Why Invest in Argentina
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Transcript of Why Invest in Argentina
Why invest in
Argentina?
Naturally Talented
to Meet Global
Market Needs
October 2009
2
Solid foundations for sustainable growth and profitability
Highly skilled, innovative and entrepreneurial labor force
Abundance of natural resources, biodiversity and environmental sustainability
Access to a large regional market and a springboard to the world
Diversified economy to meet global market needs
Rich cultural heritage and remarkable quality of life
Modern infrastructure and quality connectivity
Public sector supportive of investment
Argentina’s Investment Development Agency
Why invest in Argentina?Argentina offers investors:
2
A winning formula to succeed in your business
3Argentina’s Investment Development Agency
Argentina at a glance(2008)
3
Area: 2,780 km²Population: 40.6 millionGDP: US$326.8 billionGDP per capita PPP: US$14,413FDI: US$8.9 billionExports: US$82.1 billionImports: US$67.5 billion
Area: 2,780 km²Population: 40.6 millionGDP: US$326.8 billionGDP per capita PPP: US$14,413FDI: US$8.9 billionExports: US$82.1 billionImports: US$67.5 billion
4
Solid foundations for sustainable growth and profitability
5Argentina’s Investment Development Agency 5
Source: ProsperAr based on INDEC
10.7
8.9 8.9
4.2
5.35.7
4.0
13.0
9.38.7
5.7
4.7
7.5
3.3
9.0
7.36.8
5.0
3.22.5
1.3
China India Argentina Brazil Chile Colombia Mexico
Average 2003-2006 2007 2008
Fastest growing
economy in
Latin America
Selected Economies: GDP growth 2003-2008
Vigorous ExpansionSix consecutive years of rapid economic growth at an accumulated rate of 8.5% per year
6Argentina’s Investment Development Agency
Chile
Colombia
Ecuador
Peru
Mexico
Bolivia
BrazilSouth America
Uruguay
Paraguay
-5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0
C h ile
2010
2009
6
Balanced Accounts
Argentina maintained twin surpluses for six consecutive years and is the only
country in the region expected to maintain them in 2009 and 2010
Source: ProsperAr based on INDEC and “Regional Economic Outlook 2009”, IMF
Current and Fiscal Account Surpluses(as a percentage of GDP)
Argentina
IMF's Current Account Projections 2009-2010(as a percentage of GDP)
0
1
2
3
4
5
6
7
2003
2004
2005
2006
2007
2008
IQ 2
009
Current account balance
Primary fiscal balance
7
A Resilient EconomyLower debt levels and record-high international reserve accumulation contribute to a
more stable and predictable economy, even in the current global context
7
Source: ProsperAr based on the Ministry of Economy and the Argentine Central Bank
18 1819
2427
2826
19
10
14
20
28
32
46 46 46
De
c-9
4
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
Au
g-0
9
Public Sector External Debt (% of GDP)
International Reserves(in billions of US$)
Argentina’s Investment Development Agency
147140
126
7164
56
45
9083
76
3629 27
20
2002 2003 2004 2005 2006 2007 2008
Public Sector Total Debt
Public Sector External Debt
8
Dynamic Investment ProcessIn 2008, the highest investment rate in constant prices in the last 30 years was achieved
8
0
5
10
15
20
25
30
1993199419951996199719981999200020012002200320042005200620072008
GFCF/GDP current prices GFCF/GDP constant prices
Source: ProsperAr based on INDEC
✓ Sustained growth in the
investment rate (2003-2008)
✓ Fundamental pillar for a
sustainable economy and an
increasing production capacity
Gross Fixed Capital Formation as % of GDP(in current and constant prices)
Argentina’s Investment Development Agency
9Argentina’s Investment Development Agency 9
Global Crisis, Global Impact
The financial and economic crisis has impacted developing economies through two main
channels: financial and commercial
Financial channel:
• Global credit crunch: Lack of liquidity
and expensive financing
• Risk aversion and “flight to quality”
behavior
• Growing uncertainty leading to lower
investment levels and postponement of
investment projects
Commercial channel:
• Lower global trade flows negatively
affecting exports
• Reductions in prices, particularly
commodities
• Global FDI fell 14.2% in 2008 and
44% during the IQ2009
• Cross-border M&A sales in
developing countries fell 34.7% during
the IQ2009
• Global trade volumes are expected
to contract by 12.2% in 2009
• Emerging economies are expected to
suffer a 6.5% fall in their exports
Source: ProsperAr based on UNCTAD and World Bank
10
-47.650.7Argentina
-44.0-14.2World
% Change IT2009 vs.
IT2008
% Change 2008 vs.
2007
10
Impact of the Global Crisis on Foreign Direct Investment
In line with the rest of the world, FDI in Argentina contracted for the first time in the IVT 2008
and again in the IT 2009 and the IIT 2009
Source: ProsperAr based on UNCTAD and CEPAL.
Foreign Direct Investment(% Change, IQ 2009)
Argentina’s Investment Development Agency
-21% -21%
-39%-42%
-46%-51% -52%
-56% -56%-61%
-77%
-91%
Mal
aysi
a
Thai
land
Bra
zil
U.S
.
Chi
le
Rus
sia
Arg
enti
na
Mex
ico
Ind
ia
Sin
gapo
re
Jap
an
Ko
rea
✓During the IIT2009, FDI experienced a 88.1% reduction from the same period in 2008.
✓Hence, FDI fell by 63.6% during the IS2009.
11 11
Impact of the Global Crisis on Gross Fixed Capital Formation
Investment in Argentina also contracted for the first time in the IVT 2008 and again in the IT
2009 and the IIT 2009
Source: ProsperAr based on UNCTAD and CEPAL.
