Published and draft legislation - Colombia

New policy to encourage enterprises into the formal economy

Document 3956 - National Economic & Social Policy Council

To curb the high proportion of companies operating in the informal sector in Colombia, the government is drafting a new policy to encourage companies into the formal economy. It is targeted at micro, small and medium-sized companies, to promote their access to financing, participation in public tender processes, exporting of products and advertising for their businesses, etc.

CONPES, the National Economic & Social Policy Council, is seeking to achieve three main goals with the new policy:

  • To reduce the regulatory burden for existing companies and for those wanting to go into the formal economy, by simplifying the paperwork
  • To implement policies that allow companies to materialize the advantages of the formal economy
  • To increase the cost of remaining in the informal economy

The financial sector's role in executing this policy will cover three main areas:

  • Financial literacy, since this is viewed as "an instrument which enables entrepreneurs to take better financial decisions, as well as to recognize the best alternative for leveraging their company, with a profit and risk approach."
  • The regulatory agenda, giving the country a more modern, inclusive and secure payment ecosystem.
  • Financial technology -Fintech- promoting new tools to raise finance, such as crowdfunding.

Finally, the government will analyze the feasibility of having "development banking" in the country, in order to increase access to financing for micro and small companies.