COLOMBIA A Strategic Ally for International Business Owners April 2012

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1 COLOMBIA A Strategic Ally for International Business Owners April 2012

2 OUTLINE Who We Are Latin America, the world's source of development "The world is talking about Colombia" Why invest in Colombia?

3 WHO WE ARE

4 Who we are Entity in charge of Promoting International Tourism, Foreign Direct Investment, and Exports EXPORTS INVESTMENT TOURISM

5 Proexport supports foreign investors Information tailored to your needs. Contacts with public and private sector. Itinerary planning and travel assistance Startup process assistance and monitoring established investors. Free information during the process and absolut confidentiality

Proexport around the world Canada United Kingdom Germany Russia USA Portugal France Spain Turquey South Korea China Japon Mexico Guatemala Caribbean Arab

6 Proexport around the world Canada United Kingdom Germany Russia USA Portugal France Spain Turquey South Korea China Japon Mexico Guatemala Caribbean Arab Emirats India Costa Rica Venezuela Singapore Ecuador Peru Brazil Indonesia Chile Argentina Opened Offices Offices opening in 2012 Offices in partnership with Prochile

7 ECONOMIC TRENDS IN LATIN AMERICA AND THE WORLD

8 The largest economies in a crisis becoming their strategic allies

9 Latin America is the fourth-highest growing region in the Short-Term (ST) and third-highest in the Long-Term (LT) (LT): Long-Term: Nominal GDP Variation (ST): Short-Term: Nominal GDP Variation LT ST +104% +9% LT ST +578% +19% LT ST +57% +4% LT ST +141% +14% LT ST +166% +12% LT ST +189% +17% Source: EIU, 6 February 2012 North America Latin America Middle East and Sub-Saharan Africa Asia and Australasia Western Europe Russian Federation

10 Latin America with a better performance in terms of nominal GDP than Russia, Middle East and Sub Saharan Africa NOMINAL GDP (US $ Billion) p +126% Proy Proy Proy Proy LATINAMERICA MIDDLE EAST AND SUB-SAHARAN AFRICA RUSSIAN FEDERATION Source: EIU; p: forecast

11 Colombia, boosted Latin America s economic growth and presents a better performance against

12 Colombia is the third largest contributor to growth in Latin America. 22% Although Argentina represents a larger share of Latin America's GDP, its growth was lower than Colombia's 1% 3% 6% (%) Share of the GDP % 48% Countries' contribution to the growth of the GDP in Latin America (+166%) Variation % +159% LATIN AMERICA BRAZIL MEXICO 23% 94% 166% +320% COLOMBIA 12% +287% VENEZUELA 12% 5% 8% +305% +145% CHILE ARGENTINA 8% 8% +315% PERU 6% +398% ECUADOR 3% Source: EIU, 6 February 2012

13 Colombia's historic GDP growth rates are higher than Chile s Peru s and Venezuela s. US $ Billion 600 South America's GDP (PPP) between 2000 and 2014p CHILE COLOMBIA PERU VENEZUELA 0 Source: EIU - June 2011 P: Forecasts

14 Constant growth and macroeconomic stability in Colombia Nominal GDP (US$ Billion) Bubble Size: Population (million) Inflation (%) 1 0 Argentina Chile Colombia Egypt Malaysia Peru 2000 Source: EIU, DANE, Trading Economics, Banco de la República (Colombia)

15 Nominal GDP (US$ Billion) During the last 10 years, Colombia decreased significantly its inflation and showed a constant GDP growth Bubble Size: Population (million) Inflation (%) 1 0 Argentina Chile Colombia Egypt Malaysia Peru 2000 Source: EIU, DANE, Trading Economics, Banco de la República (Colombia)

16 America and the World. 8,0 Growth of Colombia's GDP vs. Latin America and the World p (%) 6,0 4,0 2,0 0,0-2,0-4, p 2013p 2014p Colombia's growth Latinamerica's growth World's growth Source: ANDI (National Business Association of Colombia), EIU, p:forecast

