INVEST IN THE REGION SAN MARTÍN

"Excellent climate for doing business and sustainable private investments"

OFFICE FOR THE PROMOTION OF SUSTAINABLE PRIVATE INVESTMENT - OPIPS

PRESENTATION

Macroeconomic policy aimed at maintaining economic development with social inclusion and a better distribution of wealth, and the important impetus given by the Regional Government to improve the quality of spending through the budget for results, necessarily demand support and massive participation of the private sector.

Likewise, the productive potential of goods and services in the San Martín region generate competitive and profitable investments. To this end, the Regional Government invites private investors to know the great and diverse possibilities with the guarantee of a respectful government of the investor, a national legal framework that promotes the investment and an appropriate business climate to give impetus to the generation of Promising venture,

We are aware that human capital is key to being a competitive region; therefore, the promotion of private investment is complemented by other actions of the Regional Government for the development of the productive and social sectors, in which we are paying special attention to the Human resources to improve their capacities and health conditions, thus contributing to the generation of competitive advantages that guarantee the sustainability of economic enterprises. Also, in improving the rates of profitability in the agricultural sector.

The challenge that San Martín has imposed calls for the agile and precise identification of potential opportunities, represented by public investment projects and other interventions, so that private investors contribute to the development of the region and that public officials To adopt effective and efficient decisions with a view to the orientations and purposes of the San Martin Regional Concerted Development Plan to 2021 and of the local development plans.

In this sense, the region of San Martín with a view to sustainable development launches the Plan "Invests in San Martín", which aims to develop mechanisms for sustainable private investment and that private investments in their different modalities are aimed at reducing Gaps in health, education, agriculture, road infrastructure, production, tourism, among others.

OFFICE FOR THE PROMOTION OF SUSTAINABLE PRIVATE INVESTMENT - OPIPS i

INDEX 1. DIAGNOSTIC OF SAN MARTÍN...... 4 1.1 Main features ...... 4 Area and location ...... 4 Political division ...... 4 Coin ...... 5 Language ...... 5 Centers of higher education...... 6 Weather ...... 6 1.2 Population ...... 7 1.3 Capacity of uses of the floors...... 7 1.4 Access roads ...... 8 1.5 Telecommunications ...... 9 1.6 Macroeconomic solidity...... 9 1.7 Service fee ...... 14 Energy service fee ...... 14 Water service fee...... 16 1.8 Public investment made...... 17 1.9 Private investment...... 18 2. LEGAL FRAMENWORK FOR PRIVATE INVESTMENT...... 19 2.1 Constitutional rules...... 19 2.2 Legal framework...... 19 2.3 Basic right of foreign investors...... 20 3. TAX AND TARIFF REGIME...... 21 3.1 Main taxes...... 21 Income tax...... 21 General sales tax (IGV) ...... 22 Selective consumption tax (ISC) ...... 23 Tax on financial transactions (ITF) ...... 23 Tariff duties ...... 24 General tax regime...... 24 Customs perfecting regimes...... 25 4. POTENTIAL SECTORS FOR SUSTAINABLE PRIVATE INVESTMENT...... 26 4.1 Agribusiness – agriculture...... 26 4.2 Electricity sector...... 27

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4.3 Infrastructure...... 28 Transport infrastructure...... 28 4.4 Tourism...... 30 4.5 Forestry Sector...... 31 5. INVESTMENT OPPORTUNITIES...... 32 5.1 Public – private association (APP) ...... 32 5.2 Projects in assets (PA)...... 33 5.3 Works by Taxes (OXI) ...... 38 5.4 Public – Private Alliance: Opportunities for investment in agribusiness...... 41 5.5 Other projects ...... 45 6. BIBLIOGRAPHICAL SOURCES...... 47

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1. DIAGNOSTIC OF SAN MARTÍN. The department of San Martin was created by Law No. 201 of September 4, 1906. It was subsequently created as an Autonomous Region of San Martin via Decree Law No. 25666 of August 17, 1992.

1.1 Main features 1.2 Area and location San Martin is located in the northeastern Peruvian territory, occupying areas of high and low forest, with a territorial extension of 51,253.31

ArchivoDIRCETUR Km2, which represents 4% of the national territory in the

eastern flank of the

Valle formado por el rio Huallaga Andean relief, in the northern and central sector between The parallels 5º 15` and 8º 25`15`` of south latitude from the Ecuador. Its territory occupies the middle sector of the valley formed by the Huallaga River, which makes it an area with large endowments of natural resources. The geographical boundaries are:

 North: Departments of Amazonas and Loreto.  South: Departments of Ancash and Huánuco, between meridians 75º 45 '0 "and 77º 24'22" west longitude from Greenwich Meridian.  By the East: Department of Loreto.  In the West: Departments of Liberty and Amazonas.

Political division

The San Martin region is made up of 10 provinces, with Moyobamba as its capital. On the other hand, the province with the greater number of districts is Tarapoto, followed by Lamas and Picota.

Table Nº 01: Territory, provinces and districts.

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Tabla 1: Territorio, provincia y distritos Capital de provincia Departamento Superficie Región Altitud Distritos % Nombre Provincia Km2 natural m.s.n.m

San Martín 51 253.31 Mariscal Cáceres 14 498.73 28.3% Selva Juanjuí 283 5 Bellavista 8 050.90 15.7% Selva Bellavista 249 6 Tocache 5 865.44 11.4% Selva Tocache Nuevo 497 5 San Martín 5 639.82 11.0% Selva Tarapoto 333 14 Lamas 5 040.67 9.8% Selva Lamas 809 11 Moyobamba 3 772.31 7.4% Selva Moyobamba 860 6 Rioja 2 535.04 4.9% Selva Rioja 842 9 Huallaga 2 380.85 4.6% Selva Saposoa 307 6 Picota 2 171.41 4.2% Selva Picota 223 10 El Dorado 1 298.14 2.5% Selva San José de Sisa 600 5 Course:Fuente: INSTITUTONational Institute NACIONAL of StatisticsDE ESTADISTICA and Informatics E INFORMATICA (INEI). (INEI) -

Coin

Sun (S/) • Coins: 10, 20 y 50 cents 1, 2 y 5 suns. • Ticked: 10, 20, 50, 100 y 200 suns.

Language

Spanish is the official and majority language. It is spoken by 98% of the population over 5 years. Nevertheless; there is a population of native origin that speaks their respective dialects, such as Quechua, Aymara, Ashaninka, Aguaruna, among others. Another language widely spoken within the region is Quechua, with almost 8,442 people.

Población Kechwa - Lamista Archivo DIRCETUR

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Centers of higher education.

Universities  One (1) Public  Five (5) Private

Technological and institutes  Eight (8) Publics  Fifteen (15) Privates

Weather

The climate of the region is predominantly warm and humid with only one rainy season corresponding to the southern winter. The irregularity of its morphology results in a heterogeneity of climates that vary with altitude, rainfall and the time of year.

Laguna Ollanta - Tochache

In low sectors and hills, the climate is dry and warm, with temperatures averaging 26 ° C and rainfall of 800 to 1,000 m.m. Annual concerts in the months of January - April (Bellavista and Picota); In the high hill sectors the climate is slightly humid and semi-warm, with average annual temperatures of 24 ° C and rainfall exceeding 1,500 m.m. Annual (Lamas) in the area corresponding to the eastern slope towards the Amazonian plain; The precipitation reaches 3,500 m.m. (Pongo of Caynarachi.)1.

