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Investment Booklet

  2. 2. L ib erta y O rd e n
  3. 3. PROEXPORT.COM.CO 4 Bogota, Colombia
  4. 4. GREETINGS FROM THE PRESIDENT, JUAN MANUEL SANTOS We are in the decade of Latin America, and Colombia in particular is doing exceptionally well at the moment, positioning itself as one of the region’s most dynamic destinations. 2012 was an exceptional year. We have managed to achieve positive results in all our indicators, recording the highest level of direct foreign investment in history, one of the lowest inflation rates in Latin America, a positive fiscal situation that has come very close to equilibrium and a continually falling rate of unemployment. Colombia is currently the third most business-friendly country in Latin America, the greatest reformer in the region and the number one country for investor protection, according to the World Bank’s Doing Business report. The country has also been recognised by the Heritage Foundation as one of the markets where economic freedom provides opportunities to generate positive and visible results in terms of prosperity. We have taken important steps towards integration in the global community: free trade agreements with almost all the countries of the Americas, EFTA and, in the near future, the European Union; 22 international investment agreements with over 40 countries, and 16 double taxation agreements. These are factors that make our nation a safe and strategic destination for foreign companies with plans for expansion. To such companies I would like to highlight the capacity and creativity of Colombia’s human resources, its geographical location, which makes it an attractive platform for exports and connections with the rest of the world, as well as the introduction of fiscal measures to ensure long-term sustainability, and a stable and efficient legal system that protects investment. In this brochure, you will find specific information about Colombia - based on figures and statistics sourced from both national and international organisations - which demonstrates the benefits and opportunities the country has to offer for profitable and lasting investments. International leaders, major companies and specialist media all know that Colombia is one of the rising stars with greatest prospects for economic expansion. We are at an exciting moment in our development, so for those who want to plant their seeds in profitable, safe and stable ground, the answer is Colombia. Juan Manuel Santos Calderón President of the Republic
  5. 5. PROEXPORT.COM.CO 6 8 12 13 16 18 22 23 24 26 AN ACTIVE ECONOMY IN THE GLOBAL MARKET 27 30 32 36 40 41 44 46
  6. 6. 51 56 60 63 62 64 65 67 68 68 72 74 96 Invest in COLOMBIA 7
  8. 8. 9 Invest in COLOMBIA Colombia Panama TOTAL Venezuela Ecuador 2,070 ,408 2 Km Peru Brazil
  9. 9. PROEXPORT.COM.CO 10 BRANCHES OF PUBLIC POWER The Insular Region EXECUTIVE LEGISLATIVE JUDICIAL The Caribbean Region The Andean Region The Orinoquia Region (The Eastern Plains) The Pacific Region ADMINISTRATIVE DIVISION The Amazon Region The country has 32 department states and six main regions (Caribbean, Pacific, Andean, Orinoquia, the Amazon and Insular). Colombia possesses multiple facets of development and nine metropolitan areas each with a population of over 500.000 inhabitants: Bogotá, Medellín, Cali, Barranquilla, Cartagena, Cúcuta, Bucaramanga, Ibagué and the coffee-growing region or Cultural Coffee Landscape (Manizales, Pereira and Armenia).
  10. 10. Invest in COLOMBIA 11 47.1 million inhabitants (2012 - DANE) 41 inhabitants/ Km2 (2012 DANE) GDP GDP GDP GDP (2012-Banco de La República) Per Capita (Nominal, 2012-Banco de la República) Per Capita (PPA, 2012EIU) Growth (2012-Banco de La República) (2012-DANE) (2012-Banco de la República) EXPORTS IMPORTS US$369.5 billion US$7,933 US$10,350 4.0% 10.4% 2.4% US$ 60.7 billion (2012 - DANE) US$ 59.1 billion (2012 - DANE) 94.1% (2012 - DANE) 75.22 years (2012 - DANE) UNEMPLOYMENT INFLATION RATE RATE X M
  11. 11. PROEXPORT.COM.CO 12 Medellin, Colombia
  12. 12. Peru 321 Norway 254 320 Chile Vietnam New Zealand 232 Denmark 136 Israel 248 Singapore Note: GDP in accordance with Purchasing Power Parity - PPP - prices Source: EIU - Economist Intelligence Unit. 2013. COLOMBIA IS THE WORLD’S 28TH LARGEST ECONOMY AND ONE OF THE LARGEST NONOECD COUNTRIES 2011 2012 2006 2005 2004 324 326 370 Hong Kong 6,817 2003 Sweden GDP (PPP)2012 BILLIONS. LATIN AMERICA. GDP PER CAPITA (PPP) 2000- 2012 US$ Note: GDP in accordance with Purchasing Power Parity - PPP - prices Source: EIU - Economist Intelligence Unit. 2013. 2002 402 Switzerland 8,838 2001 412 Philippines 2000 420 Belgium 2007 434 Malaysia 2008 497 Colombia 13 Invest in COLOMBIA 498 Mexico 2010 2.060 Brazil 9,920 2009 2.359 FAVOURABLE MACROECONOMIC ENVIRONMENT US$10.350 5,826 COLOMBIA’S GDP PER CAPITA IS CLOSE TO US$11,000
  13. 13. PROEXPORT.COM.CO 14 MACROECONOMIC STABILITY AND DYNAMIC LONGTERM ECONOMIC PERFORMANCE 15.6 14.1 13.7 7.0 2.5 6.5 5.3 5.5 3.9 In 2012, the Colombian economy grew by 4.0%, a percentage which is higher than the growth of the world economy (3.3%) and of Latin America and the Caribbean, which was 3.0%. It is expected to reach a figure close to 4.1% (FMI) by the end of the year. The results obtained are also in line with expectations for growth over the four-year period, which is forecast to be around 6.2% for 2014. In 2012 the country presented its highest level of international reserves US$37.5 billion and a low level of inflation 2.44%. The unemployment rate has been declining steadily over the last few years, reaching a historic minimum of 10.4% at the end of 2012. GDP, inflation, and rate of unemployment 2002 - 2016 Annual average. % Projectable 11.8 12.0 11.2 11.3 12.0 11.8 10.8 10.4 10.1 6.7 4.7 4.9 4.5 6.9 7.7 5.7 3.5 UNEMPLOYMENT RATE 6.6 2.0 4.0 1.7 2002 2003 2004 2005 2006 2007 2008 2009 2010 p: Projectable. e: Estimate. 9.9 9.7 9.3 4.0 3.7 2.4 4.7 4.9 4.9 4.7 3.1 3.1 2.9 2.9 2011 2012 2013p 2014p 2015p 2016p Source: DANE, Banco de la República. EIU - Economist Intelligence Unit, 2013. GDP INFLATION
  14. 14. Invest in COLOMBIA 15 Source: EIU - Economist Intelligence Unit.
  15. 15. Population: 2013p.* Millions of inhabitants Source: DANE; EIU - Economist Intelligence Unit, 2013. *P:Estimate. COLOMBIA HAS THE 23 LARGEST POPULATION IN THE WORLD AND THE SECOND LARGEST SPANISH SPEAKING POPULATION AFTER MEXICO 7.9 7.1 6.6 6.1 4.4 3.9 3.8 Switzerland Hong Kong Israel Norway Singapore New Zealand 8.8 Sweden 10.2 Czech v Chile 19.0 15.2 Australia Malaysia Peru 30.3 25.5 22.9 Canada 46.6 South Korea Colombia 47.1 Austria 98.62 Mexico PROEXPORT.COM.CO 16
  16. 16. 1.0 0.5 Medellin 2.4 Cucuta 0.6 Bogota 7.5 Colombia is a young and dynamic country in which 55% of the population is under 30 years of age. 47.1 MILLIONS 25.9 MILLIONS Total population 2013* Total population in metropolitan areas 2.3 The cultural landscape of the coffee-growing region (Cultural Coffee Landscape): Pereira, Manizales, Armenia. 1.1 Ibague 0.5 City Populations include surrounding metropolitan areas Source: DANE. *Forecast. 17 Invest in COLOMBIA 1.2
  17. 17. 30 Colombia is the third most business-friendly, and the most reformative country in Latin America. Similarly, it holds sixth place in the world and first in the region in terms of protecting its investors according to the World Bank’s Doing Business report 2013. Colombia 16 Panama 8 Costa Rica 7 Mexico 3 Peru 0 Venezuela -2 Ecuador -13 -8 Brazil Chile Source: The Doing Business Report, 2013 - The World Bank. Positive statistics indicate an improvement in business environment. Argentina -21 PROEXPORT.COM.CO 18 33 43 44 53 62 122 116 128 134 179 37 43 45 48 61 110 124 130 139 180
  18. 18. Invest in COLOMBIA 19 Source: The Doing Business Report, 2013 - The World Bank.
