FOR A WORLD FULL OF DEMANDING CHALLENGES,WE OFFER A COUNTRY FULL OF IT SOLUTIONS.

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COLOMBIABring IT on

COLOMBIABring IT on

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For a world full of challenges, Colombia is a country full of IT solutions, which range from content generation to software development, to be unified under a single concept:

Colombia Bring IT on

Get to know the Colombian offer in the IT sector.

WhyColombia?

Colombia is close to major global economic hubs, and has one of the most thriving and competitive economies among developing countries. Also, Colombia has one of the best connectivity infrastructures in the hemisphere, and has implemented award-winning programs, like Vive Digital. The human talent in the country is growing in terms of both quality and quantity, and the IT sector enjoys legal certainty and incentives. Therefore, Colombia is steadily becoming a world-class IT vendor.

As a result, Colombia is the perfect destination for international investors and buyers in search of technological products and services.

Learn why Colombia is an up-and-coming IT global player!

2.5

7.0 6.5

3.9

5.5

5.34.7

4.9 4.5

6.7 6.9

5.7 3.5

7.7

2.0

4.0

6.6

3.7

2.4

4.0 4.3

1.93.6

4.4 4.6

3.4 3.6

4.5 4.3

3.5 3.3

4.5

1.7

15.6

14.1 13.7

11.8 12.011.2 11.3

12.0 11.810.8 10.4

8.5 8.88.1

7.4 7.1 6.8

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014P 2015P 2016P 2017P 2018P

GDP

Unemployment Rate

Inflation

Competitivefactors

Key factors like a sound economy, a privileged geographical location, and high connectivity make Colombia one of the most attractive countries in the world to invest in and to buy IT products and solutions.

Sound,growing economy

Progress and planning regarding the GDP, inflation, and unemployment.

P: Projected

3.6%Inflation rate below target inflation for Colombia.

4.2%GDP growth in 2014, 3rd quarter, a higher figure than Latin America’s average forecasted (1.3%).

7.7%Unemployment rate in November 2014 was the lowest in 15 years.

A favorable and balanced outlookMajor international agencies like Standard & Poor’s and Fitch Ratings are assessing Colombia favorably after its macroeconomic improvements.

19 Positions Colombia has climbed 19 positions in the World Bank’s Doing Business ranking between 2010 and 2015 in terms of the ease of doing business, and it is the third in Latin America.

Top 6 in growthThe Economist magazine highlights Colombia as oneof the six countries with the largest share in global economic growth, above globalized leaders like Brazil, Russia, Mexico, United States, and Japan.

Privileged geographical location

Highconnectivity

9 submarine cablesColombia is one of the countries with the best submarine cable connectivity in the Americas, providing excellent international connection, faster data transmission, and connection stability.

8.8 million broadband connections (through Vive Digital)Exceeding all expectations, this figure was achieved in 2013, representing 4 times the total in 2010; and its expected to triple by 2018, reaching 27 million. This shows that Colombia has one of the largest number of Internet connections and users in Latin America.

GMT-5 Time zoneColombia is in the midst of five time zones, located in the same one as important business centers like New York, Toronto, and Miami.

935 FrequenciesWeekly international direct air frequencies available, which make business travel easier to and from the rest of the world.

All municipalitieshave Internet accessA total of 1,078 municipalities have Internet access thanks to the National Fiber Optics Network, a milestone achieved nowhere else in the continent. Fiber optics cannot be deployed into the remaining 45 municipalities due to geographical reasons, but connection via microwaves or 4G LTE technology is available.

GovernmentPlan

Colombia is becoming a global IT leader. This

was not achieved by chance, but thanks to the Government

programs and initiatives that

focused on increasing connectivity, improving

professional training, fostering bilingualism,

and developing the outsourcing industry, among other factors.

Vive Digital Plan

What is it?The Ministry of ICT (Information and Communication Technologies) created this program in 2010 to support technological and IT development in the country by bringing the Internet to the public and by driving digital platforms and their four basic components: Infrastructure, IT services, software, and users.

