Colombia

Colombian law affords different options for the incorporation of a for-profit local entity. In our experience, the most suitable vehicles for a foreign company to conduct business in Colombia are the branch of a foreign company (“sucursal” in Spanish), corporations (“sociedad anónima” in Spanish) and simplified stock companies (“sociedades por acciones simplificada” in Spanish or “S.A.S.” for its initials).

Please bear in mind that currently S.A.S. are the most recommended and the entity most selected by foreign investments to initiate operations in Colombia, considering it has the most flexible and simple regime. S.A.S. may be incorporated by means of a private document containing the bylaws of the company and can be wholly owned by one shareholder (has no maximum limit of shareholders). Furthermore, the shareholders have a term of two years to complete the payment of the capital. The corporate structure in a S.A.S can be provided as simple or complex as the requirements of the business considering the Board of Directors is not mandatory, but the shareholders at any time can create this corporate body. Finally, the fiscal auditor is mandatory only when the company’s gross assets as of December 31st, of the preceding year, reach or exceed 5,000 minimum wages and/or whose gross income for the previous year reach or exceed the equivalent of 3,000 minimum wages. The minimum wage corresponding to 2021 is COP$ 908.526. 

As to corporations, they must be incorporated by means of a public deed. A corporation requires at least five shareholders, none of whom can directly own 95% or more of the outstanding shares of the corporation. There is no maximum limit as to the number of shareholders of a corporation. The capital is divided into shares and at the time of incorporation, the shareholders must pay at least one third of the subscribed capital. The shareholders have 1-year term to complete the payment of the subscribed capital. Corporations always require a fiscal auditor.

Finally, branches are considered as an extension of a foreign company (parent company) and must be incorporated by means of a public deed containing the resolution of the parent company approving the incorporation. Additionally, the branch must have a fixed duration term and a defined corporate purpose related with the parent company’s purpose. As per the capital, the allocated capital is determined by the parent company and there is no limitation regarding its amount, and it must be paid at the moment of the incorporation. As the Corporation, it always requires a fiscal auditor

In terms of liability, in all the legal vehicles referred above, it will be limited to the amount of the contribution, except for fraud and cases of piercing of the corporate veil. However, in branches, as the parent company and the branch share the legal personality, the parent company will be liable for the obligations of the branch.

a. Enterprises seeking financing from investors having multiple owners in Colombia tend to form S.A.S., due to its flexibility as referred above. It is certainly possible to have a Corporation having multiple shareholders and investor backing, but it is not that common.

b. Social Enterprises are not expressly regulated in Colombia. However, Law 1901 of 2018 created the called BIC companies (“sociedades comerciales de Beneficio e Interés Colectivo” in Spanish) which, in addition to the benefit and interest of its shareholders, will act in the interest of the community and the environment. Any existing or future commercial company of any type established by law, may voluntarily adopt the status of a BIC company.

No. Colombian law does not expressly allow board members or managers to consider, balance or prioritize interests other than shareholder value in decision making.

However, managers of BIC companies must take into account the interests of the company, that of its partners or shareholders, and the benefit and collective interest that has been defined in their bylaws, aiming to protect the environment and improving the social and working conditions of their employees, generating value not only for its shareholders, but its employees and its social and natural environment.

The Colombian private regime does expressly regulate BIC Companies by means of Law 1901 of 2018.

a. As mentioned above, any existing or future commercial company of any type established by law, may voluntarily adopt the status of BIC company.

b. To be classified as a BIC company, it must comply with the following requirements set by Law 1901 of 2018 and Decree 2046 of 2019: (i) include the expression “BIC" in its name; and (ii) expressly include on its corporate purpose, at least one activity for each of the five categories listed below:

1. Business model:

• Acquire goods or services from local or women- and minority-owned businesses. Furthermore, give priority to suppliers that implement equitable and environmental standards.
• Carry out fair trade practices, and programs for suppliers to become collective owners of the company.

2. Corporate Governance:

• Draft a manual for employees in which the values and expectations of the company are stated.
• Expand diversity in the composition of boards of directors, management, executives, and suppliers, in order to include people from different cultures, ethnic minorities, diverse religious beliefs, different sexual orientations, heterogeneous physical abilities, and gender diversity.
• Disclose the financial statements of the company to its employees.
• Disclose the mission of the company in several documents.