  19. 19. PROEXPORT.COM.CO 20
  20. 20. The Economic Freedom Index, analyzing the policy development of 184 countries, has recognised Colombia as being one of the markets in the region in which economic freedom is allowing it to generate both positive and visible results in terms of prosperity. Invest in COLOMBIA 21
  22. 22. BBB 24/apr./2013 A–2 16/mar./2011 Stable BBB + 5/mar./2007 A-2 5/mar./2007 22/jun./2011 22/jun./2011 Standard & Poor’s is the first of the main rating agencies to improve the outlook of Colombia’s sovereign debt to positive: 22/jun./2011 “The effective implementation of fiscal policy reforms could improve its financial profile, reduce debt and the government’s interest burden.” 7/feb./2012 Positive - Standard & Poor’s, August, 2012. Positive August 2012. 23 Invest in COLOMBIA In 2013 Standard & Poor’s raised its outlook on Colombia’s foreign debt to positive, based on the effective implementation of tax reforms, providing the country with a stronger financial outlook.
  23. 23. PROEXPORT.COM.CO 24 CDS INDEX *Average 2012. *Credit Default Swap Index. Measures the difference between the interest rate paid for a Colombian bond in dollars abroad against the rate paid for a US bond. CDS as at 31 December, 2012. Less difference implies lower country risk. Source: La República newspaper.  Bloomberg. CDS at 31 December, 2012. 97.23bp 119.43bp 120.07bp 130.05bp 130.06bp 1118.77bp 153.23bp France
  24. 24. ITS LOW RISK PERCEPTION IS ACKNOWLEDGED BY INTERNATIONAL MARKETS, BASED ON THE ECONOMY’S POSITIVE STATE OVER THE PAST FEW YEARS.  Invest in COLOMBIA 25 CDS INDEX* Average 2012. 250 230 210 190 Colombia 170 Brazil 150 Chile 130 Mexico 110 Colombia Brazil Dec. Oct. Nov. Sep. Jul. Aug. Jun. Apr. 2011 May. Mar. Oct. Nov. Sep. Jul. Aug. Jun. Apr. May. Mar. Feb. Feb. France 50 Dec. Peru 70 Jan. 90 Jan. COLOMBIA’S RISK PERCEPTION CONTINUES TO IMPROVE AND IS ONE OF THE LOWEST IN THE REGION Colombia’s economic indicators continue to be favorable. Sound fiscal policies and low sustained levels of inflation, can be noted alongside increased confidence from international markets with regards to the country’s economic stability. Colombia has the second lowest risk perception in the region—according to its position on the Credit Default Swaps Index. The country has a lower risk perception than other countries in the region such as Brazil, Mexico, and Peru. 2012 Chile Mexico Peru France *Credit Default Swap Index. Measures the difference between the interest rate paid for a Colombian bond in dollars abroad against the rate paid for a US bond. CDS as at 31 December, 2012. Less difference implies lower country risk. Source: La República newspaper.  Bloomberg. CDS at 31 December, 2012.
  26. 26. EXTENSIVE TRADE RELATIONS - MAIN EXPORT DESTINATIONS EXPORTS, 2000 - 2012 US$ MILLIONS MAJOR EXPORT DESTINATIONS, 2012 FOB US$ 2012 MILLIONS SHARE 2012 21,980 36.7% China 3,343 5.6% Spain 2,940 4.9% MAIN DESTINATIONS United States Panama 2,857 2,556 56,915 4.8% Venezuela 60,274 4.3% Netherlands 2,503 4.2% Chile 2,189 3.7% Ecuador 1,910 3.2% Peru 1,582 2.6% India 1,363 2.3% 37,626 16,788 13,158 39,713 24,391 Source: DANE. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Invest in COLOMBIA 27 EXPORTS X
  27. 27. PROEXPORT.COM.CO 28 58,632 IMPORTS 2000-2012 US$ MILLIONS 54,675 40,683 39,669 MAJOR IMPORT DESTINATIONS - 2011 Source: DANE (The National Department of Statistics) - CIF values. 11,757 13,882 2000 2001 In 2012 Colombian world exports reached US$60.2 billion, 5.8% more than in 2011 when the country recorded US$56.9 billion. Of the total exports in 2012, the nonmining sector represented 23.7% of Colombian exports with US$14.3 billion. The main subsectors in nonmining world exports in 2012 were: - Cut flowers, with US$1.3 billion, a share of 8.8% and growth of US$16.6 million (1.3%). - Plastics in primary forms, with US$975.3 million, a share equal to 6.8% and growth of US$17.2 million (1.8%). - Bananas, with US$822 million, a share equal to 5.8% and growth of US$6.9 million (0.8%). 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 With regard to imports in 2012, the main countries from which Colombia makes its foreign purchases are United States (23.9%), China (16.3%), and Mexico (11.1%), in that order. Other countries (110 in total) accounted for a share of 28.4% on average over the last two years and this has been maintained since 2010. The main products purchased abroad in the nonmining segment and excluding coffee are: industrial machinery, vehicles, other means of transport, telecommunications/sound, and iron/steel manufacturing.
  28. 28. NONMINING EXPORTS TOTAL EXPORTS - MINING AND NONMINING SECTORS % SHARE 2012 Services 0.6% Clothing 10.2% Nonmining sectors (excluding coffee) Invest in COLOMBIA % SHARE 2012 29 Other 0.7% 24% Agrobusiness 32.8% Mining and coffee Manufacturing 55.7% 76% Total Nonmining exports 2012: US$14.008 million Source: DANE. Total exports 2012: US$60.274 million Source: DANE. The country offers a diverse range of exports and has a presence in the five continents. Colombia currently exports to 175 countries. The quality of the country’s products is recognized at a global scale and includes: cut flowers (fresh and exotic), tropical fruits, textiles and clothing, confectionary, and coffee products. With over 9,000 export companies, Colombia offers its international buyers innovation, diversity, and quality based on creativity and technology. MAIN NONMINING PRODUCTS EXPORTED BY COLOMBIA Subsector Share % 2011 Fresh cut flowers Plastics in primary forms Banana Clothing sector Household products Cosmetics and cleaning products 9% 7% 6% 5% 4% 4% Metallurgy Sugar and honey 4% 3% Subsector Share % 2011 Pharmaceutical products Iron and steel manufactures A range of products from the chemical industries Coffee products 3% 3% Confectionary 2% Live animals (beef cattle) 2% Textiles 2% 3% 2% Source: DANE. Calculations by PROEXPORT.
  29. 29. PROEXPORT.COM.CO 30 FOREIGN TRAVELLERS IN COLOMBIA 2006-2012 (THOUSANDS) 296 313 254 284 228 126 50 1,053 1,195 1,222 1,353 1,474 1,582 1,592 2006 2007 2008 2009 2010 2011 2012 Foreign travellers MAJOR NATIONALITIES OF VISITORS TO COLOMBIA, I - SEMESTER, 2012. United States of America 319,202 visitors 18.9% share Venezuela 250,404 visitors 14.8% share Ecuador 114,564 visitors 6.8% share Argentina 111,555 visitors 6.6% share
  30. 30. CAPITAL CITY NATURE FAIRS AND FESTIVALS RELIGIOUS TOURISM BIRDWATCHING SALSA HERITAGE DESTINATIONS WHALE WATCHING ADVENTURE Colombia has 53 million hectares of natural woods, 22 million hectares of savannah, arid areas, snow-capped mountains, and wetlands; It also ranks fourth in the world for its abundance of terrestrial water resources. The country’s natural parks make up 14% of national territory and it is the most biodiverse country per square kilometre in the world. The Caribbean and Pacific coasts are ideal for surfing, fishing, rafting, and regattas. The UNESCO has recognized 13 Cultural Heritage of Humanity sites in Colombia and in June 2011; the coffeegrowing region, or Cultural Coffee Landscape was added to the list. The country also offers an important array of beaches. The Islands of Baru, Rosario, San Andres and Providencia (with its “sea of seven colors” as it is traditionally called) as well as Tayrona National Park amongst others, make of Colombia an ideal tourist destination. Within Latin America, Colombia is positioning itself as one of the major destinations for events and business meetings. The country climbed 21 places (from 50 to 29) at the International Congress and Convention Association’s (ICCA) ranking of international events between 2000 and 2012. SUN AND BEACH GASTRONOMY ARCHAEOLOGY AGRITOURISM SCUBA DIVING MICE GOLF SHOPPING NAUTICAL Santa Marta San Andres & Providencia Santander Boyaca Caribbean Sea Barranquilla Bogota Cartagena de Indias Meta Medellin Pacific Ocean Huila Choco Cali - Valle del Cauca Amazon Nariño Coffe Cultural Landscape Invest in COLOMBIA ¿WHAT CAN YOU FIND? 31 CRUISE
  31. 31. PROEXPORT.COM.CO 32 Colombia currently has twelve free trade agreements in force, eight undersigned and six in the process of negotiation. These will allow preferential access to a market of over 1,500 million consumers. The country’s trade integration agenda includes 24 international investment agreements (IIA)* with over 40 countries and 17 agreements preventing double taxation (DTAA). *Includes investment chapters inside the FTA. PACIFIC ALLIANCE
  32. 32. CURRENT CAN Canada Chile EFTA (Switzerland and Liechtenstein) G2-Mexico Mercosur Northern Triangle United States Venezuela SIGNED Costa Rica European Union Iceland Norway South Korea NEGOTIATION Israel Japan Pacific Alliance Panama Turkey Source: Ministry of Commerce, Industry and Tourism. 2013. Invest in COLOMBIA 33
  33. 33. PROEXPORT.COM.CO 34 Agreements for the promotion and reciprocal protection of investments - APPRI IN FORCE Peru (agreement). Spain (agreement). China (agreement). India (agreement). Switzerland (chapter V). Liechtenstein (chapter V). Chile (chapter IX). Northem Triangle (chapter XII). Canada (chapter VIII). Mexico (chapter XVII). United States (chapter X). . SIGNED South Corea (agreement). EFTA (Iceland y Norway) (chapter). Japan (agreement). United Kingdom (agreement). European Union (chapter). UNDER NEGOTIATION Israel. Kuwait. Singapore (Negotiations concluded). Turkey. Uruguay. Qatar. FUTURE Azerbaijan. Russia.
