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El Salvador A country of opportunities December 2012

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1 El Salvador A country of opportunities December 2012
Updated: November 30, 2012

2 Gulf of Fonseca islands
El Salvador Capital San Salvador Official Language Spanish Area 21,041 Km2 / 8,124 sq mi Population 6.2 million (2011) GDP Nominal (2011) 23,054 million USD (2011) Currency $USD Time Zone UTC -6 Ahuachapán Santa Ana Chalatenango Sonsonate San Vicente Cabañas La Paz La Libertad Salvador Usulután San Miguel Morazán Unión Cuscatlán Gulf of Fonseca islands Source: Multi-Purpose Household Survey 2011 and Central Reserve Bank Total population: 6,213,730 persons

3 El Salvador Solid political & economic environment
International view of El Salvador Commercial openness & strategic location Foreign direct investment in El Salvador

4 Balance of power in congress
% Political Stability More than 25 years of free and democratic elections Alternating governance PDC ARENA FMLN Presidential election: % of votes for Presidential Candidate of winning party Source: Supreme Electoral Court of El Salvador (TSE ). Balance of power in congress Legislative Assembly 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 Central American Market
Country EL SALVADOR GUATEMALA HONDURAS NICARAGUA COSTA RICA PANAMA Central America Capital San Salvador Guatemala City Tegucigalpa Managua San Jose Panama City Official Language Spanish Area (‘000 Km2) 21.0 108.9 112.1 130.4 51.1 75.4 498.9 Population (‘000,000) 6.2 14.7 8.0 5.8 4.6 3.5 42.8 GDP PPP (Bn US$) 2011 44.6 74.8 35.7 18.9 55 50.6 279.6 GDP per capita PPP (US$) 7,550 5,079 4,444 3,206 11,923 14,096 6,533 Average Inflation rate 3.6% 5.8% 6.0% 8.6% 5.3% 5.6% Currency Dollar USD Quetzal GTQ Lempira HNL Cordoba NIO Colon SJC Time Zone UTC -6 UTC -5 El Salvador’s population data is based on the Multi-Purpose Household Survey of The population data from the rest of countries are IMF estimates of 2012. ________________________________________________________________________________________________________________________ Updated: October 2012 Quick facts of El Salvador: Dollarized Economy Hedges Currency Risk Lowest average inflation rates in Central America (3.6% for the period ) Low Interest Rate Environment Gross domestic product based on purchasing-power-parity (PPP) valuation of country GDP - PIB sobre la base de poder adquisitivo (PPA) Gross domestic product based on purchasing-power-parity (PPP) per capita GDP - PIB per cápita sobre la base de poder adquisitivo (PPA) GDP per capita PPP (US$) for Central America: Total CDP PPP of C.A./ total population of C.A. Inflation 2011 End of period consumer prices, percent change Inflation rates for all countries except El Salvador come from IMF The Central Reserve Bank updates inflation rates monthly - Next update will take place on May 7th 2012. IMF updates its databases quarterly. Inflation % % % % % % El Salvador Guatemala Honduras Nicaragua Costa Rica Panamá Inflation % % % % % % % Change Average 10/ % % % % % % Inflation improved within 3 countries from 2010 to 2011: Honduras, Nicaragua and Costa Rica. Nevertheless, El Salvador still has the lowest average inflation rate in Central America ( ). El Salvador´s ratings: updated: January 31st 2012. Ba2 Moody's BB- S&P BB Fitch IMF Honduras population was updated from 7.6 million in 2010, to 8.2 million in 2011, according to IMF. ______________________________ Investment grade Aaa Aa1, Aa2, Aa3 A1, A2, A3 Baa1, Baa2, Baa3 Speculative grade (Also known as High Yield or 'Junk') Ba1, Ba2, Ba3 B1, B2, B3 Caa1, Caa2, Caa3 70% of the population and commerce concentrates in ES, GT, and HN. Source: Multi –Purpose Household Survey, Central Reserve Banks, and IMF.

