Bogota: A Global Center for Business and a Great Place to Live
June 2019 Agenda 2
1. Invest in Bogota 2. Why Bogotá? 3. Investment Opportunities in Bogota Invest in Bogota: Investment Promotion Agency Created in 2006 by the Mayor’s Office and the Bogota Chamber of Commerce 3
Mixed non-profit corporation
Subsidiary of the Chamber of Commerce Public and Private Partners 4
Invest in Bogota Greater Bogota Convention Bureau Bogota Department of Foreign Affairs Investment Captures impactful Promotion international events
Bogota Chamber of Corferias Commerce Trade shows, Exhibitions and events Business Services
District Institute of Secretariat of Tourism Economic Development Tourism Promotion
Other District Departments Lines of Action Strategic Plan IIB Mission 5 Vision
LA1 LA2 LA3
Investment International Environment Promotion Positioning Improvement
Attract Strengthen Bogota’s Joint actions to investments that improve the generate an international visibility as a investment impact in the environment in Bogota-Region destination for investment and Bogota business
Transverse Areas Market Intelligence, Technology, Administrative and Financial, Internal Control Values Excellence in Management, Leadership, Achievement Oriented, Teamwork, Service oriented, Impact Generation Services offered to investors at every stage of the investment cycle 6
Custom made information and opportunity analysis Advice during start-up Aftercare Services
• Guidance on permits, • Continuous monitoring • General, sector and enterprise information regulations and business and improvement of set-up activities business climate • Meeting arrangements with • Contacts with potential key players suppliers, clients or partners Over 335 investment projects, US$ 2.4 billion and 39,000 jobs 7 International Recognition among the best investment promotion agencies in the world 8
“Best Investment Promotion Agency from a developing country” 1st (GIPB 2009).
Ratified as “Best Regional Investment Attraction Agency from South America” 1st (Site Selection 2015-2019).
“Third best investment attraction 3rd strategy in Latin America” (fDi Magazine 2019). Agenda 9
1. Invest in Bogota 2. Why Bogota? 3. Investment opportunities in Bogota Bogota is the great business center of Latin America 10 Bogota, ideal to live, enjoy and doing business 11
Cosmopolitan • 5,029 parks and 15 wetlands • More than 27 international schools • Over 70 malls Cultural • 6 free open-air music festivals • Home to the most important theater festival in Latin America • Over 130 museums, galleries, unconventional spaces and art institutions. • 80 libraries of the Network of Public Libraries Touristic • Bogota is a city that never sleeps; its night life is intense and permanent . • Approximately 13,204 hotel rooms and a sustainable destination for events and conventions • Eight gastronomic zones where most exclusive restaurants can be found.
Source: District Institute of Tourism Strategic Location Extended market of US$ 43 trillion and 1.57 billion people 12
5 hours from st New York, 1 Mexico City and Latin American Sao Paulo airport (2016-2018) in customer service and facilities, 44 Skytrax International direct flights 1st 3rd 15 free trade agreements in force Latin American Latin American 3 free trade agreements signed airport in air airport in 4 free trade agreements under negotiation Cargo passenger Main international direct flights movement traffic
Sources: IMF, World Economic Outlook Database, April 2019; El Dorado International Airport; Airports Council International, ACI World Airport Traffic Report 2018; Skytrax, World Airport Awards 2018; Ministry of Commerce, Industry and Tourism. Driver of Growth Bogota Region: Main consumption center in Colombia 13
3% Economic Growth of Bogota* (20182) US$ 104.5 billion GDP (2018) 57% 31.6% of financial transactions in of Colombia’s GDP (2018) Colombia (2018)
3.06% 11 million Inflation of Bogota* (2018) People (2018)
51.6% US$ 9,247 Middle class1 in Bogota* GDP per capita of Bogota* (2018) (3.7 million)
22% of Colombia’s population (2018) Source: DANE, National and Departmental Accounts, Great Integrated Household Survey (GIHS), population projections Census 2005; Financial Superintendence; District Secretary of Finance. *Refers to Bogota’s urban area. 1 Process by DESR - Invest in Bogota based on DANE (GIHS). Driver of Growth Favorable macroeconomic environment 14 Bogota GDP Growth (2001-2018)
2.8% 3%1
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Colombia Latin America Bogota Foreign Trade Inflation Unemployment43% (2018) (2018) Exports* 7.6% US $4.58 3.06% billion 10.5% 2 0 2 US $29.33 0 0 8 1 billion 8 Imports*
