PARAGUAY Oportunidades de Comercio e Inversin en Paraguay

PARAGUAY 巴拉圭經貿�投資商機�明 會 Oportunidades de Comercio e Inversión en Paraguay Jueves, 09 de Octubre de 2014 Grand Hyatt Taipei – República de China TAIWAN Embajada de la República del Paraguay en la República de China – TAIWAN

What´s new in Paraguay? • Paraguay is a vibrant and solidified democracy. • Free Market economics, along inclusive social programs resulting in a pragmatic approach to development • Government Management is oriented to results. • Presidential Commitment to the Vision ¨Simple Country¨; ¨Serious Country¨. • Paraguay is now a prime destination for investments.

. . . we have achieved relevant positions in the global market… Renewable Energy Soybean Exporter Soybean Producer � � � Stevia Producer Soybean Oil Corn Exporter � � � Yerba Mate Exporter Yuca Starch Meat Exporter � � � Barges Soybean Pellet Wheat Exporter � � �

…we have maintained a strong macroeconomic position… GDP Growth – Paraguay 1992 - 2014 GDP Exchange Rate Source: Bloomberg Average 1992 -2002 Stability of Price Inter-annual Inflation Internationa Reserves (% GDP)

…reflected in the continuous improvement in the country risk rating… Contry Risk Evolution

… and presence in the international specialized press…

… What is Paraguay (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 Insertion of Economic Paraguay in the World Growth

… we have a clear development plan… National Development Plan 2030 1 Reducción Poverty de pobreza&y Reduction Desarrollo social Social Development 2 2 Crecimiento económico Vigorous and inclusivo Inclusive Economic Growth 3 3 Inserción de Paraguay en Total Insertion el Paraguay mundo of In the World

…with strong committment to improving infrastructure… Investment of USD 16, 480 million within the next 5 years: Health & Education Telecom. $ 1. 306 $ 595 Housing $ 1. 989 Infrastructure $ 6. 275 Productive Assistance $ 1. 565 Electricity $ 2. 872 Water & Sanitation $ 1. 878 Source: Ministry of Finance

…with a legal framework oriented to enhance Competitiveness… 1. Fiscal Responsibility Act; 2. Public –Private Partnership Act; 3. 5074 Act; 4. Investments Security Act: under study in Parliament. 5. Tax Scheme 10: 10 6. Implementation of the Vision: ¨Simple Country¨, ¨Serious Country¨

… resulting in a robust GDP Growth Forecast… 16% 13. 6% 14% PIB Total PIB_Adicional GDP - Base GDP - Additional 12% PIB_Base GDP - Total 10% 8% 6. 6% 6% 6. 8% 6. 6% 6. 8% 2. 5% 2. 7% 4% 4. 8% 0. 7% 2% 4. 1% 2014 2015 2016 2017 2018 0% -2% -1. 2% 2012 2013 Source: Ministry of Finance

PARAGUAY A very competitive platform

Key Resources YOUNG LABOR FORCE GOOD FINANCIAL FORESCAST LOWEST TAX BURDEN IN THE REGION STRATEGIC LOCATION RAW MATERIAL WITH QUALITY AND LOWER COST CLEAN ELECTRIC ENERGY AT LOW COST ECONOMIC STABILITY SUSTAINABLE ECONOMIC GROWTH

The Most Competitive Tax Scheme in the Region TAXES Corporate Income Tax (*) PARAGUAY ARGENTINA URUGUAY BRAZIL Tariff for Imports of Capital Goods (Machinery and Equipments) ≤ 10% 35% 25% 34% Personal Income Tax 10% 35% 27, 5% Value Added Tax (VAT) ≤ 10% 21% 23% 25% (*) Obs: if distributed internationally it may be up to 27. 5% Source: Ministry of Finance (www. hacienda. gov. py) (VAT) Capital Goods Acquired (Inside or outside the country) Debt: Tax apply to remittances and payments in concept of Capital, Interests and Commissions 0% 0% 0% (for investments over US$ 5 mill. ) Revenues: Tax apply to dividends and utilities (for investments over US$ 5 mill. , for a period of 10 years) 0%

