why invest in argentina

Why invest in

Argentina?

Naturally Talented

to Meet Global

Market Needs

October 2009

2

Solid foundations for sustainable growth and profitability

Highly skilled, innovative and entrepreneurial labor force

Abundance of natural resources, biodiversity and environmental sustainability

Access to a large regional market and a springboard to the world

Diversified economy to meet global market needs

Rich cultural heritage and remarkable quality of life

Modern infrastructure and quality connectivity

Public sector supportive of investment

Argentina’s Investment Development Agency

Why invest in Argentina?Argentina offers investors:

2

A winning formula to succeed in your business

3Argentina’s Investment Development Agency

Argentina at a glance(2008)

3

Area: 2,780 km²Population: 40.6 millionGDP: US$326.8 billionGDP per capita PPP: US$14,413FDI: US$8.9 billionExports: US$82.1 billionImports: US$67.5 billion

Area: 2,780 km²Population: 40.6 millionGDP: US$326.8 billionGDP per capita PPP: US$14,413FDI: US$8.9 billionExports: US$82.1 billionImports: US$67.5 billion

4

Solid foundations for sustainable growth and profitability

5Argentina’s Investment Development Agency 5

Source: ProsperAr based on INDEC

10.7

8.9 8.9

4.2

5.35.7

4.0

13.0

9.38.7

5.7

4.7

7.5

3.3

9.0

7.36.8

5.0

3.22.5

1.3

China India Argentina Brazil Chile Colombia Mexico

Average 2003-2006 2007 2008

Fastest growing

economy in

Latin America

Selected Economies: GDP growth 2003-2008

Vigorous ExpansionSix consecutive years of rapid economic growth at an accumulated rate of 8.5% per year


Chile

Colombia

Ecuador

Peru

Mexico

Bolivia

BrazilSouth America

Uruguay

Paraguay

-5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0

C h ile

2010

2009

6

Balanced Accounts

Argentina maintained twin surpluses for six consecutive years and is the only

country in the region expected to maintain them in 2009 and 2010

Source: ProsperAr based on INDEC and “Regional Economic Outlook 2009”, IMF

Current and Fiscal Account Surpluses(as a percentage of GDP)

Argentina

IMF's Current Account Projections 2009-2010(as a percentage of GDP)

0

1

2

3

4

5

6

7

2003

2004

2005

2006

2007

2008

IQ 2

009

Current account balance

Primary fiscal balance

7

A Resilient EconomyLower debt levels and record-high international reserve accumulation contribute to a

more stable and predictable economy, even in the current global context

7

Source: ProsperAr based on the Ministry of Economy and the Argentine Central Bank

18 1819

2427

2826

19

10

14

20

28

32

46 46 46

De

c-9

4

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

Au

g-0

9

Public Sector External Debt (% of GDP)

International Reserves(in billions of US$)


147140

126

7164

56

45

9083

76

3629 27

20

2002 2003 2004 2005 2006 2007 2008

Public Sector Total Debt

Public Sector External Debt

8

Dynamic Investment ProcessIn 2008, the highest investment rate in constant prices in the last 30 years was achieved

8

0

5

10

15

20

25

30

1993199419951996199719981999200020012002200320042005200620072008

GFCF/GDP current prices GFCF/GDP constant prices


✓ Sustained growth in the

investment rate (2003-2008)

✓ Fundamental pillar for a

sustainable economy and an

increasing production capacity

Gross Fixed Capital Formation as % of GDP(in current and constant prices)



Global Crisis, Global Impact

The financial and economic crisis has impacted developing economies through two main

channels: financial and commercial

Financial channel:

• Global credit crunch: Lack of liquidity

and expensive financing

• Risk aversion and “flight to quality”

behavior

• Growing uncertainty leading to lower

investment levels and postponement of

investment projects

Commercial channel:

• Lower global trade flows negatively

affecting exports

• Reductions in prices, particularly

commodities

• Global FDI fell 14.2% in 2008 and

44% during the IQ2009

• Cross-border M&A sales in

developing countries fell 34.7% during

the IQ2009

• Global trade volumes are expected

to contract by 12.2% in 2009

• Emerging economies are expected to

suffer a 6.5% fall in their exports

Source: ProsperAr based on UNCTAD and World Bank

10

-47.650.7Argentina

-44.0-14.2World

% Change IT2009 vs.

