PARAGUAY LANDOF

OPPORTUNITIES

PARAGUAYTODAY…

TheBest

InvestmentClimateinthe

region(GV)

Top5 RegionalRanking

“DoingBusiness”(WB)

2° Countrywithbest

ROIinSouthAmerica (22%)

WorldClassFoodProducer

LogisticHubFortheRegion

YoungPopulation

(70/35)

Competitive

Platformfoodtoworld,productsand

servicesfortheregion

Stable,solvent,predictibleandreliableeconomy.

(Netcreditor2to1)

CONSOLIDATIONOFMACROECONOMICSTABILITYParaguayEconomicGrowth

1992-2014* ARecordofPriceStability

Annual Inflation

InternationalReserves (%ofGDP)ExchangeRegime

Source: Bloomberg

OURLATESTHIGHLIGHTSARE…

MostCompetitiveTaxScheme

10,10,10

Reestablishedmarketsanddiplomaticagreements

Lessthan 5%ofannualinflationforthe

past5years

60%annualgrowthin

MaquilaExports

GrowingRate ofFDI

60% NewInvestments(Paraguayancapital)

Applicationsto

opennewbusinesseshave

tripled

Monetarystabilityforthepast70years. (TheGuaraníisthemost

stablecurrencyinSouthamerica)

4,5% GDPgrowth(average)forthepast

10years

PARAGUAYINTHEWORLD

RENEWABLEENERGY

1st STEVIAPRODUCER

2ndPRODUCERANDEXPORTEROFYERBAMATE

3rdFLEETOFBARGE

3rdSOYBEANEXPORT

4thWORLDEXPORTEROFYUCASTARCH

4th

MAJOREXPORTEROFSOYBEANOIL

4thMAJOREXPORTER

OFSOYBEANEXPELLER

5thMAJORSOYBEAN

PRODUCER

6thMAJORCORNEXPORTER

6thMAJORWEATEXPORTER

10thMAYORBEEFEXPORTER

6thMAYORBEEFEXPORTER

6th

FLEETOFBARGE

3rd

CONTINUOUSIMPROVEMENTSINCOUNTRYRISKRATING

Country Risk Rating

Cre

dit R

atin

gs

OURVISION

POVERTYREDUCTION

INCLUSIVEECONOMICGROWTH

INSERTIONOFPARAGUAYINTHE

WORLD

“A World Class food producer; open and connected to the world; with high rates of development, rule of law and public safety;

environmentally sustainable; with women inclusion and young entrepreneurship as trademark; and a Government that promotes

solidarity, transparency and zero tolerance to corruption”

STRONGCOMMITTMENTTOIMPROVINGINFRASTRUCTURE

USD16,480millionoftotalinvestmentwithinthenext5years:

Fuente:MinisteriodeHacienda

MAININFRASTRUCTUREINVESTMENTS

PROJECT1:Improvementsofroads: -3,200kmofconstructionofroads -15,000kmofmaintenanceofroads -12,000mlreplacementofwoodenbridges

18212,00 1.296.000.000

PROJECTS2013-2018 LONGITUDE(KM) APROX.COST(USD)

PROJECT2:RoutesNr.1,2,6y7andnetworks 800,49 1.296.000.000

PROJECT3:WaterandSanitationProjects ------- 900.000.000

PROJECT4:Waterway ------- 104.000.000

PROJECT5:Route9andnetworks 1045,77 926.640.000

PROJECT2013-2018 LONGITUDE(KM) APROX.COST(USD)

PROJECT6:MainElectricityPlan ------- 2.573.000.000

PROJECT7:ManagementandMaintenanceSystemsforRoadNetwork-.RoadTolls(11)andfreight(10)

5300,00 560.000.000

PROJECT8:Villeta–Pilar-PasodePatriaRoutes 346,25 346.852.500

PROJECT9:Curuguaty-PedroJuanCaballeroRoutes 285,83 242.315.000

PROJECT10:AccessaSecondBridge(Paraguay-Brazil).(RuralAccess,UrbanAccess,ACI)

