Diapositiva 1

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Colombia A Golden Opportunity For Healthcare
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• Agenda
• Recent Evolution Facts Figures
• Colombian Healthcare Sector
• Colombian Healthcare competitiveness 2008
• International Market Access
• Pharmaceutical Market in Colombia
• Proexport Services

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General information

• Official name Republic of Colombia
• Capital Bogota, 7 Million
• GDP (2007) USD 172,000 Million
• Population (2007) 43.9 Million (77 urban, 23
  rural)
• GDP per capita (2007) USD 3,918
• GDP per capita at PPP (2007) USD 9,300
• GDP Growth (2007) 7.52
• Inflation (2007) 5.69
• Exports (2007) USD 29,991 Million
• Imports (2007) USD 32,899 Million
• FDI (2007) USD 9,028 Million
• Literacy rate 92.1
• Currency Colombian Peso (COP)

GDP Current prices Source Central Bank,
Proexport and Presidency of Colombia Exchange
Rate USD 1 COP 2014 (2007 Average rate)
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Colombias economic growth since year 2001 has
outpaced that of the Latin American region
GDP Growth Colombia vs. Latin America (1999
2007)
Source Economic Commission for Latin America and
the Caribbean (ECLAC), DANE, Forecasts ECLAC and
National Planning Department, and World Economic
Forum for Latin America in 2007
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Colombias GDP is growing at highest rate in 15
years
Source DANE Banco de la República
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Colombias significant market potential
GDP in Latin America (2007) Current Prices, USD
Billion
Population in Latin America (2007) Million of
inhabitants
Source International Monetary Fund and World
Bank 2007
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Inflation rate has consistently decreased
Inflation Rate Colombia vs. Latin America (1998
2007)
Source DANE
8
Colombias inflation rate has been decreasing
since 1990
Inflation Rate Colombia (1993 2007)
Source DANE Banco de la República
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Access to global markets with current trade
agreements
Negotiation agenda through 2010
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• Agenda
• Recent Evolution Facts Figures
• Colombian Healthcare Sector
• Colombian Healthcare competitiveness 2008
• International Market Access
• Pharmaceutical Market in Colombia
• Proexport Services

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How does the Healthcare sector work in Colombia?
Ministry of Healthcare and social welfare
Secretary of health

• General Taxes
• Wage Taxes
• (Payroll taxes)
• Other local funding sources

Health Promoting entities/ EPS

• Institutions which provide health services
• -Hospitals.
• Healthcare centres.
• Clinics

Full paying population
Subsidized population
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The purpose of the health service implies
coverage and quality.
Policy Axes
Improving Colombian access to health services
Improving health care quality for Colombians
Achieving greater efficiency in Public Health
Centres
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Public expenditure on health increased 6 times
since law 100 (1993) until the beginning of this
decade (2000)

• Healthcare coverage went from 30 to 85 since
  1990, thanks to a significant increase in health
  expenditure.

Expenditure on Health per Inhabitant
Coverage 85
Coverage 30
Source Economist Intelligence Unit Source
Fedesarrollo
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More public expenditure, implies mores coverage
Budget Vs Coverage (2002-2006)
Percentage of population without coverage
Resources of the Healthcare System to subsidized
population
Source Fedesarrollo
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Health policy with sense of equality
Income Per Person and Health Public Expenditure
by Region
The Colombian government spends around US 10 per
person with an income of US 15.5
Income Per Head
Health public expenditure per head
Source Department Administrative National of
Statics (DANE), Department Planning National
(DNP) and Fedesarrollo
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Health Expenditure is increasing per Colombian
(2002-2008)
Source Economist Intelligence Unit
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• Agenda
• Recent Evolution Facts Figures
• Colombian Healthcare Sector
• Colombian Healthcare competitiveness 2008
• International Market Access
• Proexport Services

