Colombia: New company classification offers special opportunities for MSMEs

On 5 June 2019, Decree 957 was adopted in Colombia, which redefines the criteria for the classification of companies.

According to the old system, the classification was made according to revenue only. The new system classifies by sector (manufacturing, services, trade) and revenue. The designated groups remain the same:

 

  • Microenterprises
  • Small enterprises
  • Medium enterprises
  • Large enterprises

 

The classification is based on the following criteria:

Sector Classification Range of Revenue in Pesos
Industrial Micro business 781,254,828
Small business 781,254,828 6,796,814,220
Medium business 6,796,814,220 57,577,548,140
Big business 57,577,548,140
Services Micro business 1,093,750,128
Small business 1,093,750,128 4,374,967,356
Medium business 4,374,967,356 16,015,475,304
Big business 16,015,475,304
Commerce Micro business 1,484,360,946
Small business 1,484,360,964 14,296,734,576
Medium business 14,296,734,576 71,639,903,952
Big business 71,639,903,952

The peso values ​​were calculated according to their equivalent in UVT and accordingly change with their value.

 

How can micro and small enterprises benefit?

With the change of the classification criteria, micro enterprises and small enterprises (MSME) are to be treated preferentially. The benefits of the new decree include the following:

 

  • Facilitating easier access to credits
  • Programs to promote growth and innovation
  • Use of free electronic billing software

 

Facilitating easy Access to Credits

Bancóldex, the Development Bank of Colombia, provides MSMEs with preferential loans on interest rates and terms of payment to help them finance their working capital or acquire assets. These preferential loans are made available to MSMEs via their commercial banks. In addition, the National Guarantee Fund guarantees the requested commercial banks a certain percentage of the loans.

 

Programs to promote Growth and Innovation

The Ministry of Trade, Industry and Tourism has launched an initiative called iNNpulsa Colombia, which manages the various support programs for MSMEs and helps them to apply for grants. In addition, iNNpulsa Village provides access to training, mentoring and corporate networks.

 

Use of free electronic billing Software

MSMEs can use the free electronic billing software offered by DIAN for authorization application numbering. As a result, electronic invoices can be provided with the prescribed digital signature.

 

These regulatory changes could affect your business with view to customizing or support of your ERP/SAP system. Please contact us to learn about possible necessary reactions to the changes – we are happy to assist you!