PANAMAPANAMA

TheThe PanamaPanamaCall Center Call Center OpportunityOpportunity

NationalNational Office Office forfor ExportExport andand InvestmentInvestment PromotionPromotion

MinistryMinistry ofof TradeTrade andand IndustryIndustry

PANAMAPANAMATRACKING CALL CENTER DEVELOPMENT TRACKING CALL CENTER DEVELOPMENT

IN PANAMAIN PANAMA1995: SALE OF STATE1995: SALE OF STATE--OWNED OWNED TELECOMTELECOM COMPANY, INTEL, TO COMPANY, INTEL, TO CABLE AND WIRELESSCABLE AND WIRELESS

1996: NEW 1996: NEW TELECOMTELECOM LEGISLATION IS PASSED. CREATION OF LEGISLATION IS PASSED. CREATION OF REGULATORY ENTITY OF PUBLIC SERVICESREGULATORY ENTITY OF PUBLIC SERVICES

JAN. 2001: SITEL (IN JV WITH CJAN. 2001: SITEL (IN JV WITH C&W)&W) GOES LIVE WITH LOCAL GOES LIVE WITH LOCAL SERVICESERVICE

OCT. 2001: CALL CENTER INCENTIVES LAW IS PASSED AND OCT. 2001: CALL CENTER INCENTIVES LAW IS PASSED AND DOLLAR TAX IS ELIMINATED. DOLLAR TAX IS ELIMINATED.

JAN. 2003: END OF CJAN. 2003: END OF C&W&W MONOPOLY. OTHER CARRIERS BEGIN TO MONOPOLY. OTHER CARRIERS BEGIN TO OFFER LOCAL AND OFFER LOCAL AND LONGLONG DISTANCEDISTANCE

MAY 2003: DELL AND SPHERION GO LIVEMAY 2003: DELL AND SPHERION GO LIVE

PANAMAPANAMAWhatWhat isis thethe PanamaPanama opportunityopportunity??

SocialSocial•• LanguageLanguage:: LargeLarge bilingualbilingual populationpopulation withwith strongstrong englishenglish skillsskills•• LocationLocation:: HeartHeart ofof thethe AmericasAmericas•• CultureCulture:: DiverseDiverse andand multimulti--ethnicethnic. . StrongStrong affinityaffinity toto thethe U.SU.S. . ------

100+ 100+ yearyear relationshiprelationship

PoliticalPolitical•• Incentives:Incentives: TaxTax breaksbreaks, Real Estate , Real Estate packagespackages andand HR HR

DevelopmentDevelopment assistanceassistance•• GovernmentGovernment backingbacking:: Call Center Call Center IndustryIndustry ------ TopTop PriorityPriority•• Country/Country/RegionRegion riskrisk:: StableStable environmentenvironment withwith social, social, politicalpolitical

andand economiceconomic calmcalm•• CurrencyCurrency issuesissues:: negligiblenegligible levellevel ofof inflationinflation ------ underunder 2% 2% thethe

lastlast 50 50 yearsyears. No . No currencycurrency devaluationdevaluation ------ US dollar is legal US dollar is legal tender tender ------ No Central No Central BankBank ------ No No restrictionsrestrictions onon movementmovement ofofcapitalcapital

PANAMAPANAMAWhatWhat isis thethe PanamaPanama opportunityopportunity??

EmployeeEmployee TalentTalent PoolPool•• EducationalEducational SystemSystem:: ReengineeringReengineering processprocess underwayunderway. More . More

emphasisemphasis onon englishenglish skillsskills•• QualityQuality ofof workwork:: Has Has exceededexceeded expectationsexpectations•• CostCost ofof Labor/Average Labor/Average SalarySalary:: U$400U$400 –– $600 $600

Level 1 Bilingual AgentLevel 1 Bilingual Agent•• HR HR DevelopmentDevelopment:: ExperiencedExperienced andand effectiveeffective training training

infrastructureinfrastructure

InfrastructureInfrastructure•• TelecommunicationsTelecommunications InfrastructureInfrastructure:: BestBest in in thethe regionregion•• RoadsRoads//PortsPorts//AirportsAirports:: BestBest multimodalmultimodal transporttransport systemsystem in in thethe

regionregion

PANAMAPANAMAGOVERNMENT BACKINGGOVERNMENT BACKING

Panama´sPanama´s TeleservicesTeleservices DevelopmentDevelopment StrategyStrategy isisoneone ofof thisthis Administration´sAdministration´s toptop jobjob--creationcreationinitiativesinitiatives..

A A highlyhighly coordinatedcoordinated efforteffort involvinginvolving 6 6 differentdifferentgovernmentgovernment agencies, agencies, whichwhich has has generatedgenerated 2000+ 2000+ jobsjobs in in lessless thanthan 2 2 yearsyears..

