Diapositiva 1

1
INVESTMENT OPPORTUNITIES IN PERU
INVESTMENT OPPORTUNITIES IN
May 2007
2
PERU OFFERS
Maintaining the basic macroeconomic equilibriums Inflation between 1,5 and 3,8 in the last 7 years. Fiscal Surplus of 2 forecasted for 2006.
An economy, working within the globalization process and with access to regional commercial blocks.
Stable and favorable investment climate. Investment policies based on international principles.
GDP Growth of 8 for 2006 and expected to be close to 8 for the next years.
CAN, APEC, Mercosur, European Union and the United States of America with annual commercial exchange greater than US 38 600 MM.
Legal Stability Agreements. 32 International Investment Agreements.
3
Investment plays an important role in the
countrys Economic Growth and signals a promising
future
Source Central Reserve Bank of Peru, National
Institute of Statistic and Information and SUNAT
4
Sustainable economic growth with annual
forecasted rate greater than 8
8
6
GDP Growth (Annual variation )
4
Developed
2
World
0
80
82
84
86
88
90
92
94
96
98
00
02
04
06
Source International Monetary Fund and the
Central Reserve Bank of Peru. Forecasted by
Central Reserve Bank of Peru (9th February 2007),
Ministry of Economy and Finance and the National
Institute of Statistic and Information.
5
Annual Exports growth greater than 30
Accompanied by private
investment growth
(average annual variation)
Private Investment grew
25.0
Private Investment grew
25.0
20,1 in 2006
20.0
20.0
Private
Private
Investment
Investment
15.0
15.0
10.0
10.0
5.0
5.0
0.0
0.0
-
5.0
-
5.0
-
10.0
-
10.0
01
02
03
04
05
06
01
02
03
04
05
06
Source Central Reserve Bank of Peru.
Forecasted
6
Increase in the imports of capital Goods (
Millions of US)
Rise in the commercial exchange (Millions of US)
Capital goods for the Industry
Transport Equipment
Others
Source Central Reserve Bank of Peru.
7
Peru is progressively reducing its fiscal
deficit ( of GDP)
By increasing its central government tax revenues
2,5
2,5
2,0
1,5
1,0
0,5
0.0
0,0
-0,5
-0,4
-1,0
-1,5
-1,1
-2,0
-1,7
-2,3
-2,5
-2,5
-3,0
-3,3
-3,5
2006
2007
2004
2005
2000
2001
2002
2003
Source Central Reserve Bank of Peru.
Forecasted by the Ministry of Economics and
Finance
Source SUNAT
8
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9
With increasing Net International
The careful and responsible management of our
Reserves that represent more than 12
economic program has allowed us to keep our
months of imports
country risk index among the lowest in the region.
JP Morgan Index EMBI
Updated 17 April, 2007
Source Central Reserve Bank of Peru.
Source

Bloomberg
10
Just one step away from the Investment Grade
SP
/
Moody's
Characterstic
Latin American Ranking
Fitch
AAA
Aaa
AAA
Aaa
Risk
free
Risk
free
AA
Aa1
AA
Aa1
Superior
Superior
AA
Aa2
AA
Aa2
AA
-
Aa3
AA
-
Aa3
Investment
A
A1
A
A1
High capacity of
High capacity of
Grade
A
A2
A
A2
repayment
repayment
A
-
A3
A
-
A3
BBB
Baa1
BBB
Baa1
Moderate capacity of
Moderate capacity of
BBB
Baa2
BBB
Baa2
repayment
repayment
BBB
-
Baa3
BBB
-
Baa3
BB
Ba1
BB
Ba1
Peru close
Some capacity of
Some capacity of
to the
BB
Ba2
BB
Ba2
repayment
repayment
investment
BB
-
Ba3
BB
-
Ba3
grade
B
B1
B
B1
High uncertainty in the
High uncertainty in the
B
B2
B
B2
capacity of repayment
capacity of repayment
B
-
B3
B
-
B3
CCC
Caa1
CCC
Caa1
Highly vulnerable
Highly vulnerable
CCC
Caa2
CCC
Caa2
to default
to default
CCC
-
Caa3
CCC
-
Caa3
Ca
D
Ca
D
Default
Default
Source

Bloomberg
11
Peru offers a favorable legal framework for
foreign investment ...

