Infomemo

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Peru:Business Hub in the South American Pacific

Great potential and excellent conditions for your investment

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Peru:Hub in the South American Pacific

Located on the central western coast of South America, Peru is poised to project itself as a regional commercial and production hub.

El Callao, the main port of the country (currently undergoing an expansion process) already stands out as the most dynamic terminal port on the South American Pacific coast.

Furthermore, the development of the

The US – Peru Trade Promotion Agreement signed in 2007 and which came into force on February 1st, 2009, enhances and expands the trade preferences temporarily awarded to Peruvian exports through the Andean Trade Promotion and Drug Eradication Act (ATPDEA).

The US – Peru TPA has established new standards for goods and services circulation and investment protection. Said agreement set forth the bases for negotiation of free trade treaties with Singapore, Canada, China and the European Free Trade Association (EFTA) countries, the Early Harvest Protocol with Thailand and the strengthening of the Economic Complementation Agreement with Chile.

Based on this, Peru has been negotiating an expansion of its Economic Complementation Agreement with Mexico and Free Trade Agreements with South Korea and Japan.

Initiative for Infrastructure Integration of South America (IIRSA) will consolidate Peru as the most efficient gateway between the markets of South America, Asia and the United States.

Peru is consolidating as an attractive investment destination, projecting itself as an efficient exportation platform which, thanks to the signed Trade Agreements, offers preferential access to a market of over 2 million people.

ACTIVE INTEGRATION TO THE WORLD

pERu IN THE WORLD pERu IN LATIN AmERICA

■ 1st silver producer and 2nd producer of copper. 3rd

country with the largest gold, silver, copper and zinc reserves. ■ 1st producer of fishmeal and fish oil ■ 1st in sugar cane productivity and 8th in oil palm (potential for bio-fuel development) ■ 1st exporter of asparagus, organic coffee and organic bananas and 2nd in dry paprika. ■ Investment grade credit rating

■ Leading place in business cl imate/1 , and in government receptivity for private investment in infrastructure /2 . ■ 1st producer of gold, zinc, tin and lead ■ 2nd in the natural forests ■ 3rd largest country in South America ■ Important source of natural gas on the South American Pacific Coast

Additionally, Peru has been negotiating an Association Agreement with the European Union, a bloc that through the Andean Generalized System of Preferences sets zero tariffs for fishing, textile and agricultural products.

At Latin American level, Peru is member of the Andean Free Trade Zone, a trade bloc comprising Bolivia, Ecuador and Colombia (The Andean Community). Also, within the framework of the Latin American Integration Association (ALADI in Spanish), Peru has entered into an Economic Complementation Agreement with Mercosur.

Lastly, as of 1998 Peru is member of the Asia-Pacific Economic Cooperation (APEC) forum which presided in 2008.

Investors interested in establishing in Peru will have access to these expanded markets taking advantage of our natural resources and competitive advantages

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/1 Getulio Vargas Foundation from Brazil

/2 World Economic Forum: Benchmarking National Attractiveness for Private Investment in Infrastructure, 2007

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message fromAlan García,President of Peru

Peru offers investors a fast development economic platform based on export and investment growth, and with less risk when compared with other countries

in the region. It also offers a wide range of investment opportunities in various sectors with the diversity of natural resources and progress achieved by Peruvian and foreign entrepreneurs as support. We promote foreign investment attraction with a favorable legal framework that treats foreign investors in the same way as domestic investors and is in accordance with solid international principles.

In 2008, Peru became 41st adherent to the Organization of Economic Cooperation and Development (OECD) Declaration on International Investment and Multinational Enterprises in acknowledgement to its impressive progress in fostering political reforms and improving business climate in the country.

Peru welcomes foreign investors who seek to improve sustained wellbeing in the land and to increase world economic dynamics. Our main objective is to contribute to the consolidation of prosperity, political stability and peace in our region as well as in the international community

Photo: Government Palace

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PeruOffers solid macroeconomic results and attractive conditions for private investment

A HEALTHy AND susTAINED GROWTH

2000 2001 2002 2003 2004 2005 2006 2007

Private Investment

(Millions of US$) 27,296

8,668 8,356 8,3959,221

10,545

12,285

15,117

19,478

Source: Central Reserve Bank of Peru and Ministry of Economy.

