Colombia Presentation

Presentación Colombia - Inglés

July – 2015

Colombia

Investment Environment and Business Opportunities in

Colombia

About usPROCOLOMBIAWe promote exports, tourism, investment and industrial expansion forinternationalization. We integrate the work of the Country Brand within thestrategic planning of Colombia’s promotion worldwide.

Presence in Colombia

25

Regional Offices8

Information centers

Barranquilla, Bogotá.Bucaramanga. Cali. Cartagena.Cúcuta. Medellín. Pereira

Valledupar. Pasto. Palmira. Armenia = Universidad

Gran Colombia – Cámara de Comercio.

Villavicencio. Boyacá = Tunja - Duitama - Sogamoso.

Ibagué. Santa Marta. San Andrés. Aburrá Sur. Neiva.

Barranquilla = Cámara comercio – Universidad del

Norte. Cartagena. Medellín. Bucaramanga. Cali =

Cámara de Comercio. Pereira. Bogotá. Manizales.

Cúcuta.

PROCOLOMBIA around the world

United States. Canada. Mexico. Guatemala. Costa Rica.Caribbean. Venezuela. Brazil. Ecuador. Chile. Peru. Argentina.Spain. Germany. Portugal. United Kingdom. France. Turkey.United Arab Emirates. India. China. South Korea. Russia. Japan.Singapore. Indonesia.

26 commercial offices

Presence in 30 countries

PROCOLOMBIA Services

General Facts

Colombia is the country with the highest biodiversity per km2 It is among the 17most megadiversecountries of the planet.

55%of the population is less than 30years old. There are nine cities

with over 500 thousand people.

With an extension of1,141,000 km2 almost 3 timesthe size of California and twice the size of

Texas.

Colombia is the only

country in South America

with access to both, theAtlantic and the Pacificocean.

Times of great economic achievements

GDPIQ 2015: +2.8%

GDP 2014: +4.6%Higher than the main Latin-American

countries

Controlled Inflation 2014: 3.66%Below target inflation

Unemployment rate 2014: 9.1%

Unemployment rate 2013: 9.6%.

FDI IQ 2015: US$2,825FDI 2014: US$ 16,257

Figures in US Millions

1.02 million of oil barrel daily

3rd oil producer in the region

A competitive location with easy access to markets around the globe

Mexico City4H45M

Los Angeles 8H20M

Quito1H30M

Lima3H00M

Peru

Ecuador

México

United States

Canada

Brazil

ArgentinaChile

Spain

France

Germany

Over 920 weekly direct international flights.

More than 6,125 weekly domestic flights.

Less than 6 hours to the main capital cities in

Latin America.

More than 20 different airlinesoperating in Colombia.

New York 5H35M

Toronto6H05M

Caracas 1H20M

Santiago Chile 5H00M

Buenos Aires 6H15M

Sao Paulo 5H45M

Madrid9H40M

Paris 10H40M

Frankfurt11H15M

The second largest spanish speaking country in the world and among the 30 most populated

204.5

120.8

91.6 87.1 81.164.2

50.7 48.035.8 31.9 31.0 23.9 17.9 10.6 9.8 8.6 8.2 8.1 7.3 5.5 5.2 4.6

Population 2015*Million

Source: DANE, 2015; EIU – FMI. 2015.

Colombia is within the largest economies in the world and one of the largest non-OECD economies

165

256

280

352

389

412

424

464

492

471

481

546

668

789

1,136

2,224

3,259

3,815

New Zealand

Denmark

Israel

Norway

Peru

Hong Kong

Chile

Sweden

Belgium

Singapore

Switzerland

Vietnam

Colombia

Malaysia

Australia

Mexico

Brazil

Germany

GDP at PPP – 2015 enUS$ Billion

Note: GDP adapted to PurchasingPower Parity PPP. Projected data.

Source: FMI . 2015

A growing economy within a difficult external environment

High investment in housing and infrastructure (12% growth)Growth in private consumption (4.6%)Solid labor marketPublic expenditure

Colombian growth drivers according to OECD

*For Colombia data, corresponds to real GDP growth reported for 2014 according to DANE. For the rest of L.A data corresponds to the estimated growth for 2014 according to IMF (World Economic Outlook Update – April 2014).

