PARAGUAY LAND OF OPPORTUNITIES PARAGUAY TODAY PARAGUAY TODAY

PARAGUAY LAND OF OPPORTUNITIES

PARAGUAY TODAY

PARAGUAY TODAY… The Best Investment Climate in the region (GV FOUNDATION) Top 5 Regional Ranking “Doing Business” (WB) Young Population (70/35) 2° Country with best ROI in South America World Class Food Producer (22%) Competitive Platform: food to World, products and services for the Region Stable, solvent, predictible and reliable economy (Net creditor 2 to 1) Logistic Hub For the Region

LATEST HIGHLIGHTS

OUR LATEST HIGHLIGHTS ARE… Monetary stability for the past 70 years (The Guaraní is the most stable currency in Southamerica) 4, 5% GDP growth (average) for the past 10 years 60% annual growth in Maquila Exports Most Competitive Tax Scheme 10, 10 Growing Rate of FDI Reestablished markets and diplomatic agreements 60% New Investments (Paraguayan capital) Less than 5% of annual inflation for the past 5 years Applications to open new businesses have tripled

CONSOLIDATION OF MACROECONOMIC STABILITY Paraguay Economic Growth 1992 -2014* A Record of Price Stability Annual Inflation Exchange Rate Source: Bloomberg International Reserves (% of GDP)

AN ATTRACTIVE COUNTRY FOR INVESTMENT INDICATOR OF ECONOMIC FREEDOM COUNTRY RANKING Paraguay 78 Brasil 100 Argentina Bolivia ECONOMIC CLIMATE INDICATOR (ECI) COUNTRY Paraguay Colombia RANKING 1 2 Perú 4 160 Uruguay 5 156 México 6 Chile 8 Argentina 10 Venezuela 11 Ecuador 159 Venezuela 174 FUENTE: The Heritage Foundation (www. heritage. org), Fundación Getulio Vargas.

PARAGUAY IN THE WORLD

PARAGUAY IN THE WORLD 2 nd 1 st STEVIA PRODUCER 3 rd PRODUCER AND EXPORTER OF YERBA MATE 3 rd 4 th FLEET OF BARGE SOYBEAN EXPORT 4 th MAJOR EXPORTER OF SOYBEAN OIL 4 th WORLD EXPORTER OF YUCA STARCH RENEWABLE ENERGY 5 th MAJOR EXPORTER OF SOYBEAN EXPELLER 5 th 5º MAJOR EXPORTER MAJOR OF MEAT EXPORTER OF MEAT 6º MAJOR CORN EXPORTER 6º MAJOR SOYBEAN PRODUCER 10 th MAJOR WEAT EXPORTER

CONTINUOUS IMPROVEMENTS IN COUNTRY RISK RATING

OUR VISION “A World Class food producer; open and connected to the world; with high rates of development, rule of law and public safety; environmentally sustainable; with women inclusion and young entrepreneurship as trademark; and a Government that promotes solidarity, transparency and zero tolerance to corruption” POVERTY REDUCTION INCLUSIVE ECONOMIC GROWTH INSERTION OF PARAGUAY IN THE WORLD

STRONG COMMITTMENT TO IMPROVING INFRASTRUCTURE USD 16, 480 million of total investment within the next 5 years: Health and education Telecom. USD 1. 306 USD 595 Housing USD 1. 989 Infrastructure USD 6. 275 Productive Assistance USD 1. 565 Electricity USD 2. 872 Fuente: Ministerio de Hacienda Water & Sanitation USD 1. 878

MAIN INFRASTRUCTURE INVESTMENTS PROJECTS 2013 - 2018 LONGITUDE (KM) APROX. COST (USD) 18212, 00 1. 296. 000 800, 49 1. 296. 000 PROJECT 3: Water and Sanitation Projects ------- 900. 000 PROJECT 4: Waterway ------- 104. 000 1045, 77 926. 640. 000 PROJECT 1: Improvements of roads: - 3, 200 km of construction of roads - 15, 000 km of maintenance of roads - 12, 000 ml replacement of wooden bridges PROJECT 2: Routes Nr. 1, 2, 6 y 7 and networks PROJECT 5: Route 9 and networks