IT2008

% Change 2008 vs.

2007

10

Impact of the Global Crisis on Foreign Direct Investment

In line with the rest of the world, FDI in Argentina contracted for the first time in the IVT 2008

and again in the IT 2009 and the IIT 2009

Source: ProsperAr based on UNCTAD and CEPAL.

Foreign Direct Investment(% Change, IQ 2009)


-21% -21%

-39%-42%

-46%-51% -52%

-56% -56%-61%

-77%

-91%

Mal

aysi

a

Thai

land

Bra

zil

U.S

.

Chi

le

Rus

sia

Arg

enti

na

Mex

ico

Ind

ia

Sin

gapo

re

Jap

an

Ko

rea

✓During the IIT2009, FDI experienced a 88.1% reduction from the same period in 2008.

✓Hence, FDI fell by 63.6% during the IS2009.

11 11

Impact of the Global Crisis on Gross Fixed Capital Formation

Investment in Argentina also contracted for the first time in the IVT 2008 and again in the IT

2009 and the IIT 2009

Source: ProsperAr based on UNCTAD and CEPAL.

Gross Fixed Capital Formation(% Change, IQ 2009)

-10.7-14.2Argentina

% Change IIT2009 vs.

IIT2008

% Change IT2009 vs.

IT2008

India 6.4

S. Korea -6.2

Chile -9.3

Malaysia -10.8

Mexico -11.8

Brazil -14

Argentina -14.2

US -14.5

Singapore -14.8

Japan -14.9

Thailand -15.8

Russia -16.3

Turkey -29.7

China 28.6

-30 -20 -10 0 10 20 30


� During the IIT2009, GFCF fell by

10.7% from the same period in 2008.

� Hence, investment suffered a

12.3% year-on-hear reduction in the

IS2009.


Chile-38.2%

Canada (*)-37.6%

EU (27)-31.7%

U.S.(*)-24.9%

Brazil-22.8%

China-21.7%

Argentina-21.3%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

12

Impact of the Global Crisis on Foreign Trade

Argentina recorded a smaller decline in exports compared with the major economies of

the region and the world

Sources: ProsperAr based on INDEC, SECEX , Central Bank of Chile, National Bureau of Statistics of China, Ministry of Development, Brazil’s Secretariat of Foreign Trade,

Australian Bureau of Statistics, Centre of International Economy and IMF

✓ The decline in exports of manufactured goods is also lower in Argentina than in the major economies

Exports (% Change, I Semester 2009)

*Figures from EU (27) and Canada correspond to the first five months.


High Levels of ProfitabilityFirms reached high levels of profitability in historic terms during the 2004-2008 period

13

6.1

1.2

6.0

10.9

9.9 9.7

8.9

1992-2000

2001-2003

2004

2005

2006

2007

2008

Source: ProsperAr based on Balance of Payments data and Survey of Big Companies INDEC

9.5

11.911.5

14.613.8

2003

2004

2005

2006

2007

Net margin of the top 500 companies in

Argentina(as a % of sales)

FDI return on assets(profits as a % of FDI Stock)

14 14

Rapid Increase in FDI

FDI recorded great dynamism over the past six years and showcased in 2008, for the third

consecutive year, a higher average than the 90s (net of privatizations)


Foreign Direct Investment (FDI)

(in millions of US$)

2,087 1,8583,499

4,496

8,268 8,899

5,372

2,141 2,149 1,652

4,1255,265 5,537

6,473

9,753

6,8596,369

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

FDI net of privatizations Total FDI

23,988

US$5,300


15 15

Greenfield Investment Destination

In 2008, Argentina was the 3rd greenfield investment destination in Latin America and 2nd

in South America, identified as one of the most attractive markets with highest

international potential

Source: FDI Intelligence and British Ministry of Commerce and Investment

*Ranking excludes the BRIC countries. The world report is elaborated by the

British Ministry of Commerce and Investment based on the opinion and

perspective of more than 560 management executives of international

companies.

