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Peru:Business hub in the South American Pacific

Great potential and excellent conditions for your investment

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Peru:Business hub in the South American Pacific

The country’s central location on the west coast of South America makes possible its projection as the productive and trade core in the region.

El Callao, the country’s main port (currently in undergoing expansion process) stands out among the most dynamic ports of the South American Pacific Coast.

Furthermore, the development of road infrastructure in the framework of the Initiative for the Integration of the South America

The Trade Promotion Agreement (TPA) Peru – the United States, signed in 2007 and in force since February 2009, consolidates the immediate relief for more than 7,000 tariff items, benefiting in a 100% the Peruvian exports.

The negotiation of the TPA with the United States set new standards in terms of goods and services circulation and investment protection, which have been the basis for negotiations on deepening the Economic Complementation Agreement (ACE) with Chile, the Early Harvest Protocol signed with Thailand, and the Free Trade Agreements (FTAs) signed with EFTA countries: Singapore, Canada, China and the European Union.

On these same basis, the extension of the ACE with Mexico and the signing of an FTA with South Korea and Japan is being negotiated.

Regional Infrastructure (IIRSA), will support the consolidation of Peru as an effective linking bridge between the markets of South America (particularly Brazil), Asia and the United States.

Peru is consolidating as an attractive investment destination and is projected as an efficient export platform from which, thanks to the current trade agreements will be able to access with preferences a market of more than 2,000 million people.

ACTIVE INTEGRATION IN THE WORLD

WORLDWIDE: IN LATIN AmERICA:1st silver producer and 2nd copper and zinc producer, and 3rd country with the largest reserves of gold, silver, copper and zinc. 1st producer of fishmeal and fish oil.1st exporter of asparagus, organic coffee and organic bananas and 2nd exporter of dry paprika. 1st in productivity of sugarcane (potential for development of biofuels). Investment grade credit rating.

1st producer of gold, zinc, tin and lead.2nd in natural forest areas.3rd largest country in South America.Important source of natural gas in the South American Pacific Coast. 1st place in business environment (Getulio Vargas Foundation), investor protection (World Bank), and receptiveness of government to private investment in infrastructure (World Economic Forum).

In Latin America, Peru is a member of the Andean Free Trade Zone, which also groups Bolivia, Ecuador and Colombia (Andean Community) and has signed an ACE with MERCOSUR. Furthermore, it has been studying the beginning of negotiations for the signing of an FTA with Central America.

Finally, since 1998, Peru is a full member of the Asia-Pacific Economic Cooperation Forum (APEC), the platform from which it is negotiating, along with the United States, Australia and Vietnam, its incorporation to the Trans-Pacific Strategic Economic Partnership Agreement (TPP) which New Zealand, Chile, Singapore and Brunei Darussalam already are part of.

The investors who are established in Peru can gain access to these expanded markets, also leveraging our natural resources and competitive advantages.

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Message from Alan García,President of Peru

Peru is now a very attractive country for foreign and national investors. To its diversity of natural resources and investment opportunities offered,a sound

macroeconomic balances and political stability can be added. This has been shown during the recent international crisis, which impact on our country has been limited, making our economy grow about 1%, in 2009, while other countries receded. The Projections from international analysts indicate that Peru will recover from this year its high growth rates it had in previous periods.

The political and economic reforms have allowed Peru to significantly improve its business environment, strengthening a favorable legal framework conducive to investment and reducing the country risk. One of our main objectives has been to integrate into new international markets. The recent signing of an FTA with China confirms us as an exporting country which is increasingly involved in global trade.

This promoter momentum is complemented with major projects that are being carried out both in transport infrastructure and logistics, and production of energy, mining, irrigation, etc. And we are in an energy transformation which will give a greater role to natural gas, from which new discoveries are expected, and have also given rise to a fledgling petrochemical industry.

With energy at competitive prices, various natural resources, a promoter framework for investment and a creative and hardworking population, we are an excellent business hub in the South American Pacific. Therefore, we welcome those who choose to invest in our territory, thus cooperating in the task of increasing the welfare of all Peruvians.