ImplementationImplementation ofof mostmost aggressiveaggressive andand innovativeinnovativetraining training programprogram in in thethe country´scountry´s historyhistory

PANAMAPANAMACALL CENTER LEGISLATIONCALL CENTER LEGISLATION

••CALL CENTERS ARE REGULATED UNDER CALL CENTERS ARE REGULATED UNDER TELECOMMUNICATIONS LAW 31 OF 1996TELECOMMUNICATIONS LAW 31 OF 1996

••LAW 54 OF 2001 GRANTS INCENTIVES TO LAW 54 OF 2001 GRANTS INCENTIVES TO INTERNATIONAL CALL CENTERS. AMONG INTERNATIONAL CALL CENTERS. AMONG THESE:THESE: ••TAXTAX--FREE OPERATIONS (NO SALES, FREE OPERATIONS (NO SALES,

INCOME OR ANY OTHER NATIONAL TAXES)INCOME OR ANY OTHER NATIONAL TAXES)

••SPECIAL VACATION SCHEDULESSPECIAL VACATION SCHEDULES

••MARKET FLUCTUATIONS AS A JUSTIFIED MARKET FLUCTUATIONS AS A JUSTIFIED CAUSE FOR CONTRACT TERMINATIONCAUSE FOR CONTRACT TERMINATION

••SPECIAL EMPLOYEE STABILITY REGIME SPECIAL EMPLOYEE STABILITY REGIME ––3 YEARS3 YEARS

••NO IMPORT TARIFFSNO IMPORT TARIFFS

••RESIDENCE VISAS FOR EXPATSRESIDENCE VISAS FOR EXPATS

••PRODUCTIVITY PREMIUMS, BONUSES OR PRODUCTIVITY PREMIUMS, BONUSES OR INCENTIVES ARE NOT CONSIDERED AS INCENTIVES ARE NOT CONSIDERED AS PART OF THE SALARYPART OF THE SALARY

PANAMAPANAMALEGAL STABILITY LEGISLATIONLEGAL STABILITY LEGISLATION

For a period of 10 years after registration, the law guarantees:For a period of 10 years after registration, the law guarantees:

Legal StabilityLegal Stability.. The Company will be exempted from any future laws enacted The Company will be exempted from any future laws enacted that may affect or vary the rights of the Company at the moment that may affect or vary the rights of the Company at the moment of Investment.of Investment.

National Taxation StabilityNational Taxation Stability.. The Company will be exempted from any future The Company will be exempted from any future laws enacted that may affect or vary the taxation regime applicalaws enacted that may affect or vary the taxation regime applicable to the ble to the Company at the moment of Investment.Company at the moment of Investment.

LaborLabor StabilityStability.. The Company will be exempted from any future laws enacted The Company will be exempted from any future laws enacted that may affect or vary the that may affect or vary the laborlabor regime applicable to the Company at the regime applicable to the Company at the moment of Investment.moment of Investment.

Import Tariff StabilityImport Tariff Stability.. The Company will be exempted from any future laws The Company will be exempted from any future laws enacted that may affect or vary the import tariff scheme applicaenacted that may affect or vary the import tariff scheme applicable to the ble to the Company at the moment of Investment.Company at the moment of Investment.

Municipal Taxation StabilityMunicipal Taxation Stability.. Any changes to municipal taxation regime will Any changes to municipal taxation regime will only be applicable to the Company, every five years.only be applicable to the Company, every five years.

Panama also has an agreement with OPIC, a US Federal Govt. AgencPanama also has an agreement with OPIC, a US Federal Govt. Agency y that provides country risk insurance for US investments abroad.that provides country risk insurance for US investments abroad.

PANAMAPANAMAEMPLOYER CONTRIBUTIONSEMPLOYER CONTRIBUTIONS

(as a percentage of the salary)(as a percentage of the salary)

Social securitySocial security 10.7510.75Educational insuranceEducational insurance 1.501.50Occupational SafetyOccupational Safety 2.842.84XIII monthXIII month 8.338.33Severance paySeverance pay 1.921.92VacationVacation 9.099.09National holidaysNational holidays 3.193.19Sickness licenseSickness license 5.755.75

TotalTotal 43.3743.37

PANAMAPANAMALABOR POOLLABOR POOL

SIZE OF THE LABOR FORCE: 1.1 MILLION SIZE OF THE LABOR FORCE: 1.1 MILLION (PANAMA CITY: 600,000. COLON: 80,000). (PANAMA CITY: 600,000. COLON: 80,000). 2000 CENSUS2000 CENSUS