6 Fringe benefits represent 27.61% of nominal wage
100% Fringe Benefits 27.61% Sector Monthly Minimum Wage* Daily Wage Agriculture $ $ 3.50 Maquila $ $ 6.25 Industry $ $ 7.31 Commerce & Services $ $ 7.47 Labor Laws (Regulations) Work Day Period 8 hours Work Night Period 7 hours Total Weekly Period 44 hours for day shifts and 39 hours for night shifts. The Law considers day shifts to be from 6:00a.m. to 7:00p.m. and night shifts to run from 7:00p.m. to 6:00a.m. For night shifts, there is a 25% surcharge on salary. Overtime: Day 100% basic salary Night 125% basic salary Holidays 100% basic salary Number of Payable Official Holidays • January 1st • Holy Week’s Thursday, Friday, and Saturday • May 1st • August 3rd, 5th and 6th • September 15th • November 2nd • December 25th Annual Vacations: Are paid once in the year, and correspond to the 30% of a 15-day salary. Social Security (ISSS): The Employer pays 7.5% of the base salary up to a maximum of $ Retirement Fund (AFP): The Employer contributes with 6.75% of the base salary, divided as follows: 4.05% To the Employee´s Fund 2.70% AFP Commission. Christmas Bonus: It is paid in December and is calculated according to the number of years served in the company: 1-2 years   = 10 days of salary 3-9 years   = 15 days of salary 10 or more  = 18 days of salary Annual Severance Provision: The Law does not obligate to maintain this provision, but it does obligate the payment to the employee in case of unjustified dismissal. They payment corresponds of 30 days of salary for each year served to the company and proportional for fractions of year. For estimating the severance payment, no monthly salary may exceed four times the minimum legal wage at the time. Art. 58 Labor Code. * 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

7 Source: Multi-Purpose Household Survey 2011, CIA World Factbook
Young Population 7% Average Age (Estimates) years M 23.4 F 26.2 EAP: El Salvador´s 2011 Economically Active Population The young workforce in El Salvador is prone to learn fast. MPHS 2011 Employment Unemployment 6.6% Underemployment 32.7% Workforce (PEA) 2011 2,641,133 Schooling 2011 6.2 grades EAP: 2,641,133 Source: Multi-Purpose Household Survey 2011, CIA World Factbook 7

8 El Salvador Solid political & economic environment
International view of El Salvador Commercial openness & strategic location Foreign direct investment in El Salvador

9 International view of El Salvador
Index El Salvador Guatemala Honduras Nicaragua Costa Rica Panama Human Development Index (2011) 105 131 121 129 69 58 Index of Economic Freedom (2012) 41 82 93 101 44 55 Ease of Doing Business (2013) 113 125 119 110 61 Freedom in the World (2012) Free Partially Free Partially Free Global Competitiveness Index (2012 – 2013) Infrastructure Roads Airports Energy Mobile Telephones Taxes 66 52 42 70 37 56 83 67 91 23 79 90 97 92 71 106 108 75 100 130 57 95 60 94 40 49 6 43 2 96 Global Competitiveness Index (total countries evaluated: 144) Rankings Index El Salvador Guatemala Honduras Nicaragua Costa Rica Panamá Infrastructure 66 (4.4) (4.4) (3.7) 106 (3.4) (3.7) (5.1) Roads 52 (4.5) (3.3) (3.3) 75 (3.8) (2.5) (4.5) Airports 42 (5.94) (4.9) (4.5) (4.2) (4.9) (6.4) Energy (4.9) (5.0) (3.6) (3.7) (5.5) (5.5) Mobile Telephones (125.8) (140.4) (104) (82.2) (92.2) (203.9) Taxes (35%) (40.9%) (44%) 130 (66.8%) (55%) (45.2%) Note: Numbers in parentheses are ratings given by the Global Competitiveness, these values are on a 1 to 7 scale, except for Mobile telephones (subscriptions/100 pop.) and Taxes (% profits). Ease of Doing Business 2013 (total countries evaluated: 185) Human Development Index 2011 (total countries evaluated : 187) ____________________________________________________________________________________________________________________ Updated January 31st 2012. The Heritage Foundation Index of Economic Freedom is updated in January, once a year. The closer to 1 the better. El Salvador Guatemala Honduras Nicaragua Costa Rica Panamá Index of Economic Freedom Freedom Change (-2) (-3) (+6) (-3) (+5) (+4) Three countries improved their Index of Economic Freedom: Honduras improved in 6 places Costa Rica improved 5 places Panamá improved 4 places

10 El Salvador Solid political & economic environment
International view of El Salvador Commercial openness & strategic location Foreign direct investment in El Salvador