Gross Fixed Capital Formation(% Change, IQ 2009)
-10.7-14.2Argentina
% Change IIT2009 vs.
IIT2008
% Change IT2009 vs.
IT2008
India 6.4
S. Korea -6.2
Chile -9.3
Malaysia -10.8
Mexico -11.8
Brazil -14
Argentina -14.2
US -14.5
Singapore -14.8
Japan -14.9
Thailand -15.8
Russia -16.3
Turkey -29.7
China 28.6
-30 -20 -10 0 10 20 30
Argentina’s Investment Development Agency
� During the IIT2009, GFCF fell by
10.7% from the same period in 2008.
� Hence, investment suffered a
12.3% year-on-hear reduction in the
IS2009.
12Argentina’s Investment Development Agency
Chile-38.2%
Canada (*)-37.6%
EU (27)-31.7%
U.S.(*)-24.9%
Brazil-22.8%
China-21.7%
Argentina-21.3%
-45%
-40%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
12
Impact of the Global Crisis on Foreign Trade
Argentina recorded a smaller decline in exports compared with the major economies of
the region and the world
Sources: ProsperAr based on INDEC, SECEX , Central Bank of Chile, National Bureau of Statistics of China, Ministry of Development, Brazil’s Secretariat of Foreign Trade,
Australian Bureau of Statistics, Centre of International Economy and IMF
✓ The decline in exports of manufactured goods is also lower in Argentina than in the major economies
Exports (% Change, I Semester 2009)
*Figures from EU (27) and Canada correspond to the first five months.
13Argentina’s Investment Development Agency
High Levels of ProfitabilityFirms reached high levels of profitability in historic terms during the 2004-2008 period
13
6.1
1.2
6.0
10.9
9.9 9.7
8.9
1992-2000
2001-2003
2004
2005
2006
2007
2008
Source: ProsperAr based on Balance of Payments data and Survey of Big Companies INDEC
9.5
11.911.5
14.613.8
2003
2004
2005
2006
2007
Net margin of the top 500 companies in
Argentina(as a % of sales)
FDI return on assets(profits as a % of FDI Stock)
14 14
Rapid Increase in FDI
FDI recorded great dynamism over the past six years and showcased in 2008, for the third
consecutive year, a higher average than the 90s (net of privatizations)
Source: ProsperAr based on INDEC
Foreign Direct Investment (FDI)
(in millions of US$)
2,087 1,8583,499
4,496
8,268 8,899
5,372
2,141 2,149 1,652
4,1255,265 5,537
6,473
9,753
6,8596,369
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
FDI net of privatizations Total FDI
23,988
US$5,300
Argentina’s Investment Development Agency
15 15
Greenfield Investment Destination
In 2008, Argentina was the 3rd greenfield investment destination in Latin America and 2nd
in South America, identified as one of the most attractive markets with highest
international potential
Source: FDI Intelligence and British Ministry of Commerce and Investment
*Ranking excludes the BRIC countries. The world report is elaborated by the
British Ministry of Commerce and Investment based on the opinion and
perspective of more than 560 management executives of international
companies.
Main FDI Greenfield Investment Destinations
(2008)
Country # of projectsMexico 346Brazil 245Argentina 115Colombia 73Chile 64Other 263
Argentina’s Investment Development Agency
Saudi Arabia10
Argentina9
South Africa8
Poland7
Singapore6
Indonesia5
Ukraine4
United Arab Emirates3
Mexico2
Vietnam1
Country
Markets with high potential growth for investors identified by the British Ministry of Commerce and
Investment*
16Argentina’s Investment Development Agency
Recent Investments
High profitability reassures big players to increase their commitment and attracts more leading companies to invest in Argentina
16
17
Highly skilled, innovative and entrepreneurial labor force
18Argentina’s Investment Development Agency
Human CapitalHighly skilled and talented labor force
18
✓Ranked 1st in Guggenheim research fellowships, receiving the largest number of scholarships in Latin America (2009)
✓Over 85,000 graduates from higher education programs and 6,100 postgraduates per year
✓ 106 universities throughout the country
✓Ranked 4th in the Global Entrepreneurship Monitor (2008)
✓Ranked 5th worldwide in terms of quantity of ‘Think Tanks’ and nominated as a Regional Think Tank Hub by the University of Pennsylvania (2008)
82
66
65
65
51
43
42
30
24
24
24
21
9
5
0 10 20 30 40 50 60 70 80 90
United States
Spain
Italy
Argentina
Europe & Central Asia
Chile
Uruguay
Latin America & Caribbean
World
Middle East
Brazil
East Asia & P
South of Asia
Sub-Saharan Africa
Source: ProsperAr based on World Bank, GEM 2008 and University Yearbook 2009, Ministry of Education
Gross Entry Ratio to Tertiary Education(% of new entrants)
19Argentina’s Investment Development Agency
Science, Talent and CreativityA leader in the region
19
Country 1990-2005
United States 4,605
Spain 2,195
Argentina 720
Chile 444
Mexico 268
Brazil 344
Colombia 109
✓Advertising Industry:
One of the three best places in the
world to look for ideas according to
the Gunn Report 2008
✓Research & Development:
Highest number of patents per
million inhabitants in Latin America
registered with the U.S. Patent and
Trademark Office over the past
whole 45 years
Source: Human Development Report 2007/08, United Nations, United States Patent and Trademark Office
Researchers (per million inhabitants)
20
Bernardo HoussayNobel Prize in Physiology or
Medicine 1947
For his discovery of the course of the
catalytic conversion of glycogen.