Within the hydrographic system, the region is confirmed by the main tributaries of the Huallaga river, among them the Mayo river, Sisa river, Huayabamba river, among others. It also contains gaps, which are mostly shallow, high temperature

1 Ecological and Economic Zoning of the San Martín Region /Development Plan Concerted to 2021 of GORESAM

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and semicircular. The lagoons stand out for their ichthyologic richness like the Shango, Tipishca and the Sauce.2

1.3 Population The National Census of 2007: XI of Population and VI of Housing, determined for the region San Martín a population of 728,808 inhabitants that represents the 2.7% of the total country and in relation to the census of 1993 registered an average annual growth rate of 2%, which represents in absolute values176,421 additional inhabitants.

According to INEI projections, by 2017 the region will have a population of 864,549 inhabitants, with the provinces of San Martin, Moyobamba and Rioja having the largest number of inhabitants.

Table Nº 02: Population of San Martín 2013 – 2017.

DETAIL 2013 2014 2015 2016 2017 San Martín 818,061 829,520 840,790 852,538 864,549 Moyobamba 140,299 144,216 148,160 152,254 156,461 Bellavista 56,870 57,917 58,954 60,024 61,114 El dorado 38,889 39,622 40,349 41,099 41,864 Huallaga 25,359 25,351 25,328 25,313 25,297 Lamas 84,231 84,597 84,921 85,268 85,617 Mariscal Caceres 51,221 50,927 50,927 50,927 50,927 Picota 43,100 43,823 44,533 45,267 46,014 Rioja 123,053 125,715 128,367 131,109 133,910 San Martín 181,946 184,662 187,320 190,066 192,853 Tocache 73,093 73,093 73,093 73,093 73,093 Course: INEI projections 2107.

1.4 Capacity of uses of the floors. According to the information of the EEZ, in the region of San Martin exists approximately 5, 179,649 hectares; Of which 14.87% (770,244 hectares) are productive areas, 64.6% (3, 346,287) belong to areas of protection and ecological conservation, 20.38% to recovery areas and only 0.15% to areas of urban and / Or industrial. The table shows the distribution of the areas of the region and their potential for the development of activities.

2 http://www.bcrp.gob.pe/docs/Sucursales/Iquitos/san-martin-caracterizacion.pdf

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Table N° 03: Distribution of the hectares and their types of uses.3

N° Detail Ha % 1 Productive areas 770,244 14.87

1.1 Zones for agricultural production 509,063 9.83

1.2 Areas for forest production and others 227,714 4.4

1.3 Areas for fishery production 33447 0.656

2 Protection and ecological conservation zones 3,346,287 64.6 3 Recovery areas 1,055,579 20.38 4 Areas of urban and / or industrial vocation 7,531 0.15

TOTAL 5,179,641 100

Source: Economic Ecological Zoning of San Martín – ZEE. 1.5 Access roads Distance from Lima (Km.): 763. Access to the San Martin region is as follows:

 Terrestrial: Lima- Chiclayo-Olmos-Bagua- Rioja-Moyobamba- Tarapoto: 1445 Km. by Panamericana Norte and

Fernando Belaunde Terry or DIRCETUR Archivo Marginal de la Selva roads (28 hours by bus).

Lima-Pacasmayo- Cajamarca-Balsas- Leymebamba - diversion to Articulación vial de San Martín Chachapoyas Pedro Ruiz: 1547 Km. by Panamericana Norte and Fernando Belaunde Ferry roads (22 hours by car.).

Lima-Huánuco-Tingo María-Tocache - Juanjuí - Tarapoto: 1020 Km. By the Central and Fernando Belaunde Terry or Marginal de la Selva roads (20 hours by car).

 Air: Regular flights from Lima (1 hour and 15 minutes) and from Iquitos (45 minutes) to the city of Tarapoto.

3 Source: Ecological and Economic Zoning of the San Martín Region - 2005.

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1.6 Telecommunications In terms of telephony, San Martin has been improving penetration in all types of lines in the last years, there are currently 4 in companies that have mobile coverage (Claro, Entel, Bitel and Movistar). In addition, the evolution of the number of inhabitants that have some type of mobile service is increasing, as for example in the year 2016 there were 610,050 people with some type of mobile service, that is to say a cumulative growth of 9% compared to the year 2012 (435,286 people).

Fixed telephony lines have remained stable for the last 5 years, as shown in the following table:

Table N° 04: Indicators of telephone service by modality 2012 – 2016.

Detail 2012 2013 2014 2015 2016 Fixed telephone service 34,647 33,578 25,842 25,528 25,163 Mobile phone service 435,286 478,669 536,274 578,574 610,050

Course: operators companies – OSITEL

Internet of services. The fixed internet in 2016 amounted to 1.9 subscribers per 100 inhabitants, and the main companies that offer this service are Telephonic of Peru S.A.A. And America Mobil Peru S.A.C.

Also, the mobile internet service in recent years has increased; since even the inhabitants of rural areas have access to this service; this is because the mobile phone companies within their services come included the data package.

1.7 Macroeconomic solidity. The economy of the San Martín region has made important progress in its performance in recent years, with dynamic rates of GDP growth and maintaining growth above the National GDP.

This economic growth of San Martin is the result of the coordinated work of all public and private entities in designing and executing investments that have a social and economic impact on the population. In addition, this work was accompanied by the political and macroeconomic stability of Peru.

Thus, regional competitiveness and social, economic, environmental and institutional indicators were substantially improved. The graph shows the period 2010-2016 where the regional GDP has remained constant in its growth, except in 2013, which was the year of less growth (1.6%) compared to other years.

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Graphic N° 01: Evolution of PBI 2008 – 2015 0f San Martín and Peru.

14.0 11.9 12.0

10.0 8.3 8.0 7.2 6.3 7.9 6.3 6 6.0 6.1 5.2 5.9 4.0 1.6 3.9 2.0 3.3 2.4 0.0 2010 2011 2012 2013 2014 2015 2016

SAN MARTÍN PERÚ

Source: Own elaboration- INEI

The Gross Value Added (GVA) of San Martín represents 1.2% of the national total. In addition, activities contributing to the regional GVA are: agriculture, livestock, hunting and forestry, with a share of 26.5%, trade with 11.9%, construction with 10.3%, manufacturing with 9.8%, Public administration and defense with 8.8%, among others.

The graph shows the participation of each sector in the regional GDP, noting that the agricultural sector, trade, construction and manufacturing together have a 58.5% share, reflecting that they are the main drivers of the regional economy.

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Graphic N° 02: Sectors contributing to the GDP of San Martín.

Other services 22.5

Fisheries and Aquaculture 0.1

Electricity, Gas and Water 0.6

Extraction of Petroleum, Gas and Minerals 0.9

Transport, Warehousing, Mail and Messaging 2.6

Accommodation and Restaurants 2.9

Telecom. And other Serv. of information 3.1

Public Administration and Defense 8.8

Manufacture 9.8

Building 10.3

Commerce 11.9

Agriculture, Livestock, Hunting and Forestry 26.5

0.0 5.0 10.0 15.0 20.0 25.0 30.0

Source: Own elaboration- INEI

The GDP per capita of San Martin in the last 10 years has been progressively evolving, influenced by the economic growth of the region. During the period under review there is a cumulative growth of 5.2% per annum that is one more point of national growth (4%).

