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LAW 963 2005
Official Gazette No. 45963 of July 8, 2005
By which a law is instituted legal stability for investors in Colombia Summary
CONGRESS OF COLOMBIA DECREES
ARTICLE 1o. LSCs. legal stability contracts with the aim of promoting new investments and expand existing in the national territory are established.
Through these contracts, the State guarantees to investors that sign, that if during its term adversely modifies any of these rules has been identified in the contracts as a determinant of investment, investors will be entitled to which those rules continue to apply to them the term of the respective contract.
For all purposes, modification means any change in the text of the provision made by the legislature if it is a law, by the Executive or the respective autonomous entity if it is an administrative act of national, or a change in the binding interpretation of it by competent administrative authority. Effective Jurisprudence
. Domestic and foreign investors. They may become party to the contracts of foreign legal stability national investors, be they natural or legal persons and consortia, making new investments or expand existing in the national territory, by an amount equal to or greater than 150,000 UVT, to develop the following activities: tourist, industrial, agricultural, agro export, mining, export processing zones; Free trade and oil, telecommunications, construction, railroad and port development, power generation, irrigation projects and efficient use of water resources and all activities approved by the Committee that article is the 4th paragraph b) areas. Foreign portfolio investments are excluded. Effective Notes
ARTICLE 3. STANDARDS AND INTERPRETATIONS OBJECT OF LEGAL STABILITY CONTRACTS. In legal stability contracts shall state expressly and exhaustively binding rules and their interpretations by administrative means, which are considered determinants of investment. Effective Notes
May be the subject of legal stability contracts articles, paragraphs, ordinals, numerals, literal and specific paragraphs of laws, decrees or administrative acts, namely certain general and binding administrative interpretations made by agencies and entities central sectors and decentralized for services that make up the executive branch of government at the national level, to which Article 38 of Law 489 of 1998 is concerned, the regulatory commissions and state bodies under referred to special schemes Article 40 of the Act, except the Bank of the Republic. Effective Notes
PARÁGRAFO. For the purposes of this law are understood as new investments, those made in projects that become operational after the signing of legal stability contract. Effective Notes
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ARTICLE 4. ESSENTIAL REQUIREMENTS OF LEGAL STABILITY CONTRACTS. Legal stability contracts must meet all the following requirements:
a) The investor shall submit a contract must meet the requirements contained in paragraphs c), d) and e) of this article, and should accompanied by a study in which the origin of the resources with which they intend to make new investments or expansion of existing ones, as well as a detailed description proven and accurate activity, accompanied by feasibility studies, plans and technical studies that the project requires or warrants and the number of jobs expected to be generated;
B) The contract request will be evaluated by a committee to approve or improbará signing the contract as established in the National Development Plan and CONPES document to that effect is issued. This Committee shall consist of:
- The Minister of Finance and Public Credit or his delegate.
- Minister of Commerce, Industry and Tourism, or his delegate.
- The Minister of the sector in which the investment is made, or his delegate.
- The Director of the National Planning Department, or his delegate.
- The Director of the autonomous entity, or his delegate, in the case of rules issued by such entities. Effective Notes
C) Contracts shall be expressly established the obligation of the investor to make a new investment or expansion, pursuant to article 2 of this law, the maximum term will be brought to make the investment and indicate the term of of the contract;
D) contractual clauses shall be transcribed articles, paragraphs, ordinals, numerals, literal and paragraphs of the standards issued by the agencies and entities determined in this law and binding administrative interpretations, which will ensure the stability, and the reasons why such standards and interpretations are essential in the investment decision will be exposed; Effective Notes
E) In the legal stability contracts must establish the amount of the premium that the article 5 refers to the form of payment and other characteristics thereof;
F) Contracts must subscribe by the Minister of the sector in which the investment is made, as determined by the Committee. This signature shall not be delegated. The Ministry will have four (4) months from the request of the investor, to sign the contract or to indicate the reasons why the application does not meet the requirements set forth in this law; Effective Jurisprudence
G) In the event of subrogation or assignment to the ownership of the investment, the new owner must have the approval of the Committee for the purposes of maintaining the rights and obligations in legal stability contracts.
PARÁGRAFO. In addition to the requirements referred to in paragraphs c), d) and e), the investors interested in receiving the benefits of this law states, shall:
a) Comply strictly the laws and regulations governing the activity related to the type of activity concerned and promptly pay the taxes and contributions and other social and labor to charges the company is subject;
B) Faithfully comply with all established standards or established by the State to target, condition and determine the conservation, use, management and use of environment and natural resources;
C) Comply with all legal and regulatory obligations of tax and labor order acquired in accordance with the provisions of this law.
The 5th ITEM. PREMIUM ON LEGAL STABILITY CONTRACTS. The investor who signs a Legal Stability Agreement will pay for the Nation - Ministry of Finance and Public Credit, a premium tax regulations defined on the national government determines are subject stabilization.
To this end, the Ministry of Finance and Public Credit will manage, in a period of three months from the adoption of the Law of the PND, the development and implementation of a methodology for defining premiums reflecting each the risks assumed by the Nation and the coverage requested by investors. Effective Notes
ARTICLE 6o. DURATION OF LEGAL STABILITY CONTRACTS. Legal stability contracts shall take effect since its signing and remain valid for the duration term established in the contract, which shall not be less than three (3) years nor more than twenty (20) years. Effective Notes
ARTICLE 7. CLAUSE. Legal stability contracts may include an arbitration clause to settle disputes arising therefrom. In this case, a national arbitration court ruled exclusively by Colombian law be established. Effective Jurisprudence
Article 8. EARLY TERMINATION OF THE CONTRACT. Not timely completion or withdrawal of all or part of the investment, the non-timely payment of all or part of the premium or fall within the grounds of article 9 of this law will result in the early termination of the contract .
Article 9. INABILITY TO HIRE. They may not subscribe or be awarded contracts of legal stability they have been convicted by final judgment or sanctioned by a final administrative act, in the country or abroad, at any time, for conduct of corruption that are considered punishable by law national.
ARTICLE 10. REGISTRATION. The legal stability contracts must be registered with the National Planning Department entity shall report annually to Congress on contracts concluded, standards for these covered the amounts of the protected investment and the annual tax effect of these contracts.
ARTICLE 11. LIMITATIONS ON CONTRACTS FOR STABILITY. Stability contracts must be in harmony with the rights, guarantees and duties enshrined in the Constitution and respect the international treaties ratified by the Colombian State.
No stability may be granted under this Act rules concerning: the social security system; the obligation to declare and pay taxes or forced investments that the Government decreeing states of emergency; indirect taxes; prudential regulation of the financial sector and the tariff regime of public services.
Stability can not fall on the rules declared unconstitutional or illegal by the Colombian courts during the term of the legal stability contracts. Effective Jurisprudence
ARTICLE 12. EFFECTIVE. This law governs from its promulgation.
The President of the honorable Senate,
Luis Humberto Gómez Gallo.
The Secretary General of the honorable Senate,
EMILIO RAMÓN OTERO DAJUD.
The President of the honorable House of Representatives,
CORRALES DEL CARMEN ZULEMA Jattin.
The Secretary General of the honorable House of Representatives, ANGELINO
REPUBLIC OF COLOMBIA - NATIONAL GOVERNMENT
published and execute.
Given in Bogotá, DC, on July 8, 2005.
Alvaro Uribe Minister of Finance and Public Credit, Alberto Carrasquilla
The Minister of Commerce, Industry and Tourism Jorge Humberto Botero
The Director of the National Planning Department,
SANTIAGO MONTENEGRO TRUJILLO.
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