3. Labor practices:

• Promote reasonable and equitable wage compensation for its employees.
• Promote subsidies for training and professional development of its employees and offer professional reorientation programs for employees whose employment agreement is terminated.
• Develop internal policies to allow its employees to participate in the company, through the acquisition of shares.
• Expand employee health and wellness benefit plans and design nutrition, mental and physical health strategies.
• Create options so its employees may have flexibility in the working day and create teleworking options.

4. Environmental practices:

• Carry out annual environmental audits on efficiency in the use of energy, water, and waste. Disclose the results to the public and train its employees in the social and environmental mission of the company.
• Supervise greenhouse gas emissions generated by its business activity, implement recycling or waste reuse programs, progressively increase the sources of renewable energy used by the company and encourage its suppliers to carry out their own environmental assessments and audits, in relation to the use of electricity and water, waste generation, greenhouse gas emissions and the use of renewable energy.
• Use of energy-efficient lighting systems and incentive its employees to using means of transport environmentally sustainable.

5. Practices with the community:

• Create employment opportunities for the structurally unemployed population (including young people at risk, homeless, reintegrated or released from prison).
• Encourage volunteer activities and create alliances with foundations that support social works in the interest of the community.

Therefore, the main difference with companies that are not classified as BIC is the social and environmental responsibility, transparency and good practices in their operation and innovative vision.

c. Regarding the main benefits of this classification:

• The Superintendence of Industry and Commerce established, by means of Resolution 26878 of 2020, preferential rates applicable to BIC companies, to carry out the procedures related to distinctive signs, particularly, the registration of trademarks, commercial slogans and commercial names.
• BIC companies have preferential access to credit lines offered by the National Government.
• Profits distributed as shares to BIC employees will be treated as non-income and occasional profit for income tax purposes. The above will only be applicable up to 10% of the profits that are effectively distributed to the company's employees during the year they are generated or until the following year.
• Reputational advantage.
• Loyalty of its human talent and execution of inclusive economy models.
• Attraction of foreign investment.

d. There are no such restrictions. However, Colombian law establishes that BIC companies will lose their classification for two reasons:

1. Decision of the company's highest corporate body.
2. Repeated non-compliance with the independent standard selected by the company to carry out its social and environmental reports.

By independent standard, we must understand the form through which the company's legal representative demonstrates the impact of the company's social management. The Superintendence of Companies established the following independent standards for BIC companies:

• The certification of Type B company of B Corporation.
• The GRI standards of the Global Reporting Initiative.
• The ISO 26000 standard of Corporate Social Responsibility of the International Organization for Standardization.
• The Guide to the objectives of Sustainable Development (SDG Compass) of the United Nations, the World Business Council for Sustainable Development and the GRI;
• The AA1000 series of standards of relationship and Social Responsibility of AccountAbility.

Once the repeated non-compliance with the independent standard chosen is certified by the Superintendence of Companies, it may declare the loss of the classification for the BIC company and the company must amend its bylaws to eliminate the "BIC" reference of its name and register such amendment before the chamber of commerce.

e. There are no differences in terms of time and costs. BIC companies are not that common. However, they are well known as they implement internally good practices (benefits for their employees and environmental protection, among others).

Colombian law expressly provides that a BIC company can be any company already incorporated or any company to be incorporated. Therefore, nonprofit entities cannot be classified as a BIC. 

Yes. Cooperatives are a type of non-profit entity in which the employees or users are simultaneously the contributors and the managers of the entity. It is created with the aim of jointly and efficiently producing or distributing goods or services to satisfy the needs of its associates and the community in general.

Cooperatives can apply to the special tax regime (“RTE” in Spanish), and if they are admitted, they will be liable to pay income tax at a preferential 20% rate over their profits. However, provided certain conditions are met, such 20% can be waived (0% tax):

• Profits are assigned for projects that develop the worthy or meritorious activity (charity); or
• Profits are assigned to the acquisition of assets or development of long-term projects (between 1 – 5 years).

In addition, profits that are not assigned to the social activity (charity) and non-deductible expenses are taxed with the income tax at the 20% rate (Section 1.2.1.5.1.36 of Decree 1625, 2016), and donations or gifts are computed within the entity’s annual income and subject to these rules.

Yes. The management of BIC companies must present a management report, together with the annual mandatory reports, to the maximum corporate body of the company, evidencing the evolution and development of the activities related to the condition of BIC company (described above).