Main FDI Greenfield Investment Destinations

(2008)

Country # of projectsMexico 346Brazil 245Argentina 115Colombia 73Chile 64Other 263


Saudi Arabia10

Argentina9

South Africa8

Poland7

Singapore6

Indonesia5

Ukraine4

United Arab Emirates3

Mexico2

Vietnam1

Country

Markets with high potential growth for investors identified by the British Ministry of Commerce and

Investment*


Recent Investments

High profitability reassures big players to increase their commitment and attracts more leading companies to invest in Argentina

16

17

Highly skilled, innovative and entrepreneurial labor force


Human CapitalHighly skilled and talented labor force

18

✓Ranked 1st in Guggenheim research fellowships, receiving the largest number of scholarships in Latin America (2009)

✓Over 85,000 graduates from higher education programs and 6,100 postgraduates per year

✓ 106 universities throughout the country

✓Ranked 4th in the Global Entrepreneurship Monitor (2008)

✓Ranked 5th worldwide in terms of quantity of ‘Think Tanks’ and nominated as a Regional Think Tank Hub by the University of Pennsylvania (2008)

82

66

65

65

51

43

42

30

24

24

24

21

9

5

0 10 20 30 40 50 60 70 80 90

United States

Spain

Italy

Argentina

Europe & Central Asia

Chile

Uruguay

Latin America & Caribbean

World

Middle East

Brazil

East Asia & P

South of Asia

Sub-Saharan Africa

Source: ProsperAr based on World Bank, GEM 2008 and University Yearbook 2009, Ministry of Education

Gross Entry Ratio to Tertiary Education(% of new entrants)


Science, Talent and CreativityA leader in the region

19

Country 1990-2005

United States 4,605

Spain 2,195

Argentina 720

Chile 444

Mexico 268

Brazil 344

Colombia 109

✓Advertising Industry:

One of the three best places in the

world to look for ideas according to

the Gunn Report 2008

✓Research & Development:

Highest number of patents per

million inhabitants in Latin America

registered with the U.S. Patent and

Trademark Office over the past

whole 45 years

Source: Human Development Report 2007/08, United Nations, United States Patent and Trademark Office

Researchers (per million inhabitants)

20

Bernardo HoussayNobel Prize in Physiology or

Medicine 1947

For his discovery of the course of the

catalytic conversion of glycogen.

Luis F. LeloirNobel Prize in Chemistry 1970

For his discovery of sugar

nucleotides and their role in the

biosynthesis of carbohydrates.

César MilsteinNobel Prize in Physiology or Medicine

1984For his theories concerning the specificity in

development and control of the immune

system and the discovery of the principle for

production of monoclonal antibodies.


A Tradition of Research Excellence Number one in Latin America and forth in the developing world in terms of science

related Nobel Prizes

Recent awards received by Argentine scientistsand researchers

✓An Argentine scholar was the only Latin American to receive one of the 18 foreign associate positions granted by the National Academy of Sciences of the United States in 2008.

✓The Maxime Becher medal, granted every 3 years by the US Mathematics Society, was awarded to an Argentine mathematician in 2008.

✓Argentines received the highest number of Guggenheim Foundation awards in Latin America; 13 out of the 36 awarded in 2008.

✓Argentina received the L´Oréal-Unesco for Women in Science Award for the Latin American region for two consecutive years (2007-2008).

✓Two Argentine physicists were honored by the Nobel Physics Laureate George Smoot in 2006.

20

Source: ProsperAr based on CONICET, The Nobel Prize Organization and Argentine press releases.


High Returns on Knowledge ProducedArgentine scientists are the most prolific in terms of knowledge

production in the region (as measured by science publications)

21

22.3

18.516.5 16.3

Argentina Brazil Mexico Chile

4.84.6

1.6

0.2

Argentina Chile Brazil Mexico

Science Publications per 100 Full Time

Researchers (Full-time or equivalent - 2007 or last available year)

Science Publications per Million Dollar

Spent in R&D (2007 or last available year)

Source: ProsperAr based on the Argentine Center of Information on Science and Technology (CAICYT).


