COLOMBIA A Strategic Ally for International Business Owners April 2012
OUTLINE Who We Are Latin America, the world's source of development "The world is talking about Colombia" Why invest in Colombia?
WHO WE ARE
Who we are Entity in charge of Promoting International Tourism, Foreign Direct Investment, and Exports EXPORTS INVESTMENT TOURISM
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ECONOMIC TRENDS IN LATIN AMERICA AND THE WORLD
The largest economies in a crisis becoming their strategic allies
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 2000-2011 (ST): Short-Term: Nominal GDP Variation 2010-2011 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
Latin America with a better performance in terms of nominal GDP than Russia, Middle East and Sub Saharan Africa. 6000 5000 4000 NOMINAL GDP (US $ Billion) 2000 2014p +126% 3000 2000 1000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Proy. 2011 Proy. 2012 Proy. 2013 Proy. 2014 LATINAMERICA MIDDLE EAST AND SUB-SAHARAN AFRICA RUSSIAN FEDERATION Source: EIU; p: forecast
Colombia, boosted Latin America s economic growth and presents a better performance against
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 2011 7% 48% Countries' contribution to the growth of the GDP in Latin America 2000 2011 (+166%) Variation 2000-2011 +376% +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
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 500 400 300 200 100 CHILE COLOMBIA PERU VENEZUELA 0 Source: EIU - June 2011 P: Forecasts
Constant growth and macroeconomic stability in Colombia Nominal GDP (US$ Billion) 450 2009 2010 2011 41 400 41 Bubble Size: Population (million) 350 300 250 200 17 150 100 30 28 46 28 30 48 47 29 17 17 30 40 86 84 83 50 - -6-4 -2 0 2 4 6 8 10 12 14 16 18 Inflation (%) 1 0 Argentina Chile Colombia Egypt Malaysia Peru 2000 Source: EIU, DANE, Trading Economics, Banco de la República (Colombia)
Nominal GDP (US$ Billion) During the last 10 years, Colombia decreased significantly its inflation and showed a constant GDP growth. 450 2000 2010 Bubble Size: Population (million) 400 350 41 300 37 47 250 200 28 17 84 150 30 100 50 23 70 40 15 26 0-2 0 2 4 6 8 10 12 Inflation (%) 1 0 Argentina Chile Colombia Egypt Malaysia Peru 2000 Source: EIU, DANE, Trading Economics, Banco de la República (Colombia)
America and the World. 8,0 Growth of Colombia's GDP vs. Latin America and the World 2001 2014p (%) 6,0 4,0 2,0 0,0-2,0-4,0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012p 2013p 2014p Colombia's growth Latinamerica's growth World's growth Source: ANDI (National Business Association of Colombia), EIU, p:forecast
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 (%) 2005 2011 7,6 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 2005 2006 2007 2008 2009 2010 2011 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) US $ Billion - 2011 387 378 367 348 301 298 278 272 246 233 205 184 133 Note: PPP (Purchasing Power Parity) (February 7 2012))
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)
Colombia's population is 47 million More than half of them under age 30 7 metropolitan areas with a population above 1 million people
Macroeconomic stability 15,5 14,0 GDP, Inflation and Unemployment rate (%) 2002 2011 (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 1,7 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: DANE- Colombia Central Bank - EIU: Economist Intelligence Unit Forecast e: Estimated (February 2012)
Colombia with a better performance in terms of Poverty rate Poverty Rate % Population below the Poverty Line 49,4 47,7 47,4 45 42 40,2 37,2 32,5 2002 2003 2004 2005 2008 2009 2010 2011e Source: DNP, ANDI
GDP Growth Rate (%) Insecurity problems decreased significantly Economic Growth vs Security- Colombia Insecurity Problem GDP- Growth Rate Insecurity Source Monthly Industrial Survey
TALKING ABOUT COLOMBIA...
