Colombia Presentation - January 2012

COLOMBIAA Strategic Ally for International Business Owners January 2012

OUTLINE Who We Are Latin America, the worlds source of development "The world is talking about Colombia" Why invest in Colombia? Legal Framework, benefits and support to invest in Colombia

WHO WE ARE

Who We Are Entity in charge of Promoting International Tourism, Direct Foreign Investment, and Exports TOURISM INVESTMENT EXPORTS

Proexport supports foreign investors  Information tailored to your needs.  Contacts with the public and private sectors.  Itinerary planning and assistance for travel to Colombia.  Assistance during the start up process and monitoring of established investors.  All services are free of charge and the information provided during the process is kept confidential. www.proexport.com.co

Proexport around the world 18 BUSINESS OFFICES PROEXPORTS GLOBAL 8 REGIONAL OFFICES PRESENCE 9 NOVELTIES Germany New York Canada Reino Unido Russia United States Turquey Mexico France Spain Shanghai Singapore Panama Brazil Arab Emirates Peru

ECONOMIC TRENDS IN THE WORLD AND IN LATIN AMERICA

The largest economies in a crisis …where the emerging economies are becoming their strategic allies

Latin America is the second-highest growing region in theShort-Term (ST) and third-highest in the Long-Term (LT) (LT): Long-Term: Nominal GDP Variation 2000 - 2010 (ST): Short-Term: Nominal GDP Variation 2009 - 2010 LT ST LT ST +87% +0% +470% +21% LT ST LT ST +51% +5% +112% +16% LT ST +126% +20% LT ST +148% +20%Source: EIU North America Middle East and Sub-Saharan Africa Western Europe Latin America Asia and Australasia Russian Federation

Latin America will continue to increase its nominal GDP, alwaysranking higher than Russia, the Middle East and sub-SaharanAfrica. 6000 NOMINAL GDP (US $ Billions) 2000 – 2014* 5000 +126% 4000 3000 2000 1000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Proy. Proy. Proy. Proy. 2011 2012 2013 2014 LATINAMERICA MIDDLE EAST AND SUB-SAHARAN AFRICA RUSSIAN FEDERATION Source: EIU

Colombia, with higher growth than LatinAmerica and the world, playing a positive role in the regions performance.

Colombia is the third largest contributor to growth inLatin America. Although Argentina represents a larger share of Latin Americas GDP, its 23% growth was lower than Colombias Countries contribution to the growth of the GDP in Latin America (%) Share of the GDP 2000 – 2010 (+126%) 5% 7% LATINAMERICA 126% Variation 1% 2000 - 2010 3% BRAZIL 74% 47% +224% +54% MEXICO 18% +189% COLOMBIA 10% +170% CHILE 7% 8% +107% VENEZUELA 6% 5% +188% PERU 5% +30% ARGENTINA 4% +264% ECUADOR 2% Source: EIU

Colombias historic GDP trends are greater than Chile andPeru and were ranked higher than Venezuela in 2009US $ Billions400,0 South Americas GDP between 2000 and 2012*350,0 Steady performance is300,0 expected in the countrys Chile250,0 growth compared to the rest of the region Colombia200,0 Peru150,0100,0 Venezuela 50,0 ,0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011p 2012p Source: EIU - June 2011 P: Forecasts

Constant growth and macroeconomic stability inColombia 2009 2010 Jan. – Nov. 2011 450 41 400 41 Bubble Size: Nominal GDP (US$ Billion) Population (million) 350 48 300 47 40 29 250 46 28 17 86 17 84 200 28 83 30 17 30 150 30 100 50 - -6 -4 -2 0 2 4 6 8 10 12 14 16 18 Inflation (%) 1 0 Argentina Chile Colombia Egypt Malaysia Peru 2000 Source: EIU, DANE, Trading Economics, Banco de la República (Colombia)

