opportunities colombia
DESCRIPTION
A brief presentation on the opportunities for foreign companies in Colombia.TRANSCRIPT
COLOMBIA PRESENTATIONFebruary 2011
¿Where are we coming from?
¿What are we doing?
Agenda
¿What are we doing?
¿Where are we going next?
Colombia’s Leadership�
First in�• Emeralds Production
• Variety of Palms (244 Species)
• Production of Bamboo in America
• The Biggest Coal Open Mine to Export of the World
• The Most Important Gold Museum
Second in�• Banana Production
• Varity of Butterfly (300 Families and
Colombia Ranks
• The Most Important Gold Museum
• 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
• Varity of Butterfly (300 Families and 14.000 Species)
• Flower Production
• Blackberry Production
• Exporter of Flowers
Outstanding performance of performance of the Colombian
economy
3,1%
4,6% 4,7%
5,7%
6,8%7,5%
4,1%4%
5%
6%
7%
8%
Colombia and world GDP growth (%)2000 – September 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 January18th, 2011
3,1%2,2% 2,5% 2,5%
0,4% 0,1%
-3%
-2%
-1%
0%
1%
2%
3%
4%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2009
(III Q)
2010
(III Q)
Colombia World
10
12
14
16
18
4
5
6
7
8
Eco
no
my
Gro
wth
Colombian Economy Growth Vs, Security Problem Perception, 2001 – 2010 (%)
Security
Problem
While the Colombian economy is growing, the security problem is reducing
World Crisis
0
2
4
6
8
10
-1
0
1
2
3
4
Eco
no
my
Gro
wth
Economy Growth Security Problem
Security
Problem
Source: ANDI (Asociación Nacional de Industriales)
1.573
8751.000
1.200
1.400
1.600
1.800
Nominal GDP (US$ Billion),2009
According to the Nominal GDP, Colombia is the 36th
greatest economy in the world and 5th in Latin America
875
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
1.000
Source: EIU (Economist Intelligence Unit)
4.608
5.3165.052
5.980
5.000
6.000
7.000
Colombian GDP per head, 2000 – 2010* (US$)
In the last 10 years the Colombian GDP per head doubled
140%
2.482 2.403 2.356 2.2392.722
3.354 3.677
4.6085.052
1.000
2.000
3.000
4.000
5.000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: EIU (Economist Intelligence Unit)*Forecast
United States
• Stock US$ 11,919 M• Share 30.5%
Great Britain
Main investors in ColombiaStock 2000 – September 2010**
Annual FDI net inflows have multiplied by four
10.252
6.656
10.564
7.2016.324 6.524
6.000
8.000
10.000
12.000
FDI, 2000 – September 2010US$ Millions
Variation 2008 - 2009: -32%Variation Sep 2009 – Sep 2010: 3,2%*FDI by Exchange Balance**Participation by country positive accumulated inflows, it doesn´t includes investment or reinvestment of profits in the oil sector, Value 2009: US$ 36,364 million (so far there is not data for countries at first semester of the year)Source: Banco de la República (Balance of Payments)
Great Britain
• Stock US$ 4,658 M• Share 11.9%
Spain
• Stock US$ 2,820 M• Share 7.2%
Mexico
• Stock US$ 2,213 M• Share 5,7%
2.436
1.720
0
2.000
4.000
6.000
United States
• US$ 12,879 M• Share 39.2%
Venezuela
Colombian exports by country, 2009
In nine years Colombian exports have tripled
37.626
32.852
29.663
35.974
25.000
30.000
35.000
40.000
Exportaciones, 2000 – Noviembre 2010US$ Millones
Venezuela
• US$ 4,050 M• Share 12.3%
Netherlands
• US$ 1,345 M• Share 4.1%
Ecuador
• US$ 1,257 M• Share 3.8%
Variation 2008-2009: -12,7%Variation Jan-Nov 2009 Vs Jan-Nov 2010: 21,3% Source: DANE (Departamento Nacional de Estadísticas)
13.158
0
5.000
10.000
15.000
20.000
United States
• 345.158 Visitors• Share 23,4%
Venezuela
1.700
1.876
1.200
1.600
2.000
Tourism, 2000 – 2010Thousand of Visitors**
In nine years international visitors in Colombia doubled. While tourism in the world increased 6,7%, in Colombia this trend increased 8,9% in 2010*
Internationals visitors in Colombia by country 2010*
• 197.173 Visitors• Share 13,4%
Ecuador
• 122.076 Visitors• Share 8,3%
Argentina
• 83.674 Visitors• Share 5,7%
732668
0
400
800
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Variation 2008–2009: 17,2% (includes cruise)Variation 2009 - 2010: 10,3% (includes cruise)*It doesn't Include cruise
**Includes cruiseSource: DAS (Departamento Administrativo de Seguridad)
In terms of Globalization, Colombia is ranked 3rd among Latin America countries, performing better than world economies such as Japan, Brazil, Russia and Indonesia.
