Colombia: An Upcoming Emerging Market for International Investors April 2011

1. Colombia: An Upcoming Emerging Market for International Investors April 2011

2. About Us Proexport promotes International Tourism, Foreign Direct Investment and Exports TOURISM INVESTMENT EXPORTS

3. Strategy 2011: Search Opportunities Proexport promotes Colombia worldwide as a supplier of goods and services, Foreign Direct Investment destination and International Tourism. • Search Opportunities in the International Markets. • Conducive to diversification with innovation. • Contributing to Sustainable Development andemployment generation

4. Colombia: Country with Investment Grade (S&P) "The recent gains in public confidence resulting from an improved security environment are likely to persist." Colombia's economy has displayed resilience against external shocks, and the country's favorable medium-term growth prospects should contain the public-sector debt burden Source: Standard & Poor’s – 16 March 2011

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

6. The World is talking about Colombia… “Whether on security, democratic stability, or vibrancy, the strength of Colombia’s democracy is there for all to see” Eric Farnsworth, vice president of the Council of the Americas. “Colombia has increasingly become a bright star in the Latin American constellation,” Walter Molano, Emerging-market analyst of BCP Securities “While everybody’s been focused on the super hot Brazilian Economy to the south, Colombia’s quietly gone and become amazingly investable” Jim Cramer - 8 February 2011 “Yet against all odds Colombia has become the country to watch in the hemisphere.” Newsweek, July 2010.

7. Enhanced economic performance has come hand in hand with improved security World Crisis Security Perception Source: ANDI (Asociación Nacional de Industriales)

8. Colombian Economy: Bigger than Chile, Ireland, Malaysia, Egypt, Singapore and New Zealand GDP US$ Thousand Millions – 2010* * Forecast (23 March 2011) Source: EIU (Economist Intelligence Unit)

9. The 28th largest world economy when adjusted by PPP and one of the largest non-OECD Note: GDP fixed to prices under Power Purchasing Parity * Forecast (23 March 2011) Source EIU (Economist Intelligence Unit)

10. The third largest population in Latin America and the second largest Spanish speaking population in the world Source: EIU (Economist Intelligence Unit) *Forecast (23 March 2011)

11. GDP Per-Capita has doubled since 2004 140% Source: EIU (Economist Intelligence Unit) *Forecast (23 March 2011)

12. GDP per- capita is reaching US$10,000 when adjusted by PPP Colombian GDP per Capita (PPP) 2000 – 2010* US$ 57% GDP at purchasing power parity (PPP), divided by population * Forecast (23 March 2011) Source: EIU (Economist Intelligence Unit)

13. Annual FDI net inflows have multiplied by four Main investors in Colombia Stock 2000 – September 2010** Variation 2008 - 2009: -32% Variation 2009 – 2010: -5% *FDI by Exchange Balance **Participation by country positive accumulated inflows, it doesn´t includes investment or reinvestment of profits in the oil sector, Value 2009: US$ 36,364 million (so far there is not data for countries at first semester of the year) Source: Banco de la República (Balance of Payments) (Central Bank)

14. Exports have tripled in nine years Colombia Exports by Country 2010 Variation 2008 - 2009: -12,7% Variation 2009 - 2010: 21,2% Source: DANE (Departamento Nacional de Estadísticas) ( National Department of Statistics)

15. In nine years international visitors in Colombia doubled. While tourism in the world increased 6,7%, in Colombia this trend increased 8,9% in 2010* International visitors in Colombia by Country – 2010* Variation 2008–2009: 17,2% (includes cruise) Variation 2009 - 2010: 10,3% (includes cruise) *It doesn't Include cruise **Includes cruise Source: DAS (DepartamentoAdministrativo de Seguridad) (National Department of Security)

16. In terms of Globalization, Colombia is ranked 3rd among Latin America countries, performing better than world economies such as Japan, Brazil, Russia and Indonesia. Globalization Index, 2010 Source: Ernest and Young – The Globalization Index 2010, Ranking among 60 countries.

17. The Highest level of international reserves and the lowest level of inflation on record Source: Banco de la República (Colombian Central Bank)

18. Declining spreads on Sovereign Debt -Lower than Latin America as a region- Emerging Markets Bond Index Plus (EMBI+), basis point spread over US treasuries. Source: JPMorgan - Central Bank of Peru

19. MILA will become the biggest stock exchange market by number of issuers MILA (Integrated Latin-American Market): Merging of the Chilean, Peruvian and Colombian Stock Exchange Markets 46 dealing over US$ 1 million daily Over 500 Companies 58 dealing between US$500 thousand and US$ 1 million It is expected a foreign investment growth, multiplying dealings by 5 in forthcoming years

20. Colombia: the third most “Business Friendly” country in Latin America and top reformer in the region Doing Business Ranking Variation, 2007-2011* (Change in positions) Source: Top Reformers Report, World Bank *Positive figures show improvements in business environment

21. Ranked among the top countries on investor protection Strength of Investor Protection, 2011 Rating Ranking made up by 183 countries Source: Doing Business, 2011 (World Bank)

22. Positioning Colombia as an export platform: 11 free trade agreements (FTA) with 48 countries allowing preferential access to over 1,500 million consumers In Force Signed In Negotiation Future

23. In 2011, Colombia will be negotiating 18 international investment agreements (IIA) In Force Signed In Negotiation Note: The International investment agreements (IIA) include Agreement Investment Treaties (BIT) (agreement) and Free Trade Agreements (FTA) with investment section (chapter).