Photo: Government Palace

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A SOUND AND SUSTAINABLE GROWTH

The Peruvian economy has demonstrated an excellent economic performance. In 2008 the GDP achieved a growth rate of 9.8%, among the highest in the world, accumulating eight years of continuous growth. In 2009, despite the global economic slowdown, Peru continued its growth path, registering an increase of almost 1%. Note that for several months in late 2009 and early 2010, GDP growth was between 5% and 6%, indicating the recovery of the accelerated growth rate.

To this we must add the confidence generated in the economic agents from the continuity and the responsible ruling of economic policies

For the next few years the prospects for the Peruvian economy remain favorable, based on execution notices and commissioning of major investment projects, in addition to high expectations for domestic consumption.

PRIVATE EXPORTS AND INVESTmENT

While the value of exports declined in 2009, due to the international economic crisis, this is located in a level four times higher than in 2000.

After growing for three consecutive years at rates exceeding 20%, private investment also showed a contraction in 2009, reaching a level of US$ 22,000 million.

These two variables, growth drivers in the Peruvian economy, are showing from the early months of 2010 signs of recovery. Thus, actual exports during February had an increase of 6.8%, while investment in construction grew by 16%. On one hand the local demand has provided additional impetus to economic growth.

2000 2001 2002 2003 2004 2005 2006 2007 2007

Private Investment (million US$)

27,330

22,387

8,668 8,356 8,3959,221

10,54512,285

15,117

19,484

Source: Central Reserve Bank of Peru and the ministry of Economy and Finance

2008 2009

5,000

10,000

15,000

20,000

25,000

30,000

100 100.2 105.2 109.5 114.9122.8

2000 2001 2003 2004 2005 2006

PBI (Index 2000=100)

Source: Central Reserve Bank of Peru.

132.3

144.1

158.2 159.6

2002 2007 2008 2009

20

40

60

80

100

120

140

160

PeruOffers solid macroeconomic results and attractive conditions for private investment

Business Exchange (million US$)

Exports ImportsTrade Balance

Source: Central Reserve Bank of Peru and the ministry of Economy and Finance

2000

-10,000

10,000

20,000

30,000

40,000

50,000

60,000

2001 2002 2003 2004 2005 2006 2007 2008 2009

-403 -179321 886

3,0045,286

8,986 8,2875,8733,090

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Source: Central Reserve Bank of Peru  mACROECONOmIC SOUND BALANCE

The sound economic performance in Peru are part of a clear macroeconomic balance. Therefore, as a result of a sound economic management, Peru continues to have one of the lowest inflation rates in Latin America. While the exchange rate under a regime of free assets is also one of the most stable in the region.

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2000 2001 2002 2003 2004 2005 2006 2007 2008

Net International Reserves (Total Amount in million US$)

31,19633,135

8,180 8,613 9,598 10,194

12,63114,097

17,275

27,689

Source: Central Reserve Bank of Peru

2009

2000 2001 2002 2003 2004 2005 2006 2007 2008

State Foreign Debts(% of GDP)

JP morgan EmBI+ Index(Basic points, differential on USTreasury Bonds)

15.10% 16.20%

36.02% 35.17%36.50% 37.12%

35.08%

28.03%

23.76%

18.70%

Source: Central Reserve Bank of Peru

20090.0%

10.0%

20.0%

30.0%

40.0%

1,000

900

800

700

600

600

500

400

300

200

100

Apr-

06

Jun-

06

Sep-

06

Nov-

06

Jan-

07

mar

-07

Jun-

07

Aug-

07

Oct-

07

Jan-

08

mar

-08

may

-08

Jul-0

8

Sep-

08

Nov-

08

Feb-

09

Apr-

09

Jun-

09

Aug-

09

Oct-

09

Dec-

09

mar

-10

EmBI + PeruLatin America

INTERNATIONAL ACKNOWLEDGEmENT

In mid-December 2009 Moody’s Investor granted Peru, the investment grade by increasing the credit risk qualification of foreign currency debt to Baa3 from Ba1 level. This rating is added to the previously rating granted by Standard & Poor’s (July 14, 2008) and Fitch Ratings (April 2, 2008).

This reclassification reflects the improved political and institutional stability environment, the positive evolution of the main macroeconomic variables in the country, reduction of the degree of dollarization, monetary stability, reduction of the debt ratio and the accumulation of reserves.

Peru keeps a strong international liquidity position, with a level of net international reserves of over US$ 33.000 billion, a figure equivalent to 18 months of imports, 4 times the monetary base and 1.6 times the external public debt, which can ensure the compliance with international liabilities that Peru holds.