The graph shows that in 2007 there was a GDP per capita of S / 4,373 soles and for the year 2016 S / 6,881 soles per person.

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Graphic N° 03: PBI per capita at constant prices (Thousands of suns).

18,000 16,121 14,977 15,161 15,485 16,000 14,308 13,634 12,969 14,000 12,111 12,107 11,224 12,000 10,000 8,000 6,541 6,879 5,893 5,902 6,238 5,153 5,342 6,000 4,373 4,741 4,851 4,000 2,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

San Martín Perù

Source: National Institute of Statistics and Informatics - National Directorate of National Accounts.

Evolution of exports. The economic dynamics of the San Martin region is influenced by agricultural exports to European, US, Asian and Latin American markets. The main export is coffee, which represents 76%, with organic coffee being the most demanded in the international market. Cocoa is the second product exported by the region and represents 16%, followed by other smaller products (palmito, palm butter, sacha inchi, others).

The graph shows the evolution of exports from 2010 to 2016 in FOB value and in metric tons. In the year 2010 the region exported 32,492.18 Tm, which represented 108,612.48 million dollars; in the same way in the year 2016 had an income of 77, 836.95 million dollars by the sale of 26.884 Tm of products. It should be mentioned that the increase in exports in 2011 is basically influenced by the increase in the international price of coffee.

In the following years, exports were contracted by factors such as the loss of production in coffee, which was attacked by yellow rust, and the fall in international prices of products exported by the region.

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Graphic N° 04: Evolution of exports 2009 - 2016 (Tm and value of FOB USD),

50,000.00 250,000.00 47,085.00 45,000.00 44,575.03 40,000.00 43,699.84 200,000.00 40,660.14 35,000.00 29,659.48 30,000.00 32,492.18 150,000.00 25,000.00 26,884.00 20,000.00 100,000.00

15,000.00 211,136.75

10,000.00 162,763.83 50,000.00 145,732.56

5,000.00 120,212.91

108,612.48

77,836.95 83,365.11 0.00 0.00 2010 2011 2012 2013 2014 2015 2016

Valor FOB USD TM

Source: Info trade PROMPERU.

56.90% of the exporting companies in the San Martin region are micro enterprises, 34.48% are represented by medium and small companies and only 8.62% are large companies.

The graph shows the main destination of San Martín exports, among them the United States (15%), Italy (15%), Germany (11%), the Netherlands (10%), Chile other countries.

Graphic Nº 05: Main destination markets for exports.

Estonia 3% Other markets United states Malaysia 14% 15% 5% Italy Colombia 15% 6% Canadá 6% Germany Belgium 11% 7% Chile Netherlands 8% 10%

Source: Integrated Foreign Trade Information System.

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Finance System The financial system of the San Martin region consists of banks, municipal savings banks, savings and credit banks, and financial institutions. Despite this, multiple banking shows a greater participation (68.3% in 2015) due to the higher amounts it gives to the market. This is how the boxes target the micro and small business.

Bank Continental (21.6%), Bank de Credit (20.8%), Bank Scotiabank (9.9%), CMAC de Piura (9%), 7%) and Bank Interbank (7.9%); which together account for 69.9% of all loans in the region.

The graph shows the growth in the period of 2010 - 2016 of credits and deposits. In loans, in the last 5 years there has been an increase of 11.82%, and deposits of 16.54%; this reflects the economic dynamics that sustains the San Martín region.

Graphic N° 06: Evolution of direct loans and deposits 2010 - 2016.

2,500.00 1,997.05 1,888.55 2,000.00 1,686.86 1,745.21 1,598.06

1,500.00 1,323.38 1,040.71 1,440.93 1,000.00 1,252.40 1,036.17

500.00 711.77 742.73 787.30 580.11

0.00 2010 2011 2012 2013 2014 2015 2016

Credits Deposits

Source: Own elaboration - INEI - Regional Information System for Decision Making.

1.8 Service fee Energy service fee

The electric power service in the San Martín region in the last years has normalized, since there are few cuts and the service is available 24 hours a day. The price paid per kW. H. varies according to economic sectors; the graph shows that the service sector pays $ 14.63 / kW. H., the industrial sector $ 9.37 / kW. H and the resident sector $ 16.97 / kW. H.

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Graphic Nº 07: Average price of electricity by economic sector (Cent. US $/ kW. H.).

18 16.97

16 14.63 14

12

10 9.37

8

6

4

2

0 Trade and services Industry Residential

Source: MINEM (2015) Similarly, the price varies according to the activity, in the graph shows that the activity of transport and communications is the one that pays more soles (17.71 / kWh) compared to other activities.

Graph 08 shows that transport and communications activity pays 17.71 / kWh, followed by social and health services with a rate of 17.68 / kWh, and third is the public administration with an average tariff of 17.11 / kWh.

The agriculture and livestock activity has a lower rate compared to other activities.

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Graphic Nº 08: Average electricity price per ISIC activity (Cent. US$/kWh)

Activ. Community and recreation 15.49

Public administration 17.11

Agriculture and Livestock 7.61

Street lighting 12.99

Commerce 15.73

Building 13.55

Teaching 12.36

Hotels and restaurants 12.76

Real estate agencies 11.13

Financial Intermediation 14.67

Manufacture 10.58

Mining 9.7

Extraterritorial organizations 15.91

Fishing 11.68

Social and health service 17.68

Electricity, gas and water supply 10.08

Transportation and telecommunications 17.71

0 5 10 15 20

Source: MINEM (2015) Water service fee.

In Peru, the water tariff is based on the principles of the Tariff Regulation established in article 29 of the General Law of Sanitation Services, Law 26338. Article 94 of the Regulation of the Law, Supreme Decree 09-95 -PRES.

The following tables show the commercial and industrial tariffs for the main provinces of the region:

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Table Nº 05: Rate structure in EPS Moyobamba SRL.

Fixed Category Assignment Class Rang (m3) Variable charge (S/ rate of M3) consumption water Sewerage Social 0 a more 1.334 0.371 1.75 18

Residential 0 a 8 1.334 0.371 1.75 Domestic 8 a 20 1.420 0.395 1.75 20 a more 2.977 0.829 1.75 18 1.748 0.487 1.75 Commercial 0 a more 3.154 0.878 1.75 Not 30 a more 26 residential. Industry 0 a more 3.154 0.878 1.75 90 Estate 0 a more 1.748 0.487 1.75 90 Source: SUNASS Table Nº 06: Tarapoto current tariff structure..

minimum Assignment of Fee of Category Fee S/ M3 consumption consumption consumption m3/month m3/month Social 0 a more 0.9052 5 12 0 a 25 0.9052 25 Domestic 10 25 a more 1.8103 40 30 0 a 30 1.2929 50 Commercial 12 60 31 a more 2.5858 100 0 a 100 1.8490 100 Industry 40 101 a more 3.6849 200 0 a 25 0.9052 25 Estate 20 26 a more 1.8103 50 Source: SUNASS. 1.9 Public investment made. The Regional Government with the objective of reducing the existing gaps in the economic sectors has strategically prioritized public investment. In that sense, it prioritizes strategic works in road and health infrastructure with 36% and 24%. There is also a 12% investment in sanitation infrastructure and 7% in education, and the other sectors on a smaller scale.