4,6%*

2,4% 2,1% 1,8% 1,3%

0,5%0,1%

-4,0%

3,4%3,8%

3,0%2,7%

0,9%

-0,3%1,0%

-7,0%

2014

2015f

Gross domestic product growth 2014 and 2015f

Latin America and Caribbean (Average

growth)

Low inflation

Source: IMF (World Economic Outlook – April 2015)* The average doesn’t include Venezuela and Argentina* For Colombia data corresponds to real inflation reported for 2014 according to DANE. For the rest of L.A data corresponds to the expected inflation for 2014

2.9%3.7% 4.0% 4.2%

6.2%

69.8%

2.2%3.6% 3.1% 2.9%

8.0%

98.5%

Peru Colombia Mexico Chile Brazil Venezuela

Latin America and Caribbean (Average

growth) 2014:

3,64%

2014

2015

Inflation, percent variation2014, 2015e

Macroeconomic stability and strong economic performance in the long term

P: ProjectedSource: DANE; Banco de la República;Forecasted data source: FMI, April 2015

Inflation

GDP

Unemployment rate15.6

14.1 13.7

11.8 12.011.2 11.3

12.0 11.810.8 10.4

9.6

7.06.5

5.54.9 4.5

5.7

7.7

2.03.7

2.4 1.9

3,7

9.1 9.0 8.9 8.9 8.9

3.7 3.6 3.2 3.0 3.0

2.53.9

5.34.7

6.7 6.9

3.5

1.7

4.0

6.6

4.04.9 4.6

3.4 3.7 4.0 4.2

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

GDP Growth, Inflation and unemployment Rate 2002 –2018p (%)

Colombia has continuously decreased its poverty levels

Source: Poverty: National Administrative Department of Statistics – DANEMiddle class: The gained decade: the evolution of the middle class in Colombia between 2002 and 2011. Documento CEDE # 50. Universidad de los Andes. And RADDAR for 2013 data.

50%

31%

28%

18%

9%8%

16%

30%

2002 2003 2004 2005 2008 2009 2010 2011 2012 2013 2014

Poverty

Middle class

Extreme poverty

Percentage of people in poverty2002 – 2014

A rapidly expanding middle class

2.9%

4.1%

4.2%

4.7%

5.5%

Average real growth of consumer expenditure, 2014 – 2018

Middle class* in Colombia as a percentage of total population

16%

25%

37%

46%

2002 2012 2020 2025

24.7

6.7

11.6

19.0

Million

inhabitants

* Calculus based on a 4.6% GDP growthMiddle class: Monthly household income between 3.2MW and 13MW (MW) Minimum wage in Colombia 2014: USD 320.Source: Fedesarrollo (2013) and Euromonitor

Significant progress in terms of purchasing power Index of GDP per capita at current prices, 1999 – 2019e

1999=100

Source: IMF – World Economic Outlook, April 2015e = estimated

332.4

366.5

235.6

301.9

230.2246.9

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e 2015e 2016e 2017e 2018e 2019e

Colombia Latinamerica World

Economic growth, Investor Confidence and Security

* Figures do not include FDI registered for SabMiller adquisition of Bavaria in 2005 (USD 4,800 MM).** Perception of insecurity as a key issue affecting industrial growth in the country. Monthly Industrial Survey -ANDI. Source: National Business Association of Colombia - ANDI. Balance of Payments – Banco de la República.

00

05

10

15

20

25

30

0

1.000

2.000

3.000

4.000

5.000

6.000

20

00 -

I

20

00 -

II

20

00 -

III

20

00 -

IV

20

01 -

I

20

01 -

II

20

01 -

III

20

01 -

IV

20

02 -

I

20

02 -

II

20

02 -

III

20

02 -

IV

20

03 -

I

20

03 -

II

20

03 -

III

20

03 -

IV

20

04 -

I

20

04 -

II

20

04 -

III

20

04 -

IV

20

05 -

I

20

05 -

II

20

05 -

III

20

05 -

IV

20

06 -

I

20

06 -

II

20

06 -

III

20

06 -

IV

20

07 -

I

20

07 -

II

20

07 -

III

20

07 -

IV

20

08 -

I

20

08 -

II

20

08 -

III

20

08 -

IV

20

09 -

I

20

09 -

II

20

09 -

III

20

09 -

IV

20

10 -

I

20

10 -

II

20

10 -

III

20

10 -

IV

20

11 -

I

20

11 -

II

20

11 -

III

20

11 -

IV

20

12 -

I

20

12 -

II

20

12 -

III

20

12 -

IV

20

13 -

I

20

13 -

II

20

13 -

III

20

13 -

IV

20

14 -

I

20

14 -

II

20

14 -

III

20

14 -

IV

IED - US$ million* Insecurity perception**

Colombia, an investment-grade country with positive outlook

Source: S&P Ratings; Revista Dinero, Colombian Treasury.