2008 2000 2001 2002 2003 2004 2005 2006 2007

Exports

(Millions of US$) 31,529

6,955 7,026 7,7149,090

12,809

17,368

23,830

27,882


2008

200213

238262

303

336

2002 2003 2005 2006 2007 2008

PBI(Thousands of Million in New Soles)


373

* Macro-economical Multiannual Framework 2010 – 2012 estimates

388

417

449

other countriy in the region to face the current international crisis scenario.

Exports increased 13% in 2008, exceeding US$ 31.500 million after having tripled their value between 2003 and 2007. Meanwhile, private investment posted ─for third consecutive year a growth rate in excess of 20%. These are the growth divers of Peruvian economy. Construction is growing at over 16% rates annually and capital goods imports expanded 58% in the last year. Local demand has been providing an additional boost to economic growth, thus employment increases in rates close to 9%.

High tax revenues which increased in 28% in 2006, 15% in 2007 and 11% additional in 2008 public investment was benefited, enabling levels in excess of 4% of the GDP.

2004 2009* 2010* 2011*

/4 Macro-economical Multiannual Framework 2010 – 2012

Peru stands out for its excellent economic performance. In 2008, the gross domestic product posted a 9.8% growth rate, accumulating by March 2009 an unprecedented 93 consecutive month growth. These results are among the highest in the world. According to estimates, Peruvian economy will keep a 4.8% /4 annual average growth pace during 2009 – 2012, achieving 10 consecutive years of fast expansion.

These positive expectations for the coming years are based on investment announcements, public and private; in the high domestic consumption perspectives and mainly in the responsible economic policies which have enabled to accumulate international reserves, strengthen the financial system, maintain the fiscal surplus and reduce the GDP – debt ratio, which puts us in a better position than many

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RECENT RESULTS RELATED TO INVESTMENT2004 2005 2006 2007 2008 2009 *

GDP (var%) 5.1 6.8 7.7 8.9 9.8 2.2

Private Investment (var%) 8.1 12.0 20.1 23.2 25.6 -6.7

Public Investment (var%) 5.7 12.2 13.0 19.7 41.9 40.0

PCI (var%) 3.5 1.5 1.1 3.9 6.7 1.5

Average Exchange Rate (New soles per US$) 3.41 3.30 3.27 3.13 2.93 3.06

Employment in companies of 10 or more workers (var%) 3.6 5.7 8.7 8.9 8.5 n.d.

Exports (var% in US$) 40.9 35.3 36.9 17.5 13.1 -21.2

Capital goods imports (var% in US$) 19.6 29.6 35.4 41.9 57.6 n.d.

Construction GDP (var%) 4.7 8.4 14.7 16.6 16.5 5.3

Tax collection (var%) 13.6 14.3 27.8 15.3 11.0 n.d.

Source: Central Reserve Bank of Peru, Ministry of Economy and National Institute of Statistics and Informatics of Peru.

sOLID mACROECONOmIC EQuILIBRIum

INTERNATIONAL RECOGNITION

Peru’s economic solid results are framed within a clear macroeconomic equilibrium. As a result of its good economic management, Peru keeps one of the lowest inflation rates in Latin America. Its floating exchange rate is also one of the most stable in the region.

On July 2008, credi t rat ing agency Standard and Poor ’s ( S & P ) r a t e d P e r u w i t h t h e “investment grade” from “BBB-” to “BB+” (speculation grade). This upgrading adds to prior rate granted by Fitch Ratings and Canadian Dominion Bond Rating Service (DBRS).

T h e i m p r o v e m e n t i n t h e classification of the Peruvian debt responds to the reduction of the degree of “dollarization”, improved in f iscal accounts, reduction of the debt burden and an increase in international r ese rves as a r esu l t o f the remarkable trade surplus in the l as t years . In th i s way Pe ru ma in ta ins a l e v e l o f international reserves of over US$ 30 b i l l i on , an amount equ iva lent to 14 months o f i m p o r t s , 5 t i m e s p r i m a r y emission and 1.6 public foreign debt, which allows us to meet the international obligations

Furthermore, in 1999 the 3.2% fiscal deficit reversed to a surplus of more than 2 points of the GDP. It is noteworthy that Peru’s fiscal equilibrium is one of the most remarkable in the region.

