ORGANIC LAW ON SOCIAL TRANSPARENCY: NEW REGULATIONS FOR SOCIAL ORGANIZATIONS

On August 28, 2025, the Organic Law on Social Transparency (hereinafter, LOTS) was published in Official Registry Third Supplement No. 112. This law promotes transparency among Non-Profit Social Organizations with the aim of preventing, detecting, and controlling irregular capital flows. Below are the main aspects of the regulation concerning Non-Profit Social Organizations:

1. Non-Profit Social Organizations

Non-Profit Social Organizations (hereinafter, NPSOs) are all legal entities authorized to operate in the country that do not pursue profit and whose activities are aimed at achieving objectives of general and/or collective interest.

1. New Oversight Authority

The Superintendency of Popular and Solidarity Economy (hereinafter, SEPS) will be responsible for the oversight, auditing, intervention, control, and supervision of Non-Profit Social Organizations operating within the national territory.

1. Classification and Registration of NPSOs

In order to assess the risk level of Non-Profit Social Organizations (NPSOs), SEPS will classify them based on the following criteria:

1. The origin of the funds they receive and the volume of resources they manage;
   
   
2. The nature and purposes of the activities they carry out;
   
   
3. The territorial or transnational scope of their operations.

1. Obligations for NPSOs

Non-Profit Social Organizations (NPSOs) must establish control mechanisms to prevent the misuse of the funds they receive by implementing measures such as:

1. Internal and/or external audits; detailed records of all transactions; and periodic reports on the use of funds;
   
   
2. Due diligence processes to identify donors and beneficiaries;
   
   
3. Ongoing assessment and monitoring of risks related to resource diversion, embezzlement, and money laundering;
   
   
4. Implementation of codes of ethics, whistleblower channels, and appointment of individuals responsible for managing corruption risks;
   
   
5. Adoption of a simplified compliance and integrity manual;
   
   
6. Implementation of an Institutional Integrity System;
   
   
7. NPSOs classified as high-risk must appoint an Institutional Compliance Officer.

1. Unified Information System

NPSOs are required to register in SEPS’s Unified Information System, as failure to do so will prevent them from carrying out activities within the national territory.

NPSOs that are already legally established and active as of the effective date of this law must complete their registration in the Unified Information System for Non-Profit Social Organizations within a maximum period of one hundred eighty (180) days.

1. Unique Taxpayer Registry for NPSOs

To obtain and/or update their Unique Taxpayer Registry, NPSOs are required to submit the certificate of registration in the Unified Information System.

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This publication contains information of general interest and does not constitute legal opinion on specific issues. Any analysis will require legal advice from the Firm.