November 2010

AGENDA

¿Where are we coming from?

¿What are we doing?

¿Where are we going next?

Colombia’s Leadership"
 Colombia ranks
First in"
• Emeralds Production
• Variety of Palms (244 Species)
• Production of Bamboo in America Second in"
• The Biggest Coal Open Mine to Export of
the World • Banana Production
• The Most Important Gold Museum • Varity of Butterfly (300 Families and
• Variety of Orchids (3500 Species) 14.000 Species)
• Exotic Birds (1815 Species) • Flower Production
• Frog Varieties (764 Species) • Blackberry Production
• Quality of Coffee • Exporter of Flowers
• Arabian Coffee exports
• Exporter of Coal in Latin-American
• Biodiversity per Km2
Outstanding performance of the
Colombian economy
Colombia: A dynamic
economy

Colombia and world GDP growth (%)

2000 – I Sem 2010
8% 7,5%
6,8%
7%
6% 5,7%
5% 4,6% 4,7% 4,4%
4% 3,1%
3% 2,2% 2,5% 2,5%
2%
1% 0,4%
0%
-1% -0,3%
-2%
-3%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2009 2010
(I Sem) (I Sem)
Colombia World
Source: DANE (National Accounts), EIU (Market Indicators & Forecasts)
Note: * EIU forecast to the World and Latin Focus to Colombia
Note: Last update October 4th, 2010
While the Colombian economy is
growing, the security problem is reducing

Colombian Economy Growth Vs, Security Problem Perception,

2001 – 2010 (%)
8 World 18
Crisis
7 16

Security Problem
Economy Growth

6 14
5 12
4 10
3 8
2 6
1 4
0 2
-1 0

Economy Growth Security Problem

Source: ANDI (Asociación Nacional de Industriales)
According to the Nominal GDP, Colombia is the
36th greatest economy in the world and 5th in
Latin America

Nominal GDP (US$ Billion),

1.800 2009
1.573
1.600
1.400
1.200
1.000 875
800
600
400 326 309
234 234 222 211 195 193 190 187 183 182
163 162 129 127 117 116 109
200 93 91 89
29
0

Source: EIU (Economist Intelligence Unit)

In the last 10 years the Colombian GDP
per head doubled

Colombian GDP per head,

2000 – 2010 (US$)
7.000
140% 5.980
6.000
5.316
5.000 5.052
4.608
4.000
3.354 3.677
2.722
3.000 2.482 2.403 2.356 2.239
2.000

1.000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: EIU (Economist Intelligence Unit)

 FDI in Colombia is three times greater
than nine years ago

FDI, 2000 – I Sem 2010 Main investors in Colombia

US$ Million Stock 2000 – I Sem 2010*
12.000
United States
10.252 10.564
10.000 • Stock US$ 11,627 M
• Share 31.0%
8.000 7.201
6.656 Great Britain
6.000 5.043 • Stock US$ 4,591 M
4.115 • Share 12.2%
4.000
2.134 Spain
2.000
• Stock US$ 2.716 M
• Share 7.2%
0
Mexico
• Stock US$ 2,176 M
• Share 5.8%

Variation 2008 - 2009: -32%

Variation I Sem 2009 - I Sem 2010: - 18%
*Participation by country over the positive accumulated inflows, it doesn´t include investment in oil sector or reinvestment
of profits. Value 2000 – I Sem 2010: US$ 37,555 million
Note: The country list doesn´t include Anguilla and Panama, the third and fourth countries in the ranking
Source: Banco de la República (Balance of Payments)
In nine years Colombian
exports tripled

Exports, 2000 – August 2010 Colombian exports by country, 2009

US$ Million
40.000
37.626 United States
35.000
32.852 • US$ 12,879 M
30.000 25.675 • Share 39.2%
25.000 21.057
20.000 Venezuela
13.158 • US$ 4,050 M
15.000
• Share 12.3%
10.000
5.000 Netherlands
0 • US$ 1,345 M
• Share 4.1%

