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					                    Colombia:
An Upcoming Emerging Market for International Investors
                        April 2011
About Us



      Proexport promotes International Tourism, Foreign
               Direct Investment and Exports


           TOURISM         INVESTMENT           EXPORTS
Strategy 2011: Search Opportunities

 Proexport promotes Colombia worldwide as a supplier of
 goods and services, Foreign Direct Investment destination and
 International Tourism.

 • Search Opportunities in the International Markets.

 • Conducive to diversification with innovation.

 • Contributing to Sustainable Development and employment
   generation
Colombia: Country with Investment Grade (S&P)


                                                 "The recent gains in public
                                                confidence resulting from an
                                                     improved security
                                                  environment are likely to
                                                          persist."

                                                 Colombia's economy has
                                                displayed resilience against
                                                  external shocks, and the
                                                country's favorable medium-
                                                   term growth prospects
                                                 should contain the public-
                                                     sector debt burden
                                                      Source: Standard & Poor’s – 16 March 2011
Colombia, The C in the CIVETS




       “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
                   ambitions will have to take immediate action in these markets.”
                                                                                Michael Geoghegan, CEO HSBC
                                                           April 26, 2010 in his speech to AmCham Hong Kong
The World is talking about Colombia…




                                                   “Whether on security, democratic stability, or
                                                   vibrancy, the strength of Colombia’s
                                                   democracy is there for all to see”
                                                        Eric Farnsworth, vice president of the Council of the
                                                                                                  Americas.
                                                   “Colombia has increasingly become a bright
                                                   star in the Latin American constellation,”
                                                            Walter Molano, Emerging-market analyst of BCP
“While everybody’s been focused on the super
                                                                                               Securities
hot Brazilian Economy to the south, Colombia’s
quietly gone and become amazingly investable”      “Yet against all odds Colombia has become the
                                                   country to watch in the hemisphere.”
                    Jim Cramer - 8 February 2011                                          Newsweek, July 2010.
Enhanced economic performance has come
hand in hand with improved security



                          Colombian Economy Growth Vs Security Perception,
                      8                  2001 – 2010 (%)                                   World    20
                                                                                           Crisis
     Economy Growth




                      6




                                                                                                        Security Perception
                                                                                                    15
                      4
                                                                                                    10
                      2
                                                                                                    5
                      0

                 -2                                                                                 0



                                    Economy Growth                      Security Problem
                                   Source: ANDI (Asociación Nacional de Industriales)
Colombian Economy: Bigger than Chile, Ireland, Malaysia,
Egypt, Singapore and New Zealand



                                     GDP
                          US$ Thousand Millions – 2010*




                            * Forecast (23 March 2011)
                            Source: EIU (Economist Intelligence Unit)
The 28th largest world economy when adjusted by PPP
and one of the largest non-OECD




                       Note: GDP fixed to prices under Power Purchasing Parity
                       * Forecast (23 March 2011)
                       Source EIU (Economist Intelligence Unit)
The third largest population in Latin America and the second
largest Spanish speaking population in the world




                               Source: EIU (Economist Intelligence Unit)
                               *Forecast (23 March 2011)
GDP Per-Capita has doubled since 2004




                                        140%




                           Source: EIU (Economist Intelligence Unit)
                           *Forecast (23 March 2011)
GDP per- capita is reaching US$10,000 when adjusted by PPP


                             Colombian GDP per Capita (PPP)
                                   2000 – 2010* US$


   10.000
                                                        57%                                          9.180
                                                                                       8.747 8.800
    9.000                                                                      8.456
                                                                    7.851
    8.000                                               7.205
                                             6.820
    7.000                     6.359
            5.851 6.016 6.175
    6.000
    5.000
    4.000
            2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

                         GDP at purchasing power parity (PPP), divided by population
                                        * Forecast (23 March 2011)
                                 Source: EIU (Economist Intelligence Unit)
Annual FDI net inflows have multiplied by four


                                                                                                                                      Main investors in Colombia
                                                                                                                                    Stock 2000 – September 2010**




        Variation 2008 - 2009: -32%
        Variation 2009 – 2010: -5%
        *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) (Central Bank)
Exports have tripled in nine years