Outstanding Performance, Today and TomorrowThe most innovative country in South America

22

1

2

20

39

42

46

47

48

49

52

62

67

69

Japan

Switzerland

Ireland

Russia

Argentina

China

Chile

Mexico

Brazil

India

Colombia

Peru

Ecuador

Innovation Prospects Ranking 2009-2013

(Position: highest=1, lowest=82)

2004/2008

Ranked as the most innovative country in

South America and one of the best in the developing world

Source: ProsperAr based on Innovation Index, Economist Intelligence


Rising Capacities and Greater CapabilitiesRemarkable labor productivity gains

23

100

110

120

130

140

2003 2004 2005 2006 2007 2008


+30%

Labor Productivity (Index 2003=100)

24

EntrepreneurshipArgentina ranks fourth on the Global Entrepreneurship Monitor (2008)

24

Global Entrepreneurship Monitor Ranking(2008)

Source: ProsperAr based on GEM 2008

05

101520253035404550

Bo

livia

Co

lom

bia

Per

u

Arg

entin

a

Ecu

ado

r

Do

min

ican

Rep

ub

lic

Ind

ia

Bra

zil

An

go

la

Ch

ile

Eg

ypt

Uru

gu

ay

Mex

ico

Ser

bia

�Large group of talented and

motivated entrepreneurs

�Business schools have

international prestige in the field


25

Abundance of natural resources, biodiversity and environmental sustainability


Size, Abundance and VarietyTo enjoy and develop

26

✓8th largest country in the world, 2nd

in Latin America

✓9th largest agricultural area in the

world

✓32 million Ha of forests

✓4,500 km of exploitable mining

resources

✓4,700 km along the Atlantic Coast

with rich fisheries

✓3rd largest fresh water reservoir in

the world, the Guaraní Aquifer

(shared with Brazil, Paraguay and

Uruguay)Source: ProsperAr based on United Nations Food and Agriculture Organization

(FAO), CIA World Factbook, and other sources


Diverse Energy SourcesOutstanding natural resources to fuel growth

27

✓Vast oil and gas resources with

exploration opportunities

✓Hydraulic energy generates 38% of

the total electricity

✓Growing wind and solar energy

production

✓Three nuclear power generation

plants

✓One of the top five biofuel producers

worldwide

✓ Incentives for renewable energy

production under Law 26,190 (2006)Source: ProsperAr based on United Nations Food and Agriculture Organization

(FAO), CIA World Factbook, and other sources


From High Peaks to Blue LakesVaried terrenes

28

✓Exuberant beauty and extraordinary

flora and fauna can be found

throughout Argentina.

✓Visitors are captivated by the deep

blue lakes, high mountain peaks,

large salt pans, paleontological sites,

fertile valleys, snow-covered

volcanoes, subtropical rain forests,

crystal-like glaciers, white deserts,

long rivers, boundless flat lands and

vibrant cities.


From the Warm North to the Cold SouthMultiple climates

29

✓The North: warm; from subtropical

with a wet season to tropical

without a wet season; including

tropical highland.

✓The Center: moderate

temperatures; influenced by the

ocean, moderately arid; the Pampas

grassy plains.

✓The West and South Center:

Patagonian cold temperatures; arid

mountains and plains.

✓The South: cold, arid and windy;

humid in the far South; high

mountain snow.


Eco-Intelligent GrowthCommitted to environmental sustainability

30

174,000 km² of protected

areas

(6.4% of national

territory)

1

2

35

38

39

46

47

97

105

120

Switzerland

Sweden

Brazil

Argentina

United States

Australia

Mexico

South Africa

China

India

Source: ProsperAr based on Yale Environmental Sustainability Index and World Development Indicators, WB

Yale Environmental Performance Index

(Position: highest=1, lowest=149)

Access to a large regional market and a springboard to the world


An Internationally Recognized ChoiceOne of the fastest growing FDI destinations in the world

32

1.7

4.1

5.3 5.5

6.5

9.7

2003 2004 2005 2006 2007 2008

Growing FDI (in billions of US$)

Source: ProsperAr based on International Accounts, INDEC and UNCTAD

2nd South American FDI destination for greenfield

projects (2008)

