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What is normal abroad but works differently in Colombia

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Last verified: 2026-10-26 · Status: Stable

Colombia is an open market with a long record of honouring contracts, but several everyday business habits from abroad work differently here, and each carries a cost or a deadline. Interest is capped by a usury rate certified monthly by the financial regulator, invoices must be paid within 45 days unless both parties are large companies, an unchallenged invoice is accepted after 3 business days, and contracts between residents are settled in pesos, not dollars. Every bank debit pays a 4 per thousand financial transactions tax, costs need an electronic invoice to be deductible, employees receive a legal mid year and year end bonus plus an annual severance deposit, and every corporation and foreign branch needs a statutory auditor.

USD figures use the TRM (tasa representativa del mercado) of COP 3,158.43 per US dollar, valid 24 to 26 October 2026, from the official TRM series certified by the Superintendencia Financiera and published on datos.gov.co. Conversions are for orientation only.

Key facts

Current banking rate (interés bancario corriente), consumer and ordinary credit, October 2026	19.06 % effective a yearSuperintendencia Financiera Resolución 1472 de 2026, as of 2026-10-26 · in force
Usury ceiling, consumer and ordinary credit, October 2026 (1.5 times the current banking rate)	28.59 % effective a yearCódigo Penal art. 305; Código de Comercio art. 884; Resolución 1472 de 2026, as of 2026-10-26 · in force
Late interest when not agreed	1.5 times the current banking rate textCódigo de Comercio art. 884, as of 2026-10-26 · in force
Maximum payment term for commercial obligations (not between two large companies)	45 calendar daysLey 2024 de 2020 art. 3, as of 2026-10-26 · in force
Period to reject an invoice before irrevocable acceptance	3 business daysCódigo de Comercio art. 773; Ley 1676 de 2013 art. 86, as of 2026-10-26 · in force
Foreign currency contracts between residents	Not authorised in foreign exchange save special rules; foreign currency obligations paid in pesos when payment in the currency is not legally possible textResolución Externa 1 de 2018 art. 83; Código de Comercio art. 874, as of 2026-10-26 · in force
Financial transactions tax (GMF) rate	0.4 %Estatuto Tributario art. 872, as of 2026-10-26 · in force
Share of GMF paid that is deductible	50 %Estatuto Tributario art. 115, as of 2026-10-26 · in force
Electronic invoicing system mandatory	Yes; paper only when the issuer faces technological problems textEstatuto Tributario art. 616-1, as of 2026-10-26 · in force
Prima de servicios (mandatory bonus)	30 days of salary a yearCST art. 306, as of 2026-10-26 · in force
Annual cesantía deposited in a severance fund	30 days of salary a yearCST art. 249; Ley 50 de 1990 art. 99, as of 2026-10-26 · in force
Interest on cesantía paid to the worker	12 % a yearLey 50 de 1990 art. 99, as of 2026-10-26 · in force
Monthly minimum wage 2026	1750905 COPDecreto 1469 de 2025 art. 1, as of 2026-10-26 · in force
Minimum integral salary 2026 (13 minimum wages)	22761765 COPCST art. 132; Decreto 1469 de 2025, as of 2026-10-26 · in force
Gross assets that require a revisor fiscal	5000 monthly minimum wagesLey 43 de 1990 art. 13 par. 2, as of 2026-10-26 · in force
Gross income that requires a revisor fiscal	3000 monthly minimum wagesLey 43 de 1990 art. 13 par. 2, as of 2026-10-26 · in force
TRM used for conversions on this page	3158.43 COP per USDTRM certified by the Superintendencia Financiera, valid 24 to 26 October 2026, as of 2026-10-26 · in force

The rule

1. Abroad, commercial parties usually agree any interest rate. In Colombia, where a commercial contract does not set the interest rate, the interest is the current banking rate (interés bancario corriente); where late interest is not agreed, it is 1.5 times that rate; and if the creditor charges more than these limits it loses all the interest. Charging more than 1.5 times the current banking rate certified for the period, in a loan or a credit sale, is also the crime of usury, punished with 32 to 90 months of prison and a fine of 66.66 to 300 monthly minimum wages. The Superintendencia Financiera certifies the current banking rate every month; for 1 to 31 October 2026, Resolución 1472 de 2026 set it at 19.06 percent effective a year for consumer and ordinary credit, so the usury ceiling for that period is 28.59 percent effective a year.
Cost to do it: No fee. A clause above the ceiling costs the lender all its interest, and the usury offence carries 32 to 90 months of prison and a fine of 66.66 to 300 monthly minimum wages.
Example: A COP 1,000,000,000 commercial loan at the October 2026 ceiling of 28.59 percent effective a year yields COP 285,900,000 of interest in a year. Written at 30 percent, the lender would lose all the interest. / About US$316,613 of principal and US$90,520 of interest at the ceiling; at 30 percent the lender earns nothing on the loan.Código de Comercio (Decreto 410 de 1971), art. 884 as amended by Ley 510 de 1999 art. 111; Código Penal (Ley 599 de 2000) art. 305; Superintendencia Financiera Resolución 1472 de 2026, Código de Comercio art. 884; Código Penal art. 305, 1971-03-27 official text · verified 2026-10-26