                                                                                                 Colombia Exports by Country
                                                                                                            2010
                                                                                                         United States
                                                                                                         • US$ 16.879 M
                                                                                                         • Share 42,5%
                                                                                                         China
                                                                                                         • US$ 1.967 M
                                                                                                         • Share 4,9%
                                                                                                         Ecuador
                                                                                                         • US$ 1,825 M
                                                                                                         • Share 4,5%
                                                                                                         Netherlands
                                                                                                         • US$ 1.617 M
     Variation 2008 - 2009: -12,7%
                                                                                                         • Share 4,1%
     Variation 2009 - 2010: 21,2%
     Source: DANE (Departamento Nacional de Estadísticas) ( National Department of Statistics)
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*



                                                                                 International visitors in Colombia
                                                                                        by Country – 2010*
                                                                                                 United States
                                                                                                 • 345.158 Visitors
                                                                                                 • Share 23,4%

                                                                                                 Venezuela
                                                                                                 • 197.173 Visitors
                                                                                                 • Share 13,4%


                                                                                                 Ecuador
                                                                                                 • 122.076 Visitors
                                                                                                 • Share 8,3%

                                                                                                 Argentina
                                                                                                 • 83.674 Visitors
      Variation 2008–2009: 17,2% (includes cruise)                                               • Share 5,7%
      Variation 2009 - 2010: 10,3% (includes cruise)
      *It doesn't Include cruise
      **Includes cruise
      Source: DAS (Departamento Administrativo de Seguridad) (National Department of Security)
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
    5
  4.5   4.32

    4            3.81
                            3.61      3.58       3.57
                                                           3.43      3.37
  3.5                                                                           3.28      3.18   3.13   3.04   3.00   2.96   2.85
    3
  2.5
    2
  1.5
    1
  0.5
    0




         Source: Ernest and Young – The Globalization Index 2010, Ranking among 60 countries.
The Highest level of international reserves and the lowest
level of inflation on record


                                         International Reserves Colombia,                                        28.445
    30.000
                                              US$ Millions 2000-2010
    20.000                                                                                      24.041 25.365
                                                                  14.957 15.440     20.955
                                              10.921    13.540
                         10.245    10.844
                9.006
    10.000

           0
                2000      2001      2002      2003      2004      2005    2006     2007      2008     2009        2010


                                              Inflation Rate Colombia,
   10,0%       8,8%                               2000- March 2011
                       7,7%                                                       7,7%
    8,0%                       7,0% 6,5%
                                                5,5%                     5,7%
    6,0%                                                 4,9% 4,5%
    4,0%                                                                                           3,2%
                                                                                                          1,8%     1,8%
    2,0%
                                                                                         2,0%
    0,0%
               2000    2001    2002    2003     2004    2005     2006    2007    2008    2009 2.010       Mar.    Mar.
                                                                                                          2010    2011

                Source: Banco de la República (Colombian Central Bank)
Declining spreads on Sovereign Debt
-Lower than Latin America as a region-




   Emerging Markets Bond Index Plus (EMBI+), basis point spread over US treasuries.
   Source: JPMorgan - Central Bank of Peru
MILA (Integrated Latin-American Market): Merging of the Chilean,
Peruvian and Colombian Stock Exchange Markets



                              MILA will become the biggest stock exchange
                                      market by number of issuers


                                                       46 dealing over
                                                      US$ 1 million daily
                                Over 500
                               Companies             58 dealing between
                                                    US$500 thousand and
                                                        US$ 1 million


                                 It is expected a foreign investment growth,
                                   multiplying dealings by 5 in forthcoming
                                                     years
Colombia: the third most “Business Friendly” country in Latin
America and top reformer in the region


          Doing Business Ranking Variation, 2007-2011*
                      (Change in positions)
                                                                           Latin-
                                                                          America      Country
                                                                          Ranking
                                                                           Mexico        35
                                                                            Peru         36
                                                                          Colombia       39
                                                                            Chile        43
                                                                           Panama        72
                                                                          Argentina      115
                                                                          Costa Rica     125
                                                                            Brazil       127
                                                                           Ecuador       130
                                                                          Venezuela      172




            Source: Top Reformers Report, World Bank
            *Positive figures show improvements in business environment
Ranked among the top countries on investor protection



           Strength of Investor Protection, 2011
                                                           World
                                                                     Country
                                                          Ranking
                                                             5      Colombia
                                                            20      Peru
                                                            28      Chile
                                                            44      Mexico
                                                            74      Brazil
                                                            109     Argentina
                                                            109     Panama
                                                            179     Venezuela