Ecuador
• US$ 1,257 M
• Share 3.8%

Variation 2008-2009: -12,7%

Variation Jan-Aug 2009 Vs Jan-Aug 2010: 21,9%
Source: DANE (Departamento Nacional de Estadísticas)
In nine years international visitors in Colombia
doubled. While tourism in the world fell 4% in
Colombia it increased 10.2% in 2009*

Tourism, 2000 – September 2010 Internationals visitors in Colombia

Thousand Visitors** by country 2009*
2.000

1.700 United States

1.600 • 314,870 Visitors
1.325
• Share 23%
1.201
1.200
Venezuela
800 • 238,082 Visitors
732 668 • Share 18%

400
Ecuador
0 • 101,833 Visitors
• Share 7.5%
Spain
• 77,922 Visitors
• Share 6%

Variation 2008–2009: 17,2% (includes cruise)

Variation Jan-Sep 2009 Vs. Jan-Sep 2010: 10,3% (includes cruise)
*It doesn't Include cruise
**Includes cruise
Source: DAS (Departamento Administrativo de Seguridad)
During 2009, Colombia was one of the
best economic performers in the region

Exports FDI
-12,7% Colombia -16% Chile
-16,7% Peru -31% Peru
-20,2% Chile -32% Colombia
-20,6% Argentina -42% Brazil
-21,2% Mexico -50% Argentina
-22,7% Brazil -51% Mexico
-35,9% Venezuela -990% Venezuela

Tourism
Colombia 10,7%

Peru 3,9%

Chile 1,9%
Source: Official sources of each country, World Tourism
Brazil -4,9% Organization, LatinFocus and EIU
Mexico* -6,7% Export: Variations in FOB between 2008 and 2009
FDI: Variation FDI flows between 2008 and 2009
Argentina* -13,1% Tourism: Variation number of foreign visitors between 2008 and 2009 (do not
include cruise)
Venezuela* -17,5% *Variation between January-August 2008 and Jan-August 2009
Colombia, one of the best Emerging Markets
Bond Index Plus (EMBI+) in Latin America

Sovereign Spreads (EMBI+): Colombia Vs. Latin America ,

2000-2010*
1600
1400
1200
1000
800
600
400
200
0

23Jan09
24Apr00

27Mar01

6Nov01
28Feb02

29Jan03
8Oct02

9Sep03

20Apr04
6Aug04

14Mar05

4Aug06

19Mar07
9Jul07

21Feb08

14Apr10
2Aug10
29Dec03

22Dec09
3Jan00

11Aug00

17Jul01

19Jun02

20May03

25Nov04

30Jun05

24Nov06

11Jun08
30Sep08

13May09
31Aug09
19Oct05

26Oct07
1Dec00

Latin America Colombia

Emerging Markets Bond Index Plus (EMBI+), basis point spread over US treasuries.
*From January 2000 until October 2010
Source: JPMorgan - Central Bank of Peru
Violence levels are
decreasing
surprisingly
 Homicide rate per 100 thousand
inhabitants reduced to a half

Homicides per 100.000

Inhabitants, 2000 – August 2010
75
64,6 65,8
65 62,7

55 52,8
44,6
45 39,3
36,7 35,4
35 33,0 33,0

23,3 22,3
25
15

Variation 2008-2009: 7%
Variation Jan-Aug 09 Vs. Jan-Aug 10: -4%
Source: Ministry of Defense
Bogotá, safer than
Washington, Atlanta and Miami

Homicides per 100,000 Inhabitants

2008
120 107
100
80
60
40
40 29
17 18 18 19 20 21 22
20 10
3 4 5
0

Source: Bogotá Chamber of Commerce, based on information issued by AméricaEconomía Intelligence and the Bogotá
Metropolitan Police; FBI
Colombia: second place in Latin America in the
list of countries that best protect people and
private property

Personal security and private property are

adequately protected, 2010 World
Country
Chile Ranking

Colombia 4,53 32 Chile

Brazil 47 Colombia
3,32
50 Brazil
Peru 3,15
51 Peru
Argentina 1,96
56 Argentina
Mexico 1,68
57 Mexico
Venezuela 0,22 58 Venezuela

0,00 1,00 2,00 3,00 4,00 5,00 6,00

Source: IMD World Competitiveness, 2010. Ranking among 58 countries.

