Name
Global FinTech Guide
Country _ Name
Colombia
SectionTitle
Crowdfunding / crowdinvesting / crowdlending
Body
FinTechs belonging to this category operate crowdfunding, crowdinvesting and crowdlending platforms on which money is raised to invest in various projects, mainly start-up companies and real estate projects.

Crowdfunding is not a defined financial service, but generally used to describe donation-based crowdfunding (the investor donates the money to the project), reward-based crowdfunding (the investor receives an often symbolic consideration for his investment), equity-based crowdfunding (crowdinvesting: the investor participates in the profits of the financed project or acquires shares or debt instruments) or lending-based crowdfunding (crowdlending: the investor is reimbursed at the end of the project with or without interest).

Introduction

Attitude of the country towards crowdfunding, crowdinvesting and crowdlending platforms

Colombia law is trying to catch up with these new financing tools that are innovative and far from the secular tools of the financial system. In Colombia, we have a very robust regulatory structure because we have had precedents of illegal collection of money from the public (ponzi schemes) and money laundering which in practice makes it a little more difficult to carry out these activities because there are a large number of requirements, rules, limits that in the end are a barrier to entry for those who want to carry out this activity of crowdfunding in Colombia. 

Legal affairs

Obligations and requirements to provide crowdfunding, crowdinvesting and crowdlending platforms described above

Decree 1357 of 2018 regulates the services of collaborative financing or “Crowdfunding” in Colombia. 

This collaborative financing can only be performed by companies authorized by the Colombian Financial Superintendence. 

The companies which intend to provide collaborative financing services must (i) be incorporated as limited liability companies in accordance with Organic Statute of the Financial System; (ii) they must be registered with the National Registry of Stock Market Agents (known for its initial in Spanish as RNAMV); (iii) they must have security controls; and (iv) they must have management procedures.

If a company develops any kind of collaborative financing without the due permits of the Colombian Finance Superintendence, it will be considered as a criminal activity. 

According to the Colombian Criminal Code, if a person or entity collects money from the public in a massive and habitual way without the prior authorisation of the competent authority, it will be imprisoned from 120 months to 240 months, and a fine of up to 50,000 Colombian legal monthly minimum wages can be imposed.

Additional comments regarding the legal situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area

The entities that carry out the activity of collaborative financing may not:

  1. Provide advice related to the productive projects financed through them, nor with respect to any situation that may generate conflicts of interest with respect to the activity.
  2. Directly manage the resources of the productive projects financed, in accordance with the provisions of paragraphs 4 and 5 of Article 2.41.2.1.1.1. of this Decree.
  3. To assure returns or yields on the investment made.
  4. Grant loans, credits, or any other type of financing to the contributors or recipients, or act as a contributor in the projects promoted or financed through the same entity.
  5. Assume the character of recipients of productive projects that are published or financed through the same entity for collaborative financi

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