-3.3

-2.5-2.3

-1.7

-1.0

-0.3

2.1

3.1

2.1

2000 2001 2002 2003 2004 2005 2006 2007 2008

Fiscal Position

(% del GDP)


2000 2001 2002 2003 2004 2005 2006 2007

Net International Reserves

(Total Amount in US$ Million) 31,196

8,180 8,6139,598 10,194

12,63114,097

17,275

27,689

Source: Central Reserve Bank of Peru.

2008

Source: Central Reserve Bank of Peru

EMBI + Peru Latin America

Aug-

05

Oct-0

5

Dec-

05

Feb-

06

Apr-06

Jun-

06

Aug-

06

Nov-

06

Jan-

07

Mar

-07

May

-07

Aug-

07

Oct-0

7

Jan-

08

Mar

-08

May

-08

Jul-0

8

Sep-

08

Nov-

08

Jan-

09

Apr-09

Jun-

09

* Estimated growth rates in the Mult-annual Macroeconomic Framework 2010 - 2012

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InfrastructureDEVELOpING COmpETITIVENEs OF pERu Exponential growth of Peru’s economy and in particular its lively international trade are creating significant demand for public use infrastructure and logistic services. It is estimated that Peru requires annual investments exceeding 5% of the GDP. That is, between 6 and 8 billion dollars for the next years. This is a great business opportunity for investors, infrastructure operators and construction companies who can participate in the sector through different modalities, such as public-private partnerships (PPPs) and private initiatives. Currently, ProInversion is in charge of transferring ─under the PPPs scheme, a portfolio of infrastructure projects that exceeds US$ 4 billion in investment requirements. These projects are referred to sectors like energy, telecommunications, irrigation works, gas pipelines, airports, ports and roads, among others.Also, the Peruvian Government prioritized the concession of 12 infrastructure projects which included: 3 river ports, 3 sea ports, 2 road projects, 2 irrigation works projects, a wastewater treatment plant and a six airport package in

the southern zone of the country. To date, ProInversion has awarded 3 projects, reaching an investment commitment of US$ 850 million.

ProInversion’s Project PortfolioRoad Projects• Amazon axis of IIRSA – Central branch• Huancayo – Huancavelica railroad• Lima Urban trainAirports• Regional Airports– Second group• Cusco International AirportPorts• San Martin Port Terminal (Pisco)• Pucallpa Port Terminal• Iquitos Port Terminal• Salaverry Port Terminal• Yurimaguas Port Terminal• Ilo Port Terminal Electricity• T.L. Tintaya – Socabaya (220 kv) and

associated sub-stations• Strengthening of the North System (sec-

ond transmission circuit of 220 kv.) • Thermal plant in Quillabamba ( 400MW)• T.L. Chilca-Marcona-Caravelí (500 Kv)• T.L. Las Malvinas - Mantaro (500Kv)• Cold Generation Reserve (600 MW,

dual thermal plants)• Natural gas Power Thermal Plant of

combined cycle of 140 MW - Cuzco Natural Gas• Distribution systems in the Ayacucho,

Junín & Ancash regions• Pipeline to Chimbote• Distribution system in the cities of

Quillabamba, Cusco, Puno, Arequipa, Moquegua and Tacna

Telecommunications• Juliaca – Pto.Maldonado rural wide band• Buenos Aires - Canchaque integrated

telecommunications service implementation

• VRAE Broadband and Camisea – Lurin Wide Band

• C Band of 1900 MHZAgriculture• Majes-Siguas II Special Project• Chavimochic Special ProjectTourism • San Lorenzo Island• Kuelap cable carsReal Estate• San Martin former military barracks• Lobitos beach

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Infrastructure ■ Regional Airports: A package of six

regional airports located in the South shall be given in concession for 25 years. This will demand an investment of over US$ 200 million. Additionally, a study is being conducted to build a new airport in Cusco (Chincheros).

■ Road network: Within the network of the Initiative for the Integration of Regional Infrastructure in South America (IIRSA), ProInversion promotes the concession of the Amazon Axis center sector (IIRSA Center) that will transversally connect the city of Lima with the main cities and production zones of the Highlands and Central Jungle.