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
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 ¹http://money.msn.com/investment-advice/7-global-hot-spots-for-investors?fb_ref=scptif&fb_source=profile_multiline
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 years, where would you invest? 65 57 Innovation Rank 79 76 47 43 38% 25% 25% 18% 1 2 3 4 4 Brazil Colombia Chile Mexico Perú Innovation Rank Company spending on R&D University- Industry collaboration in R&D 2010 2011 (position among 139 countries) Source: Investor perception research JP Morgan Chase Bank Co. Source: WEF 2011 2012 (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. 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. Change in Doing Business Ranking, 2007-2012* (Variation in the number of positions) Colombia Peru Panama Mexico Ecuador Venezuela Brazil Argentina Chile Costa Rica -6-10 -12-14 -15-20 11 9 26 45 Country World Ranking 2012 World Ranking 2011 Chile 39 41 Peru 41 39 Colombia 42 47 Mexico 53 54 Panama 61 63 Argentina 113 114 Costa Rica 121 121 Brazil 126 120 Ecuador 130 131 Venezuela 177 175 Source: Doing Business 2012 World Bank Report *Positive numbers indicate improvements in business environment
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
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
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 2009. 120,0 100,0 80,0 60,0 40,0 20,0 S&P BRICS 40 S&P CIVETS 60
WHY INVEST IN COLOMBIA?
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.
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
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, 2011 3/ Scale 0-10. 0: 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, 2011 4/ Scale 0-10. 0: deficient 10: satisfactory 3,71 3,43 3,21 3,01 1,02 0,49 Source: IMD World Competitiveness, 2011. Ranking of 59 countries. 3/ Government decisions are effectively implemented 4/ Transparency in the government policy is satisfactory.
Colombia Peru Chile México Brazil Argentina Panama Venezuela Investor Protection Index 2011 8,3 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
According to international standards, Colombia classified in Upper Middle Income Economies. US $ 8000 Income Per Capita, Atlas Methodology 7000 6000 Upper Middle Income 5000 4000 +180% 3000 Lower Middle Income 2000 1000 0 Low Income 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2011e Source: Ministry of Finance and Public Credit EIU, WorldBank e: forecast - February 7-2012
GDP per capita adjusted to PPP almost reach the US$10,000 Colombia's GDP per capita (PPP)*, 2000 2011e (US $) 5.826 5.984 6.151 6.343 6.817 7.204 7.817 8.474 8.842 8.940 9.310 9.790 +60% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (e) GDP Per Capita adjusted to prices at purchasing power parity (PPP) Source: EIU (Economist Intelligence Unit) (February 7, 2012)
Colombia is living its best moment: High international reserves and a low inflation rate 9.006 10.245 10.844 10.921 International Reserves Colombia (US$ million) 2000 2011e 13.540 14.957 15.440 20.955 24.041 25.365 28.464 32.302 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011e 8,8 7,7 7,0 6,5 5,5 Inflation Rate(%) 2000 March 2011 7,7 5,7 4,9 4,5 2,0 3,2 3,73 1,8 1,5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 January - March 2011 Source: Bank of the Republic - DANE January - March 2012
Colombia reach the highest FDI flow in history FDI, 2000 2011 US $Million 13.234 Main Investors in Colombia 2000 2011** 10.252 10.564 United States Accumulated US $9,595 million Share of 24.8% England 2.436 6.656 6.899 Accumulated US $5,684 million Share of 14.7% Spain Accumulated US $3,431 million Share of 8.9% 1.720 Canada Accumulated US $1,373 million Share of 3.6% Variation 2010 2011: +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 2000 2011: US $38,615 million Note: the list of the top countries investing in Colombia does not include Anguilla or Panama, in third and fourth place. Source: Bank of the Republic - Balance of Payments
FDI Increase in Non Traditional sectors FDI in Colombia by Sectors 2009-2011 FDI in Colombia by Non Traditional Sectors 2009-2011 Transport, Storage and Communications 5% Manufacturing 6% Construction 4% Financial Services 8% Commerce, Rest. & Hotels 12% Agribusiness 1% Mining 27% Oil 37% Agribusiness 2% Construction 10% Transport, Storage and Communication 14% Manufacturing 18% Commerce, Rest., and Hotels 33% Financial Services 23% % Share by total FDI of positive flows by origin country, without reinvesting profit and not including the petroleum sector. Total investment 2009 2011: US$ 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 2.254,0 937,7 325,3 912,8 142,4 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Ranking of countries receiving FDI from Colombia (2000-2010) 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$ 3.763 Billion Acquisition of one hundred percent of the Central American Bank Investment: US$ 1.9 Billion