2. Abroad, large buyers often impose 90 or 120 day payment terms on suppliers. In Colombia, since the second year of the Fair Terms Law (from 1 January 2022), every merchant must pay its commercial obligations within 45 calendar days of receiving the goods or completing the service. Only deals between two companies that are both large companies are excluded, and contracts with consumers, loans and similar contracts where deferred payment is essential are outside the law. Clauses that exceed the term, waive late interest or limit the debtor's liability are ineffective by law without a court ruling, and the creditor can also claim its documented collection costs through executive proceedings.
Cost to do it: No fee. Paying late adds late interest (by default 1.5 times the current banking rate, Código de Comercio art. 884) plus the creditor's documented collection costs.
Example: A large Colombian buyer receives COP 100,000,000 of goods from a small supplier on 1 October 2026; it must pay by 15 November 2026, and a contract clause allowing 90 days has no effect. / About US$31,661. If both companies were large, a 90 day term would be valid.Ley 2024 de 2020, Ley de pago en plazos justos (Diario Oficial 51.384, 23 July 2020, in force 1 January 2021), Art. 2, art. 3 and transitory paragraph, art. 5, art. 7 and art. 10, 2020-07-23 official text · verified 2026-10-26 · changed: The law set a 60 day maximum in its first year (2021) and 45 days from its second year (2022 onward); health system operations moved to a 60 day maximum from the third year.

3. Abroad, an invoice is usually just a payment request. In Colombia, an invoice is a negotiable instrument (título valor): it is irrevocably accepted if the buyer does not return it or send a written claim against its content within 3 business days of receiving it. Once accepted, it can be endorsed to factoring firms and banks, and any retention of the invoice or act of the buyer that blocks its free circulation is a restrictive trade practice that the Superintendencia de Industria y Comercio can sanction; company managers must state in their annual management report that they did not obstruct the free circulation of suppliers' invoices.
Cost to do it: No fee. A buyer that misses the 3 business day window loses its right to reject the invoice's content.
Example: A supplier issues an invoice of COP 50,000,000 on a Monday; if the buyer has not rejected it by Thursday, the supplier can sell it to a factoring firm, which can collect the full amount at maturity. / About US$15,831.Código de Comercio art. 773 as amended by Ley 1231 de 2008 art. 2; Ley 1676 de 2013 art. 86 and art. 87 (Diario Oficial 48.888, 20 August 2013, in force six months after promulgation), Código de Comercio art. 773; Ley 1676 de 2013 art. 86 and 87, 2013-08-20 official text · verified 2026-10-26 · changed: Ley 1676 de 2013 cut the period to reject an invoice from 10 calendar days (Ley 1231 de 2008) to 3 business days, effective six months after promulgation (February 2014). Some official compilations of the Código de Comercio still show the old 10 day text.

4. Abroad, two local companies can usually price and pay a contract in US dollars. In Colombia, save special rules of the exchange regime (for example certain oil, gas and fuel sales between residents), deposits, financial operations and in general any contract or agreement between residents in foreign currency using foreign exchange are not authorised, and operations between residents and free trade zone users are internal operations paid in Colombian pesos. A contract may still be denominated in dollars, but an obligation in foreign currency is paid in that currency only if legally possible, and otherwise in Colombian pesos. Employees whose salary is set in foreign currency may demand payment in pesos at the official rate of the payment day.
Cost to do it: No fee. The cost is economic: a dollar priced contract between residents is settled in pesos, so the parties bear the exchange rate move between pricing and payment.
Example: A Colombian company signs a US$10,000 a month service contract with another Colombian resident; on a payment day with a TRM of COP 3,158.43, it pays COP 31,584,300 in pesos. / US$10,000 of contract value, settled in pesos; a 5 percent move in the TRM changes the peso cost by about COP 1,579,215 (about US$500).Banco de la República, Resolución Externa 1 de 2018 (Boletín de la Junta Directiva 13, 25 May 2018); Código de Comercio art. 874; Código Sustantivo del Trabajo art. 135, Resolución Externa 1 de 2018 art. 83 and art. 93; Código de Comercio art. 874; CST art. 135, 2018-05-25 official text · verified 2026-10-26