PROJECT 2013 - 2018 LONGITUDE (KM) APROX. COST (USD) ------- 2. 573. 000 5. 300, 00 560. 000 PROJECT 8: Villeta – Pilar-Paso de Patria Routes 346, 25 346. 852. 500 PROJECT 9: Curuguaty - Pedro Juan Caballero Routes 285, 83 242. 315. 000 PROJECT 10: Access to Second Bridge (Paraguay - Brazil). (Rural Access, Urban Access, ACI) 47, 00 172. 787. 000 PROJECT 11: Urban Electric Train 44, 00 250. 000 PROJECT 6: Main Electricity Plan PROJECT 7: Management and Maintenance Systems for Road Network - Road Tolls (11) and freight (10) TOTAL INVESTMENT 8. 359. 624. 500

LEGAL FRAMEWORK ORIENTED TO ENHANCE COMPETITIVENESS Fiscal Responsibility Act Investment Security Act: In Process Public – Private Partnership Act 5074 Act Tax Scheme 10: 10 Implementation of the Vision "Simple Country" - “Serious Country“

GDP GROWTH 16% 13. 6% 14% 12% 10% 8% 4. 8% 6% 2% 6. 8% 6. 6% 6. 8% 2. 5% 2. 7% 4. 1% 2014 2015 2016 2017 2018 0. 7% 4% 6. 6% 0% -2% -1. 2% 2012 2013 GDP_Basic GDP_Additional

PARAGUAY COMPETITIVE PLATFORM

AVAILABLE RESOURCES YOUNG LABOR FORCE GOOD FINANCIAL FORESCAST STRATEGIC LOCATION LOWEST TAX BURDEN IN THE REGION RAW MATERIAL WITH QUALITY AND LOWER COST CLEAN ELECTRICITY WITH LOWER COST ECONOMIC STABILITY SUSTAINABLE ECONOMIC GROWTH

COMPETITIVE TAX SCHEME TAXES Corporate Income Tax(*) Personal Income Tax Value Added Tax (VAT) PY ≤ 10% AR UR 35% 25% 34% 35% 27, 5% 21% 23% Tariffs on Capital Goods Import (Machinery and Equipment). BR 25% (*) Obs: If distributed internationally may be up to 27. 5%. + 0% (VAT) Capital Goods (Inside and outside the country) 0% DEBT: Tax on remittances, Capital, Interest and Commissions (Per Investment > USD 5 mn) 0% INCOME: Income on dividends and profits (For Investing> USD 5 mn for 10 years) 0% = Paraguay has the most competitive Tax Scheme in the Region Source: Treasury (www. hacienda. gov. py

PARAGUAY IS A PROFITABLE INVESTMENT DESTINATION PRODUCE FOOD FOR THE WORLD DEVELOP COMPETITIVE PLATFORMS FOR THE REGION ESTABLISH A UNIQUE LOGISTICS PLATFORM IN THE REGION BUILD PARTNERSHIPS WIN - WIN FOR THE EUROPEAN MARKET: - REGIONAL MERCOSUR - EUROPEAN REGIONAL

MAIN COMPETITIVE ADVANTAGES IN PARAGUAY FOR BRAZILIAN COMPANIES Sector Competitive Factors Trained labor force Clothing Footwear Autoparts Electronics Agricultural products Chemical products and Metalwork Labor Wage/Hours (Average in USD) Young Population Electricity cost Tax Source: Supply Chain Report, IPIE - IDB, progress report, *JAN 2014 Paraguay vs. Brazil Untrained labor force (-) 53, 2%. (-) 29, 3%. (-) 35, 2%. Average Wage/ Month (-) 20, 7%. Machine Operator USD/MWh VAT INCOME TAX (+) 8, 0%. (-) 63, 6%. * (-) 63, 2%. (-) 60, 0%.