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Infrastructure DEVELOPING COmPETITIVINESS OF THE COUNTRYThe exponential growth of international trade in Peru, and the resulting consolidation of exporters poles, are generating a substantial increase in demand for logistics services and infrastructure.

It is estimated that Peru requires annual infrastructure investment of over 5% of GDP, that is between US$ 6,000 and US$ 8,000 million. This represents a great business opportunity for investors, infrastructure operators and construction companies that can participate in the sector through various forms such as Public Private Partnerships (PPP) and Private Initiatives (PIs)1.

ProInversion currently has a mandate to transfer under the PPP scheme a portfolio of over 40 infrastructure projects, around US$ 5,000 million in investment requirements. These projects are related to sectors such as energy, telecommunications, irrigation, pipelines, airports, ports and road transportation projects, among others.

SECTORS AND PROJECTS TABLE Land Transport•Road IIRSA Centro: section 2•Road Autopista del Sol: Sullana section –

Frontier with Ecuador•Road Panamericana Sur: Ica – Frontier with

Chile. •Huancayo – Huancavelica Train•Lima and Callao mass Transportation Electric

System Line 1: Villa El Salvador – Av. Grau.-San Juan de Lurigancho

•Cajamarca – Bayovar Train•Transcontinental train “Brazil – Peru” (FETAB)Airports•Second Group of Regional Airports•International airport of CuscoPorts•North multipurpose Terminal of Callao•San Juan de marcona Port Terminal•San martin Port Terminal (Pisco)•Salaverry Port Terminal •Ilo Port Terminal•Pucallpa Port Terminal •Iquitos Port Terminal•Yurimaguas Port Terminal•Navigable River Routes: Yurimaguas-IquitosEnergy•Transmission Line Tintaya - Socabaya (220 Kv)•Transmission Line Talara – Piura (220 Kv)•Transmission Line macchu Picchu – Abancay –

Cotaruse (220 kv)•Transmission Line Trujillo – Chiclayo (500 KV)•Santa Teresa Hydroelectric Power Station•Cold Power Generation Reserve (800 mW)

Natural Gas •Gas pipeline to Chimbote •Distribution Sytem of Natural Gas in

Quillabamba, Cusco, Puno, Arequipa moquegua and Tacna cities

•Distribution System of Natural Gas in Ayacucho, Junín and Ancash Departments

•Thermal Plant in Quillabamba – Cusco (200 mw)

Telecommunication •C Band of 1900 mHz•Rural Broadband Puerto maldonado

– Juliaca •Buenos Aires Canchaque

implementation of Telecommunication Integrated services

•Broad band for the development of VRAE

•Broadband Lurin – Camisea Agriculture •Special Project majes - Siguas II •Special Project Chavimochic, phase

1 – third stage Tourism and Real Estate•San Lorenzo Island•Kuelap Cable car •Lobitos Camp •Former San martin headquarters Sanitation •La Chira PTARPenitentiary Facilities •Penitentiary Facilities in Lima region

1 According to current legal framework (L.D. 1012) Public – Private Partnership can be self-sustainable or co-financing. In Private Initiatives the co-financing cannot be required to the State.

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Infrastructure Airports: Six regional airports located

in the south of the country will be given in concession for 25 years. These will require investments of over US$ 200 million. It is also under study the construction of a new airport in Cusco.

Road System: ProInversion promotes the concession of section 2 of the Central Branch of the Amazonas Axis (Road IIRSA Centro), which will connect the city of Lima to the main cities and productive areas of the central Highlands and Forest. In addition, will grant in concession 2 sections of the Panamerican highway that will respectively enhance the connectivity with the borders of Ecuador and Chile.

Ports: The National Port Authority (APN) and ProInversion promote the granting in concession of five maritime terminals (North Terminal of Callao, Salaverry, Pisco, Ilo and Marcona) and three river ports (Iquitos, Yurimaguas and Pucallpa) of the interconnection with Brazil. Investment is estimated over US$ 1.700 million.