5. Abroad, moving money between bank accounts rarely carries a tax. In Colombia, the financial transactions tax (gravamen a los movimientos financieros, GMF) applies at 4 per thousand to each transaction that disposes of funds held in current or savings accounts or in deposit accounts at Banco de la República, and to drafts of cashier's checks. A company may deduct 50 percent of the GMF it actually paid in the year, if certified by the withholding agent, whether or not it relates to its business.
Cost to do it: 4 per thousand (0.4 percent) of each taxable debit; half of it is deductible for income tax.
Example: Paying a COP 1,000,000,000 supplier invoice from a Colombian current account triggers COP 4,000,000 of GMF, of which COP 2,000,000 is deductible. / About US$1,266 of GMF on a US$316,613 payment, of which about US$633 is deductible.Estatuto Tributario, art. 871 (added by Ley 633 de 2000 art. 1) and art. 872 (as amended by Ley 1819 de 2016 art. 214, Diario Oficial 50.101, 29 December 2016); art. 115 (as amended by Ley 2277 de 2022 art. 19), Estatuto Tributario art. 871, 872 and 115, 2016-12-29 official text · verified 2026-10-26

6. Abroad, a paper or PDF invoice often supports a tax deduction. In Colombia, the invoicing system comprises the sales invoice, equivalent documents and every electronic document the tax authority (DIAN) designates, under the technical conditions DIAN sets for generation, transmission and validation; a paper invoice is valid only where the issuer faces technological problems. Costs, deductions and VAT credits are only accepted when backed by invoices meeting the legal requirements, and failing to transmit, issuing without requirements or not issuing invoicing documents triggers the sanctions of art. 651, 652 and 652-1.
Cost to do it: Issuing electronic invoices requires a DIAN validated solution; an expense without a valid invoice is not deductible, so a COP 10,000,000 cost loses its income tax shield.
Example: A Colombian subsidiary that pays COP 10,000,000 for consulting against an unvalidated PDF invoice from a local provider cannot deduct the cost or credit the VAT. / About US$3,166 of cost without a tax deduction.Estatuto Tributario art. 616-1 (as amended by Ley 2155 de 2021 art. 13, Diario Oficial 51.797, 14 September 2021) and art. 771-2 (added by Ley 383 de 1997 art. 3), Estatuto Tributario art. 616-1 and 771-2, 2021-09-14 official text · verified 2026-10-26

7. Abroad, bonuses are usually discretionary and severance is paid only on dismissal. In Colombia, every employer must pay the prima de servicios, a legal benefit of 30 days of salary a year paid in two halves, by 30 June and within the first 20 days of December, proportionally to time worked. Separately, each 31 December the employer settles the auxilio de cesantía (one month of salary per year of service), deposits it before 15 February of the following year in the severance fund the worker chooses, and pays the worker 12 percent annual interest on it; each day of delay in the deposit costs one day of salary. These benefits may be folded into an integral salary only for workers earning at least 10 monthly minimum wages plus a benefit factor of at least 30 percent, that is 13 minimum wages.
Cost to do it: About 2 extra months of salary a year (prima plus cesantía) and 12 percent interest on the cesantía, on top of social security and payroll contributions.
Example: An employee earning COP 5,000,000 a month receives COP 2,500,000 of prima by 30 June and COP 2,500,000 in December; the employer deposits COP 5,000,000 of cesantía before 15 February and pays COP 600,000 of interest. The 2026 minimum integral salary is COP 22,761,765 a month (13 times COP 1,750,905). / About US$1,583 of prima, US$1,583 of cesantía and US$190 of interest for the year; the minimum integral salary is about US$7,207 a month.Código Sustantivo del Trabajo art. 306 (as amended by Ley 1788 de 2016 art. 1, Diario Oficial 49.927, 7 July 2016), art. 249 and art. 132 (as amended by Ley 50 de 1990 art. 18); Ley 50 de 1990 art. 99 (28 December 1990); Decreto 1469 de 2025 art. 1 (2026 minimum wage COP 1,750,905), CST art. 132, 249 and 306; Ley 50 de 1990 art. 99, 2016-07-07 official text · verified 2026-10-26

8. Abroad, small and closely held companies often need no external auditor. In Colombia, every sociedad por acciones covered by the Código de Comercio (such as the S.A.) and every branch of a foreign company must have a revisor fiscal, a statutory auditor who must be a Colombian public accountant, and any commercial company of any kind must have one when its gross assets at 31 December of the prior year reach 5,000 monthly minimum wages or its gross income in the prior year reaches 3,000 monthly minimum wages. For the SAS, Ley 1258 de 2008 art. 28 provides for a revisor fiscal where the law requires one, who must then be a certified public accountant, and its profits must in any case be supported by financial statements certified by an independent public accountant.
Cost to do it: Professional fees of the revisor fiscal vary by provider and are not regulated.
Example: A foreign company that opens a Colombian branch to sign a services contract must appoint a revisor fiscal from the outset, however small the branch; an SAS subsidiary must appoint one once its prior year gross income reaches 3,000 monthly minimum wages. / No fixed fee; budget for a recurring professional engagement.Código de Comercio art. 203; Ley 43 de 1990 art. 13 (13 December 1990); Ley 1258 de 2008 art. 28, Código de Comercio art. 203; Ley 43 de 1990 art. 13 num. 1 lit. a and par. 2; Ley 1258 de 2008 art. 28, 1990-12-13 official text · verified 2026-10-26