The report must be drafted based on one of the independent standards mentioned above and it must expressly provide the independent standard chosen.  The management report must be published on the company's website for public consultation, or if the company does not have a web page, the report must be available in the domicile of the company and must be sent to anyone who requests it.

No.

No.

No.

No.

No major investor classes are required to look at ESG issues. However, the local regulator issued a document with the guidelines to be taken into account in order to invest in private equity funds. In such guidelines, ESG standards are included. Although the guidelines are not legally mandatory, most of the institutional investors in Colombia (i.e. pension funds and insurance companies) tend to implement them when making investment decisions in private equity funds.

Additionally, such guidelines only cover investments in private equity funds, considering that pension funds and insurance companies are not authorized to directly invest in shares of companies nor on non-profit entities.

Social Enterprises receive grants, charitable investments, and traditional investments. The type of funding typically varies based on the Enterprise form. In fact, Non-profit Enterprises receive more charitable investments, while Social Enterprises formed as for-profit corporations receive more traditional investments.

For-profit impact investments have been carried out in Colombia for over 10 years. Although such investments are not completely developed, they are an alternative for institutional and high net worth individuals (for example impact investments private equity funds). Local investors have not yet implemented impact investments in which the return is represented by the impact itself (for those cases in which the impact is measurable). 

There is no special government funding specifically available to Social Enterprises. However, when the enterprise has the form of a BIC corporation (collective interest and benefits – Beneficio e Interés Colectivo), the government grants benefits such as priority access to lines of credit given by the government.

Any other support, usually represented in tax benefits, is granted by the government depending on the type of project and the economic sector.

The Main points for the Colombian regulatory framework are listed below:

• Decree 1625 of 2016 modified by Decree 2205 of 2017 - Provides for a 25% discount on income tax for investments in environmental control, conservation or improvement. Additionally, it establishes a deduction on gross income tax for investments in the agricultural sector in construction, repair and any investments for the foundation, expansion and improvement of rural farms. For these events, certain requirements must be fulfilled accredited.
• Law 1834 of May 23, 2017- This law aims to develop, promote, and protect creative industries, which are understood as those industries that generate value by reason of their goods and services and that are based on intellectual property.
• Law 1558 of 2012- Seeks the promotion, development, and regulation of tourism as well as a sustainable development and establishment of mechanisms for the participation and coordination of the public and private sectors. Additionally, it establishes the figure of “Tourism of Social Interest” that has the purpose of providing accessible tourist services to the less favored population and promoting the development of places susceptible of raising their economic standard of living through the tourist industry.
• Decree 1650 of 2017- This decree seeks to grant tax benefits for companies that develop their economic activity in the zones most affected by the armed conflict in Colombia. Its main purpose is to recover and promote the economic development of more than 344 zones by granting companies a progressive income tax rate for a period of 10 years.
• This mechanism provides investors the possibility of paying up to 50% of their income tax, through the direct execution of investment projects in the areas most affected by violence and poverty. For the year 2019, 41 taxpaying companies were linked to this mechanism and a total of 42 projects were approved with an investment of approximately $ USD 69 million dollars.
• Decree 2112 of 2019 – This decree regulates a special tax regime created by the national government with the aim of attracting domestic and foreign investment and generating employment in cities with high unemployment rates. This regime is called the Special Economic and Social Zone whereby it is granted a special income tax rate benefit for those who have or plan to create a business in the departments of Norte de Santander, La Guajira, Arauca and the capital cities of Quibdó and Armenia.

 In addition, within the framework of the initiative: 'Pact for Colombia, Pact for Equity' developed by 45 guilds and more than 60 public sector entities, agreements for growth and the generation of employment were reached regarding the sectors: BPO, processed food, tourism, software and IT, chemicals, fashion, movement industries, construction, forestry, meat and orange economy.

No, currently there are none.

They are not required to disclose ESG factors, though some choose to do so for marketing reasons in their management report, presented annually.

This is however, one of the most important aspects that institutional investors are looking into in annual reports.

Impact investing is slightly changing from a side/complementary aspect of portfolios, but rather as an across-the-board asset class.

Impact bonds are utilized at the local level. In fact, each local government decides to use impact bonds to develop social projects as they fit. The use of impact bonds has increased, especially in regard to employability projects with marginal communities.

