045 colombian presentation november 2010

8/8/2019 045 Colombian Presentation November 2010

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November 2010


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Where are we coming from?

AGENDA

What are we doing?

Where are we going next?


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Colombias Leadership

Colombias Leadership


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First in

Emeralds Production Variety of Palms (244 Species)

Production of Bamboo in America

The Biggest Coal Open Mine to Export ofthe World

Second in Banana Production

Varity of Butterfly (300 Families and

Colombia ranks

Variety of Orchids (3500 Species) Exotic Birds (1815 Species)

Frog Varieties (764 Species)

Quality of Coffee Arabian Coffee exports

Exporter of Coal in Latin-American

Biodiversity per Km2

14.000 Species) Flower Production

Blackberry Production

Exporter of Flowers


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Outstandin erformance of theOutstandin erformance of the

Colombian economy

Colombian economy


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4,6% 4,7%

5,7%

6,8%7,5%

4,4%5%6%7%8%

Colombia and world GDP growth (%)

2000 I Sem 2010

Colombia: A dynamic

economy

Source: DANE (National Accounts), EIU (Market Indicators & Forecasts)

Note: * EIU forecast to the World and Latin Focus to ColombiaNote: Last update October 4th, 2010

3,1%

2,2% 2,5% 2,5%

0,4%

-0,3%

-3%

-2%-1%0%1%2%3%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2009

(I Sem)

2010

(I Sem)

Colombia World


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12

14

16

18

5

6

7

8

rowth

Colombian Economy Growth Vs, Security Problem Perception,2001 2010 (%)

Securit

While the Colombian economy is

growing, the security problem is reducing

World

Crisis

0

2

4

6

8

-1

0

1

2

3

Economy

Economy Growth Security Problem

Problem

Source: ANDI (Asociacin Nacional de Industriales)


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1.573

1.200

1.400

1.6001.800

Nominal GDP (US$ Billion),

2009

According to the Nominal GDP, Colombia is the36th greatest economy in the world and 5th in

Latin America

326 309234 234 222 211 195 193 190 187 183 182 163 162 129 127 117 116 109 93 91 89

290

200

400

600

800

.

Source: EIU (Economist Intelligence Unit)


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5.3165.052

5.980

5.000

6.000

7.000

Colombian GDP per head,2000 2010 (US$)

In the last 10 years the Colombian GDPper head doubled

140%

2.482 2.403 2.356 2.2392.722

3.354 3.677

4.608

1.000

2.000

3.000

4.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: EIU (Economist Intelligence Unit)


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United States

Stock US$ 11,627 M Share 31.0%

Great Britain

Main investors in ColombiaStock 2000 I Sem 2010*

10.252 10.564

7.2018.000

10.000

12.000

FDI, 2000 I Sem 2010US$ Million

FDI in Colombia is three times greater

than nine years ago

Variation 2008 - 2009: -32%Variation I Sem 2009 - I Sem 2010: - 18%*Participation by country over the positive accumulated inflows, it doesnt include investment in oil sector or reinvestment

of profits. Value 2000 I Sem 2010: US$ 37,555 millionNote: The country list doesnt include Anguilla and Panama, the third and fourth countries in the rankingSource: Banco de la Repblica (Balance of Payments)

Stock US$ 4,591 M Share 12.2%

Spain

Stock US$ 2.716 M Share 7.2%

Mexico Stock US$ 2,176 M Share 5.8%

2.134

.5.043

4.115

0

2.000

4.000

6.000


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United States

US$ 12,879 M Share 39.2%

Colombian exports by country, 2009

37.626

32.852

21.057

25.67525.000

30.000

35.000

40.000

Exports, 2000 August 2010US$ Million

In nine years Colombian

exports tripled

Variation 2008-2009: -12,7%

Variation Jan-Aug 2009 Vs Jan-Aug 2010: 21,9%Source: DANE (Departamento Nacional de Estadsticas)

US$ 4,050 M Share 12.3%

Netherlands

US$ 1,345 M Share 4.1%

Ecuador

US$ 1,257 M Share 3.8%

13.158

0

5.000

10.000

15.000

20.000


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United States

314,870 Visitors Share 23%

Venezuela

Internationals visitors in Colombiaby country 2009*

1.700

1.201

1.325

1.200

1.600

2.000

Tourism, 2000 September 2010Thousand Visitors**

In nine years international visitors in Colombiadoubled. While tourism in the world fell 4% in

Colombia it increased 10.2% in 2009*

Variation 20082009: 17,2% (includes cruise)Variation Jan-Sep 2009 Vs. Jan-Sep 2010: 10,3% (includes cruise)*It doesn't Include cruise