                                       Rating

              Ranking made up by 183 countries
              Source: Doing Business, 2011 (World Bank)
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                       SIGNED                   IN NEGOTIATION            FUTURE
 • CAN (Peru, Ecuador y        • United Stated                • South Korea        • Japan
   Bolivia)                    • EFTA (Iceland,               • Panama             • Australia
 • MERCOSUR (Argentina,          Liechtenstein, Norway and    • Turkey             • New Zealand
   Paraguay, Uruguay and         Switzerland)                                      • Costa Rica
   Brazil)                     • Canada                                            • Dominican Republic
 • Chile                       • European Union (Signature)                        • Gulf Community
 • G2-Mexico
 • North Triangle (Honduras,
   Guatemala y El Salvador)
In 2011, Colombia will be negotiating 18 international
investment agreements (IIA)




         In Force
         Signed
         In Negotiation

                IN FORCE                                        SIGNED                                   IN NEGOTIATION
  • Peru (Agreement)                             • China (Agreement)                            • Kuwait and Japan
  • Mexico (Agreement)                           • Peru (Deeper agreement)
  • Spain (Agreement)                            • India (Agreement)
  • Switzerland (Agreement)                      • United Kingdom (Agreement)
                                                 • South Korea (Agreement)
  • CAN (Ecuador and Bolivia) (Chapter)
                                                 • EFTA (Iceland, Liechtenstein and
  • Chile (Chapter)                                Norway) (Chapter)
  • North Triangle (Honduras, Guatemala          • United States (Chapter)
    and El Salvador) (Chapter)                   • Canada (Chapter)
 Note: The International investment agreements (IIA) include Agreement Investment Treaties (BIT) (agreement) and Free Trade
 Agreements (FTA) with investment section (chapter).
In 2011, Colombia will be negotiating 16 double taxation
agreements (DTA)




       In Force
       Signed
       In Negotiation


          IN FORCE                       SIGNED                 IN NEGOTIATION
 • CAN – Peru, Ecuador and   •   Switzerland               • United States, Germany,
   Bolivia                   •   Canada                      Czech Republic, Holland,
 • Spain                     •   Mexico                      Belgium, India, Japan, France
 • Chile                     •   South Korea
                             •   Portugal
Productive Transformation Program: A Public - Private
Partnership to strengthen and build “world class sectors”


                                                                                  Encourage and improve
              Promote development of
                                                                                 production of competitive
                 NEW & EMERGING
                                                                                   products and services
                    SECTORS
                                                                                  ESTABLISHED SECTORS
   Business Process
   Outsourcing and
   Off shoring
   BPO&O



                                  Health Services
                                  Exportation




                                                  Promote value added,
                                               innovation & development in
                                                  AGRIBUSINESS SECTOR

                  Chocolate                Palm and vegetable   Shrimp Farming         Cattle
                  Confectionery            Oil
Colombia is a Country of
Regions and Opportunities for Investment




       Automotive
          Tourism
            BPO
Cosmetics and Personal
      Hygiene
 Agribusiness/Biofuels
Automotive Opportunities




                           This industry represents 6.2% of GDP. Colombia is
                           the fifth largest producer of vehicles in the region,
                           with great potential for growth.

                           • Opportunities in Automotive: Colombia features
                           trade agreements covering vehicles.

                           •Opportunities in Bus and Truck Assembly:
                           Colombia’s largest cities are developing Mass
                           Transit Systems.

                           • Opportunities in Auto Part Manufacturing:
                           Assemblers in Colombia require suppliers for both
                           Original Equipment and replacement parts.
Tourism Opportunities


                        Multiple opportunities in recreational an business
                        tourism.

                        • Opportunities for recreational tourism:
                             “Colombia: Undiscovered Destination”
                            Multi-destination country:
                             Andean, Caribbean, Pacific and Amazon.
                            Wide variety of tourism: Natural Tourism,
                            History and Culture, Sun and Beach.

                        • Opportunities for business tourism (MICE):
                             Seven cities with dynamic business activity
                            and several more centers of growth.
                            More than 2.500 multinational operating in
                            Colombia.
ICT – BPO&O Opportunities


                            • Opportunities for creating shared services centers
                            for Latam.

