LAW 963 OF 2005

(July 8)

Official Journal No. 45.963 of 08 July 2005

166 by Law 1607 of 2012 >

For which a law of legal stability is introduced for investors in Colombia

THE CONGRESS OF COLOMBIA,

DECRETA:

ARTICLE 1o. CONTRACTS OF LEGAL STABILITY. 166 by Law 1607 of 2012 > Contracts of legal stability are established in order to promote new investments and to expand existing ones in the territory national.

Through these contracts, the State guarantees to the investors that they subscribe to them, that if during its term it is modified in an adverse way to these of the norms that have been identified in the contracts as determining the investment, investors will have the right to be continued to apply those rules for the term of the respective contract.

For all purposes, any change in the text of the rule made by the Legislator is understood if it is a law, by the Executive or the respective autonomous entity if it is an administrative act of the order national, or a change in the binding interpretation of the same by competent administrative authority.

ARTICLE 2o. DOMESTIC AND FOREIGN INVESTORS. 166 by Law 1607 of 2012 > 51 of Law 1111 of 2006. The text with the new term is as follows: > National and foreign investors, whether natural or legal persons, as well as consortia, who make new or new investments, may be a party to legal stability contracts. expand existing ones in the national territory, for an amount equal to or greater than 150,000 UVT, to develop the following activities: tourism, industrial, agricultural, agroforestry, mining, processing zones export; free trade and oil, telecommunications, construction, port and ferry developments, electricity generation, irrigation projects and the efficient use of water resources and any activity approved by the Committee that deals with Article 4 (b literal (b). Foreign portfolio investments are excluded.

ARTICLE 3o. RULES AND INTERPRETATIONS THAT ARE THE SUBJECT OF LEGAL STABILITY CONTRACTS. 166 by Law 1607 of 2012 > In contracts for legal stability, the rules and their rules must be stated in an express and taxative manner binding interpretations made by administrative means, which are considered to be the determinants of the investment.

May be the subject of contracts of legal stability the articles, incisos, ordinal, numerals, literals and specific paragraphs of laws, decrees or administrative acts of general character, concretely determined, as well as the binding administrative interpretations made by the central and decentralized bodies and entities of services that make up the executive branch of the public authority in the national order, referred to in Article 38 of the 1998 Law 489, the Regulatory and Regulatory Commissions state agencies subject to special schemes referred to in Article 40 of the same law, with the exception of the Bank of the Republic.

PARAGRAFO. 49 of Act 1450 of 2011. The new text is as follows: > For the purposes of this law, they are understood as new investments, those that are carried out in projects that come into operation after the subscription of the contract of legal stability.

ARTICLE 4. ESSENTIAL REQUIREMENTS OF LEGAL STABILITY CONTRACTS. 166 by Law 1607 of 2012 > Contracts of legal stability shall comply with all of the following requirements:

(a) The investor shall submit a contract application which must comply with the requirements contained in subparagraphs (c), (d) and (e) of this Article, and shall be accompanied by a study showing the origin of the resources with which the new investments or the extension of the existing ones are sought, as well as a detailed and precise description of the activity, accompanied by feasibility studies, plans and technical studies required by the project or the number of jobs to be generated;

(b) The contract application shall be evaluated by a Committee that approves or will prove the subscription of the contract in accordance with the National Development Plan and the CONPES document that for this purpose is issued. This Committee shall be composed of:

-The Minister of Finance and Public Credit, or your delegate.

-The Minister of Commerce, Industry and Tourism, or your delegate.

-The Minister of the branch in which the investment is made, or its delegate.

-The Director of the National Planning Department, or its delegate.

-The Director of the autonomous entity, or its delegate, in the case of rules issued by those entities.

(c) The obligation of the investor to make a new investment or an extension, in accordance with Article 2o of this Law, shall be expressly set out in the contracts, the maximum period shall be indicated for make the investment and indicate the term of the term of the contract;

(d) In the contractual clauses, the articles, incites, ordinals, numerals, literals and paragraphs of the rules issued by the bodies and entities determined in this law, as well as the interpretations, must be transcribed. binding administrative provisions, on which stability will be ensured, and the reasons why such rules and interpretations are essential in the decision to invest;

e) In legal stability contracts, the amount of the premium referred to in Article 5o, the form of payment and other characteristics of the premium shall be established;

(f) Contracts shall be signed by the Minister of the branch in which the investment is made, as the Committee has so requested. This signature may not be delegated. The Ministry will have four (4) months, starting from the investor's request, to subscribe to the contract or to indicate the reasons why the application does not meet the requirements outlined in this law;

g) In the event of subrogation or transfer of ownership of the investment, the new holder shall have the approval of the Committee, in order to maintain the rights and obligations acquired in the contracts of legal stability.