17 Colombia with the highest third quarter growth since 2005 Mining and household consumption were the two drivers of economic growth Colombian Finance Minister: Juan Carlos Echeverry GDP Variation (%) ,6 7,7 7,6 7,5 7,5 4,0 6,1 5,4 3,3 5,7 5,7 6,3 6,1 5,2 5,5 3,6 3,0 4,0 4,7 3,3 5,1 4,7 5,1 6,1 0,1 1,0 0,8 1,0 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV Fuente: DANE (National Administrative Department of Statistics)

In GDP terms, Colombia is the 28th strongest economy in the world using the PPP method of valuation 466 443 423 GDP (PPP)

18 In GDP terms, Colombia is the 28th strongest economy in the world using the PPP method of valuation GDP (PPP) US $ Billion Note: PPP (Purchasing Power Parity) (February ))

The twenty-third largest population in the world; The second most numerous Spanish-speaking population 113,8 Population Millions of People 2011* 47,5

19 The twenty-third largest population in the world; The second most numerous Spanish-speaking population 113,8 Population Millions of People 2011* 47,5 46,1 40,9 38,2 34,4 30,4 29,1 22,5 17,3 11,3 10,7 10,6 9,5 8,4 7,9 7,8 5,2 5,0 4,4 Source: EIU (Economist Intelligence Unit) *Forecast; (February 7, 2012)

20 Colombia's population is 47 million More than half of them under age 30 7 metropolitan areas with a population above 1 million people

21 Macroeconomic stability 15,5 14,0 GDP, Inflation and Unemployment rate (%) (Annual Average) 13,6 11,8 12,0 11,2 11,3 12,0 11,8 Unemployment rate 10,8 7,0 2,6 6,5 3,9 5,5 4,9 5,3 4,7 6,7 6,9 4,5 5,7 7,7 3,5 4 2,0 3,2 5,9 3,7 GDP Inflation 1, Source: DANE- Colombia Central Bank - EIU: Economist Intelligence Unit Forecast e: Estimated (February 2012)

22 Colombia with a better performance in terms of Poverty rate Poverty Rate % Population below the Poverty Line 49,4 47,7 47, ,2 37,2 32, e Source: DNP, ANDI

23 GDP Growth Rate (%) Insecurity problems decreased significantly Economic Growth vs Security- Colombia Insecurity Problem GDP- Growth Rate Insecurity Source Monthly Industrial Survey

24 TALKING ABOUT COLOMBIA...

25 THE COLOMBIAN COMEBACK: President Juan Manual Santos talks with TIME. Caribbean city of Cartagena), marks a comeback for Colombia, which is emerging from half a century of crippling guerrilla, drug and political violence and is making a serious bid and diplomatic player. Source: TIME Magazine, April 23, 2012

26 continues on the economic rise as one of the hot spots for investors Colombia is a potential investment hot spot Beyond the BRICs: New investment hotspots is rated as the most business-friendly Latin American country by the World and security is less of an issue now as the government seems to be winning its battle against crime and its expected economic growth rates and demographics in the coming years are among the best in the whole region. Alex Duffy, Fidelity s Latin America Fund The Independent, April 30, 2011 According to Thomburg Developing World Fund¹: WHY? is unbelievable strong and it s one the favorite countries in Latin America 1. Robust inflow of investments from Big Oil 2. Foreign money is flowing into develop significant gold and coal assets. 3. There s a greater political stability ¹

27 IEE (Institute of Economic Studies) - Spain Colombia will do better than other countries of the region in case of a new global recession Rodrigo Chavez Director, Latin America and Caribbean Colombia has become an attractive destination

68% If you were to invest in a Latin American country in the next 3

65 57 Innovation Rank 79 76 47 43 38% 25% 25% 18% 1 2 3 4 4 Brazil

University- Industry collaboration in R&D 2010 2011 (position among 139

28 68% If you were to invest in a Latin American country in the next 3 years, where would you invest? Innovation Rank % 25% 25% 18% Brazil Colombia Chile Mexico Perú Innovation Rank Company spending on R&D University- Industry collaboration in R&D (position among 139 countries) Source: Investor perception research JP Morgan Chase Bank Co. Source: WEF (position among 142 countries)

Colombia has improved its Confidence Index, ranking higher than the Global average. 8 Dec, 2011 Colombia adheres to the OECD Declaration on International Investment.