UNEMPLOYMENT: 14.1% (Q1 ´03)UNEMPLOYMENT: 14.1% (Q1 ´03)

75% OF EMPLOYED POPULATION WORK IN SERVICES 75% OF EMPLOYED POPULATION WORK IN SERVICES INDUSTRYINDUSTRY

PANAMA HAS A LONG HISTORY AS AN INTERNATIONAL SERVICES AND BANKING CENTER --- 85 BANKS FROM MORE THAN 35 COUNTRIES

PANAMA HAS A PANAMA HAS A LONGLONG HISTORY HISTORY AS AN INTERNATIONAL AS AN INTERNATIONAL SERVICES AND BANKING SERVICES AND BANKING CENTER CENTER ------ 85 BANKS FROM 85 BANKS FROM MORE THAN 35 COUNTRIESMORE THAN 35 COUNTRIES

PANAMAPANAMA

EDUCATIONEDUCATION••PANAMA IS THE PANAMA IS THE REGION´SREGION´S LARGEST INVESTOR IN EDUCATION LARGEST INVESTOR IN EDUCATION PER CAPITA PER CAPITA

••FROM 1990FROM 1990--1999, INVESTMENT IN EDUCATION HAS BEEN 1999, INVESTMENT IN EDUCATION HAS BEEN DOUBLED, FROM DOUBLED, FROM $$250M IN ´90 TO 250M IN ´90 TO $$500M IN ´99 (5% OF GDP)500M IN ´99 (5% OF GDP)

•• LITERACY RATE IN THE CITIES OF PANAMA AND COLON IS 97%LITERACY RATE IN THE CITIES OF PANAMA AND COLON IS 97%

••ENGLISH LANGUAGE TRAINING IS COMPULSORY THROUGHOUT ENGLISH LANGUAGE TRAINING IS COMPULSORY THROUGHOUT ELEMENTARY AND HIGH SCHOOL, AS OF 2003ELEMENTARY AND HIGH SCHOOL, AS OF 2003

••INTERNET ACCESS IN EVERY SCHOOL INTERNET ACCESS IN EVERY SCHOOL BYBY 20042004

PANAMAPANAMAUNIVERSITY POPULATIONUNIVERSITY POPULATION

CURRENT UNIVERSITY ENROLLMENT IS +/CURRENT UNIVERSITY ENROLLMENT IS +/-- 117,000117,000

IN PUBLIC UNIVERSITIES: 97,000IN PUBLIC UNIVERSITIES: 97,000

IN PRIVATE UNIVERSITIES: 20,000IN PRIVATE UNIVERSITIES: 20,000

WOMEN MAKE WOMEN MAKE UPUP ROUGHLY 60% OF STUDENT BODYROUGHLY 60% OF STUDENT BODY

PUBLIC UNIVERSITIES ARE FUNDED ALMOST ENTIRELY BYTHE STATE. AT +/- $35.00 PER SEMESTER, UNDERGRADUATE TUITION IS MERELY SYMBOLIC

PUBLIC UNIVERSITIES ARE PUBLIC UNIVERSITIES ARE FUNDED ALMOST ENTIRELY FUNDED ALMOST ENTIRELY BYBYTHE STATE. AT +/THE STATE. AT +/-- $$35.00 PER 35.00 PER SEMESTER, UNDERGRADUATE SEMESTER, UNDERGRADUATE TUITION IS MERELY SYMBOLICTUITION IS MERELY SYMBOLIC

MostMost popular popular undergradundergrad degreedegree programsprograms::LawLaw, Medicine, , Medicine, EngineeringEngineering, , BusinessBusiness AdministrationAdministration, , Marketing/Marketing/AdvertisingAdvertising

PANAMAPANAMA

MAJOR UNIVERSITIES IN PANAMAMAJOR UNIVERSITIES IN PANAMA

••UNIVERSITY OF PANAMAUNIVERSITY OF PANAMA

••SANTA MARIA LA ANTIGUA CATHOLIC UNIVERSITYSANTA MARIA LA ANTIGUA CATHOLIC UNIVERSITY

••TECHNOLOGY UNIVERSITY OF PANAMATECHNOLOGY UNIVERSITY OF PANAMA

••UNIVERSIDAD LATINAUNIVERSIDAD LATINA

••UNIVERSIDAD LATINOAMERICANA DE CIENCIAS Y UNIVERSIDAD LATINOAMERICANA DE CIENCIAS Y TECNOLOGIA TECNOLOGIA

••FLORIDA STATE UNIVERSITYFLORIDA STATE UNIVERSITY

••UNIVERSIDAD DEL ISTMOUNIVERSIDAD DEL ISTMO

••UNIVERSIDAD INTERAMERICANAUNIVERSIDAD INTERAMERICANA

••UNIVERSITY OF LOUISVILLEUNIVERSITY OF LOUISVILLE

••NOVA SOUTHEASTERN UNIVERSITYNOVA SOUTHEASTERN UNIVERSITY

••COLUMBUS UNIVERSITYCOLUMBUS UNIVERSITY

PANAMAPANAMAH.RH.R. DEVELOPMENT INCENTIVES. DEVELOPMENT INCENTIVES

ENGLISH/CALL CENTER TRAINING PROGRAMS:ENGLISH/CALL CENTER TRAINING PROGRAMS:

