COLOMBIA Trends and Developments Contributed by: Clare Montgomery, Karen Santamaria and Silvana Aroca, Baker McKenzie
tant tool in preventing tax evasion, money laun - dering, financing of terrorism, corruption, trans - national bribery and illegal collection of funds. DIAN has started following up with entities that have not yet registered in the UBO register. The adoption of these measures is consistent with emerging global trends in Europe, Asia and the United States. For companies interested in attracting foreign investors, new regulations in these jurisdictions (along with vigilant gov - ernment review), will allow for better informed judgements and confidence when engaging in foreign financial transactions and due diligence. Disclosure of business groups The registration of UBOs with the Colombian tax authorities should also be consistent with cor - porate registrations required of Colombian enti - ties at the public trade register. The disclosure of business groups and control situations in this register has been mandatory since the enforce - ment of Law No 222 of 1995. In the last few years, the Superintendence of Companies, the regulator for companies whose shares are not publicly traded or subject to supervision by other Superintendencies, has specified the level of detail that must be dis - closed on the ownership chain up to the final parent or controlling entity. It issued regulations granting a period during which companies could update their ownership chain voluntarily to comply with the directions issued by the Superintendence of Companies on disclosing accurate and complete information in exchange for reduced fines in 2021. This measure has created an environment where companies must be accurate and detailed in disclosing their control structures, ensuring that
all information on their control chain is properly registered. Failure to do so is becoming easier to detect and sanction given the different transpar - ency measures in both Colombia and abroad. There have been several high-profile cases in the last 12 months in which entities were fined by the Superintendence of Companies for not disclosing all members of registered groups or the full ownership chain. Conflicts of interest Another significant change in the Colombian corporate governance landscape has been the update to the conflicts of interest regime. The new provisions of Decree No 46 of 2024 make it clear that any direct or indirect interest that may compromise an administrator’s judge - ment or independence in making decisions in a company’s best interest must be disclosed to shareholders. Administrators include board members, legal representatives and liquidators, among others. Decree No 46 of 2024 also provides a compre - hensive guide to the procedure for disclosing this conflict of interest and obtaining authori - sation from the shareholders to carry out the transactions. Endorsement by investors may be granted as long as the proposed business or activity does not harm the company’s interest. Additionally, to avoid abusive related party trans - actions, new provisions establish that there is a conflict of interest for administrators when con - tracting with the company’s direct or indirect controlling entity or any of their subsidiaries. The other focus of attention has been to hold administrators accountable for their actions. When controlling shareholders are directly involved in the company’s management or have delegated this function to a person close to
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