29 Colombia has improved its Confidence Index, ranking higher than the Global average. 8 Dec, 2011 Colombia adheres to the OECD Declaration on International Investment. As an adherent to the Declaration, Colombia commits to treating foreign investors in the same way as domestic investors and to promoting responsible business conduct. Source: oecd.org, Regus, Press Release, October 5/ 2011

Colombia: third "friendliest" country to do business in Latin America and the biggest reformer in the region Colombia had a better performance among other countries of the region in the last 5 years.

30 Colombia: third "friendliest" country to do business in Latin America and the biggest reformer in the region Colombia had a better performance among other countries of the region in the last 5 years. Change in Doing Business Ranking, * (Variation in the number of positions) Colombia Peru Panama Mexico Ecuador Venezuela Brazil Argentina Chile Costa Rica Country World Ranking 2012 World Ranking 2011 Chile Peru Colombia Mexico Panama Argentina Costa Rica Brazil Ecuador Venezuela Source: Doing Business 2012 World Bank Report *Positive numbers indicate improvements in business environment

Three of the top risk rating agencies gave Colombia the

economic and financial situation, highlighting: Its

fulfillment of obligations An increase in its

31 Three of the top risk rating agencies gave Colombia the The three agencies agree on the country's positive economic and financial situation, highlighting: Its ability to deal with external shocks Its historic fulfillment of obligations An increase in its macroeconomic credibility A visible improvement in security conditions 7 February 2012

32 Colombia: The C in CIVETS Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa (CIVETS). These are countries with major populations, dynamic, diverse economies, political stability and a promising brilliant future. Any company with global ambitions will have to take immediate action in these Michael Geoghegan, CEO HSBC April 26, 2010 in his speech to AmCham Hong Kong

33 S&P CIVETS 60 Indicator, second generation of emerging economies 140,0 100-based index, June 07 The stock performance of the CIVETS group is greater than the BRICS since ,0 100,0 80,0 60,0 40,0 20,0 S&P BRICS 40 S&P CIVETS 60

34 WHY INVEST IN COLOMBIA?

twice the size of Texas Bordering the Pacific and Atlantic

35 General facts The land area of Colombia is nearly 1,141,000 km2, almost 3 times the size of California and twice the size of Texas Bordering the Pacific and Atlantic oceans Colombia is one of the most biodiverse countries in the world.

City: 4:45 Perú Brasil Colombia Caracas (Venezuela): 1:20 Colombia Lima (Peru): 3:00 Colombia Sao

36 A competitive location with easy access to America Canadá Estados Unidos México Caribe Venezuela Flight Time (hours:minutes) Colombia New York : 5:35 Colombia Miami: 3:00 Ecuador Colombia Mexico City: 4:45 Perú Brasil Colombia Caracas (Venezuela): 1:20 Colombia Lima (Peru): 3:00 Colombia Sao Pablo (Brasil): 5:45 Chile Argentina Colombia Santiago (Chile): 5:00 Colombia Buenos Aires (Argentina): 6:15

37 Colombia is ranked 2 nd among the region in terms government efficiency Chile Colombia Peru Brazil Mexico Chile Argentina Colombia Venezuela Brazil Peru Mexico Argentina Venezuela 6,78 Government Decisions, / Scale : ineffective 10: effective 4,04 3,96 3,83 2,9 1,88 1,58 Colombia is making progress in development. 7,65 Transparency of Government policy, / Scale : deficient 10: satisfactory 3,71 3,43 3,21 3,01 1,02 0,49 Source: IMD World Competitiveness, Ranking of 59 countries. 3/ Government decisions are effectively implemented 4/ Transparency in the government policy is satisfactory.