■ Competitive ports: The National Port Authority and ProInversion promote the concession of three sea ports (Salaverry, Pisco and Ilo) and three river ports (Iquitos, Yurimaguas and Pucallpa) which connect the Peruvian Amazon region and Brazil. Investments exceeding US$300 million are expected.

■ Power Transmission: In order to strengthen the National Electric Power

pROINVERsION’s pROJECT AGENDA

Photo: Ana Cecilia Gonzales-Vigil

Grid, ProInversion has been entrusted the concession of 5 power lines, representing an investments of US$700 million approximately.

■ Irrigations: Important irrigation projects are being implemented to boost the increasing agro-industrial development and ensure the efficient use of water. ProInversion will grant in concession the works of the second stage of the Majes-Siguas Special Project, in the Arequipa region (South coast), and the third stage of Chavimochic, in the La Libertad region (Northern coast). These projects will improve 38,500 and 60,000 hectares of agricultural use, respectively.

Perurepresentsan increasing and dynamic market of PPPsin Latin America

pRIVATE INITIATIVEsTo promote participation of the private sector, the Peruvian government published in 2008 the framework for the development of Private Initiatives.

Private initiatives are a way through which the private sector can submit investment projects in assets, companies, services, infrastructure public works and public utilities.

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MiningmINING CLusTER IN LATIN AmERICAIn 2008 Peruvian mining exports exceeded US$ 18,500 million, which represented more than 50% of the country’s total exports. The ore Peru produces includes basic metals as well as precious ones. In Latin America, Peru is still a leader in gold, silver, zinc, lead, tin and tellurium production, and the second producer of copper and molybdenum. According to the portfolio projects registered by the Ministry of Energy and Mines (MEM), 25 billion dollars in investments are expected; this would ensure a sustained activity growth in the sector and could imply annual investment levels that could reach US$ 5 billion. Peru’s geological wealth, available cadastre and geological quality data, readily available supplies from top of line vendors and a legal framework that encourages private investment make Peru one of the most attractive destinations for mining investments worldwide.

HIGHLIGHTs – mINING sECTOR ■ The geological potential of Peru

is remarkable. Peru is a world class producer of gold, silver copper and zinc/5, ranking number 3 in the world.

■ The Andes Mountains are Peru’s backbone and the world’s principal source of mineral deposits.

■ The number and area of mining prospecting projects increase every year driving the Lima Stock Exchange to create a Risk Capital or Project Portfolio Segment.

■ Ample avai labi l i ty in the necessary domestic raw materials and service markets for development of mining activities, which enables Peru to consolidate itself as a key mining cluster in South America.

Only 10% of the territory with mining potential in Peru has been explored and only 6% has been developed so far.

/5 U.S. Geological Survey – USGS

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Additionally, Peru has an interesting potential in non metallic minerals, such as travertines, marble, diatomite (1° producer in South America), bentonite and borates, being one of a few countries in the world that have deposits of the latter.Also, after the launching Project Bayovar by CVRD /6 a Brazilian transnational company, Peru will produce 3.9 million tons per year of phosphoric rock, an amount that can be double in the medium term.

Practically all the world major mining companies are operating in thecountry

2000

3,220 3,2053,809

4,690

7,124

9,790

14,735

17,32818,656

2001 2002 2003 2004 2005 2006 2007 2008

Mining Exports (US$ Million)

Source: Customs and BCRP

MAIN MINING EXPORT COMPANIES IN PERU (FOB US$ Million)COMPANY 2007 2008

Southern Peru Copper CorporationCopper, molybdenum and silver

2,907 2,886

Antamina Mining CompanyCopper, molybdenum and zinc

3,013 2,845

Freeport Macmoran Cerro VerdeCopper

1,622 1,710

Newmont Yanacocha Gold

1,114 1,616

Minera Barrick MisquichilcaGold

1,123 1,379

Doe Run PeruSilver, copper, lead, zinc and others

1,279 1,236

CorminCopper, lead, zinc and other

611 1,012

AYS Copper, lead and zinc

352 541

Procesadora SudamericanaGold

460 485

MINSUR Tin

589 455

TOTAL 13,070.5 14,164.8

Source: Customs and Adex Data Trade. Made by: ProInversión.