The most competitive platform in South America Sector Clothing Shoes Autoparts Electronics Agricultural Production Quimical Products and Metalwork Competitive Factors Labor: Trained Labor Force Salary/Hour Machinery Operator (Average in USD) Untrained Labor Force Average Salary / Month Young Labor Force Electric Energy Taxes Paraguay vs. Brazil (-) 53, 2%. (-) 29, 3%. (-) 35, 2%. (-) 20, 7%. (+) 8, 0%. USD/MWh (-) 63, 6%. VAT (-) 63, 2%. Income Tax (-) 60, 0%. Source: Supply Chain Report, IPIE - IDB, Progress Report, Jan 2014

Very competitive platform for the world Three ways to access to the benefits of the GSP + status of Paraguay: attraction of MERCOSUR industry, enhancing of domestic industry; attraction of European industry. 1 Atraction of Argentinian and Brazilian industries for exporting to the EU, based on the competitive advantages of Paraguay Argentina and Brazil 2 Enhancing the local market and investments considering the increase in the competitive advantage European Union Paraguay Mercosur + Chile European Union E. U. B A Industry Atraction of european industry for exporting to Mercosur and Chile B Atraction of european industry for exporting to the E. U. B Selected Industries for Atraction from the E. U. 3 A Atraction of European Industry for exporting to Mercosur based on Tariff ´s elimination • Source: Arthur D. Little´s Report

Tour of OPPORTUNITIES

Border of Opportunities

Opportunities for Asian Tech World Class Technology Training Center FREE TRADE ZONE FOR MULTINATIONAL COMPANIES SILICON BORDER World Class Technology Center INDUSTRIAL PARKS

2 - Paraguay: Agroindustrial powerhouse to Feed the World With: • Incorportation of technology. • Irrigation systems. • Territorial planning for agriculture and livestock. ¨Paraguay can increase its agricultural output by 300%

3 – Paraguay: Potential to become the 5º Largest Exporter of Meat by 2020 Paraguay – Meat Exports Meat Exporters - 2013 Paraguay – Meat Exports 2013 Refrigerated Frozen Exports – Main Meat Packing USD Millions

4. - Paraguay: Logistic Hub Bolivia Brasil Argentina

5. - Reforestation: For domestic demand export Area suitable for commercial reforestation 8. 000 ton/year : is the estimated energy demand + Wood Products 60. 000 ha. declared: Reforestation Stock 22. 000 ton 2, 75 years since native wood finishes 50. 000 ha/year : Reforestation amount required to cover current demand: High Media Low

6. - Real Estate 1: Housing solutions • Estimated Demand: – 100, 000 new houses per year. – 300, 000 houses (maintenance). – 800, 000 houses (minor repairs and maintenance) Asuncion and Vicinity Areas

7. - Real Estate 2: Corporate Solutions and Hotels Main Investments - USD • 30% of annual growth in the sector. • 2015 / 2016 : 20 projects; more than USD 450 M of total investment.

8 – Outsourcing Potential Maquila exports by sector, August 2014 (in %) 1 g 2 3 01 4 12 20 11 20 10 20 09 20 08 20 07 20 06 20 05 20 04 20 30 Au 20 n- 10 2. 0 8. 4 Ja 0 7. 9 03 Food products 1. 2 20 Pet food 62. 6 27. 5 01 1. 2 1. 1 0. 9 0. 4 0. 1 Wood and its. . . 54. 7 20 Pharma products Maquila Exports, January to August (Million USD) 200. 0 150. 0 100. 0 +54% 159. 5 103. 6 50. 0 2013 2014 159. 5 102. 1 74. 8 79. 5 20 Plastic and its. . . 27. 1 159. 4 142. 0 140. 9 02 17. 2 15. 1 14. 9 12. 1 9. 8 180. 0 160. 0 140. 0 120. 0 100. 0 80. 0 60. 0 40. 0 20. 0 - 20 Textile and apparel Annual Maquila Exports (Million USD) Maquila Exports, August (Million USD) 30. 0 25. 0 20. 0 15. 0 10. 0 5. 0 - 24. 9 +64% 15. 2 2013 2014

Private Opportunities in Paraguay 1) 2) 3) 4) 5) 6) 7) 8) Food Industry. Textile Industry and Clothing. Metalwork Industry. Wire Harnesses. Shoes and Leather Industry. Reforestation. Logistics. Livestock Production, slaughter for export. 9) 10) 11) 12) 13) 14) Agricultural Transformation (irrigation, quality certification) Railroad Transportation for Passengers. Real Estate. Agribusiness. Business Services. Financial Sector. 30

Thank You! 34