Globalization Index, 2010
4,32
3,813,61 3,58 3,57
3,43 3,37 3,28 3,18 3,13 3,04 3,00 2,96 2,85
2,5
3
3,5
4
4,5
5
Source: Ernest and Young – The Globalization Index 2010, Ranking among 60 countries.
0
0,5
1
1,5
2
2,5
Colombia, one of the best Emerging Markets Bond Index Plus (EMBI+) in Latin America
800
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. Source: JPMorgan - Central Bank of Peru
0
200
400
600
800
3Ja
n0
0
25
Ap
r00
15
Au
g0
0
6D
ec0
0
2A
pr0
1
24
Jul0
1
14
No
v0
1
11
Ma
r02
1Ju
l02
21
Oct
02
12
Fe
b0
3
5Ju
n0
3
25
Se
p0
3
16
Jan
04
10
Ma
y0
4
27
Au
g0
4
17
De
c04
7A
pr0
5
26
Jul0
5
15
No
v0
5
1S
ep
06
26
De
c06
19
Ap
r07
9A
ug
07
3D
ec0
7
28
Ma
r08
18
Jul0
8
7N
ov
08
5M
ar0
9
24
Jun
09
14
Oct
09
5Fe
b1
0
28
Ma
y1
0
17
Se
p1
0
Latin America Colombia
Violence levels are decreasing decreasing surprisingly
Homicides per 100.000 Inhabitants, 2000- Nov 2010
Homicide rate per 100 thousand inhabitants reduced to a half
65,8
52,8
44,6
39,3 36,7
33,0 33,0 35,4
31,2
40
50
60
70
Source: Ministry of Defense of Colombia
33,0 33,0 31,2
0
10
20
30
2002 2003 2004 2005 2006 2007 2008 2009 nov-10
Colombia: Second country as a People and Private Property Protector in Latin-America
WorldRanking
Country
32 Chile
47 Colombia
3,15
3,32
4,53
Perú
Brasil
Colombia
Chile
Personal Safety and Private Property Protection, 2010
Fuente: IMD World Competitiveness, 2010.
50 Brasil
51 Perú
56 Argentina
57 México
58 Venezuela
0,22
1,68
1,96
3,15
0,00 1,00 2,00 3,00 4,00 5,00 6,00
Venezuela
México
Argentina
Perú
The best thing about about
Colombia is its human capital
We have the second most qualified labor available in the region
WorldRanking
Country
28 Chile
35 Colombia5,11
5,30
5,66
Argentina
Colombia
Chile
Avaliability of Qualified Labor, 2010
Source: IMD World Competitiveness, 2010. Ranking among 57 countries.