PARAGRAFO. In addition to the requirements referred to in literals (c), (d) and (e), the investor who intends to benefit from the benefits provided by this law shall be obliged to:

(a) To comply strictly with the laws and regulations governing the activity linked to the type of activity in question and to pay the taxes, fees and contributions and other social and labour charges in a timely manner; is subject to the company;

b) faithfully comply with the set of rules established or established by the State to guide, condition and determine the conservation, use, management, and use of natural resources;

c) Meet all legal and regulatory obligations of tax and labor order acquired in accordance with the provisions of this law.

ARTICLE 5o. PREMIUM IN LEGAL STABILITY CONTRACTS. 166 by Law 1607 of 2012 > 48 of Law 1450 of 2011. The new text is as follows: > The investor who subscribes to a Legal Stability Contract will pay in favor of the Nation-Ministry of Finance and Public Credit, a premium that will be defined on the tax rules that the National Government determine that they are subject to stabilization.

For this purpose, the Ministry of Finance and Public Credit will manage, within three months of the approval of the NDP Law, the elaboration and implementation of a methodology for the definition of premiums that each of the risks assumed by the Nation and the coverage requested by investors.

ARTICLE 6o. DURATION OF CONTRACTS FOR LEGAL STABILITY. 166 by Law 1607 of 2012 > Legal stability contracts shall begin to apply from their signature and shall remain in force for the duration of the term established in the contract, which may not be less than three (3) years, not more than twenty (20) years.

ARTICLE 7o. ARBITRATION CLAUSE. 166 by Law 1607 of 2012 > Contracts of legal stability may include an arbitration clause to settle disputes arising therefrom. In this case, a national arbitration tribunal will be established exclusively governed by Colombian law.

ARTICLE 8o. EARLY TERMINATION OF THE CONTRACT. 166 by Law 1607 of 2012 > The timely failure or withdrawal of all or part of the investment, the timely non-payment of the entire or part of the premium or the incourse in the The causal link to the article 9o of this law shall result in the early termination of the contract.

ARTICLE 9o. INABILITY TO CONTRACT. 166 by Law 1607 of 2012 > They may not subscribe or be beneficiaries of legal stability contracts who have been convicted by executing or sanctioned by a judgment. a definitive administrative act, in the national territory or abroad, at any time, for conduct of corruption that is considered punishable by national law.

ARTICLE 10. REGISTER. 166 by Law 1607 of 2012 > Legal stability contracts must be registered with the National Department of Planning, entity that will report annually to the Congress of the Republic on the contracts concluded, the rules for these measures, the amounts of the investment protected and the annual tax effect derived from these contracts.

ARTICLE 11. LIMITATIONS TO STABILITY CONTRACTS. 166 by Law 1607 of 2012 > Stability contracts must be in harmony with the rights, guarantees and duties enshrined in the Political Constitution and respect for international treaties ratified by the Colombian State.

The stability provided for in this law cannot be granted on rules relating to: the social security system; the obligation to declare and pay the taxes or forced investments that the National Government decrees under states of exception; indirect taxes; prudential regulation of the financial sector and the tariff regime for public services.

Stability will also not fall on the rules declared unconstitutional or illegal by the Colombian judicial courts during the term of the legal stability contracts.

ARTICLE 12. VALIDITY. 166 by Law 1607 of 2012 > This law governs from its enactment.

The President of the honorable Senate of the Republic,

LUIS HUMBERTO GOMEZ GALLO.

The Secretary General of the honorable Senate of the Republic,

EMILIO RAMON OTERO DAJUD.

The President of the honorable House of Representatives,

CARMEN JATTIN CORRALES ZULEMA.

The Secretary General of the honorable House of Representatives,

ANGELINO LIZANO RIVERA.

COLOMBIA-NATIONAL GOVERNMENT

Publish and execute.

Dada en Bogotá, D. C., 8 July 2005.

ALVARO URIBE VELEZ

The Minister of Finance and Public Credit,

ALBERTO CARRASQUILLA BARRIER.

The Minister of Commerce, Industry and Tourism,

JORGE HUMBERTO BOTERO ANGULO.

The Director of the National Planning Department,

SANTIAGO MONTENEGRO TRUJILLO.