Colombian Superintendence of Corporations confirms the possibility of distributing dividends in kind to non-resident investors

Equal treatment for foreign and domestic investors

Article 2.17.2.2.1.1 of Decree 1068 of 2015 provides that foreign capital investments in Colombia must receive the same legal treatment as those made by Colombian residents, in other words, foreign investors may neither be discriminated against nor afford more favorable conditions than local investors.

This principle extends to the form of dividend payments. As such, dividends distributed to non-resident shareholders may, under certain conditions, be paid in kind—just as they may be to resident shareholders.

When are dividends in kind allowed?

Although Colombian corporate law generally requires dividends to be paid in cash—as set forth in Articles 155 and 156 of the Commercial Code—the Superintendence has repeatedly recognized that dividends may be paid in kind, provided the following conditions are met:

• The general shareholders’ meeting or the board of partners (as applicable) must authorize the in-kind distribution.
• Shareholders must give their express and unequivocal consent to receive a non-cash dividend.

Such interpretation has been consistently upheld by the Superintendence in several legal opinions, including Opinions No. 220-031783 of 2011, 220-111374 of 2015, and most recently No. 220-002368 of 2020.

Corporate considerations

This interpretation is particularly relevant for companies with international investors that seek alternatives to cash dividends—either due to liquidity constraints or as part of broader tax or capital planning strategies. To ensure compliance and minimize legal exposure, companies must:

• Clearly document the in-kind distribution in corporate resolutions.
• Obtain express acceptance from each beneficiary shareholder.
• Fulfill all reporting and registration obligations before the Colombian Central Bank.

How can Forvis Mazars assist you?

At Forvis Mazars, our legal and tax teams are equipped to assist corporate clients in structuring compliant and tax-efficient dividend distribution mechanisms, including dividends in kind to non-resident shareholders.

Our services include:

• Legal support in drafting and documenting shareholders’ resolutions.
• Analysis and amendment of bylaws or shareholders’ agreements.
• Foreign investment registration before the Banco de la República.
• Comprehensive advice on foreign exchange and tax implications.