Rating PerspectiveTerm

Long Term –Foreign currency



BBB

BBB

Baa2

Stable

Positive

Stable

In July 2014, Moody´s was the last rating agency in improving Colombia´s rating due to two key drivers:

1. Positive growth forecast thanks to 4G infrastructure

2. A sound fiscal management that will continue in the future

Colombia tops the region as the best country for doing business in 2015

19

Colombia, 34*

Peru, 35 *

-1Mexico, 39 *

+4

-2

Chile, 41 *

+3

Panama, 52 *

Position out of 189 economies

Change in rank 2014 – 2015**

0

Ecuador, 115 *

+3

Brasil, 120 *

Source: Doing Business Report 2015. World Bank* Position between 189 economies. ** Positive numbers indicate an improvement in the business environment

Colombia is the leader in terms of Investor Protection in the region and 10th worldwide.

Source: Doing Business 2015 – World Bank * Índex: 0-10 and 10 = the best score

7.2

6.3 6.25.8 5.8 5.8 5.6

4.8 4.74.2

Co

lom

bia

Bra

zil

Per

u

Ch

ile

Mex

ico

Arg

enti

na

Pan

ama

Uru

guay

Ecu

ado

r

El S

alva

do

r

Ranking Country

10 Colombia

35 Brazil

40 Peru

56 Chile

62 Mexico

62 Argentina

76 Panama

110 Uruguay

117 Ecuador

154 El Salvador

Investment Protection IndexDoing Business - 2015

“The OCDE investment policy review examines

Colombia's achievements in

developing an open and transparent

investment regime and its efforts to

reduce restrictions on international

investment” OECD

As an adherent to the Declaration, Colombia:

Colombia was officially invited on May 2013 to initiate the process to become full member of the OECD

Source: OECD

Colombia is implementing the roadmap to become fullmember of the OECD

Colombia participates in the OECD Investment Committee and is working forparticipating in the OECD Trade Committee among others. With the OCDEDeclaration on Multinational Enterprises :

1

2

An harmonized instrument for National Treatment is establishedfor investors and investments in OECD countries.

Several recommendations are recognized and adopted by OECDcountries for promoting responsible business conduct inmultinational enterprises.

Once Colombia become full member of the OECD, the country will have access tothe best technical advisory in development policies and shall be evaluated inaccordance with high economic and social policy standards. It represents anopportunity for reviewing and improving the public policies in Colombia looking fora better climate for business and economic development.