Luis F. LeloirNobel Prize in Chemistry 1970
For his discovery of sugar
nucleotides and their role in the
biosynthesis of carbohydrates.
César MilsteinNobel Prize in Physiology or Medicine
1984For his theories concerning the specificity in
development and control of the immune
system and the discovery of the principle for
production of monoclonal antibodies.
Argentina’s Investment Development Agency
A Tradition of Research Excellence Number one in Latin America and forth in the developing world in terms of science
related Nobel Prizes
Recent awards received by Argentine scientistsand researchers
✓An Argentine scholar was the only Latin American to receive one of the 18 foreign associate positions granted by the National Academy of Sciences of the United States in 2008.
✓The Maxime Becher medal, granted every 3 years by the US Mathematics Society, was awarded to an Argentine mathematician in 2008.
✓Argentines received the highest number of Guggenheim Foundation awards in Latin America; 13 out of the 36 awarded in 2008.
✓Argentina received the L´Oréal-Unesco for Women in Science Award for the Latin American region for two consecutive years (2007-2008).
✓Two Argentine physicists were honored by the Nobel Physics Laureate George Smoot in 2006.
20
Source: ProsperAr based on CONICET, The Nobel Prize Organization and Argentine press releases.
21Argentina’s Investment Development Agency
High Returns on Knowledge ProducedArgentine scientists are the most prolific in terms of knowledge
production in the region (as measured by science publications)
21
22.3
18.516.5 16.3
Argentina Brazil Mexico Chile
4.84.6
1.6
0.2
Argentina Chile Brazil Mexico
Science Publications per 100 Full Time
Researchers (Full-time or equivalent - 2007 or last available year)
Science Publications per Million Dollar
Spent in R&D (2007 or last available year)
Source: ProsperAr based on the Argentine Center of Information on Science and Technology (CAICYT).
22Argentina’s Investment Development Agency
Outstanding Performance, Today and TomorrowThe most innovative country in South America
22
1
2
20
39
42
46
47
48
49
52
62
67
69
Japan
Switzerland
Ireland
Russia
Argentina
China
Chile
Mexico
Brazil
India
Colombia
Peru
Ecuador
Innovation Prospects Ranking 2009-2013
(Position: highest=1, lowest=82)
2004/2008
Ranked as the most innovative country in
South America and one of the best in the developing world
Source: ProsperAr based on Innovation Index, Economist Intelligence
23Argentina’s Investment Development Agency
Rising Capacities and Greater CapabilitiesRemarkable labor productivity gains
23
100
110
120
130
140
2003 2004 2005 2006 2007 2008
Source: ProsperAr based on INDEC
+30%
Labor Productivity (Index 2003=100)
24
EntrepreneurshipArgentina ranks fourth on the Global Entrepreneurship Monitor (2008)
24
Global Entrepreneurship Monitor Ranking(2008)
Source: ProsperAr based on GEM 2008
05
101520253035404550
Bo
livia
Co
lom
bia
Per
u
Arg
entin
a
Ecu
ado
r
Do
min
ican
Rep
ub
lic
Ind
ia
Bra
zil
An
go
la
Ch
ile
Eg
ypt
Uru
gu
ay
Mex
ico
Ser
bia
�Large group of talented and
motivated entrepreneurs
�Business schools have
international prestige in the field
Argentina’s Investment Development Agency
25
Abundance of natural resources, biodiversity and environmental sustainability
26Argentina’s Investment Development Agency
Size, Abundance and VarietyTo enjoy and develop
26
✓8th largest country in the world, 2nd
in Latin America
✓9th largest agricultural area in the
world
✓32 million Ha of forests
✓4,500 km of exploitable mining
resources
✓4,700 km along the Atlantic Coast
with rich fisheries
✓3rd largest fresh water reservoir in
the world, the Guaraní Aquifer
(shared with Brazil, Paraguay and
Uruguay)Source: ProsperAr based on United Nations Food and Agriculture Organization
(FAO), CIA World Factbook, and other sources
27Argentina’s Investment Development Agency
Diverse Energy SourcesOutstanding natural resources to fuel growth
27
✓Vast oil and gas resources with
exploration opportunities
✓Hydraulic energy generates 38% of
the total electricity
✓Growing wind and solar energy
production
✓Three nuclear power generation
plants
✓One of the top five biofuel producers
worldwide
✓ Incentives for renewable energy
production under Law 26,190 (2006)Source: ProsperAr based on United Nations Food and Agriculture Organization
(FAO), CIA World Factbook, and other sources
28Argentina’s Investment Development Agency
From High Peaks to Blue LakesVaried terrenes
28
✓Exuberant beauty and extraordinary
flora and fauna can be found
throughout Argentina.
✓Visitors are captivated by the deep
blue lakes, high mountain peaks,
large salt pans, paleontological sites,
fertile valleys, snow-covered
volcanoes, subtropical rain forests,
crystal-like glaciers, white deserts,
long rivers, boundless flat lands and
vibrant cities.
29Argentina’s Investment Development Agency
From the Warm North to the Cold SouthMultiple climates
29
✓The North: warm; from subtropical
with a wet season to tropical
without a wet season; including
tropical highland.
✓The Center: moderate
temperatures; influenced by the
ocean, moderately arid; the Pampas
grassy plains.
✓The West and South Center:
Patagonian cold temperatures; arid
mountains and plains.
✓The South: cold, arid and windy;
humid in the far South; high
mountain snow.