Likewise, there is a cumulative investment of S / 2, 830, 959,461 (two thousand eight hundred and thirty million nine hundred and fifty-nine thousand four hundred and sixty- one with 00/100). The graph shows the distribution of accumulated investment in the sectors of 2007 - 2016, highlighting the regional public investment in road, hospital, sanitation and educational infrastructure. In addition, there was a cumulative investment of S / 12, 861,114 million soles, in the production of a cumulative investment of S / 75, 363,241 million soles and in the environment 51, 112.603 million soles.

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Graphic N° 09: Cumulative public investment by sectors from 2007 to 2016.

Environmental Bridges Others Irrigation/ 2% 5% 2% def.rivereñas 3% Health 24% Basic sanitation 12% Electrification 3% Productive Education 3% 7%

Neighborhood roads 3%

Road 36%

Source: Own preparation - Friendly Consultation.

1.10 Private investment. In macro terms, in the period 2007-2016, there was an increase of 83% in private sector investments in agriculture and basically in the installation and maintenance of hectares of major crops in the San Martín region. By private sector we understand the small and medium producers more their organizations, mainly cooperatives and associations. Consequently we refer to the primary supply of agricultural crops.

The crops in question are: cocoa, coffee, oil palm, rice, corn, palmetto, sacha inchi, and orange. The accumulated investment for the period is $ 3.806 billion dollars, going from $ 155 million in 2007 to $ 443 million in 2016, equivalent to an annual growth of 11% on average.4.

The crops that have grown the most in terms of investment are cocoa, coffee and oil palm. During the period the investment in cocoa grew by 163%, in coffee grew 114%, and oil palm grew 98%; Just these products are those promoted by the Alternative Development Program in the region through the National Commission for Development and Life without drugs - DEVIDA, the Regional Government San Martín - GORESAM and International Cooperation. Other products with good economic growth are rice and corn, which together represented 47% of the total investments in the study period, and a 50% growth in the farmers' investments in these crops.

4 Information calculated based on approximate data.

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2. LEGAL FRAMENWORK FOR PRIVATE INVESTMENT. 2.1 Constitutional rules. The Political Constitution of Peru of 1993, in article 58, mentions that private initiative is free and is exercised in a social market economy, by which every natural or legal person has the right to undertake and develop with full autonomy, activity Economic situation of their choice. However, private initiative cannot collide with the general interests of the community, which are protected by our legal system. Consequently, the State, under the regime of the social market economy, guides the development of the country and acts mainly in the areas of employment promotion, health, education, security, public services and infrastructure.

In this sense, there are the essential principles that guarantee the favorable legal framework for the development of private investment in general and foreign investment. In this way it promotes:

 Freedom of work, business, commerce and industry.  Free competition, prohibition of the establishment of monopolies and the fight against abuse of the dominant position.  The freedom to contract.  The power of the State to establish guarantees and grant securities through law contracts.  Equality in treatment for domestic and foreign investment.  The guarantee of free possession and disposition of foreign currency.  The inviolability of property and the establishment of exceptional grounds that allow for expropriation prior to a fair payment, the application of the principle of equality in tax matters, and the recognition that no tax can have confiscatory effects.

2.2 Legal framework. The San Martin region offers a favorable legal framework for private investment in the different sectors. It is also framed within national policies on the promotion of private investment. Within the norms, the policy of promoting sustainable investments in the region is aligned.

The general legal framework for treatment of foreign investments is complemented by the Framework Law for the Growth of Private Investment, approved by Legislative Decree No. 757, the Regulation of Legal Stability Regimes, approved by Supreme Decree 162-92-EF, As well as amending and complementary rules.

The legal framework for treatment of investments is based on the principle of "national treatment". Foreign investments are allowed without restrictions in the vast majority of economic activities and no prior authorization is required because of their status as foreigners. The acquisition of shares owned by national investors is totally permitted, both through the stock market and through over-the-counter transactions.

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Foreigners, whether natural or juridical persons, are in the same condition as Peruvians when it comes to property. However, foreigners cannot acquire or own mines, lands, forests, water, fuels or energy sources, from any border boundary and up to 50 kilometers within the country, except for cases of public necessity expressly declared by supreme decree Approved by the Council of Ministers.

Foreign investment can be freely given in any of the business forms recognized by law, under the following modalities:

 Foreign direct investment, as a contribution to social capital.  Contributions for the development of contractual joint ventures.  Investments in goods and properties located within the national territory.

Likewise, there are specific legal rules where private investment is promoted through Public - Private Associations, which include the following:

 Legislative Decree No. 1251 amending Legislative Decree No. 1224, Framework Law for the Promotion of Private Investment through Public Private Partnerships and Asset Projects, which aims to establish the processes and modalities for the promotion of private investment to boost National economy, the generation of productive employment and the country's competitiveness.

 Legislative Decree No. 1250 amending Law No. 29230, Law that promotes regional and local public investment with the participation of the private sector, through the modality of works by taxes.

 In the San Martin region, the Office for the Promotion of Sustainable Private Investment (OPIPS) was created; In charge of encouraging and supporting the activities of the private sector, aimed at promoting the development of regional resources and creating the necessary instruments. It is constituted as the agency that represents the Regional Government in its dealings with local, national and foreign investors, and supports the positioning of the region as an attractive destination for investment, socially inclusive, solidary and environmentally responsible.

2.3 Basic right of foreign investors.

 Non-discriminatory treatment vis-à-vis the national.  Freedom of trade and industry and freedom of export and import.  Free remittance of profits or dividends.  The right to use the most favorable exchange rate available in the market for foreign exchange transactions that it requires.  Free re-export of its capital.  Unrestricted access to internal credit.  Free hiring of technology and remittance of royalties.

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 Freedom to acquire shares owned by national investors.  Freedom to contract abroad safe for your investment.  Possibility of signing with the State legal stability agreements for their investment in the country.

3. TAX AND TARIFF REGIME. 3.1 Main taxes. Income tax.

It is a tax of annual periodicity that is applied on the income obtained by the taxpayers domiciled in the country, without taking into account the nationality of the natural persons, the place of incorporation of the companies nor the location of the producing source. It also taxes taxpayers not domiciled in the country, only with respect to their income from Peruvian source.

In the case of companies, the aforementioned tax is applied on any gain or benefit derived from operations with third parties, as well as on the result of exposure to inflation determined at the end of each fiscal year.

The income attributed to said tax is classified as follows:

 First: rents produced by the lease, sublease and assignment of goods.  Second: rents from other capitals.  Third: income from commerce, industry and others expressly considered by law. Fourth: independent work income.  Fifth: income from dependent work and others from independent activities expressly designated by law.

Applicable fees.

a. Persons domiciled.  The tax payable by domiciled legal persons will be determined by applying the 30% rate on their net income. In addition, they will pay 4.1% on any amount charged as an expense that results, in fact, an indirect provision of profits, not susceptible of later tax control.

 The tax payable by domiciled legal persons will be determined by applying the 30% rate on their net income. In addition, they will pay 4.1% on any amount charged as an expense that results, in fact, an indirect provision of profits, not susceptible of later tax control.

 The tax payable by natural persons is determined by applying to the annual global net income the following cumulative progressive scale:

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Until 27 UIT1, 15%. More of 27 UIT and until 54 UIT, 21%. More of 54 UIT, 30%.

 Dividends and other forms of distribution of profits received from legal entities: 4.1%, via retention by the payer, with a definitive character.

b. Persons not domiciled.  Interest from external credits: 4.99%, provided they meet the following requirements:  Cash loans will be credited with the entry of the currency into the country through the national financial system.  That the credit does not accrue an annual interest to the rebate higher than the prevailing preferential rate in the place from which it comes, more than 3 points.

