This document summarizes opportunities and challenges for business in Latin America. It notes that Latin America has high GDP growth rates and is a major trading partner and commodity producer. While there are challenges like infrastructure and nationalism, opportunities exist in foreign direct investment, labor, and key projects in countries like Colombia, Panama, and Peru. The document provides an overview of taxation, regulations on getting money in and out, and arbitration in Latin America. It also lists contact information for lawyers at Holland & Knight who specialize in the region.

1. Copyright © 2015 Holland & Knight LLP. All Rights Reserved
How to Capitalize on Opportunities
in Latin America
March 2015

2. Overview: Why Latin America?
» Latin America has one of the fastest GDP growth rates in the world
(2.5% in 2013; 0.8% in 2014)
˗ And certain countries are stand outs:
• 2013: Panama 8.4%; Peru 5.8%; Colombia 4.7%;
» Latin America is already a major investment destination from the world’s
leading economies
» Latin America is a key trading partner with the USA, China, Japan, South
Korea as well as the European Union
» Latin America has a GDP per capita higher than that of China and the
Middle East (US$9,800 in 2013)
» Latin America is the world’s power house for commodities e.g. Chilean &
Peruvian copper, Argentine soy, Brazilian & Bolivian iron ore,
Venezuelan oil, Colombian coal - the list goes on!
» Fast growing middle class and consumer sector
» Latin America has a highly-skilled and competitive human resources
pool
Source: World Bank
2

3. Challenges
Compliance Government
Infrastructure Nationalism
3

4. Opportunities: Foreign Direct Investment
» In 2013, foreign direct investment in Latin America reached US$188
billion, as a result of the increase in local consumption
» 45% of foreign invesment was in existing projects
4

5. Labor in Latin America
» Latin America tends to allow labor flexibility in order to increase
competitiveness, with the exception of countries like Venezuela, Ecuador
and Bolivia
» Labor laws in most of the countries in Latin American follow International
Labor Organization (OIL) conventions
» In Latin America, all employers must enroll employees in the Social
Security System for health, pension and labor risks
» In the region, employees can work a maximum of eight (8) hours per day
and forty-eight (48) hours per week
5

6. Labor in Latin America (Cont’d)
» Labor Cost in Latin America Per Employee
6
Country Percentage
Colombia 42.93%
Chile 29.4%
Mexico 36.4%
Peru 52%
Ecuador 47.8% + 15% of the
Company´s Profits

7. Taxation in Latin America
» Latin America is very active in the international trading system with a large
number of Free Trade Agreements (FTA) and over 20 intraregional FTA´s
» The OECD is proactively influencing tax policy within Latin America, bringing
world accepted standards for issues such as Corporate Tax, Tax Administration,
Transfer Pricing, Double Taxation Treaties (DTT´s) and Tax Information Exchange
Agreements (TIEA´s)
» OECD members in Latin America comprise Mexico and Chile, while Brazil is part
of an “enhanced engagement”. Countries such as Colombia are currently under
an open discussion for membership in the Organization
» Latin American countries are expanding their DTT networks worldwide, allowing
for the existence of international standards under OECD guidelines and providing
tax certainty and protection for investors
» TIEA´s are also taking place in Latin America, facilitating enhanced international
cooperation in tax matters through exchange of information
7

8. Taxation in Latin America (Cont´d)
» Overview of basic Corporate Income Tax rates and DTT´s in force in
certain Latin American countries :
8
Country Basic Corporate
Income Tax Rate
DTT´s in force
Colombia 25% 8
Panama 25% 12
Peru 30% 3
Chile 20% 25
Brazil 15% - 25% 29
Argentina 35% 16
Mexico 30% 50
Notes:
1. Income subject to taxation might vary in case by case scenarios, as some countries tax worldwide income such as
Colombia or Peru, while others like Panama tax national source income only.
2. Additional charges to the basic corporate income tax could also be levied.
3. DTT´s listed include treaties in force as of December 31, 2014.