Social impact bonds (SIB), share the characteristics of other SIBs, meaning they are not truly bonds, but rather results-driven agreements: investors are paid if the social outcome of the program funded by the SIBs is achieved[i]. In this sense, SIBs are not negotiated securities, but rather private agreements between private and/or public entities. Parties are free to negotiate the terms and conditions that suit investors’ needs and social necessities and thus are only regulated by the norms of the Civil and Commercial Codes and not in any way by the securities and capital market regulations.  The first SIBs were structured in 2017 and invested in a project called Empleando Futuro (Employing the Future) with the objective to employ and retain 766 people for at least three months. The second BIS was placed in 2020 with a similar purpose: employ vulnerable populations but retain them for at least six months.

[i] Sir Ronald Cohen. Impact: Reshaping Capitalism to Drive Real Change, Ebury Press. (2020).

No.

Crowdfunding is legal. However, the local regulator has established demanding requirements that must be complied by the enterprises and corporations that aim to use crowdfunding mechanisms, including corporate form, authorization before the local regulator and registered before the Local Registry of Agents of the Securities Markets (Registro Nacional de Agentes del Mercado de Valores).

A recent reform on the establishment of a crowdfunding platform has successfully launched increasing the investment opportunities for crowdfunders with the supervision of the Colombian Stock Exchange (BVC) and the Superintendence of Finance.

Non-profit social enterprises may be subject to tax benefits in Colombia by qualifying under the Special Taxation Regime for non-profits.

a. The Special Taxation Regime allows for the qualified legal entities to have an income tax rate of 20% on the net profit or surplus (opposed to the 32% income tax rate for non-qualified legal entities in 2020 or 31% in 2021). If there is no surplus or net profit or it is entirely destined to directly or indirectly to programs that develop the legal activity and the meritorious category of the entity in the following year, said profit or surplus would be exempt from income tax.

b. Please note that the Special Taxation Regime for non-profits is applicable to non-profit foundations, associations, and corporations, as well as cooperatives only that have applied to be qualified to be part of the Special Taxation Regime by the Colombian Tax Authority (DIAN).

c. In order to be qualified in the Special Taxation Regime, the non-profit foundations, associations and corporations, as well as cooperatives must be legally constituted and their legal activity falls within one or more of the meritorious categories listed by law; such activities seek to contribute to the integral development of society or a community by supporting weak economic groups or vulnerable populations, such as: women who are heads of households, children, research, education, etc. The entity’s funds and assets shall not be reimbursed nor its surplus distributed, under any form, regardless of the term employed, either directly or indirectly, during its existence or at the time of its dissolution and liquidation It is also important for the entity to be registered before the Colombian Tax Authority (“RUT”), and deliver to the DIAN a list of accounting records and corporate documents of the entity, in order to request the qualification.

Yes. Tax deductible donations must be certified by the legal representative, tax auditor and accountant of the non-profit entity qualified under the Special Taxation regime that receives the donation. This certificate must state the date when the donation was made, the type of person or entity that donated, the type of asset given, its monetary value, the manner in which the donation was made, and the destination of said funds.

Please refer to point 1.a.

No. Please note that the non-profit must be constituted in Colombia as a legal entity as a requirement to apply for qualification under the Special Taxation Regime.

No. There are regulatory sandboxes for fintech companies. If fintechs are classified as BIC companies, those will apply.

The Ministry of Commerce, Industry and Tourism, to support the growth and development of small and medium enterprises, established the following programs:

1. Modernization and Innovation Fund. Its purpose is to support modernization and innovation projects of micro, small and medium enterprises by means of financial and non-financial instruments. Among the main benefits of this program are the following:

• Financing of programs, projects and activities for the development of technological tools and commercial activities of small companies.
• Apply for non-financial instruments aimed at promoting and encouraging small businesses, through non-reimbursable co-financing of programs, projects and activities.
• Support small businesses in the implementation of the policy of business development, production, trade, technology and innovation, which is carried out by the Ministry of Trade, Industry and Tourism.

2. Policy of Support to the Business Formalization. Its purpose is to implement an intervention strategy aimed to reduce the percentages of informality in the country. Among the main benefits of this program are the following:

• Improve the cost-benefit ratio of formality.
• Reduce the regulatory burden on formal businesses.
• To materialize the potential benefits of formality in commercial businesses
• Improve information for public policy decisions regarding the formalization of companies.
• Generate more information about the business universe and its level of formality and improve the quality and interoperability of business administration records.