The best thing about Colombia is its
human capital
We have the second most qualified
labor available in the region

Availability of Qualified Labor, 2010

World
Chile 5,66 Country
Ranking

Colombia 5,30 28 Chile

Argentina 5,11 35 Colombia

México 4,60 38 Argentina

Brasil 3,78 49 Mexico

Perú 3,33 55 Brazil

55 Peru
Venezuela 2,89
57 Venezuela
0,00 1,00 2,00 3,00 4,00 5,00 6,00

Source: IMD World Competitiveness, 2010. Ranking among 58 countries.

According to the IMD, Colombia's labor
regulations hinder business activities in Latin
America the least

Labor regulations (hiring/firing

practices, minimum wages, etc.) do not hinder
business activities, 2010 World
Country
Ranking
Colombia 4,35
30 Colombia
Peru 4,23
33 Peru
Chile 3,71 43 Chile
Mexico 2,87 51 Mexico
Argentina 2,72 52 Argentina
Brazil 2,15 56 Brazil

Venezuela 0,63 58 Venezuela

0,00 1,00 2,00 3,00 4,00 5,00 6,00

Source: IMD World Competitiveness, 2010. Ranking among 58 countries.

According to the IMD, Colombia has the best Index
on rigidity of employment in Latin America

Index on rigidity of employment in Latin

America, 2010 World
Country
Colombia 10,0 Ranking

Chile 9 Colombia
18,0
20 Chile
Argentina 21,0
22 Argentina
Peru 39,0
40 Peru
Mexico 41,0 42 Mexico
Brazil 46,0 48 Brazil
Venezuela 69,0 58 Venezuela

0,00 20,00 40,00 60,00 80,00

Source: IMD World Competitiveness, 2010. Ranking among 58 countries.

Privileged geographical position
Just 3 hours from Miami and
5:45 hours from São Paulo
5:35 Nueva York
3:00 Miami Frec. 19 / Week
Frec. 31 / Week

4:45 Ciudad De 1:20 Caracas

México Frec. 47 / Week
Frec. 14 / Week
Since
2000, international
flights to Colombia
increased 120%
3:00 Lima
Frec. 30 / Week
5:45 São Paulo
Frec. 12 / Week
5:00 Santiago
Frec. 7 / Week 6:15 Buenos
Aires
Source: Proexport Frec. 7 / Week
 A country that protects the environment. In
addition, environmental laws in Colombia does not
affect the competitiveness of enterprises
Colombia is the tenth country in the world and
the first in the region in protecting the
environment

Environmental Performance Index, 2010

World
Country
Ranking
Colombia 76,8

Chile 73,3 10 Colombia

Peru 69,3 16 Chile

Mexico 67,3 31 Peru

Brazil 63,4 43 Mexico

Venezuela 62,9 62 Brasil

Argentina 61 64 Venezuela

70 Argentina
0 20 40 60 80 100
Rating

Source: Environmental Performance Index 2010, Yale University

Colombia among the CIVETS
“The new BRICs are
Colombia, Indonesia, Vietnam, Egypt, Turkey and
South Africa (CIVETS). They are countries with major
populations, dynamic, diverse economies, political
stability and each of them has a brilliant future. Any
company with global ambitions will have to take
immediate action in these markets."
Michael Geoghegan, CEO HSBC
April 26, 2010 in his speech to AmCham Hong Kong

Colombian is known in America and around the world to be an

Emerging Country with excellent social and business activities
contributing in the process of rapid economic growth and FDI
attraction.
¿Where are we coming from?