GSP+ : PARAGUAY AS PLATFORM FOR COMPETITIVE INTERNATIONAL COMPANIES OPPORTUNITIES TO EXPLORE 1 Attract industries from Argentina and Brazil, through the GSP+ (Exportable competitiveness from Paraguay) ARGENTINA Y BRASIL Empower the local market and investment considering the increased competitive advantages. 2 PARAGUAY UNIÓN EUROPEA U. E. MERCOSUR + CHILE B A A 3 Attract European Industries to Paraguay to export to Mercosur and Chile. B Attract European Industries to Paraguay to export to the E. U. Attract European Industries considering the direct and preferential access to Mercosur. Fuente: análisis Arthur D. Little

GSP+: COMPETITIVE PRODUCTION IN PARAGUAY FOR THE E. U. SECTORS MFN TARIFFS GSP+ TARIFFS CLOTHING MANUFACTURE 12, 0% 0, 0% FOOD 12, 2% 0, 0% PLASTIC ARTICLES 6, 5% 0, 0% INSECTICIDES AND OTHER PESTICIDES 6, 5% 0, 0% LEATHER 5, 5% 0, 0% ANIMAL FEED AND OTHER ANIMAL FOODS 9, 6% 0, 0% SHOES 17, 0% 0, 0%

BESIDES THE GSP+ … LABOR COST 2014 (USD x HOUR) – SOCIAL COST -67% 4, 2 -30% -80% -2% -81% 12, 9 6, 0 (2) INCOME TAX 2014 -71% -71 % 35% 34% Main Competitive Advantages in Paraguay for Companies 62 124 63 (3) (2) (3) VALUE ADDED TAX (VAT) 2014 -62% 26, 3% -50% 308 21, 9 (1) 10% ENERGY PRICING - INDUSTRIAL SECTOR Year 2014 (USD x MWH WITHOUT TAX) 10% -52% -60% -53% 21% 25% 21, 4% Source: ANDE, Eurostat, CIER, U. S. Bureau of Labor Statistics, KPMG statistics, Oanda y análisis Arthur D. Little

MACRO SECTORS WITH POTENTIAL

AGROINDUSTRIAL POWERHOUSE TO FEED THE WORLD Paraguay can increase its agricultural output by 300% with: Irrigation System Technology Territorial Planning

5 th LARGEST MEAT EXPORTER BY 2020 Paraguay regained its status from the World Organization for Animal Health (OIE) as free of Foot and Mouth Disease (FMD) with a vaccination regime. Exports from Paraguay TONS 3, 000 1° India 2, 500 2° Brazil 2, 000 3° Australia 1, 500 4° New Zealand 1, 000 5° Paraguay 6° Canada 500 7° Uruguay 2011 2012 2013 2014 2015 OCT 2015 ABR 8° European Union (Source: ARP with data of USDA, 2013) Meat Exports - 2013 Frozen 78% Refrigerated 22% Value of Exports of the main meat companies ACHIEV E D 2015

INTERNAL CORRIDOR LOGISTIC HUB: TRANSPORTATION OF GRAINS, MEAT, MINING Campo Grande TRANSPORT OF GRAINS TODAY: Through Paranagua or Santos. Time: aprox. 45 days. Distance: 1500 km aprox. Cost: Expensive freight due to Interstate tolls and limited time scheduled for freight. PHASE 1: Bitrains transport pathway through Pedro Juan Caballero to Concepcion. Hidrovia to Nueva Palmira. Time: between 15 y 20 days. Distance: 800 km. Aprox (Concepcion). Cost: aprox. cost reduction of USD 500 million per year. Punta Pora Concepcion PJ ASU Santos Paranagua Rosario N. Palmira PHASE 2: Exit to the Pacific. BRAZIL Buenos Aires Montevideo Rio de Janeiro