47,00 172.787.000

PROJECT11:UrbanElectricTrain 44,00 250.000.000

TOTALINVESTMENT 8.359.624.500

LEGALFRAMEWORKORIENTEDTOENHANCE COMPETITIVENESS

FiscalResponsibilityActPublic–PrivatePartnership

Act5074Act

Investment Security Act: In Process

TaxScheme10:10:10

ImplementationoftheVision "SimpleCountry"-“Serious

Country“

GDPGROWTH

-8%

0%

8%

15%

23%

30%

2012 2013 2014 2015 2016 2017 2018

6,8%6,6%6,8%6,6%

4,8%

13,6%

-1,2%

2,7%2,5%2,7%2,5%0,7%

GDP_Basic GDP_Addi_onal PIBTotal

AVAILABLERESOURCES

YOUNGLABORFORCE

RAWMATERIALWITHQUALITYANDLOWERCOST

GOODFINANCIALFORESCAST

CLEANELECTRICITYWITHLOWERCOST

STRATEGICLOCATION

ECONOMICSTABILITY

LOWESTTAXBURDENINTHEREGION

SUSTAINABLEECONOMICGROWTH

COMPETITIVETAXSCHEME

ParaguayhasthemostcompetitiveTaxSchemeinthe

Region

INCOME: Income on dividends and profits (For Investing> USD 5 mn for 10 years)

0%

DEBT: Tax on remittances, Capital, Interest and Commissions (Per Investment > USD 5 mn)

0%

(VAT) Capital Goods (Inside and outside the country)

0%

TariffsonCapitalGoodsImport(MachineryandEquipment).

0%TAXES PY AR UR BR

CorporateIncomeTax(*)

≤10% 35% 25% 34%

PersonalIncomeTax 10% 35

% 25% 27,5%

ValueAddedTax(VAT) ≤10% 21

% 23% 25%

(*)Obs:Ifdistributedinternationallymaybeupto

27.5%.

+ =

Source:Treasury(www.hacienda.gov.py

Sector CompetitiveFactorsParaguayvs.Brazil

• Clothing• Footwear• Autoparts• Electronics• Agriculturalproducts• ChemicalproductsandMetalwork

Labor

Trainedlaborforce

MachineOperator

Untrainedlaborforce

(-)53,2%.(-)29,3%.(-)35,2%.

Wage/Hours

(AverageinUSD)AverageWage/Month (-)20,7%.

YoungPopulation (+)8,0%.Electricitycost USD/MWh (-)63,6%.

TaxVAT (-)63,2%.

(-)60,0%.INCOMETAXSource:SupplyChainReport,IPIE-IDB,progressreport,jan2014

OPPORTUNITIESTOEXPLORE

AttractindustriesfromArgentinaandBrazil,throughtheGSP+(ExportablecompetitivenessfromParaguay)1

ARGENTINA Y BRASIL UNIÓN EUROPEA

AttractEuropeanIndustriesconsideringthedirectandpreferentialaccesstoMercosur.3

MERCOSUR+CHILE U.E.

Empowerthelocalmarketandinvestmentconsideringthe increasedcompetitiveadvantages.2

PARAGUAY UNIÓNEUROPEA

Fuente:análisisArthurD.Little

Attract European Industries to Paraguay to export to the E. U.

A BAttract European Industries to Paraguay to export to Mercosur and Chile.

B

A

CLOTHINGMANUFACTURE

FOOD

PLASTICARTICLES

INSECTICIDESANDOTHERPESTICIDES

LEATHER

ANIMALFEEDANDOTHERANIMALFOODS

SHOES

12,0% 0,0%

12,2% 0,0%

6,5% 0,0%

6,5% 0,0%

5,5% 0,0%

9,6% 0,0%

17,0% 0,0%

SECTORS MFNTARIFFS GSP+TARIFFS

Source:ANDE,Eurostat,CIER,U.S.BureauofLaborStatistics,KPMGstatistics,OandayanálisisArthurD.Little

INCOMETAX 2012

VALUEADDEDTAX (VAT)2013

ENERGYPRICING-INDUSTRIALSECTOR Year2012(USDxMWHWITHOUTTAX)

LABORCOST2012 (USDxHOUR)–SOCIALCOST

MainCompetitiveAdvantagesinParaguayforCompanies

124216

575712,9

4,2

21,9

6,0

26,3%34%35%

10%

21,4%20,5%21%

10%

-81%-29%-68%

% Diferencia de Paraguay

(2)

-54%-74%-0%

-62%-71 %-71% -53%-51%-52%

(3) (3) (3) (2)(1)

Paraguaycanincreaseitsagriculturaloutputby300%with:

Technology IrrigationSystem

TerritorialPlanning

ParaguayregaineditsstatusfromtheWorldOrganizationforAnimalHealth(OIE)asfreeofFootandMouthDisease(FMD)withavaccinationregime.

