Jose Pacheco Tejeira Viceminister of Foreign Trade Ministry of Trade and Industry Panama

1. PANAMA: Building a Global Business Platform Jose Pacheco TejeiraViceminister of Foreign TradeMinistry of Trade and IndustryPanama

2. PANAMA: Building a Global Business Platform StrategicGeographical Position International Financial Center Connectivitythroughland, sea and air WorldClasslogisticPlatform Open ServiceDollarizedEconomy Ideal Sitefordoingbusiness

3. PANAMA: Building a Global Business Platform PANAMA PROFILE • GDP – Real growthrate (%): - Year 2010: 7.5 - Year 2011: 10.6 - March 2012: 10.6 • GDP per cápita: US$8,622 (2011) • GDP compositionby sector (%): - Agriculture: 4.1 - Industry: 16.7 - Services: 79.2 • Inflationrate (%): 5.9 (2011) • Unemploymentrate (%): 4.6 (March 2012) • Population: 3.5 millons • Lifeexpectancy at birth: 77.9 years - Male: 75.2 years - Female: 80.9 years • Total area: 75,517 Km2

4. EFTA (European Free Trade Association, Iceland – Liechtenstein – Norway - Switzerland) CANADA USA SouthKorea Central America Costa Rica, El Salvador Honduras, Guatemala, Nicaragua ROC (Taiwan) Enforced Signed (under implementation) Negotiating (4 agreements with 7 countries) and Integration process with SIECA (Central America) PERU SINGAPORE PANAMA: Building a Global Business Platform Panama Trade PartnersPanama has pursued a policy of liberalization and free trade ADA Association Agreement between EU and Central America (27 countries) CHILE

5. PANAMA: Building a Global Business Platform RANKING OF IMPORTS BY COUNTRY IMPORTS 1998 IMPORTS 2007 IMPORTS 2011 (P) Ranking includes CFZ and PetroleumProcessingZones

6. PANAMA: Building a Global Business Platform Investment Grade + Foreign Investment + Sustained Growth BBB Positive +33% BBB Stable Baa3 Positive Fuente: FMI (2010). • 2006: +10.1% • 2007: +12.2% • 2008: +10.7% • 2009: +3.2% • 2010: +7.5% • 2011p: +7.0%

7. PANAMA: Building a Global Business Platform Companies and Multinationals

8. PANAMA: Building a Global Business Platform Government Strategic PlanningFocusing on sectors with the greatest potential will generate more than 500,000 new jobs over the next decade. • The development plan prioritizes the stabilization of public finances • Panama aims to improve on its Investment Grade credit rating and will ensure that the level of public debt stays below 30% of GDP over the next 10 years. • Significant investments in the education, health, public safety, and transportation sectors will increase the standard of living and benefit the residents of Panama. • During the next five years, this investment will be primarily focused on infrastructure development that will generate jobs and stimulate growth on a path towards sustainable development. Key Growth Drivers (Measured by their impact on incremental GDP and job creation)

9. PANAMA: Building a Global Business Platform The Logistics Environment LOGISTICS CABINET • MAIN TASK • Development of a Master Plan to promote Panama as a global logistic hub for world trade.

10. PANAMA: Building a Global Business Platform Connectivity Panama dominates the region with more direct connectivity

11. PANAMA: Building a Global Business Platform Tourism Developing a new air logistics networkPanama’s new air connectivity development plan • The plan seeks to further develop air connectivity beyond the Panama City and Colon corridor. • Through the development of 6 new airports and the expansion and remodeling of another 6 existing terminals.

12. PANAMA: Building a Global Business Platform The Panama CanalThe main international trade engine • Over 14,000 vessels transit this waterway each year. • 300 million tons through more than 120 routes. • It’s complemented by Panama’s port infrastructure that handles an annual volume of more than 7 million TEUs.

13. PANAMA: Building a Global Business Platform INFRASTRUCTUREThe Panama Canal Expansion The main international trade engine CURRENT LOCKS Figure 1: Graphicalimage of theexpansionproject. PACIFIC OCEAN • The Canal expansion is on schedule and is $413.8 million under budget. • Completion Year: 2014 FUTURE LOCKS

14. Rotterdam Rotterdam Rotterdam Bremerhaven Tilbury Felixstowe Osaka Hamburg Nagoya Dunkerque Thamesport Halifax Shanghai Zeebrugge Seattle NJ/NY Kwangyang Qingdao Wilmington Le Havre Pusan Pusan Newport News Antwerp Tokyo Oakland Keelung Charleston Baltimore Shimizu Port Said Yantian Yokohama Los Angeles Miami Savannah Savannah Savannah . Hong Kong Kobe Long Beach New Orleans Everglades Marseilles Colombo Colon Kingston Manzanillo (Mx) Veracruz Manzanillo Hakata Chabang La Spezia Kaohsiung Cartagena Puerto Limón Maracaibo La Guaira Balboa Tanjung Priok Guanta Buenaventura Puerto Cabello Manta Doniambo Guayaquil Singapore Callao Santos Arica Tahiti Paranagua Iquique Itajai Brisbane Coquimbo Antofagasta Sydney Valparaíso San Antonio Melbourne Auckland San Vicente PANAMA: Building a Global Business Platform Maritime ConnectivityInternational Ports Connected through the Panama Canal every Week Boston Transit the Canal Source : ACP Feeder services that don´t transit the Canal