9. Getting Money In & Out: Foreign Exchange
» Many major Latin American countries allow investments to flow in, and
profits to flow out, relatively freely.
» However, there is a sliding scale of bureaucracy, as well as some pitfalls.
For example:
˗ Panama: US dollar is effectively the official currency
˗ Peru: No restrictions or limitations concerning foreign exchange. No foreign
exchange controls, registrations, approvals, etc. For the remittance of foreign
currency to or from Peru
˗ Brazil: Foreign currency transactions are only through authorized financial
institutions. All inward investment must be registered with the Central Bank.
Capital may be repatriated free of tax up to the amount registered with the
Central Bank. Profits may be remitted abroad without limit, up to the level of
registered foreign capital and available retained earnings
˗ Argentina: Very tightly controlled. Significant obstacles exist to repatriate
profits and investment capital.
9

10. Arbitration & Litigation in Latin America
» Many Latin American players are accustomed to customary international
arbitration provisions (ICC, etc.)
» Several countries in Latin America have adopted rules to be selected as
arbitration venues
» Country members of the OAS, such as Colombia, Peru and Panama,
are now members of the Inter-American Convention of International
Commercial Arbitration (January, 1975)
» A current trend in Latin America is the constitutionalization of law, which
means that all processes, regardless of the jurisdiction must respect the
rights of individuals
10

11. Colombia: Key Projects
Infrastructure: Ports, Roads, Metro,
Railroad, Airports – P3 Projects
Oil & Gas (Unconventional Plays -
Hydraulic Stimulation) + Energy
Telecommunications + Technical
Developments
Hospitality
Services + BPO
11

12. Panama: Key Projects
Expansion of the Panama
Canal
Bidding for a Subway Line in
Panama City
Construction of Social Interest
Housing
Road Infrastructure
12

13. Peru: Key Projects
Subway Lines in Lima
Road Infrastructure
Expansion of Matarani Port
Expansion of La Pampilla Refinery Plant
Unconventional Hydrocarbons + Transportation
of Oil & Gas
Hospitals/ Healthcare
13

14. Latin America Relations with Israel
14
Colombia – FTA
signed but not yet
approved by
Congress
Mercosur
(Argentina, Brasil,
Paraguay and
Uruguay) - FTA
Mexico - FTA
Panama –
Agricultural,
Economical and
Comercial
Cooperation
Chile -
FTA
Panama
- FTA
In NegotiationAlready Negotiated

15. Financing Your Latin American Business
» Significant amounts of local currency financing is available through local
banks in numerous Latin American countries
˗ Highly developed banking sector
˗ Significant liquidity
» Trade financing lines available through numerous local development
banks
» Several Latin American countries have investment grade credit ratings,
so local businesses enjoy favorable rates from international banks
˗ Brazil, Colombia, Peru, Panama
» International banks actively providing project financing for in key sectors
including energy, infrastructure, health care, etc.
15

16. Holland & Knight Offices
16
Portland
Los Angeles
San Francisco
Dallas
Chicago
Boston
New York
Washington, D.C.
Northern Virginia
Atlanta
Lakeland Miami
Fort Lauderdale
West Palm Beach
Orlando
Jacksonville
Tampa
Tallahassee
Anchorage
Bogotá,
Colombia
Mexico City,
Mexico
Austin
Denver

17. Biographies
17
» As a partner in Holland & Knight's
Bogotá office, Mr. Zapata brings
more than with 20 years of
experience in the natural resources
sector.
» He focuses his practice on corporate
and commercial matters with an
emphasis on the environment,
energy and natural resources.
» Primarily represents government
organizations as well as electric, oil,
gas, mining, agrochemical and
industrial companies.
» Partner in Holland & Knight´s New
York office.
» Has extensive transactional and
advisory experience on corporate
matters and major international
financial transactions, particularly in
emerging markets.
» He regularly advises on cross-
border corporate issues and on a
variety of debt, equity and equity-
linked securities offerings, as well as
project bonds and structured finance
and securitization transactions.
Jose V.
Zapata
Stephen
Double

18. Questions?

19. Thank You!

20. Contacts
20
» Stephen Double
» 31 West 52nd Street
» +1.212.513.3528
» New York, NY 10019
» stephen double@hklaw.com
» José Vicente Zapata
» Carrera 7 # 71-21, Torre A,
Piso 8
» +57.1.745.5720
» Bogotá, D.C., Colombia
» jose.zapata@hklaw.com