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Colombia has the 3rd largest health expenditure
as percentage of the GDP in Latin America
Source Economist Intelligence Unit
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Colombia has the largest Public expenditure in
Latin America
Source World Competitiveness Year Book 2008, IMD
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Colombia ranks second in Latin-American
infrastructure (2008)
Source World Competitiveness Year Book 2008, IMD
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Colombia's legislation aims to provide an
appropriate business environment (2008)
Source World Competitiveness Year Book 2008, IMD
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Facilitating business above average (2008)
Change in ranking on the ease of doing business
Colombia has become one of the top countries in
the world in facilitating the business
environment through legal and procedure reforms.
Colombia
Colombia ranked above world average in positive
change in ranking on the ease of doing business.
Average
Ranking 178 countries
Source Doing Business Database 2007 2008.
Proexport Calculations
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Available skilled work force (2008)
Source World Competitiveness Year Book 2008, IMD
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• Agenda
• Recent Evolution Facts Figures
• Colombian Healthcare Sector
• Colombian Healthcare competitiveness 2008
• International Market Access
• Proexport Services

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A wide market access to countries in the Americas
and Europe
Signed Agreements
Consumers with a health spending over US
2,200,000 Million
ATPA-APTDEA
CAN
CENTER AMERICA AND CARIBEAN
AGREEMENT COLOMBIA-CHILE
AGREEMENT COLOMBIA-MERCOSUR
TLC COLOMBIA- EL SALVADOR, GUATEMALA AND HONDURAS
Agreements in Process
TLC COLOMBIA/PERÚ - CANADÁ
AGREEMENT CAN - UE
EFTA
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The medical devices sector is growing in Colombia
Trade of Medical Devices in Colombia (2000-2007)
Accumulated Growth 153
CARG 12,3
Accumulated Growth 404
CARG 22,4
Source ANDI
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Main Imported Products
Source ANDI
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Colombia as an export platform Main exported
products
Source ANDI
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Main Export Destinations
Source ANDI
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The most competitive FTZs in Latin America 15
income tax and allows sales to the local market

• Single 15 income tax rate for 30 years
  extendable for an equal period of time.
• Any goods entered to the Free Trade Zones are
  considered to be outside the national territory
  when it comes to taxes related to imports and
  exports.
• No customs taxes (VAT or CUSTOMS DUTIES)
• VAT exemption for raw materials, inputs and
  finished goods sold from the national customs
  territory to industrial Free Trade Zone users.
• Exports made from Free Trade Zones to foreign
  countries benefit from international trade
  agreements. (Except Peru)
• No customs taxes for any machinery directly
  related with the business operation which is
  imported for abroad and entered to the Free Trade
  Zone
• Quick and simplified customs procedures

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Three different types of Free Trade Zones
An operator (known as the operating user)
administers the zone where the companies conduct
their industrial, commercial or service
activities.
1. PERMANENT FREE TRADE ZONE (PFTZ)
Requirements of PFTZs for Industrial users of
goods and services
Exchange rate used  USD 1 COP 1800. Minimum
Monthly Legal Wage for 2008 is COP 461.500. The
M.M.L.W, as well as the exchange rate is subject
to variations.
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A free trade zone to a single company
2. SINGLE ENTERPRISE FREE TRADE ZONE (SEFTZ)
Authorizes a single company to develop its
industrial activities of goods or services in a
given area of the national territory.
Goods
Each additional investment of USD 5.9 MM reduces
the number of jobs required by 15 in any case 50
job must be created.
Exchange rate used  USD 1 COP 1800. Minimum
Monthly Legal Wage for 2008 is COP 461.500. The
M.M.L.W, as well as the exchange rate is subject
to variations.
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A free trade zone for international events
Area authorized to hold international fairs,
exhibits, congresses and seminars of importance
for the countrys economy and foreign trade.
3. TRANSITORY FREE TRADE ZONE (TFTZ)
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Why take advantage of Colombia's Free Trade
Zones?

• Income tax rate does NOT depend on the exports or
  sales to the domestic market.
• It is compatible with the World Trade
  Organization and has no maximum expiration
  deadline or pending extension procedures with the
  WTO.
• Allows companies to settle in any place of the
  country using the figure of Single Enterprise
  Free Trade Zones.
• No sectors are excluded from the Free Trade Zones
  regime.
• Tax exemptions on imports and also on income
  taxes along with other regional taxes.
• The tax exemptions on imports dont depend on the
  inexistence of national production.
• Colombias commercial agenda guarantees stability
  and a privileged position as an export platform.

