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EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR 1 A country of opportunities December 2012.

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Presentation on theme: "EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR 1 A country of opportunities December 2012."— Presentation transcript:

1 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR 1 A country of opportunities December 2012

2 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador Ahuachapán Santa Ana Chalatenango SonsonateSan Vicente Cabañas La Paz La Libertad San Salvador Usulután San Miguel Morazán La Unión Cuscatlán Gulf of Fonseca islands Capital San Salvador Official Language Spanish Area 21,041 Km 2 / 8,124 sq mi Population 6.2 million (2011) GDP Nominal (2011) 23,054 million USD (2011) Currency $USD Time Zone UTC -6

3 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR Solid political & economic environment International view of El Salvador Commercial openness & strategic location Foreign direct investment in El Salvador El Salvador

4 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR 4 Political Stability More than 25 years of free and democratic elections Balance of power in congress Legislative Assembly Alternating governance PDC ARENA FMLN Presidential election: % of votes for Presidential Candidate of winning party Source: Supreme Electoral Court of El Salvador (TSE ). President for 5 year term with no possible consecutive reelection 1 chamber with 84 seats for 3 year terms March 2012 Congress election results, seats won by each party

5 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR Central American Market Country EL SALVADORGUATEMALAHONDURASNICARAGUACOSTA RICAPANAMA Central America CapitalSan SalvadorGuatemala CityTegucigalpaManaguaSan JosePanama City Official LanguageSpanish Area (000 Km 2 ) 21.0108.9112.1130.451.175.4498.9 Population (000,000) 6.214.78.05.84.63.542.8 GDP PPP (Bn US$) 2011 44.674.835.718.95550.6279.6 GDP per capita PPP (US$) 7,5505,0794,4443,20611,92314,0966,533 Average Inflation rate 2010-2011 3.6%5.8%6.0%8.6%5.3%5.6% Currency Dollar USD Quetzal GTQ Lempira HNL Cordoba NIO Colon SJC Dollar USD Time ZoneUTC -6 UTC -5 Source: Multi –Purpose Household Survey, Central Reserve Banks, and IMF. 70% of the population and commerce concentrates in ES, GT, and HN.

6 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR Fringe benefits represent 27.61% of nominal wage * Effective since May ** 2011 Provision in case of termination of contract *** Applies to companies with more than 10 employees Source: Ministry of Labor El Salvador Sector Monthly Minimum Wage* Daily Wage Agriculture $ 105.00 $ 3.50 Maquila $ 187.50 $ 6.25 Industry $ 219.30 $ 7.31 Commerce & Services $ 224.10 $ 7.47 Nominal Wage 100% Fringe Benefits 27.61%

7 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR 7 M 23.4 F 26.2 EAP: 2,641,133 years Young Population Average Age (Estimates) Source: Multi-Purpose Household Survey 2011, CIA World Factbook

8 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador Solid political & economic environment International view of El Salvador Commercial openness & strategic location Foreign direct investment in El Salvador

9 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR International view of El Salvador Index El SalvadorGuatemala Honduras NicaraguaCosta RicaPanama Human Development Index (2011) 1051311211296958 Index of Economic Freedom (2012) 4182931014455 Ease of Doing Business (2013) 1139312511911061 Freedom in the World (2012) Free Partially Free Free Global Competitiveness Index (2012 – 2013) Infrastructure Roads Airports Energy Mobile Telephones Taxes 101 66 52 42 70 37 56 83 67 91 58 67 23 79 90 97 92 71 106 79 92 108 106 75 90 100 108 130 57 95 131 60 42 94 119 40 44 49 6 43 2 96

10 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador Solid political & economic environment International view of El Salvador Commercial openness & strategic location Foreign direct investment in El Salvador

11 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR 11 Legal Framework Investment Law International Services Law Tourism Law Free Zones Law Equal treatment to national & international investors Liberty to transfer funds and profits abroad Access to local financing Incentives to strategic sectors (contact centers, BPOs, maintenance and repair of airplanes, logistics, etc.) Total permanent tax exemptions (income and municipal taxes) and import duties. Incentives to industrial activities Total permanent taxes exemption (income and municipal taxes) and import duties. Incentives to industrial activities Total permanent taxes exemption (income and municipal taxes) and import duties. Renewable Energy Incentives Law Customs duties exemption on imports of machinery, equipment and materials Income tax exemption for a period of 5 to 10 years Total tax exemption on revenues from the sale of Certified Emission Reductions

12 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR 12 Commercial Openness Access to a potential market of 1,200 million people

13 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR Main Trade Partners Main Export Products Source: Central Reserve Bank Main Trade Partners and Export Products El Salvador Exports 2011 USD 5,308.8 million