30Argentina’s Investment Development Agency
Eco-Intelligent GrowthCommitted to environmental sustainability
30
174,000 km² of protected
areas
(6.4% of national
territory)
1
2
35
38
39
46
47
97
105
120
Switzerland
Sweden
Brazil
Argentina
United States
Australia
Mexico
South Africa
China
India
Source: ProsperAr based on Yale Environmental Sustainability Index and World Development Indicators, WB
Yale Environmental Performance Index
(Position: highest=1, lowest=149)
Access to a large regional market and a springboard to the world
32Argentina’s Investment Development Agency
An Internationally Recognized ChoiceOne of the fastest growing FDI destinations in the world
32
1.7
4.1
5.3 5.5
6.5
9.7
2003 2004 2005 2006 2007 2008
Growing FDI (in billions of US$)
Source: ProsperAr based on International Accounts, INDEC and UNCTAD
2nd South American FDI destination for greenfield
projects (2008)
2008
World -14.2 %
Developed economies -29.2 %
Developing economies 17.3 %
Latin America &
Caribbean 13.2%
Argentina 50.7 %
FDI Inflows Growth
33Argentina’s Investment Development Agency
An Economy Integrated to the Region and the WorldLeading multinational companies operate in Argentina, many of them with a long-term
vision and commitment
33
Top 50 Transnational Corporations with a presence in Argentina
Nearly 2,000 TNCs(half of the Fortune 100). Many
TNCs operating with along-standing tradition and
long-term vision
34Argentina’s Investment Development Agency 34
CLISA
Top 50 Local Multinationals
Going GlobalLeading Argentine companies operating internationally
35Argentina’s Investment Development Agency
Open EconomyRising trade flows
35
34
40
47
55
66
82
20
29
36
43
56
70
2003 2004 2005 2006 2007 2008
Exports Imports
Exports ↑
19% (average annual growth rate
2003-2008)
Imports ↑
29%
(average annual growth rate
2003-2008)
Source: ProsperAr based on INDEC
Rising Exports and Imports of Goods and Services
(in billions of US$)
36Argentina’s Investment Development Agency
A Global OpportunityA gateway to Latin America’s largest markets and a springboard to the world
36
Main trade agreements:
Trade negotiations underway include an agreement with
the South African Customs Union (SACU), countries of the
Gulf Cooperation Council and Morocco; a more
comprehensive agreement with the European Union (EU);
a trade preference agreement with India; and a free trade
agreement with Israel (in process).
14,41413,295
10,326
4,778
Argentina Uruguay Brazil Paraguay
Source: ProsperAr based on IMF
MERCOSUR: Customs Union
Members: Argentina, Brazil,
Uruguay, Paraguay
Associates: Bolivia, Chile, Colombia,
Ecuador, Peru, Venezuela
Mercosur member countries GDP per capita(PPP dollars 2008)
GDP: US$1.9 trillion
Population: 241 million
inhabitants
37Argentina’s Investment Development Agency
Linked UpInternational synergies for global integration
37
WORLD TRADE ORGANIZATION: Founding member
G-20: Argentina and Brazil are the only two members representing South America
Investment Protection and Promotion Treaties: 59 bilateral investment treaties
ALADI ( Latin American Integration Association) provides the institutional
framework for regional integration, promoting the creation of an area of economic
preferences in the region, with the ultimate goal of establishing a common Latin
American market.
Members: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay,
Peru, Uruguay, Venezuela and Cuba.
38Argentina’s Investment Development Agency
Open SocietyAuspicious environment for business to thrive
38
✓ Open Society
✓ Commitment to democracy and freedom
✓ Free of religious, ethnic and armed conflicts
Map of Freedom 2008
Argentina is a free country with a high degree
of political and civil freedom, according to the
findings of the Freedom House 2008 survey.
The survey concluded that more than half of
the world does not enjoy full freedom.
FREE
PARTLY FREE
NOT FREE
Source: Freedom House
39
Diversified economy to meet global market needs
40Argentina’s Investment Development Agency
Producing VarietyWidely diversified economy
40
GDP by Sector(% of GDP, 2008)
Source: ProsperAr based on INDEC
Real estate &
business services
11%
Wholesale &
retail trade
12%
Education, health &
community services
13%
Manufacturing industry
21%
Agriculture, livestock,
forestry & fishing
10%Transport, storage &
communications
8%
Government
6%
Construction
6%
Financial intermediation
5%
Mining
4%
Hotels & restaurants
3%Electricity, gas & water
1%
41Argentina’s Investment Development Agency
Investment Opportunities Across Sectors in Argentina
41
Agro-Industry, Wine & Biofuels
Manufactured Goods with
Added Value or Design
Biotechnology
Pharmaceuticals & Health
Professional Value-Added
Services
Creative Industries
Software & Information Technology
Mining & Forestry
Tourism
42Argentina’s Investment Development Agency
Agro IndustryLeading global producer & exporter of food commodities and products
42
24.5
18.2
73.3
32.0
50.2
20.5
23.3
14.7
11.6
12.0
9.9
1.3
Natural honey
Pears
Lemon juice, concentrated
Safflower seeds
Soybean oil
Grape juice
Sunflower oil
Lemons and limes
Soybeans
Safflower oil
Powdered whole milk
Sunflower seeds
Argentine Share in Global Exports and Global Position(export % and position)
Source: ProsperAr based on FAO data
43Argentina’s Investment Development Agency
Agro IndustryHigh agricultural efficiency and productivity
43
Soybean Production Yield(Hectograms/Hectare, 2007)
Wheat Production Yield(Hectograms/Hectare, 2007)
Source: ProsperAr based on FAO
29,71128,133 28,066
24,36923,010
Argentin
a
Brazil
U.S.
Austra
lia
Canada
28,27027,046
23,220 22,199
10,562Arg
entina
U.S.