24. In 2011, Colombia will be negotiating 16 double taxation agreements (DTA) In Force Signed In Negotiation

25. Productive Transformation Program: A Public - Private Partnership to strengthen and build “world class sectors” Promote development of NEW & EMERGING SECTORS Encourage and improve production of competitive products and services ESTABLISHED SECTORS Health Services Exportation Promote value added, innovation & development in AGRIBUSINESS SECTOR Business Process Outsourcing and Off shoring BPO&O Shrimp Farming Chocolate Confectionery Palm and vegetable Oil Cattle

26. Colombia is a Country of Regions and Opportunities for Investment • Automotive • Tourism • BPO • Cosmetics and Personal Hygiene • Agribusiness/Biofuels

27. Automotive Opportunities • This industry represents 6.2% of GDP. Colombia is the fifth largest producer of vehicles in the region, with great potential forgrowth. • Opportunities in Automotive: Colombia features trade agreements covering vehicles. • Opportunities in Bus and Truck Assembly: Colombia’s largest cities are developingMass Transit Systems. • Opportunities in Auto Part Manufacturing: Assemblers in Colombia requiresuppliers for both Original Equipment and replacement parts.

28. Tourism Opportunities • Multiple opportunities in recreational an business tourism. • Opportunities for recreational tourism: • “Colombia: Undiscovered Destination” • Multi-destination country: • Andean, Caribbean, Pacific and Amazon. • Wide variety of tourism: Natural Tourism, History and Culture, Sun and Beach. • Opportunities for business tourism (MICE): • Seven cities with dynamic business activity and several more centers of growth. • More than 2.500 multinational operating in Colombia.

29. ICT – BPO&O Opportunities • Opportunities for creating shared services centers for Latam. • Opportunities for outsourcing companies that provide BPO, KPO, ESO, F&A, HRO and R&D services. • Opportunities for developing and integrating IT applications and services. • Opportunities for providing telecommunication services to a growing markets, and strengthening telecommunication infrastructure. • Opportunities for film studies and developing content for the film, TV and media industries.

30. Cosmetics and Personal Hygiene Opportunities • Colombian cosmetics industry is one of the region’s largest and fastest growing with significant competitive advantages. • Opportunities for Production: • Cosmetics production sector has doubledin the last 7 years, exceeding Latam average. • Opportunities for Creating Logistics Hub: • Outstanding geographic location • Excellent logistical capacity. • Opportunities for Establishing Research and Development Centers: Colombia has the greatest biodiversityper Km2 of any country in the world.

31. Agribusiness Opportunities • Colombia has competitive advantages in agroindustrial sector as land availability, ample water resources and high export potential for this products. • Opportunities in Biofuels: • Colombia has 7.3 million hectares suitable for biofuel development. • High levels of productivity for Sugarcane and Palm Oil. • Opportunities in Reforestation: Colombia has certain species withhigh yields and short biological cycles. • Opportunities in the Dairy Sector: • Fourth largest milk producer in Latam. • Third largest dairy market in Latam.

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

33. New single company FTZ in seven regions of the country • Characteristics • Boyacá, Cesar, La Guajira, Norte de Santander, Arauca, Guainía and Vichada. • Equivalent requirements between the different types of Single Company Free Trade Zones. • 2 year limitation for the execution of 100% of the investment and employment commitments. • Application must be filed before the Tax Authorities (DIAN) prior to December 31st, 2011. • Requirements Ex/rate COP 2000 = US$ 1 Not all the municipalities in the regions bordering Venezuela are included. Refer to Decree 2696 of 2010.

34. 89 Free Trade Zones Free Trade Zone Approved Single - Company Free Trade Zone Permanent Free Trade Zone Source: Ministry of Trade, Industry and Tourism. The investment amounts required to obtain the Free Trade Zone status are calculated in Minimum Monthly Legal Wages (M.M.L.W). This information is presented in dollars using a US$1 = COP 2,000 exchange rate. For 2011, the M.M.L.W is COP 535.600. The M.M.L.W, as well as the exchange rate are subject to variations. 34

35. Colombia offers Legal Stability Contracts to guarantee investment projects Investments over US$2.01 million* (7500 M.M.L.W.)** Investor pays 1% premium based on the amount of the investment. 0.5% in unproductive periods Conditions Period From 3 to 20 years maximum Signed contracts 67 legal stability contracts approved, 66 legal stability contracts signed *The investment requirement is calculated with an exchange rate of COP $ 2000 = 1 USD. It is responsibility of the investor to calculate the investment requirement at the moment of submitting the application for the Legal Stability Agreement. ** One minimum monthly legal wages – M.M.L.W. equivalent COP$ 535.600 or US$ 267,8

36. Other incentives by sector: Income tax exemption for up to 20 years

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

38. PROEXPORT’s services to Investors • Information tailor made to your needs • Facilitation of contacts with the public and private sector • Setting up of agendas to Colombia • Services for investors already established in Colombia • Free of charge and confidential • Investment specialists in New York, London, Beijing and Sao Paulo.

39. Thank you! www.proexport.com.co