11 Legal Framework Investment Law International Services Law
Equal treatment to national & international investors Liberty to transfer funds and profits abroad Access to local financing Investment Law Incentives to strategic sectors (contact centers, BPO’s, maintenance and repair of airplanes, logistics, etc.) Total permanent tax exemptions (income and municipal taxes) and import duties. International Services Law Incentives to industrial activities Total permanent taxes exemption (income and municipal taxes) and import duties. Free Zones Law Incentives to industrial activities Total permanent taxes exemption (income and municipal taxes) and import duties. Tourism Law MARCO LEGAL Ley de Inversión Objetivo: El objetivo de la ley es promover la inversión, particularmente la inversión extranjera, con el propósito de contribuir al desarrollo económico y social de El Salvador, a través del incremento de la productividad, de la generación de nuevos empleos, de las exportaciones de bienes y servicios, así como de la diversificación de la producción. Beneficios Procedimientos amigables: para que las inversiones nacionales y extranjeras puedan ser fácilmente establecidas y desarrolladas. Tratamiento equitativo para todos los inversionistas: los inversionistas y corporaciones extranjeros tendrán los mismos derechos y obligaciones que los inversionistas nacionales, sin excepciones salvo aquellas determinadas por la ley, de forma que no se tomen medidas discriminatorias, que detengan el establecimiento, administración, uso, extensión, venta y liquidación de sus inversiones. Libertad para realizar inversiones: cualquier persona natural o jurídica, nacional o extranjera, puede realizar inversiones de cualquier tipo en El Salvador, excepto aquellas limitadas por la ley, sin medidas discriminatorias por razón de nacionalidad, domicilio, raza, género o religión. Transferencia de fondos al exterior: a los inversionistas extranjeros se les garantiza su derecho a realizar transferencias de fondo hacia el exterior en materias relacionadas con su inversión sin atraso y con la libertad de convertir su moneda a través del mercado bancario. Acceso a financiamiento local: los inversionistas extranjeros tendrán acceso al financiamiento local disponible a través del sistema financiero y sus instituciones. Protección de la propiedad y seguridad: de acuerdo a la Constitución de la República, los inversionistas nacionales y extranjeros tendrán garantía en su propiedad y la libre disposición de sus bienes. Creación de la Oficina Nacional de Inversiones (ONI): Esta oficina fue creada como una dependencia del Ministerio de Economía. Está encargada de facilitar, centralizar y coordinar los procedimientos gubernamentales que deben realizar los inversionistas nacionales y extranjeros para la ejecución de sus obligaciones económicas, administrativas, fiscales, migratorias, así como las de producción de estadísticas relacionadas con estas inversiones. Ley de Servicios Internacionales Objetivo: Esta ley se aprobó en 2007 por el gobierno salvadoreño para promover la inversión extranjera en servicios estratégicos como logística y distribución, call centers, BPOs, desarrollo de software, desarrollo e investigación, así como la reparación y mantenimiento de aviones, barcos de carga y cruceros. La ley de servicios internacionales contempla el establecimiento de parques y centros de servicio, un concepto único en la región centroamericana. Exención de aranceles y derechos para la introducción de maquinaria, equipo, herramientas, repuestos, accesorios, muebles, equipo de oficina y otros bienes requeridos para realizar la actividad promovida durante el periodo de operaciones en el país. Exención del impuesto sobre la renta durante todo el periodo de operaciones en el país. Exención total de los impuestos municipales sobre el activo de la empresa. Ley de Zonas Francas Objetivo: La ley de Zonas Francas industriales y de comercialización brinda beneficios a individuos y compañías, nacionales o extranjeras, que utilicen Zonas Francas o Depósitos para Perfeccionamiento Activo. 100% de exención del impuesto sobre la renta durante el periodo de operaciones en el país, desde el año fiscal en el que beneficiario inicie operaciones. 100% de exención de impuestos municipales en los activos y patrimonio de la compañía, durante el periodo de operación en el país, desde el año fiscal en el que beneficiario inicie operaciones. 100% de exención del impuesto a la transferencia de bienes inmuebles, para la adquisición de inmuebles a ser utilizados en la actividad promovida. 100 de exención de impuestos a las importaciones de maquinaria y equipo necesario para la producción para exportación. Admisión gratuita de material prima necesaria para la actividad de exportación. Exención de impuestos para la importación de lubricantes y combustibles necesarios para la actividad exportadora cuando ellos no sean producidos en el país. Sin límites para capital extranjero. La venta en El Salvador de mercadería o servicios relacionados con el comercio producido en la Zona Franca es permitida siempre que los impuestos de importación correspondientes, el impuesto sobre la renta, el IVA y los impuestos municipales en los bienes finales sean pagados. Ley de Turismo Objetivo: promover la inversión nacional y extranjera en El Salvador en actividades turísticas. Beneficios: Total exención de impuesto de la renta por un periodo de 10 años. Exención en el IVA y aranceles para los bienes importados. Total exención de impuestos en transferencias de bienes raíces para la adquisición de inmuebles a ser utilizados en el proyecto. Exención parcial de los impuestos municipales (hasta 50%) por un periodo de 5 años, empezando en el año fiscal en el cual el negocio inicie operaciones. La inversión mínima para calificar a los incentivos mencionados anteriormente fue reducida a $25,000 dólares en diciembre de 2010. Junio Gobierno anuncia proyecto de creación y reforma de cuerpos legales para atracción de inversión: Nuevos cuerpos legales: Ley de Asocios Público-Privados: Ley que permitirá el desarrollo de infraestructura y la prestación de servicios públicos mediante la suscripción de contratos de largo plazo entre el Estado y un privado. Actualmente presentada a la Asamblea Legislativa. Contratos de Estabilidad Jurídica: Cuerpo legal que permitirá asegurar a los inversionistas que una vez instaladas las condiciones iniciales de la inversión, éstas se mantendrán durante el transcurso de la misma.    Garantías mobiliarias: permitirá el otorgamiento de créditos con bienes muebles como maquinaria o similares como equivalente de garantía. Propuestas de leyes a reformar: Ley de Zonas Francas: Se plantea una modificación a los cuerpos legales parar mantener los incentivos fiscales a las empresas que se establezcan en estos recintos. Estos estímulos estarán sujetos a la inversión y generación de empleos. Ley de Servicios Internacionales: Cuerpo legal que regula el establecimiento y funcionamiento de parques y centros de servicio. La modificación consistirá en ampliar y actualizar los servicios beneficiados por esta ley. Se incluirán los servicios médicos, los odontológicos y los de turismo como beneficiarios. De igual forma se ampliará el apoyo a los centros de contacto para que atiendan no solo llamadas, sino que puedan proveer servicios administrativos. Finalmente también se está habilitando dentro de la ley que puedan operar los beneficiarios fuera de zonas francas. Adicionalmente la ley pretende apoyar la instalación de servicios de reparación de contenedores en el puerto de La Unión. 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 Renewable Energy Incentives Law