38 Argentina
49 México
55 Brasil
56 Perú
57 Venezuela2,89
3,33
3,78
4,60
5,11
0,00 1,00 2,00 3,00 4,00 5,00 6,00
Venezuela
Perú
Brasil
México
Argentina
Colombia is the country with the best quality education in science and mathematics in the region
2,95
3,35
3,56
Venezuela
Argentina
Colombia
High quality education in Science and Mathematics in Latin America, 2010
WorldRanking
Country
39 Colombia
44 Argentina
Source: IMD World Competitiveness, 20010. Ranking among 57 countries. World Economic Forum, Executive Opinion Survey 2008, 2009
2,23
2,58
2,71
2,91
0 1 2 3 4
Perú
México
Brasil
Chile 48 Venezuela
49 Chile
51 Brasil
53 México
54 Perú
According to IMD, Colombia has the best Labor Market Flexibility Index in Latin America
21,0
18,0
10,0
Argentina
Chile
Colombia
Labor Market Flexibility Index in Latin America, 2010
WorldRanking
Country
9 Colombia
20 Chile
69,0
46,0
41,0
39,0
0,00 10,00 20,00 30,00 40,00 50,00 60,00 70,00 80,00
Venezuela
Brasil
México
Perú22 Argentina
40 Perú
42 México
48 Brasil
58 Venezuela
Source: IMD World Competitiveness, 2010. Ranking among 57 countries.
Privileged Geographical
Position
4:45 Ciudad De México
Frec. 14 / Week
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 São Paulo
Frec. 14 / Week
5:45 São PauloFrec. 12 / Week
6:15 Buenos Aires
Frec. 7 / Week
5:00 SantiagoFrec. 7 / Week
Source: Proexport
3:00 LimaFrec. 30 / Week
Since 2000, international flights to Colombia increased
120%
A Country that protects the
environment, in addition,
environmental laws environmental laws in Colombia does not
affect the competitiveness of
enterprises
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 and the 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
“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 brilliant future. Any company with global
ambitions will have to take immediate action in
these markets.“
Michael Geoghegan, CEO HSBCApril 26, 2010 in his speech to AmCham Hong Kong
¿Where are we coming from?
¿What are we doing?
Agenda
¿What are we doing?
¿Where are we going next?
Positioning Colombia as an export platform: 11 free trade agreements (FTA) with 48 countries allowing preferential access to over 1,500 million consumers
In Force
Signed
In Negotiation
Future
IN FORCE
•CAN (Peru, Ecuador y Bolivia)•MERCOSUR (Argentina, Paraguay, Uruguay and Brazil)•Chile•G2-Mexico•North Triangle (Honduras, Guatemala y El Salvador)
SIGNED
•United Stated•EFTA (Iceland, Liechtenstein, Norway and Switzerland)•Canada•European Union (Signature)
IN NEGOTIATION
•South Korea•Panama
FUTURE
•Japan•Australia•New Zealand•Turkey•Costa Rica•Dominican Republic•Gulf Community
In 2011, Colombia will be negotiating 18 international investment agreements (IIA)
IN FORCE
•Peru (Agreement)
•Mexico (Agreement)
•Spain (Agreement)
•Switzerland (Agreement)
•CAN (Ecuador and Bolivia) (Chapter)
•Chile (Chapter)
•North Triangle (Honduras, Guatemala and El Salvador) (Chapter)
SIGNED
•China (Agreement)•Peru (Deeper agreement)• India (Agreement)•United Kingdom (Agreement)•South Korea (Agreement)•EFTA (Iceland, Liechtenstein and Norway) (Chapter)•United States (Chapter)•Canada (Chapter)
IN NEGOTIATION
•Kuwait and Japan
Note: The International investment agreements (IIA) include Agreement Investment Treaties (BIT) (agreement) and Free Trade Agreements (FTA)
with investment section (chapter).
