1. Which financial (not tax or labour) short-term compensation schemes for immediate losses due to social distancing measures have been implemented? For which industries/sizes of business?

As a result of the COVID-19 emergency in Colombia, the President declared a national Social, Economic and Ecological Emergency (the “State of Emergency”) by means of Decree 417 of 2020.  The State of Emergency enables the Executive Branch of the Government, for a 30-day period, to issue Legislative Decrees addressed to resolving the emergency.  Legislative Decrees have the same rank as laws/statutes enacted by Congress -the legislative branch-. A significant number of measures have been adopted to mitigate the effects of the crisis:

  • Decree 444 of 2020. Within the framework of Decree 417 of 2020, the Ministry of Finance and Public Credit issued Decree 444 creating the Emergency Mitigation Fund (“FOME”) as a fund/account to (i) providing resources for the health care system, (ii) mitigating the adverse effects on the productive activities and (iii) fostering appropriate conditions for employment and continuous growth of the economy. Thus, FOME’s resources will be used to avert the crisis or prevent the extension of its effects on the national territory. Specifically, FOME will aim to:
    • Carry out operations to provide transitory cash flow support to the financial sector trough the temporary transfer of securities, term deposits, among others;
    • Invest in equity or debt instruments issued by private, public or mixed capital companies engaged in activities of national interest, including shares with special participation conditions, dividends, among others;
    • Provide direct financing to private, public or mixed capital companies engaged in activities of national interest;
    • Provide cash flow to the Nation, only in those events where the effects of the emergency extend to the ordinary sources of cash flow. This support will only be intended to meet the social and economic needs of the business sector, caused by the State of Emergency.

These operations may be carried out only to prevent the extension of the effects of the State of Emergency declared by Decree 417 of 2020. 

  • Circular 007 of 2020 (“Instructions”) of the Superintendencia Financiera de Colombia (“SFC”). 
  • By means of this Instructions, prudential measures were issued by the SFC to mitigate the effects of the economic market situation and the health emergency situation in the financial system debtors.

Thus, the SFC determined that credit institutions should establish effective policies and procedures to identify the clients that will be subject of the agile application of special measures to attend the situation, emphasizing on those economy sectors identified as being “of particular attention” by the National Government. These measures will consider at least the following, notwithstanding the possibility to implement additional measures:

  • For those credits which, as of 29 of February of 2020, do not have a default greater than or equal to 30 days, even if they were modified and/or restructured, grace periods may be established to address the client’s particular situation, without the client being considered a greater risk factor. Financial entities may continue to accrue interests during this period. 
  • For the established grace period, these loans will maintain the rating they had as of February 29, 2020, and only after that it should be requalified according to the risk analysis performed by the financial entity. Therefore, during that period the client’s rating at the risk centrals will remain unchanged.
  • For a 120-day period, changes to the credit’s conditions in attention to the provisions issued by means of this Circular will not be understood as a generalized practice for portfolio normalization.   

2. Which medium-to long-term stabilisation measures are in place in your jurisdiction?

The Colombian government has announced it will offer guarantees, through the National Guarantee Fund, so that small and medium enterprises (“SMEs”) have access to the different credit options granted by the financial sector. The government has noted that the funds that will be available in this regard will be mainly for companies that are trying to preserve their employees and have difficulties with their payroll. However, this has not been implemented yet.

Also, in order to avoid the spread of COVID-19, and to relieve the negative effects on the economic activities, from a corporate standpoint, many measures were taken, especially regarding the extension of deadlines. Please find below a summary of the most important measures taken so far:

  • Superintendence of Companies: 
    • Suspension of terms of mercantile and insolvency proceedings, from March 17th to March 31st. 
    • Suspension of terms of administrative and disciplinary proceedings from March 18th to April 8th. That suspension is not applicable to public procurement proceedings, which have their own suspension regime.  
    • Circular Letter 003 of 2020: Extended the deadline to deposit the financial statements before Superintendence of Companies by December 2019. The new deadlines are in April and May of 2020.
    • Circular Letter 002 of 2020: Instructions to the ordinary shareholders’ meeting to take place online. In order to carry out the right of inspection before the ordinary shareholders’ meeting, and avoid commutes, the Superintendence of Companies allowed virtual means to facilitate its exercise, as long as the information is duly secured. 
  • Superintendence of Industry and Commerce:
    • Resolution 11927 of March 16th: Suspension of terms in administrative proceedings from March 17th to March 31st.
  • Superintendence of Notaries and Registries: 
    • Resolution 03133 of March 24th: they stablished special hours of operation, to avoid crowds.
  • Ministry of Commerce, Industry and Tourism:
    • Decree 398, March 13th, 2020: Allows companies that have already summoned the ordinary shareholders’ meeting before March 13th, to modify the summon in order to include that the meeting will take place online. This could be done up to one day before the meeting takes place.  To do so, the new summon should include the software and the access information for the shareholders, or their proxies. 
    • Decree 434, March 19th, 2020: Extended the deadline for the shareholders to hold the ordinary shareholders’ meeting, to the next month after the end of the declaration of sanitary emergency. Therefore, if the ordinary meeting was not summoned yet, the shareholders do not have to meet the first working day of April as usual. Under the current circumstances, they will have the right to do it the first working day of the month after the end of the state of emergency. 
    • Likewise, the deadline to renew the commercial registry before the Chamber of Commerce was extended to July 3rd, 2020.  For people registered into the Bidders Registry (RUP for its name in Spanish), they are obliged to renew their registry until the fifth working day of July 2020.  
  • Confederation of Chambers of Commerce: The Chambers of Commerce across the country are temporarily closed. The Chamber of Commerce of Bogotá enabled virtual means to register different procedures (such as registration of minutes) and communicate with the users.