12 Commercial Openness Access to a potential market of
1,200 million people

13 Main Trade Partners and Export Products
El Salvador Exports 2011 USD 5,308.8 million Main Export Products _______________________________________________________________________________________________ Updated: January 31st 2012 Exports 2010 4,500 Million 2011 5,308.8 Million The Central Reserve Bank published El Salvador´s Trade Balance for 2011 on January 26th 2012. Salvadoran exports for 2011 registered a total of US $5,308.8 million, US $810 million above exports registered at the end of This represents a growth of 18% compared to the same period of 2010. By product category, non-traditional exports registered a total amount of US $3,510.5 million, representing an increase of 16.2% and hogging a participation of 66.13% on total exports. Maquila exports were US $1,201 million (growth: 5.9% participation: 22.62%) and traditional exports registered US $597.3 million (growth: 74% / participation: 11.25%). Trading Partners Position in 2011 1 USA % 46% 2 Guatemala % 14% 3 Honduras % 13% 4 Nicaragua % 6% 5 Costa Rica % 4% 6 Panama % 2% 7 DR % 1% 8 Germany % 3% 9 Mexico % % 8 10 Canada % 1% 11 Spain % 1% 12 Others % 7% Trading Partners 2011 1USA % 2 Guatemala % 3 Honduras % 4 Nicaragua % 5 Costa Rica % 6 Germany % 7 Panama % 8 Mexico % 9 Spain % 10 Canada % 11 DR % 12 Others % Export Products Non-Traditional % 66% Maquila % 23% Traditional % % Source: Central Reserve Bank

14 Strategic Location Main airlines serving Main Freight Companies
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. Main Freight Companies Main airlines serving El Salvador Regular charter flights Air Cargo DHL UPS Arrow Maritime MAERSK NIPPON CROWLEY CSAV MSC APL SEABOARD Hamburg Süd (Montreal, Toronto)

15 Strategic Location

16 Strategic Location

17 El Salvador Solid political & economic environment
International view of El Salvador Commercial openness & strategic location Foreign direct investment in El Salvador

18 Foreign Direct Investment
Stock USD 8,141 million (35.3 % of GDP) Companies with new owners: AviancaTaca and Davivienda.