Performance higher than Latin America and the World isexpected over the next few years. Growth of Colombias GDP vs. Latin America 2001 - 2010 (%) 08 06 04 02 00 -02 -04 Colombian growth Latinamerican growth World growth Source: ANDI (National Business Association of Colombia), EIU

Colombia with the highest third quarter growthsince 2005 “”Mining and household consumption were the two drivers of economic growth” Colombian Finance Minister: Juan Carlos Echeverry GDP Variation (%) 2005 – III TRIM 2011 7,6 7,7 7,6 7,5 7,7 6,1 6,3 6,1 5,7 5,7 5,4 5,2 5,5 5,1 4,7 4,7 5,1 4,0 4,0 3,3 3,6 3,0 3,3 1,0 0,8 1,0 0,1 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III 2005 2006 2007 2008 2009 2010 2011 Fuente: DANE

Colombian economy: larger than that of Chile, Ireland, Malaysia, Egypt,Singapore and New Zealand, among others Nominal GDP US $ Billions - 2010 289 242 238 229 224 223 218 214 207 203 196 154 140 138 130 104 92 36 Source: EIU (Economist Intelligence Unit) (10 Oct 20)

Colombia: 28th strongest economy in the world adjusted toPPP and one of the largest non-OECD economies GDP (PPP) US $ Billions - 2010 437 417 383 352 348 342 327 277 277 259 259 229 220 188 173 121 Note: GDP adjusted to prices at purchasing power parity (PPP) Source: EIU (Economist Intelligence Unit) (October 10, 2011)

The twenty-fourth largest population in the world;The second most numerous Spanish-speaking population Population Millions of People - 2010* 112,469 46,927 45,92 40,52 38,206 34,033 29,96 28,631 22,2 17,09 11,27 10,637 10,63 9,4119 8,417 7,8665 7,6247 5,077 4,9181 4,388 Source: EIU (Economist Intelligence Unit) *Forecast (October 10, 2011)

By 2050, Colombia will be among the top 30 economies in the world. Top 30 economies of the world, by 2050 GDP US$ constant 2000 Billion 1 China 24.617 16 Indonesia 1.504 2 US 22.270 17 Australia 1.480 3 India 8.165 18 Argentina 1.477 4 Japan 6.429 19 Egypt 1.165 5 Germany 3.714 20 Malaysia 1.160 6 UK 3.576 21 Saudi Arabia 1.128 7 Brazil 2.960 22 Thailand 856 8 Mexico 2.810 23 Netherlands 798 9 France 2.750 24 Poland 786 10 Canada 2.287 25 Iran 732 11 Italy 2.194 26 Colombia 725 12 Turkey 2.149 27 Switzerland 711 13 S. Korea 2.056 28 Hong Kong 657 14 Spain 1.954 29 Venezuela 558 15 Russia 1.878 30 South africa 529 • 19 of the top 30 will be emerging economies. • Colombia will be the top economy in Latin America for growth in GDP per capita. • Per capita income will triple in the 40 years. http://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=ej73gSSJVj&n=28 2364.PDFSource: The World in 2050, Quantifying the shift in the global economy, HSBC, Global Research. 2011.

THAT’S WHY THE WORLD ISTALKING ABOUT COLOMBIA...

"By the end of the year, the regions figures may set a new record" - CEPALBeyond the BRICs: New Interesting Pointsof Investment +91.4% in FDI Colombia 1st Sem 2010 vs 1st Sem 2011 “Brazil and Colombia are at the top of the list Colombia is a potential point of investment: of the countries that have received the most “It is considered the friendliest country for business funds…” in Latin America according to the World Bank and, “Current investment flows confirm the strong after many delays, it is about to sign a free trade performance of the economies in Latin America agreement with the US” and the Caribbean, despite the environment of economic turbulence” “Security is no longer an issue after the actions taken by the government; it seems they are winning Alicia Bárcena – Executive Secretary of ECLAC the fight against crime, and its economic and demographic growth rates for the next few years are expected to be among the highest in the region" Alex Duffy, Fidelity´s Latin America Fund The Independent, April 30, 2011 Source: Portafolio, October 26, 2011