PROINVERSION PROJECTS IN AGENDA

Foto: Ana Cecilia Gonzales-Vigil

Power Transmission: In order to strengthen the National Interconnected Electric System (SEIN), ProInversion has the mandate to give in concession four transmission lines, one hydroelectric plant and a cold power generation reserve system. Projects require investments of US$ 700 million

Irrigation: ProInversion will award in concession the works of the Second Stage of the Special Project Majes- Siguas in Arequipa region (South Coast), and Phase I - Third stage of Chavimochic, in La Libertad Region (North Coast). Projects that will enhance 46.000 and 31,000 hectares of agricultural use, respectively.

Peru represents a growing and dynamic APPs market in Latin America

PRIVATE INITIATIVESIn order to encourage private sector participation in infrastructure development, the Peruvian Government promotes a legal framework for the development of private initiative.• Through this method private investors can submit proposals for investment projects on public assets and services.

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MiningLATIN AmERICA mINING CLUSTER The Peruvian Mining sector is noted for its geological potential and diversity of base and precious metals, which are extracted throughout the territory, and it has allowed a global positioning as the first silver producer and second largest producer of copper and zinc and also leads in Latin America the production of gold, lead, tin and tellurium. According to the portfolio of projects registered by the Ministry of Energy and Mines (MEM), we expect investments of over US$ 37,000 million in the coming years, ensuring a sustained growth in activity in the sector and leading to annual investment levels of around US$ 5,000 million.

The Peruvian mining wealth, the availability of quality cadastral and geological information, local supply of mining providers and the legal mining promoter framework of private investment, make Peru one of the most attractive destinations for mining investment in the world.

HIGHLIGHTS DATA OF THE mINING SECTOR

The sector records exports of around US$ 17.00 million annually.

The geological potential of Peru stands out greatly, becoming the third country in the world with the largest reserves of gold, silver, copper and zinc (according to USGeological Survey - USGS).

The Fraser Institute calls Peru as one of the most attractive destinations for exploration in Latin America, indicating that US$ 350 million were invested in this activity, in 2009.

Wide local availability of inputs and services required for the development of the mining industry contribute to the consolidation of Peru as Latin American and global mining cluster.

Only 10% of the territory of Peru’s mining potential has been explored and only 6% is currently being used

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2000

3,220 3,2053,809

4,690

7,124

9,790

14,735

17,32818,656

16,859

2001 2002 2003 2004 2005 2006 2007 2008 2009

mining Exports (million of US$)

Peru has a significant potential in non-metallic minerals such as travertine, marble, diatomite (1 ° producer in South America), bentonite and borates (one of the few countries with deposits of this mineral).

The utilization of phosphates from Bayovar by the Brazilian company CVR (expected production of 3.9 million tons of phosphate rock per year) and further processing into fertilizer is a clear example of the type of investment that can be developed in non-metallic segment.

Virtually every major mining company in the world operates in the country.source: Customs and BCRP

mAIN EXPORT mINING COmPANIES IN PERU

(million US$)

Newmont Yanacocha Gold 1,616 2,082

Southern Peru Copper CorporationCopper, molybdenum and silver 2,886 1,932

Compañía minera AntaminaCopper, molybdenum and zinc 2,845 1,904

minera Barrick misquichilcaGold 1,379 1,317

Freeport macmoran Cerro VerdeCopper 1,710 1,251

CorminCopper, lead, zinc and others 1,012 1,232

Procesadora SudamericanaGold 485 715

AYS Copper, lead and zinc 541 557

mINSUR Tin 455 271

Doe Run PeruSilver, copper, lead, zinc and others 1,236 254

TOTAL 14,164.8 11,515.2

Source: Customs and Adex Data Trademade by: ProInversion

Foto: Ana Cecilia Gonzales-Vigil

NON-mETALLIC POTENTIAL

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Fisheries and Aquaculture

FISHING WORLD POWERPeru has exceptional natural features for the development of fisheries and aquaculture. The presence of various currents compared in the 3,080 kilometers of coastline favor upwelling of nutrients that make the Peruvian sea one of the most productive in the world.

The Peruvian oceanographic conditions have the potential to sustainably extract about 8 million metric tons (MT) per year in seafood products. This has enabled a level of exports of indirect human consumption (CHI by its abbreviation in Spanish) of US$ 1.683 million (fishmeal and fish oil) and US$ 526 million in products for direct human consumption (CHD by its abbreviation in Spanish).

Peru is the world’s leading exporter of fishmeal. It produces annually about 1.5 million MT, which are almost entirely for the foreign market. It represents approximately 35% of world production and 45% of international trade.