/6 Compahia Vale do Rio Doce

NON mETALLIC pOTENTIAL

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Fishing and Aquaculture

WORLD’s LEADING FIsHING COuNTRyPeru has exceptional natural characteristics for development of fishing and aquaculture. The presence of diverse currents along the 3,080 kilometers of the Peruvian coast favor an extraordinary amount of nutrients making the Peruvian sea one of the most productive marine ecosystems in the world.

The oceanographic conditions of the Peruvian sea offer the possibility to sustainably fish close to 8 million metric tons per year in hydro-biologic products. This has enabled the exports of this sector to grow at an average rate of 13% between 2000-2008 reaching export levels in indirect human consumption products (IHC) of US$ 1.791 billion (fishmeal and fish oil) and US$ 621 million in direct human consumption products (DHC).

Peru is currently considered as a fishing power for being world leader in unloading, production and export of fishmeal; it annually produces close to 1.5 million metric tons, which almost in their entirety are destined to foreign markets. It represents roughly 35% of world production and has a 45% participation of international commerce.

In the last years, there has been dynamism in foreign and domestic investment in the sector.

In the IHC segment, investment was aimed at prime

Our geographical location facilitates Access to the Asian market, our main destination market

and super prime fishmeal processing. There were also investments in fishing fleets and plants for product developing aimed to attend the DHC (a developing segment), specifically canned and frozen products from various species, such as bonito, giant squid, tuna and anchovy, very abundant in our waters.

It is worth noting that DHC exports tripled in the last five years, exceeding US$ 600 million in 2008. This segment’s potential is in its early development stage, thus there are ample business possibilities in that field.

2000

1,131 1,1231,056 1,026

1,381

1,6261,768

1,958

2,413

2001 2002 2003 2004 2005 2006 2007 2008

Fishing Exports (Million of US$)

Source: Customs and Adex Data Trade.

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Aqua-farming in Peru finds very favorable conditions. The extensive coastline, the numerous continental bodies of water, the availability of super prime quality fishmeal and a territory holding 88% of world life zones define our country as an excellent place for aquaculture activities with the possibilities of all year round and stable production. The north coast is bristling with shrimp farms, tilapia (specially in reservoirs), and scallops, whereas the south coast waters favor farming of turbot, sole, abalone and oysters, among other species.The highlands hold many projects involving trout; and in the Amazon basin aqua-farming operations are based on native species like the paiche.

Additionally, aquaculture activities have tax incentives which include lower income tax rates, anticipated VAT recovery and a 5% for exports, value drawback.

MAIN FISHING EXPORT COMPANIES IN PERU

(Million in US$ FOB)

COMPANY 2007 2008

Tecnológica de Alimentos 317.2 317.5

Pesquera Hayduk 146.4 212.8

Corporación Pesquera Inca 69.4 200.9

Austral Group 160.8 176.4

Pesquera Diamante 103.3 158.5

Pesquera Exalmar 66.6 105.6

CFG Investments 84.8 103.3

Companía Pesquera del Pacífico Centro 51.3 54.4

Colpex International 33.8 43.5

Companía Pesquera Ribaudo 28.4 37.8

TOTAL 1, 062.0 1,464.7

Source: Customs and Adex Data Trade. Made by: ProInversión.


AQuACuLTuRE pOTENTIAL

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AgribusinessHIGH VALuE pRODuCTsPeru is today a world leader in fresh asparagus, organic coffee and organic banana exports, it is the second exporter of dry paprika; fourth of fresh mango and sixth of fresh avocado and canned artichoke. It is worthy to mention the expansion of table grapes, sweet onion, olives, pecans and diverse local species which are gaining ground in international markets.

Sector exports show a sustained growth trend. During 2000-2008, exports increased at an average yearly rate of 19%, reaching US$ 2.597 million. This is the result of important business entrepreneurial ventures (especially in the coast) that have created a greater diversification of the export offer with a growing specialization in high value crops, mainly fruits and vegetables. In Peru the farm land is estimated in 8 million hectares. In order to promote its intensive use, the Peruvian government has been executing and encouraging private investment in irrigation works in high yield zones. This is the case of projects such as Chavimochic and Olmos, both on the northern coast, which have enabled to ensure the availability of regulated irrigation in 38,500 and 40,000 hectares,

respectively, and creating a ring of agro-export clusters around them.