15. Infrastructure ProjectsNational Road and Highway Network Improvements PANAMA: Building a Global Business Platform The Ministry of Public Works has engaged in a major overhaul of Panama City’s internal road network, as well as the expansion of major national highway segments. • Reorganization of Panama City’s road network: includes new overpasses in 18 intersections in metropolitan area by 2014. • Expansion of Highways: Corredor Sur will be widened to six lanes, while Corredor Norte will be extended until the Tocumen area . • In addition, highway segment expansion outside Panama City have been competitively awarded. 15

16. PANAMA: Building a Global Business Platform Infrastructure ProjectsNational Road and Highway Network Improvements • Madden – Colon II: US$ 220 Million • Divisa – Chitre: US$ 112.1 Million • La Villa – Las Tablas: US$ 75.7 Million • David – Boquete: US$ 119.8 Million • Arraijan – La Chorrera: US$ 152.6 Million • Total: US$ 680.2 Million

17. PANAMA: Building a Global Business Platform Integrated transportation systemPublic transportation system serving GPC will integrate the Metro and Metro Bus systems. • An international bidding process was undertaken to select the operator of the MetroBus system. • The winner was the Colombian group Fanalca. • Panama’s MetroBus system will have 1,200 state of the art Volvo and Mercedes-Benz buses operating on 76 routes.

18. PANAMA: Building a Global Business Platform PROINVEXPanama Trade and Investment Agency The shortest road of investing in Panama • ONE STOP SHOP Integrated Information System that allows the investors to easily identify all the instruments that the National Government has available for the Direct Foreign Investment. • CONCIERGE SERVICE in processes of due diligence. PROINVEX is also responsible of coordinating the international commercialization and the promotion of the exports of national products.

19. PANAMA: Building a Global Business Platform Incentive Laws An attractive legal framework for investment as Multinational Headquarters (SEM)Every year, more multinational companies choose Panama • Judicial stability facilitates trade and provides investment incentives. • One of the most competitive legislations in the region. • Laws specifically aimed at multinational companies complement the incentives offered by special zones. • No Taxable income (Offshore Operations)

20. PANAMA: Building a Global Business Platform Multinational Headquarters (SEM)Every year, more multinational companies choose Panama

21. PANAMA: Building a Global Business Platform Special Economic ZoneThe Colon Free Zone The most important free trade zone in the western hemisphere • Operating since 1948. Currently houses over 3,042 operators. • The second largest free trade zone in the World after Hong Kong. • The Colón Free Zone is located a few kilometers from the Panama Canal in the Caribbean sector. • Goal for 2012 is to handle $30 billion in annual trade volume.

22. PANAMA: Building a Global Business Platform Special Economic ZoneCity of Knowlegde Research & Development For Example: Information Technology, Biomedical, Renewable Energy Florida StateUniversity, University of California-Berkeley, Georgia TechUniversity UnitedNations, Unicef, Red Cross, WorldFoodProgramme

23. PANAMA: Building a Global Business Platform Special Economic ZonePanama Pacifico Law No. 41 of July 2004.

24. PANAMA: Building a Global Business Platform Special Economic Zones Zones can be established anywhere in the country

25. PANAMA: Building a Global Business Platform Incentive Laws Film industry Incentives are granted for the development of the movie making and audiovisual industry • Fiscal, customs, labor and migratory incentives are granted to the industry. • Eliminates bureaucratization and guarantee prompt processes for the productions. • BENEFITS FOR THE FOREIGN PRODUCTION • Sole “One-Stop-Shop” for the paperwork. • Processing of Migratory and Labor Permits for the foreign personnel. • Customs: Temporary custody of equipment without guarantee bond. • Permits for public locations throughout the entire national territory. • Link with producers, technicians, casting agencies and national personnel.

26. PANAMA: Building a Global Business Platform CLOSING FACTS Panama: Where the World Meets • #1-for Financial Freedom In Latin America. • #1-for Port Facilities in the Western Hemisphere. • #1- in Latin America for Availability of Venture Capital. • #1-for Air Transport Facilities in Latin America. • #2-among Most Competitive Economies in Latin America. • #3-for Business Freedom in Latin America. • #3-in the World for Affordability of Financial Services.

27. PANAMA: Building a Global Business Platform Jose Pacheco TejeiraViceminister of Foreign TradeMinistry of Trade and IndustryPanama