In recent years the sector has shown a great

Our geographic location provides easy access to Asian markets, our primary target market.

2000

1,131 1,1231,056 1,026

1,381

1,6261,768

1,958

2,413

2,210

2001 2002 2003 2004 2005 2006 2007 2008 2009

Fishery Exports(million US$)

Source: Customs and Adex Data Trade

activity in both local and foreign investment. The foreign capital come mainly from China and Norway, which are also major fishing powers.

In the CHI (IHC - by its English abbreviation) segment, the investment was directed to fishmeal processing of prime and super prime quality. In the segment of CHD (DHC by its English abbreviation), the funds were earmarked for fleet

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The Aquaculture activity in Peru is also very favorable. The extensive coastline, the large number of water bodies, the availability of super prime quality fish meal, relatively stable climates define the country as an excellent space for aquaculture development with potential production along the entire year.

On the North Coast the sea shrimp, tilapia farming (particularly in reservoirs) and scallops are developed. The cold waters of the south favor the breeding of turbot, sole, abalone and oysters, among other species. In the highlands abound projects based on trout and in the Amazon basin the aquaculture of native species as paiche is developed.

In addition, aquaculture has incentives that include a lower rate of income tax (15% versus the overall rate of 30%)

mAJOR FISHING EXPORTING COmPANIES IN PERU

(million US$)

COmPANIES 2008 2009

Tecnológica de Alimentos 372 378

Austral Group 176 202

Corporación Pesquera Inca 201 188

Pesquera Diamante 159 178

Pesquera Hayduk 213 160

Pesquera Exalmar 106 124

CFG Investments 103 100

Pesquera Ribaudo 38 34

CompaníaPesqueradelPacíficoCentro 54 33

Colpex International 44 33

TOTAL 1, 072.1 1,429.7

Source: Customs y Adex Data Trademade by: ProInversion

Foto: Ana Cecilia Gonzales-Vigil

acquisition and construction of plants for canned and frozen species such as mackerel, bonito, squid or jumbo squid, tuna and anchovy (Peruvian tuna).

It should be noted that in the last 5 years the DHC exports have accelerated, growing at an average annual rate exceeding 12%. The potential of this segment is still underdeveloped with plenty business opportunities .

AQUACULTURE POTENTIAL

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AgrobusinessHIGH VALUE PRODUCTSPeru is the world leader in export of fresh asparagus, organic coffee and organic bananas, is the second largest exporter of dried paprika, the fourth in fresh mango and the sixth in fresh avocado and canned artichokes. Also includes other crops such as grapes, sweet onion, olives, and various species that are gaining space in the international market.

Exports of the sector have multiplied by four in less than 10 years, reaching in 2009 the figure of US$ 2.461 million. This is a result of major business enterprises (specially in the Coast) that have generated a greater diversification of export supply with growing specialization in high value crops, mainly fruits and vegetables.

In Peru, the land area suitable for cultivation is estimated at 8 million ha. In order to promote its intensive use, the State executes and promotes investment in irrigation infrastructure. That is the case of Chavimochic and Olmos projects (on the north

coast), which have allowed, in its early stages, ensuring the ava i lab i l i ty o f r e g u l a t e d irrigation in 40,000 and 38,000 ha., r e s p e c t i v e l y , g e n e r a t i n g t h e d e v e l o p m e n t o f a g r o - e x p o r t clusters.

BIOFUELS:

According to FAO, Peru get the highest global yield in sugarcane (121 MT / ha.), and ranks eighth in oil palm yield (17.27 MT / ha.). This represents an important comparative advantage for biofuel production.

It should be noted that the Peruvian law promotes the commercialization of biofuels through mandatory blending of diesel with biodiesel, and gasoline with ethanol.

2000

643 644766

848

1,126

1,339

1,794

1,967

2,5972,461

2001 2002 2003 2004 2005 2006 2007 2008 2009

Agriculture exports(millions of US$)

source: Customs and Data Trade

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SECTOR DATA HIGHLIGHTSDue to its location, excellent

climatic and soil conditions (land), Peru has the advantage of being able to schedule the harvest period, taking advantage of «seasonal windows» and therefore get the maximum price. (U.S., Europe and Asia).