The Best ICT Policyin the WorldIn 2012, the Vive Digital Plan earned Colombia an award during the Mobile World Congress in Barcelona, and it has become a role model abroad.

50% + homes connectedOver half of Colombian homes, now have Internet access.

99.8% businesses have gone digitalThe proportion of enterprises with Internet access increased with growing demand for software and IT services and solutions to compete in the domestic and global arenas.

899 Vive Digital LocationsThese public Internet centers, located in cities and municipal capitals, provide access to people with low income.

51.7% of Colombians are now connectedThis figure places Colombia as one of the countries with the most widespread Internet access in Latin America above Brazil, Mexico, Ecuador, Costa Rica and Peru.

ViveLabThe ViveLab National Network is comprised by 17 laboratories deployed across the country. These labs have cutting-edge technology to create, develop, and produce digital content. More than 15,000 people will be trained in the period 2014-2018.

Implement 6Digital RightsDigital ID, email account, basic cloud space, medical history information, ICT ownership.

5 new national strategies for ICT appropriation A. ‘En TIC Confío’: secure and

responsible ICT use.

B. $2.5 million ‘Digital Users’ .

C. ‘Redvolución’ through innovative learning.

D. 120,000 teleworkers nationwide.

E. ‘Cinema for everyone’ offers people with disabilities, new means for entertainment by using technology.

75.000New students on IT careers.

7,621 Vive Digital KiosksBy the end of 2014, Colombia will have this number of public access points to bring Internet and ICT tools to remote locations and jurisdictions with a population over 100 persons.

More than 4,700+During its first five open calls,

Digital Talent has provided more than 4,700 forgivable loans to help

Colombian students who wish to pursue an ICT-related career.

USD $15.9 billionTotal budget available for Digital

Talent until the end of 2014.

Digital Talent

Apps.co

Finishing Schools

What is it?This is an initiative to provide Colombians with

training through technical and technological, graduate and post-graduate programs in order to meet the increasing domestic and global demand

for IT services and solutions.

What is it?An initiative within Vive Digital to promote and support ICT-based businesses, focusing on software development (particularly mobile apps), and digital contents.

What is it?A program created by a public-private partnership in order to support the outsourcing industry (i.e., KPO, BPO, ITO) with scholarships granted to industry workers worth up to USD $2.500, particularly in fields like software and IT services.

USD $12 millionThis is the total budget for Finishing Schools, provided by the Inter-American Development Bank (IDB).

2,000Total number of mobile apps developed thanks to this initiative by the end of 2014.

60,000 +This is the total number of entrepreneurs who have created or renewed projects or companies with a focus on software and ICT.

Regulationsand incentives

Free Trade Agreementes (FTA)

3 Trade Agreements in

negotiation

Colombia is currently negotiating 2 FTAs

and a Trade in Services Agreement (TiSA).

1,600

This is the total number of companies

that exported their products or services to

the United States for the first time during

the first 2 years of the FTA. These include

software and IT services firms.

5 agreements signed

With South Korea, Costa Rica, Israel,

Panama, and the Pacific Alliance pending

Congress approval to become effective.

13 agreements in force

The 13 trade agreements entered

into with over 50 countries include the FTAs with the United States, the European Union, the Southern

Cone Common Market (Mercado

Comun del Sur, Mercosur), Mexico,

Chile, and the Andean Nations Community

(Comunidad Andina de Naciones, CAN).

DoubleTaxation Agreements (DTA)

InternationalInvestment Agreements (IIA’s)

What are they?The purpose of DTAs is to eliminate or reduce double taxation, promote cooperation between states to prevent tax evasion and to promote trade between countries. The DTAs are limited to the tax on income and on capital; indirect taxes such as sales tax (“VAT”) are not covered by these instruments, nor territorial taxes such as industry and commerce (“ICA”) are included.

What are they?These are agreements created under a transparent regulatory framework with a clear set of rules to reduce non-commercial risks for investors. These are international Investment Agreements that provide security to foreign investments in the country with which the agreement has been signed.

10 countriesColombia has entered into DTAs with Mexico, Chile, Canada, Spain, Switzerland, India, Peru, Ecuador, Bolivia, and South Korea.