Source: IMF, World Economic Outlook Estimates, April 2018; District Secretary of Finance; DANE, National Accounts; Consumer’s Price Index, Great Integrated Household Survey (GEIH) ; DIAN-SIEX. *Imports and exports of goods. Driver of Growth Diverse economy, mainly associated with the service sector 15
Source: DANE, Departmental Accounts Driver of Growth An economy that surpasses some Latin American countries 16
Bogota Region’s GDP vs. Latin America countries GDP
105 US$ Billions (2018) 81
65 60 59
42 41
26 24 13
Bogota Dominican Panama Uruguay Costa Rica Paraguay Bolivia El Salvador Honduras Nicaragua Region Republic
Source: International Monetary Fund projections, World Economic Outlook Estimates, April 2019, DANE, National Accounts. Competitive Awards and recognition on international rankings 17
City with the highest number of M&As in Latin America rd 2017 - 2018 3 City of the Future in Latin America 2019 - 2020 • Ranked 5th in 2017-2018 3rd Global City in Latin America
2019 • Stands out in development of human capital, stability and th City for corporate tourism in Latin security 5 America International Congress and Convention Association (ICCA) th 2018 7 • First destination in Colombia with the largest number of international events. • Ranked 6th in 2017 Human Capital Young labor force of over 4.6 million people 18
tertiary graduates per year 188,057 * More than 44,000*are from postgraduate programs
of the country’s total Ph.Ds. 43%
of Colombia’s technicians and technologists 35%
2/10 of the best universities in Latin America
of active research groups in the country 37%
Source: National Ministry of Education, Labor Observatory for Education; QS Intelligence Unit, QS World University Rankings 2019; Colombian Science and Technology Observatory. * Invest in Bogota estimation for 2018 based on Ministry of Education, Labor Observatory for Education. The average growth of the last 5 years is used. Attractive City for Investment Bogota is home to more than 300 of the Forbes 2000 companies 19
Distribution of large and medium Companies with foreign capital sized companies in Colombia established in Bogota 1,504 (2017) (2002-2018)
679 Rest 492 51% Bogota Region 49%
20022003200420052006200720082009201020112012201320142015201620172018
Source: Confecamaras; Bogota Chamber of Commerce, Knowledge management and Transformation based on Mercantile Registry. Process by Invest in Bogota FDI* in Bogota Around US$22.3 billion (2008-2018) 20
by source country by industry sector
Business Services U.S.A. 24.3% 14%
Spain 17.1% Others France 7.5% 27% Software & IT services United Kingdom 5% 13% Real state Chile 4.2% 3% Industrial Machinery, Argentina 3.7% Equipment & Textiles Tools 9% Mexico 3.7% 3% Oil & Gas Services Germany 3.5% 5%
Food & Tabaco Brazil 3.4% Consumer 5% Products Venezuela 3.4% Others 24.2% Financial Services Communications 8% 6% 7%
Calculations by: Invest in Bogota based on information provided by fDi Markets, Invest in Bogota certifications and companies’ web pages. *FDI greenfield (includes expansion). Attractive City for Investment Free Trade Zone Regime 21
VAT (Value Added Tax) (19%) • Purchase of international and national raw materials, capital goods and services • Exported goods and services 0%
Income tax (33%) • Preferential tax rate 20% Local ICA tax 0% (1.14% of gross sales) • Exported goods and services Possibility to: • Sell to the local market • Create a Single Company Free Trade Zone (subject to certain requirements) • Partial process (up to 40%) outside the Free Trade Incentives Duties Zone • Free import of machinery and raw Ease of export: 0% materials • Neither shipment authorization, nor export declaration is needed*
*Only requirement: FTZ’s User Operator authorization Attractive City for Investment Free Trade Zones 22
ZF Exennta ZF de Tocancipa Gachancipa Tocancipa • 276,322 m² at 30 km from Bogota • 387,000 m² at 35 km from Bogota • Potential segments: ITO, BPO, KPO, • Potential segments: autoparts, cosmetics, pharma, biotech, industrial activities construction materials, manufacturing, logistics
ZF Metropolitana ZF de Bogotá Cota Bogota • 235,320 m² at 3.5 km from Bogota • 960,000 m² • Potential segments: ITC industry, BPO services, • Potential segments: SCM and logistics, pharmaceutical, logistics, call centers cosmetics and pharmaceutical, Biotech, (BPO, ITO, KPO) Intexzona ZF de Occidente Mosquera Funza • 328,000 m² at 12 km from Bogota • 860,000 m² at 2,2 km from Bogota • Potential segments: autoparts, logistics, • Potential segments: diagnostic and medical O&G services, coatings, packaging, SW devices, contact centers, data centers, logistics development.
