Oil & Gas / Infrastructure

Regulatory Environment in Colombia

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Oil & Gas - General

Main Authorities:
- Ministry of Mines and Energy
- Ministry of Environment
- National Agency of Hydrocarbons (ANH)
- DIMAR (Maritime - offshore)

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Oil & Gas - General

Exploration and exploitation:
NOC: Ecopetrol listed company (88.5%
Government-Owned)
Any other qualified local or foreign oil company

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Information on Contracts
ANHs webiste www.anh.gov.co E&P-TEA Contract Status of Contracts:
14 Offshore Blocks
All of them at the exploration stage
Operator

No of Blocks

Anadarko

Repsol

Shell

Ecopetrol

ONGC Videsh

Petrobras

Equion Energia
Limited

1
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MAP

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Offshore Potential
Use of offshore vessels is increasing:
No exploration along the Pacific coast yet
Blocks in Caribbean at exploration stage

Market is not crowded

Possibility to enter the market through JVs is limited But
system allows foreigners to enter on their own

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Points to Consider (Offshore)

Operating vessels in Colombian territorial waters:
Colombian
flagged
exemptions).

vessel

(authorities

grant

Conditions for operators.

Owners should be Colombian (written law) Courts

understand that this rule has been repealed.
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Points to Consider (Offshore)

2014 Christmas Present:
Decree 2682 of 23 December 2014
Possibility for Block Operators to seek declaration
of Offshore Areas as Free Trade Zones

No foreign investment restrictions in oil and

gas sector

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Infrastructure - General
Main Authorities
National Infrastructure Agency (ANI)
Depending on type of project and location,
other authorities will be involved at national
and local levels

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Opportunities for Singapore

Traditional:
Ports
PSAs investment in Aguadulce in 2013

Airports
Mass transport
Consider social infrastructure:
- Public Housing
- Education
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Public Private Partnerships - PPPs

Legal framework came into effect in 2012

More active role of private sector in undertaking and

financing infrastructure projects

Companies may present projects to entities for

consideration. If no public funding required

Grant of project without tender offer (subject to

compliance with requirements)
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PPPs (Contd)
Use of trust vehicles to manage project cash flows

Protection to creditors
Limited public funding if PPP commenced at
request of private sector
Rules on public procurement apply (governments
overriding powers)
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Points to Consider (General)

Constitutional protection to private property
rights
Most areas open to foreign investment
Other useful Constitutional tools:
Right to obtain information from authorities within
15 business days
Expedited court enforcement of fundamental
rights by way of tutela
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Points to Consider (General)

Foreign exchange regulations (limited effect)
Need to set up a branch or local presence?
Subsidiary incorporation
Simplified Stock Corporation (similar to a
Singapore Pte Ltd)
Stock Corporation in limited cases
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Points to Consider (General)

Documents granted abroad to set up a branch
or company Notarized, legalized and
translated into Spanish
Visa requirements Usual
Mandatory employment laws may be
applicable if work carried out in Colombia
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Points to Consider (General)

Onshore Free trade zones
Strong arbitration tradition and international
arbitration framework - requirements for
international arbitration need to be satisfied

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Points to Consider (Taxes)

Worldwide income taxation of residents
Foreign companies or non-residents only
taxed on Colombia-sourced income
Income Tax Rate for Residents and Foreign
companies with PE or Branch: 25%
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Points to Consider (Taxes)

Income Tax Rate for Foreign Companies with
no PE or Branch:
39% in 2015
40% in 2016
42% in 2017

Income Tax Rate for Companies in Free Trade

Zones: 15%
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Points to Consider (Taxes)

Surtax (CREE) of 9% of net income for some
tax payers
If taxable base > 800M COP 5% for 2015 (to
increase 1% yearly until 2018)

Alternative Minimum Tax (Income and CREE)

3% of taxpayers net worth
Capital Gains 10% generally
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Points to Consider (Taxes)

One Tier Taxation - Dividends flow freely if
income previously taxed
DTAs

9 Full DTAs
7 Partial DTAs on shipping/aviation

Extensive List Tax Havens

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Points to Consider (Taxes)

Other Taxes:
VAT: 16% but:
preferential rate of 0% for exports and 5% for
certain goods

Financial Transactions Tax: 0.4% generally

Real Property
Other taxes at municipal level

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Thank you
The contents of this material are for information only. Nothing in this material shall be deemed to be
legal advice and reliance shall not be placed on it.

2011 Duane Morris & Selvam LLP. All Rights Reserved. Duane Morris is a registered service mark of Duane Morris LLP.
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