 Interests paid by foreign banks and financial companies established in the country as a result of the use in the country of their lines of credit abroad: 1%.  Dividends and other forms of distribution of profits received from legal entities: 4.1%, via retention by the payer, with a definitive character.  Royalties: 30%.  Technical assistance: 15%.  Other income, including interest from external loans, as well as interest paid abroad by the country's companies for credits granted by a foreign company with which it is economically linked: 30%.  Individuals will calculate their tax by applying the 30% rate to pensions or remuneration for personal services performed in the country, royalties and other income.

General sales tax (IGV)

General sales tax (IGVI) is a tax that levies the value added in each transaction carried out in the different stages of the economic cycle, using a debit and credit scheme that works as follows: of the tax calculated by each taxpayer (which is called tax Gross), deducts the IGV paid for all purchases of goods and services made (tax credit), so that only the difference between these two amounts is what is paid to the tax authorities

a. Taxed transactions.

This tax levies the consumption of goods and services in our country, and affects the following operations:

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A.1 The sale in the country of movable property.

A.2 The provision or use of services in the country.

A.3 Construction contracts.

A.4 The first sale real estate made by the builders.

A.5 The importation of goods.

b. Rate. A 15% rate is applied on transactions taxed with the IGV. At that rate is added the rate of 2% of the Municipal Promotion Tax (MPI). In this way, a total of 17% IGV + IPM is applied to each taxed transaction.

Selective consumption tax (ISC)

The Selective Consumption Tax levies the sale in the country, at the producer level and the importation of goods such as cigarettes, alcoholic beverages, mineral and water, other luxury goods, fuels, casino games and bets. Tax rates range from 0%, 2%, 10%, 17%, 20%, 30% and 125%, depending on the type of good or service. In some cases it provides for the payment of fixed amounts, depending on the product or service taxed.

Tax on financial transactions (ITF)

It is a tax levied with the aliquot of 0.005% of the banking operations (debits and credits) in national or foreign currency. The following transactions are not taxed with the Tax on Financial Transactions:

 Payments to accounts opened by Employers on behalf of their workers or pensioners, to pay wages or pensions.  The payments to workers' Compensation of Service Times or CTS.  Accreditation or debit in the accounts that the mutual funds, mutual funds maintain in companies of the financial system by contribution of its associates.  Movement of accounts of the same holder.

3.1.4.1 Rent – amazon regime. These include natural or legal persons who carry out the following economic activities: agriculture, aquaculture, fisheries, tourism, as well as manufacturing activities related to the processing, processing and marketing of primary products from the activities indicated above and forest transformation, provided That are produced in the Amazon region. It should be noted that the "Amazon" zone is delimited in article 3 of the Law for the Promotion of Investment in the Amazon (Law 27037 and amendments). This Law and its regulations indicate a series of requirements that taxpayers must meet in order to be eligible for this benefit.

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Tariff duties The customs duties are levied on the importation into the country of foreign goods and are calculated on the CIF value of the import (CIF Ad Valorem Rights). Tax rate: four (04) levels: 0%, 4%, 6% or 11%, according to national subheading.

General tax regime.

It is a tax regime that includes natural and legal persons who generate third-class income (those from capital, labor or the joint application of both factors).

When the investor acquires goods and / or receives the services necessary to generate his income, he must demand that he receive invoices, receipts for fees, or tickets that give entitlement to the tax credit and / or that allow to sustain expense or cost for tax purposes.

If customers have RUC you must extend an invoice. If you are a final consumer and do not have a RUC, you must issue a sales ticket, ticket or tape issued by a cash register that does not grant a right to a tax credit or that supports expenses or costs for tax purposes.

If you are a natural person, the ledgers you should bring are:

a) If your annual gross income arrives:

 Up to 100 UIT (S/ 405,000 for 2017).

 Cash and banks books  Inventory and balance sheet book.  Purchase record  Sales and income records

 T more than 100 UIT ( more than S/ 405,000 for 2017)

If you are a legal person you must keep complete accounting in all cases. Likewise, it must also carry any other special books to which it is obliged due to the type of organization or other special circumstances (forms, minutes, etc.).

The taxes to which they are affected the ones that are in this regime are the following:

 IGV: 17% of monthly sales entitled to deduct tax credit.  System A): Coefficient Method on Monthly Net Income.  System B): Method of 2% of Monthly Net Income.

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 Annual declaration and payment of regularization: 30% on net taxable income.  In addition, if applicable, you must make Temporary Tax payments to Net Assets 0.4% (ITAN).  ISC: Only if I was affectionate. The tax rate is in accordance with the attached tables of the IGV and ISC Law.  If you have dependent workers: Contributions to ESSALUD: 9%

If it is the case, it must comply with the deductions corresponding to the income paid by the second, fourth and fifth category, contributions to the ONP, as well as non-domiciled taxpayers.

Customs perfecting regimes.

3.1.7.1 Temporary administration regime The regime implies the suspension of customs duties and all taxes applicable to the importation of goods destined to processes of "inward processing" for their subsequent export.

Physical and / or chemical transformation to which raw materials, materials, ingredients, intermediates and, in general, any kind of commodity to produce or transform a good, the assembly of two or more goods, and The operations to which the containers, packaging materials and over packs of the goods to be exported are subjected.

Requirements:

 That the merchandise to be interned is destined for operations and / or processes of inward processing.  That the applicant company is formally incorporated in the country and registered in the sectorial registers corresponding to its economic activity

This regime includes all types of goods, whether raw materials, materials, ingredients, intermediate products, parts and pieces, and goods for packaging, packaging and packaging, and must be effectively contained in the goods to be exported.

The term of the regime is 24 months and requires a guarantee for suspended duties and taxes.

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3.1.7.2 Drawback or refund of customs duties It is the customs regime that allows to obtain by the exportation of goods the total or partial restitution of the customs duties that have taxed the import of the goods contained in the goods exported or consumed during their production.

The refund rate is 5% of the FOB value of the export of up to the first US $ 20, 000, 000.00 annual export of products by tariff subheading and by unrelated exporting company.

Exporters who import, or have imported through third parties, goods incorporated or consumed in the production of the exported good, as well as goods produced with inputs or raw materials imported and purchased from local suppliers, according to the provisions Legal provisions on the matter.

4. POTENTIAL SECTORS FOR SUSTAINABLE PRIVATE INVESTMENT. 4.1 Agribusiness – agriculture. In recent years the agricultural activity of San Martin has integrated more technology to the exploitation of the land, using agricultural machinery, fertilizers and pesticides, which has allowed to recover extensive agricultural areas previously abandoned after an ephemeral production under the system of rozo , Tomb and burning, very traditional in the Amazon.

At present, the areas for agricultural production in the San Martín region are distributed as follows:

Table Nº 07: Distribution of agricultural areas in the region of San Martin.