Source: Invest in Bogota Note: IFOU FTZ and El Dorado FTZ are not included since both are conceived for special purpose. Attractive City for Investment Income tax deductions and discounts 23
Discount of 25% of investment for the control and improvement of the environment Up to 100% 01 deduction on R&D and innovation 02 projects over the income tax Discount of 25% of the investment on R&D or innovation over the income tax
Up to 100% deduction on value paid for VAT in 03 acquisition of capital assets with global tariff charge over the income tax
04 Up to 200% Deduction of disabled employees’ salaries over the income tax Attractive City for Investment Creative Industries Special Regime 24 Requirements
Must have their principal place of business within Colombian territory
corporate Incorporated and operating before December 31, 2021 tax 100% exemption Hire a minimum of 3 employers directly related with the ICT industry for 7 years Minimum investment of US$ 50,000 in maximum 3 years. The company's gross income must be a maximum of US$ 917,000* Companies have to file application request to the Ministry of Culture. It is compatible with the Free Trade Zone regime. Source: Law 1943 of 2018. *USD 1 = COP 3,000 Attractive City for Investment Mega-Investments Regime 25 Requirements Benefits
250 direct jobs May sign tax stability contracts with the State to ensure Reduced rate benefits for up to 20 years Tax authority 27% approval
Depreciation of fixed assets over a For up to 20 minimum period of years US$340 million two (2) years investment over a Not subject to : maximum of 5 • Presumptive rental system years* • Equity tax • Dividend tax
Source: Law 1943 of 2018. *An exchange rate of USD 1 = COP 3,000 is used to express 30 million TVU (Tax Value Units). Attractive City for Investment Other tax incentives 26
Agroindustry Sustainable use of Social Housing (VIS) Publishing companies forest plantations • Income tax exemption for • Exempt from income tax • 100% income tax exemption for • Exemption of income tax in companies that carry out • Sales excluding VAT on companies that invest a minimum the use of forest scientific or cultural construction and financing of US$** 283,000 plantations until 2037 material
Hotel construction and repair River transport CERT* Renewable energies • Sales may be tax exempt • • Additional investments in • Preferential income tax rate of 9% in Exemption of income tax until 2032 hydrocarbons and mining will be construction and repair of hotels in for companies that provide Revenues Not Deemed Income • Or, deduction of 150% of municipalities of less than 200,000 river transport services for Tax Purposes neither the investment on income inhabitants for 20 years until 2032 occasional gain tax
Fuente: Ministry of Finance. Law 1943 of 2018. * Tax Reimbursement Certificate. ** USD 1 = COP 3.000 Attractive City for Investment Exporting Services 27
Exemption with bimonthly VAT refund
Special Plan for Exporting Services Allows the temporary importation of equipment with total or partial suspension of tariff and deferral of VAT payments
Source: Tax Code A City with Future Innovative solutions for mobility 28
Bike paths Transmilenio Transmicable
Total circuit of 3.34 kilometers in 13.5 More than 1,000,000 daily trips Innovative transport model (BRT), minutes with 3 main stations (Portal el and more than 600,000 users. replicated in more tan 57 cities. Tunal, Juan Pablo II and Las Manitas).
470 Kilometers of network for Registers around 2.6 million Has 163 cabins that will mobilize 3,600 bikes exclusively. passengers daily and more tan 70 passengers per hour in each way. million per month. Bogota is considered by the BID as one of the best places for the use Has a roadway corridor of 114km It will benefit 750,000 citizens of the south of bikes in Latin America. with 147 stations functioning. west of the city.