ExportsfromParaguay

0

200

400

600

800

1000

1200

1400

1600

Brasil India Australia EEUU N.Zelanda Paraguay Uruguay Canada UE-28 Argentina

TONELADAS

TONELADAS

(Source:ARPwithdataofUSDA,2013)

6°

Tons

MeatExports-2013 ValueofExportsofthemainmeatcompanies

CampoGrande

RiodeJaneiroSantos

PuntaPora

Paranagua

MontevideoBuenosAires

Rosario

N.Palmira

ASU

ConcepciónPJ

LOGISTICHUB: TRANSPORTATIONOFGRAINS,MEAT,MINING

TRANSPORTOFGRAINS

TODAY:ThroughParanaguaorSantos. Time:aprox.45days. Distance:1500kmaprox. Cost:ExpensivefreightduetoInterstatetollsandlimitedtimescheduledforfreight.

PHASE1:BitrainstransportpathwaythroughPedroJuanCaballerotoConcepcion.HidroviatoNuevaPalmira.. Time:between15y20days. Distance:800km.Aprox(Concepción). Cost:aprox.costreductionofUSD500millionperyear.

PHASE2:ExittothePacific.

8.000.000tn/year:iestimateddemandforenergy+woodenproducts

60.000hadeclared:Stockforreforestation

22.000.000tn.

2,75years,sincethenativewoodfinishes

50.000ha/year:Reforestationamountrequiredtomeetcurrent

demand

Alta

Media

Baja

SuitablesurfaceforCommercialReforestation

ORDEN DPTO. SUP.TOTALSUPERFICIE(Has.)

ALTA MEDIA BAJA

TOTALS 9.433.095,80 7,328,713,71 3.243.915,61 20.005.725,12

Mainareasofhousingdevelopment-AsunciónandVicinityAreas

Fuente:SENAVITAT

100.000newhousesperyear

300.000houses(maintenance)

800.000houses(minorrepairsandmaintenance)

ESTIMATEDDEMAND

30%annualgrowthinthesector2015/16:20newprojects-morethan

USD450millionofnewinvestments.

TotalInvestmentUSD426million

MAININVESTMENTS

FOODINDUSTRY

TEXTILEANDCLOTHINGINDUSTRY

METALLURGICALANDLIGHTMETAL

MECHANICSINDUSTRY

AUTOPARTSLEATHERANDFOOTWEARINDUSTRY

REFO

RESTAT

ION

LOGISTIC

LIVESTOCKPRODUCTION,SLAUGHTERFOREXPORT

AGRICU

LTURA

LTR

ANSFORM

ATION

PUBLICINFRASTRUCTU

RE(≥7000USDMILLION)

RIVERPORTSANDLANDPORTS

AIRPORTS WATERWAY

RAILWAY

PASSEN

GER

TR

ANSPORTAT

ION

REALSTATELIVESTOCKANDAGRICULTURALPRODUCTION

BUSINESSSERVICES

FINANCIALSECTOR

AnnualExportsMilion

i

0

56

113

169

225

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

202.073.168

159.441.560140.914.577142.011.964

102.089.020

62.587.35279.496.97674.763.559

54.688.663

27.546.3098.407.6417.930.8382.001.0621.184.351

LaborForce-Persector

ConfeccionesyTextlesAutopartes

CalzadosysuspartesProductosfarmacéutcos

ServiciosintangiblesPlástcosysusmanufacturasCuerosysusmanufacturasMaderaysusmanufacturasAlimentosparamascotasProductosalimentcios

CauchoysusmanufacturasManufacturasdiversas

Pigmento,pinturaycolorantes

0 750 1.500 2.250 3.000

13

16

19

51

140

255

509

662

804

804

1058

1784

2344

AccumulatedExportperitem(En%)

Autopartes

ConfeccionesyTextles

Cuerosysusmanufacturas

Plástcosysusmanufacturas

Calzadosysuspartes

Productosfarmacéutcos

Serviciosintangibles

Maderaysusmanufacturas

Alimentosparamascotas

Pigmento,pinturaycolorantes

Productosalimentcios

Manufacturasdiversas

Cauchoysusmanufacturas

0,00 7,50 15,00 22,50 30,00

0,10970,13240,8175

0,89251,09931,2214

4,7218

7,034611,430311,575

19,9845

20,25220,7289

52%annualgrowthinthesector

24newapprovedprojectsapproved(2014).

20%totalexportstoBrazil(BraziliancompaniesinPY).

10newprojectsinthepipeline.

PARAGUAY LANDOF

OPPORTUNITIES

Av.Mcal.López3333c/Dr.Weiss Tel:(+59521)6163028

e-Mail:info@rediex.gov.py

THANKYOU