REFORESTATION: DOMESTIC DEMAND EXPORT Suitable surface for Commercial Reforestation 8. 000 tn/year: Estimated demand for energy + wooden products 60. 000 ha declared: Stock for reforestation 22. 000 tn. 2, 75 years, since the native wood finishes Alta 50. 000 ha/year: Reforestation amount required to meet current demand Media Baja ORDEN DPTO. TOTALS SUPERFICIE (Has. ) ALTA MEDIA BAJA 9. 433. 095, 80 7, 328, 713, 71 3. 243. 915, 61 SUP. TOTAL 20. 005. 725, 12

REAL STATE 1: HOUSING SOLUTIONS ESTIMATED DEMAND Main areas of housing development - Asunción and Vicinity Areas 100. 000 new houses per year 300. 000 houses (maintenance) 800. 000 houses (minor repairs and maintenance) Fuente: SENAVITAT

MAIN INVESTMENTS REAL STATE 2: CORPORATE AND HOTEL SOLUTIONS 30% annual growth in the sector 2015 /16: 20 new projects - more than of new. USD 450 million investments. Total Investment USD 426 million

RIVER PORTS AND LAND PORTS AIRPORTS WATERWAY LOGISTIC LIVESTOCK PRODUCTION, SLAUGHTER FOR EXPORT REAL STATE LIVESTOCK AND AGRICULTURAL PRODUCTION BUSINESS SERVICES AGRICULTURAL TRANSFORMATION PUBLIC INFRASTRUCT URE ( 7000 USD MILLION) AUTOPARTS LEATHER AND FOOTWEAR INDUSTRY REFORESTATION FOOD INDUSTRY TEXTILE AND CLOTHING INDUSTRY METALLURGICA L AND LIGHT METAL MECHANICS INDUSTRY RAILWAY PASSENGER TRANSPORTATION ADDITIONAL INVESTMENT OPPORTUNITIES IN PARAGUAY FINANCIAL SECTOR

OUTSOURCING (MAQUILA) Millions Annual Exports 225 200 175 150 125 100 75 50 25 0 202 159 142 75 55 1 8 8 2 141 24 new approved projects approved (2014). 102 79 52% annual growth in the sector 63 20% total exports to Brazil (Brazilian companies in PY). 28 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 10 new projects in the pipeline. Labor Force - Per sector Accumulated Export per item (En %) Textiles 20, 73 Autoparts 20, 25 Textiles Autoparts 11, 58 Plastics 11, 43 Footwear 7, 03 Pharmaceutical Products 804 Intangible Services 804 1, 22 Wood & Manufacture Pet Food 1, 10 Pet Food 1, 95 0, 89 662 509 Leather & Manufacture Wood & Manufacture Others 1. 058 Plastics 4, 72 Intangible Services 1. 784 Footwear 19, 98 Leather & Manufacture 2. 344 255 140 99 Others 5, 00 10, 00 15, 00 20, 00 25, 00 0 500 1. 000 1. 500 2. 000 2. 500

THE ROI OF PARAGUAY IS THE BEST ROI 2 nd WITH SOUTH AMERICA (AS ECLAC) Latin America and the Caribbean (Selected Countries): Income IDE as a proportion of the FDI 207 -2011 (%) 30 25 25 21 20 17 16 15 14 13 13 10 10 9 8 7 6 6 5 3 2 2 el zu ne Ve Source: United Nations Economic Commission for Latin America and the Caribbean (ECLAC). a Sa lva do r El Ni ca ra gu o éx ic M Br as il nd a( ur Re as p. Bo l. d e) Pa na m á Ur ug ua y Ec ua do r Co st a. R ica a in Ho nt ge Ar om a( bi Es a t. Pl ur. d e) Do Co l liv i Bo m in ica na ile Ch p. Re Gu at em al a ay gu Pa ra Pe rú 0

PARAGUAY LAND OF OPPORTUNITIES Av. Mcal. López 3333 c/ Dr. Weiss Tel: (+595 21) 616 3028 e-Mail: info@rediex. gov. py THANK YOU