2008

World -14.2 %

Developed economies -29.2 %

Developing economies 17.3 %

Latin America &

Caribbean 13.2%

Argentina 50.7 %

FDI Inflows Growth


An Economy Integrated to the Region and the WorldLeading multinational companies operate in Argentina, many of them with a long-term

vision and commitment

33

Top 50 Transnational Corporations with a presence in Argentina

Nearly 2,000 TNCs(half of the Fortune 100). Many

TNCs operating with along-standing tradition and

long-term vision


CLISA

Top 50 Local Multinationals

Going GlobalLeading Argentine companies operating internationally


Open EconomyRising trade flows

35

34

40

47

55

66

82

20

29

36

43

56

70

2003 2004 2005 2006 2007 2008

Exports Imports

Exports ↑

19% (average annual growth rate

2003-2008)

Imports ↑

29%

(average annual growth rate

2003-2008)


Rising Exports and Imports of Goods and Services

(in billions of US$)


A Global OpportunityA gateway to Latin America’s largest markets and a springboard to the world

36

Main trade agreements:

Trade negotiations underway include an agreement with

the South African Customs Union (SACU), countries of the

Gulf Cooperation Council and Morocco; a more

comprehensive agreement with the European Union (EU);

a trade preference agreement with India; and a free trade

agreement with Israel (in process).

14,41413,295

10,326

4,778

Argentina Uruguay Brazil Paraguay

Source: ProsperAr based on IMF

MERCOSUR: Customs Union

Members: Argentina, Brazil,

Uruguay, Paraguay

Associates: Bolivia, Chile, Colombia,

Ecuador, Peru, Venezuela

Mercosur member countries GDP per capita(PPP dollars 2008)

GDP: US$1.9 trillion

Population: 241 million

inhabitants


Linked UpInternational synergies for global integration

37

WORLD TRADE ORGANIZATION: Founding member

G-20: Argentina and Brazil are the only two members representing South America

Investment Protection and Promotion Treaties: 59 bilateral investment treaties

ALADI ( Latin American Integration Association) provides the institutional

framework for regional integration, promoting the creation of an area of economic

preferences in the region, with the ultimate goal of establishing a common Latin

American market.

Members: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay,

Peru, Uruguay, Venezuela and Cuba.


Open SocietyAuspicious environment for business to thrive

38

✓ Open Society

✓ Commitment to democracy and freedom

✓ Free of religious, ethnic and armed conflicts

Map of Freedom 2008

Argentina is a free country with a high degree

of political and civil freedom, according to the

findings of the Freedom House 2008 survey.

The survey concluded that more than half of

the world does not enjoy full freedom.

FREE

PARTLY FREE

NOT FREE

Source: Freedom House

39

Diversified economy to meet global market needs


Producing VarietyWidely diversified economy

40

GDP by Sector(% of GDP, 2008)


Real estate &

business services

11%

Wholesale &

retail trade

12%

Education, health &

community services

13%

Manufacturing industry

21%

Agriculture, livestock,

forestry & fishing

10%Transport, storage &

communications

8%

Government

6%

Construction

6%

Financial intermediation

5%

Mining

4%

Hotels & restaurants

3%Electricity, gas & water

1%


Investment Opportunities Across Sectors in Argentina

41

Agro-Industry, Wine & Biofuels

Manufactured Goods with

Added Value or Design

Biotechnology

Pharmaceuticals & Health

Professional Value-Added

Services

Creative Industries

Software & Information Technology

Mining & Forestry

Tourism


Agro IndustryLeading global producer & exporter of food commodities and products

42

24.5

18.2

73.3

32.0

50.2

20.5

23.3

14.7

11.6

12.0

9.9

1.3

Natural honey

Pears

Lemon juice, concentrated

Safflower seeds

Soybean oil

Grape juice

Sunflower oil

Lemons and limes

Soybeans

Safflower oil

Powdered whole milk

Sunflower seeds

Argentine Share in Global Exports and Global Position(export % and position)

Source: ProsperAr based on FAO data


Agro IndustryHigh agricultural efficiency and productivity

43

Soybean Production Yield(Hectograms/Hectare, 2007)

Wheat Production Yield(Hectograms/Hectare, 2007)

Source: ProsperAr based on FAO

29,71128,133 28,066

24,36923,010

Argentin

a

Brazil

U.S.