3. Policy of Technical Support to the Entrepreneurship in Colombia. Its purpose is to design and implement the Public Policy of Entrepreneurship in accordance with the guidelines established in the Law 1014 of 2006 to promote the culture of entrepreneurship and applies to entrepreneurs nationwide. Among the main benefits of this program are the following:

• Strengthen the development of skills and promote an entrepreneurial culture to improve the skills of entrepreneurs, productive capabilities and growth of their businesses.
• Improve access to financing mechanisms to support entrepreneurship.
• Strengthen networks and marketing strategies to facilitate the exchange of experiences and access to different markets for entrepreneurs.
• Facilitate technological development and innovation in enterprises, to strengthen their potential for growth and competitiveness.

4. Policy of income generation for groups of special constitutional protection at national level. Its objective is to support the execution of the National policy of income generation for populations belonging to groups of special constitutional protection in the framework of the policies of the commercial, industry and tourism sectors.

This program is mainly addressed to the victims of the conflict in Colombia and its main benefits are the following:

• Guarantee the reception of incomes in a sustainable and autonomous way.
• Increase the productive potential of new entrepreneurs, through the development of their capacities and the creation of opportunities that guarantee the access and the accumulation of assets.
• Increase the levels of literacy and education.
• Provide access to physical and financial resources and technical assistance services for the development of productive ideas and new businesses.

The National Guarantee Fund created a special guarantee program named "United for Colombia" (“Unidos por Colombia” in Spanish). Its purpose is to offer credits to support debts acquired by small and medium companies, in order to mitigate the economic impact generated by the Covid-19, trying to keep their businesses afloat avoiding liquidity problems and massive layoffs.

• Additionally, the National Government through its programs for PYMES (small and medium enterprises in Spanish) establishes a series of general policies to strengthen its development by means of financing methods and co-financing.
• In 2020 it was enacted Law 2069 of 2020 (“Ley de Emprendimiento” in Spanish”) which establishes the following benefits for the small and medium companies:
• Reduction of fees and measures that simplify the incorporation and operation of companies.
• Reduction in the fees applicable to the registration of (i) food and beverages, (ii) medicines and biological products, (iii) cosmetics, toiletries and household hygiene products, and, (iv) medical devices, before the National Institute of Health and Food Surveillance (INVIMA - Instituto Nacional de Vigilancia de Medicamentos y Alimentos” in Spanish), with differentiation for small and medium companies and exception of payment for micro enterprises.
• Adjustment in the tariff ranges of the departmental registration tax for micro businesses.
• Implementation of exploratory mechanism of regulation for innovative models.
• A differentiated accounting system is established for microenterprises.

Likewise, the law of payment in fair terms was issued (“Ley de Pago a Plazos Justos” in Spanish), through which the micro, small and medium enterprises will receive the payments of their products or services rendered in a maximum of 60 days, and from January 2022 this term will be reduced to 45 calendar days. This will allow for greater liquidity for the survival and competitiveness of micro and small businesses in Colombia.

Yes. The general rule is that any company under the supervision of the Superintendence of Companies that receives an income or has assets equal to or greater than 40,000 Colombian Legal Minimum Wages (about USD10,688,541 for 2021), will be under the obligation of implementing an AML System called the SAGRILAFT and a Business Ethics Program meant to prevent corrupt practices within the private sector. This will apply regardless of which structure the company has. However, companies belonging to certain sectors such as financial, mass transportation, foreign trade or pharmaceutical sectors will have additional requirements which are issued by the Superintendence in charge of overseeing these types of activities.

The Superintendence of Companies oversees the operation of the BIC companies. For these purposes, the Superintendence of Companies must apply three supervision criteria:

• Pedagogy: It will focus on informing, promoting and training the companies, its managers and entrepreneurs, about the BIC companies, its benefits, regulation, requirements and duties.
• Regulatory Compliance: It will be verified by the BIC management report (mentioned above). The administrators of BIC companies will be responsible for the development of the activities of benefit collective; therefore, the Superintendence of Companies will only verify the execution of the business practices, the adequate use of the chosen independent standard and the presentation and publicity of the BIC management report.
• Timely and Early Action: By these criteria, the Superintendence of Companies will prevent and correct breaches of regulations that may lead to sanctions and even the loss of BIC status.

No. Law 1116 of 2006 (“Law 1116”) regulates the general regime of commercial company’s bankruptcy proceedings, including those companies that have specific social or environmental objectives. According to Article 2 of Law 1116, this regime applies to a company that: (i) is not excluded from the scope of Law 1116, (ii) performs business in the Colombian territory on a permanent basis and (iii) is mixed or privately owned. The bankruptcy proceeding will be carried out under the direction and supervision of Colombian courts.