In Force
Signed
In Negotiation
In 2011, Colombia will be negotiating 16 double taxation agreements (DTA)
IN FORCE• CAN – Peru, Ecuador and Bolivia• Spain • Chile
SIGNED• Switzerland• Canada• Mexico• South Korea• Portugal
IN NEGOTIATION• United States, Germany, Czech Republic, Holland, Belgium, India, Japan, France
In Force
Signed
In Negotiation
Doing Business Ranking Variation, 2007-2011*(Change in positions)
Colombia: the third most “Business Friendly” country in Latin America and top reformer in the region, according to the World Bank (2011)
Latin-America Ranking
Country
Mexico 35
Perú 36
Colombia 39
Chile 43
Source: Top Reformers Report, World Bank*Positive figures show improvements in business environment
Chile 43
Panama 72
Argentina 115
Costa Rica 125
Brazil127
Ecuador 130
Venezuela 172
Mexico 35
Perú 36
World Ranking
Country
5 Colombia
20 Peru
28 Chile
Strength of Investor Protection, 2011
Ranked among the top countries on investor protection
Ranking made up by 183 countriesSource: Doing Business, 2011 (World Bank)
28 Chile
44 Mexico
74 Brazil
109 Argentina
109 Panama
179 Venezuela
Rating
�15% income tax rate.
�No import duties.
�VAT exemption for goods sold from Colombia to FTZ
�Benefit from international trade agreements. (Except
The most competitive FTZ’s in Latin America: 15% income tax and allows sales to the local market
�Benefit from international trade agreements. (Except
Peru)
�Allow sales to the local market.
Free Trade Zones
Single-Company(SCFTZ)
Permanent (PFTZ)
Characteristics
Boyacá, Cesar, La Guajira, Norte de Santander,
Arauca, Guainía and Vichada.
• Equivalent requirements between the different types
of Single Company Free Trade Zones.
• 2 year limitation for the execution of 100% of the
New single company FTZ in seven regions of the country
• 2 year limitation for the execution of 100% of the
investment and employment commitments.
• Application must be filed before the Tax Authorities
(DIAN) prior to December 31st, 2011.
Requirements
Investment (approx.) and Direct Jobs
USD 1,34 Million 50
Not all the municipalities in the regionsbordering Venezuela are included. Refer toDecree 2696 of 2010.
Ex/rate COP 2000 = US$ 1
Free Trade Zone Approved
Single - Company Free Trade ZonePermanent Free Trade Zone
Investment commitments
Total Investment (USD Million)
6.426
Direct Jobs 46.122
Indirects Jobs 94.251
84 Free Trade Zones
35
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$1 = COP 2,000exchange rate. For 2011, the M.M.L.W is COP 535.600. The M.M.L.W, as well as the exchange rate are subject to variations.
Indirects Jobs 94.251
Investment executed so far
Total Investment (USD Million)
2.315
Direct Jobs 5.509
Indirects Jobs 25.271
Requirements for industrial firms of goods and services
Total Assets(US$)
Investment Ammount
(US$ Million)
Minimum direct jobsgeneration
0 – 134.000 0 0
PERMANENT FREE TRADE ZONES (PFTZ)Several firms installed in a FTZ already established
0 – 134.000 0 0
134.001 – 1,34 Million 0 20
1,34 Million – 8,03 Million
1,34 30
More than 8,03 Million 3,08 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$1 = COP 2,000 exchange rate. For 2011, the M.M.L.W is COP 535.600. The M.M.L.W, as wellas the exchange rate are subject to variations.
FTZ typeInvestment (US$
Million)AND direct jobs
Goods (1) 40,17 150
Services (2)
2,68 – 12,32 500
12,32 – 24,64 350
SINGLE-COMPANY FREE TRADE ZONES (SCFTZ): A single firm can get all FTZ advantages by installing itself in any place in Colombia
(1) Each additional investment of US$ 6.16 million reduces 15 jobs of requirement. In any case, there must be generated at least 50 jobs.
(2) For health services companies, 50% of jobs may be vinculated, not direct.(3) 50 indirect jobs can replace 20 direct jobs.
Services (2) 12,32 – 24,64 350
US$ 24,64 or more 150
Services – Ports (3) 40,17 20
Exchange rate: US$ 1 = COP 2,000. Minimum Monthly Legal Wages (M.M.L.W.) for 2011 is COP 535.600. M.M.L.W. and Exchange Rate are subject to changes.