  34. 34. 35 IN FORCE CAN (Perú, Ecuador y Bolivia). Canada. Chile. Spain. Switzerland. SUSCRIBED Czech Republic. India. Mexico. Portugal. South Corea. UNDER NEGOTIATION Belgium. France. Germany. Holland. Japan. United States. FUTURE Brazil. China. Israel. Italy. Invest in COLOMBIA Agreements for the avoidance of double taxation and the prevention of tax evasion - DTTs
  35. 35. PROEXPORT.COM.CO 36 26 markets have been identified for which Colombia could become a platform for exporting products to the United States and the Andean Community of Nations (CAN) countries, as well as 12 markets in Europe, 6 in Asia , and 7 in Latin America and Canada.
  36. 36. 37 Invest in COLOMBIA COLOMBIA AS AN EXPORT PLATFORM TO THE WORLD AND FOR THE WORLD Colombia’s 12 current trade agreements with over 20 markets allow the country to have tariff advantages for exporting to these markets with highly competitive rates, as well as logistical advantages. Some examples of export platforms based on logistical advantages of air freight City of Origin Journey time Lima Freight US$/ Kg Journey time Country of Origin La Paz Freight US$/ Kg Sector Tariffs charged for Journey time Flete US$/ Kg New York 9 h 35 min 6.17 9h 4.91 9 h 55 min 6.79 Mexico City 9 h 15 min 4.70 5 h 50 min 3.47 6 h 40 min 4.15 Bogota 5 h 55 min 1.30 2 h 55 min 1.39 3 h 30 min 2.85 Argentina USA Canada Mexico 10.9% 5.44% 28.16% Chemicals 4.4% 3.0% 8.74% Textiles Brazil Destination City São Paulo Tariff Advantages to United States, Canada and Mexico. 15.6% 18% 30% Automotive and Auto Parts Ecuador Colombia Chemicals 4.4% 2.16% 6.44% Food and Tobacco 23.3% 0% 25.59% Drinks 7.6% 0% Building Materials -- 0% 7.19% 0% 0% 0%
  37. 37. PROEXPORT.COM.CO 38 Tariff Advantages to Latin America. Tariffs charged for Country of Origin Sector 15.4% 16.12% 10.12% 17.9% 17.86% 16.22% Electronic Components and Semiconductors 19.3% 17.6% -- Chemicals 14% 16% -- Automotive and Auto Parts 16.17% 13.7% 6.00% Electronic Components México CAN** Electronic Components and Semiconductors Canada Brazil Industrial Plant and Equipment United States Argentina 15.21% 15.1% 6.00% 0% 0% 0% Colombia ** Andean Community (Colombia, Peru, Bolivia and Ecuador) Some examples of export platforms based on logistical advantages of sea transport. Destination Country Country of Origin United States Canada Transit time (Days) Freight US$/Kg Transit time (Days) Freight US$/Kg Brazil 40 155 49 212 Argentina 41 133 48 158 Ecuador 12 66 Colombia 11 54 10 75 Colombia’s logistical advantages allow it to ship a container to the United States in up to 30 days less than other countries in the region, generating a saving of more than US$130. COLOMBIA AS AN EXPORT PLATFORM TO THE WORLD AND FOR THE WORLD Colombia has direct cargo flights to the main cities in the United States, Canada and Latin America, enabling us to save up to 9 hours flight time and make a saving of US$9/Kg.
  38. 38. Some examples of export platforms based on logistical advantages of air freight Destination Country Country of Origin United States Destination City Canada Brazil Transit time (Days) Flete US$ Transit time (Days) Flete US$ Transit time (Days) Flete US$ Francia 22 304 39 98 23 82 Alemania 26 314 -- -- 16 62 España 24 242 45 221 18 91 Reino Unido 20 294 24 117 29 73 China 22 111 27 140 37 98 Corea 19 110 21 138 40 91 Colombia 11 54 10 75 12 53 City of Origin Tariff Advantages to Latin America, United States and Canada Country of Origin Germany Spain United Kingdom Colombia Toronto Sao Pablo Journey time Freight US$/ Kg Journey time Freight US$/ Kg Journey time Freight US$/ Kg Berlin 11 h 30 min 2.70 9 h 50 min 5.20 13 h 35 min 7.08 Paris 8 h 05 min 2.85 11 h 2.85 11 h 45 min 8.42 Madrid 8 h 30 min 2.22 11 h 5 min 2.3* 11 h 10 min 1.89 London 7 h 40 min 2.61 7 h 55 min 3.37 11 h 45 min 5.60 Beijing 15 h 34 min 6.13 12 h 50 min 6.12 22 h 40 min 10.29 Seoul 13 h 50 min 4.61 13 h 4.35 23 h 55 min 8.85 6h 1.85 6 h 05 min 1.52 5 h 55 min 1.30 Colombia Tariffs charged for Sector United States Canada Brazil Argentina Electronic Components and Semiconductors 3.08% 5.1% 20% 20% Chemicals France New York 6.5% 6.5% 16% 16% Automotive and Auto Parts 1.3% 6.1% 20% 34.98% Industrial Plant and Equipment 4.7% 1.42% 16.12% 5.98% 6.5% 14% 14% Country of Origin Tariffs charged for Sector 15.43% Chemicals Tariff Advantages to Latin America, Mexico and Brazil. Industrial Plant and Equipment 4.4% 1.69% 15.8% 15.43% Industrial Plant and Equipment 3.35% 3.24% 16.1% 8.11% 7.51% 16.8% 22% 0% 0% 0% 0% Canada Mexico Brazil Metals China 15.4% Metals United States Korea Colombia 11.2% 5.4% 20% 22.7% Electronic Components and Semiconductors 8.0% 3.5% 17.1% 22% Textiles 20.4% 18% 30% 35% Metals 5.7% 5% 20% 18% 0% 0% 0% 0% 39 Invest in COLOMBIA Some examples of export platforms based on logistical advantages of sea transport.
  39. 39. PROEXPORT.COM.CO 40
  40. 40. 5.3% 2.26 Internet access connections have tripled over the last five years, rising from 2.17 million in 2008 to 7.25 in 2012. In the period 2011-2012 alone, subscriptions to fixed and mobile internet increased by 18.2%. The number of mobile telephone subscribers has also grown exponentially by five times since 2004 until reaching the figure of 49.07 million subscribers by the end of 2012, with a penetration rate of 105.3 subscribers per 100 inhabitants. 7.6% 3.27 10.5% 4.60 13.9% 6.19 91.0% 85.2% 77.3% 41.36 42.03 68.6% 33.94 47.5% 29.76 23.0% 21.85 10.40 105.3% 100.3% 49.07 46.20 97.7% 44.48 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: CRC – The Commission of Telecommunication Regulation (CRT). MinTIC, 2013. 41 Invest in COLOMBIA RAPID GROWTH IN THE CONSUMER MARKET: OVER 49 MILLION ACTIVE MOBILE USERS
  41. 41. PROEXPORT.COM.CO 42 Access to the Internet has tripled over the last FIVE years 2,150,718 7,256,091 6,140,271 4,384,181 3,181,431 2,179,951 1,072,881 218,405 2004 501,238 2005 2006 2007 2008 2009 2010 2011 2012
  42. 42. Source: e-government survey – The United Nations, 2012. Drafted by Proexport. 0.93 0.87 0.85 0.84 0.68 0.66 0.62 0.62 0.57 0.56 0.54 0.52 0.49 0.47 0.41 The most recent United Nations e- government survey shows that Colombia maintains its leadership in the region with regards to e-government; holding second place in Latin America and ranking forty-third in the world Invest in COLOMBIA 43
  43. 43. PROEXPORT.COM.CO 44 easy access to global markets Colombia is strategically located within five different time zones; sharing one of these with important and central business hubs including New York, Toronto, and Miami. It finds itself at the heart of the hemisphere’s ma commercial and financial centres, jor both in North and South America, sharing cultural affinity with both regions— an asset in terms of the successful consolidation of operations. More than 22 airlines, both cargo and passenger based, fly to Colombia. The country counts on over 700 direct, international frequencies and above 4,900 domestic frequencies every week. Key strategic location Over 800 direct international flights per week. More and more airlines are adding routes and flight frequencies, which improves Colombia’s air connectivity direct international flights have increased by 130% between 2000 and 2010 Over 4,500 domestic flights per week Over 20 airlines operate in Colombia
  44. 44. DIRECT AIR CONNECTIVITY Invest in COLOMBIA 45 11 h 15 m Frankfurt 6 h 05 m 5 h 35 m 10 h 40 m Toronto Paris New York 9 h 40 m Madrid 8 h 20 m Los Angeles 3 h 00 m Miami 4 h 45 m Mexico City 1 h 20 m Colombia: competitive location with easy access to global markets The data includes routes flying out Caracas 1 h 30 m Quito 3 h 00 m Lima 5 h 00 m Sao Paulo Santiago de Chile of Barranquilla, Bogota, Cali, and Medellin International Airports. Source: Routes and Tariffs – Tools for the Colombian exporter. Processed by Proexport Colombia. 5 h 45 m 6 h 15 m Buenos Aires
  45. 45. PROEXPORT.COM.CO 46 623 Colombia is situated on a focal point of maritime activity. It is close in proximity to the Panama Canal, a crossroad for the main lines of global trade communication, a strategic connection point between North and South America—as well as the East Coast of the United States of America and Asia. These features present an opportunity by means of acting as a commercial exchange platform. Air connections for cargo transport from Colombia are covered by 32 airlines with cargo quotas operating on more than 1,700 export routes with access to some 400 cities around the world. El Dorado International Airport has the highest movement of cargo in Latin America, with 520,000 tons moved. 400 thousand tons cargo were transported (air cargo) in 2012.
