Diapositiva 1

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Colombia A Golden Opportunity
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• Agenda
• Recent Evolution Facts Figures
• Investment Incentives

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General information

• Official name Republic of Colombia
• Capital Bogota, 7 Million
• GDP (2007) USD 172,000 Million
• Population (2007) 43.9 Million (77 urban, 23
  rural)
• GDP per capita (2007) USD 3,918
• GDP per capita at PPP (2007) USD 9,300
• GDP Growth (2007) 7.52
• Inflation (2007) 5.69
• Exports (2007) USD 29,991 Million
• Imports (2007) USD 32,899 Million
• FDI (2007) USD 9,028 Million
• Literacy rate 92.1
• Currency Colombian Peso (COP)

GDP Current prices Source Central Bank,
Proexport and Presidency of Colombia Exchange
Rate USD 1 COP 2014 (2007 Average rate)
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Colombias economic growth since year 2001 has
outpaced that of the Latin American region
GDP Growth Colombia vs. Latin America (1999
2007)
Source Economic Commission for Latin America and
the Caribbean (ECLAC), DANE, Forecasts ECLAC and
National Planning Department, and World Economic
Forum for Latin America in 2007
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Colombias significant market potential
GDP in Latin America (2007) Current Prices, USD
Billion
Population in Latin America (2007) Million of
inhabitants
Source International Monetary Fund and World
Bank 2007
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Inflation rate has consistently decreased
Inflation Rate (1998 2007)
Source DANE
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FDI increased by 323 since 2000
FDI Flows (2000-2007 ) USD Million
Sab Millers investment USD 5,525 M
Source Balance of Payments, Central Bank
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Exports increased by 150 since 2002
Exports (2000 2007) USD Million
Source DANE, Proexport
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Foreign visitors to Colombia doubled since 2005
Foreign Passenger Arrivals to Colombia (2000
2010) Number of Travelers (Millions)
Source Security Administration Department
DAS G Goal
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Leader in reforms to facilitate business
Change in ranking on the ease of doing business
Colombia has become one of the top countries in
the world in facilitating the business
environment through legal and procedure reforms.
Panamá
Peru
Mexico
Ecuador
Bolivia
Chile
Nicaragua
Uruguay
Brasil
Argentina
Venezuela
Source Doing Business Database
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Our economy grows as our safety improves
Source DANE - Ministry of Defence ForecastEcono
mist Intelligence Unit
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Colombias best asset is its qualified human
capital
Availability of skilled workforce (0 not
available 10 available)
Competent managers (0 not available 10
available)
Ranking (55 countries)
Source The World Competitiveness Yearbook
2007-IMD
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Rating Agencies upgrade Colombia's Confidence
Indexes
Standard Poors kept Colombias qualification
BB due to constant economic stability. February
2008
Fitch Ratings upgrades Colombia to BB, June 2007
Moodys also upgraded Colombia in June 2007
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The Economic press has noticed our changes
Colombia's strong fundamentals stand out. Its
130 billion economy, a world leader in the
production of coffee, petroleum, textiles, and
flowers, is growing at 6.8 a year, two full
points faster than the Latin American average. In
the past 10 years, Colombia has slashed its
inflation rate from 18 to 5, and since Uribe
was elected, unemployment has dipped from 16 to
13. The nation has never defaulted on its debt
or experienced hyperinflation. And
entrepreneurial thinking is spreading Robert
Fazard. May 28th, 2007
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The Economic press has noticed our changes
In the space of just five years something
remarkable has happened the cities have become
relatively safe. Murder and kidnapping rates have
plunged, and there are no more bombs. The only
explosion are in property prices Rory Caroll
June 8th, 2007
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The Economic press has noticed our changes
Last year, for the third year in a row,
Colombias economy grew by 5 and registered a
surge in investment. March 2007
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The Economic press has noticed our changes
Colombia has been fighting to prove that it is a
safe and worthwhile investment destination and
has now put itself firmly back onto the
investment map. Courtney Fingar , January 2007
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Following the title Colombias lessons for
Brazil, February 2007 edition of EPOCA magazine
highlight Colombias outstanding results
regarding crime reduction in major cities.
The Economic press has noticed our changes
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The world's largest companies have invested in
Colombia
Nearly 700 multinational companies have
operations in Colombia
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Access to global markets (2002 Scenario)
Colombia is pushing forward on its
internationalization process
- Internationalization
panorama in 2002 -
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Access to global markets (2010 plan)
Negotiation agenda through 2010
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Agreements to facilitate investments (2002
Scenario)
Double Taxation Agreements DTSs

Investment Agreements BITs
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Agreements to facilitate investments (2010 plan)
Double Taxation Agreements DTSs

Investment Agreements BITs
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• Agenda
• Recent Evolution Facts Figures
• Investment Incentives

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

• Single 15 income tax rate.
• Any goods entered to the Free Trade Zones are
  considered to be outside the national territory
  when it comes to taxes related to imports and
  exports.
• No customs taxes (VAT or CUSTOMS DUTIES)
• VAT exemption for raw materials, inputs and
  finished goods sold from the national customs
  territory to industrial Free Trade Zone users.
• Exports made from Free Trade Zones to foreign
  countries benefit from international trade
  agreements. (Except Peru)
• No customs taxes for any machinery directly
  related with the business operation which is
  imported for abroad and entered to the Free Trade
  Zone
• Quick and simplified customs procedures