“Colombia, one of the stars of Latin America…”IEE (Institute of Economic Studies) - Spain“Colombia will be better off than the rest of the countries in the region in the “Colombia is the second most attractive event of another global recession” country for investment in Latin America Rodrigo Chavez – Director, Latin America and Caribbean in the next 3 years.” If you were to invest in a Latin American country in the next 3 years, where would you invest? “Colombia has become quite an attractive 68% destination for investment…Increased 38% 25% 25% 18% security in Colombia has been reflected in the growth of the GDP per capita since 1 2 3 4 4 2002.” Brazil Colombia Chile Mexico Peru Source: Investor perception research JP Morgan Chase Bank Co.

Colombia has improved its Confidence Index,ranking higher than the Global average. 8 Dec, 2011 – “Colombia adheres to the OECD Declaration on International Investment. As an adherent to the Declaration, Colombia commits to treating foreign investors in the same way as domestic investors and to promoting responsible business conduct.” Business Confidence Index (Points) Colombian companies are beating the international trend. 125 130 119 114 “The report has concluded that although the global outlook has clearly regressed almost everywhere in comparison with six months ago, Colombia has broken this trend.” April 2011 October 2011 Ana Maria Castro, Regus Director of Northern Latin America Colombia GlobalSource: oecd.org, Regus, Press Release, October 5/ 2011

In terms of Globalization, Colombia is in 3rd place in Latin America,beating world economies such as Japan, Brazil, Russia and Indonesia Globalization Index, 2010 4,32 3,81 3,61 3,58 3,57 3,43 3,37 3,28 3,18 3,13 3,04 3,000 2,96 2,85 Source: Ernst and Young – The Globalization Index 2010, Ranking among 60 countries.

Colombia: third "friendliest" country to do business in LatinAmerica and the biggest reformer in the region Colombia remains the top reformer in the region in recent years. Change in Doing Business Ranking, 2007-2012* (Variation in the number of positions) World World Country Ranking Ranking Colombia 45 2012 2011 Perú 26 Panamá 11 Chile 39 41 México 9 Peru 41 39 Ecuador -6 Colombia 42 47 Venezuela -10 Mexico 53 54 Brasil -12 Panama 61 63 Argentina -14 Argentina 113 114 Chile -15 Costa Rica 121 121 Costa Rica -20 Brazil 126 120 Ecuador 130 131 Venezuela 177 175 Source: Doing Business 2012 World Bank Report *Positive numbers indicate improvements in business environment

Three of the top risk rating agencies have rated Colombia"Investment Grade" The three agencies agree on the countrys positive economic and financial situation, highlighting:  Its ability to deal with external shocks  Its historic fulfillment of obligations  An increase in its macroeconomic credibility  A visible improvement in security conditions May 31, 2011

Colombia: The C in 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

S&P CIVETS 60 Indicator, second generation of emergingeconomies 100-based index, June 07 The stock performance of the CIVETS group has been greater than that of the BRICS group since 2009. Source: Standard & Poor’s

EAGLES: “Emerging And Growth-Leading Economies” China Taiwan India Russia Brazil Egypt Turkey Mexico Indonesia South Korea Colombia Each of them is expected to contribute more to global growth over the next ten years than the average of theArgentina Thailand Peru large developed countries. Colombia is on the waiting list to be included in the group Philippin Bangladesh Malaysia Poland Altogether, BBVA expects the EAGLEs to be responsible es for half of the worlds growth over the next ten years. On the other hand, the G7 will only contribute 14% of saidSud Africa Nigeria Vietnam Pakistan growth.

WHY INVEST IN COLOMBIA?