For Being a dry tropic near the Equator Line, the Peruvian coast has a stable climate, free from heavy rains and vertical solar radiation, which gives «natural greenhouse” conditions.

The sector has a promoting regulatory framework that includes a lower rate of income tax (15% versus the overall rate of 30%), 20% annual depreciation of investments in infrastructure (hydraulic and irrigation), and implementing the system of advance recovery of value added tax without requiring a minimum investment amount.

Seasonal Supply of major Export Products Offer

JAN FEB DECNOVOCTSETAGOJULJUNmAYAPRmAR

Asparagus

Coffee

mango

grape

Avocado

Onion

Banana

Olives

Tangerine

Tangelo orange

Paprika

Piquillo pepper

Artichoke

Sugar cane

Source: ministry of Agriculturemade by: ProInversion

Foto: Ana Cecilia Gonzales-Vigil

It is estimated that Peru has 8 million hectares suitable for cultivation, of which only three hectares are harvested annually.

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TourismSOUTH AmERICA TOURISm CAPITAL

As a result of promotional efforts and the growing international recognition of the Peruvian tourist attractions, the number of tourists increased from less than one million in 2002, to over 2 million in 2009. While the foreign currency generated by the sector rose from US$ 837 million to US$ 2.471 million in the same period.

However, tourist arrivals is still low considering the vast range and diversity of destinations with tourism potential still to be developed.

Currently, 75% of inbound tourism in Peru is historical cultural. However, tourism offers in Peru a wide range of resources, which allows the development of various proposals such as nature tourism, mystical tourism, experiential tourism, adventure tourism, among others.

Many companies are taking advantage of the huge potential of tourism businesses, referring both to the provision of travel services for the traveler as hotel infrastructure segment in which investments have been announced of at least US$ 1,000 million, in the category of 4 and 5 star and boutique hotels.

Investment opportunities include:The development of the Northern

Tourist Circuit, which stretches from the coast, where we find warm beaches, cities and archaeological sites as Chan Chan and Túcume and Sicán museums and Royal Tombs of Sipan to the Upper Amazon, where is located the walled city of Kuelap, a destination with potential to achieve a similar recognition as Machu Picchu.

Consolidation of the South Circuit, which is centered in the city of Cusco and Machu Picchu (considered one of the Seven Wonders of the Modern World), but is generating synergies with nearby attractions as the archaeological complex of Choquequirao, the Colca Canyon and the Valley of Volcanoes in Arequipa, and the Uros Islands on Lake Titicaca in Puno.

The promotion of tourism in the Peruvian Amazon, using the vast biodiversity that the area offers and the huge business potential in terms of the growing interest in ecotourism and experiential tourism in the world.

In 2008 almost 2 million of foreign tourists visited Peru, but the figure is still low compared to the country’s potential.

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SECTOR HIGHLIGHTSUnique cultural destination:

nine attractions are classified by UNESCO as a cultural and natural heritage of mankind.

Current landscape: natural attractions ranging from the beaches of the Pacific Coast to the Amazon Rain Forest, through the Andes with peaks over 6,000 meters. Vast flora and fauna: 84 of the 114 life zones in the world, Peru is considered mega-diverse country. Peruvian territory is the home of 1.730 species of birds, 330 species of amphibians, 462 mammals species and 25,000 plant species (4,000 species of orchids).

Some origen countries with greater growth in 2009(Var. %)

Source: mINCETUR

It should also be noted that Peruvian cuisine is gaining significant international recognition. It has been listed by The Economist as one of the 10 best cuisine in the world and has become an additional reason to visit Peru.

Foto: Xavier Conesa

2000

997 967 9981,070

1,277

1,4871,635

1,812

1,949

2,139

2001 2002 2003 2004 2005 2006 2007 20092008*

Tourists arrival(Thousands of people)

Source: mINCETUR

Spain 7.0%

Australia 8.4%

Colombia 13.9%

Argentina 25.6%

Brazil 28.7%

Canada 5.2%

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Peru offers to foreign investment:

• Non-discriminatory treatment compared to nationals.

• Unrestricted access to most economic sectors.• Not imposing performance requirements.• Free transfer of capital.• Free competition.• Guarantee to private property.• Freedom to purchase shares from nationals.• Freedom to access internal and external credit.• Freedom to royalties remittances.• Free technology procurement.• Freedom to contract abroad insurance.• Network of agreements for the promotion and

protection of investments.