Low barriers to FDI

Source: OECD

0,00

0,05

0,10

0,15

0,20

0,25

0,30

0,35

0,40

0,45

Ch

ina

Mya

nm

ar

Ara

bia

Sau

dit

aIn

do

nes

iaJo

rdan

iaIn

dia

Nu

eva

Zela

nd

aM

alas

ia

Méx

ico

Tun

isia

Ru

sia

Can

adá

Isla

nd

iaK

azak

hst

anC

ore

aA

ust

ralia

Isra

el

Ucr

ania

Au

stri

aB

rasi

lM

on

golia

Per

úEs

tad

os

Un

ido

sN

oru

ega

Suiz

aK

irgu

ista

nP

olo

nia

Mar

ruec

os

Egip

toR

ein

o U

nid

oTu

rqu

íaSu

ecia

Ch

ila

Sura

fric

aJa

pó

nIt

alia

Co

sta

Ric

aEs

lova

qu

iaLa

tvia

Fran

cia

Irla

nd

aLi

tuan

iaB

élgi

caA

rgen

tin

aD

inam

arca

Gre

cia

Hu

ngr

íaC

olo

mb

iaA

lem

ania

Esp

aña

Fin

lan

dia

Esto

nia

Ho

lan

do

Rep

úb

lica

Ch

eca

Ro

man

iaEs

love

nia

Po

rtu

gal

Luxe

mb

urg

o

Promedio

Promedio OECD

FDI regulatory restrictiveness index, 2013Closed = 1; Open = 0

Two years in a row as one of the top 20 destinations for FDI

Source: UNCTAD – World Investment Report 2013 and 2014

0

43

16

-5

69

-23

19

45

42

17

32

28

52

54

64

65

48

231

74

124

14

15

16

19

21

22

23

23

23

23

30

34

54

71

62

68

72

92

103

129

Poland

France

Colombia

Finland

Russia

Switzerland

Indonesia

Mexico

Spain

Chile

Netherlands

India

Australia

Canada

Brazil

Singapore

United Kingdom

Unites States

Hong Kong, China

China

Developed economies

2014

2013

Developing and transition economies

2014

2013

Top 20 host economies in 2014 (USD billion)

Sectors different from oil & mining have a higher share within FDI inflows in Colombia

Source: Balance of Payments - Banco de la República. Share of all countries with positive cumulative investment, The information includes reinvested profits or investments in the oil sectorNote: the list of the top countries investing in Colombia does not include Panama.

Top Investing Countries in Colombia 2000– 2014

FDI Inflows. 2008 –2015US$ million

United States

• US$ 27,499 million

• 22%

United Kingdom


• 13.5%

Spain


• 8.4%

Switzerland


• 6%

Oil and mining

Other sectors

4,197

7,0958,120

9,838

2,205 1,719

5,722

7,945

8,8096,419

1,6091.107

Promedio 2008-2011 2012 2013 2014 2014 I Trim 2015 I Trim

2,8253,814

16,20915,039

9,919

16,257

During the last years, the stock of Colombia’s outward FDI keeps its positive trend

Source: Banrep, 2015Source TOP three Latin American investors: EIU, 2015

Stock of outward FDI1994 – 2014, US$ million

3.652

43,561

1994 - 2002 1994 - 2014

895

235

2014 IQ 2015 IQ

FDI Outflows2013– 2014, US$ million

Chile

US$ 11,949Mexico

US$ 7,610Colombia

US$ 3,899

Top three Latin American investors to the world (2014) USD million

United States US$ 7,583 million

17.4%

United KingdomUS$ 6,013 million

13.8%

PanamaUS$ 7,175 million

16.5%

PeruUS$ 2,892 million

6.6 %

Stock of outward FDI, 1994-2014 Main countries

Important multinationals have recently chosen Colombia as a location for new projects

The multinational Unilever, opened one of its most advanced detergent plant worldwide, through which it seeks to supply

domestic and foreign markets

Hewlett Packard, the North American multinational in information technology, opened a global service center in

Medellin.

Japanese fiber optic cable manufacturer, Furukawa, opened a production plant in Palmira, Valle del Cauca in order to take

advantage of Colombia’s FTA´s.

Mexichem invested a total of US$ 24 million to increase its production capacity in Colombia.

Hero Motors invested in a production plant in Cauca, for covering Colombian market with a possibility of reaching

Brazilian market from Colombia.

Some examples of high profile Colombian “multilatinas”

One of the largest food companies in

Colombia, Nutresa has presence in 12countries in Latam, with manufacturing

plants in 8 of them.

Recently, the company signed anagreement to acquire 100% of the shares

in Tresmontes Lucchetti S. A. in

Chile for USD 758 million.

SURA Brand is currently well known in the

insurance, pension and investment fund businessthrough its operations in Mexico, Peru, Uruguay andChile.

In 2011, the group bought ING assets in Latin

America for USD $ 3,614 million.

It is the largest financial conglomerate in Colombia.

The Group has subsidiaries in El Salvador,Panama, and Puerto Rico.

In 2012, Bancolombia acquired 100% of the

ordinary shares and 90.9% of the preferred shares of

HSBC Bank in Panama.

Some examples of high profile Colombian “multilatinas”

Carvajal SA, is a conglomerate with

presence in 15 countries and

recognized for its role in the field of

packaging, stationery, design and

advertising.

In 2013, Carvajal S.A made an

investment of $ 23.7 million for the

construction of a manufacturing and

distribution center in Peru.

Colombiana SA is one of the country's leadingcompanies in the production and marketing ofsweets, chocolate and biscuits.

The company has strengthened its internationalstrategy with the opening of 11 branchesthroughout the Americas and has a productionplant in Guatemala to supply the American market.

Tecnoquímicas is specialized in heath products andservices, personal care and household cleaning,processed foods, and agricultural and veterinaryproducts in Colombia and Latin America.

