Colombia's New Government

On 7 August 2026, Abelardo de la Espriella assumed the presidency of Colombia — the first inauguration held outside Bogotá. He won the 21 June runoff with 49.66% against Iván Cepeda's 48.70% — a margin of roughly 252,000 votes out of more than 25 million cast, on the highest turnout ever recorded in a Colombian runoff. For companies operating in Colombia, the relevant question is not who won. It is which of the announced changes will become law, on what timeline, and what should be decided before that becomes clear.

What Is Confirmed

Three facts are settled. The transfer of power occurs on 7 August. The vice president is José Manuel Restrepo, who served as finance minister under the Duque administration — a signal of fiscal orthodoxy that markets read immediately. And the mandate is exceptionally narrow: under one percentage point, in a contest where the losing campaign contested more than a quarter of polling tables before the final count.

That narrowness is itself a planning input. A government elected by a margin this thin, facing a Congress it does not control, will find structural reform harder to pass than campaign rhetoric implies. Announcements should be read as intent, not as schedule.

The currency has already moved. The peso strengthened materially through the second quarter, trading below 3,300 per dollar in late July against highs above 3,800 in May. Part of that is political repricing; part is a carry trade against a central bank policy rate near 12%. Treasury teams with Colombian exposure should not assume either driver is permanent.

What Has Been Announced — and What an Announcement Is Worth

The administration has set out an agenda that would represent the most significant reorientation of Colombian tax policy in a decade. The DIAN would be simplified from administering roughly fifteen national taxes to three principal ones: corporate income tax, value added tax, and VAT on imports. The financial transactions tax — the four-per-thousand levy that has been a fixture of Colombian commerce since 1998 — would be eliminated, as would the wealth tax, on the argument that it discourages investment.

A package of approximately ninety decrees has been reported as prepared for the first days of the new government. Among them: authorisation of new hydrocarbon exploration contracts, and the enabling of hydraulic fracturing.

None of this is law. Decrees can be issued quickly but are subject to constitutional review — a lesson Colombia learned expensively in the first half of this year. Tax structure changes of the scale described require congressional passage across four debates. The distance between an announced agenda and an enacted one is where planning errors are made.

The Fiscal Inheritance

The new government inherits two unresolved tax matters, and both carry immediate consequences for foreign-owned entities.

The first is settled law and represents recoverable money. Decreto 1474 of 2025, which introduced emergency tax measures in late December, was declared unconstitutional by the Constitutional Court on 15 April 2026 in judgment C-079/26, following the annulment of the underlying state of emergency six days earlier. The decree produced legal effects only between 30 December 2025 and 28 January 2026. The Court ordered that direct taxes affected during that window may not be assessed or collected, that amounts paid in advance be returned, and that indirect taxes be refunded to those who can demonstrate they bore the cost. Situations already consolidated — sanction reductions and settlements secured before 28 January — remain valid.

Companies that paid under that decree have a claim. Many have not yet quantified it.

The second is unfinished business. The outgoing administration filed a fourth tax reform on 20 July 2026, seeking roughly 21.9 trillion pesos in additional revenue from 2027. Its provisions would matter considerably to foreign parents: the withholding rate on dividends paid to non-residents would rise to 30% with the existing credit eliminated; the significant economic presence levy on digital services would increase from 3% to 5%; the payroll exemption threshold for parafiscal contributions would fall from ten to three minimum wages, raising employment costs materially. The incoming government publicly rejected the reform on 22 July. It has not been approved, and its prospects are poor. It should be monitored, not planned around.

Energy: The Clearest Reversal

No sector faces a sharper prospective change than hydrocarbons. The outgoing government suspended the signing of new exploration contracts as part of its energy transition policy and, on 20 July, filed legislation to prohibit fracking outright. The incoming government has stated it will move in the opposite direction from its first days.

The underlying position explains the urgency on both sides. Colombia closed 2025 with 1,717 gigacubic feet of proven gas reserves — a decline of 16.8% in a single year and 54.6% below the 2018 level, equivalent to 5.9 years at current production. Exploratory investment fell roughly 42% between 2022 and 2025. On 30 July, Ecopetrol opened a competitive process to contract imported liquefied natural gas for five years, with deliveries through Buenaventura beginning late in 2026.

For operators, the practical consequence is that contracting conditions may change quickly — and that fiscal terms remain the open variable. The non-deductibility of royalties has now been introduced, struck down by the Constitutional Court, reintroduced by emergency decree, struck down again, and proposed once more in the July reform. Any model that treats the fiscal regime as settled is modelling the wrong thing.

The Investment Picture Behind the Politics

Foreign direct investment reached USD 11,469 million in 2025, down 16.1% from 2024 and roughly a third below the 2022 peak. Colombia fell from third to fifth place in the region, behind Brazil, Mexico, Chile and Peru.

The composition matters more than the headline. In the first half of 2026, investment flows outside oil and mining fell 32% year on year, while extractive flows declined only 5.4%. Close to 80% of first-half foreign investment concentrated in oil and mining. Colombia has become more dependent on extractive capital, not less — the opposite of the stated policy objective of the past four years.

For a manufacturer, a services group or a technology company evaluating Colombia, this is the more useful signal than any electoral result: competition for quality non-extractive assets is thinner than it has been in years.

What to Do in the Next Ninety Days

Quantify the Decreto 1474 position. This is settled law and the only item on this list with a defined deadline dynamic. Determine what was paid under the decree between 30 December and 28 January, whether it was direct or indirect, and what documentation supports a refund claim. Confirm that any sanction reduction or settlement obtained before 28 January is properly documented as consolidated.

Model the dividend scenario without acting on it. A move from the current treatment to a 30% rate on distributions to non-residents would change repatriation economics significantly. Run the numbers. Do not restructure holding arrangements on the basis of a filed but unapproved bill that the incoming government has rejected.

Review payroll exposure. If the parafiscal threshold were to fall from ten to three minimum wages, employment costs would rise from 2027 for a substantial share of the formal workforce. Establish what that means for your Colombian headcount now, while it is a planning exercise rather than a compliance one.

Do not assume the tax calendar is stable. Two governments in one fiscal year, with an emergency decree annulled and a reform pending, is an environment where filing positions taken in good faith can require revision. Documentation discipline matters more than usual this year.

Watch the first thirty days, not the first speech. What is actually signed in August, and what survives constitutional review in the months after, will tell you considerably more than the campaign did.

The Discipline of Waiting Well

Political transitions reward neither the companies that move first nor those that wait longest. They reward the ones that separated what is confirmed from what is announced, quantified their exposure under each scenario, and were ready to act when the distinction resolved.

Colombia has produced, in a single fiscal year, an annulled emergency decree with refunds outstanding, a tax reform filed by a government with days remaining in office, and an incoming administration proposing to dismantle much of the existing structure. That is an unusual amount of movement. It is also entirely navigable with the right preparation — which is, as always, the difference between complexity and risk.