Clean and Forestry City Produced areas Available permanent production Rioja 45,462.39 42,376.00 3,086.39 39,255.23 Bellavista 123,533.98 65,049.89 58,484.09 114,615.55 Moyobamba 58,300.54 50,355.00 7,945.54 112,716.68 Huallaga 6,344.55 20,381.00 - 14,036.45 281,463.54 San Martín 109,826.58 20,268.00 89,558.58 117,124.51 Lamas 64,669.52 28,883.00 35,786.52 175,470.95 Picota 23,232.06 32,952.00 - 9,719.94 90,751.96

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El dorado 24,293.95 18,599.05 5,694.90 14,897.31 Mariscal. 20,074.13 28,315.00 - 8,240.87 159,258.84 Cáceres Tocache 95,976.59 82,745.00 13,231.59 117,391.35 TOTAL 571,714.29 389,923.94 181,790.35 1,222,945.92 Source: Regional Agriculture Directorate - ZEE

Noting that there are 181,790. 35 thousand hectares available to promote agricultural production with market focus.

Likewise; the territory has the following characteristics conducive to private investment:

 Great biodiversity that exists in the region San Martín allows the development of diverse agricultural crops interesting for the international market, many of which already have been positioned.  Optimum natural conditions (diverse soils and climates) and the expanding market generate interesting business and investment opportunities in this area.  Our biodiversity allows the development of healthy and quality products, managed under environmental care systems that are demanded by emerging markets.  The region has experience in the development of 11 production chains that energize 30% of the regional economy.  Another alternative of investment is the heading of natural medicine through the use of native plants.  Diversity of native species with high nutritional potential (super food): aguaje, camu camu, among others.  More than US $ 49, 890,039.16 million in exports of products to more than 58 countries.

4.2 Electricity sector. In recent years the demand for electricity has grown. To the intense development of the construction sector, agricultural activity and population increase in urban areas. The San Martín region was articulated to the National Interconnected Electricity System - SEIN with the purpose of increasing the electric coverage throughout the regional territory.

Thus, the region has the following interesting characteristics for private investment:

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 There is an interesting potential of electricity generation, mainly hydropower.  There are yet to be explored other abundant sources of renewable energy such as solar, wind, biomass and geothermal.  In 2015, more than 90.2% of the regional population had access to electricity.  The energy supply in the department of San Martín is around 75 MW, made up mainly of SEIN (75%).

Graphic N°10: Moderate projection of the total demand of San Martín (in MW).

Course: DREM-SM (2017)

4.3 Infrastructure. Transport infrastructure.

The provision of infrastructure is an essential condition for achieving the development of the region. The access of producers to a quality road infrastructure promotes productive diversification.

In the transport sector, the investments promoted by GORESAM, together with its strategic allies, improve the Infraestructura vial Nueva Cajamarca - Yuracyacu quality of life of the population and the interconnection of producers with the regional, national and international markets.

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Map of the asphalted and affirmed roads - San This is being achieved Martín through the implementation of projects that include the expansion of services at airports, the installation and replacement of bridges, the construction and rehabilitation of roads, among others.

These investments have allowed the percentage of paved kilometers to increase; from 62.1% in July 2011 to 85.4% in July 2016.

But there is still a large gap in the sector that with public investment has not been reduced. It is a great opportunity for the realization of private investment in its different modalities.

Health

In the region San Martin runs the largest hospital network in the country, with nine establishments in the main cities of the region. With an investment that exceeds 650 million soles. The new health infrastructure will offer the best conditions to serve the population.

.

Thus, there is a great opportunity for private investment in the management of non-hospital services. In addition, in the management and control of hospital waste.

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4.4 Tourism. In tourism our region is positioning itself as an attractive alternative, due to the wealth and variety of tourist resources

that we possess. This is demonstrated by DIRCETUR Archivo the number of 1'155,121 visitors who arrived in the region during the year 2016, between national and foreign,

showing a growth of 6.41% in relation to

the year 2015, which indicates our Vista del Morro de Calzada positioning as an attractive and competitive destination, if We compare with regions with similar supply, such as Loreto, Ucayali, Huánuco, Madre de Dios, Junín and Pasco.

GORESAM, through the Regional Directorate for Foreign Trade and Tourism, has been working on the diversification of its current tourism offer through the prioritization of areas with vocation and tourism potential, such as the Alto Mayo destination (ecotourism, speleology, ), The destination Tarapoto (adventure, culture and fun), the destination Abiseo (ecotourism and adventure) and the destination Tocache (agro tourism and espeleism). In these places the improvement of the infrastructure of the tourist attractions and the promotion of the same in the different spaces and national and international events has been developing.

Likewise, there is great potential for private investment in this sector because of the dynamism and own characteristics of the region. Private investment may be oriented to the development of various activities and services; for this it is highlighted that in the territory can develop the following activities:

 Tourism development of the type of nature tourism (ecotourism), adventure tourism, rural tourism, for which a variety of attractions (internal geological formations, thermal waters, courses and waterfalls, natural lookouts, protected natural areas and Biodiversity).  Cultural tourism, presenting various forms of cultural manifestations as legacy of ancestors and living cultures (archaeological remains, Macoy Zapata petroglyphs, native indigenous communities).  Among the resources that the region of San Martín

counts as a sustainable and specialized tourism are bird watching, flowers especially orchids, beautiful lagoons, the Abiseo River National Park Catarata Ahuashiyacu

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and the Gran Pajatén Archaeological Complex, base Of the Chachapoyas culture, among other important resources.

4.5 Forestry Sector. The San Martín region has excellent climatic and soil conditions for the forestry activity, as well as a land use capacity of 1,800,000 hectares for forest production.

In the Amazon region there are 46.4 million hectares with the greatest capacity being forest production (36% of the national territory). Of this territory, only 7.3 million hectares have forest concessions granted, of which 497,793 hectares are located in San Martín, reason why this region is one of the main forest producers of the country.

The most important lumber products are lumber and parquet friezes. According to INRENA, San Martín presents the fifth largest production of sawn wood with 38,457 cubic meters, which represents approximately 5.3 percent of the national production.

The forest production of San Martin has more than 60 different species that are used for different uses, being the most used cedar, huasca, the screw and the stator.

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5. INVESTMENT OPPORTUNITIES.

The San Martin region with a view to sustainable and inclusive development seeks to attract private investment in all existing mechanisms by law and other strategic modalities of participation. The following are strategically prioritized projects:

5.1 Public – private association (APP)

WATER SYSTEMS, SEWERAGE AND WASTEWATER TREATMENT IN THE PROVINCE OF BELLAVISTA

Objective: The project consists in the execution of works to improve and expand the drinking water, sewage and wastewater treatment systems in the towns of Bellavista, Limón and Porvenir in the province of Bellavista; In order to ensure 24-hour water service and reduction of water pollution.

Competent entity : Regional Government San Martín

Modality : Co-funded State Initiative

Investment : S/ 98, 526,130 million.

Influence zone : Bellavista, Limón and Porvenir.

TOCACHE AERODROME AIRPORT

Objective: The project consists of the rehabilitation and improvement of the airport service offer at Tocache aerodrome. In addition, it aims to strengthen territorial connectivity, to complement terrestrial transitability, and to articulate the territory in an integral way; Especially in the southern part of the territory, which limits its economic dynamism due to its physical remoteness with the most important population and commercial centers of the region

Competent entity : Regional Government San Martín

Modality : Co-funded State Initiative

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Investment : S/ 28, 000,000 million.

Influence zone : Tocache.

5.2 Projects in assets (PA).

CALZADA LIVESTOCK FARM.

Objective: The development of livestock activities in the Farm of Calzada, consists of the reactivation of the farm where the companies develop activities that improve the cattle activity of the region of San Martín.

Competent entity: Regional Government of San Martín.