¿What are we doing?

¿Where are we going next?

In 2010, Colombia will be negotiating 12 free trade
agreements (FTA) with 48 countries obtaining
preferential access to over 1,500 million consumers

In Force
Signed
In Negotiation
Future

IN FORCE SIGNED IN NEGOTIATION FUTURE

•CAN (Peru, Ecuador y •United Stated •South Korea •Japan
Bolivia) •EFTA •Panama
•MERCOSUR (Iceland, Liechtenstein, N
(Argentina, Paraguay, Uru orway and Switzerland)
guay and Brazil) •European Union
•Chile •Canada
•G2-Mexico
•North Triangle
(Honduras, Guatemala y
El Salvador)
In 2010, Colombia will be negotiating 22
international investment agreements (IIA)
with 48 countries

In Force
Signed
In Negotiation

IN FORCE SIGNED IN NEGOTIATION

• Peru (Agreement)
• Mexico (Chapter)
• Spain (Agreement)
• Switzerland (Agreement)
• CAN (Ecuador and Bolivia) (Chapter)
• Chile (Chapter)
• North Triangle (Honduras, Guatemala
and El Salvador) (Chapter)
Note: The International investment agreements (IIA) include Agreement Investment Treaties (BIT) (agreement) and Free Trade Agreements (FTA)
with investment section (chapter).
• China (Agreement) • Kuwait, Japan, UAE, Germany and
• Belgium-Luxembourg (Agreement) France (the last two countries
• India (Agreement) negotiations are suspended because the
• United Kingdom (Agreement) implementation of the Lisbon agreement)
• South Korea (Agreement) (Agreement)
• EFTA (Iceland, Liechtenstein and
Norway) (Chapter)
• European Union (Chapter) (excludes
those countries with agreements)
• United States (Chapter)
• Canada (Chapter)
In 2010, Colombia will be negotiating 19 double
taxation agreements (DTA) with 22 countries

In Force
Signed
In Negotiation

IN FORCE SIGNED IN NEGOTIATION

• CAN – Peru, Ecuador and • Switzerland • United
Bolivia • Canada States, Germany, Czech
• Spain • Mexico Republic, Holland, Belgium, In
• Chile dia, Japan, France, Israel, Unit
• South Korea
ed Arab Emirates and
• Portugal Venezuela (suspended)
Colombia: third most “Business Friendly”
country in Latin America and main reformer in
the region, according to the world bank (2011)

Doing Business Ranking Variation, 2007-2011*

(Change in positions)
World Ranking Country
Colombia 40
Peru 29 Mexico 35

Panama 9 Perú 36

Mexico 8 Colombia 39

Brazil -6 Chile 43

Ecuador -7 Panama 72

Venezuela -8 Argentina 115

Argentina -14 Costa Rica 125

Chile -15 Brazil 127

Costa Rica -20 Ecuador 130

Venezuela 172
-40 -20 0 20 40 60

Source: Top Reformers Report, World Bank

*Positive figures show improvements in business environment
Colombia is the fifth country in the world and
first in Latin America that most protects
investors

Strength of Investor Protection, 2011

Colombia 8,3 World
Country
Ranking
Peru 6,7 5 Colombia
Chile 6,3 20 Peru
Mexico 6,0 28 Chile

Brazil 5,3 44 Mexico

74 Brazil
Panama 4,7
109 Argentina
Argentina 4,7 109 Panama
Venezuela 2,3 179 Venezuela

0 2 4 6 8 10
Rating

Ranking made up by 183 countries

Source: Doing Business, 2011 (World Banck)
The most competitive FTZ’s in Latin America:
15% income tax and allows sales to the local
market

15% income tax rate.

No import duties.