  46. 46. Invest in COLOMBIA 47 Source: Routes and Tariffs – Tools for the Colombian exporter. Processed by Proexport Colombia.
  47. 47. PROEXPORT.COM.CO 48 *Over More than 3,000 ocean freight routes (regular, direct, and connecting services) depart from Colombian ports, made up of 28 shipping companies, destined for 500 ports around the world. Colombian ports mobilize 127 million tons of cargo and receive close to 25,000 vessels via the Atlantic and Pacific coasts. Likewise, port companies providing a public service mobilize around 2.1 million containers a year. * The data includes routes departing from the ports of Barranquilla, Buenaventura, Cartagena, and Santa Marta. Source:  Routes and Tariffs – Tools for the Colombian exporter. Processed by Proexport Colombia. 127 million tons of cargo were shipped by sea in 2012.
  48. 48. Invest in COLOMBIA 49
  49. 49. PROEXPORT.COM.CO 50 Atlantic Ocean Buenaventura Buenaventura
  50. 50. PROEXPORT.COM.CO 52 COLOMBIA POSSESSES A SKILLED AND DEVELOPED WORKFORCE MORE THAN 53% (MASTER DEGREES AND FURTHER STUDIES) According to Euromonitor International, Colombia had the third highest number of graduates, of the following subjects, in the region during 2012: Social Sciences, Business, Law, Engineering, Manufacturing, and Construction. Seven of Colombia’s universities rank as amongst the best in the world. The availability of human resources is growing at a higher rate than many other countries. According to the Growth of the Workforce Index (IMD, 2012) Colombia is ranked as fifth in the world and second in the region in terms of both growth and labor force.
  51. 51. Postgraduate Vocational & Technical 55.872 28% 39.322 19% Undergraduate 105.979 53% Source: (Ministerio de Educación Nacional de Colombia) Colombian Ministry of Education. The national government supports the promotion of bilingualism by means of initiatives such as iSpeak. This scheme provides local and foreign companies with information regarding Colombian nationals with a certified level of English­ applicable to the — professional world. Currently, more than 26,000 professionals from many of Colombia’s cities, have a certified level of the language. Invest in COLOMBIA 53
  53. 53. World ranking amongst 59 coutries % Increase in labour force Mexico 2 3.78% Chile 3 3.57% Colombia 5 3.05% Venezuela 15 1.95% Peru 18 1.86% Argentina 28 1.10% Invest in COLOMBIA 55
  54. 54. PROEXPORT.COM.CO 56
  55. 55. Colombia is betting on innovation as a crosscutting component in order to transform both products and services that generate added value and skilled employment. The National Government has allocated 10% of royalty payments, arising from the extraction of hydrocarbons and minerals, to strengthen science, technology and innovation. Its aim is to advance towards becoming a knowledge-based economy. *Non mining energy Source: DNP. 57 Invest in COLOMBIA Sectors based on innovation are a symbol of our vision for the future; our move towards greater development and our steadfast ambition of competing within the international market are on an equal footing with higher income countries – National Development Plan 2010-2014.
  56. 56. PROEXPORT.COM.CO 58 INNOVATION DEVELOPMENT INCENTIVES In order to achieve these goals and foster new investment into R+D, and as a means of obtaining innovative processes, the following mechanisms have been created: INCOME TAX DEDUCTIONS EQUIVALENT TO 175% OF THE VALUE INVESTED INTO RESEARCH AND DEVELOPMENT AN EXEMPTION OF SALES TAX (VAT) ON THE IMPORTATION OF EQUIPMENT USED BY R+D CENTRES RECOGNISED BY COLCIENCIAS RESOURCES RECEIVED TO FINANCE SCIENTIFIC AND TECHNOLOGICAL PROJECTS OR INCOMES FROM INNOVATION ARE INCOME TAX EXEMPT. PROTECTION OF INDUSTRIAL PROPERTY IN ACCORDANCE WITH INTERNATIONAL STANDARDS EQUIPMENT AND DEVICES IMPORTED BY R&D CENTRES RECOGNIZED BY COLCIENCIAS WILL BE EXEMPT FROM VALUE ADDED TAX (VAT) With the aim of strengthening business innovation and high-impact, innovative entrepreneurship Bancoldex (Programme to invest in Private Capital Funds) has created Innpulsa. This Innovation and Development Unit cultivates financial and non-financial tools to promote and strengthen business innovation and dynamic ventures. Its work is based on four strategic levels:
  58. 58. PROEXPORT.COM.CO 60
  59. 59. FREE ZONES WITH INCOME TAX OF 15%2, POSSIBILITY OF SELLING TO THE LOCAL MARKET, EXEMPTION FROM CUSTOMS DUTIES (VAT, TARIFFS) AND ACCESS TO THE BENEFITS OF INTERNATIONAL TRADE AGREEMENTS. For Free Zones applied for or approved before 31 December 2012. For Free Zones applied for after 31 December 2012, income tax of 15% must be paid + income tax for equity – CREE, for which the rate is 9% for the years 2013 to 2015 and 8% for the following years. 2 3 4 Invest in COLOMBIA EMPLOYMENT INCENTIVES 61
  60. 60. PROEXPORT.COM.CO 62 Income tax of 15%* *For Free Zones applied for or approved before 31 December 2012.
  61. 61. Invest in COLOMBIA 63
  63. 63. - The allocation of 10% of royalty payments to strengthen science, technology, and innovation. - Increase R&D investment by 0.16% of GDP to 0.5% of GDP by 2014. - Increase value added exports (non-mining energy) by 31%, from US$14,318 million in 2010 to US$21,000 million in 2014. - To finance the education of 2,550 new PhDs by 2014. - Promote an innovation ecosystem with 12 Business Angels networks by 2014. Infrastructure investment of 3% to 4% of GDP, which means, in Colombia’s case, doubling current investment levels. This alongside other mechanisms such as royalties and adjustment funds will allow the country adequate levels of sector investment. - Government objective: 1 million low-income (social) houses (VIS - Spanish Abbreviation). - A plan is being worked on to donate 100,000 homes to single mothers, displaced people, victims of natural disasters, and those not earning a minimum salary. - Mining and energy GDP will grow by 16.8% by the year 2014 and will reflect a share of more than 25% of GDP in Colombia. - The mining and energy sector will generate 100,000 new jobs between 2010-2014. - Total sector exports for 2014 will surpass US$35,000 million. - 2014 objectives include electrical power reaching 16,234 MW, hydrocarbon production 1,150,000 bpd and coal mining production 124 million tons; as well as extending geological coverage of the country to 80%. - Colombia, third highest rate of precipitation in Latin America and eleventh in the world. - Special Commercial Reforestation Programme: Taking advantage of the country’s forestry potential (17 million hectares) pushing for commercial reforestation as a strategic element of the agricultural sector. - Unique forestry “one-stop window”: An instrument created with the aim of centralizing procedures and formalities required for commercial forestry activities. - Regulated forestry law. - Agricultural technology innovation. Invest in COLOMBIA 65
  64. 64. 66 PRODUCTIVE TRANSFORMATION PROGRAMME- (PTP) PROEXPORT.COM.CO The Productive Transformation Programme, PTP, is a public and private collaboration created by the Ministry of Commerce, Industry, and Tourism in 2008. It fosters productivity and competitiveness within (high exporting potential) sectors by means of more efficient coordination between the private and public sectors. PTP OBJECTIVES: » Improve sector productivity and competitiveness. » Facilitate coordination between private and public sector players. » Help companies and sectors benefit from trade agreement opportunities, by means of solid, exportable goods. » Contribute towards improving the quality of life of Colombians via the successful performance of productive sectors and companies that generate employment. Sectors within the Colombian economy were identified by means of open calls. Currently 16 sectors are involved in the Programme: Every one of the sectors linked to the programme hold a specifically tailored business plan. These aim at addressing and repairing existing weaknesses within the supply chain, improve human capital, reduce specialization and training gaps, and operate under a regulatory framework. This framework should impose no barriers to productivity and competitiveness, allow Colombian companies easy access to foreign markets, on an equal footing, and incorporate sustainability (as a distinguishing factor) to their products and processes.