Kind: Public - Private Partnership.

Modality: Transfer of assets with investment commitment.

Investment: S/. 681,302.00 aprox.

Term : 15 years.

Influence zone : San Martín región.

Potential activities to develop: Livestock activity

Temperature: 22 to 30º C

M.S.N.M: 850

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PISCIGRANJA COMUNAL DE JEPELACIO.

Objective: The project seeks the administration of public infrastructure services for the production of fingerlings.

Competent entity: Regional Production Directorate - GRSM.

Kind: Public - Private Partnership.

Modality: Lease, Usufruct, Swap or others permitted by law.

Total area : 2.79 hectares

Estimated investment : S/ 173.245,52 soles

Term : 20 years.

Influence zone : Jepelacio district – Moyobamba.

Potential activities to be carried out: Production of fry, fish, among other aquaculture activities.

Temperature: 17ºC a 28º C

M.S.N.M: 1045

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FISH CENTER OF MASHUYACU

Objective: It consists of the integral development of economic activities that put in value to fish center and contribute with the economic dynamism of the zone.

Competent entity: Regional Directorate of Production - DIREPRO.

Type: Public-Private Partnership

Modality: Transfer of assets.

Total area: 24.51 hectares.

 Area occupied (Infrastructure): 2.57 hectares.

 Free area: 21,94 hectares

Influence zone : Sector Mashuyacu, hamlet Pablo Mori, district and province of Rioja.

Potential activities to be carried out: Aquaculture production, tourism and recreational activities.

Temperature: 16.5ºC a 28.4 º C

M.S.N.M: 856

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SAN JUANITO FOUND – NEW CAJAMARCA.

Objective: To develop productive activities through the participation of the private sector in order to give sustainability the asset.

Competent entity: Regional Government of San Martín.

Type: Public-Private Partnership

Modality: Transfer of assets.

Total area : 32.5 hectares.

Term : To be defined

Influence zone : New Cajamarca – Rioja.

Potential activities to be carried out: Production of passion fruit, hard and hard avocado and other economic activities that are aligned to GORESAM policies.

Temperature: 16.7 a 29º C

M.S.N.M: 837

THE MOLINA FOUN – NEW CAJAMARCA.

Objective: To develop productive activities through the participation of the private sector in order to give sustainability the asset.

Competent entity: Regional Government of San Martín.

Type: Public-Private Partnership

Modality : Transfer of assets.

Total area : 10 hectares

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Influence zone : New Cajamarca – Rioja.

Potential activities to be carried out: Production of passion fruit, hard and hard avocado and other economic activities that are aligned to GORESAM policies.

Temperature: 16.7 a 29º C

M.S.N.M: 844

MOYOBAMBA HEMODIALYSYS CENTER

Objective: This project consists of the construction, implementation and operation of the Moyobamba hemodialysis center.

Competent entity : Regional Health Directorate of San Martín.

Type : Public-Private Partnership

Modality : Transfer of assets.

Area of influence : Moyobamba.

LAMAS ONCOLOGICAL PREVENTORY

Objective: This project consists of the construction, implementation and operation of Lamas oncologic prevention.

Competent entity : Regional Health Directorate of San Martín.

Type : Public-Private Partnership

Modality : Transfer of assets.

Area of influence : Moyobamba.

TARAPOTO HEMODIALYSYS CENTER

Objective: This project consists of the construction, implementation and operation of the hemodialysis center of Tarapoto.

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Competent entity : Regional Health Directorate of San Martín.

Type : Public-Private Partnership

Modality : Transfer of assets.

Area of influence : Moyobamba.

5.3 Works by Taxes (OXI)

Project's name : Improvement of the educational service in the I. E. Nº 0417 - New Bambamarca, district of Polvora, province of Tocache, department San Martín.

Status : Profile – Approved

Investment : S/ 7, 990,737

Beneficiaries. : 2,889

Project`s name : Improvement and expansion of the educational service in the initial, primary and secondary levels of the I. E. José Antonio Encinas Franco, district and province of Moyobamba - San Martín.

Status : Profile - Approved

Investment : S/ 14, 311,569

Beneficiaries : 7,035

Project`s name : Installation of the educational service of the secondary level in the Soritor River, Alto Mayo and Nueva Santa Cruz sector care units, Awajún district, Rioja province, San Martín department..

Status : Profile - Approved

Investment : S/ 9, 572,897

Beneficiaries : 4,066

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Project`s name : Creation of the commercial communal center in the locality of Buenos Aires, district of Buenos Aires - Picota - San Martín.

Status : Perfil - Aprobado

Investment : S/ 430,473.39

Beneficiaries : 3,217

Project`s name : Improvement of health services in the health facility I.4 of Uchiza.

Status : Formulation - Idea

Investment : S/ 22, 500,000

Beneficiaries : 20,729

Project`s name : Improvement of health services in the II.E de Juanjui establishment.

Status : Formulation - Idea

Investment : S/ 54, 300,000

Beneficiaries : 28,000

Project`s name : Improvement of health services in the health facility of Morales, district of Morales, province and region of San Martín.

Status : Idea - Idea

Investment : S/ 26, 800,000

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Beneficiaries : 28,669

Project`s name : Improvement of health services in the health establishment of the Band of Shilcayo, district of the Band of Shilcayo, province and region San Martín.

Status : Idea - Idea

Investment : S/ 3, 500,000

Beneficiaries : 39,595

Project`s name : Improvement of health services in the health facility of Lluyllucuha, district of Moyobamba province of Moyobamba, region San Martín.

Status : Idea - Idea

Investment : S/ 19, 850,000

Beneficiaries : 81,280

Project`s name : Improvement of health services in the rural hospital of Nueva Cajamarca, district of Nueva Cajamarca, province of Rioja, region of San Martín.

Status : Idea - Idea

Investment : S/ 48, 000,000

Beneficiaries : 44,170

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Project`s name : Construction and implementation of the prehospital emergency center of the health network.

Status : Idea - Idea

Investment : S/ 12, 000,000

Beneficiaries : 829,520

Project`s name : Implementation of specialized mobile medical care service for the San Martín region.

Status : Idea - Idea

Investment : S/ 7, 500,000

Beneficiaries : 829,520

5.4 Public – Private Alliance: Opportunities for investment in agribusiness.

COCOA Name of the business: Articulation of public - private partnerships for the export of cocoa with qualified producer organizations.

Objective: Articulate investors with producer organizations for the export and / or industrialization of cocoa.

Description of the business idea: The business proposal is presented for those investors interested in working in public - private alliances to export and / or industrialize cocoa produced in the region through producer organizations, ensuring the internationalization of the production and sale of their products At competitive prices. At the same time, work together to strengthen the entrepreneurial capacities of producer organizations and increase productivity levels.

Areas identified with potential: City of San Martin, Lamas, El Dorado, Mariscal Cáceres, Tocache and Bellavista.

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Production volume: 42,607 thousand tons annually.

Modality of participation of the private company: commercial contracts, shareholders, articulation, other modalities.

PASSION FRUIT Name of the business: Develop public - private partnerships to promote the cultivation of passion fruit.

Objective: Promote the cultivation of passion fruit with private companies that guarantee the purchase in a sustained way

Description of the business idea: The business proposal is presented for those investors interested in working through public - private alliances, to promote the cultivation of passion fruit as an input for agroexportadoras and the sale (fresh fruit) in dynamic markets. At the same time, work together to strengthen the entrepreneurial capacities of producer organizations and increase productivity levels.