Depending on whether the company will be registered by public deed or private document, the complete incorporation process (including registration before the chamber of commerce, the tax authority and registration before the central bank, if applicable) may take approximately 3 to 4 weeks from the preparation and collection of all documents.

The incorporation of a legal entity generally entails the following expenses: (i) payment of registration taxes at a rate of 0.7% of the assigned equity, which shall be paid to the Chamber of Commerce when the documents are submitted, (ii) the payment of a fee applicable to the registration in the public registry, which is calculated based on the assets of the entity, which may vary from COP$ 34,000 (US$ 11 approx.) to COP$ 1,674,000 (US$ 575 approx.)

The Colombian Tax Authority (DIAN) authorizes the qualification in the Special Taxation Regime to non-profit legal entities defined in section 1. Please note that every year (in the first 3 months) the qualification as part of the special tax regime must be renewed. To do so, the interested entity must meet the legal requirements and file a new request before the DIAN to obtain the certificate authorizing the entity to continue under such regime.

Yes, new companies in Colombia can be easily incorporated as any of the legal vehicles referred above - the simplest and fastest may be S.A.S. because of the benefits established for its incorporation and operation.

BIC companies, which are the closest classification to social enterprises in Colombia, can be easily incorporated, including the expression “BIC" in its name and specific activities (as mentioned above), on its corporate purpose. They do not require additional requirements as to its incorporation compared to those who are not classified as BIC. Considering the benefits and reputational status of BIC companies, in our opinion, they can easily flourish in Colombia.

In the general corporate form, directors and officers must use their powers in the best interests of the company and shareholders. While they are not prevented from considering other interests, such as the environment or the larger community, it would be better were they more easily able to consider those interests.

In addition, the proposed rules for investment funds that discourage “impact” investing in Social Enterprises that do not prioritize financial return for investors is obstructive to Social Enterprises, in that without funding, Social Enterprises cannot flourish.

The Social Enterprises can enter into public procurement contracts as far as they comply with the requirements set forth by the correspondent public entity for each tender or awarding procedure. In this regard, according to the Colombian public procurement statute (Law 80/1993), public entities shall introduce enabling requirements for companies to participate in the procurement procedures, such requirements include legal standing, financial capacity and experience. The content of these enabling requirements will be set by the public entity according to the scope of the contract to be awarded and the applicable law.

Given Colombia’s socio-economic context, it is important to point out the following:

• Colombia is number 19 in the 2019 Global Terrorism Index which analyzes the impact of terrorism in 163 countries. This means that Colombia is in the top 20 of countries most impacted by terrorism, following countries such as Afghanistan, Syria, Egypt, and South Sudan, amongst others.
• In addition, a World Bank study estimated that 7.5% of the country’s GDP is linked to money laundering activities.
• In 2019, Colombia scored 37 in the perception of public corruption index, putting it in the 96th position in a rank of 180 countries. The score goes from 0 to 100, where 0 is a country perceived as highly corrupt and 100 is a country perceived as least corrupt.
• Moreover, a 2019 study shows that between 2016 and 2018, more than 320 cases of corruption were recorded in Colombia.

These rankings show that corruption and money laundering related risks should be considered when doing business in Colombia.

Regarding Social Enterprises and bearing in mind that in Colombia the closest classification is BIC companies, we consider that it would be beneficial to encourage the incorporation and operation of this type of entity by means of a regulation with a particular regime applicable to Social Enterprises. 

Also regarding tax law, we propose:

1. Relief non-profits from formal obligations: For instance, modify the tax calendar for non-profits qualified under the special tax regime and extending the deadlines for VAT payment.

2. VAT refund programs for non-profit organizations: Include non-profit entities that due to the nature of their operations cannot recover VAT through compensation and/or refund.

3. Incentives to guarantee donations by Increasing the discount rate (i.e., 40-50%) to the donor and expanding benefit for those contributors who commit to making the donations in the future.

Incorporate mandatory compliance criteria for all companies within their operation (regardless of the business activity they carry out) aimed at protecting and contributing to their social and natural environment and establish that all companies must ensure the protection of social and environmental standards regulated at national and international level.

Also tax incentives such as discounts in the income tax return or allowing enterprises to deduct all of the investments made as part of their social and environmental endeavors would enhance social and environmental awareness and commitment.

No.