**Includes cruiseSource: DAS (Departamento Administrativo de Seguridad)

238,082 Visitors Share 18%

Ecuador

101,833 Visitors Share 7.5%

Spain 77,922 Visitors Share 6%

732 668

0

400

800


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Exports FDI

-21,2%

-20,6%

-20,2%

-16,7%

-12,7%

Mexico

Argentina

Chile

Peru

Colombia

-50%

-42%

-32%

-31%

-16%

Argentina

Brazil

Colombia

Peru

Chile

During 2009, Colombia was one of thebest economic performers in the region

Source: Official sources of each country, World TourismOrganization, LatinFocus and EIUExport: Variations in FOB between 2008 and 2009FDI: Variation FDI flows between 2008 and 2009Tourism: Variation number of foreign visitors between 2008 and 2009 (do notinclude cruise)*Variation between January-August 2008 and Jan-August 2009

Tourism

-35,9%

-22,7%

Venezuela

Brazil

-17,5%

-13,1%

-6,7%

-4,9%

1,9%

3,9%

10,7%

Venezuela*

Argentina*

Mexico*

Brazil

Chile

Peru

Colombia

-990%

-51%

Venezuela

Mexico


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Colombia, one of the best Emerging MarketsBond Index Plus (EMBI+) in Latin America

1000

1200

1400

1600

Sovereign Spreads (EMBI+): Colombia Vs. Latin America ,

2000-2010*

Emerging Markets Bond Index Plus (EMBI+), basis point spread over US treasuries.*From January 2000 until October 2010Source: JPMorgan - Central Bank of Peru

0

200

400

600

800

3Jan0

0

24Apr00

11Aug0

0

1Dec0

0

27Mar01

17Jul01

6Nov01

28Feb02

19Jun0

2

8Oct02

29Jan03

20May03

9Sep03

29Dec03

20Apr04

6Aug04

25Nov0

4

14Mar05

30Jun0

5

19Oct0

5

4Aug06

24Nov0

6

19Mar07

9Jul07

26Oct0

7

21Feb08

11Jun0

8

30Sep0

8

23Jan09

13May09

31Aug0

9

22Dec09

14Apr10

2Aug10

Latin America Colombia


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Violence levels areViolence levels are

surprisinglysurprisingly


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62,7 64,665,8

52,855

65

75

Homicides per 100.000Inhabitants, 2000 August 2010

Homicide rate per 100 thousand

inhabitants reduced to a half

Variation 2008-2009: 7%

Variation Jan-Aug 09 Vs. Jan-Aug 10: -4%Source: Ministry of Defense

,

39,3 36,733,0 33,0

35,4

23,3 22,3

15

25

3545


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107

100

120

Homicides per 100,000 Inhabitants2008

Bogot, safer thanWashington, Atlanta and Miami

3 4 510

17 18 18 19 20 2122

2940

0

20

40

60

80

Source: Bogot Chamber of Commerce, based on information issued by AmricaEconoma Intelligence and the BogotMetropolitan Police; FBI


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4,53Colombia

Chile

Personal security and private property are

adequately protected, 2010World

RankingCountry

32 Chile

47 Colombia

Colombia: second place in Latin America in thelist of countries that best protect people and

private property

0,22

1,68

1,96

3,15

,

0,00 1,00 2,00 3,00 4,00 5,00 6,00

Venezuela

Mexico

Argentina

Peru 50 Brazil

51 Peru

56 Argentina

57 Mexico

58 Venezuela

Source: IMD World Competitiveness, 2010. Ranking among 58 countries.


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The best thing about Colombia is itsThe best thing about Colombia is its


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WorldRanking

Country

28 Chile

35 Colombia5,11

5,30

5,66

Argentina

Colombia

Chile

Availability of Qualified Labor, 2010

We have the second most qualified

labor available in the region

38 Argentina

49 Mexico

55 Brazil

55 Peru

57 Venezuela


2,89

3,33

3,78

4,60

0,00 1,00 2,00 3,00 4,00 5,00 6,00

Venezuela

Per

Brasil

Mxico


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WorldRanking

Country

30 Colombia

33 Peru

According to the IMD, Colombia's laborregulations hinder business activities in Latin

America the least

4,23

4,35

Peru

Colombia

Labor regulations (hiring/firingpractices, minimum wages, etc.) do not hinder

business activities, 2010


43 Chile51 Mexico

52 Argentina

56 Brazil

58 Venezuela0,63

2,15

2,72

2,87

3,71

0,00 1,00 2,00 3,00 4,00 5,00 6,00

Venezuela

Brazil

Argentina

Mexico

Chile


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According to the IMD, Colombia has the best Indexon rigidity of employment in Latin America