OCA PROGRAMOCA PROGRAM –– ADMINISTERED BY THE TRAINING ADMINISTERED BY THE TRAINING OFFICE OF THE MINISTRY OF LABOR. FUNDED BY IDB OFFICE OF THE MINISTRY OF LABOR. FUNDED BY IDB AND CENTRAL GOVT.AND CENTRAL GOVT.

COSPAE PROGRAMSCOSPAE PROGRAMS -- PRIVATE SECTOR COUNCIL FOR PRIVATE SECTOR COUNCIL FOR EDUCATIONAL ASSISTANCE, EDUCATIONAL ASSISTANCE, anan associationassociation ofof privateprivatesector sector companiescompanies dedicateddedicated toto promotingpromoting educationeducation.. FUNDED FUNDED BYBY CENTRAL GOVT. AND PRIVATE SECTOR DONATIONSCENTRAL GOVT. AND PRIVATE SECTOR DONATIONS

CustomizedCustomized totomeetmeet industryindustrystandardsstandards andandrequirementsrequirements

GOVERNMENT GRANTS LABOR INCENTIVES FOR GOVERNMENT GRANTS LABOR INCENTIVES FOR RECRUITMENT, SELECTION AND TRAINING OF RECRUITMENT, SELECTION AND TRAINING OF PANAMANIAN WORKERS ON A PANAMANIAN WORKERS ON A PROJECTPROJECT--BYBY--PROJECT PROJECT BASISBASIS

PANAMAPANAMACONNECTIVITYCONNECTIVITY

••Five major submarine Five major submarine fiber optic cables land in fiber optic cables land in Panama, providing the Panama, providing the best connectivity in best connectivity in Latin AmericaLatin America. .

••100% Digital System. 100% Digital System. Comparable with N.Y., Comparable with N.Y., London and CaliforniaLondon and California

••3000+ 3000+ GbpsGbps bandwithbandwithavailabilityavailability

••Minimal Risk of Natural Minimal Risk of Natural DisastersDisasters

PANAMAPANAMATELECOMTELECOM INFRASTRUCTUREINFRASTRUCTURE

••Substantial redundant bandwidth capacity. The most reliable Substantial redundant bandwidth capacity. The most reliable systems in the Regionsystems in the Region

••Private sector has invested hundreds of millions of dollars in Private sector has invested hundreds of millions of dollars in upgrading the telecommunications infrastructure of Panamaupgrading the telecommunications infrastructure of Panama

••A variety of major carriers are currently providing services in A variety of major carriers are currently providing services in Panama, promoting a fierce competition in prices and quality of Panama, promoting a fierce competition in prices and quality of services. Prices range according to volume and capacity. services. Prices range according to volume and capacity.

PANAMAPANAMAREAL ESTATE INCENTIVESREAL ESTATE INCENTIVES

••THE GOVT., THROUGH THE THE GOVT., THROUGH THE INTEROCEANIC REGION AUTHORITY (ARI)INTEROCEANIC REGION AUTHORITY (ARI), , OFFERS VERY ATTRACTIVE AND COMPETITIVE REAL ESTATE OFFERS VERY ATTRACTIVE AND COMPETITIVE REAL ESTATE OPPORTUNITIES IN THE OPPORTUNITIES IN THE REVERTED AREASREVERTED AREAS

••REVERTED AREAS: LAND AND INSTALLATIONS THAT WERE FORMERLY REVERTED AREAS: LAND AND INSTALLATIONS THAT WERE FORMERLY ADMINISTERED ADMINISTERED BYBY U.SU.S. ARMED FORCES AND WERE RETURNED TO . ARMED FORCES AND WERE RETURNED TO PANAMA AS A RESULT OF THE PANAMA CANAL TREATIES PANAMA AS A RESULT OF THE PANAMA CANAL TREATIES

HOWARD AIR FORCE HOWARD AIR FORCE BASE, PANAMABASE, PANAMA

FORT DAVIS, COLONFORT DAVIS, COLON

CITY CENTER

PANAMA CANAL

MAJOR CALL CENTERS IN PANAMA CITY AND VICINITY