11 IIA’sThis is the total number of current IIA’s with countries like Chile, China, Spain, India, Peru, United States, Mexico, and Canada.

Exemption on the export of services

HabeasData Law

Labor Incentive:Tax Discounts

Support forscientificand technological development

What is it?A decree signed in 2013 that grants value added tax (VAT) exemption for all exported services for exclusive foreign use or consumption.

What is it?In terms of Personal Data Protection, Colombia is up-to-date with international standards on the protection of personal data.

In order to promote the hiring of people under 28 years of age and women older than 40 years of age, as well as displaced, reintegrated and disabled people, employers enjoy discounts in income tax and in complementary parafiscal and payroll contribution taxes for up to 3 years.

Income tax deduction equivalent to 175% of the amount invested in technological research and development projects which does not exceed 40% of the net income.Full income tax exemption for 5 years for new software developed with a high amount of scientific and/or technological research.

“The country has the potential to become a global leader in the digital era”.

These thoughts by the Minister Diego Molano Vega (Ministry of ICT) are starting to become a reality, and the digital revolution is evident in two ma jor sectors: Software & IT services and digital contents.

Learn why Colombia is now a global player!

Colombians’ aptitude, know-how, and creativity are acknowledged around the world, and they find a land of opportunities in the software & IT services sector. In fact, Colombia makes software for domestic and international markets, and the country provides IT services for companies around the world.

Software& IT

USD $932.9 million Total sales in the Colombian software industry by 2014.

The most sought-after servicesAmong large companies in the country are business risk management and supply chain management solutions.

The mostpowerful cloudThe demand for cloud computing apps and services in Colombia will notably increase among large companies and MSMEs.

The main industries demanding software and IT productsTelecommunications, financial, government, mass consumption, and manufacturing.

Data management in the rural sectorSmall and large agricultural, hunting, fishing, and forestry producers are demanding data management software to reduce costs, conduct vermin control, and improve their production chain.

Oil and gas sector, eager to implement IT servicesColombian State oil company Ecopetrol and related transnationals are demanding more and more IT services, like mobile telecommunications to optimize their drilling, extraction, and logistics procedures.

Internet and mobile apps: Pivotal services for the banking systemThe financial sector is seeking to expand the banking services in the country, and apps and mobile services are the perfect tool to meet this goal thanks to the widespread use of mobile Internet and smart phones.

Infrastructure, bolsteredthrough mobilityThe Colombian Government is determined to develop the air, road, port, and railway infrastructure with a budget over USD $9 billion. Software and mobile communication services are fundamental to improve efficiency, reduce time, and control expenses.

Telemedicine becomes a realityThanks to the country’s high Internet connectivity and the widespread use of smart phones and mobile devices, telemedicine is now available for Colombians. As a result, both large and small health institutions are looking for technological products and services to help them care for their patients remotely.

The power sector also demands mobile servicesAs with other sectors, the power industry demands mobile communications services for process optimization and network management.

Domestic demand

Total sales forthe IT servicesindustry in Colombia: $2.24 billion USD

Source: General characterization of BPO, KPO, ITO (IDC, 2013).

Overview: Software & ITin Colombia

Colombia isthe third countrywith most IT services sales in Latin America after Brazil and Mexico.

Specializedhuman talent

Leading the regionColombia has the most qualified manpower and the highest development in Latin America, ahead of countries like Argentina, Chile, and Brazil (IMD).

342,225*This is the total number of graduates from Systems Engineering and other IT-related careers in Colombia between 2001 and 2013 (12.9% of the total of new professionals).*Includes Systems Engineering, Telematics, Electronics, Telecommunications and Industrial.

+4,700 Digital talent beneficiaries

This is the total number of recipients of forgivable loans to enroll in technical, technological, graduate, and post-graduate programs with high demand in the IT sector.