World

Ranking Country

9 Colombia

20 Chile

18,0

10,0

Ar entina

Chile

Colombia

Index on rigidity of employment in Latin

America, 2010

22 Argentina

40 Peru

42 Mexico

48 Brazil

58 Venezuela69,0

46,0

41,0

39,0

0,00 20,00 40,00 60,00 80,00

Venezuela

Brazil

Mexico

Peru



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4:45 Ciudad DeMxico

3:00 MiamiFrec. 31 / Week

5:35 Nueva YorkFrec. 19 / Week

1:20 CaracasFrec. 47 / Week

Just 3 hours from Miami and

5:45 hours from So Paulo

rec. ee

5:45 So PauloFrec. 12 / Week

6:15 Buenos

AiresFrec. 7 / Week

5:00 SantiagoFrec. 7 / Week

Source: Proexport

3:00 Lima

Frec. 30 / Week

Since2000, internationalflights to Colombia

increased 120%


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A country that protects the environment. InA country that protects the environment. In,

affect the competitiveness of enterprises,

affect the competitiveness of enterprises


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69,3

73,3

76,8

Peru

Chile

Colombia

Environmental Performance Index, 2010

World

Ranking Country

10 Colombia

16 Chile

Colombia is the tenth country in the world andthe first in the region in protecting the

environment

Rating

Source: Environmental Performance Index 2010, Yale University

61

62,9

63,4

67,3

0 20 40 60 80 100

Argentina

Venezuela

Brazil

Mexico 31 Peru

43 Mexico

62 Brasil

64 Venezuela

70 Argentina


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The new BRICs are

Colombia, Indonesia, Vietnam, Egypt, Turkey and

South Africa (CIVETS). They are countries with major

populations, dynamic, diverse economies, political

stability and each of them has a brilliant future. Any

company with global ambitions will have to take

Colombia among the CIVETS

immediate action in these markets."Michael Geoghegan, CEO HSBC

April 26, 2010 in his speech to AmCham Hong Kong

Colombian is known in America and around the world to be anEmerging Country with excellent social and business activitiescontributing in the process of rapid economic growth and FDI

attraction.


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In 2010, Colombia will be negotiating 12 free tradeagreements (FTA) with 48 countries obtaining

preferential access to over 1,500 million consumers

In Force

Signed

In Negotiation

Future

IN FORCECAN (Peru, Ecuador yBolivia)

MERCOSUR(Argentina, Paraguay, Uruguay and Brazil)

ChileG2-Mexico

North Triangle(Honduras, Guatemala yEl Salvador)

SIGNEDUnited StatedEFTA(Iceland, Liechtenstein, Norway and Switzerland)

European UnionCanada

IN NEGOTIATIONSouth KoreaPanama

FUTUREJapan


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In 2010, Colombia will be negotiating 22international investment agreements (IIA)

with 48 countries

Note: The International investment agreements (IIA) include Agreement Investment Treaties (BIT) (agreement) and Free Trade Agreements (FTA)

with investment section (chapter).

In ForceSigned

In Negotiation

IN FORCE

Peru (Agreement)

Mexico (Chapter)

Spain (Agreement)

Switzerland (Agreement)

CAN (Ecuador and Bolivia) (Chapter)

Chile (Chapter)

North Triangle (Honduras, Guatemalaand El Salvador) (Chapter)

SIGNED

China (Agreement)Belgium-Luxembourg (Agreement) India (Agreement)United Kingdom (Agreement)South Korea (Agreement)EFTA (Iceland, Liechtenstein andNorway) (Chapter)

European Union (Chapter) (excludesthose countries with agreements)

United States (Chapter)Canada (Chapter)

IN NEGOTIATION

Kuwait, Japan, UAE, Germany andFrance (the last two countriesnegotiations are suspended because theimplementation of the Lisbon agreement)(Agreement)


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In 2010, Colombia will be negotiating 19 doubletaxation agreements (DTA) with 22 countries

IN FORCE

CAN Peru, Ecuador andBolivia

Spain Chile

SIGNED

Switzerland Canada Mexico South Korea Portugal

IN NEGOTIATION

UnitedStates, Germany, CzechRepublic, Holland, Belgium, India, Japan, France, Israel, United Arab Emirates and

Venezuela (suspended)