  65. 65. 67
  66. 66. PROEXPORT.COM.CO 68 Source: UNCTAD Report, 2012. IED Attractiveness Index Source: Survey “Opinions of North American and European investors with regards to Latin American companies.” J.P. Morgan, 2011. IED Potential Index
  67. 67. In 2012, Colombia achieved its highest ever FDI flows, rising from US$1.7 billion in 2003 to US$15.8 billion. FDI also increased by a further 16.3% in the period 2011 - 2012. 15,612 13,404 6,896 2,504 Colombia also became the country with the third highest FDI flow as a percentage of GDP in the region. Between 1994 and 2012 almost 50% of global FDI investment flows in Colombia was generated mainly by the United States, UK, Spain, and Chile. Average 1994 2002 Average 2003 2010 2011 2012 MAIN INVESTOR COUNTRIES / CUMULATIVE 1994 – 2012*    Source: Banco de la República-Balance of Payments. Variation 2011–2012: +16.3%. *Share calculated from the total number of countries with positive cumulative investment, excluding reinvestment of profits or oil sector investment. Note: the list of main investor countries in Colombia excludes Panama. United States United Kingdom Spain Chile US$11,665 million 20.2% share US$6,334 million 11% share US$5,918 million  10.3% share US$4,238 million 7.3% share Invest in COLOMBIA IN 2012 COLOMBIA REACHED ITS HIGHEST EVER FDI FLOWS 69 IED, 1994-2012 US$MILLIONS
  68. 68. 70 PROEXPORT.COM.CO Venezuela 1.7% / 5.3 Colombia 4% / 13.6 Source: Banco de la Republica - Balance of Payments. Brazil 2.7% / 66.6 Chile 7% / 17.3 Peru 4.6% / 8.1 Argentina 1.6% / 7.2 Direct Investment received US$billions
  69. 69. Among nonmining sectors, manufacturing, transport, storage and communications, and financial and business services, represent more than 60% of the FDI flows in Colombia in 2012. FDI FLOW - PRIMARY SECTORS SHARE % - 2012* FDI FLOW - PRIMARY NONMINING SECTORS SHARE % - 2012* Other 2.2% Electricity, Gas, and Water 5.1% Oil Sector 33.8% Commerce, Restaurants, and Hotels 10.1% Finance and Business Services 10.8% Transport, Storage, and Communications 10.9% Total FDI 2012: US$15,896 million.* Manufacturers 12.9% Other 3.4% Manufacturers 25.0% Electricity, Gas, and Water 10.0% Commerce, Restaurants, and Hotels 19.5% Mines and Quarries (includes Coal) 14.2% *Share calculated from total positive net (sector) investment: US$15,896 million. Finance and Business Services 21.0% Transport, Storage, and Communications 21.1% Total FDI 2012: US$8,197 million.* *Total nonmining sector participation with positive net investment: US$8,197 million. Invest in COLOMBIA 71 OIL AND MINING REPRESENT 48% OF FDI IN COLOMBIA WITH US$7.6 BILLION, FOLLOWED BY MANUFACTURING (US$2.5 BILLION) AND TRANSPORT, STORAGE, AND COMMUNICATIONS (US$ 1.7 BILLION).
  70. 70. PROEXPORT.COM.CO 72 COLOMBIA: ONE OF LATIN AMERICA’S “NEW TIGERS” The influential American paper, the Wall Street Journal, recently described Colombia as being part of a new group of countries in the region emerging as a viable alternative for investors. “Characterized by youthful populations, growing middle classes, relatively low debt and dynamic economic expansion, these countries are poised to grab a bigger share of the region’s growth and attract more money from international investors.” Colombia and Peru stand out amongst Latin America’s “new tigers” due to their rapid and continuous growth. Their currencies are solid and stable, they have managed to control inflation, their credit ratings are higher than those of their neighbours and their government’s have shown willingness to act in the face of deterioration. Colombia and Peru: Latin American’s “new tigers” – The Wall Street Journal. July 26, 2012.
  71. 71. COLOMBIA FTA BECOMING A REALITY The accord will render clear benefits for both sides. Colombia remains the third largest market in Latin America for U.S. exports and the second most important for small- and medium-sized firms. The two sides en a $35 billion trade merchandise relationship. joy The FTA will boost U.S. exports by $1.1 billion and provide access to Colombia’s $180 billion services market. The Miami Herald, May 7, 2012. BBVA: COLOMBIA BECOMES A GLOBAL ECONOMIC SURPRISE “The country registers a growth trail that accelerated in the last twelve years. Investment has experienced a healthy steady advance and so has private consumption. Investment inflow jumped from 14% of GDP in 2000 to 28% in 2012, which represents 5.5 times in twelve years, painting a very promising panoramas” Juana Tellez chief economist, BBVA Colombia. “ These indicators together with the fact Colombia is undergoing a second economic opening following the signing of trade agreements can see Colombia join the elite of global economies. According to our forecasts, emerging countries will contribute 85% of global growth over the next 10 years and trade will be key to this growth” added Tellez, according to a press release from this financial Spanish entity. Economic Perspective Report EAGLEs 2012 – BBVA Bank February 20, 2012. MOVING ON FROM BRICS Colombia, among other countries such as Turkey and South Africa—are being touted as the next generation of tiger economies - fast-growing and relatively diverse economies, which means, unlike BRIC countries, they should be less heavily dependent on external demand. The country is emerging as an attractive destination for investors as it works to distance itself from its troubled past. Elected in 2010, President Juan Manuel Santos has continued the centerright policies of former President Alvaro Uribe, prioritizing security and attracting overseas investors. Improved security measures have led to over the last decade have helped per capita gross domestic product to double since 2002. Meanwhile, Colombia’s sovereign debt was promoted to investment grade by all three ratings agencies this year. The Wall Street Journal. September 18, 2011. April 23, 2012. Invest in COLOMBIA 73
  72. 72. 1. Assembly - Demand driven by the development of Mass Transit Systems in Colombia’s ma cities. Bogotá alone will jor require 12,000 new buses over the next few years. - 75% of cargo in Colombia is transported by land, requiring a frequent renewal of the vehicle fleet. - The country has a penetration of 80.2 vehicles per 1,000 inhabitants, representing a great opportunity for growth in a market that shows no signs of saturation. - Demand driven by Colombia’s growth in foreign trade. - Lorry scrapping policy: Over 50,000 units. 2. Autoparts - Due to high demand in the aftermarket, imports of autoparts increased by 39%. Acolfa 2012 - Andean Automotive Agreement: requirement for minimum local content for the assembly of motorbikes, light vehicles, lorries and buses. - Exports of autoparts have increased by 40% over the last 5 years, representing 61.5% of the export basket of the automotive sector. - Sales of US$ 570 million in autoparts to local producers. - In 2011, sales to local autopart producers amounted to around US$ 700 million. Acolfa 2012. Atlantico Cundinamarca Risaralda Valle del Cauca Bogota - Domestic and foreign companies are certified to the highest international standards. - The country has a Qualified Warehousing Procedure for Conversion and Assembly, which guarantees tariff-free status for automotive goods that meet Andean origin requirements. - Demand for vehicles in Colombia has increased by 25% between 2005 and 2012, resulting in sales of over 300,000 units in the last year. Econometria 2013 - Colombia is the fourth largest country for vehicle assembly in Latin America, employing 2.6% of personnel working in the manufacturing industry. Andi 2012 - The scrapping policy and the growth of trade in the country have had an effect on the demand for freight vehicles, which increased by 24.3% between 2011 and 2012, reaching 30,600 units. Econometria 2013 - Colombia hosts a number of wellknown assemblers such as: Renault, General Motors, Mazda, Toyota-Hino and Busscar. Assembly and auto parts 75 Invest in COLOMBIA ADVANTAGES
  73. 73. PROEXPORT.COM.CO 76 ADVANTAGES Observatory, 2012. Atlantico Magdalena Bolivar Centers year. ANDI, 2012. Antioquia Caldas Risaralda Quindio Cundinamarca Valle del Cauca - Colombia is the third largest market for cosmetics and toiletries in Latin America. Euromonitor International, 2013. - Production activity in the sector has seen average annual growth of 9.9% since 2000. Andi, Chamber for the Cosmetics and Toiletries Industry, 2012. - Compound annual sales growth for the sector is forecast at 7.1% for the period 2012-2016. Euromonitor International, 2013. - Ma multinationals jor in the sector such as Kimberly-Clark, Belcorp, Yanbal, Henkel, Procter & Gamble, Avon, and Unilever have established operations in the country.