Total ITacademic programs(2001-2013)

29.9%

45.9%

5%19.2%

Systems Engineeringand Related Fields

Electric Engineeringand Related Fields

Electronic EngineeringTelecommunicationsand Related Fields

Industrial Engineeringand Related Fields

* Source: Ministry of National Education of Colombia

78 CMMI-appraised companies

These companies are rated at different software maturity levels according to the CMMI program and, with the support of the Ministry of Information and Communication Technologies, 45 companies are between Level 2 and 4, and 10 companies are in CMMI Level 5, and another 66 companies are under preparation for future appraisal under the CMMI model.

15 companies holding other certifications Colombian IT companies are also certified according to quality standards like MoProSoft and MPSBR.

144 TSP/PSP-certified companiesColombia has 144 companies with Team Software Process/Personal Software Process certifications, and more than 100 will soon obtain theirs.

465 individuals certified in TSP/PSPBesides companies, 465 developers have personal certifications, with 149 of them being certified by the Software Engineering Institute (SEI), the international authority in this field.

50 IT Mark-certified companies

This is the total number of companies certified under this international IT model for MSMEs, and other 63 companies are currently undergoing the certification process.

Certifications

Colombia’s potential is spread out across its regions, bringing an additional competitive advantage over other countries that concentrate around one or two cities.

Six major regions present significant achievements for the software & IT sector, each of them featuring different strengths, advantages, and approaches.

(Source: “Strategic overview of the software sector and related services” survey, MinICT, 2013).

The Caribbean:Logistics and transportation

Antioquia:Energy

Santander:Mining and hydrocarbons

Cundinamarca:Banking and financial services

The Pacific:Agribusiness

Coffee Cultural Landscape:Agribusiness and Biotechnology

Localopportunities

Development centersThe region has field-specific development centers, like the Colombian Oil Institute (Instituto Colombiano del Petroleo), with the capacity to drive technological solutions in the sector and reach not only other regions of Colombia, but the rest of the world

First research groupCurrently, there is a research group developing specialized software for oil companies such as Ecopetrol and Halliburton.

Banking and financial servicesThis industry is a regional priority for the software & IT sector, as Bogotá hosts main offices of national and international banks.

Demanding industryHistorically, banks have spearheaded the integration of new technologies and they are the industry with the most stringent quality standards regarding software and services. Nowadays, organizations demand or prefer CMMI-certified providers and PMP-certified project managers.Mining and hydrocarbons

Historically, this is the main industry in the region, and the software & IT sector is heavily investing in it.

Antioquia

EnergyAs the main energy companies gather in this region (e.g., Empresas Publicas de Medellin, Isagen, or ISA), local software & IT sector companies focus on the energy industry.

Department PlanThe Science and Technology Plan of Medellin includes a specific item common for both the IT and energy industries.

2 clustersThe region has one ICT and one energy cluster that complement each other to develop software and technology solutions and to improve performance, competitiveness, and profitability in the sector.

Santander Cundinamarca

The Caribbean

Logistics and transportationThe Colombian Caribbean software & IT sector focuses on logistics and transportation.

Key infrastructureThe current main infrastructure developments in Colombia include the Sun Route (Ruta del Sol), the restoration of the navigable canal in the Magdalena River, and the railway corridor.

Cartagena and Barranquilla,world-class portsThanks to a focus on logistics and transportation, both capital cities are expected to become major ports in Latin America and be among the best ports in the world by 2032.

AgribusinessIn order to leverage the region’s biodiversity and develop environmentally-friendly exploitation plans, the software & IT sector in the Coffee Cultural Landscape is placing its bets on agribusiness.

2 clusters in syncPacifiTIC, a cluster promoting ICT, and another that promotes the agribusiness sector operate in the region. This promotes an environment that facilitates the creation of joint projects.

developed in Colombia include United States,Mexico, Ecuador, Chile, Peru, and Spain.

AgribusinessConsidering the region’s geographical and economic features, the software & IT sector lends its hand to agribusiness.

4 research groupsFocused on engineering, software, biotechnology/bioinformatics, and ICT. (Source: Colciencias)

Biotechnology and bioinformaticsThe main opportunities for the sector are biotechnology and bioinformatics applied in agriculture and agroindustrial activities.

2 challengesThe main challenges for the IT sector in the region are to develop agricultural information systems and improve local competitiveness.