BIOFuELsThere is a great potential for biofuel crop development. According to the Food and Agricultural Organization (FAO), Peru holds the world’s highest yield in sugar cane (121 MT / ha.), and holds eighth place in oil palm yield (17 MT / ha.). It is important to highlight the fact that Peruvian law fosters biofuel marketing through an obligatory mix of diesel with biofuel, and gasoline with ethanol. To this end, oil palm production investments are being dynamized as well as that of the expansion of sugar cane. To meet with biofuels legislation it is necessary to install an estimated new 60,000 ha. of oil palm and 10,000 ha. of sugar cane.

2000

643 644766

848

1,126

1,339

1,794

1,967

2,597

2001 2002 2003 2004 2005 2006 2007 2008

Agroindustrial Exports(Million of US$)

Source: Customs and Adex Data Trade.

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sECTOR HIGHLIGHTs

■ 84 of the existing 108 types of climate can be found in Peru, which allows the development of a great diversity of crops at different times of the year.

■ With a dry tropical weather and close to the Equator line, Peru is bathed in vertical solar radiation, which increases crop productivity and allows reaching the optimum organoleptic characteristics.

■ Being part of the southern hemisphere is very favorable from a price perspective. It allows for off season exports to the great markets of the northern hemisphere.

■ Agro-industry in Peru has a promotional regulatory framework that includes a lower income tax rate (15% instead of 30% for other sectors), 20% annual depreciation for hydraulic infrastructure investments and irrigation Works, and prior recovery of General Sales Tax.

Seasonal supply calendar of Main Export Products

JAN FEB DECNOVOCTSEPAUGJULJUNMAYAPRMAR

Asparagus

Coffee

Mango

Grapes

Avocado

Onion

Banana

Olives

Tangerines

Tangelo Oranges

Paprika

Piquillo Pepper

Artichoke

Sugar Cane

Source: Ministry of Agriculture. Made by ProInversion.


It is estimated that Peru has 8 million hectares of farm land of which only 3 are harvested annually

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TourismpERu: TOuRIsm CApITAL OF sOuTH AmERICA

The number of tourists visiting Peru went from less than 1 million in 2002 to 1.95 million in 2008 as a result of the promotion effort and the increasing international recognition of Peruvian tourist attractions. Hard currency earned by the sector in that same period skyrocketed to US$ 2.395 million from a previous US$837 million. However, tourist arrival is still on the low end considering the vast offer and diverse destinations with tourist potential yet to be developed and exploited. Currently, 75% of receptive tourism in Peru has historical-cultural characteristics. However, Peru’s tourist attractions offer a wide range of resources, which favors the development of diverse proposals such as: nature tourism, mystic tourism, homestay tourism, adventure tourism, among others. Numerous companies are taking advantage of the great potential offered by tourism business, whether as service providers for travelers or hotel infrastructure, a segment in which investments of at least US$ 1 billion have been announced a great deal of it in 4 and 5 stars hotels and boutique hotels.

Investment opportunities include:

■ The deve lopment o f the Northern Tourist Circuit, which extends from the coast, where we can find cities and archaeological sites like Chan Chan, Túcume and the Royal tombs of Sipán museum; to the high jungle where the walled citadel of Kuelap awaits visitors; a place with the potential to turn into a destination as famous as Machu Picchu in the future.

■ The consolidation of the Southern Circuit, with the city of Cusco and the Machu Picchu citadel (chosen as one of the Seven Wonders of the Modern World); which is creating synergies with surrounding attractions as the amazing archaeological rests of Choquequirao; Colca Canyon and the Vulcanoes Valley in Arequipa; and the islands of the Uros in Titicaca Lake in Puno.

■ Tourism promotion in the Peruvian Amazon with a great potential due to an increasing interest for ecotourism in the world.

Close to 2 million tourists visited Peru in 2008, but the number is still low compared to the potential of the Country

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sECTOR HIGHLIGHTs

■ U n p a r a l l e l e d c u l t u r a l destination: Nine attractions have been selected as world heritage sites by UNESCO.There are numerous archaeological Inca and Pre-Inca places.