In Force

Signed

In Negotiation

C l bi thi d t B i F i dl


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9

29

40

Panama

Peru

Colombia

Doing Business Ranking Variation, 2007-2011*(Change in positions)

Colombia: third most Business Friendlycountry in Latin America and main reformer in

the region, according to the world bank (2011)

World Ranking Country

Mexico 35

Per 36

-20-15

-14

-8

-7

-6

8

-40 -20 0 20 40 60

Costa RicaChile

Argentina

Venezuela

Ecuador

Brazil

Mexico

Source: Top Reformers Report, World Bank*Positive figures show improvements in business environment

Colombia 39

Chile 43

Panama 72

Argentina 115

Costa Rica 125

Brazil 127

Ecuador 130

Venezuela 172


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6,3

6,7

8,3

Chile

Peru

Colombia World

Ranking Country

5 Colombia

20 Peru

Strength of Investor Protection, 2011

Colombia is the fifth country in the world andfirst in Latin America that most protects

investors

Ranking made up by 183 countriesSource: Doing Business, 2011 (World Banck)

2,3

4,7

4,7

5,3

,

0 2 4 6 8 10

Venezuela

Argentina

Panama

Brazil 44 Mexico74 Brazil

109 Argentina

109 Panama

179 Venezuela

Rating

Th t titi FTZ i L ti A i


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15% income tax rate.

No import duties.

VAT exemption for goods sold from Colombia to FTZ

The most competitive FTZs in Latin America:15% income tax and allows sales to the local

market

Benefit from international trade agreements. (Except

Per)

Allow sales to the local market.

Free Trade Zones

Single-Company(SCFTZ)

Permanent (PFTZ)


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Characteristics

Putumayo, Cauca, Huila, Nario, Caquet, Boyac, C

esar, La Guajira, Norte de

Santander, Arauca, Guaina and Vichada.

Equivalent requirements between the different typesof Sin le Com an Free Trade Zones.

New single company FTZ in twelveregions of the country

2 year limitation for the execution of 100% of theinvestment and employment commitments.

Application must be filed before the Tax Authorities(DIAN) prior to: December 30th, 2010 for

Putumayo, Cauca, Huila, Nario, Caquet regions;

December 31st, 2011 for Boyac, Cesar, La

Guajira, Norte de Santander, Arauca, Guaina andVichada regions.

Requirements

Investment (approx.) and Direct Jobs

USD 1.29 Million 50

Not all the municipalities in the regionsbordering Venezuela are included. Refer to

Decree 2555 of 2010. Ex/rate COP 2000 = US$ 1


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Free Trade Zone Approved

Single - Company FreeTrade ZonePermanent Free TradeZone

Investment commitments

Total Investment (USDMillion)

6.426

Direct Jobs 46.122

84 Free Trade Zones

36

Source: Ministry of Trade, Industry and Tourism. The investment amounts required to obtain the Free Trade Zone status arecalculated in Minimum Monthly Legal Wages (M.M.L.W). This information is presented in dollars using a US$1 = COP 2,000

exchange rate. For 2010, the M.M.L.W is COP 515.000. The M.M.L.W, as well as the exchange rate are subject to variations.

Indirects Jobs 94.251

Investment executed so far

Total Investment (USDMillion)

2.315

Direct Jobs 5.509

Indirects Jobs 25.271

PERMANENT FREE TRADE ZONES (PFTZ)


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Requirements for industrial firms of goods and services

Total Assets(US$)

Investment Ammount

(US$ Million)

Minimum direct jobsgeneration

0 129,000 0 0

PERMANENT FREE TRADE ZONES (PFTZ)Several firms installed in a FTZ already

established

129,008 1.28 Million 0 20

1.28 7.72 Million 1.28 30

More than 7.72 Million 2.96 50

Back

Source: Ministry of Trade, Industry and Tourism. The investment amounts required to obtain the Free TradeZone status are calculated in Minimum Monthly Legal Wages (M.M.L.W). This information is presented indollars using a US$1 = COP 2,000 exchange rate. For 2009, the M.M.L.W is COP 515.000. The M.M.L.W, as wellas the exchange rate are subject to variations.

SINGLE COMPANY FREE TRADE ZONES (SCFTZ): A


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FTZ typeInvestment (US$

Million)

AND direct jobs

Goods (1) 38.62 150

2.57 11.84 500

SINGLE-COMPANY FREE TRADE ZONES (SCFTZ): Asingle firm can get all FTZ advantages by installing itselfin any place in Colombia

(1) Each additional investment of US$ 5.9 million reduces 15 jobs of requirement. In any case, there must be generated atleast 50 jobs.