Canada
Brazil
Austra
lia
44Argentina’s Investment Development Agency
Agro IndustryBooming exports & innovation
44
✓16% of the total expenditure on innovative
activities is for agro industry
✓8% of the manufacturing’s R&D investments
are agro-industry related
✓55 biotech firms are working to further
develop the country’s Food & Beverage
industry
Source: ProsperAr based on INDEC
R&D Applied to the Value Chain
Rising Manufactured Exports of
Agricultural Origin(in billions of US$)
1112
1415
21
28
2003
2004
2005
2006
2007
2008
45Argentina’s Investment Development Agency
Wine IndustryUnique terroir, tradition and freedom to innovate
45
Source: National Vitiviniculture Institute (INV)
0
100
200
300
400
500
600
700
2001
2002
2003
2004
2005
2006
2007
2008
mil
lio
ns
of
US
$
0
50
100
150
200
250
300
350
400
450
mil
lio
ns
of
lite
rs
Millions of liters US$ millions
Wine Exports(in millions of US$ and in million of liters) 5th largest
producer in the world
7th largest domestic market
7th largest exporter in the world
Fastest growing exporter in the world (22.3% per year, 2002-2008)
46Argentina’s Investment Development Agency
Wine IndustryQuality-Value advantage positions Argentine wines globally
46
Traditional and High Potential Markets Growing Sophistication and Value Added
237%
44%
35%
24%
25%
Icon
Ultra
Premium
Super
Premium
Premium
Popular
Premium
Export Growth by Price Segment compound annual growth rate
(2002-2008)
Glass-Bottled Wine Exports by Country Destination (2008)
Source: Wine of Argentina and Wine Area
United States
29.0%
Others
15.4%
Canada
10.4%
U.K.
9.3%Netherlands
7.1%
Brazil
7.7%
Latin America
5.2%
Other Europe
4.6%
Asiatic Countries
3.8%Nordic Countries
3.7%Mexico
2.5%Russia
1.2%Russia
1.2%
47Argentina’s Investment Development Agency
BiofuelsA green powerhouse: competitive production of renewable & clean energy
47
14.3%
12.0%
11.6%
11.1%
7.2%
U.S.
Germany
France
Brazil
Argentina
Projection of Top Five Biodiesel Producers in 2010(share in total production %)
Source: World Ethanol and Biofuels Report by the Consulting Company F.O. Lichts
Investment Incentives Biofuels: accelerated
depreciation of income tax and early return of VAT for
capital goods and equipment.
✓ Competitive advantage based
on abundant and high-quality
natural resources, qualified
human resources and existing
industrial capacity.
48
Projected Rise in International Demand
Argentina’s Investment Development Agency
BiofuelsStrong international and domestic demand
48
0
4,750
9,500
14,250
19,000
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: ProsperAr based on the Energy Secretariat
✓Diesel, easily replaceable by biofuel (biodiesel), leads domestic fuel consumption accounting for 66% of total consumption.
✓Argentine Biofuel Law 26,093 (2006) establishes mandatory biofuel mixes (5%) by 2010.
Countries with mandatory biofuel
(biodiesel) mixes
✓European Union
✓Brazil
✓United States
✓Japan
✓Canada
Projected Diesel Consumption(in thousands of m3)
Estimated growth rate: 3,5%
49
Manufactured Goods with Added Value or DesignAttractive selection of investment opportunities
49Agencia Nacional de Desarrollo de Inversiones
Auto Parts Industry
�Developed and innovative industry with a long tradition in the
country.
�International leading companies with presence in Argentina: Fiat,
Ford, General Motors, Mercedes Benz, Peugeot-Citroën, Renault,
Toyota, Volkswagen, Iveco and Scania.
�Great opportunity for growth in auto parts to complement
regional and global demand in the automotive industry which is
increasing in sophistication and innovation.
�Success case: Rafaela, Santa Fe (Basso) is a leading world producer
and exporter of valves.
Agro Industrial Machinery and Precision Instruments
�Major agro machinery cluster with more than 100 years of
expertise, 40,000 employees (80% skilled labor) and 650 factories.
�Know-how to produce innovative equipment for new agronomic
practices like “Direct Sowing”.
�A growing production of high-tech precision agro components.
50
Manufactured Goods with Added Value or DesignAttractive selection of investment opportunities
50Agencia Nacional de Desarrollo de Inversiones
Manufactured goods with design: sailboats, cruisers and vessels
�High quality and international recognition.
�Over 25 years exporting to developed countries mainly the European and
Asian markets.
�Integrated value chain: 120 builders of sailboats, cruisers, vessels, inflatable
boats, equipment and all necessary services for the production and
maintenance of a wide range of boats.
�Installed capacity of 700,000 m2 and occupying 700,000 people.
Nuclear, Spatial and Industrial Engineering
�INVAP: technology-based company dedicated to developing advanced
technology in nuclear, aerospace, medical and industrial sectors.
�In 2000 won an international tender, beating specialized companies from
countries like Canada, Germany and France for a 20 MW reactor power, which
was sold for approximately US$200 million.
�The reactor is used for scientific research in the fields of health, environment
and industry and the production of radioisotopes for medicinal purposes,
catering to Australia, New Zealand and Southeast Asian market.
� IMPSA: global company dedicated to producing solutions for power
generation from renewable resources.
51Argentina’s Investment Development Agency
Pharmaceutical IndustryLong standing tradition, innovation and rising potential
51
Source: Argentina Industrial Chamber of Pharmaceutical Laboratories (CILFA)
Growing Sales & Exports(in millions of US$)
✓Highest local market share of domestic labs in comparison with other Latin American countries.