The company has direct presence in Central

America through its 3 production plants in El

Salvador.

Total trade increased fourfold in the last 10 years

24

,91

5

25

,15

1

24

,67

1

27

,00

8

33

,47

5

42

,39

5

50

,55

3 62

,88

8 77

,29

5

65

,68

3 80

,50

2

11

1,6

28

11

8,7

58

11

8,2

19

11

8,8

24

200020012002200320042005200620072008200920102011201220132014

Total International Trade (X+M)

United States

• Exports: US$ 14,106million

• Imports: US$ 18,193 million

China

• Exports: US$ 5,755 million


Mexico

Exports: US $914 million

Imports: US$ 5,273 million

India

• Exports: US $2,739 million


Exports and Imports.2000 – 2014 US$ million

Top commercial partners 2014

Source: DANE.Traditional and non traditional exports are included

During the last 10 years, Colombia increased threefold its exports

Source: DANE Traditional and Non – traditional products are included

Exports. 2000 – 2014 FOB Values US$ millions

Top export non – traditional products 2014

United States 25.7%

China10.5%

Panama6.6%

Spain6%

Fresh Flowers 2.5%

Plastic in primary forms 1.9%

Banana1.5%

13,15816,730

24,391

37,626

56,954 58,822

54,795

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Imports also have increased rapidly.

Source: DANE

Top imports by origin 2014Imports 2000 – 2014 CIF Values - US$ million

11,757

21,204

39,666

32,891

54,233

59,397

64,028

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

United States 28.7%

China18%

Mexico 8.1%

Germany3.9%

Oil & its derivatives 11.7%

Vehicles7.5%

Telecommunications 7%

Colombia has access to more than 45 countries and 1,500 million consumers through its network of Trade Agreements

Source: Colombian Ministry of Commerce, Industry and Tourism. 2015.

*These are Partial Scope Agreements (PSA)- - - The dotted line refers to member countries of The Pacific Alliance other than Colombia. – Chile, Peru and México.

Canada

United States

Mexico

Guatemala

Honduras

El Salvador

Ecuador

BrazilPeru

Argentina

Paraguay

Uruguay

Liechtenstein

Switzerland

Island Norway

European Union

Turkey

Israel

Japan

Panama

Chile

Bolivia

Costa Rica

Venezuela*

Pacific Alliance

South Korea

Cuba*

Nicaragua*

In force

Signed

In negotiation

International Investment Agreements - IIA

Source: Colombian Ministry of Commerce, Industry and Tourism. 2015.

Canada

United States

Mexico

Guatemala

Honduras

El Salvador

Peru

Switzerland

Turkey

Japan

Chile

Note: The International investment agreements (IIA) include Agreement Investment Treaties – BIT (agreement) and Free Trade Agreements – FTA- with investment section (chapter).

Spain

China

India

UnitedKingdom

Kuwait

Singapore

Azerbaijan

Qatar

Russia

France

UAE

In force

Signed

In negotiation

Costa Rica

South KoreaIsrael

Panama

PacificAlliance

Brazil

Double Taxation Agreements - DTA

Canada

Mexico

Peru

Switzerland

Japan

Chile

South KoreaSpain

India

Belgium

France

Czech Republic

PortugalUnited States

Bolivia

Ecuador

Netherlands

In force

Signed

In negotiation

United Kingdom

Source: Colombian Ministry of Commerce, Industry and Tourism and Ministry of Finances. 2015.

Germany

Colombia: A gateway to the Pacific Alliance

Source: MCIT, 2013

GDP of USD 2,123 billionThe members generate 35% of the region´s GDP

Population of 214 million Almost Brazil´s Population

47% of the regional FDI Total FDI of US$ 85,488 million (2013)

FTAs with 60 countriesAccess to benefits of markets that represent 85.7% of the World GDP

Mexico

Colombia

Peru

Chile

MILA is the first cross border initiative to integrate equities markets, without any sort of merger or global corporate integration, using only technological tools along with