Austra

lia

Canada

28,27027,046

23,220 22,199

10,562Arg

entina

U.S.

Canada

Brazil

Austra

lia


Agro IndustryBooming exports & innovation

44

✓16% of the total expenditure on innovative

activities is for agro industry

✓8% of the manufacturing’s R&D investments

are agro-industry related

✓55 biotech firms are working to further

develop the country’s Food & Beverage

industry


R&D Applied to the Value Chain

Rising Manufactured Exports of

Agricultural Origin(in billions of US$)

1112

1415

21

28

2003

2004

2005

2006

2007

2008


Wine IndustryUnique terroir, tradition and freedom to innovate

45

Source: National Vitiviniculture Institute (INV)

0

100

200

300

400

500

600

700

2001

2002

2003

2004

2005

2006

2007

2008

mil

lio

ns

of

US

$

0

50

100

150

200

250

300

350

400

450

mil

lio

ns

of

lite

rs

Millions of liters US$ millions

Wine Exports(in millions of US$ and in million of liters) 5th largest

producer in the world

7th largest domestic market

7th largest exporter in the world

Fastest growing exporter in the world (22.3% per year, 2002-2008)


Wine IndustryQuality-Value advantage positions Argentine wines globally

46

Traditional and High Potential Markets Growing Sophistication and Value Added

237%

44%

35%

24%

25%

Icon

Ultra

Premium

Super

Premium

Premium

Popular

Premium

Export Growth by Price Segment compound annual growth rate

(2002-2008)

Glass-Bottled Wine Exports by Country Destination (2008)

Source: Wine of Argentina and Wine Area

United States

29.0%

Others

15.4%

Canada

10.4%

U.K.

9.3%Netherlands

7.1%

Brazil

7.7%

Latin America

5.2%

Other Europe

4.6%

Asiatic Countries

3.8%Nordic Countries

3.7%Mexico

2.5%Russia

1.2%Russia

1.2%


BiofuelsA green powerhouse: competitive production of renewable & clean energy

47

14.3%

12.0%

11.6%

11.1%

7.2%

U.S.

Germany

France

Brazil

Argentina

Projection of Top Five Biodiesel Producers in 2010(share in total production %)

Source: World Ethanol and Biofuels Report by the Consulting Company F.O. Lichts

Investment Incentives Biofuels: accelerated

depreciation of income tax and early return of VAT for

capital goods and equipment.

✓ Competitive advantage based

on abundant and high-quality

natural resources, qualified

human resources and existing

industrial capacity.

48

Projected Rise in International Demand


BiofuelsStrong international and domestic demand

48

0

4,750

9,500

14,250

19,000

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: ProsperAr based on the Energy Secretariat

✓Diesel, easily replaceable by biofuel (biodiesel), leads domestic fuel consumption accounting for 66% of total consumption.

✓Argentine Biofuel Law 26,093 (2006) establishes mandatory biofuel mixes (5%) by 2010.

Countries with mandatory biofuel

(biodiesel) mixes

✓European Union

✓Brazil

✓United States

✓Japan

✓Canada

Projected Diesel Consumption(in thousands of m3)

Estimated growth rate: 3,5%

49

Manufactured Goods with Added Value or DesignAttractive selection of investment opportunities

49Agencia Nacional de Desarrollo de Inversiones

Auto Parts Industry

�Developed and innovative industry with a long tradition in the

country.

�International leading companies with presence in Argentina: Fiat,

Ford, General Motors, Mercedes Benz, Peugeot-Citroën, Renault,

Toyota, Volkswagen, Iveco and Scania.

�Great opportunity for growth in auto parts to complement

regional and global demand in the automotive industry which is

increasing in sophistication and innovation.

�Success case: Rafaela, Santa Fe (Basso) is a leading world producer

and exporter of valves.

Agro Industrial Machinery and Precision Instruments

�Major agro machinery cluster with more than 100 years of

expertise, 40,000 employees (80% skilled labor) and 650 factories.