✓ Local labs in Argentina account for 56% of local sales while domestic firms in Brazil account for 25%, 24% in Uruguay, and 12% in Mexico.
✓ Two companies included in the Ranking of the 19 Argentine Multinationals (ProsperAr-Columbia).
National Labs
56%
International
Labs
44%
Market Share of International & National Labs
in Argentina
0
500
1,000
1,500
2,000
2,500
3,000
2003 2004 2005 2006 2007 2008
Sales Exports
+69%
+134%
52Argentina’s Investment Development Agency
Health IndustryApplied knowledge
52
✓ The rate of clinical trials per 100,000 inhabitants is 1.45, nearly double the average (0.79) in Latin America.
✓ Competitive advantages due to solid hospital infrastructure and hi-tech equipment.
✓ Creation of the clinical trial registry in 2009: critical tool for researchers, experts, patients and donors.
✓ Focus on the more advanced phases of clinical trials.
Source: ProsperAr based on CEPAL (2008) and CAEME
34.037.2
44.949.6
65.8
91.8
2002 2003 2004 2005 2006 2007
+170%
Share of Clinical Trials by Phase (in %)
Clinical Research Investments in the
Pharmaceutical Industry(in millions of US$)
Phase I
1%Phase II
18%
Phase IV
68%
Phase III
13%
53Argentina’s Investment Development Agency 53
BiotechnologyApplied research and first-class scientists
✓More than 35 bioscience research institutes operating in private companies and universities
✓Highest number of biotechnology companies per capita in Latin America
✓ Leader in GMO applications accounting for 17% of world GM crop area
✓ Integrated with industrial production (agricultural and pharmaceutical industries)
✓High-calibre scientists and researchers
✓ Two biotechnology companies included in the Ranking of the 19 Argentine Multinationals (ProsperAr-Columbia)
Source: Biotec Sur, International Service for the Acquisition of Agri-biotech Applications (ISAAA) and Bisang, Gutman, Lavarello, Sztulwark and Diaz (2006)
Biotechnology Investment Incentives: accelerated
depreciation of income tax and early
reimbursement of VAT intended to reduce
payments in the first years in purchase of capital
goods and related equipment
Human Health
11%
Food
Ingredients
15%
Animal Health
25%
Seeds &
Plants
41%
Inoculants
8%
Biotechnology Sales(by type)
54Argentina’s Investment Development Agency
Professional Value Added Services High quality at competitive costs
54
Source: ProsperAr based on Balance of Payments data, INDEC, Deloitte Global Shared Services Survey 2009 and Global Services Magazine
Cultural & Entertainment(US$419 mn) IT
(US$770 mn)
Business, Professional & Technical (US$3,7oo mn)
✓ According to Deloitte’s latest Global Shared
Services Survey, 265 leading global firms from
all sectors, rank Argentina as the fifth best
location for outsourcing services for it’s labor
quality and availability, just below the US,
India, UK and China (2009)
✓ Buenos Aires as the 14th most attractive city
in the emerging world for outsourcing
activities (“Global Services” index)
✓ A location with the presence of leading
companies: Globant, Atento, Teletech,
Teleperformance, Motorola, Microsft, HP,
IBM, Citibank, Repsol, CapGemini, Tata
Consulting and Nextel
Record Levels of Exports of Value Added
Professional Services = US$4.9 billion(2008)
55Argentina’s Investment Development Agency
Professional Value Added Services Strong advantages make Argentina a global center for skilled outsourcing
55
Source: ProsperAr based on Balance of Payments data, INDEC, ATKearney Consulting and Global Services Magazine
Minimal time difference with the
US and main European cities✓ High penetration and best English levels in
the region (Cambridge ESOL exams)
✓ Other languages spoken: Italian, German,
Portuguese and French
✓ Cultural similarities with European markets
✓ Competitive costs
✓World renowned creativity
(advertising and design)
✓ Native Spanish speakers reaching out to a
population of 500 million people that speak
the language worldwide
Argentina Time Zone = GMT -3 hours
56Argentina’s Investment Development Agency 56
Growing Software Production & Exports
(in millions of US$)
Source: ProsperAr based on Cessi and INDEC
0
500
1,000
1,500
2,000
2,500
2003 2004 2005 2006 2007 2008
SALES EXPORTS
+364%
+152%
✓ 1,600 software companies
(60% SMEs)
✓ Young and dynamic sector:
40% of the SMEs started operations
after 2002 and 85% after 1991
✓ In 2008 exports accounted for
28.6% of total sales and 55% of all
software companies export
✓ Leading international presence:
IBM, NEC, Siemens, Google, Oracle,
SAP, Intel, Motorola and Sabre
Holdings
✓ According to The Economist's
technological ranking, Argentina
surpasses Mexico, Colombia and
Peru and ranks 3rd in Latin America
after Brazil and Chile (2009)
Software and IT Industry Thriving growth driven by innovative local firms and leading global companies
57Argentina’s Investment Development Agency
Software and IT IndustryTalented labor force and public support
57
Source: ProsperAr based on Cessi and other sources
Córdoba
Santa Fe
Mendoza
Tandil
Mar Del Plata
Buenos Aires
Gualeguaychú
Rosario
✓ Available and affordable high skilled
labor force
✓ 243 IT degrees offered locally
✓ Some 70,000 students enrolled in
university-level informatics programs
✓ Public-Private cooperation networks
✓ Software Promotion Law (2004)
✓ Diverse attractive locations
IT Industry Investment Incentives:
10-year tax stability; tax credit up to
70% of employers’ contributions;
60% reduction in income taxes.
