May 2020 Regulatory Update: Bolivia, Colombia, Costa Rica, Panama, Paraguay

Our senior legal and accounting experts deliver monthly updates on regulatory and other changes in their respective countries in Latin America.

Find out regulatory changes occurring across Latin America that may impact you and your business.

Extension for Registry of Commerce renewal in Bolivia

Biz Latin Hub legal and accounting experts in Bolivia
Bolivia’s response to the COVID-19 includes an extension of the deadline for commercial renewal with the Registry of Commerce.

In Bolivia, the government’s response to the COVID-19 pandemic has included an extension of the typical deadlines for companies to provide certain documents to government agencies out to 29 May. These documents include:

  • Annual Financial Statements,
  • the company’s Annual Report 2019, and
  • Income Tax Declaration.

As such, the deadline for commercial renewal with the Registry of Commerce (Registro de Comercio) will be rescheduled. The official due date is pending confirmation from government officials.

Colombia reduces contributions from employees and employers

In Colombia, Decree 558 of 2020 reduced the required pension contributions from employers and employees in order to increase business cash flow and disposable income for individuals. This is part of Colombia’s overall initiative to prevent mass job loss.

These pension contributions are reduced from 16% to 3% – 2.5% from employers and 0.5% from employees).

Other Decrees and Circulars announced by Colombia during their COVID-19 Pandemic response include:

  • Circular 021: outlines options for flexible working arrangements, and options to take vacations in advance to avoid further layoffs.
  • Circular 022: confirms temporary rules around the authorization to suspend contracts as a result of suspended business activities
  • Circular 027: states that employers cannot force employees to take unpaid leave
  • Circular 033: measures to protect employment through paid leave, changing working hours, and other potential modifications
  • Decree 488: Ministry of Labour authorizes employees to withdraw money from severance funds in case of reduced income or job loss.

Note: There is the possibility that the government may shortly announce a valued-added tax (VAT) reduction on rent of up to 19%. This has not yet been officially confirmed.

Tourist visas extended in Costa Rica

Due to closed borders and the reduced capacity of Costa Rica’s immigration agency, Dirección General de Migración y Extranjería, tourist visas were extended for those unable to leave the country, despite their visa expiring.

Costa Rica is one of the most successful countries in Central America in countering the spread of COVID-19. However, borders will remain closed until at least 15 June.

Suspension of public services payments in Panama

The Panamanian government has announced Law 295, which enforces a suspension of public services payments until 31 December 2020. This includes payments on internet, electric energy, water, and phone and cell phones services.

Additionally, Executive Decree 145 announced the suspension of lease payments and evictions up to 2 months after the lift of the state of national emergency. Private agreements between parties are allowed. 

New legal entity in Paraguay: Simplified Shares Company

Man researching new legal entity in Paraguay on tablet
The government has announced a new legal entity in Paraguay called the Company by Simplified Shares.

The government has announced a new legal entity in Paraguay called the Simplified Shares Company. In Paraguay, this is called the Empresa por Acciones Simplificadas, or EAS entity. This was established through Law No. 6480.

The country is still awaiting regulation by decree of this law, in order to fully enter into force. This new legal entity aims to further promote business in Paraguay.

Law No. 6524 declared a State of Emergency throughout the country due to the COVID-19 Pandemic, and temporary administrative, fiscal and financial measures were established. The confinement measures have been relaxing in various sectors, and public services have been transitioning towards higher capacity since 18 May.

Seek further legal and accounting advice from trusted experts in Latin America

Our legal and accounting experts support businesses and business owners to understand changes to Latin America’s regulatory environment that may impact their operations.

For further advice and support, reach out to experienced specialists who can guide you through new or evolving compliance practices. At Biz Latin Hub, our multinational and multilingual team of experts are here to offer customized support in market entry, company formation, corporate compliance, trade, trademarks, accounting and tax, immigration, and hiring and payroll activities.

Contact our team today for personalized support.

Biz Latin Hub senior legal and accounting experts in Latin America
Our legal and accounting experts are fully equipped to deliver key support to businesses operating in Latin America.

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