Listed companies: 590

1,591,120 1,726,3001,967,814

254,403306,694

314,207583,609561,815

597,522

1,062,6821,153,248

1,313,200

2012 2013 2014

Foreigns non resident in Colombia Cruise visitors

Resident Colombians abroad Special Cross Borders

Total 20123,491,814

Total 20133,748,957

Total 2014 4,192,743

Colombia is more attractive for international travelers

Inbound tourist 2012 - 2014

Source: Migration Colombia and MinCIT. PROCOLOMBIA calculation

Main origin countries 2014

United States

• 376,410 visitors

• 19.1%

Venezuela


• 13.9%

Ecuador


• 6,4%

Brazil


• 6.3%

Sectors of opportunity – Energy: A diversified source base and a pivotal location in the Americas

Source: World Economic Forum 2014 and UPME* UPME (Colombian Planning Unit of Mines and Energy)

0,66

0,67

0,67

0,7

0,71

0,72

0,72

0,72

0,73

0,75

Latvia

Costa Rica

Spain

Colombia

Denmark

Switzerland

Sweden

France

New Zealand

Norway

The Global Energy Architecture Performance Index 2014

Colombia was ranked first in Latin America and seventh in the

world according to the “Energy Architecture Performance Index

2014”. WEF, 2014.

103 Power Generation projects in

different stages: Installed capacity of 4,974 MW*

13 power transmission projects in

different stages*

High potential in Biofuels and alternative energies

Source: Ministry of Transport

Fourth Generation of PPP’S (4g) –

Roads: US$ 24 Bill.-Intervention of 8.000 Km of Roads- 1.300 Km of new Roads- 40 new concessions

Ports: US$ 2.1 Bill. (2015-2018)

Improvement of the Magdalena river navigability:

US$ 1.3 Bill.

Airports: interventions US$ 1.8 Bill (10 projects) and constructions US$

2.3 Bill (2 projects). (2015-2018)

Step Rail Ways Concession Program (feasibility study – step 2)

US$ 4.2 Bill.

Opportunities to develop air, road, river and airport

infrastructure

Sectors of opportunity – Infrastructure: A major drive for growth

Opportunity sectors – Manufactures for the local and foreign markets

Medellín 2,441,123 hab.

Cali2,344,734 hab.

Barranquilla1,212,943 hab.

Bogotá 7,776,845 hab.

Cartagena 990,179 hab.

Cúcuta 643,666 hab.

Ibagué 512,631 hab.

Bucaramanga527,451 hab.

Soledad 599,012 hab.

Building materials, cars and parts, clothing,cosmetics and cleanness products, electricmachines, others.

Colombia has a business network of more

than 3,700 industrial companies with

export experience

More than 400.000 graduates and

specialists in engineering related areas between2000 and 2011

9 cities with more than 500 thousandcitizens

Source: MinTic and IDC

Sectors of opportunity – ServicesIT, BPO, ITO, Shared Services, Apps

Colombia is one the three major providers of IT services in the

region.

2 years in a row showing double-digit sales growth

Some foreign players in Colombia

The broadband connections increased from 2.2 to 8.8 millions

between 2010 and 2014

In the next 4 years, the broadband connections will be tripled

reaching 27 million connections

Available labor force of more than 1,200,000 professionals graduated

in fields related to financial and value added shared service

operations

A country of regions and differentiated opportunities for investors Caribbean Region

• Strategic location to access North America and the Caribbean. Just twohours and one hour away from the US and Panama, respectively.

• The 5 ports in the Caribbean move more than 55 million tons.

• 38% of the people in San Andres and Providencia are bilingual.

• It has 8 of the country's 9 submarine cables.

• There are 14 clusters in the Caribbean region with different initiatives that support health services, IT, agribusiness, logistics, and the dairy sector.

• According to the International Congress and Convention Association (ICCA), Cartagena is the second Meetings and Corporate Tourism destination in Colombia.

• Productive investments in: agribusiness, logistics and tourism services, and production of industrial supplies.

• Its business sector is comprised by more than 2,600 companies, with 322 manufacturing companies, for example:• 28 plastic container companies• 24 metalworking companies • 16 chemicals companies, etc.

Population 10.2 million

Economically Active Population

4.6 million

GDP (Billion USD) $ 55.198

Source: DANE, 2014

A country of regions and differentiated opportunities for investors

Population 26,5 Millones


5,9 Millones

GDP (Billion USD) 234.959

Source: DANE, 2014

Andean/Central Region

• It is home to more than 50% of the population in Colombia.

• It is the main industrial and services hub in the country, representing 69% and 73.3% of the domestic GDP respectively.

• It clusters 70% of the business sector, with more than 26,400 companies.