46.9 million Catholic Majority Religion Total Surface Area Population (Freedom of Religion) 1,141,748 Km² Government Presidential Republic Juan Manuel Bogotá PresidentSantos Calderón Capital Time Zone Currency GMT - 5 hours Colombian Peso (COP$) Official Language Territorial Waters Spanish 928,660 Km² Source: DANE - EIU

Colombia among countries with low risk of politicalinstability Risk of Political Instability, 2011 7/ Bureaucracy, 2011 8/ Scale 0-10. 0: high – 10: low Scale 0-10. 0: it is an obstacle – 10: it is not an obstacle Chile 9,4800 Country Rating Brazil 8,1700 Chile 4.82 Colombia 6,9600 Colombia 3.05 Peru 6,8400 Mexico 2.26 Mexico 5,5900 Peru 1.95 Argentina 4,9700 Brazil 1.62 Venezuel Argentina 1.44 1,0700 a Venezuela 0.59Source: IMD World Competitiveness, 2011. Ranking consisting of 59 countries.7/ The risk of political instability is very low.8/ Bureaucracy is not an obstacle for business activity.

Colombia, top country in the region for supportingand promoting business productivity Company Productivity, 2011 1/ Scale 0-10. 0: it is not supported – 10: it is supported 5,38 5,37 5,29 5,2 Colombia is a leader in guiding 4,89 4,58 3,74 companies to higher productivity with global strategies. Argentina Brazil Venezuela Mexico Colombia Chile Peru Efficiency of small and medium-sized companies, 2011 2/ Scale 0-10. 0: low – 10: high 6,2 5,72 5,44 5,36 5,22 4 Colombia focused on the 2,81 development of small- and medium-sized companies to Brasil México Chile Colombia Perú Argentina Venezuela strengthen competitiveness.Source: IMD World Competitiveness, 2011. Ranking of 59 countries.1/ Companies productivity is supported by global strategies (supplies, offshoring and outsourcing).2/ Small- and medium-sized companies are efficient according to international standards.

Colombia has a more efficient institutional and legalframework than Argentina, Brazil and Venezuela Institutional Framework, 2011 1/ Legal and Regulatory Framework, 2011 2/ Scale 0-100. 0: it is not efficient – 100: it is efficient Scale 0-10. 0: it is not encouraging – 10: it is encouraging 57 Chile 07 Peru 05 47 46 45 Colombia 04 40 Brazil 04 33 31 Mexico 03 Argentina 02 Venezuela 01 Colombia stands out among Latin American markets with efficient structural reforms focused Argentina Venezuela Peru Chile Mexico Brazil Colombia improving a competitive economy.Source: IMD World Competitiveness, 2011. Ranking consisting of 59 countries.1/ The countrys institutional framework is efficient in the countrys competitiveness. - 2/ The legal and regulatory framework promotes company competitiveness.

Second country in the region in governmenttransparency and effective decisions Government Decisions, 2011 3/ 6,78 Scale 0-10. 0: ineffective – 10: effective 4,04 3,96 3,83 Colombia is making 2,9 1,88 1,58 progress in institutional development. Chile Argentina Brazil Mexico Colombia Peru Venezuela 7,65 Transparency in Government policy, 2011 4/ Scale 0-10. 0: deficient– 10: satisfactory 3,71 3,43 3,21 3,01 1,02 0,49 Mexico Brazil Argentina Chile Colombia Peru VenezuelaSource: IMD World Competitiveness, 2011. Rankingconsisting of 59 countries.3/ Government decisions are applied effectively.4/ Transparency in the governments policy is satisfactory.