                            • Opportunities for outsourcing companies that
                            provide BPO, KPO, ESO, F&A, HRO and R&D
                            services.

                            • Opportunities for developing and integrating IT
                            applications and services.

                            • Opportunities for providing telecommunication
                            services to a growing markets, and strengthening
                            telecommunication infrastructure.

                            • Opportunities for film studies and developing
                            content for the film, TV and media industries.
Cosmetics and Personal Hygiene Opportunities



                                  Colombian cosmetics industry is one of the region’s
                                  largest and fastest growing with significant
                                  competitive advantages.

                                  • Opportunities for Production:
                                       Cosmetics production sector has doubled in
                                       the last 7 years, exceeding Latam average.

                                  • Opportunities for Creating Logistics Hub:
                                       Outstanding geographic location
                                       Excellent logistical capacity.

                                  • Opportunities for Establishing Research and
                                  Development Centers: Colombia has the greatest
                                  biodiversity per Km2 of any country in the world.
Agribusiness Opportunities


                             Colombia has competitive advantages in agroindustrial
                             sector as land availability, ample water resources and
                             high export potential for this products.

                             • Opportunities in Biofuels:
                                  Colombia has 7.3 million hectares suitable for
                                  biofuel development.
                                  High levels of productivity for Sugarcane and
                                  Palm Oil.

                             • Opportunities in Reforestation: Colombia has certain
                             species with high yields and short biological cycles.

                             • Opportunities in the Dairy Sector:
                                   Fourth largest milk producer in Latam.
                                   Third largest dairy market in Latam.
The most competitive FTZ’s in Latin America: 15% income tax
and allows sales to the local market


      15% income tax rate.
      No import duties.
      VAT exemption for goods sold from Colombia to FTZ
      Benefit from international trade agreements. (Except
         Peru)

      Allow sales to the local market.
                                                 Permanent (PFTZ)
              Free Trade Zones

                                                  Single-Company
                                                      (SCFTZ)
New single company FTZ in seven regions of the country



                                             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
                                               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
                                             Ex/rate COP 2000 = US$ 1
Not all the municipalities in the regions
bordering Venezuela are included. Refer to
Decree 2696 of 2010.
89 Free Trade Zones


                                                                         Free Trade Zone Approved
                                    Single - Company Free                      Investment commitments
                                    Trade Zone
                                    Permanent Free Trade                Total Investment (USD
                                    Zone                                                                           6.658
                                                                        Million)
                                                                        Direct Jobs                               46.721
                                                                        Indirect Jobs                             95.001


                                                                              Investment executed so far

                                                                        Total Investment (USD
                                                                                                                   2.317
                                                                        Million)
                                                                        Direct Jobs                                5.509
                                                                        Indirects Jobs                            26.052

  Source: Ministry of Trade, Industry and Tourism. The investment amounts required to obtain the Free Trade Zone status are
  calculated in Minimum Monthly Legal Wages (M.M.L.W). This information is presented in dollars 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 well as the exchange rate are subject to variations.
                                                                                                                              34
Colombia offers Legal Stability Contracts to guarantee
investment projects




                  Investments over US$2.01 million* (7500 M.M.L.W.)**
Conditions        Investor pays 1% premium based on the amount of the
                  investment. 0.5% in unproductive periods


    Period       From  3                to       20        years
                 maximum

  Signed          67 legal stability contracts approved, 66 legal
contracts         stability 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
Other incentives by sector: Income tax exemption for
up to 20 years
Formalization and Employment Generation


                              New employees under twenty eight (28) years old. Length of benefit by
                                                    employee: 2 years.


   Discount in the
   income tax and              New employees certified in displacement situation, reintegration or
   supplementary                      disability. Length of benefit by employee: 3 years.
 contributions, and
 other contributions
     from payroll
  (Do not include positions     New women employees above 40 years old with more than 1 year
   generated by mergers or           unemployed. Length of benefit by employee: 2 years.
       replacements)




                              New employees with incomes lower than 1.5 SMMLV. Length of benefit
                                                    by employee : 2 years.
PROEXPORT’s services to Investors



  • Information tailor made to your needs

  • Facilitation of contacts with the public and private sector

  • Setting up of agendas to Colombia

  • Services for investors already established in Colombia

  • Free of charge and confidential

  • Investment specialists in New York, London, Beijing and Sao Paulo.
     Thank you!




www.proexport.com.co

				
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