14 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR 14 Main airlines serving El Salvador Strategic Location Main Freight Companies Air Cargo DHL UPS Arrow Regular charter flights Maritime MAERSK CROWLEY MSC SEABOARD NIPPON CSAV APL Hamburg Süd Close to key markets Closeness to the vital maritime routes. A natural bi-oceanic logistics corridor. Container terminal ready for post panamax ships. A dominant airport certified A1 by the FAA linking important cities. (Montreal, Toronto)

15 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR Strategic Location

16 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR Strategic Location

17 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador Solid political & economic environment International view of El Salvador Commercial openness & strategic location Foreign direct investment in El Salvador

18 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR Foreign Direct Investment Stock 2011 USD 8,141 million (35.3 % of GDP)

19 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR Specialized TextilesAeronauticsElectronics Medical Devices Offshore Business Services Health Services TourismAgro-industry Logistics and Infrastructure Footwear Investment Opportunities

20 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador offers an aircraft maintenance, repair and overhaul (MRO) industry for commercial aircraft, which has successfully placed the country on the global aviation map. The successful operations of Aeroman, a member of Canadian MRO group Aveos, are widely recognized within the emerging Latin American aeronautical clusters. Aeronautics Compliance with international certifications ensuring the highest quality required in aircraft maintenance services.

21 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador: Quality in aircraft maintenance services Technical Universities and Institutes have specialized curricula developed in conjunction with the private enterprise to ensure the availability of skilled labor. In addition to maintenance services for commercial aircraft, a variety of other companies in the emerging aerospace clusters offer the following services: R44 helicopter and corporate airplane maintenance. Distribution and warehousing services for aircraft parts. Component maintenance shops. Ground Services. Light sports aircraft (LSA) airframe, wing tip, and engine part manufacturing in composite materials, etc. Aircraft harness system assembly. Refurbishment on older Light Sports Aircraft (LSA) models. A Free Trade Zone Law and an International Services Law which provides tax incentives to these types of manufacturing. Available land for the development of industrial operations next door to the International Airport of El Salvador, under Public Private Partnership (PPP) mode. Investment Opportunities in Aeronautics: Commercial aircraft maintenance service operations. R44 helicopter maintenance operations. Light Sports Aircraft (LSA) airframe part manufacturing. Painting and maintenance of commercial aircraft interiors. 7

22 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR For investors in agro industry and entrepreneurs who seek a platform to produce and export, El Salvador offers attractive opportunities in the following sectors : Fruit Farming Aquaculture Ornamental plant farming Food & Beverages These sectors are highly favored by good weather and easy access to regional and international markets. Agroindustry Climate, tax incentives and a platform connected to additional markets.

23 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador: A production and export platform El Salvador possesses suitable climatic and soil conditions for fruit and ornamental plant farming. Suitable soil and climatic conditions for the production of a wide variety of tropical fruits. The country has optimal interconnections for the trade and transport of agro industrial products. Availability of water resources for the sustainable development of aquaculture. Negotiated trade agreements open the possibility for the sector to expand to regional and international markets. Competitive labor costs. Investment Opportunities in Agro Industry: Aquaculture Sector: Development of the production chain through the supply of young fingerlings, feed and other inputs to attain productivity and quality of aqua cultured products. Fruit Farming Sector: Development of supporting industries for the provision of supplies, equipment, quality vegetative materials and processing technology for the expansion of crops of avocado, Persian lime, coconut and organic products. Processed Foods Sector: Opportunities in the development of complementary industries in a sector in continuous growth in areas such as: packaging, process technology, machinery and equipment.

24 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR International medical device manufacturing companies will find in El Salvador a strategic partner to be used as a platform for export to markets in North America, Central America and the Caribbean. Medical Devices Rapid access to markets

25 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador: A strategic partner in medical devices El Salvador has tax incentives that encourage the establishment of foreign companies within a regulatory framework. Investors enjoy rapid access to markets with a potential of 1,100 million people through the existing FTAs and thanks to its strategic location. The country has focused on developing industrial and service parks boosting industrial growth, especially in the textile and plastics sectors. El Salvador is a pioneer in Latin America in the training of professionals in prosthetics and orthotics, putting a highly skilled workforce at the disposal of businesses. Investment Opportunities in Medical Devices: Disposable laboratory and diagnostic equipment. Hospital linen and disposable clothing. Hospital furniture. Orthopedic products. Packing and packaging of disposable medical devices.

26 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador offers a successful platform for electronic component manufacturing, with over 30 years of proven credibility. The country has experience in the manufacture of ceramic and tantalum capacitors in compliance with required international standards. This has enabled the country to acquire and implement state-of-the-art technology and know-how. The high quality, efficiency and productivity of operations in El Salvador have ensured the transfer of manufacturing plants from England, the Czech Republic, Mexico, China and the U.S., achieving continued expansion in all processes. Electronics High productivity and quality manufacturing at competitive costs.