According to international standards, Colombia is in thegroup of upper-middle income countries US $ 7000 Income Per Capita, Atlas Methodology 6000 Upper Middle Income 5000 4000 3000 Lower Middle Income 2000 1000 Low Income 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: Ministry of Finance and Public Credit - EIU

Colombias GDP per capita has triplied since 2003. Colombias GDP Per Capita 2000 – 2010 (US $) 6.153 5.362 5.091 4.610 3.670 3.354 2.721 2.471 2.391 2.347 2.233 +176% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: EIU (Economist Intelligence Unit) (October 12, 2011)

The GDP Per Capita adjusted to PPP is nearly US $10,000 Colombias GDP Per Capita (PPP)*, 2000 – 2010 (US $) 9.300 8.842 8.940 8.474 7.817 7.204 6.817 6.343 6.151 5.826 5.984 +60% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 •GDP Per Capita adjusted to prices at purchasing power parity (PPP) Source: EIU (Economist Intelligence Unit) (October 12, 2011)

Colombia is living its best moment:High international reserves and low inflation International Reserves Colombia, 28.445 30.000 US$ Millions 2000-2010 20.000 24.041 25.365 14.957 15.440 20.955 10.921 13.540 10.245 10.844 9.006 10.000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Colombias Inflation Rate (%) 8,8 2000 – Nov. 2011 7,7 7,7 7,0 6,5 5,5 5,7 4,9 4,5 4,0 3,2 2,0 2,5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Jan. - Jan. - Nov. Nov. 2010 2011 Source: Bank of the Republic - DANE

Colombia reach the highest FDI flow in history FDI, 2000 – 3rd Quarter 2011 Main Investors in Colombia US $Million 2000 – 2010** 10.821 10.252 10.564 United States • Accumulated US $9.333 Billion • 28.8% share 6.914 7.137 England 6.656 • Accumulated US $4.631 Billion • 12.8% share 5.734 2.436 Spain • Accumulated US $2.637 Billion 1.720 • 7.3% share Mexico • Accumulated US $1.517 Billion • 4.2% share Variation 2009–2010: -3.1% Variation 3rd Quarter 2010 – 3rd Quarter 2011: 88.7% *Figures obtained through the foreign currency balance of the Bank of the Republic. **Share of all countries with positive cumulative investment, without reinvested profits or investments in the oil sector. Accumulated value 2000 – 2010: US $45,946 million Note: the list of the top countries investing in Colombia does not include Anguilla or Panama, in third and fourth place. Source: Bank of the Republic - Balance of Payments

Although natural resource extraction is the top area receiving FDI,financial services, trade and manufacturing are getting stronger. FDI in Colombia by Sector, FDI in Colombia by Non-Traditional Sectors, 2009 – 3rd Quarter 2011 2009 – 3rd Quarter 2011 Electricity, Water and Gas Others Transport, Construction Others 4% storage and 3% 3% 1% Construction communications 9% 6% Financial Manufactures Services 8% Oil Transport, 25% 35% storage and communication 16%Trade, Rest. And Trade, Rest. And Financial Hotels Hotels Services Manufactures Mining and 24% 9% 9% 22% Quarry 26% Share of all countries with positive cumulative investment, without reinvested profits or investments in the oil sector. Accumulated value 2009 – 3rd Quarter 2011: US $17,999 million Source: Bank of the Republic

Colombia is also increasing its investment flowsabroad. US $ Millions 6.529 Ranking of countries 4.662 receiving FDI from Colombia (2000-2010) 1. USA 3.088 2. England 3. Panama 2.254 4. Brazil 938 5. Peru 6. Guatemala 325 913 7. Mexico 142 8. Chile 9. Ecuador2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 10. Venezuela Assembly of the first 500,000-volt electric Purchased 60% of Peruvian energy transmission system in Peru. Investment: company Cálidda. US $130 Million Investment: US$ 111 Million Purchased ING companies in Chile, Acquisition of one hundred percent of the Mexico, Peru, Uruguay and Colombia Central American Bank Investment: US$ 3.763 Billion Investment: US$ 1.9 Billion Source: Banrep