With the possibility of signing Legal Stability Agreements that guarantees ...

TO INVESTORS• Stability of the right to non discrimination.• Stability of the Income Tax regime.• Stability of free availability of foreign exchange.• Stability of free remittance regime of profits,

dividends and royalties.

TO THE RECEIVING COMPANY• Stability in Manpower recruitment Regimes.• Stability of export promotion schemes.• Stability of Income Tax Regime.

Conditions of the Legal Stability Agreements

• Minimum investment commitment of $ 5 million in any sector of the economy and US$ 10 million in the cases of mining and hydrocarbons.

• The validity of the agreement is 10 years. In the case of concessions, the validity is extended to the period of the concession.

Excellent conditions for Investments in Peru

According to the World Economic Forum Peru leads the world ranking of global macro-prudential soundness indicator, which reflects the financial stability that the country offers. Moreover, at Latin American level Peru is in the first position in the receptiveness index to private investment in infrastructure.

Peru leads the world ranking of g lobal macro-prudentia l s o u n d n e s s i n d i c a t o r

ATTRACTIVE REGULATORY FRAmEWORK

Source: World Economic Forum, Benchmarking National Attractiveness for Private Investment in LA Infrastructure. 2007.

1. Peru

6. China

8. Switzerland

9. France

10. Holland

11. Mexico

17. Argentina

35. Brazil

39. Chile

41. Colombia

51. Venezuela

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P e r u r a n k s f i r s t i n t h e region regarding government r e cep t i v enes s t o p r i v a t e investment in infrastructure

1. Peru

2. Colombia

3. Chile

4. Uruguay

5. El Salvador

6. Bolivia

7. Brazil

8. Dominican Rep.

9. Mexico

10. Guatemala

11. Venezuela

12. Argentina

5.8

5.6

5.5

4.8

4.6

4.5

4.2

4.2

4.1

4.0

3.2

5.3O

5.43

5.48

5.495.70

5.82

6.53

3.184.50

4.66

4.78

3.1

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Peru has signed international Investment Agreements with 33 countries of the Pacific Basin, Europe and Latin America, strengthening the policy of openness and a stable and predictable climate framework for investment.

Bilateral investment agreements recently negotiated with Colombia and Japan, and the investment chapters of FTAs such as those signed with the United States, Chile, Canada and Singapore are based on a negative list approach, with national treatment principle applied from the establishment phase of investment. They also include provisions for transparency and non-imposition of performance requirements. It is also worth noting the recent closure of negotiations on a trade agreement between Peru and the European Union, which in investment matters basically refers to the establishment of investment and management of capital movements.

Peru has signed the OPIC agreement to facilitate the issuance of risk coverage the US investment taking place in Peru. It is also a MIGA member and signatory to the Constitutive Convention of the International Centre for Settlement of Investment Disputes - ICSID and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. It is important to note that Peru promotes the use of alternative settlement resolution, including arbitration, even in cases where the State is one of the parties.

OECD STANDARDS

Since July 2008, Peru is an adherent of the International Declaration on Investment and Multinational Enterprises of the OECD and participates since then in the Investment Committee of this organization. The Committee is a forum for the exchange of experiences and initiatives to promote economic development and investment. To participate in this committee will allow Peru to effectively facilitate the domestic and foreign investment in the country. ProInversion has been named as OECD”Contact Point” in Peru.

EFFECTIVE PROTECTION TO INVESTORSPECIAL SCHEmE FOR ADVANCE RECOVERY OF VAT

Aimed to individuals or corporations that invest in any sector of economic activity to generate third category income (companies).

The scheme involves the refund of VAT charged on imports and / or local purchases of new capital goods, intermediate goods, new services and construction contracts, made in the pre-operational stage, to be used directly by beneficiaries of the scheme for the implementation of projects under investment contracts and are intended to carry out transactions subject to the VAT or exports.

REQUIREmENTSTo enter into an Investment Agreement with ProInversion and the relevant Sector, pledging to invest an amount not less than US$ 5 million (not including VAT).The project requires pre-operative period equal to or greater than two years.Obtain the Supreme Resolution endorsed by the Minister of Economy and Finance and the Holder of the relevant Sector, given the approval to people who qualify to benefit from the scheme, as well as goods, services and construction contracts to be awarded on the Advance Recovery of VAT.