3. Which measures (Guarantees, Loans, Equity Injections, etc.) are available?

In accordance with the SFC’s announcement, financial institutions have assessed the conditions to provide financial viability to debtors and preventing the current situation from having a significant economic effect on their personal finances. So far, the following measures have been taken:

  • For the commercial portfolio, some entities have chosen to review options to support the company’s capital, structure and financial relief, such as: i) grace period for payment of capital; ii) long-term debt reprofiling; iii) alternatives and sources of funding with favorable conditions; vi) quotas freeze up to six months for mortgage, consumer and business loans; v) special lines of commercial portfolio to finance working capital of SMEs and large companies, among others. In line with the instructions of the SFC, these measures will not affect the debtor's risk rating.
  • The Bank Of Foreign Trade of Colombia (“Bancoldex”) launched an initiative called Colombia Responde, consisting on a special line of credit for COP$ for the tourism and aviation sectors – and their supply chains-, in addition to those related to the public entertainment industry. This measure seeks to maintain the companies of these sectors in favorable financial conditions in the face of a drop in the demand of their services. 

Colombia Responde offers loans in COP and the maximum amount per company is up to COP$ for SMEs and up to COP$ for large companies.

The interest rate offered to financial intermediaries is IBR+0%, being the final rate freely negotiable between the entrepreneur and his bank. The final interest rate should include a minimum 2% reduction in the interest of the employer, compared to the traditional offer of the financial intermediaries.

  • Other entities have chosen to create special lines of credit around COP$500.000.000.000 to support small, medium and large companies, which are being affected in the payment of payrolls, freezing the payment of capital and interests for up to 6 months. In the specific case of Bancolombia, one of the first entities to implement this measure, it is a special line of ordinary portfolio with indexation to IBR for a period of up to 12 months from the disbursement date.
  • In the agricultural sector, Banco Agrario chose to maintain the flow of credit resources, especially for small, medium ad large agricultural producers. This ensures the opportunity for sowing and adequate maintenance of crops.

4. Have these mid- to long-term stabilisation measures already been notified with EU or other antitrust bodies?

There are no antitrust bodies on a regional LATAM level.

5. Which prerequisites are necessary to qualify for a programme?

Currently, the special line of credit Colombia Responde is the only measure with qualification requirements. Since its aim is to diminish the impact on the cash flow of companies in the face of a drop in the demand for tourism service, only legal entities considered small, medium or large companies belonging to the following economic sectors will qualify for this program:

  • Companies in the country’s tourism sector, with a valid National Tourism Registry, which must be attached at the time of application;
  • Companies providing air transport services in Colombia under ISIC codes 5111, 5112, 5121, 5122 and 5223, in accordance with revision 4.0 of the Departamento Administrativo Nacional de Estadística (“DANE”);
  • Companies related to public entertainment under ISIC codes 9006, 9007 and 9008, in accordance with revision 4.0 of the DANE;

These loans may be granted to the partners or shareholders of the above-mentioned legal entities when the resources are to be used to capitalize the company.

After the disbursement of the resources, the capitalized company must send the financial intermediary a certificate issued by the tax reviewer or accountant, certifying the correct application of the loan.  Trusts constituted by companies that meet the above-mentioned conditions may also have access to these resources.  The status of beneficiary of the line of credit and the corresponding documentation must be validated by the financial institution before the loan is processed and attached to the application form submitted to Bancoldex.

6. Are there any major reasons that may inhibit an applicant from successfully applying for a stabilisation measure?

Please refer to the answer of question 1 in relation to the limits established by the SFC to the credits that may be subject to grace periods.  

7. In an international context, are subsidiaries and branches of foreign parent/holding companies eligible to apply? For EU-States: Also for non-EU-third countries?


8. Do your country’s stabilisation schemes foresee restrictions on use of cash/other restrictions?

So far, from a corporate standpoint, we are not aware of any restrictions on use of cash or investments for national or international companies, nor for the distribution of dividends abroad. 

Other restrictions taken by the government are set forth in Decree 462 of 2020, which restricted exports of 24 necessary products to prevent and avoid the spread of COVID-19 for six months, which included: soap, alcohol, toilet paper, antibacterial cleansing gel, and others. 

9. How are insolvency application deadlines handled in times of Corona?

In this regard, the National Government has announced that it will issue a special regime for the development of the insolvency proceedings within the framework of Decree 417 of 2020, for those who wish to benefit from these measures.

In the meantime, not many pronouncements have been made on the subject.  As a provisional measure, on March 16 of 2020 the Superintendencia de Sociedades issued a Resolution, which decrees as a transitional measure, on grounds of public health, the suspension of terms for Commercial and Insolvency Procedures that are carried out in the headquarters of Bogotá and the Regional Intendencies, between March 17of 2020 and March 22 of 2020.

10. How far have local insolvency/restructuring laws been changed/eased which might have an impact on international businesses?

No amendments have been made so far. 


There are no specific measures. 

Daniel Rodríguez
Daniel Rodríguez, LL.M.