In 10 years, exports tripled Exports, 2000 - November 2011 Top destinations of exports, 2010 US $Millions 51.179 United States • US $16.879 B 37.626 39.820 • 42.5% share China 32.852 35.974 • US $1.967 B • 4.9% share 13.158 Ecuador • US $1.825 B • 4.5% share Holland • US $1.617 B • 4.1% share Variation 2008 - 2009: -12.7% Variation 2009 - 2010: 21.2% Variation Jan Nov 2010 - Jan Nov 2011: 42.3% Source: DANE (National Department of Statistics)

Colombia is increasingly attractive to tourists Foreign visitors to Colombia Main nationalities of visitors arriving to 2006 - January November 2011 Colombia, 2010** (thousands) 2.587 2.681 2.546 2.381 United States 2.096 910 2.011 • 345,158 Visitors 949 1.968 • 23.4% share 1.095 1.059 314 402 992 296 265 Venezuela 285 246 228 • 197,173 Visitors 127 51 • 13.4% share 1.354 1.475 1.320 1.432 Ecuador 1.053 1.195 1.223 • 122,076 Visitors • 8.3% share 2006 2007 2008 2009 2010 Ene - Nov Ene - Nov Argentina 2010 2011 • 83,674 Visitors • 5.7% share DAS Cruise land border crossings Total * DAS and Cruise information to November 2011; Land Border Crossings to June 2011 Sources: DAS, MCIT, Bank of the Republic. Proexport Calculations.

Colombia is continuing to improve its bond credit rating(EMBI+) Sovereign Risk (EMBI+): Colombia vs. Latin America 1000 900 800 700 600 500 400 300 200 100 0 Latinamerica Colombia Emerging Markets Bond Index Plus (EMBI+), points over US Treasury Bonds. Source: JPMorgan – Central Bank of Peru

Colombia has a better sovereign risk performanceagainst other european countries. Sovereign Risk : Colombia vs. Europe 500 450 400 350 300 250 200 150 100 50 - Colombia Spain France Holand Italy Sovereing debt compared withGermany Source: DatosMacro http://www.datosmacro.com/prima-riesgo, Banco Central del Perú, December 31/2011

Colombia vs. OECD Countries(Doing Business Indicators - World Bank) Percentile ranking Best practice Establishment of a business Closure of a Acquisition of Best performance business construction permits Average performance Worst performance Contract Labor compliance legislation Cross-border Property trade register Paying Obtaining taxes credit Investor protection Source: OECD – Colombia Economic Assessment, 2010

A low risk of political instability supports productivity and drives small and medium-sized companies:Colombia has become the regions most sustainable country.

Colombia is the regions most sustainable country. Sustainable Development, 2011 1/ Scale 0-10. 0: it is not a priority – 10: it is a priority Colombia 6.18 Colombia is moving forward as a 5.84 Chile leader in Latin America toward sustainable development. 5.58 Brazil Peru 5.05 Mexico 5.03 Venezuela 4.78 4.22 Argentina Source: IMD World Competitiveness, 2011. Ranking consisting of 59 countries. 1/ Sustainable development is a priority for companies.

A country with distinct regions and opportunities for investment Caribbe • Caribbean Region: tourism, logistics, an petrochemical cluster, construction supplies, Region Atlantic export platform Central / Andean Region • Central/Andean Region: service outsourcing, high value-added manufacturing, hub to cover domestic market, specialized agroindustry.Pacific OrinocoRegion Region • Pacific Region: manufacturing, agroindustry, logistics, biotechnology, Pacific export platform • Orinoco Region: agriculture, forestry, biofuels, hydrocarbons Amazon Region • Amazon Region: conservation, ecotourism (Leticia)

Multiple development centers: 10 metropolitan cities/areaswith populations greater than 500,000 inhabitants Barranquilla (1.9) Santa Marta (0.6) Cartagena (1.3) Cúcuta (0.8) Medellín (3.6) Bucaramanga (1.1) Coffee Triangle: Pereira, Manizales, Armenia and Cartago (1.8) Bogotá (8.7) Cali (2.9) Ibagué (0.6) Total population 2011 46 million Total population in metropolitan areas 23.3 millionPopulation of cities including their metropolitan area. 2011Source: DANE