■ L a n d s c a p e I n t e n s i t y : natural attractions range from beaches on the Pacif ic coast to the tropical jungles of the Amazon, traversing the Andes mountain range with peaks over 6,000 meters above sea level.

■ Ecosystem major diversity: 84 of the114 existing life zones in the world.

■ Vast flora and fauna: 1,730 bird species, 330 amphibious species, 462 mammal species and 25,000 plant species (4,000 orchid varieties).

2000

997 967 9981,070

1,277

1,4871,635

1,812

1,949

2001 2002 2003 2004 2005 2006 2007 2008

Tourist arrival (Thousands of people)

Tourist arrival according to country of origin ( % variation 2007 - 2008)

Source: Mincetur.

Source: Mincetur.

Poland 55.4%

India 47.3%

Cuba 29.7%

Colombia 21.6%

Norway 20.9%

Canada 22.7%

DominicanRepublic 26.2%

Taiwan 33.9%

The Philippines 41.3%

We must highlight the fact that Peruvian gastronomy has been gaining international recognition. According to The Economist, Peruvian cuisine rates among the ten best in the world and is one more reason to visit Peru.

Photo: Xavier Conesa

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Peru offers foreign investors:

• investmentThe same treatment as local investors• sectorsunrestricted access to most economic

sectors• No performance requirements are imposed• Free capital transference• Free competition• Private Property guarantees• Freedom for acquiring shares from nationals• Free access to domestic and foreign credit• Freedom of royalty remittance• Free technological hiring• Freedom for hiring insurance abroad• Network of investment promotion and protection

agreement.

With the possibility of signing Legal Stability Agreement that guarantee…

To the investor• Stability rights for no discrimination• Stability of the Income Tax regime• Stability of the regime for free availability of

foreign currency• Stability of the regime for free transfer of profits,

dividens and royalties.

To Receiving Company• Stability of the labor hiring regime • Stability of the export promotion regimes• Stability of the Income Tax regime

Conditions of the juridical stability agreement

• Commitment to invest at least US$ 5 million in any sector of the economy; US$ 10 million in case of mining or hydrocarbons

• The term of the agreement is 10 years. In case of concessions the period shall extends to the concession period.

Outstanding conditions for Investing in PeruPeru tops a global macroprudential indicator ranking, according to World Economic Forum, this reflects the country’s financial stability. Furthermore In the World Economic Forum’s index measuring attractiveness for private investment in infrastructure in Latin America, Peru holds the first place.

Peru ranks f i rst in g lobal macroprudential indicator

ATTRACTIVE REGULATORY FRAMEWORK

Source: World Economic Forum, Benchmarking National Attractiveness for Private Investment in LA Infrastructure 2007.

Investor Protection Index

Source: World Economic Forum, The Financial Development Report 2009.

PeruChinaSwitzerlandColombiaFranceHollandMexicoArgentinaBrasilChileVenezuela

6.535.82

5.705.51

5.495.48

5.435.30

4.663.18

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Peru holds first place in government receptiveness to private investment in infrastructure Peru Colombia Chile Uruguay El Salvador Bolivia Brasil Dominican Rep.Mexico Guatemala Venezuela Argentina

5.85.65.5

4.84.64.5

4.24.24.14.0

3.23.1

4.78

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Peru has signed 32 bilateral Investment and Protection Agreements that consolidate its liberalization with countries from the Pacific basin, Europe and Latin America. Peru has improved its negotiation standards for International Investment Agreements to consolidate a stable and predictable framework for investments. The recently negotiated bilateral agreements with Colombia and Japan, and the investment chapters in the FTA with the USA, Chile, Canada, Singapore and China are based on a negative list approach, with national treatment principle applying from the establishment phase of the investment. They also have transparency clauses and no imposing performance requirements. Peru has entered into the OPIC /7 agreement that facilitates operations granting coverage to investment from USA carried out in Peru. Peru is also member of MIGA /8 and signed the International Center for Settlement of Investment Disputes –ICSID/9, as well as the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Furthermore, Peru promotes using alternative mechanism for dispute settlement, such as arbitration, even in cases involving the State.