Areas identified with potential: Moyobamba and Rioja Province.

Yield: 30 tonnes / ha / year.

Shelf life: 4 - 5 years depending on handling

Vegetative period: The first harvest is obtained after 8 months of planting.

Disaggregated profitability analysis by year - 1 ha.

YEAR 1 YEAR 2 TOTAL ECONÓMICO ANALYSIS S/. S/. S/. Total cost of production 8,507.05 4,026.45 12,533.50 Yield (kg/ha) 6,800.00 23,200.00 30,000.00 Unit cost 1.25 0.17 0.42 Unit Price (s/.x kg) 0.80 0.80 0.80 Total income 5,440.00 18,560.00 24,000.00 Net profit -3,067.05 14,533.55 11,466.50 Profitableness -36.05% 360.95% 91.49% Course: QUICONARC, 2017 Own elaboration.

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Modality of participation of the private company: commercial contracts, shareholders, articulation, others.

LEMON TAHITÍ

Name of business: Develop public - private partnerships to promote Tahiti lemon cultivation.

Objective: Promote the cultivation of Tahiti lemon for export purposes through public - private alliances.

Description of the business idea: The business proposal is presented to investors interested in working through public - private partnerships to promote the cultivation of Tahiti lemon for export to dynamic markets in a sustainable way. At the same time, work together to strengthen the entrepreneurial capacities of producer organizations and increase productivity levels.

Areas identified with potential: Picota Province, Mariscal Cáceres and Bellavista.

Yield: 30 tonnes / ha / year.

Shelf life: 15 - 20 years depending on the type of agronomic management.

Vegetative period: At 1.5 years of grafting the first harvest is obtained, this is in function of agronomic management.

Analysis of profitability disaggregated per year (1 ha).

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 ECONÓMICO ANALYSIS S/. S/. S/. S/. S/. Production cost 10,231.30 7,214.58 7,789.78 7,858.78 7,458.78 Yield (kg/ha) - 9,000.00 15,000.00 25,000.00 30,000.00 Unit cost - 0.80 0.52 0.31 0.25 Unit price (s/.x kg) 0.80 0.80 0.80 0.80 0.80 Total income - 7,200.00 12,000.00 20,000.00 24,000.00 Net profit -10,231.30 -14.58 4,210.22 12,141.22 16,541.22 Profitability -100.00% -0.20% 54.05% 154.49% 221.77% Month / year income (s/.) - -1.22 350.85 1,011.77 1,378.43 Source: Empresa Casa Blanca, 2017 Own elaboration.

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Modality of participation of the private company: commercial contracts, shareholders, articulation, others.

LEMON SUTIL

Name of business: Develop public - private partnerships to promote the cultivation of subtle lemon.

Objective: Promote the cultivation of subtle lemon for export in dynamic markets through public - private alliances.

Description of the business idea: The business proposal is presented to investors interested in working through public - private partnerships to promote the cultivation of subtle lemon as an input for agro - industries and export to dynamic markets in a sustainable way. At the same time, work together to strengthen the entrepreneurial capacities of producer organizations and increase productivity levels.

Areas identified with potential: Picota Province, Mariscal Cáceres and Bellavista.

Yield: 30 tonnes / ha / year.

Shelf life: 15 - 20 years depending on the type of agronomic management.

Vegetative period: At 1.5 years of grafting the first harvest is obtained, this is in function of agronomic management.

Analysis of profitability disaggregated per year (1 ha).

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 ECONÓMICO ANALYSIS S/. S/. S/. S/. S/. Production cost 10,231.30 7,214.58 7,789.78 7,858.78 7,458.78 Yield (kg/ha) - 9,000.00 15,000.00 25,000.00 30,000.00 Unit cost - 0.80 0.52 0.31 0.25 Unit price (s/.x kg) 0.80 0.80 0.80 0.80 0.80 Total income - 7,200.00 12,000.00 20,000.00 24,000.00 Net profit -10,231.30 -14.58 4,210.22 12,141.22 16,541.22 Profitability -100.00% -0.20% 54.05% 154.49% 221.77% Month / year income (s/.) - -1.22 350.85 1,011.77 1,378.43 Source: Own elaboration based on production data in Piura.

OFFICE FOR THE PROMOTION OF SUSTAINABLE PRIVATE INVESTMENT - OPIPS 44

Production volume: to be defined Modality of participation of the private company: commercial contracts, shareholders, articulation, others.

TROPICAL FRUITS Name of the business: Industrialization and commercialization of the tropical fruits of the region of San Martín.

Objective: To collect, industrialize and commercialize tropical fruits produced in the San Martín region.

Description of the business idea: The business proposal is presented for those investors interested in collecting, industrializing and marketing tropical fruits according to seasonality. What is sought is to take advantage of the existing potential and diversify the economics of the farmers.

Areas identified with potential: The production of tropical fruits is distributed in all provinces and districts of the region.

Production volume: There are approximately 10,312.8 hectares of tropical fruit trees that produce 117, 206. 75 thousand tons annually. Yields vary depending on crop and agronomic management.

Modality of participation of the private company: commercial contracts, shareholders, articulation, other modalities.

5.5 Other projects

Creation of recreational, cultural and sports services in the district of Tarapoto, province and region of San Martin.

Objective: The project consists of the creation of recreational, cultural and sports services in the district of Tarapoto, with the purpose of having a space where citizens can develop sports and recreational activities.

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Competent entity: Regional Government of San Martin.

Modality: Co-financed state initiative

Amount of investment: S/ 24, 600,792.79

Area of influence: Tarapoto

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6. BIBLIOGRAPHICAL SOURCES. o Development Plan Concerted to 2021 of GORESAM o Ecological and Economic Zoning of the San Martín Region - 2005. o INEI population projections 2107.

Websites

 http://www.investinperu.pe/modulos/JER/PlantillaStandard.aspx?are=0&prf=0&jer=580 0&sec=1  http://www.bcrp.gob.pe/docs/Sucursales/Iquitos/San-Martin-Caracterizacion.pdf  http://www.sunat.gob.pe/orientacionaduanera/importacionvehiculos/tributos_aplicables. html  http://webinei.inei.gob.pe:8080/SIRTOD1/inicio.html#app=db26&d4a2- selectedIndex=1&d9ef-selectedIndex=0  https://www.osiptel.gob.pe/articulo/11-lineas-instaladas-por-departamento  https://www.osiptel.gob.pe/documentos/2-indicadores-del-servicio-movil  https://www.regionsanmartin.gob.pe/subpage.php?opc=48  http://www.obrasporimpuestos.pe/0/0/modulos/JER/PlantillaStandard.aspx?are=0&prf= 0&jer=5&sec=0  http://www.siicex.gob.pe/siicex/portal5ES.asp?_page_=290.20600#anclafecha

OFFICE FOR THE PROMOTION OF SUSTAINABLE PRIVATE INVESTMENT - OPIPS 47

CONTACTS

Name: Regional Government San Martín

Contact area: Office for the Promotion of Sustainable Private Investment

Address: Calle Aeropuerto Nº 150 Barrio Lluyllucucha - Moyobamba

Phone: (042) 564100 Anex. 1560

E-mail:[email protected]

OFFICE FOR THE PROMOTION OF SUSTAINABLE PRIVATE INVESTMENT - OPIPS 48