Source: BID, Secretaría de Movilidad, Transmilenio, IDU. A City with Future Urban Renewal Projects 29
Bronx Creative District Lagos de Torca Triangulo de Fenicia
Center of economic activity and Renovation and actualization project of the Urban renovation plan: Triangulo de revitalization, transformed in a favorable north of Bogota. It will go from the 183rd Fenicia. Located in the Circunvalar Avenue, environment in which ideas come Street to the limits with Chia, and between in the Eje Ambiental (Jiménez Avenue), and together: the entrepreneurship, the the 7th Avenue and Boyaca’s Avenue. the 3rd Avenue. inspiration and the entertainment. • 1,800 hectares of neighborhoods with • 900 homes • Area: 30,000 square meters equipment and parks • 25,000 square meters of commerce • Existent infrastructure (La Milla, La • 280,000 people (metropolitan, zonal and neighborly) Flauta and Batallón de Reclutamiento) • Boulevard of 15 kilometers • 40,000 square meters of offices and • New creative building • Metropolitan park of 150 hectares hotels • 128,000 homes (50% VIP and 50% VIS) • 3,500 square meters of public equipment
Sources: Fundación Gilberto Alzate Avendaño, PGP Legal, Universidad de los Andes. A City with Future New projects on mobility infrastructure 30
Bogota’s Metro Road Corridors
Bogotá, capital and home to migrants 1. ALO Sur: Length: 49 kilometers, 30 from all corners of Colombia, is making minute reduction per trip, two lanes each progress on the country's largest direction, 16 meter platforms, bike paths. infrastructure project. 2. 13rd Street: Length: 11.3 kilometers, • First line of the subway (elevated) public space: 301,692 square meters, bike • Length : 23.96 kilometers path with a length of 19.4 kilometers, it will • It will mobilize close to 1 million benefit 267,424 people. passengers 3. North Accesses: 41 kilometers, 2 • Number of stations: 16 exchangers, 6 Transmilenio stations, 6 • Distance between stations: 1.4 pedestrian bridges. kilometers
Sources: ANI, Cundinamarca’s Government Office, Empresa Metro de Bogota, IDU. Agenda 31
1. Invest in Bogota 2. Why Bogota? 3. Investment Opportunities in Bogota DD INVESTMENT OPPORTUNITIES
Priority sectors Services Infrastructure
Life sciences Manufacturing DD INVESTMENT OPPORTUNITIES
Life sciences H Health Medical Pharmaceuticals Cosmetics Services devices Value Proposition 40% of the production in Colombia: # 1 Health system in Latin America, with 96% of coverage Bogota-Region
32% of the sector’s Bogota: favorable climate for 73% of the 76 main companies 26% of the stores of the 7 graduates in the country manufacturing – Lower costs of the sector in Bogota-Region main retailers of the country (´05-´15) Bogotá: 7 of the best 44 Bogota-Region share in Colombia Colombia: 3rd consolidated 47% Exports 66% Manufacturers Natural Ingredients market in Latin America hospitals in Latin America 82% Imports 49% Jobs Some opportunities
Infrastructure improvement Local supply production and Local production and Import Packaging production finished product substitution* Structure for prevention in the provision Clinic trials Value chain development Cosmetic supplies
*84% of the market is foreign DD INVESTMENT OPPORTUNITIES
Services IT BPO Value Proposition 81% of the sector’s companies in the 63% of the sector’s sales and 62% of the country shared service centers in the country Second country in Latam with the mayor number of submarine cables 70% of the bilingual population (English) of Colombia lives in Bogota Bogotá: 40% (1.2 Mn) of the business graduates and 39% (220K) of the systems engineering graduates and related careers in the last 15 years
Some opportunities Customized Enterprise solutions Back office: ICT, finance and engineering
Software development Voice outsourcing and KPO DD INVESTMENT OPPORTUNITIES
Services Creative Industries
Value Proposition Bogotá: 59% of the graduates in related careers to the sector
10.270 companies are part of the ecosystem in Bogota - 29% of the country
Simple and centralized regulation for filming in Bogotá - PUFA
Position 20 in export of creative services between 141 countries
Some opportunities Regional distribution and marketing Production and post production offices which cover the whole Spanish – Creative divisions of new formats speaking market DD INVESTMENT OPPORTUNITIES
Manufacturing Construction Materials Processed Foods Value Proposition Most dynamic construction sector of Latin Growth of 39% in the processed food America (9.9% of growth) demand in Colombia
30% of the country’s active constructions 40% of the food and beverage imports of are in Bogota the country
Significant participation in the national 46 of the 100 main companies are in GDP (9.4%) Bogota-Region
Some opportunities Finish & Appearance Products: Ceramics, Exports of premium products painting, lacquers and glass Cables, PVC, plastics and cement and Development of the value chain: inputs, ready-mix concrete manufacturing packing and cold chain DD INVESTMENT OPPORTUNITIES
Infrastructure Value Proposition Most ambitious agenda of infrastructure Infrastructure projects that impact other projects for the city in 40 years economic sectors
Pipeline of the top 10 projects add up a total Integration of private companies under the of USD 12,000 B structure of PPP
Project USD million Type of contract Some opportunities Metro 4,400 Concession Transmilenio Kra 7a 860 Public works Mobility Fleet renewal 500 Concession Regiotram 500 PPP/OP Airport El Dorado 2 1,200 PPP Social Infrastructure Water treatment plant 1,500 Concession Lifting station PTAR 130 Public works Urban renewal Hospitals 516 PPP Lagos de Torca 3,500 Private development – Trust Water & Sanitation Creative District 80 PPP CAN 138 Concession Ministries 240 Concession Smart Cities Total 13,564 Thank you
Invest in Bogota Carrera 7ª No.71-21 Torre B oficina 407 Tel: +57 (1) 742 3030 Bogota, Colombia [email protected] www.investinbogota.org