  74. 74. 1. Production - Exports of inputs for construction totalled US$ 370 million in 2012, 8% higher than the figure recorded in 2010. Ministry of Commerce, Industry and Tourism and DANE. - Availability of qualified human resources: over 12,000 technicians and professionals graduate every year in engineering subjects related to the sector. Employment Observatory, 2011. Bolivar 2. I+D+i Antioquia - National government initiatives and incentives Risaralda to promote R+D+i in the Valle del sector. Colciencias. Cauca - High intellectual property standards: protection of industrial property to international standards (20 years’ protection for patent holders). - Opportunities exist with regards to nanomaterial ecological material and smart technology. 3. Logistics Centers - Obligatory passage for shipping companies covering the north-south, north-east and western shipping routes, thanks to Colombia’s proximity to the Panama Canal and its access to the two oceans. - Over 3,700 maritime frequencies and approximately 1,000 flight frequencies are available for the transportation of goods. Atlantico Santander Cundinamarca Bogotá · The GDP of the construction sector represents 7% of total GDP. Total GDP has grown in Colombia at an average annual rate of 5.2% since 2006. This growth was higher than the average in Chile, Mexico, Venezuela, Argentina, Asia, Europe, and the United States for the same period. · By 2014 investment in infrastructure will reach 3% of GDP (US$12 billion3). This investment will be used for road building and improvements to airports, ports and railways. National Infrastructure Agency. · The Ministry of Transport launched the Fourth Generation of Road Concessions (4G), infrastructure projects for the next two years. It is estimated that investments of US$ 24 billion will be made, which will be distributed among approximately 30 projects covering 8,170 kilometres, in over 22 departments in the country. Ministry of Transport. · For 2014, the Government has made a commitment to support the building of 1 million new homes. The Government will provide 100,000 social housing homes through its allocation of a budget of US$2.3 billion. · Important sector multinationals such as, Prebuild, Lafarge, Holcim, and Saint Gobain have established operations in the country. Production and logistics centers. 3 Estimated value based on projected GDP of Colombia at current prices for 2014 according to EIU (US$422.8 billion). 77 Invest in COLOMBIA ADVANTAGES
  75. 75. PROEXPORT.COM.CO 78 ADVANTAGES 1. Production - Over 30,000 companies are registered by the Chamber of Commerce and make up 20% of the Industrial sectors workforce. Inexmoda 2012. - Imports increased by 49% between 2010 and 2012 to meet internal and external demand: clothing saw an increase of 97%, leather, footwear and leather goods 47% and textiles 46%. DIAN 2013. - More than 70% of companies are concentrated in the clothing, manufacturing and trade subsectors. Vertical integration investment opportunities exist in various links of the chain, including textiles, fibres, supplies, and services. Inexmoda 2012. 2. Logistics Centres - The country holds the possibility of preferential access to over 1,500 million consumers thanks to Free Trade Agreements. - Competitiveness in access to the North American market at costs on average 3 times lower than those incurred from China. Atlantico Santander Antioquia Risaralda Cundinamarca Valle del Cauca -Represents over 9.8% of the GDP of manufacturing industries, around 1.2% of domestic added value and 5% of the country’s total exports. DANE, 2012 -Imports increased by 49% between 2010 and 2012 to meet internal and external demand: clothing saw an increase of 97%, leather, footwear and leather goods 47% and textiles 46%. DIAN 2013 -Major multinationals in the sector have established operations in the country, such as: Kaltex, Polymer Group and Parkdale Mills. -The industry is characterized by having flexible production tailored to clients’ needs, with delivery times to match the speed of world demand. • The Industry has integrated processes: design, cutting, production and distribution, amongst others. • An internationally renowned, skilled workforce specially trained for the industry. R+D+I and production Production Production and logistic centers
  76. 76. Bogotá Tunja - Santa Marta – Ibagué – Neiva – Popayán - Cúcuta • Voice BPO: Telemarketing – Collection – Sales – Customer Service • Back Office: Outsourcing of Financial and Accounting Services – Human Resources • KPO: Outsourcing of Engineering Services – Telemedicine – R+D+i – Graphic Design – Legal Services – Medical Transcriptions • Voice BPO ADVANTAGES Atlantico Medellín • Voice BPO: Telemarketing – Collection – Sales – Customer Service • Back Office: Outsourcing of Financial and Accounting Services – Human Resources – Document Handling – 2nd Level Help Desk • KPO: Business Intelligence Services Cali • Voice BPO: Services – Collection • Back Office: - Outsourcing of Financial and Accounting Services • KPO: - Health – Pharmaceutical – Aeroespace Barranquilla • Voice BPO: Call Centres - Outsourcing of Financial and Accounting Services • KPO: Outsourcing of Engineering Services Bucaramanga • Voice BPO • KPO: Telemedicine - Outsourcing of Engineering Services Coffee Triangle Magdalena Antioquia Risaralda Tolima Caldas Quindio Valle del Cauca Huila Norte de Santander Santander Cundinamarca Boyaca • The BPO industry in Colombia has created more than 130,000 jobs. Diario Económico Portafolio, 2012. • Companies like Sutherland, Teleperfomance and Convergys have major bilingual operations in the country. ACDCC, 2012. • The industry continues to grow at sustained levels: 13.58% between 2010 and 2011. ACDCC, 2012. • The value of exports increased by 125% over the last five years, reaching US$ 141 million in 2011. ACDCC, 2012. • The Target Market in 2014 for IT and BPO service companies in Colombia will be focused on the segments of Engineering Services, Research and Development, IT Services and Value Added BPO Services. Tholons, 2010. • For the third consecutive year, Colombia was included in the report “Top 30 destination countries for Offshore Services”. The report highlights the strengths of the country as a location for call centre operations and transactional BPO work, proactive government support for the IT sector and competitive costs. Gartner, 2013. 79 Invest in COLOMBIA • Voice BPO: Basic Voice (Manizales) – Telesales (Pereira) • Back Office (Pereira) • KPO: Biodiversity (Colombia Bioinformatics and Computational Biology Centre – Manizales)
  77. 77. Support: - Hardware and Software Implementation & Support Education and Training Deployment and Integration PROEXPORT.COM.CO 80 Bogotá Coffee Triangle Outsourcing IT Services: - Infrastructure – Network & Desktop – Application Management – Hosted Application Management – Hosted Infrastructure Business: Business Outsourcing Services IT Support and Training: Support: - Hardware and Software Implementation & Support Education and Training Deployment and Integration Medellín Outsourcing TI Services: - Infrastructure – Network & Desktop – Application Management – Hosted Application Management – Hosted Infrastructure Business: Business Outsourcing Services IT Support and Training: Support: - Hardware and Software Implementation & Support Education and Training Digital Animation Development of Mobile Applications Deployment and Integration Cali Outsourcing IT Services: - Network & Desktop – Application Management and Maintenance IT Support and Training: Outsourcing IT Services: - Network & Desktop – Application Management and Maintenance IT Support and Training: Support: - Hardware and Software Implementation & Support Barranquilla Atlántico Cundinamarca Antioquia Caldas Risaralda Quindío Valle del Cauca Outsourcing IT Services: - Network & Desktop – Application Management and Maintenance IT Support and Training: Support: - Hardware and Software Implementation & Support Education and Training Bucaramanga Outsourcing IT Services: - Network & Desktop – Application Management and Maintenance IT Support and Training: Support: - Hardware and Software Implementation & Support Education and Training Popayán Outsourcing IT Services: - Network & Desktop – Application Management and Maintenance IT Support and Training: Support: - Hardware and Software Implementation & Support
  78. 78. COMPETITIVE ADVANTAGES 26. In 2011 the IT spend in Colombia reached the figure of US$6.1 billion; distributed respectively in the niches of hardware US$3.6 bn (58%), IT services US$1.9 bn (30%), and software US$698 m (11%). Household and the Communications and Media, Banking and Government sectors represent more than 50% of the total IT spend in the country. IDC, 2012. 27. The IT market has grown by more than 26% in the last 5 years. Between 2010 and 2011 sales increased significantly by approximately 44%. IDC, 2012. 28. IT Services continue to be the second most important technology market, retaining more than 30% of the market share. In the period 2010-2011 sales increased by more than 16%. ITO, Deployment and Support Services represent over 65% of Atlantico Cundinamarca Antioquia Caldas Risaralda Quindio Valle del Cauca the market share. IDC, 2012. 29. ITO: The sustained growth of the industry in its different vertical sectors means a high demand for IT services. 30. Vertical Sectors: The country offers a wide range of sectors that demand a high component of outsourced services, not only the companies investing in the country, but also the base of domestic companies which are increasingly requiring these services. Invest in COLOMBIA 81
  79. 79. PROEXPORT.COM.CO 82 1. Upstream services (exploration and production) - It is forecast that Colombia will have potential oil reserves of more than 47 billon barrels. Ecopetrol, 2012. - It is estimated that by 2014 the country will hold 570 exploratory wells and more than 204 E&P contracts. 2. Midstreamdownstream services (transport, storage, and refining) - Colombia has approximately 8.000 km of pipelines and it seeks to double its installed capacity. - Expansion and modernization projects are in place in Cartagena’s refinery (aiming for 160 kbd) and Barrancabermeja’s refinery (capacity of 250 kbd).