27 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador: A platform for electronic components manufacturing Setting of strategic alliances with academia to ensure availability of skilled workforce. E-cluster in formation around the AVX Kyocera Company in El Salvador. Wide local supply chain in place in the areas of metalworking, plastics, support systems, automation systems, engineering, transport and chemicals, among others. Existence of a Law on Free Zones offering tax incentives to this type of manufacturing. The best international airport in the region just 35 minutes from San Salvador, and 2.5 hours from Miami. Available land for the development of industrial operations next door to the International Airport of El Salvador under Public Private Partnership (PPP) mode. Electrical network system with strong capacity for expansion. Investment Opportunities in Electronics: Electronic component manufacturing and production. Electronic equipment and parts assembly. Cell phone electronic component repair.

28 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR For offshore business service firms seeking to enter markets in the U.S. and Spanish- speaking countries, El Salvador is a strategic partner for providing quality multi-region business services. Our dynamic business environment, strategic location for near-shoring, time- zone complementarity and the outstanding performance of our bilingual human resources (English/Spanish), makes us a strategic platform for companies offering global services. The modern and advanced local telecommunications infrastructure ensures the delivery of quality services and cost- effective location for this industry. Offshore Business Services Cost effective near-shore location, based on a state of the art telecommunications platform which guarantees your global offer.

29 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador: Complementary strategic partner for multi-region operations Strategic location in relation to English- and Spanish-speaking customers (shorter flight times from North and South America). Same time zone for primary customers (U.S. and Canada) and Spanish-speaking markets (91% of the global Spanish-speaking population). Time-zone complementarity for customers in Europe and Asia (24/7 possibility). Friendly, hardworking and service-oriented people with neutral English and Spanish accents. Exceptional performance against key indicators (KPIs) such as Sales, C-Sat, FCR, etc. Complementary service to other geographical areas and high- end front-office services. Young and committed workforce (60% of the population under 35 years). Cultural affinity of the workforce with priority markets. Investment Opportunities in Offshore Business Services: Voice Business Process Outsourcing (Call Centers) Non-voice Business Processes Outsourcing (BPOs) Shared Service Centers (KPOs)

30 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador offers the opportunity to invest in health establishments catering to patients living in the U.S. and Canada, taking advantage of the geographical proximity to those markets, the low costs of health professionals and the fast connections between medical facilities and enviable landscape sites.. Health Services Geographical proximity to the main countries of origin of medical tourism, offering quality services at low costs

31 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador: Strategic location and excellent connectivity between touristic sites The strategic location of El Salvador and the presence of TACA airline's hub in the country provide excellent air connectivity to the U.S. and Canada (2 hours from Miami and 5 hours from Los Angeles by direct flight). The best road infrastructure in the region allows visiting the wide variety of tourist attractions the country offers in a short time (beaches, lakes, volcanoes, colonial cities, etc.). The community of Salvadorans abroad, about 2 million people, is A natural market who constantly visits the country and buys health treatments locally. The existence of qualified medical professionals who have earned postgraduate degrees abroad offer their services at very competitive costs. There is a Law on International Services that encourages the establishment of health centers. Investment Opportunities in Health Services: Hospitals Specialized clinics Rehabilitation centers Medical spas Hospitals Resorts for treatment of chronic diseases.

32 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador offers attractive investment opportunities to specialized textile and clothing companies wishing to enter the regional Central and North American markets based on the favorable tariff conditions of FTAs with the U.S. (CAFTA) and the European Union. El Salvador offers a vertically integrated industry, which promotes a competitive high-fashion, high- turnover garment manufacturing industry. Specialized Textiles and Apparel Vertically integrated industry with easy access to markets

33 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador: Specialized textile and apparel sector environment More than 260 textile and apparel companies have established themselves in the country, including internationally recognized companies such as Pettenati, George C. Moore, UNIFI, Swisstex, CS America and APS. The rule of origin granted by the CAFTA-DR Free Trade Agreement allows free access for textiles manufactured in the region with yarn produced in Central America. A cluster of companies that use synthetic fibers (nylon, polyester, micro fiber, among others –products paying a 32% tariff when imported from Asia through the U.S.) is in the process of consolidation. The country offers a wide variety of services, including embroidery, industrial laundry, dyeing and finishing, cutting and packing, which have been a great support to the manufacturing operations of companies such as HBI, Fruit of the Loom, Adidas and Lacoste, among others. The evolution of the manufacturing scheme from "maquila" to "full package" has developed the supply chain through materials distribution centers, required for vertical integration and sustainability of the industry. Investment Opportunities in Specialized Textiles and Apparel: Manufacture of yarn and fabrics. Manufacture of knitted garments with accessories and embellishments (embroidery, screen printing, heat transfers, etc.). Manufacture of garments included in the Single Transformation category: bras, girl dresses, boxer shorts, sleepwear and luggage.