EFFECTIVE pROTECTION TO INVEsTORs

On July 2008, Peru joined OECDs Declaration on International Investment and Multinational Enterprises and since then takes part in the Investment Committee of this entity. This committee is a place for experience interchange and initiatives to promote economic and investment development. Membership in this committee will enable Peru to efficiently expedite domestic and foreign investment in the country. ProInversion has been designated as Peru’s “Contact point” within the OECD .

pERu ENTERED OECD INVEsTmENT COmmITTEE

/7 Overseas Private Investment Corporation

/8 Multilateral Investment Guarantee Agency

/9 International Center for Settlement of Investment Disputes

–ICSID

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Private Investment Promotion Agency - Peru

Your strategic ally for your investment in PeruMore than US$ 9 billion in investment commitments

Private investment in Peru has increased from US$ 12 billion per year during 2001-2006 to close US$ 27 billion a year now. Private investment has increased over 100% in only 3 years, with similar results for exports, capital assets imports and the construction activity of great projects and industrial plants, like those related to housing, shopping centers and entertainment center, restaurants and hotels.This has occurred within the framework of the excellent conditions Peru offers, with a sustained accelerated macroeconomic increase climate and one of the most stable and “investor - friendly” policies within the OECD and APEC standards. ProInversion is the governmental agency created to promote private investment in Peru with an aim to increase competitiveness and to make viable the potential productivity of the country. Based on these objectives ProInversion has developed at least 80 processes which have allowed transferring (by sale or under the PPPs scheme) assets and services from the Peruvian State to private investors and operators, and which represent investment commitments for over US$ 9 billion. The current project portfolio under promotion process exceeds US$ 4 billion in investment requirements.

EssENTIAL AspECTs OF A WORLD uNIQuE AGENCy

■ In addition to promoting the business environment in Peru and assisting development of investment projects, ProInversion has been entrusted with carrying out the PPP’s processes and large sale of public assets.

■ Proinversion’s Board of Directors is comprised of five ministers, among which are the Minister of Economy and Ministers related to production and infrastructure sectors.

■ ProInversion has an important network of contacts that include international organizations, business organizations, private companies, domestic and foreign non governmental organizations, promotion agencies from other countries and embassies, among others.

■ The agency has two regional offices and maintains a dynamic relationship with the Regional Governments, assisting them with its expertise and transferring know-how.

Photo: PROINVERSIÓN Photo: PROINVERSIÓN Photo: PROINVERSIÓN

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ProInversion facilitates and assists in the evaluation or effective execution of totally private projects. In these cases its participation encompasses a series of services range from providing information requests from potential investors, confirming local availability of some type of resource or required service and organizing meeting agendas with other information sources or with potential suppliers and even to

sERVICE TO pOTENTIAL INVEsTORs

request from corresponding authorities information on the application of existing legal framework for specific situations.

Additionally, ProInversion takes active part in facilitating investments by identifying, eliminating or reducing impacts from bureaucratic red tape.

In this way, ProInversion works as the strategic ally of your investment in Peru.

Legal Deposit has been made at the National Library of Peru at: N° 2008-14672

proInversion headquarters in Lima is located on:Av. paseo de la República 3361, Lima 27, perú

Telephones:In Lima: (511) 6121200Arequipa: (5154) 608115piura: (5173) 310081

Write to us at E-mail: [email protected] us: www.proinversion.gob.pe

INVEsTOR suppORT CENTER : [email protected]

CONTACT INFORmATION AT pROINVERsIÓN

EXECuTIVE BOARD

Executive Bureau [email protected] and Promotion Office [email protected] Affairs Office [email protected]

CONCEssION pROJECTs, ppps AND puBLIC AssET sALEs IN:

Ports [email protected] [email protected], Hydroenergy and Irrigation [email protected] [email protected] [email protected] [email protected] [email protected] and Hydrocarbons [email protected] and Capital markets [email protected] [email protected] and Real Estate [email protected]

Private Investment Promotion Agency - Peru

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Av. Paseo de la República 3361, Lima 27, Perú.Telephones: Lima: (511) 6121200 / Arequipa: (5154)

608115 / Piura: (5173) 310081 [email protected]

www.proinversion.gob.pe

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