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Colombia: New business legal entity, “commercial benefit and interest society”

Colombia: New business legal entity

A new law, Ley 1901 of 2018, passed in June 2018 adds a new entity to the list of legal organizations in Colombia.

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The new entity—commercial benefit and interest societies (Sociedades Comerciales de Beneficio e Interés Colectivo (BIC))—is not, in the traditional sense, a new type of company or society. It is a new designation for existing or new companies.

Companies that want to be designated as having BIC status must adopt standards that are favorable for “the common good” and that demonstrate care of the environment. In addition, BIC entities need to adopt fair salary policies, plans for training employees, employment options for “vulnerable populations,” and enter into contracts for goods and services with domestic companies so as to promote regional development.

While there are no specific tax benefits being made available to BIC companies, it is expected that being identified as a BIC entity would have a positive impact on the corporate reputation in light of the corporate social responsibility position.

 

Read a June 2018 report (Spanish) prepared by the KPMG member firm in Colombia

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