  80. 80. Wellness Tourism: Development of Thalassotherapy centres, infrastructure for hydrotherapy and spas – Wellness Centres. Nature Investment in “Eco-Luxury” hotels, Eco-gambling, Ecolodge and sustainable infrastructure associated with nature tourism (eco-trails, observation towers, bridges, environmental management infrastructure, etc.). Sun and Beaches: Luxury hotels, “luxury included” resorts, golf resorts. City Hotels Construction of full-, limited- and select-service hotels in secondary cities around the country where the hotel supply does not yet meet demand. Entertainment Construction of theme parks, venues for shows and events (concerts). - Growth in arrivals of foreign visitors to Colombia is above the global average. Arrivals of international visitors to Colombia rose from 600,000 in the year 2000 to almost 1.7 million in 2012. - There are tax benefits such as exemption from income tax for a period of 30 years in hotel infrastructure, exemption from income tax for a period of 20 years for ecotourism services with effect from the tax year 2003, and tax and customs duty benefits on capital goods used for tourism exports (Vallejo Plan). Bolívar Guajira Atlántico San Andrés Córdoba Antioquia Magdalena Santander Boyacá Chocó Paisaje Cultural Cafetero Vichada Altillanura Valle del Cauca Bogotá Amazonas - In 2012, real hotel revenues increased by 7.3% compared to the previous year, and the numbers of staff employed increased by 3.4% in the same period (DANE 2013). - In 2012, hotel occupancy rates reached 53.5%, 1.7 percentage points higher than in 2011 (DANE 2013). - Colombia has around 750 international flights connecting 20 destinations around the world. - Colombia climbed 21 places (from 50th to 29th) in the ICCA (International Congress and Convention Association) ranking of international events between 2006 and 2012. - Ma international hotel chains such as Accor, Hilton, jor IHG, Wyndham, Meliá and Starwood have come to the country. 83 Invest in COLOMBIA COMPETITIVE ADVANTAGES
  81. 81. PROEXPORT.COM.CO 84 1. Production - Located on the equator, it is unaffected by hurricanes, typhoons and other natural phenomena. IGAC, 2010. - Well-established, internationally experienced companies are present in the country offering high quality products and skilled personnel. 2. R+D+i - Internationally recognised research centre CENIACUA has fostered scientific and technological advancement for the development of the industry – via the establishment of best practise and the cultivation of production. The centre also contains a Genetic Improvement Project acknowledged both nationally and internationally. 3. Logistics Centers - Free Trade Agreements are currently in force, undersigned and in negotiations with the major shrimp and prawn importers of the region and the - The climate and water temperatures in Colombia are relatively invariable, resulting in stable production throughout the year. IGAC, 2010.
  82. 82. Invest in COLOMBIA 85
  83. 83. PROEXPORT.COM.CO 86 1. Production - Good physiographical soil, and climate condition support the cultivation of cocoa. Ministry of Agriculture and Rural Development) (MADR), 2010. - The modernization of crops to clones guarantees worldclass cocoa and improves current production. National Cocoa Development Plan 2012-2021. - Defined genetic material (both regional and universal clones) is in place for use according to the needs of each agro-ecological zone in the country. Fedecacao, Ministry of Agriculture and Corpoica, 2011. - Income tax exemption exists for slow-yield crops plantations established between 2003 and 2014. 2. Logistics Centres - Free Trade Agreements are in force and in negotiation with the primary cocoa importing global markets. 3. R+D+i - The 10-year Cocoa Plan 2012-2021 primarily aims at making Colombia a world-class player in the Fine and Aromatic Cocoa market. It aims at increasing productivity from an average of 400 kg/ha/year to 1,200 kg/ha/year and reach modern crop production of 1,800 kg/ha/year. The 10-year Cocoa Plan 2012-2021. - Research aimed at increasing average yields from 400 kg/ha/year to 1,200 kg/ha/year and achieving yields of 1,800 Kg/Ha/year for modern crop varieties. Ten-year Cocoa Plan 2012-2021 Production and logistics centres. Production. Production and R+D+i - Colombian cocoa is characterized by its intense flavour and aroma, qualities held by only 5% of the world’s beans. International Cocoa Organization, ICCO, 2011. - Ecuador, Colombia, Peru and Venezuela produce 70% of the world’s fine and aromatic cocoa. FAO, 2010 - Colombia has two million hectares with potential to develop cocoa crops. Ministry of Agriculture 2003. - The confectionery and chocolate industry is part of the Ministry of Commerce, Industry, and Tourism’s Productive Transformation Programme (PTP) - seeking to increase sector competitiveness via public-private alliances and business plans.
  84. 84. - The trade deficit in forest products represents an opportunity to exploit the domestic market in view of its size - 46 million inhabitants in 2011. DANE. - Private sector funded research centres focusing on research into a single product, facilitating the transfer and adoption of results. (Cenicafe, Conif, Cenicaña, Augura, Ceniacua, Cenipalma, Cevipapa, Ceniflores) - Biotechnology research to develop seeds with higher yields per planted hectare and pest control. Corpoica CBB 2013. Invest in COLOMBIA 87
  85. 85. PROEXPORT.COM.CO 88 1. Production - Ethanol: Colombia has the highest sugarcane production yield rate in the world. FAO, 2010. - Biodiesel: Colombia is the fifth highest global producer of palm oil, taking first place in Latin America. FAO, 2010. - The biomass generated from the cultivation of palm oil can produce energy, extracted from methane and other by-products. International Conference on Palm Oil 2012. - The biofuel produced in Colombia reduces greenhouse gas emissions by approximately 86%, placing it above the standard requirements in Europe and the United States. International Conference on Palm Oil, 2012. 2. Logistics Centres - Colombia holds Free Trade Agreements with biofuel importing countries. 3. R+D+i - A network of R+D+I centres support the industry including CENIPALMA (the National Centre for Oil Palm Research) and Sugar Cane (CENICAÑA). - Construction of new biorefineries, biomass plants and development of Transesterification, to enable the conversion of sugarcane and oil palm into biodiesel.
  86. 86. Invest in COLOMBIA 89
  87. 87. PROEXPORT.COM.CO 90 ADVANTAGES In 2011 the consumption of flat steel products in Colombia reached 1.5 million tons per year with a domestic production deficit of around 63%. Over the coming years demand for steel will be driven by the national government’s plans to build a million homes and to invest in infrastructure, which will double as a proportion of GDP by 2021, reaching US$ 55 billion. The production of flat products in Colombia represents 24% of the total metal produced. Andi, 2012 Over 680 companies in Colombia are involved in the metal-mechanic sector. BPR Benchmark, 2012. The metal-mechanic sector in Colombia produces the ma jority of flat products by smelting recycled steel. Andi, 2012 Atlantico Antioquia Bogota Boyaca Valle del Cauca · The metal-mechanic sector represents an advantage in terms of converting the country into an export platform, as it has technological know-how, modern manufacturing equipment, international goodwill, high quality standards, manufacturing of small batches at lower cost and shorter delivery times than the competition, and a stable workforce, amongst other advantages. Andi, 2012 · At the end of 2012, Colombia became one of the group of 20 countries producing more than 1 million barrels of oil per day and this is expected to continue to rise. This will generate a sustained demand for industry-related products. · With an energy production capacity of 14,480 GW/hour and more than 1,000 MMcfd of natural gas, the country has the energy resources necessary for the operation of steelworks and metal-mechanic plants. · The steel and metal-mechanic sector represents 12% of Colombian industry and generates 15% of employment in manufacturing industry. Andi 2012 · Demand for steel in Colombia increased by 57% between 2005 and 2011, with consumption reaching 3.3 million tons in 2011. Andi 2012 · Skilled workforce: Over 111,000 technicians and professionals graduated between 2001 and 2011. Observatorio Laboral, 2012
  88. 88. 1. In 2013, Colombia continued to hold 4th place out of 12 Latin American and Caribbean countries in the ranking produced by the Latin American Private Equity & Venture Capital Association (LAVCA), which measures favourable conditions for the development of the PEF industry. 2. One of Colombia’s strengths is its attactive regulatory framework for the formation and management of private equity funds. 3. Colombia represents 1% of total resources raised in Private Equity Funds and Venture Capital in Latin America, with Latin America representing 5% globally. 4. There are 38 funds with a committed capital of more than USD 3.7 billion, which represents a major alternative source of financing for Colombian businesses. 5. There is an excellent opportunity to secure local capital resources from institutional investors such as pension funds and insurance companies, which have performed outstandingly in recent years. Invest in COLOMBIA 91