(2) For health services companies, 50% of jobs may be vinculated, not direct.(3) 50 indirect jobs can replace 20 direct jobs.

. .

23.69 or more 150

Services Ports (3) 38.62 20

Exchange rate: US$ 1 = COP 2,000. Minimum Monthly Legal Wages (M.M.L.W.) for 2010 is COP 515,000.

M.M.L.W. and Exchange Rate are subject to changes.

Back

SCFTZSCFTZ AgribusinessAgribusiness

SINGLE COMPANY FREE TRADE ZONES (SCFTZ): A


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FTZ type

Investment (US$

Million) Or related jobs to the production

Agribusiness 19,31 500

SINGLE-COMPANY FREE TRADE ZONES (SCFTZ): Asingle firm can get all FTZ advantages by installing itselfin any place in Colombia

BiofuelsMeat and Fish

Oil and grease products from vegetables and animals

Dairy products

Legume and fruits, prepared or preserved, tea, soup, vinegar, sauces and yeast*

Coffee

* According to the national statistics this products classification is called products not classifiedpreviously.Exchange rate: US$ 1 = COP 2,000. Minimum Monthly Legal Wages (M.M.L.W.) for 2009 is COP

515,000. M.M.L.W. and Exchange Rate are subject to changes.

Back

C l bi ff L l St bilit C t t


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Investments over US$1.93 million* (7500 M.M.L.W.)**

Investor pays 1% premium based on the amount of theinvestment. 0.5% in unproductive periods

Conditions

Colombia offers Legal Stability Contractsto guarantee investment projects

Period From 3 to 20 yearsmaximum

Signedcontracts

70 legal stability contracts approved, 56 legalstability contracts signed

*The investment requirement is calculated with an exchange rate of COP $ 2000 = 1 USD. It is responsibility ofthe investor to calculate the investment requirement at the moment of submitting the application for the LegalStability Agreement.** One minimum monthly legal wages M.M.L.W. equivalent COP$ 515.000 or US$ 257,5


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125% income tax deduction over investments inscientific and technological developments.

Other tax incentives

200% income tax deduction over salaries and socialbenefits paid to handicapped employees.

Other incentives by sector: Income tax


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Exemption for 30 years for companies that build orrestyle hotels before 2018.TourismTourism

Exemption for 20 years starting from 2003.EcoEco--tourismtourism Exemption for 10 years after the start of production in

crops planted between 2003 and 2013.Late yield cropsLate yield crops

Permanent exemption for investment in new forestplantations, sawmilling and timber plantations.ForestryForestry

Other incentives by sector: Income taxexemption for up to 20 years

Publishing of books, magazines, booklets or collections

of scientific or cultural characteristics are exempt until2013.EditorialEditorial

Exemption for 10 years for products manufactured inColombia with high scientific and technologicalresearch content, starting from 2003.c

New medicinalNew medicinalproducts and softwareproducts and software

Exemption for 15 years for sale (by the generators) of

electricity based on wind resources, biomass oragricultural waste.

RenewableRenewableenergyenergy

Exemption for 15 years starting from 2003 to provideservices in slabs and boats with net weight below 25tons.

River transportRiver transport


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Where are we coming from?

What are we doin ?

Where are we going next?

Potential World Class Sectors


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Encourage and improve production ofcompetitive products & services

ESTABLISHED SECTORES

Promote development ofNEW & EMERGING

SECTORS

Productive Transformation ProgramGovernment - Private sector"

The business plans include initiatives


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HUMAN RESOURCE DEVELOPMENT

buscar

LEGAL AFFAIRS & REGULATION

Pertinence, improved skills, readiness and retention inthe industry. Bilingualism and promotion of university-

industry partnerships...

Adapt the regulatory framework to suit the

The business plans include initiatives

along four key topics...

INDUSTRY AFFAIRS

INFRAESTRUCTURE

n us ry s nee s.

Put in place strategies to: attract foreigninvestment ,strengthen sectorrepresentation, bolster management

capabilities .

Ensuring adequate infrastructure is inplace to suit industrys needs.

ACTION PLAN

184Initiatives


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Proexport as a Foreign Promotion


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Promote Colombias international image through three

business lines

Proexport as a Foreign PromotionAgency


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Information tailor made to your needs

Facilitation of contacts with the public and private sector

Setting up of agendas to Colombia

PROEXPORTs services to investors

Free of charge and confidential

Investment specialists in New York, Los Angeles, Miami and Chicago


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We will be delighted

www. investincolombia.com.co

045 colombian presentation november 2010

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