38 Colombia Peru Chile México Brazil Argentina Panama Venezuela Investor Protection Index ,3 Colombia is ranked 5th worldwide and 1st in Latin America in terms of Investor Protection 6,7 6,3 6,0 5,3 4,7 4,7 World Ranking Country 5 Colombia 20 Peru 2,3 28 Chile 44 Mexico 74 Brazil 109 Argentina 109 Panama 179 Venezuela Source: Doing Business, 2011 World Bank

39 According to international standards, Colombia classified in Upper Middle Income Economies. US $ 8000 Income Per Capita, Atlas Methodology Upper Middle Income % 3000 Lower Middle Income Low Income e Source: Ministry of Finance and Public Credit EIU, WorldBank e: forecast - February

40 GDP per capita adjusted to PPP almost reach the US$10,000 Colombia's GDP per capita (PPP)*, e (US $) % (e) GDP Per Capita adjusted to prices at purchasing power parity (PPP) Source: EIU (Economist Intelligence Unit) (February 7, 2012)

41 Colombia is living its best moment: High international reserves and a low inflation rate International Reserves Colombia (US$ million) e e 8,8 7,7 7,0 6,5 5,5 Inflation Rate(%) 2000 March ,7 5,7 4,9 4,5 2,0 3,2 3,73 1,8 1, January - March 2011 Source: Bank of the Republic - DANE January - March 2012

42 Colombia reach the highest FDI flow in history FDI, US $Million Main Investors in Colombia ** United States Accumulated US $9,595 million Share of 24.8% England Accumulated US $5,684 million Share of 14.7% Spain Accumulated US $3,431 million Share of 8.9% Canada Accumulated US $1,373 million Share of 3.6% Variation : +92% *Figures obtained through the foreign currency balance of the Bank of the Republic. **Share of all countries with positive cumulative investment, without reinvested profits or investments in the oil sector. Accumulated value : US $38,615 million Note: the list of the top countries investing in Colombia does not include Anguilla or Panama, in third and fourth place. Source: Bank of the Republic - Balance of Payments

FDI Increase in Non Traditional sectors FDI in Colombia by Sectors 2009-2011 FDI in Colombia by Non Traditional Sectors 2009-2011 Transport, Storage and

& Hotels 12% Agribusiness 1% Mining 27% Oil 37% Agribusiness 2% Construction 10% Transport, Storage and Communication 14% Manufacturing 18% Commerce, Rest.

43 FDI Increase in Non Traditional sectors FDI in Colombia by Sectors FDI in Colombia by Non Traditional Sectors Transport, Storage and Communications 5% Manufacturing 6% Construction 4% Financial Services 8% Commerce, Rest. & Hotels 12% Agribusiness 1% Mining 27% Oil 37% Agribusiness 2% Construction 10% Transport, Storage and Communication 14% Manufacturing 18% Commerce, Rest., and Hotels 33% Financial Services 23% % Share by total FDI of positive flows by origin country, without reinvesting profit and not including the petroleum sector. Total investment : US$ 27,629 million. Source: Banco de la República.

Colombia is also increasing its investment flows abroad. US $ Million 8.289,0 6.562,0 4.662,0 3.088,2 2.

Brazil 5. Peru 6. Guatemala 7. Mexico 8. Chile 9. Ecuador 10. Venezuela Assembly of the first 500,000-volt electric transmission system in Peru.

44 Colombia is also increasing its investment flows abroad. US $ Million 8.289, , , , ,0 937,7 325,3 912,8 142, Ranking of countries receiving FDI from Colombia ( ) 1. USA 2. England 3. Panama 4. Brazil 5. Peru 6. Guatemala 7. Mexico 8. Chile 9. Ecuador 10. Venezuela Assembly of the first 500,000-volt electric transmission system in Peru. Investment: US $130 Million Purchased 60% of Peruvian energy company Cálidda. Investment: US$ 111 Million Source: Banrep Purchased ING companies in Chile, Mexico, Peru, Uruguay and Colombia Investment: US$ Billion Acquisition of one hundred percent of the Central American Bank Investment: US$ 1.9 Billion

In 8 years, exports quadrupled Top Exports Destination,

954 United States US $21.720 million Share of 38.1% 37.

524 million Share of 4.4% 13.158 13.129 7.730 9.

9% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

45 In 8 years, exports quadrupled Top Exports Destination, 2011 Exports, 2000 March 2012 US $Million United States US $ million Share of 38.1% Netherlands US $2.524 million Share of 4.4% Chile US $2.205 million Share of 3.9% Jan - Jan - Mar Mar Variation : -21.2% Variation : 43% Variation Jan Mar 2010 vs. Jan Mar 2011: 23.2% Source: DANE (National Department of Statistics) China US $1.989 million Share of 3.5%

46 In 10 years imports grew four times Imports, US$ Million Top destinations of imports, 2011 United States US $13,593 million Share of 24.9% China US $8,176 million Share of 15% Mexico US $6,059 million Share of 11% Variation : 23.7% Variation : 34.4% Source: DANE (National Department of Statistics) CIF Values Brazil US $2,740 million Share of 5%

47 1,053 1,195 1,223 1,354 1,475 1,582 Colombia is increasingly attractive to visitors Foreign visitors to Colombia (thousand) Main nationalities of visitors arriving to Colombia, Estados Unidos visitors Share 20.1% Venezuela visitors Share 14.5% Ecuador visitors Share 6.9% Argentina visitors Share 5,9% Puntos DAS de Control Migratorio Visitantes Land Border en Cruceros Crossings Sources: DAS, MCIT, Bank of the Republic. Proexport Calculations.

48 Colombia is continuing to improve its bond credit rating (EMBI+) Sovereign Risk (EMBI+): Colombia vs. Latin America Latinamerica Colombia Emerging Markets Bond Index Plus (EMBI+), points over US Treasury Bonds. Source: JPMorgan Central Bank of Peru

49 Colombia has a better sovereign risk performance against other european countries. Sovereign Risk : Colombia vs. Europe Colombia Spain France Holand Italy Sovereing debt compared withgermany Source: DatosMacro Banco Central del Perú, December 31/2011

50 Colombia is ranked 1 st of Sustainable Development instability and a higher support on business productivity

51 According to IMD, Sustainable Development is a priority in Colombian companies Source: IMD World Competitiveness, Ranking of 59 countries. 1/ Sustainable development is a priority for companies. Sustainable environmental Development, / Scale : it is not a priority 10: it is a priority Colombia Chile Colombia is moving forward as a leader in Latin America toward sustainable development Brazil 5.05 Peru 5.03 Mexico 4.78 Venezuela 4.22 Argentina

Caribbean Region Central / Andean Region

platform Amazonia Region Orinoco Region:

52 Variety of opportunities in all five Colombian Regions Pacific Region Caribbean Region Central / Andean Region Orinoquía Region Caribbean Region: Tourism, Logistics, Petrochemical, Construction Supplies Atlantic Export Platform Central/Andean Region: Outsourcing Services, high value-added manufacturing, hub to cover domestic market, specialized agrobusiness Pacific Region: Manufacturing Agribusiness, logistics, biotechnology, Pacific export platform Amazonia Region Orinoco Region: Agriculture, forestry, biofuels, hydrocarbons Amazon Region: Conservation, ecotourism (Leticia)

53 Colombia has around 10 metropolitan cities, with more than 500,000 inhabitants. Barranquilla (1.9) Cartagena (1.3) Santa Marta (0.6) Medellín (3.6) Coffee Triangle: Pereira, Manizales, Armenia and Cartago (1.8) Cali (2.9) Cúcuta (0.8) Bucaramanga (1.1) Bogotá (8.7) Ibagué (0.6) Total population million Total population in metropolitan areas 23.3 million Population of cities including their metropolitan area Source: DANE (National Department of Statistics)

Positioning Colombia as an export platform: 11 free trade agreements (FTA),allowing

Noruega Islandia Canada Canadá Liechtenstein United Estados States Unidos

Guatemala Honduras Israel El El Salvador Panamá Ecuador Perú Perú Brazil Brasil

54 Positioning Colombia as an export platform: 11 free trade agreements (FTA),allowing preferential access to over 1,500 million consumers European Unión Europea Union Noruega Islandia Canada Canadá Liechtenstein United Estados States Unidos Switzerland Suiza Turkey Turquía South Corea Korea del Sur Jaan Mexico México Guatemala Honduras Israel El El Salvador Panamá Ecuador Perú Perú Brazil Brasil Bolivia Chile Chile Uruguay Paraguay Argentina In force signed In negociation Future Source: (SICE) (OAS)