Coffee CulturalLandscape The Pacific

Main destinations for software

Digital

The digital contents sector includes all creative activity that leverages digital data and meets

the needs of the various economic sectors.

Content

• Video games• Animation• Mobile apps• Audiovisual

• 2D and 3D animation• Mobile apps• Websites• Motion graphics• Advertising support and digital marketing

strategies, including Branding Content• Short and full-length film formats: Films and

television (series, soaps), advertisement, documentaries.

• Advergames• Augmented reality

Considering Colombia´s strenght in human talent and the high level of foreign demand, PROCOLOMBIA´s strategies for internationalization and attraction of FDI revolve around mobile apps, digital animation, audiovisual products, and video games.

Colombia’s digital contents sub-sectors include:

The main digital content products manufactured

in Colombia include:

This Sector focuses on entertainment,

advertisement, and utility marketing/tools and

education.

An exporting

sector

Over 57% of digital content companies export their products

and services.

Exports were more than 30% of these firms’ incomes.

Main export destinations are United States, Mexico, Canada,

Latin America, and Spain.

LatinAmerica

Mexico

57%

Media or formats where productions are displayed

Total of companies per sector served (domains).

Entertaiment

4825

2318

101010

88

75443222

Goverment

Education

Commerce

Other

Telecommunications

Finance

Health

Percentage of companiesper sub-sector

ClientsThe main attended industries by the digital contents

sector are entertainment, government, and education. More than 40% of the companies belong to this area.

Entertaiment

Advertising/ Marketing

33%10%

4%

Education

Others

Tools/utility

6%Films

7%Consoles

9%Other

36%Web

28%Mobile APPS

14%Television

Main competitive factors in companies

Overview: Digital contents in Colombia

TalentKnowledgeGovernment supportQualityInfrastructurePrivileged location

CaucaQuindioAtlanticoValleCaldasSantander

DepartmentCundinamarcaAntioquiaBogota D. C.Risaralda

7893

45

6

10

21

6%Films

7%Consoles

9%Other

36%Web

28%Mobile APPS

14%Television

3

8

7

6

59

10

2

4

1

According to a survey by PROCOLOMBIA and the Ministry of ICT, approximately 9 of every 10 companies in the survey were founded between 2006 and 2013. The oldest company was created in 1994.

88% are new companies

Sub-sectors and opportunitiesColombia’s digital contents sector has 4 main sub-sectors: Mobile apps, video games, digital animation, and audiovisual services.

Percentage of companiesper sub-sector

ColombianCompanies

4 5

23 24

5

10

15

20

25

1994-2000 2001-2005 2006-2010 2011-2013

Source: survey byProColombia and Ministry of ICT.

13%DigitalMarketing

6%E-books

6%Other

23%VideoGames

20%MobileApps

17%AudiovisualProducts

15%DigitalAnimation

These are pieces of software for smart phones, tablets, or other mobile devices.

There are numerous mobile app categories, such as entertainment,

education, health, news, and professional and business apps, among others.

Electronic games are highly demanded among adults, teenagers, and children, and

are available across different platforms, like PCs, consoles, mobile devices, and even

social media like Facebook.

Main destinations for mobile apps and video games developed in Colombia

Mobile apps

Video games

Source: survey byProColombia and Ministry of ICT.

13%DigitalMarketing

6%E-books

6%Other

23%VideoGames

20%MobileApps

17%AudiovisualProducts

15%DigitalAnimation

Digital animation is a technique that creates moving images through computer technology. Graphics are 2D or 3D.

Animation end products appear in movies, short films, advertising, video games, augmented reality, commercials, among others, and are created for different platforms like TV, movie theaters, websites, video game consoles, PCs, and mobile devices, among others.

Main destinations for animation developed in Colombia

Digitalanimation

The concept of “audiovisual” mixes image and sound to produce a new language or

experience. Just like digital animation, audiovisual products are used across

different platforms like movies, television, Internet, video games, and mobile devices.

Audiovisual products

Main destinations for audiovisual productions made in Colombia

France

Film Industry Act

Eligibility• Minimum spending of 1,800 current minimum

monthly wages (approximately USD $600,000 ).

• The project must be registered by the producer, and the producer must be a legal entity.

Colombia offers a cash rebate for films partially or totally produced in Colombia (long feature films, TV, movies with a broadcast of up 2 episodies, documentaries an animation). 40% for “film services” (services related to audio-visual pre-production, production or post-production including artistic and technical services) and 20% for “fiilm logistics services” (those that are provided for hotel, catering, and transportation) of the amount spent in the country.

The cash rebate applies to services provided by Colombian companies that are domiciled or residing in the contry. It will be paid resourses of the Colombian Film Fund (FFC for its Spanish acronym), a financing instrument or account created in 2012 with funds from the General Nation Budget.

For more information visit: www.locationcolombia.com

• Filmed in part or in full within the national territory.

• Foreign projects must hire cinematographic services through Colombian companies previously registered with the Ministry of Culture.

Cash rebate 40% - 20%

Countries likelyto produce

audiovisual workin Colombia

France

Office in charge of designing, adopting, and promoting ICT policies, plans, programs, and projects like Vive Digital and Digital Talent.

The breakthroughs of Colombia regarding competitiveness, productivity, entrepreneurship, IT development, and scientific and technological research were achieved thanks to the efforts by the National Government, regional offices, and private organizations. The major organizations in charge of Colombia’s development include:

SupportingOffices

Ministry of Information Technology and Communications

Office in charge of supporting entrepreneurship, tourism projects, and the production of goods, services and technology across the country in order to improve competitiveness and sustainability, as well as promoting value-added products and services.

Ministry of Trade, Industry and Tourism PROCOLOMBIA is the government

office in charge of attracting foreign investment, supporting non- traditional exports, and promoting the country as an international tourism destination. It provides its clients with comprehensive support and expert advice through its domestic and international branch offices, granting access to services and means to facilitate the design and implementation of their internationalization strategy, looking to create, develop, and consolidate business opportunities.

PROCOLOMBIA

A National Government program focused on improving Colombia’s industry and on developing companies in 20 sectors of key importance to the domestic economy, including Outsourcing & BPO and software and IT development.

Productive Transformation Program (PTP)

National Business Association of Colombia (Asociacion Nacional de Empresarios de Colombia, ANDI) is a non-profit organization that promotes and fosters the political, economic, and social principles of a free market system.

Proimagenes Colombia

This is a second-tier bank that designs and provides financial and non-financial instruments to drive competitiveness, productivity, growth and development of micro, small, medium and large Colombian enterprises that both export or trade domestically.

A non-profit private organization that groups domestic and international software firms and develops strategies to drive the software and IT sector and promote Colombia as a world-class producer

The Digital and Audiovisual Media Contents Trade Union supports animation and video game companies, and promotes information, production, and commercialization of these contents.

The Colombian Equity Funds Association (Asociacion Colombiana de Fondos de Capital, COLCAPITAL) is a private equity funds trade union that aims to support, develop, and promote industry in Colombia.

Office established in 2012 to support and promote extraordinary entrepreneurial development, that is, business initiatives that can develop quickly, cost-effectively,and continuously. To achieve this goal, the office fosters a high level of innovation and entrepreneurship.

Investment Promotion Offices(Agencias de Promocion de Inversion, APRI)

ACI Medellin • Invest in Bogota • Invest in Pereira • Invest in Manizales • Invest in Armenia • Invest in Santander InvestPacific • Probaranquilla • Invest in Cucuta • Invest in Huila • Invest in Cartagena • Invest in Choco

The Video Game Developers Association of Colombia (Asociacion de Desarrolladores de Videojuegos de Colombia, IGDA) is a non-profit organization that aims to develop and support the video game industry of Colombia.

IGDA

Fedesoft Bancoldex

iNNpulsa SOMOS ANDI

The Mixed Fund for Film Promotion (Proimagenes Colombia) is a non- profit organization that aims to consolidate and support Colombia’s film industry.

COLCAPITAL

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COLOMBIABring IT on

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