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Three different types of Free Trade Zones
An operator (known as the operating user)
administers the zone where the companies conduct
their industrial, commercial or service
activities.
PERMANENT FREE TRADE ZONE (PFTZ)
Authorizes a single company to develop its
industrial activities of goods or services in a
given area of the national territory.
SINGLE ENTERPRISE FREE TRADE ZONE (SEFTZ)
Area authorized to hold international fairs,
exhibits, congresses and seminars of importance
for the countrys economy and foreign trade.
TRANSITORY FREE TRADE ZONE (TFTZ)
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Easy access to Permanent Free Trade Zones
according to your assets
Requirements of PFTZs for Industrial users of
goods and services

Exchange rate used  USD 1 COP 1800. Minimum
Monthly Legal Wage for 2008 is COP 461.500. The
M.M.L.W, as well as the exchange rate is subject
to variations.
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Single Enterprise Free Trade Zones
Companies not physically located inside a PFTZ
are entitled to benefit from the FTZ regime
Requirements to get the Single Enterprise Free
Trade Zone Status
Goods
Each additional investment of USD 5.9 MM reduces
the number of jobs required by 15 in any case 50
job must be created.
Services
For recognized entities which provide health
services, 50 of the jobs may be outsourced.
Exchange rate used  USD 1 COP 1800. Minimum
Monthly Legal Wage for 2008 is COP 461.500. The
M.M.L.W, as well as the exchange rate is subject
to variations.
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Single Enterprise Free Trade Zones
Requirements to get the Single Enterprise Free
Trade Zone Status
Agribusiness (investment or employment)
Port Services
50 jobs may be outsourced instead of the 20
direct jobs
Exchange rate used  USD 1 COP 1800. Minimum
Monthly Legal Wage for 2008 is COP 461.500. The
M.M.L.W, as well as the exchange rate is subject
to variations.
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Why take advantage of Colombia's Free Trade
Zones?

• 15 income tax rate for 30 years extendable for
  an equal period of time.
• This rate does NOT depend on the exports or sales
  to the domestic market.
• It is compatible with the World Trade
  Organization and has no maximum expiration
  deadline or pending extension procedures with the
  WTO.
• Allows companies to settle in any place of the
  country using the figure of Single Enterprise
  Free Trade Zones.
• No sectors are excluded from the Free Trade Zones
  regime.
• Tax exemptions on imports and also on income
  taxes along with other regional taxes.
• The tax exemptions on imports dont depend on the
  inexistence of national production.

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Why take advantage of Colombia's Free Trade
Zones?

• Colombias commercial agenda guarantees stability
  and a privileged position as an export platform.
• Colombia offers a significant domestic market
  with excellent growth perspectives.
• There are important advantages regarding human
  capital at a professional and operative level
  when it comes to quality, availability and costs.
  

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Investors can subscribe Legal Stability Contracts
with the Colombian Government
Guaranteeing the legislation and administrative
interpretation considered as a determining factor
for the investment project.
Objective

• Investments over USD 1,900.000
• Investor must pay a premium to the Government
  equivalent to 1 of the investment made.

Conditions
Period
From 3 to 20 years maximum.
Admission
Technical report
Evaluation and approval
of the application
Final evaluation
These contracts exclude rules regarding the
social security system, the obligation to report
and pay taxes levied by the government under a
state of emergency, indirect taxes (i.e., the VAT
or the tax on banking transactions), prudential
regulations of the financial system and the
utility rate system.
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Tax incentives by sectors Exempt Income tax up
to 20 years in many sectors

• Income tax exemptions are granted in some
  strategic sectors
• Tourism Income tax exemption on remodeling or
  building a new hotel until 2032
• Eco-tourism Income tax exemption for 20 years
  beginning in 2003
• Late-yield crops Income tax exemption on the use
  of oil, palm, rubber, cocoa, citric trees and
  other late-yield crops planted between 2003 and
  2013 and intended for exports.
• Forestry Income tax exemption on new forest and
  timber tree plantations and sawmills
• Publishing Income tax exemption until 2013 for
  publishing companies of books, magazines,
  brochures or scientific or cultural collectible
  series.

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Income - deductible expenses

• Deductions include among others the following
• 40 of the amount invested in productive real
  assets acquired.
• 100 of the amount paid for Industry Commerce,
  sign and billboard, and property taxes during the
  corresponding taxable year, as long as they are
  directly related to the taxpayers economic
  activity.
• 25 of the tax paid on financial transactions may
  be deducted, regardless of their relationship to
  the taxpayers economic activity.

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Financial support for investors
BANCOLDEX Entrepreneurial Development and
foreign Trade Bank

• Colombian currency exchange policy consulting.
• Reception and Emission of bank guarantees
• Finance for - Investment
• - Working capital
• - Other necessities
• Duff Phelps AAA
• Bancoldex is a public institution

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Conclusions

• Colombia shows favorable conditions and continued
  improvements in economy, security, and labor
  force stability.
• Remarkably competitive mechanisms such as Free
  Trade Zones and Legal Stability Agreements are
  the result of the development of government
  policies regarding investment promotion.
• As a result of all the improvements, a high level
  of trust is perceived from entities and business
  persons around the world.

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Proxeports overseas offices
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