In 2012, Colombia will be negotiating 21 international investment agreements (IIA) In Force Signed In Negotiation IN FORCE SIGNED IN NEGOTIATION Peru (Agreement) Mexico (Agreement)

Canada (Chapter) China (Agreement) India (Agreement) United Kingdom (Agreement) South Korea (Agreement) EFTA (Iceland and Norway) (Chapter) United States (Chapter) Japan Kuwait Turkey

55 In 2012, Colombia will be negotiating 21 international investment agreements (IIA) In Force Signed In Negotiation IN FORCE SIGNED IN NEGOTIATION Peru (Agreement) Mexico (Agreement) Spain (Agreement) Switzerland (Agreement) Liechtenstein (Chapter) CAN (Ecuador and Bolivia) (Chapter) Chile (Chapter) North Triangle (Honduras, Guatemala and El Salvador) (Chapter) Canada (Chapter) China (Agreement) India (Agreement) United Kingdom (Agreement) South Korea (Agreement) EFTA (Iceland and Norway) (Chapter) United States (Chapter) Japan Kuwait Turkey European Union Panamá Note: The International investment agreements (IIA) include Agreement Investment Treaties (BIT) (agreement) and Free Trade Agreements (FTA) with investment section (chapter).

In 2012, Colombia will be negotiating 16 double taxation agreements (DTA) In Force Signed In Negotiation IN FORCE CAN Peru, Ecuador and Bolivia Spain

56 In 2012, Colombia will be negotiating 16 double taxation agreements (DTA) In Force Signed In Negotiation IN FORCE CAN Peru, Ecuador and Bolivia Spain Chile Switzerland Canada Mexico South Korea India SIGNED IN NEGOTIATION United States, Germany, Czech Republic, Netherlands, Belgium, Portugal, Japan, France

57 National Development Plan Strengthen cultivable areas and mechanized them to increase exports AGRIBUSINESS Leading driver of economic and social development Take advantage of large, unexplored gold and coal reserves MINING Stimulate the creation, improvement and infrastructure development INNOVATION Promote the development of Housing for everyone INFRASTRUCTURE HOUSING

Opportunities Linked to the INNOVATION Increase Science and Technology share in Domestic

Increase the number of patents per 100,000 inhabitants Increase nearly 4 times 2006

INFRASTRUCTURE The Government has launched an ambitious infrastructure plan, which

58 Opportunities Linked to the INNOVATION Increase Science and Technology share in Domestic GDP goal: 2%. Increase the number of patents per 100,000 inhabitants Increase nearly 4 times 2006 results for 2012: the Professional Education Challenge. INFRASTRUCTURE The Government has launched an ambitious infrastructure plan, which involves new inter-departmental highways, ports and airports to make Colombia more competitive. This plan requires over US $50 billion and significant support from the private sector. MINING Colombia has a potential of approximately 17 billion tons of possible coal reserves and 28 million ounces of gold, generating a competitive advantage compared to other countries in the region

Opportunities Linked to the Engines HOUSING Requirements: One Million Homes Colombia has a high housing deficit in the country's largest cities due to internal

The government has planned to build one million homes, 70% of which will be LIH.

59 Opportunities Linked to the Engines HOUSING Requirements: One Million Homes Colombia has a high housing deficit in the country's largest cities due to internal displacement and economic difficulties. The sector is divided into 2 major areas: Low Income Housing and Non-LIH. The government has planned to build one million homes, 70% of which will be LIH. AGRIBUSINESS Opportunities in: Biofuels, Reforestation, Dairy Sector Colombia has potential cultivable areas, which require significant capital investment to mechanized the sector in order to increase exports. Peasants and indigenous communities living in these areas will benefit from this initiative.

