliance with foreign exchange obligations, the portfolio manager must submit the corresponding foreign exchange declaration to the Central Bank, in accordance with the type of transaction, through the IMC, using Forms 04 and 05 of Banco de la República.

Additionally, the Reporte Estadístico de Inversiones de Capital del Exterior de Portafolio en Colombia (IPEXT in Spanish, Statistical Report of Foreign Portfolio Capital) must be submitted in accordance with External Regulatory Circular DCIP-83 of 2021 (only available in Spanish).

This statistical report must be completed by all administrators of foreign portfolio capital investors (including those referred to in Article 2.17.2.2.2.3, Decree 1068 of 2015, custodians of foreign portfolio capital investments in Colombia, and local entities that administer programs on negotiable certificates of deposit representing securities (ADRs / GDRs / GDNs) as provided in Section 7.2.2, Chapter 7, Circular DCIP-83 and its amendments (only available in Spanish).

The information requested corresponds to the monthly consolidated amounts of balances, purchases and sales of portfolio investments made by non-residents in Colombia, in accordance with the provisions of Decree 1068 of 2015 (only in Spanish)  and the regulations that amend or replace it. This report includes foreign capital investment transactions regardless of whether they were carried out in foreign currency, as well as programs involving certificates representing ADRs / GDRs / GDNs.

• In accordance with Article 1 of External Resolution 01 of 2018 (only in Spanish) issued by the Board of Directors of Banco de la República, and Chapter 1 of External Regulatory Circular - DCIP 83 (only in Spanish), residents and non-residents who carry out foreign exchange transactions must provide the foreign exchange market intermediaries, as well as Banco de la República in the case of clearing accounts, with the minimum data required for the transactions channeled through the foreign exchange market (Foreign Exchange Declaration).