Impact Policy Tracker Policy

Colombia’s Benefit and Collective Interest Companies (BICs)



In 2018, Colombia became the first Latin American country to establish Benefit and Collective Interest Companies (BIC) through Law 1901. To qualify as a BIC, a company must include "BIC" in its name and align its corporate purpose with at least one activity from these five key areas: business model, corporate governance, labour practices, environmental practices, and community engagement. BICs are required to prioritise sustainable sourcing, fair trade practices, employee participation, diversity in governance, environmental audits, and community support. They must also report their impact according to independent standards, such as the B Corporation certification, GRI standards, and ISO 26000 on corporate social responsibility.



Highlights

  • Pioneer in Latin America: Colombia was the first country in Latin America to legally recognise BICs, inspired by models in the U.S., France, and Italy. With over 2000 BICs registered, including companies like Alpina, Movistar, Casa Toro, and Tetra Pak, Colombia's leadership has influenced countries like Ecuador and Peru in regulating and recognising “triple impact” businesses. Although the model is currently limited to commercial companies, future legislation may expand it to other entities, creating the potential for a "fourth sector" similar to European examples in Denmark and Luxembourg.

  • Economic Incentives: BICs enjoy several incentives, including reduced industrial property service fees, tax advantages for employee stock distribution, and preferential treatment in public contracts. They also benefit from preferential access to government credit lines and tax benefits on profits distributed as shares to employees.

  • No Need for a Specific Type of Business Entity: The BIC model allows any existing commercial company to voluntarily adopt the BIC status by amending its corporate purpose. This flexibility makes it easy for companies to transition to this model without major restructuring.

Government’s Role:
Market Regulator


Country:
Colombia

Policy Type:
Specific Legal Forms for Impact-driven Businesses

Year: 2018

Responsible Institution:
Congress of Colombia

Additional information:
Social Enterprise Law Survey: Colombia

Specific Legal Forms for Impact-driven Businesses

What are Specific Legal Forms for Impact Businesses?

Since the introduction of the Benefit Corporation (BC) model in the United States in 2010, several countries, including Italy (2016), France (2019), and Spain (2022), have established specific legal statuses -such as società benefit and entreprise à mission- that allow companies to pursue both profit and public benefit simultaneously, clearly demonstrating their commitment to creating positive societal impact. Benefit Corporations differ from traditional business models as they are legally required to pursue a public benefit, not just increasing profits for shareholders. This means that directors and executives must consider the interests of all stakeholders, such as employees, suppliers, customers, the community, and the environment. Furthermore, Benefit Corporations must report their performance using third-party standards to assess their social and environmental impact.

Among the advantages of adopting such statuses are legal protection for directors who prioritise long-term social and environmental goals over short-term profits, enhanced employee retention, and increased customer loyalty. BC status also provides clarity for impact investors and signals a company’s commitment to its social and environmental purpose. In some countries, such as Colombia, the legal status is tied to tax incentives, offering tangible financial benefits. However, the necessity of creating a specific legal form depends on each country’s existing regulatory framework. In some cases, such as South Korea, governments have opted for certification systems rather than new corporate structures. 

For more information on specific legal forms for impact businesses, visit The Rise of Benefit Corporations (2024) and The International Handbook of Social Enterprise Law (2022).