34 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador offers attractive tourism projects in various stages of development that take advantage of a wide array of attractions located close to each other (surf spots, beaches, mountains, lakes, volcanoes). The country has a historical past inherited from the Maya, a pleasant climate all year round, competitive pricing of land, low construction costs and proximity to important markets of origin of international tourism. Tourism Surf, fishing, adventure tourism and the Maya world... all in one place.

35 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador: Variety of close-by touristic attractions Tax incentives regulated by a Law on Tourism. Foreign investors have the opportunity of acquiring property in their own name. Competitively priced land and low construction costs. Rapid access to a variety of tourist attractions. Short flight times from North and South America. The International Airport of El Salvador handles more than 470 arrivals and departures every week. Pleasant climate all year round. Warmth and friendliness in tourist service. Investment Opportunities in Tourism: Mixed-use developments. Hotels: Urban, Resort, Boutique, Bed & Breakfast, Eco-lodge, Hostels. Vacation homes. Properties with tourism potential Marinas

36 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR For companies producing consumer goods seeking to sell to larger markets, El Salvador, the logistics hub of Central America, provides air and seaport zones with tax incentives for manufacturing, logistics and distribution, becoming a gateway to U.S., Asian and European markets. El Salvador has the infrastructure, geographical proximity and free trade agreements to ensure easy and timely access to large markets. Logistics Easy and timely access to large markets.

37 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR El Salvador: Strategically located and available infrastructure Convenient location: Proximity to the trans-Pacific route (connecting Asia and the Americas); proximity to the Panama Canal (1. 5 days by sea); rapid maritime access to U.S. markets on the East and West coasts; and rapid road access to the Southern and Eastern U.S. markets. Maritime infrastructure available to receive large ships: La Union Centroamericana Port with the potential to become the leading container port on the Pacific coast of Central America. Land connectivity: The port is located 371 km. away from Puerto Cortes (Honduras Atlantic Coast); 8 hours from the border with Mexico; and 34 hours from the U.S. border (Texas). Air connectivity with rapid access to U.S. markets from the International Airport of El Salvador. Approximate flight durations: Miami: 2:30 hours; Los Ángeles: 4:00 hours; Houston: 4:00 hours; New York: 5:00 hours; Panama: 1:30 hours. Investment Opportunities in Logistics: Logistics activity zones in the proximity of seaports. Airport logistics center Distribution centers Puerto de Acajutla, located in Sonsonate Puerto La Unión, located in La Unión

38 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR 38 For companies producing footwear seeking to sell to larger markets, El Salvador, the logistics hub of Central America, provides air and seaport zones with tax incentives for manufacturing, logistics and distribution, becoming a gateway to U.S., Asian and European markets. El Salvador has the infrastructure, geographical proximity and free trade agreements to ensure easy and timely access to large markets. Logistics Easy and timely access to large markets. Footwear A platform to export to large markets.

39 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR Began in the city of Santa Ana with local artisans. El Salvador: Footwear Industry Currently: Big companies as ADOC, DURAMAS, CARICIA, GARBAL, exports to United States, Central America and The Caribbean, Europe and Asia. 16 small enterprises, primarily produce to the Salvadoran market. 390 handicraft workshops producing for the small and large companies located in San Salvador and Santa Ana. ASPC: Salvadoran Association of Footwear Producers with 125 companies of La Libertad, La Paz, La Unión, San Vicente and San Salvador. 2011 Exports: US $42 million (12% annual growth over the last 6 years -2005/2011-). El Salvador has the 26th position as a footwear supplier of the United States. El Salvador exports to the US market grew 28% in 2011. Source: USITC The Imports grew by 23% compared to 2010 (US $106 million) and 9% annually in the last 6 years.

40 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR Services provided by PROESA Information on the business climate, economic factors, set-up and operational costs, regulations, availability of human capital and any other information required in the early stages of the evaluation process. Personalized attention to specific enquiries. Information and Advisory Facilitates the evaluation process of the country by offering: Advises international companies on investment opportunities in El Salvador by providing: Information on investment opportunities in strategic industries, as well as incentives and investment advantages of those industries. Statistics and customized industry information. Works to identify contacts and locations for international investors through: Finding of specific locations and sites for each project. Facilitating contacts of potential partners, government institutions and providers of goods and services including legal, financial, customs, real estate, among others. Organization and coordination of customized site visits to El Salvador. Assists potential and established investors with: Integral support on procedures required to establish or expand business operations in the country. Establishment and Expansion Assistance Business Opportunities

41 EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR TEL +503 2246 6400 Edificio D'Cora Primer Nivel, Urb. Santa Elena, Antiguo Cuscatlán, La Libertad, El Salvador, C.A. www.proesa.gob.sv


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