60 "The world is beginning to identify with Colombia's engines"

61 Established one of its two worldclass product research and development centers. Investment: US $20 M Jobs: Service center for financial and accounting operations - Spanish Market-. Investment: US $5-8 M Jobs: 1500 India Global service center for BPO and IT operations Investment: US $100 M Jobs: 1000 United States United States Development of 12,000 hectares of sugar cane and the construction of an ethanol plant with a capacity of 376,000 liters per day Investment: US $300 M Jobs: 1,000 Israel MERHAV 2010 Established a Private Capital Fund in Colombia for Infrastructure Investment: (Amount of the Fund): US $400 M Canada

62 Productive Transformation Program: A Public - Private Partnership to strengthen and build world class sectors INNOVATION AGRIBUSINESS IT Services and MINING SERVICES SECTOR Business process, outsourcing and offshoring BPO&O Software Health Services Exports MANUFACTURING SECTORS Graphic communication industry Textiles, Fashion & Design Electric Power Automotive Industry AGRIBUSINESS SECTOR INFRASTRUCTURE Chocolate, Confectionery and Raw Materials Cattle Palm and Vegetable Oil Shrimp Farming Cosmetics and Personal Care Products

63 In order objectives, the action plans contains initiatives related to four subjects... STANDARDS & REGULATIONS HUMAN RESOURCE DEVELOPMENT Sense of belonging, improve skills and retention in the industry. Promote bilingualism and universitycompany alliances. Adjust standards and regulations to industry needs. STRENGTHENING INDUSTRY AND PROMOTION Attract foreign investment, strengthen the sector, its trade unions, and its management and promotion capacity. INFRASTRUCTURE Manage the adequate infrastructure available required for each sector. ACTION PLAN More than 185 Initiatives

64 benefits and support

65 The most competitive FTZ s in Latin America: 15% income tax and sales allowed to the local market 15% income tax rate. No import duties. VAT exemption for goods sold from Colombia to FTZ Benefit from international trade agreements. (Except Peru) Allow sales to the local market. Free Trade Zones Permanent (PFTZ) Single-Company (SCFTZ)

66 100 Free Trade Zones Free Trade Zone Approved Single - Company Free Trade Zone Permanent Free Trade Zone Investment commitments Total Investment (USD Million) Direct Jobs Indirect Jobs Investment executed so far Total Investment (USD Million) Direct Jobs Indirect Jobs Source: Ministry of Trade, Industry and Tourism. The investment amounts required to obtain the Free Trade Zone status are calculated in Minimum Monthly Legal Wages (M.M.L.W). This information is presented in dollars using a USD 1 = COP exchange rate. For 2012, the M.M.L.W is COP The M.M.L.W, as well as the exchange rate are subject to variations. 67

67 Other incentives by sector: Income tax exemption for up to 20 years Tourism Eco-tourism Late yield crops Forestry Editorial New medicinal products and software Renewable energy River transport Research and Technological Development Exemption for 30 years for those who invest in the construction or renovation of hotels between January 1 st, 2003 and December 31, Exemption for 20 years starting from Exemption for 10 years after the start of production in crops planted between 2003 and Permanent exemption for investment in new forest plantations, sawmilling and timber plantations. Publishing of books, magazines, booklets or collections of scientific or cultural characteristics are exempt until Exemption for 10 years for products manufactured in Colombia with high scientific and technological research content, starting from Exemption for 15 years for sale (by the generators) of electricity based on wind resources, biomass or agricultural waste. Exemption for 15 years starting from 2003 to provide services in slabs and boats with net weight below 25 tons. 175% income tax deduction over investments in scientific and technological developments.

68 Formalization and Employment Generation New employees under twenty eight (28) years old. Length of benefit by employee: 2 years. Discount in the income tax and supplementary contributions, and other contributions from payroll (Do not include positions generated by mergers or replacements) New employees certified in displacement situation, reintegration or disability. Length of benefit by employee: 3 years. New women employees above 40 years old with more than 1 year unemployed. Length of benefit by employee: 2 years. New employees with incomes lower than 1.5 SMMLV. Length of benefit by employee : 2 years.

Colombia: An Upcoming Emerging Market for International Investors April 2012

Colombia: An Upcoming Emerging Market for International Investors April 2012 Proexport is the organization within the Colombian Government responsible for the promotion of International Tourism, Foreign