Crowdfunding regulation in Colombia

On July 31st 2018, the Ministry of Treasury issued the Decree 1357, that regulates the functioning of collaborative financing of productive projects through values, as in the case of crowdfunding.

The Decree intends to encourage the creation of electronic platforms that serve as vehicles for those receivers who request financing on their own behalf to allocate it to a productive investment project.

To prevent crowdfunding being used for illegal purposes, the Decree only authorized two types of collaborative financing: i) through representative debt values; or ii) through representative values of social capital.

Additionally, it established a limit for a productive project will be maximum 10,000 monthly minimum salaries in the case of qualified contributors (USD $2,600,000, approximately), or a maximum of 3,000 monthly minimum salaries in the case of another type of contributor (USD $780,000, approximately).

The Decree establishes that the Superintendence of Finance of Colombia will only authorize corporations that have as their sole corporate purpose a collaborative financing, and whose denomination will be "collaborative financing society".

Likewise, stock exchanges and trading or securities systems are authorized by the Superintendence of Finance of Colombia.

The regulation will only apply to those entities, receivers and contributors that exercise crowdfunding and are incorporated in Colombia.

Originally published on 14 August 2018 by Parra Rodríguez Abogados

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