In 8 years, exports quadrupled Top Exports Destination, 2011 Exports, 2000 March 2012 US $Million 56.954 United States US $21.720 million Share of 38.1% 37.626 32.852 39.820 Netherlands US $2.524 million Share of 4.4% 13.158 13.129 7.730 9.527 Chile US $2.205 million Share of 3.9% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Jan - Jan - Mar Mar 2011 2012 Variation 2009-2010: -21.2% Variation 2010-2011: 43% Variation Jan Mar 2010 vs. Jan Mar 2011: 23.2% Source: DANE (National Department of Statistics) China US $1.989 million Share of 3.5%
In 10 years imports grew four times Imports, 2000 2011 US$ Million 39.669 54.675 40.683 Top destinations of imports, 2011 United States US $13,593 million Share of 24.9% China US $8,176 million Share of 15% 11.757 13.882 Mexico US $6,059 million Share of 11% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Variation 2009-2010: 23.7% Variation 2010-2011: 34.4% Source: DANE (National Department of Statistics) CIF Values Brazil US $2,740 million Share of 5%
1,053 1,195 1,223 1,354 1,475 1,582 Colombia is increasingly attractive to visitors Foreign visitors to Colombia 2006 2011 (thousand) Main nationalities of visitors arriving to Colombia, 2011 51 127 228 285 296 315 Estados Unidos 317.954 visitors Share 20.1% Venezuela 228.926 visitors Share 14.5% 2006 2007 2008 2009 2010 2011 Ecuador 108.913 visitors Share 6.9% Argentina 93.822 visitors Share 5,9% Puntos DAS de Control Migratorio Visitantes Land Border en Cruceros Crossings Sources: DAS, MCIT, Bank of the Republic. Proexport Calculations.
Colombia is continuing to improve its bond credit rating (EMBI+) 1000 900 800 700 600 500 400 300 200 100 0 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
Colombia has a better sovereign risk performance against other european countries. Sovereign Risk : Colombia vs. Europe 500 450 400 350 300 250 200 150 100 50 - Colombia Spain France Holand Italy Sovereing debt compared withgermany Source: DatosMacro http://www.datosmacro.com/prima-riesgo, Banco Central del Perú, December 31/2011
Colombia is ranked 1 st of Sustainable Development instability and a higher support on business productivity
According to IMD, Sustainable Development is a priority in Colombian companies Source: IMD World Competitiveness, 2011. Ranking of 59 countries. 1/ Sustainable development is a priority for companies. Sustainable environmental Development, 2011 1/ Scale 0-10. 0: it is not a priority 10: it is a priority 6.18 5.84 Colombia Chile Colombia is moving forward as a leader in Latin America toward sustainable development. 5.58 Brazil 5.05 Peru 5.03 Mexico 4.78 Venezuela 4.22 Argentina
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)
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 2011 47.5 million Total population in metropolitan areas 23.3 million Population of cities including their metropolitan area. 2011 Source: DANE (National Department of Statistics)
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) 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 Chile Switzerland Canada Mexico South Korea India SIGNED IN NEGOTIATION United States, Germany, Czech Republic, Netherlands, Belgium, Portugal, Japan, France
National Development Plan 2010-2014 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 GDP. 2019 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 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.
"The world is beginning to identify with Colombia's engines"
2011 - Established one of its two worldclass product research and development centers. Investment: US $20 M Jobs: 400 2011 - Service center for financial and accounting operations - Spanish Market-. Investment: US $5-8 M Jobs: 1500 India 2011 - Global service center for BPO and IT operations Investment: US $100 M Jobs: 1000 United States United States 2011 - 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
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
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
benefits and support
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)
100 Free Trade Zones Free Trade Zone Approved Single - Company Free Trade Zone Permanent Free Trade Zone Investment commitments Total Investment (USD Million) 7.036 Direct Jobs 47.163 Indirect Jobs 97.363 Investment executed so far Total Investment (USD Million) 3.158 Direct Jobs 6.674 Indirect Jobs 23.069 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 2.000 exchange rate. For 2012, the M.M.L.W is COP 566.700. The M.M.L.W, as well as the exchange rate are subject to variations. 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, 2017. Exemption for 20 years starting from 2003. Exemption for 10 years after the start of production in crops planted between 2003 and 2014. 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 2013. Exemption for 10 years for products manufactured in Colombia with high scientific and technological research content, starting from 2003. 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.
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.