Back
SCFTZ SCFTZ AgribusinessAgribusiness
FTZ typeInvestment (US$
Million)Or related jobs to the production
Agribusiness 20,09 500
Subsectors which are eligible for FTZ status under agribusiness requirements
SINGLE-COMPANY FREE TRADE ZONES (SCFTZ): A single firm can get all FTZ advantages by installing itself in any place in Colombia
Subsectors which are eligible for FTZ status under agribusiness requirements
Biofuels
Meat 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 classified previously”.
Exchange rate: US$ 1 = COP 2,000. Minimum Monthly Legal Wages (M.M.L.W.) for 2011 is COP 535.600. M.M.L.W. and Exchange Rate are subject to changes.
Back
Investments over US$2.01 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 Contracts to guarantee investment projects
Period From 3 to 20 yearsmaximum
Signed contracts
67 legal stability contracts approved, 66 legalstability contracts signed
*The investment requirement is calculated with an exchange rate of COP $ 2000 = 1 USD. It is responsibility of the investor to calculate the investment requirement at the moment of submitting the application for the Legal Stability Agreement.** One minimum monthly legal wages – M.M.L.W. equivalent COP$ 535.600 or US$ 267,8
� 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.
• Exemption for 30 years for companies that build or restyle 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 forest plantations, sawmilling and timber plantations.ForestryForestry
Other incentives by sector: Income tax exemption for up to 20 years
• Publishing of books, magazines, booklets or collections of scientific or cultural characteristics are exempt until 2013.
EditorialEditorial
• Exemption for 10 years for products manufactured in Colombia with high scientific and technological research content, starting from 2003.c
New medicinal New medicinal products and softwareproducts and software
• Exemption for 15 years for sale (by the generators) of electricity based on wind resources, biomass or agricultural waste.
Renewable Renewable energyenergy
• Exemption for 15 years starting from 2003 to provide services in slabs and boats with net weight below 25 tons.
River transportRiver transport
¿Where are we coming from?
Agenda
¿What are we doing?
¿Where are we going next?
Encourage and improve
production of competitive
products and services
ESTABLISHED SECTORS
Promote development of
NEW & EMERGING
SECTORS
Business Process
Outsourcing and
Off shoring
BPO&O
Productive Transformation Program: A Public - Private Partnership to strengthen and build “world class sectors”
Promote value added,
innovation & development in
AGRIBUSINESS SECTOR
Cocoa and Chocolate
Confectionery
Palm and vegetable
Oil
Shrimp Farming Cattle
HUMAN RESOURCE DEVELOPMENT
buscar
LEGAL AFFAIRS & REGULATION
Pertinence, improved skills, readiness and retention in the industry. Bilingualism and promotion of university-industry partnerships...
Adapt the regulatory framework to suit the industry’s needs.
The business plans include initiatives
along four key topics...
INDUSTRY AFFAIRS
INFRAESTRUCTURE
industry’s needs.
Put in place strategies to: attract foreign investment ,strengthen sector representation, bolster management capabilities .
Ensuring adequate infrastructure is in place to suit industry’s needs.
ACTION PLAN
184 Initiatives
Promote Colombia’s international image through three business lines
Proexport as a Foreign Promotion Agency
The Colombian Government creates favorable conditions and offers the best support for investors. Proexport occupied position 16 in the list of the best investment promotion agencies of the world and provides the following services to foreign investors:
� Tailor made information requests.
� Contacts with key entities in the public and private sectors
WORLD CLASS SERVICES FOR INVESTORS
� Set up of site visits
� Aftercare services for investors already established in Colombia
� Assessment and improvement of business climate
� Confidential and free of charge. All information provided is handled with the utmost discretion.
Proexport has Investment PromotionTeams in 20 cities around the World
www.investincolombia.com.co
Thank You!!!