IT Hot Spots
58Argentina’s Investment Development Agency
Creative IndustryDiverse and attractive segments
58
HOTSECTORS
AdvertisingAdvertising
PublishingPublishing
AudiovisualAudiovisual
DesignDesignFashionFashion
VideogamesVideogames
MusicMusic
59Argentina’s Investment Development Agency
Creative IndustryA flourishing cluster
59
The Gunn Report 2008
The most awarded countries in the world in 2008
TV &
CinemaPrint Interactive
Gunns
Blazing(*)Total
U.S. (1) 149 52 91 39 331
Great Britain (2) 124 39 45 4 212
Argentina (3) 99 21 2 7 129
Germany (4) 47 35 31 6 119
Japan (5) 42 1 60 14 117
Advertising
2005 2006 2007
Annual growth rate 19.6% 18.6% 15.0%
As a % of total GDP 2.6% 2.8% 3.0%
Export boom:
US$500 million in 2007,
double 2002 values
Cultural GDP
Source: ProsperAr based on The Gunn Report 2008. (*) Note: Gunns Blazing tallies all
awards given under the various labels of Integrated, Mixed Media, Innovative,
Content and Contact, Titanium, and other advertising award categories; Frapa
(The Format Recognition and Protection Association)
Source: ProsperAr based on SINCA.
Argentina, leading television
content exporter: 4th exporter in
TV contents wordlwide
Argentina in Top 3 :
One of the three best places in
the world to look for ideas. And
one of the three best to produce
them, according to
The Gunn Report.
60Argentina’s Investment Development Agency
TourismMagnificent cultural experiences and a striking geography attract global tourism
60
1,0521,476
1,883
2,472
3,0603,295
2001 2004 2005 2006 2007 2008
Rising Tourism Expenditures(in millions of US$)
Source: Tourism Secretariat
0.93
1.511.79
2.062.30 2.33
2001 2004 2005 2006 2007 2008
Tourist arrivals(in millions of people)
✓ One of the most exciting and diverse tourist
destinations in Latin America offering from
wine tourism to eco-friendly adventures
✓ Buenos Aires ranked in the top 5 cities to
visit in the world for 3 consecutive years
(Travel & Leisure, 2009)
✓ Buenos Aires ranked #1 gay friendly city by
Out Traveller Magazine
✓ Excellent hotel infrastructure throughout the
country
✓ Exquisite gourmet dining & restaurants
61Argentina’s Investment Development Agency
Mining IndustryNatural advantage and strong incentives
61
Source: Mining in Numbers 2008, Mining Secretariat
In figures…
Mining Investment Incentives:
30-year tax stability, exemption from
tariffs on imports of capital goods
among other tax benefits
2003 2008
Accumulated
growth rate 2015 projected
Investments (millions of US$) 224 1,771 748% 10,079
Exports (millions of US$) 1,119 3,558 241% 7,330
Exploration (meters drilled) 170,000 500,000 201% NA
Direct employment (inhabitants) 19,000 40,000 110% 87,250
Production (GPV in millions of US$) 1,383 4,554 253% 9,476
62Argentina’s Investment Development Agency
ForestryGrowing opportunities
62
648
821 842
9891,0481,032
2003 2004 2005 2006 2007 2008
Source: ProsperAr based on INDEC Trade database..
Timber exports (in millions of US$)
✓ Endowed with large and varied
extensions of primary forests,
ranging from subtropical forests
in the North to coniferous forests
in the South.
Forestry Investment
Incentives: 30-year tax
stability, extendable to up to
50; early VAT return; special
depreciation for income tax
63
Rich cultural heritage and remarkable quality of life
64Argentina’s Investment Development Agency
Create, Experience, Enjoy!Exciting and dynamic culture
64
✓Rich urban life with an endless arrayof cultural activities: 928 museums, 2,813 theaters and 448 cinemas.
✓Buenos Aires chosen World Book Capital 2011 by UNESCO with 2,191 public libraries.
✓Argentina is the World Capital for enjoying Soccer and Polo, and has talents such as Ginobili in the NBA, Del Potro in Tennis and Los Pumas in rugby.
✓ For golf lovers, the country offers golf courses amidst mountains, on sea coasts, in jungle regions, in the forest or even in the city.
65Argentina’s Investment Development Agency
Live ArgentinaRemarkable living standards
✓Argentina has the highest quality of life index in the region, right after Canada and the UK, taking the 21st position from a total of 194 countries surveyed (International Living 2009)
✓Argentina is ranked in the High Development category of the Human Development Report and is ranked 2nd in Latin America (UNDP 2009)
✓Buenos Aires was nominated as the best city to live in Latin America (The Economist 2009)
✓Buenos Aires, together with Berlin and Montreal, was appointed as City of Design under the UNESCO Global Alliance's Creative Cities Network
65
66Argentina’s Investment Development Agency
Share ArgentinaCelebrating cultural richness and diversity
✓Ranked first in the region in UNDP
Gender-related development Index
(2008)
✓Buenos Aires ranked as the number
one worldwide gay friendly city in
Out Traveler Magazine (2008)
✓ The country offers world-class health
services at the most competitive
costs and caters for international
education with bilingual schools and
universities responding to numerous
cultures.