• It offers 4 international airports with more than 1,800 air cargo routes handling over 730 million tons per year.

• Medellin was acknowledged as the most innovative city in the world. There are noteworthy developments in CO2 emission reduction processes, cultural attractions, and reduced criminal rates. Urban Land Institute, 2013. (El tiempo)

• The Santander Free Trade Zone is the number one in terms of job creation among the Free Trade Zones created since 2009. NoticiaVaguardia Liberal, 2014.

• Bogota is the sixth most attractive city in Latin America to engage in business activities, according to América Economía, 2014.

•




4,1 Millones


Source: DANE, 2014

The Pacific Region

• In 2013, the 2 public service ports in the department of Valle del Cauca handled 44.5% of the foreign trade operations in Colombia by sea.

• It gathers approximately 10% of the business sector in Colombia with more than 3,100 companies.

• Valle del Cauca is the 4th department in Colombia with the highest arrivals of non-resident foreign travelers. In 2013, this figure increased by 10.3%.

• Valle del Cauca is a strategic location to address the domestic market. Also, Buenaventura is one of the closest ports to Asia in the Americas.

• Valle del Cauca gathers 29% of the central distribution logistic platforms for the main companies in the country.

• Valle del Cauca is the most cost-efficient region to invest, according to the Financial Times, 2014.




4,3 Millones


Source: DANE, 2014

The Orinoquia and the Amazon Regions

• Great opportunities regarding agribusiness, oil goods and services, hotel infrastructure, and tourism.

• In 2013, 13,955 foreign travelers arrived in these regions, showing a 29% growth compared to the previous year.

• In 2013, more than 1,979,067 acres were planted with agricultural products, showing a 6.6% increase.

• With over 3,212 acres cultivated with different clones, this is the main rubber-producing region in Colombia. MinAgricultura (Ministry of Agriculture)

• It gathers nearly 40% of the area suitable for reforestation for commercial purposes in Colombia. UPRA

Labor incentives

New employees with incomes lower than 1.5 Minimum Wages (US$ 476). Length of benefit by employee : 2 years.

New women employees above 40 years oldwith more than 1 year unemployed. Length ofbenefit by employee: 2 years.

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

New employees certified in displacementsituation, reintegration or disability. Length ofbenefit by employee: 3 years.

Discount in the income tax and supplementary contributions, and other contributions from payroll.(Do not include positions generated by mergers or replacements)

Incentives for job creation and formalization

Small firms: staff no more than 50 employees, total assets not exceeding 5,000 SMMLV.(US$ 1.3 aprox)

Application of escalation – Income Tax

0% - 2 first years25% - third year 50% - fourth year 75% - fifth year 100% - from the sixth year

Incentives for job creation and formalization

Level of education of the employee Subsidy granted to the company for each employee

High school 1 SMLMV + transportation subsidy + social benefits

Technical professional COP$ 700.000 + transportation subsidy + social benefits

Technical COP$750.000 + transportation subsidy + social benefits

University COP$900.000 + transportation subsidy + social benefits

Incentive for the first job

The subsidy is granted until one year provided that the companymaintains the labor contract, with at least the 60% of theemployee appointed for the vacant positions.

It is a subsidy granted by the Government to companies legally constituted under Colombian lawsand with at least, one year of existence, which provide employment for young people within 18 and28 years old with no previous labor experience.

Free Trade Zones: Reduced income tax and sales allowed to the local market

Caribbean Region

Andean Region

Pacific Region

Guajira

MagdalenaAtlántico

Bolívar

Valle del Cauca

Cauca

Norte de Santander

Santander

Boyacá

Cundinamarca

Huila

Antioquia

Caldas

Risaralda

Quindío

FTZ requested or approved prior to December 31, 2012. 15% Income tax.

FTZ filed after December 31, 2012. Income tax of 15% + 9% tax CREE. Since December 31, 2014, is applicable and additional CREE tariff of 5% for 2015. The additional CREE tariff increases per year until 2018

Free Trade Zone

“Special Standing Uniempresarial” (FTZ)

Permanent Free Trade Zone

Free Trade Zones: Reduced income tax and sales allowed to the local market

No import duties. VAT exemption for goods sold from Colombia to FTZ.

Benefit from international trade agreements.

Allows sales to the local market.

Free trade zones for different investor styles.

Colombia Presentation

Economy & Finance

Transcript of Colombia Presentation