  89. 89. PROEXPORT.COM.CO 92 OPPORTUNITIES • The National Government plans to increase investment to US$10 billion in 2014 and US$30 billion in 2021. • Colombia is the country with the third largest infrastructure needs in Latin America. It has 250 km of paved road network per million inhabitants, while countries like Chile have 1,000 km. • According to BP, Colombia was the sixth biggest world coal producer in 2012, with an international export handling requirement of 110 million tons per year. RIVER AND PORT PROJECTS • Project to improve navigability and cargo transport on the River Magdalena. • Orinoco Corridor: Meta – Orinoco – Atlántico. • Amazon Corridor: Putumayo – Amazon – Atlántico. • Construction of 1 New Port in Dibulla (Guajira) and 2 new ports between Ciénaga and Santa Marta. • Expansion of new container ports in Cartagena and increased oil export capacity via the Ecopetrol port in Coveñas. • Deepening of the Buenaventura access channel is currently underway and will shortly be followed by a deepening of the Cartagena access channel. ROAD INFRASTRUCTURE • The National Government aims at increasing forecast investment to US$1.1 billion in 2014 and US$1.7 billion in 2021. • The Ministry of Transport has been implementing a program called Roads for Prosperity to improve 50,000 km of the tertiary road network over a four-year period. • The Colombian government plans to have 5,200 km of dual carriageway in place by 2021. AIRPORT INFRASTRUCTURE • In 2014 passenger numbers will increase from 23.4 to 30 million. • In 2014 works will be completed at the El Dorado terminal and a new control tower will be built. • By mid-2013, new airports will be built in Cartago, Armenia, Neiva, and Popayán and the license to operate the Ernesto Cortissoz airport in Barranquilla will be re-awarded. • Civil works at Cali Airport and structuring of the new airport in Ipiales. RAILWAYS • Central Railway System: 1,045 km. Project currently being structured to initiate a public tender process. • El Carare Train Concession: 460 km, construction of second line on the Atlantic Railway Network (45 km La Loma - Ciénaga). Source: National Infrastructure Agency. ANI
  90. 90. MOTORWAYS FOR COMPETITIVENESS Ruta Del Sol (Sectors 1, 2 and 3) Americas – Sector 1 PORTS Ports RAILWAYS Autopista de la Montaña Motorway Central Railway System Buenaventura Bogota – Cucuta Corridor Atlantic Railway Network Highland Railways El Carare Rail Project AIRPORTS Airports Under License North-East Airports Coffee Triangle Airports Pacific Railway Network Source: ANI. Invest in COLOMBIA 93
  91. 91. PROEXPORT.COM.CO 94 GENERAL INFORMATION • International cargo market of 120 million tons (seaports only). • Local cargo market of 160 million tons, and an air cargo market of 680,000 tons. • 75% of the world’s largest distribution companies have access to the service ports handling Colombian imports and exports. • Over 80% of foreign trade, in volume and value, is concentrated in 5 cities and their service areas, but the country has one of the longest average distances between centers of production and consumption. • Coal and fuel account for 75% of the country’s volume of foreign trade. Excluding these, 81% of the value of trade is handled in containers, the rest in dry bulk. • 47% of cargo handled in the 4 main port cities (Buenaventura, Santa Marta, Cartagena, and Barranquilla) consists of containers, the main port being Cartagena. 22% is coal, mostly handled by Santa Marta, and 20% is solid bulk. Sources: • National Planning Department. (2008). • Conpes – National Logistics Policy Policy (2008). • Port Supervision Authority. • Ministry of Transport. • Regional Port Authorities. • Invias. OPPORTUNITIES • The privileged position of Colombia, with coastlines facing the Pacific Ocean and the Atlantic Ocean and as a gateway to South America, enables it to have connections with the world’s main ports and production and distribution centers. • Creation of logistics platforms (transshipment platforms). • Creation of dry ports. • Creation of an infrastructure that will allow for multimodal transport. • Improvement of cold chain (division of cold, dry, and frozen foods increase in capacity of sorticontainers). • Introduction of information systems to enable real time monitoring of loading and unloading of goods (at certain ports). • Thanks to its trade treaties, Colombia has preferential access to 1,500 million consumers. BENEFITS • Low freight charges compared with other countries in the region for general transport of goods to markets in North America, South America, and Central America. • Approximately 1,000 cargo flight frequencies. • Third most important market in Latin America. • Thanks to its trade treaties, Colombia has preferential access to 1,500 million consumers.
  92. 92. TYPES OF LOGISTICS PLATFORMS Urban distribution and cargo consolidation logistics areas Support at border logistics areas Sta. Marta Barranquilla Cartagena Riohacha Maicao Valledupar Dry ports Sincelejo Monteria Turbo Cucuta Bucaramanga Air cargo centers Barrancabermeja Medellin Pto Berrio Manizales Pereira Armenia Buenaventura Tunja Ibague Buga Bogota D.C. Multimodal platforms Cali Regional cargo consolidation logistics areas Neiva Popayan Tumaco Pasto Ipiales Port Logistic Actitivity Zones (LAZ) Source: CONPES. Invest in COLOMBIA 95
  93. 93. PROEXPORT.COM.CO 96
  94. 94. PROEXPORT COLOMBIA is the organization in charge of promoting Colombia as an international tourist destination, attracting direct foreign investment and fostering nontraditional exports. Through our national and international office network, we provide support and comprehensive assistance to national entrepreneurs, through offering services with the aim of facilitating the design and execution of its internationalization strategy, seeking the generation and tracking of business opportunities. We foster international business through the identification of market opportunities, the design of penetration strategies, the internationalization of companies, assistance in the design of action plans, contact between entrepreneurs Our network of sales promotion offices helps us to provide a wide array of services, both for Colombian exporters international buyers and foreign investors. CUSTOMIZED INFORMATION CONTACTS WITH THE PUBLIC AND PRIVATE SECTORS AGENDAS: ORGANIZATION AND ASSISTANCE WHEN VISITING COLOMBIA ATTENTION TO THE ESTABLISHED INVESTOR FREE AND CONFIDENTIAL: EVERY SERVICE IS FREE AND THE INFORMATION SUPPLIED IN THE PROCESS IS HANDLED CONFIDENTIALLY 97 Invest in COLOMBIA PROEXPORT COLOMBIA INVESTOR SERVICES in sales promotion, investment and international tourism activities; the specialized services offered to foreign entrepreneurs who are interested in acquiring Colombian goods and services or investing in Colombia, and the creation of alliances with private and public, national and international entities, enabling us to broaden the availability of resources in order to support the various corporate initiatives promoted by the organization for the development and improvement of its service portfolio.
  95. 95. PROEXPORT.COM.CO 98 EXPORT PORTFOLIO INVESTMENT PORTFOLIO TOURISM PORTFOLIO COLOMBIA COLOMBIA COLOMBIA » Plans for business colaboration » Seminars for established investors. » SIFAI (Encouraging and facilitating » Business colaboration » Plan–Exporter projects. » Institutional Projects. with exporters. » Commercial Information and adequate supply (Centros de Información, DEI and Cooperation). Buyer mission. COLOMBIA AND OVERSEAS » Buyer mission. » Business networking. » International fairs. investment system). » Regional level articulation and promotion. COLOMBIA AND OVERSEAS COLOMBIA AND OVERSEAS » Preparation of tailor made information. » Coordination and development of » Special Projects. » Business events. » Particular promotion activities. investment agendas. » Technical and commercial missions. » Showrooms.  » Webpage for exporters and buyers » Contact with key private and public ABROAD ABROAD » International Seminars and Events. sector entities. Plans – with operators. » Workshops, destination ABROAD » Trade agenda. » » Exporters mission. » Business collaboration promotion presentations, and international fairs. » Familiarization trips / media Tourism Portal. Institutional added value presence (activations).
  96. 96. SUPPLY VS. DEMAND ANALYSIS Website: Invest in COLOMBIA 99
  97. 97. PROEXPORT.COM.CO 100 - Support for established investors. Implement expansion plans (re-investment, exports, corporate tourism). - Detect obstacles and refer concerns to relevant parties. - Provide support to established foreign investors. • Tailor-made information • Agenda coordination for investors • Comprehensive workplan with journalists and opinion generators - Identifying / linking projects with national and regional support. - Cooperate with regional entities.
  98. 98. Cartagena de Indias. Invest in COLOMBIA 101
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  100. 100. GERMANY CANADA Montreal, Toronto. Vancouver UNITED STATES San Francisco, Miami, Los Angeles, Washington D.C New York, Houston, Atlanta, Dallas. Chicago MEXICO Mexico City, Guadalajara. NORTH TRIANGLE (Guatemala, Honduras, El Salvador) COSTA RICA (Panama). COLOMBIA UNITED KINGDOM FRANCE PORTUGAL CHILE JAPAN SOUTH KOREA CHINA CARIBBEAN Beijing, Shanghai, Pto.Rico, Dominican Republic Trinidad and Tobago VENEZUELA ECUADOR PERU RUSSIA Invest in COLOMBIA 103 SPAIN INDIA UNITED ARAB EMIRATES BRAZIL ARGENTINA TURKEY INDONESIA PROEXPORT IN THE WORLD For more information about the investment opportunities in Colombia please contact: