INVEST IN COLOMBIA: GENERAL CONTEXT, OPPORTUNITIES BY SECTOR AND DOING BUSINESS.

JORGE IVÁN VALENCIA GONZÁLEZGESTION COMPARTIDA

Colombia

dircomercial@gestioncompartida.comCOL +57 3014108550

USA +1 3058144756

www.gestioncompartida.com

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Regional

Strategies

Infrastructure and competitive strategics

Transversal

Strategies

Pillars

Consolidation of the social law state

Good Goverment

Social MobilityCountry and green

growth

Colombia

the most

educated

Colombia

equitative and

without extreme

poverty

Colombia

in peace

Source: DNP, 2014.

3

VARIABLE 2014 2015 Notes

Population 47,66 MillionIt´s a big market and the internal demand is permanentlyincreasing.

GDP Annual Growth rate 4,20% 3,50%** Fedesarrollo Calculation. Decreased by oil internationalprices and deceleration of mining and imports sectors.

GDP per capita 4.376,4 USD

Unemployment Rate 9,10% 8,50% ** Goverment Goal, one of the lowest in the last 10 years

Inflation Rate 3,66% 4%One of the lowest and most stable of LATAM, excluding ARGand VEN

Balance of Trade-1,73 USD

Billion

Exports 2,87 USD Billion

Imports 5,49 USD BillionColombia is a big importer of goods, with the currencyvariability we can improve and revert this tendence with anational production by industry.

Foreign Direct Investment3.569 USD

Million

The most important countries which invest in Colombia areUnited States, Spain, Chile and England. This is currently ingrowth tendency in the last 10 years.

Nominal exchange rate COP/USD (end of period)

2.392,46 2.583,20 It was stable in 2013 and 2014 with an average of 2000 itincreases 35% in one month.

Minimum Salary in US Dollar 238,46 249,44

Poverty rate 29,30% 25% of decrease in the last 4 years

Extreme Poverty Rate 8,50% 32% of decrease in the last 4 years

Source: DNP, DANE, Ministerio de Hacienda and Banco de la República, 2015

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Highlight Stability >4%

Source: www.tradingeconomics.com; Peru INEI,

Colombia DANE, Belgium National Bank,

Mexico INEGI, Spain INE, Usa Bureau of

economic analysis.

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

Belgium Spain Mexico Colombia Peru Chile UnitedStates

Economic Growth GDP Annual Growth Rate (Percent change in gross domestic product)

2012

2013

2014

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Country 2014 Ranking

Spain 33

Colombia 34

Peru 35

Mexico 39

Chile 41

Belgium 42

Panamá 52

Costa Rica 83

Ecuador 115

Brazil 120

Argentina 124

Venezuela 182

Position Changes

Colombia

Panama

Costa Rica

Mexico

Peru

Venezuela

Ecuador

Chile

Brazil

Argentina

Source: Ranking Doing Business World Bank Group, 2014.

¡Colombia is in the second position

concerning getting credit, with the

leaders New Zealand and United

States!

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Proyecciones de FedesarrolloPara 2015 se espera un crecimiento del 3,5% con riesgos a la baja principalmente

por minería

Fuente: Fedesarrollo.

Variación anual del PIB

3,5

0,6

8,3

15,0

0,5

4,8

4,8

3,4

-1,1

4,3

8,9

3,0

3,7

3,5

-2 0 2 4 6 8 10 12 14 16

Agropecuario

Minería

Construcción de edificaciones

Construcción de obras civiles

Industria manufacturera

Resto de sectores

PIB

%

2015 2014

GDP - Annual Growth %

Other sectors

Industry

Construction of civil infrastructure

Construction housing and buildings

Mining

Agriculture

Source: Fedesarrollo, 2015.

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Coffee and flowers production

increased higher than 5%.

Deceleration in other cultivations

and cattle business.

CEO of SAC (Sociedad de

Agricultores de Colombia) estimated

a growth between 2,5% and 3,6%.

Fedesarrollo Forecast 3,4%.

Source: Invest in Colombia – Procolombia, 2015

8

Depreciation will influence

positively.

REFICAR (Refinería de Cartagena)

will star work in the second

semester of 2015.

Negative effect of the ecuatorian

safe guarding reverted by exclusion

of industrial goods and future

removal of measures.

Fedesarrollo Forecast 3%

Source: Invest in Colombia – Procolombia, 2015.

9

Coal production reaching 100

million tons.

Oil production decreasing 3% and

low international barrel price.

Metal minerals recovering until

2016.

Non metal minerals dynamized by

construction.

Enviromental licensing.

Conflict with communities in

producing regions.

Fedesarrollo Forecast -1,1%

Source: Invest in Colombia – Procolombia, 2015

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It will still be the engine of economy.

The best way for Colombia to be a

competitive country is to overcome

its weaknesses through

infrastructure.

Whole development and

improvement of roads by private

and public investment and

concessions.

Challenge to reduce logistics cost

for the improvement of roads and

use of seaways and rail ways.

Development and improvement of

the cargo ports and airports.

Fedesarrollo Forecast 6,9%.

Source: Invest in Colombia – Procolombia, 2015

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Group Road Lenght (Km) Total CAPEX Status

1 Girardot-Honda-Puerto Salgar 212,6 USD 459 Million Awarded

2 Mulaló-Loboguerrero 31,82 USD 596,5 Million Bidding in process

3 East Cundinamarca Perimeter Corridor 156,6 USD 565 Million Awarded

4 Cartagena-Barranquilla 146,7 USD 479,5 Million Awarded

Autopistas para la prosperidad

grupo 1

Autopista al río Magdalena 2: Remedios Puerto-Berrio

150 USD 686,5 Million Awarded

Autopista Conexión Norte: Remedios-Caucasia

145 USD 491,5 Million Awarded

Autopista Conexión Pacífico 1: Ancon Sur-Bolombolo

49,7 USD 895 Million Awarded

Autopista Conexión Pacífico 2: Bolombolo-La Primavera

97,78 USD 456 Million Awarded

Autopista Conexión Pacífico 3: La pintada-3 Puertas

142 USD 650 Million Awarded

Autopistas para la prosperidad

grupo 2

Autopista al río Magdalena 1: Pradera-Alto de dolores

161 USD 1.006 Million Awarded

Fourth Generation (4G) Road Concessions Projects - First Wave Projects

Source: National Infrastructure Agency Projects, 2014.

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TAX TYPE MAIN ASPECTS

General Income Tax RateGeneral Income Tax: 25%

Capital gains: 10%

Income Tax for Equality - CREE 9%

Value Added Tax VATGeneral Rate: 16%

Special rates: 0% - 5%

Consumption taxvehicles /telecommunications/ food

and beverages4%, 8% and 16%

GMF (debit tax) 0,40%

Industry and commerce tax (ICA)From 0.2% to 1.4%, depending on the

municipality

Real State taxFrom 0.3% to 3.3%, depending on the

municipality

Wealth taxFrom 0,2% to 0,8%, over aprox USD

450.000 of equity.

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High protection to investors, fast

growth in foreign direct investment.

FTA (Free trade agreement) with 50

countries (including United States

and European Union).

The 3 most important things in the

last year (2014) was the general

decrease of oil price, because this

affects the nation budget (Colombia

is an important exporter of oil with a

6-9% of GDP) The Currency and

the effect of the Dollar-Peso, which

increased in 35% the cost of imports

and the tax reform because will

generate a moderate level of taxes

for the foreign investor and

entrepreneurships (Wealth TAX and

CREE).

Respect for private and intellectual

property.

14

Colombia is the only South

American country with a privilege

access to two oceans, Atlantic and

Pacific.

The goverment has as a goal to

increase the port capacity in a

70% through out the spreading of

existing ports, construction an a

public services ports and dragging

of the access canals

Advance in national security and

the peace process.

Colombia has an internal demand

in development, which supports

the economic growing and it

becomes an invitation to new

investors. The local consumers

now trust more the national

market, low unemployment and

increase in the acquisition

capacity.

Colombia has one of the most

important public initiatives, for

improvement and construction of

8.170 Km of roads, estimated in

US $24.4 billion.

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Country with the highest diversity by

square meter, is consider one of the

seventeen most diverse countries in

the planet.

Boom in natural resources.