VAT exemption for goods sold from Colombia to FTZ

Benefit from international trade agreements. (Except
Perú)

Allow sales to the local market.

Permanent (PFTZ)
Free Trade Zones

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

Characteristics
Putumayo, Cauca, Huila, Nariño, Caquetá, Boyacá, C
esar, La Guajira, Norte de
Santander, Arauca, Guainía and Vichada.
• Equivalent requirements between the different types
of Single Company Free Trade Zones.
• 2 year limitation for the execution of 100% of the
investment and employment commitments.
• Application must be filed before the Tax Authorities
(DIAN) prior to: December 30th, 2010 for
Putumayo, Cauca, Huila, Nariño, Caquetá regions;
December 31st, 2011 for Boyacá, Cesar, La
Guajira, Norte de Santander, Arauca, Guainía and
Vichada regions.
Requirements
Not all the municipalities in the regions Investment (approx.) and Direct Jobs
bordering Venezuela are included. Refer to USD 1.29 Million 50
Decree 2555 of 2010.
Ex/rate COP 2000 = US$ 1
84 Free Trade Zones

Free Trade Zone Approved

Single - Company Free Investment commitments
Trade Zone
Permanent Free Trade Total Investment (USD
Zone 6.426
Million)
Direct Jobs 46.122
Indirects Jobs 94.251

Investment executed so far

Total Investment (USD

2.315
Million)
Direct Jobs 5.509
Indirects Jobs 25.271

Source: Ministry of Trade, Industry and Tourism. The investment amounts required to obtain the Free Trade Zone status are
calculated in Minimum Monthly Legal Wages (M.M.L.W). This information is presented in dollars using a US$1 = COP 2,000
exchange rate. For 2010, the M.M.L.W is COP 515.000. The M.M.L.W, as well as the exchange rate are subject to variations.
36
PERMANENT FREE TRADE ZONES (PFTZ)
Several firms installed in a FTZ already
established

Requirements for industrial firms of goods and services

Total Assets Investment Ammount Minimum direct jobs

(US$) (US$ Million) generation

0 – 129,000 0 0

129,008 – 1.28 Million 0 20

1.28 – 7.72 Million 1.28 30

More than 7.72 Million 2.96 50

Source: Ministry of Trade, Industry and Tourism. The investment amounts required to obtain the Free Trade
Zone status are calculated in Minimum Monthly Legal Wages (M.M.L.W). This information is presented in
dollars using a US$1 = COP 2,000 exchange rate. For 2009, the M.M.L.W is COP 515.000. The M.M.L.W, as well
as the exchange rate are subject to variations.

Back
SINGLE-COMPANY FREE TRADE ZONES (SCFTZ): A
single firm can get all FTZ advantages by installing itself
in any place in Colombia

Investment (US$
FTZ type AND direct jobs
Million)
Goods (1) 38.62 150
2.57 – 11.84 500
Services (2) 11.84 – 23.69 350
23.69 or more 150
Services – Ports (3) 38.62 20

SCFTZ Agribusiness

(1) Each additional investment of US$ 5.9 million reduces 15 jobs of requirement. In any case, there must be generated at
least 50 jobs.
(2) For health services companies, 50% of jobs may be vinculated, not direct.
(3) 50 indirect jobs can replace 20 direct jobs.

Exchange rate: US$ 1 = COP 2,000. Minimum Monthly Legal Wages (M.M.L.W.) for 2010 is COP 515,000. Back
M.M.L.W. and Exchange Rate are subject to changes.
SINGLE-COMPANY FREE TRADE ZONES (SCFTZ): A
single firm can get all FTZ advantages by installing itself
in any place in Colombia

Investment (US$
FTZ type Or related jobs to the production
Million)
Agribusiness 19,31 500

Subsectors which are eligible for FTZ status under agribusiness requirements
Biofuels
Meat and Fish
Oil and grease products from vegetables and animals
Dairy products