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Strategic partner for your investment in PeruOver US$ 10,500 million in investment commitments

Private investment in Peru has risen from an average of US$ 12,000 million per year over the period 2001-2006, at levels above US$ 20,000 million per year today. In just five years private investment has doubled, showing a similar dynamic to that of exports, imports of capital goods and construction activity, both large projects and industrial plants, as well as those related to real estate development and commercial centers.

This has been given an excellent framework conditions for investment characterized by the responsibility of macroeconomic policies and an investment policy considered as one of the most stable and “investor friendly” at both the OECD and APEC.

ProInversion is the State agency in charge of promoting private investment in Peru with the objective of increasing competitiveness and expedite the country’s productive potential.

Based on these objectives, ProInversion has developed from inception to date more than 90 processes that have allowed transfer (in sale or under the PPP scheme) assets and services of the Peruvian State to private investors and operators, which represent commitment investment of over US$ 10.500 million. The current project portfolio in promotion process is around US$ 5000 million in investment requirements.

BASIC ASPECTS OF A UNIQUE AGENCY WORLD WIDE

In addition to promoting the business climate in Peru and support the development of investment projects, ProInversion has the task of leading the PPP process and sale of major public assets.

The ProInversion Steering Council is made up by six Ministers, among which ARE the Prime Minister (who presides), the Minister of Economy and Ministers related to the productive and infrastructure sectors.

ProInversion has a network of contacts including high-profile internat ional organizat ions, business associations, private companies, international non-governmental organizations and national investment promotion agencies in other countries, embassies, among others.

Likewise, ProInversion keeps a dynamic relationship with Regional and Local Governments providing advise and supports the work of investment promotion.

Foto: ProInversion Foto: ProInversion Foto: ProInversion

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ProInversion facilitates and accompanies the evaluation or actual implementation of entirely private initiative projects during the stages of pre-establishment, establishment and post-establishment.

ProInversion participation in these cases includes services ranging from meeting requests for information or to confirm local availability of some type of resource or service requested and organize

SERVICES TO POTENTIAL INVESTORS

meetings agendas up to making consults to relevant authorities regarding the implementation of existing legal framework in specific situations.

In addition, ProInversion is actively involved in the facilitation of investment through the identification, elimination or reduction of impacts from administrative barriers.

Thus, ProInversion is the strategic partner of your investment in Peru.

Deposit done in the Biblioteca Nacional del Perú: Nº-2010 – 06574

ProInversion headquarters in Lima. Av. Paseo de la República 3361, Lima 27, Perú

Telephones:In Lima: (511) 6121200In Arequipa: (5154) 608115In Piura: (5173) 310081

E-mail: contact@proinversion.gob.pe.Website: www.proinversion.gob.pe

INVESTOR SUPPORT CENTER: CONTACT@PROINVERSION.GOB.PE

CONTACT DATA AT PROINVERSION

EXECUTIVE DIRECTORATE

Executive Directorate direccionejecutiva@proinversion.gob.peFacilitation and Investment Promotion Division dfpi-direccion@proinversion.gob.peTechnical Matters Division dat-direccion@proinversion.gob.pe

CONCESSION PROJECTS AND SALE OF PUBLIC ASSETS IN:

Ports dat-puertos@proinversion.gob.peRailways dat-ferroviarios@proinversion.gob.peAgriculture, Hydroenergy and Irrigation dat-irrigacion@proinversion.gob.peAirports dat-aeropuertos@proinversion.gob.peSanitation dat-saneamiento@proinversion.gob.peMining dat-mineria@proinversion.gob.peTelecommunications dat-telecomunicaciones@proinversion.gob.peElectricity matters and Hydrocarbons dat-energia@proinversion.gob.peSugar and Capital Markets dat-capitales@proinversion.gob.peRoads / Coast – Highlands programs dat-viales@proinversion.gob.peTourism and Real Estate dat-turismo@proinversion.gob.pePenitentiary Facilities dat-penitenciarios@proinversion.gob.pe

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Av. Paseo de la República 3361, Lima 27, Perú.Telephones: Lima: (511) 6121200 / Arequipa: (5154) 608115

/ Piura: (5173) 310081 contact@proinversion.gob.pe

www.proinversion.gob.pe