• Non discriminatory treatment.
• Irrestrictive access to most economic sectors.
• No performance requirements.
• Free transfer of capital.
• Free competition.
• Guarantee for Private Property
• Freedom to purchase stocks from locals.
• Freedom to access internal and external credit.
• Freedom to pay royalties.
• Network of investments agreements and member of
  ICSID and MIGA

Legal Framework Constitutional provisions, Law
for the Promotion of Foreign Investment,
Legislative Decree N 662, Framework Law for
Private Investment Growth, Legislative Decree N
757, Law for the Promotion of Private Investment
in Infrastructure and Public Service Works,
Approved by Supreme Decree N 059-96-PCM
12
With a legal system that guarantees basic rules
and statutes that will not change
For national and foreign investments
and his receiving company

• National treatment
• Free availability and remittance of foreign
  currency
• Income tax rules applicable to dividends.

• Recruitment regimes
• Regimes for the promotion of exports
• Income Tax Regime.

During ten years. In case of concession, the term
is subject to the term of contract (60 years
maximum) The only requirement minimum investment
of US 5 Million (US 10 Million in mining and
hydrocarbon sectors)
With capitals coming from abroad
13
With a stable tax regime, which main taxes are
Note Burden goods fuels, luxury goods,
liquors and cigarettes Legislative Decree No.
973 (12.03.07) standardizes the treatment for all
economic activities regarding the advance
recovery of the value added tax (VAT).  It will
come into force and effect the first business day
of the month following the 90 calendar days that
may take for this Decrees regulations to be
prepared and published. It is established that
tax payers who purchase capital assets but do not
start operations, within the framework of
investment contracts subscribed with the State,
will be able to recover the VAT paid in said
purchases.
14
and a reduced tariff structure and low tariff
dispersion
TARIFF LEVELS AD-VALOREM SURCHARGES TARIFF LINES
0 3 028 43,29
12 2 843 40,65
17 48 0,69
20 759 10,85
25 316 4,52
Total 6 994 100.00
SIMPLE AVERAGE APPLIED TARIFF RATE SIMPLE AVERAGE APPLIED TARIFF RATE 8.29
Source SUNAT
15

• Free market access to
• Andean Community of Nations
• Chile
• MERCOSUR
• Mexico
• United States
• European Union
• Thailand

Trade Promotion Agreement with Singapore under
negotiations
16
Peru has the largest Chinese population in South
America

• The Chinese came to Peru in the second half of
  the 19th century. Nowadays 15 of the country's
  total population has some Chinese ancestry.
• The Chinese influence in Peru is still very
  noticeable, especially in the culinary field.

17
Factors promoting trade and investment
China
Peru

1. Great source of inputs.
2. Source of water and energy, besides the ability
   to transform raw material.
3. Need of investments to develop infrastructure.
4. Demand of value added products.

1. Need of inputs to keep growth rates.
2. It requires supply sources with added value
   because of the lack of water and energy.
3. Availability of funds.
4. Its high volumes of production justify the
   development of added value proudcts.

18
Bilateral trade (US million)
Source SUNAT
19
Bilateral trade (US million)
Source SUNAT
20
Bilateral trade principal products
Principal exports from Peru to China
Principal imports from China

• Domestic appliances
• Machines for the processing of information
• Motorcycles
• Parts and accessories of machinery
• Devices of telecommunication
• Units of Memory
• Textiles
• Tires for cars and trucks
• Video cameras

• Flour, powder and "pellets" of fish.
• Copper, zinc, molybdenum, lead and concentrates.
• Preparations and conserves of mollusks
• Raw Oils of oil

21
Bilateral trade exporters importers
Main exporting firms
Main importing firms

• COMPANIA MINERA ANTAMINA S.A
• CONSORCIO MINERO S A CORMIN
• TEAM EXPORT S.A.C.
• SOUTHERN PERU COPPER CORPORATION
• BHP BILLITON TINTAYA S.A.
• AYS S.A.
• SHOUGANG HIERRO PERU S.A.A.
• VOLCAN COMPANIA MINERA S.A.A.
• CIA MINERA RAURA S A
• CORPORACION PESQUERA INCA S A

• SAGA FALABELLA S A
• LG ELECTRONICS PERU S.A.
• DELTRON INTERNATIONAL S A
• SONY SUCURSAL DEL PERU
• IMPORTACIONES HIRAOKA S.A.C.
• NEXTEL DEL PERU S.A.
• TECH DATA PERU S.A.C.
• PROCTER GAMBLE PERU S.R.L.
• TIENDAS POR DEPARTAMENTO RIPLEY S.A.
• TIM PERU SAC

22
Investment up to 2006 US250.000.000
Sectors
Principal Investors

• Shougang Corporation
• Chen Kuo Ksiung
• China National Import and Export Commodities
  Inspection Corp
• HSBC Latin America Holdings Limited
• Hsiang Sheng Huo
• Qixin Su
• Lin Zhang

• Commerce
• Finance
• Fishing
• Hydrocarbon
• Mining
• Services
• Tourism

23
Peru
Strong figures
Strategic location
Excellent opportunities