Colombia Gets GAFI Ratings Boost
Colombia Gets GAFI Ratings Boost: A Great Choice for Offshore Business
Colombia's recent GAFI ratings upgrade has positioned it as a prime location for international business. Following rigorous evaluations, the Financial Action Group of Latin America (Gafilat) re-evaluated Colombia's compliance with Recommendation 10 and Recommendation 12, both of which were upgraded from "partially fulfilled" to "mostly fulfilled." This development highlights Colombia's strength in fighting financial crime and provides valuable insights for those interested in doing business in Latin America.
In recent years, Colombia has emerged as a preferred destination for offshore companies. The country's economic stability, strategic location, and skilled workforce have made it an attractive option for international business owners looking to expand their operations. In addition, Colombia's latest ratings boost by the Financial Action Group of Latin America (Gafilat) has reinforced its position as a safe and secure destination for offshore businesses.
The GAFI ratings are widely recognized as the gold standard for evaluating a country's compliance with anti-money laundering and counter-terrorism financing regulations. Viewing the position of jurisdictions in the list of recommendations is the first step that anyone with the intention of making international business must do when making a final decision. In this regard, Colombia has been rated as "mostly fulfilled" in Recommendation 10 and Recommendation 12, which are key measures for ensuring compliance with international financial regulations.
Recommendation 10
Recommendation 10 pertains to customer due diligence, a crucial aspect of preventing financial crime. It requires financial institutions to identify their customers and verify their identities through reliable and independent sources. Colombia's recent upgrade in this area signifies its strong commitment to combatting money laundering, terrorist financing, and financing of the proliferation of weapons of mass destruction.
Recommendation 12
Similarly, Recommendation 12, which deals with politically exposed persons (PEP), has also been upgraded to "mostly fulfilled." This recommendation requires financial institutions to take additional measures to mitigate the risks associated with PEPs. Colombia's progress in this area is reflected in the External Circular 11 of 2022 of the Financial Superintendence of Colombia (SFC), which includes the concept of obtaining the approval of senior management for the client's link.
These upgrades have not gone unnoticed by the international community, with experts highlighting Colombia's success in implementing measures that address financial crime. In particular, the Director of the Financial Information and Analysis Unit (UIAF), Luis Eduardo Llinás Chica, believes that these improvements in the rating of Colombia's compliance with international financial regulations have demonstrated the country's clear improvement in the financial system.
Types of Legal Entities
For entrepreneurs looking to establish offshore companies in Colombia, there are several legal entities to choose from. The Simplified Limited Liability Company (SAS) is the preferred option for many entrepreneurs as it offers flexibility and limited liability protection. This entity is only obliged by law to appoint a legal auditor if its total assets exceed US $1,655,000 or its annual billing exceeds US $994,000 and must appoint at least one legal representative domiciled in Colombia.
The Limited Liability Society (Ltda.) is another legal entity that is preferred by many entrepreneurs. It is generally not obliged to appoint a legal auditor, unless its assets exceed US $1,655,000 or its annual billing exceeds US $994,000. Additionally, it must count as a legal representative of the company a permanent resident of Colombia.
Finally, the Public Limited Company (SA) is a legal entity that is obliged by law to appoint a legal auditor. This entity is recommended for larger companies that plan to establish permanent legal activities in Colombia. However, the scope of the operations is defined by the parent company, which must appoint at least one permanent resident in the country to act as legal representative.
Conclusion
In conclusion, If you're looking to set up an offshore company in Colombia, Matwal Solutions can assist you in the process, ensuring that all legal requirements are met and your business is established smoothly. With our extensive experience in the financial industry and our commitment to providing the highest quality services, you can trust us to help you navigate the process of setting up a company in Colombia. Contact us today to learn more about our services and rates, and let us help you take the first step towards establishing your offshore company in Colombia.