66
67Argentina’s Investment Development Agency
Explore ArgentinaBreathtaking views, magnificent natural scenes
67
Source: ProsperAr based on UNESCO
UNESCO World Heritage Sites
✓Iguazu Falls & National Park, recently
chosen as world best attraction (The
Guardian, 2009)
✓The Perito Moreno Glaciers
✓Jesuit Missions of the Guaranis
✓Archaeological site Cueva de las Manos,
and the Pinturas River Canyon
✓Valdes Peninsula
✓Ischigualasto and Talampaya
Natural Parks
✓Jesuit Block and Estancias of Cordoba
✓Quebrada de Humahuaca
Modern infrastructure and quality connectivity
69Argentina’s Investment Development Agency
A Road to SuccessModern infrastructure connecting Argentina within and beyond its borders
Source: ProsperAr based on CIA world fact book and Ministry of Federal Planning, Public Investment and Services
69
✓31,909 km of railways, 9th in the world
✓231,374 km of roadways, 23rd in the world
✓25 sea ports and 38 river ports
✓11,000 km of waterways, 12th in the world
✓58 airports, 23 of them international
✓Pipelines:
• Gas: 28,138 km
• Oil: 5,939 km
• Refined products: 3,629 km
70Argentina’s Investment Development Agency 70
Source: ProsperAr based on CIA world fact book , National Communications Commission, and iEco survey conducted with Marco Marketing Consultants.
✓ Showcases the highest broadband
penetration in the region with 8.8%
according to Cisco's Barometer (2008)
✓Modern and competitive network, in a
highly deregulated market
✓ Highest mobile and fixed-line density in
South America
✓ Ranked 18th worldwide in terms of
Internet usage, with 3.8 million hosts and
more than nine million users
✓ Buenos Aires, WiFi capital with the highest
wireless density per inhabitant in Latin
America, surpassing Sao Paulo, Mexico
City and Santiago (iEco, 2009)
Broadband Penetration in Latin America(in %)
Modern ConnectivityAdvanced and competitive telecommunications
Venezuela: 3.6%
Brazil: 5.2%
Uruguay: 7.6%
Argentina: 8.8%
Colombia: 4.1%
Peru: 2.7%
Chile: 8.8%
71Argentina’s Investment Development Agency
Committed to ImprovementNational Plan to boost infrastructure capacity
71
Source: ProsperAr based on Ministry of Federal Planning,
Public Investment and Services
The National Strategic Plan for Infrastructure 2003-
2011 aims to increase:
� Gas transport-distribution by 30%
� Electric energy generation by 72%
� Transport network by 69%
The Key Investment areas are:
✓Energy
‣ Gas transport
‣ Electricity generation & transport
✓Transport infrastructure
‣ Roads
‣ Railways
‣Waterways
‣ Ports
‣ Airports
✓Living conditions
‣Water works, sewage and irrigation
‣ Homes
‣ Health and Education
Increasing Infrastructure Budget(in billions of US$)
0.31.1
1.7
3.2
4.75.8
8.0
16.0
2002
2003
2004
2005
2006
2007
2008
2009p
Public sectorsupportive of investment
73Argentina’s Investment Development Agency
Welcoming InvestorsProtection and equal rights for foreign investors
73
Equal treatment and rights extended to foreigners, guaranteed by the
Argentine Constitution
✓Equal treatment for local and foreign investors
✓Foreign investors may:
�Remit abroad liquid profits arising as a return on their investment as
well as repatriate their investment
�Avail themselves of any of the legal forms of incorporation foreseen by
Argentine legislation
�Make use of domestic credits and loans with the same rights and under
the same conditions as domestic companies of domestic capital
�Access all sectors of economic activity as there are no activities
reserved exclusively for local enterprises
74Argentina’s Investment Development Agency
Horizontal Incentives:
Apply to all economic sectors or activities
✓Investment Promotion Law (No. 26,360): early VAT return and/or accelerated
depreciation for capital goods and infrastructure projects
✓0% tariff on imports of capital goods
✓0% tariff on imports of goods which are part of a large investment project
✓For every new job created, 50% reduction on employers’ contributions during the
first year of employment and a 25% reduction in the second year
✓Others: FONTAR, FONSOFT, SEPyME programs, plans to foster employment, and
export promotion plans (for further details please see “Investment Incentives”
published by ProsperAr)
Attractive IncentivesSupport for your investments
74
75Argentina’s Investment Development Agency
Regional Incentives:
Local stimulus programs and support for infrastructure investments
✓Exemptions from provincial taxes for a determined period of time
� Gross income
� Stamp taxes
� Property tax
✓Financial support for infrastructure investments and purchase of relevant
equipment
✓Subsidized rates for public utilities
Attractive IncentivesSupport for your investments
75
76Argentina’s Investment Development Agency
Attractive IncentivesSupport for your investments
76
Sectoral Incentives:
� Automotive industry: cash reimbursement based on local content; tariff free access to Brazil and Mexico.
� Software: 10-year tax stability; tax credit up to 70% of employers’ contributions; 60% reduction on income taxes.
� Biofuels and biotechnology: accelerated depreciation of income tax and early return of VAT for capital goods and equipment intended for the project.
� Mining: 30-year tax stability; exemption from tariffs on imports of capital goods among other tax benefits.
� Forestry: 30-year tax stability, extendable to up to 50; early VAT return; special depreciation regime for income tax.
� Infrastructure: incentives for public-private partnerships (PPP´s).
� Oil and gas exploration and exploitation: early VAT refund, income tax reductions.
77
ProsperArProfessional assistance for your business to succeed in Argentina
✓Providing timely and relevant information on
business sectors and geographical locations in
Argentina
✓Help identify investment and innovation
opportunities in strategic sectors
✓Troubleshoot red tape and obstacles; facilitate
the whole investment process
✓Assist in building partnerships between foreign
investors and local companies
Our group of professionals will gladly assist you by:
Argentina’s Investment Development Agency 77
78
To learn more about how investing
in Argentina can benefit you,
please contact us:
www.prosperar.gov.ar
+ 5411-4328-9510
ArgentinaNaturally Talented to Meet Global Market Needs
Argentina’s Investment Development Agency 78