Positioning Colombia as an export platform: 11 free trade agreements(FTA) ,allowing preferential access to over 1,500 million consumers In Force Signed In Negotiation Future IN FORCE SIGNED IN NEGOTIATION FUTURE • CAN (Peru, Ecuador y Bolivia) • United States • South Korea • Japan • MERCOSUR (Argentina, Paraguay, • EFTA (Iceland and Norway) • Panama • Australia Uruguay and Brazil) • Turkey • New Zealand • Chile • European Union (Signature) • Costa Rica • G2-Mexico • Dominican Republic • North Triangle (Honduras, • Gulf Community Guatemala y El Salvador) • Switzerland • Liechtenstein • Canada

In 2012, Colombia will be negotiating 21 internationalinvestment agreements (IIA) In Force Signed In Negotiation IN FORCE SIGNED IN NEGOTIATION • Peru (Agreement) • China (Agreement) • Mexico (Agreement) • India (Agreement) • Kuwait • Spain (Agreement) • United Kingdom (Agreement) • Turkey • Switzerland (Agreement) • South Korea (Agreement) • Liechtenstein (Chapter) • EFTA (Iceland and Norway) (Chapter) • European Union • CAN (Ecuador and Bolivia) (Chapter) • United States (Chapter) • Japan • Panamá • Chile (Chapter) • North Triangle (Honduras, Guatemala and El Salvador) (Chapter) • Canada (Chapter) Note: The International investment agreements (IIA) include Agreement Investment Treaties (BIT) (agreement) and Free Trade Agreements (FTA) with investment section (chapter).

In 2012, Colombia will be negotiating 16 double taxationagreements (DTA) In Force Signed In Negotiation IN FORCE SIGNED IN NEGOTIATION • CAN – Peru, Ecuador and • Canada • United States, Germany, Bolivia • Mexico Czech Republic, Netherlands, • Spain • South Korea Belgium, Portugal, Japan, • Chile France • India • Switzerland

National Development Plan 2010 - 2014 Strengthen cultivable Make use of large,areas and update them unexplored gold and with technology to coal reserves increase exports Leading driver of AGRIBUSINESS economic and social MINING development Stimulate the creation, INNOVATION Promote the improvement and development of expansion of “Housing for All” infraestructure INFRASTRUCTURE HOUSING

Opportunities Linked to the Engines INNOVATION • Increase the share of Science and Technology in the Domestic GDP. The goal for 2019 is 2%. •Increase the number of patents per 100,000 inhabitants •The Professional Education Challenge, increasing 2006 results nearly 4 times over for 2012. INFRASTRUCTURE • The Government has launched an ambitious infrastructure plan, which involves new inter-departmental highways, ports and airports to make Colombia more competitive. This plan requires over US $50 billion and significant support from the private sector. MINING • Colombia has a potential of approximately 17 billion tons of possible coal reserves and 28 million ounces of gold, generating a competitive advantage compared to other countries in the region

Opportunities Linked to the Engines HOUSING Requirements: • One Million Homes • Colombia has a high housing deficit in the countrys largest cities due to internal displacement and economic difficulties. • The sector is divided into 2 major areas, Low Income Housing and Non-LIH. The government has planned to build one million homes, 70% of which will be LIH. AGRO Opportunities in: Biofuels, Reforestation, Dairy Sector • Colombia has potential cultivable areas, which require considerable capital investments in order to modernize the sector for growth and exportation. The peasants and indigenous communities that live in these areas will benefit from this initiative.