19 Investment Opportunities
Specialized Textiles Aeronautics Electronics Medical Devices Offshore Business Services Health Services Tourism Agro-industry Logistics and Infrastructure Footwear

20 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 Quality in aircraft maintenance services
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. 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. In addition to maintenance services for commercial aircraft, a variety of other companies in the emerging aerospace clusters offer the following services: A Free Trade Zone Law and an International Services Law which provides tax incentives to these types of manufacturing. R44 helicopter and corporate airplane maintenance. Distribution and warehousing services for aircraft parts. Available land for the development of industrial operations next door to the International Airport of El Salvador, under Public Private Partnership (PPP) mode. Component maintenance shops. Ground Services. 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 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 A production and export platform
El Salvador: A production and export platform El Salvador possesses suitable climatic and soil conditions for fruit and ornamental plant farming. Availability of water resources for the sustainable development of aquaculture. Suitable soil and climatic conditions for the production of a wide variety of tropical fruits. Negotiated trade agreements open the possibility for the sector to expand to regional and international markets. The country has optimal interconnections for the trade and transport of agro industrial products. 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 Medical Devices Rapid access to markets
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 A strategic partner in medical devices
El Salvador: A strategic partner in medical devices El Salvador has tax incentives that encourage the establishment of foreign companies within a regulatory framework. The country has focused on developing industrial and service parks boosting industrial growth, especially in the textile and plastics sectors. Investors enjoy rapid access to markets with a potential of 1,100 million people through the existing FTAs and thanks to its strategic location. 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 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 El Salvador: A platform for electronic components manufacturing
Setting of strategic alliances with academia to ensure availability of skilled workforce. Existence of a Law on Free Zones offering tax incentives to this type of manufacturing. E-cluster in formation around the AVX Kyocera Company in El Salvador. The best international airport in the region just 35 minutes from San Salvador, and 2.5 hours from Miami. Wide local supply chain in place in the areas of metalworking, plastics, support systems, automation systems, engineering, transport and chemicals, among others. 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 Offshore Business Services
 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 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). Exceptional performance against key indicators (KPIs) such as Sales, C-Sat, FCR, etc. Same time zone for primary customers (U.S. and Canada) and Spanish-speaking markets (91% of the global Spanish-speaking population). Complementary service to other geographical areas and high- end front-office services. Young and committed workforce (60% of the population under 35 years). Time-zone complementarity for customers in Europe and Asia (24/7 possibility). Cultural affinity of the workforce with priority markets. Friendly, hardworking and service-oriented people with neutral English and Spanish accents. Investment Opportunities in Offshore Business Services: Voice Business Process Outsourcing (Call Centers) Non-voice Business Processes Outsourcing (BPOs) Shared Service Centers (KPOs)

30 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 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 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. 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.) . 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 Specialized Textiles and Apparel
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 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 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 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. 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. 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. 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 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 El Salvador: Variety of close-by touristic attractions
 Tax incentives regulated by a Law on Tourism. Short flight times from North and South America. Foreign investors have the opportunity of acquiring property in their own name. The International Airport of El Salvador handles more than 470 arrivals and departures every week. Competitively priced land and low construction costs. Pleasant climate all year round. Rapid access to a variety of tourist attractions. 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 Logistics Easy and timely access to large markets.
  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 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. 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. 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. Puerto de Acajutla, located in Sonsonate Puerto La Unión, located in La Unión Investment Opportunities in Logistics: Logistics activity zones in the proximity of seaports. Airport logistics center Distribution centers

38 Footwear Logistics A platform to export to large markets.
  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. Footwear Logistics A platform to export to large markets. Easy and timely access to large markets.

39 Footwear Industry El Salvador: 2011
Began in the city of Santa Ana with local artisans. 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 Source: USITC The Imports grew by 23% compared to (US $106 million) and 9% annually in the last 6 years. 1 ESTADOS UNIDOS (U.S.A.) 2 GUATEMALA 3 COSTA RICA 4 HONDURAS 5 ESPANA 6 NICARAGUA 7 MEXICO 8 SUD-AFRICA 9 PANAMA 10 REINO UNIDO

40 Services provided by PROESA
Facilitates the evaluation process of the country by offering: Information and Advisory 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. Advises international companies on investment opportunities in El Salvador by providing: Business Opportunities 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: Assistance 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. Establishment and Expansion Assists potential and established investors with: Integral support on procedures required to establish or expand business operations in the country.

EXPORT AND INVESTMENT PROMOTION AGENCY OF EL SALVADOR TEL Edificio D'Cora Primer Nivel, Urb. Santa Elena, Antiguo Cuscatlán, La Libertad, El Salvador, C.A.

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