Legume and fruits, prepared or preserved, tea, soup, vinegar, sauces and yeast*

Coffee
* According to the national statistics this products classification is called “products not classified
previously”. Back
Exchange rate: US$ 1 = COP 2,000. Minimum Monthly Legal Wages (M.M.L.W.) for 2009 is COP
515,000. M.M.L.W. and Exchange Rate are subject to changes.
Colombia offers Legal Stability Contracts
to guarantee investment projects

Investments over US$1.93 million* (7500 M.M.L.W.)**

Conditions Investor pays 1% premium based on the amount of the
investment. 0.5% in unproductive periods

Period From 3 to 20 years

maximum

Signed 70 legal stability contracts approved, 56 legal

contracts stability contracts signed

*The investment requirement is calculated with an exchange rate of COP $ 2000 = 1 USD. It is responsibility of
the investor to calculate the investment requirement at the moment of submitting the application for the Legal
Stability Agreement.
** One minimum monthly legal wages – M.M.L.W. equivalent COP$ 515.000 or US$ 257,5
Other tax incentives

 125% income tax deduction over investments in

scientific and technological developments.

 200% income tax deduction over salaries and social

benefits paid to handicapped employees.
Other incentives by sector: Income tax
exemption for up to 20 years

• Exemption for 30 years for companies that build or

Tourism restyle hotels before 2018.
Eco--tourism
Eco • Exemption for 20 years starting from 2003.
• Exemption for 10 years after the start of production in
Late yield crops crops planted between 2003 and 2013.
• Permanent exemption for investment in new forest
Forestry plantations, sawmilling and timber plantations.
• Publishing of books, magazines, booklets or collections
Editorial of scientific or cultural characteristics are exempt until
2013.
• Exemption for 10 years for products manufactured in
New medicinal
Colombia with high scientific and technological
products and software
research content, starting from 2003.c
Renewable • Exemption for 15 years for sale (by the generators) of
electricity based on wind resources, biomass or
energy agricultural waste.
• Exemption for 15 years starting from 2003 to provide
River transport services in slabs and boats with net weight below 25
tons.
¿Where are we coming from?

¿What are we doing?

¿Where are we going next?

Potential World Class Sectors
Productive Transformation Program
“Government - Private sector"

Encourage and improve production of Promote development of

competitive products & services NEW & EMERGING
ESTABLISHED SECTORES SECTORS
The business plans include initiatives
along four key topics...
HUMAN RESOURCE DEVELOPMENT

Pertinence, improvedbuscar
skills, readiness and retention in
the industry. Bilingualism and promotion of university-
industry partnerships...

LEGAL AFFAIRS & REGULATION

Adapt the regulatory framework to suit the

industry’s needs.

INDUSTRY AFFAIRS
Put in place strategies to: attract foreign ACTION PLAN
investment ,strengthen sector
representation, bolster management
capabilities .
INFRAESTRUCTURE

Ensuring adequate infrastructure is in 184

place to suit industry’s needs.
Initiatives
By 2019, these world-class sectors will multiply
their 2008 revenues by 3,4 times and their exports
by 7,7

2032
2019
TODAY 2012

313.000 773.100 1.112.600 1.988.700

Jobs 2,5 X 3,6 X 6,4 X

20.126 39.670 69.100 215.800

Total sales
US$ Millions 2,0 X 3,4 X 10,7 X

Exports 4.397 18.090 34.023 126.462

US$ Millions 4,1 X 7,7 X 28,8 X
Proexport as a Foreign Promotion
Agency

Promote Colombia’s international image through three

business lines
PROEXPORT’s services to investors

• Information tailor made to your needs

• Facilitation of contacts with the public and private sector

• Setting up of agendas to Colombia
• Aftercare services for investors already established in the Colombia

• Free of charge and confidential

• Investment specialists in New York, Los Angeles, Miami and Chicago

We will be delighted
to assist you

www. investincolombia.com.co