"The world is starting to identify with Colombias engines"

2011 - Established one of its two worldclass product research and development centers. Investment: US $20 M United Jobs: 400 States2011 - Service center for financial and accounting operations -Spanish Market-.Investment: US $5 - 8 MJobs: 1500 India 2011 - Global service center for BPO and IT operations Investment: US $100 M United Jobs: 1000 States2011 - Development of 12,000 hectares of sugar cane and the construction of an ethanolplant with a capacity of 376,000 liters per dayInvestment: US $300 M Israel MERHAVJobs: 1,000 2010 – Established a Private Capital Fund for Colombia in Infrastructure Investment: (Amount of the Fund): US $400 M Canada

Productive Transformation Program: A Public - Private Partnershipto strengthen and build “world class sectors” SERVICES MANUFACTURING AGRIBUSINESS SECTOR SECTORS SECTOR Business process, Graphic Chocolate outsourcing and communication Confectionery offshoring BPO&O industry Textiles, Fashion & Cattle Design IT Services and Palm and vegetable Software oil Electric Power. Health Services Automotive Industry Shrimp Farming Exports Cosmetics and Personal Care Products

In order to do so, the action plans contain initiativesrelated to four thematic subjects... HUMAN RESOURCE DEVELOPMENT Sense of belonging, improved skills, and increased availability and retention in the industry. Bilingualism and university- company alliances. STANDARDS & REGULATIONS Adjust standards and regulations to industry needs. STRENGTHENING INDUSTRY AND PROMOTION ACTION PLAN Attract foreign investment, strengthen the sector and its trade unions, and its management and promotion capacity. INFRASTRUCTURE Manage the availability of the right More than 185 infrastructure that is required in each sector. Initiatives

Legal Framework, benefits and support to invest in Colombia

The most competitive FTZ’s in Latin America: 15% income taxand sales allowed to the local market 15% income tax rate. No import duties. VAT exemption for goods sold from Colombia to FTZ Benefit from international trade agreements. (Except Peru) Allow sales to the local market. Permanent (PFTZ) Free Trade Zones Single-Company (SCFTZ)

99 Free Trade Zones Free Trade Zone Approved Single - Company Free Trade Investment commitments Zone Permanent Free Trade Zone Total Investment (USD 6.993 Million) Direct Jobs 47.115 Indirect Jobs 97.363 Investment executed so far Total Investment (USD 3.158 Million) Direct Jobs 6.674 Indirect Jobs 23.069 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 USD 1 = COP 2.000 exchange rate. For 2012, the M.M.L.W is COP 566.700. The M.M.L.W, as well as the exchange rate are subject to variations. 65

Other incentives by sector: Income tax exemption forup to 20 years • Exemption for 30 years for those who invest in the construction or renovation Tourism of hotels between January 1st, 2003 and December 31, 2017. Eco-tourism • Exemption for 20 years starting from 2003. • Exemption for 10 years after the start of production in crops planted between Late yield crops 2003 and 2014. • Permanent exemption for investment in new forest plantations, sawmilling and Forestry timber plantations. • Publishing of books, magazines, booklets or collections of scientific or cultural Editorial characteristics are exempt until 2013. New medicinal products • Exemption for 10 years for products manufactured in Colombia with high and software scientific and technological research content, starting from 2003. • Exemption for 15 years for sale (by the generators) of electricity based on Renewable energy wind resources, biomass or agricultural waste. • Exemption for 15 years starting from 2003 to provide services in slabs and River transport boats with net weight below 25 tons. Research and Technological • 175% income tax deduction over investments in scientific and technological Development developments.

Formalization and Employment Generation New employees under twenty eight (28) years old. Length of benefit by employee: 2 years. Discount in the income New employees certified in displacement situation, reintegration or tax and supplementary disability. Length of benefit by employee: 3 years. contributions, and other contributions from payroll (Do not include positions New women employees above 40 years old with more than 1 year generated by mergers or unemployed. Length of benefit by employee: 2 years. replacements) New employees with incomes lower than 1.5 SMMLV. Length of benefit by employee : 2 years.

Count on us to help you identify and do business with Colombia www.proexport.com.co

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Colombia Presentation - January 2012

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