Habit abroad	Colombian rule	Source
Any agreed interest rate	Ceiling of 1.5 times the certified current banking rate (28.59 percent effective a year for consumer and ordinary credit in October 2026); excess loses all interest	Código de Comercio art. 884; Código Penal art. 305
90 or 120 day supplier terms	45 calendar days maximum unless both parties are large companies	Ley 2024 de 2020 art. 3
Invoice as a payment request	Accepted after 3 business days without written rejection; freely transferable	Código de Comercio art. 773; Ley 1676 de 2013 art. 86 and 87
Dollar contracts between local firms	Not authorised in foreign exchange save special rules; settled in pesos, including with free trade zone users	Resolución Externa 1 de 2018 art. 83 and 93; Código de Comercio art. 874
Free bank transfers	4 per thousand GMF on each debit; 50 percent deductible	Estatuto Tributario art. 871, 872 and 115
PDF invoice supports a deduction	Electronic invoicing system validated by DIAN; costs need valid invoices	Estatuto Tributario art. 616-1 and 771-2
Discretionary bonus, severance only on dismissal	Prima of 30 days a year plus annual cesantía deposit with 12 percent interest	CST art. 249 and 306; Ley 50 de 1990 art. 99
No auditor for small companies	Revisor fiscal for every company with shares and foreign branch, and above the size thresholds	Código de Comercio art. 203; Ley 43 de 1990 art. 13

Normal abroad, different in Colombia: quick reference (verified 26 October 2026)

Worked example

A US$1,000,000 supply contract from a foreign parent to its Colombian subsidiary is a cross border operation and may be paid in dollars through the exchange market; the same contract between the subsidiary and a Colombian distributor must be settled in pesos (about COP 3,158,430,000 at the TRM of COP 3,158.43).
Paying that COP 3,158,430,000 from a Colombian bank account costs COP 12,633,720 of GMF (about US$4,000), of which COP 6,316,860 (about US$2,000) is deductible.
If the distributor is a small company, the subsidiary must pay it within 45 calendar days of receiving goods or services, and any invoice it does not reject within 3 business days becomes irrevocably accepted and transferable to a factoring firm.

Step by step

Check the Superintendencia Financiera's monthly certification of the current banking rate before setting interest or late interest in any loan or credit sale, and cap clauses at 1.5 times that rate.
Set supplier payment terms at 45 calendar days or less unless both parties are large companies, and adjust procurement and invoice verification so that corrections are requested promptly, which pauses the term.
Set up an internal process to review and, where needed, reject supplier invoices in writing within 3 business days of receipt.
Price contracts with Colombian residents in pesos, or in dollars payable in pesos at the TRM of the payment day, and keep dollar settlement for cross border operations channelled through the exchange market.
Budget 4 per thousand GMF on outgoing payments and ask the bank for the annual GMF certificate to support the 50 percent deduction.
Enable electronic invoicing with a DIAN validated solution before the first sale, and require valid electronic invoices from local suppliers.
Calendar payroll deadlines: prima by 30 June and by 20 December, cesantía deposit before 15 February, and the 12 percent interest to workers.
Appoint a revisor fiscal when incorporating an S.A. or opening a foreign branch, and test each year whether an SAS or limitada crosses the Ley 43 thresholds.

Common traps

Charging interest above the ceiling does not just cut the rate back: under Código de Comercio art. 884 the creditor loses all the interest, and above 1.5 times the certified rate it is a crime under Código Penal art. 305.
The usury ceiling changes every month and differs by credit type; a rate that was lawful when a contract was signed must be checked against the certification for each period in which interest accrues.
Some official compilations of the Código de Comercio still show the old 10 calendar day period to reject an invoice; the period is 3 business days since Ley 1676 de 2013.
Payment term clauses longer than 45 days with smaller suppliers are ineffective by law without any court ruling (Ley 2024 de 2020 art. 7 and 10), so a supplier can demand late interest from day 46.
The GMF applies to each debit, so moving money through several local accounts before paying a supplier multiplies the cost.
A cost backed only by a PDF or paper invoice from a supplier obliged to invoice electronically can be rejected for income tax and VAT (Estatuto Tributario art. 771-2).
The prima and cesantía are owed on top of salary; an offer letter that quotes a foreign style annual package without them understates the real payroll cost unless it is a valid integral salary of at least 13 minimum wages.
Late deposit of cesantía costs one day of salary for each day of delay (Ley 50 de 1990 art. 99).

Sources

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