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Investors can subscribe Legal Stability Contracts
with the Colombian Government
Guaranteeing the legislation and administrative
interpretation considered as a determining factor
for the investment project.
Objective

• Investments over USD 1,900.000
• Investor must pay a premium to the Government
  equivalent to 1 of the investment made.

Conditions
Period
From 3 to 20 years maximum.
Admission
Technical report
Evaluation and approval
of the application
Final evaluation
These contracts exclude rules regarding the
social security system, the obligation to report
and pay taxes levied by the government under a
state of emergency, indirect taxes (i.e., the VAT
or the tax on banking transactions), prudential
regulations of the financial system and the
utility rate system.
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Tax incentives by sectors Exempt Income tax up
to 20 years in many sectors

• Income tax exemptions are granted in some
  strategic sectors
• Tourism Income tax exemption on remodeling or
  building a new hotel until 2032
• Eco-tourism Income tax exemption for 20 years
  beginning in 2003
• Late-yield crops Income tax exemption on the use
  of oil, palm, rubber, cocoa, citric trees and
  other late-yield crops planted between 2003 and
  2013 and intended for exports.
• Forestry Income tax exemption on new forest and
  timber tree plantations and sawmills
• Publishing Income tax exemption until 2013 for
  publishing companies of books, magazines,
  brochures or scientific or cultural collectible
  series.

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Tax incentives by sectors Exempt Income tax up
to 20 years in many sectors

• New medical and software products manufactured in
  Colombia with a high content of national
  scientific and technological research and covered
  by new patents registered before the appropriate
  authorities are income-tax exempt during 10 years
  beginning in 2003.
• Investments in projects classified as scientific,
  technological and technological innovation
  projects by the National Science and Technology
  Council may be deducted from the income tax
  corresponding to the year during which the
  investment was made, at a rate of 125 of the
  amount invested, provided such deduction does not
  exceed 20 of the taxpayers net income before
  deducting the investment.
• The National Science and Technology Council
  determines whether a project carried out by
  Research or Technological Development Centers
  approved thereby is a scientific research or a
  technological innovation, and assesses the need
  to import equipment or other elements for its
  development. Once the Council declares that such
  a project meets the requirements, the National
  Tax and Customs Office (DIAN) authorizes The VAT
  exemption for the equipment and other elements to
  be thus imported

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Income - deductible expenses

• Deductions include among others the following
• 40 of the amount invested in productive real
  assets acquired.
• 100 of the amount paid for Industry Commerce,
  sign and billboard, and property taxes during the
  corresponding taxable year, as long as they are
  directly related to the taxpayers economic
  activity.
• 25 of the tax paid on financial transactions may
  be deducted, regardless of their relationship to
  the taxpayers economic activity.

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Investors that trust in Colombia
A 500 employee production plant.
2 production plants manufacturing medical
devices, and sterilization equipment.
A 300 employees production plant, with exports to
over 5 countries in the region.
A dialysis production plant for Latin America.
2 Production plants of medical devices and
hearing aids for Latin America
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Conclusions

• The recent growth of Colombian Healthcare system
  allows
• Improving Healthcare quality
• Improving access to health services
• Achieving greater efficiency in Public Health
  Centres.
• This implies a opportunities for medical devices
  and pharmaceutical products.
• Colombia has the biggest public expenditure on
  health in the region. It is a potential sector
  to invest.
• Colombia is the second country in health and
  science infrastructure in Latin-America.
• Colombia has one the most competitive workforce
  in the Region.
• Colombia has a number of trade agreements which
  facilitate foreign trade with others countries,
  including North-America.

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Proexport Entity that will provide you
world-class services

• Information requests (economic, sector specific
  information, legal, procedural, etc)
• Contacts with private and public sectors
• Set up of agendas when investors decide to visit
  Colombia
• Aftercare services for investors that are already
  establishes in the country
• Assessment and improvement of business climate
• All services are free of charge. The main goal is
  to make the development of new businesses an
  efficient and friendly process.

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Proexport offices around the World
London Office 2 Conduit Street, 6th Floor London
W1S 2XB Tel. [phone] Mobile 44 (0)
7717 864581