�Know-how to produce innovative equipment for new agronomic

practices like “Direct Sowing”.

�A growing production of high-tech precision agro components.

50

Manufactured Goods with Added Value or DesignAttractive selection of investment opportunities

50Agencia Nacional de Desarrollo de Inversiones

Manufactured goods with design: sailboats, cruisers and vessels

�High quality and international recognition.

�Over 25 years exporting to developed countries mainly the European and

Asian markets.

�Integrated value chain: 120 builders of sailboats, cruisers, vessels, inflatable

boats, equipment and all necessary services for the production and

maintenance of a wide range of boats.

�Installed capacity of 700,000 m2 and occupying 700,000 people.

Nuclear, Spatial and Industrial Engineering

�INVAP: technology-based company dedicated to developing advanced

technology in nuclear, aerospace, medical and industrial sectors.

�In 2000 won an international tender, beating specialized companies from

countries like Canada, Germany and France for a 20 MW reactor power, which

was sold for approximately US$200 million.

�The reactor is used for scientific research in the fields of health, environment

and industry and the production of radioisotopes for medicinal purposes,

catering to Australia, New Zealand and Southeast Asian market.

� IMPSA: global company dedicated to producing solutions for power

generation from renewable resources.


Pharmaceutical IndustryLong standing tradition, innovation and rising potential

51

Source: Argentina Industrial Chamber of Pharmaceutical Laboratories (CILFA)

Growing Sales & Exports(in millions of US$)

✓Highest local market share of domestic labs in comparison with other Latin American countries.

✓ Local labs in Argentina account for 56% of local sales while domestic firms in Brazil account for 25%, 24% in Uruguay, and 12% in Mexico.

✓ Two companies included in the Ranking of the 19 Argentine Multinationals (ProsperAr-Columbia).

National Labs

56%

International

Labs

44%

Market Share of International & National Labs

in Argentina

0

500

1,000

1,500

2,000

2,500

3,000

2003 2004 2005 2006 2007 2008

Sales Exports

+69%

+134%


Health IndustryApplied knowledge

52

✓ The rate of clinical trials per 100,000 inhabitants is 1.45, nearly double the average (0.79) in Latin America.

✓ Competitive advantages due to solid hospital infrastructure and hi-tech equipment.

✓ Creation of the clinical trial registry in 2009: critical tool for researchers, experts, patients and donors.

✓ Focus on the more advanced phases of clinical trials.

Source: ProsperAr based on CEPAL (2008) and CAEME

34.037.2

44.949.6

65.8

91.8

2002 2003 2004 2005 2006 2007

+170%

Share of Clinical Trials by Phase (in %)

Clinical Research Investments in the

Pharmaceutical Industry(in millions of US$)

Phase I

1%Phase II

18%

Phase IV

68%

Phase III

13%


BiotechnologyApplied research and first-class scientists

✓More than 35 bioscience research institutes operating in private companies and universities

✓Highest number of biotechnology companies per capita in Latin America

✓ Leader in GMO applications accounting for 17% of world GM crop area

✓ Integrated with industrial production (agricultural and pharmaceutical industries)

✓High-calibre scientists and researchers

✓ Two biotechnology companies included in the Ranking of the 19 Argentine Multinationals (ProsperAr-Columbia)

Source: Biotec Sur, International Service for the Acquisition of Agri-biotech Applications (ISAAA) and Bisang, Gutman, Lavarello, Sztulwark and Diaz (2006)

Biotechnology Investment Incentives: accelerated

depreciation of income tax and early

reimbursement of VAT intended to reduce

payments in the first years in purchase of capital

goods and related equipment

Human Health

11%

Food

Ingredients

15%

Animal Health

25%

Seeds &

Plants

41%

Inoculants

8%

Biotechnology Sales(by type)


Professional Value Added Services High quality at competitive costs

54

Source: ProsperAr based on Balance of Payments data, INDEC, Deloitte Global Shared Services Survey 2009 and Global Services Magazine

Cultural & Entertainment(US$419 mn) IT

(US$770 mn)

Business, Professional & Technical (US$3,7oo mn)

✓ According to Deloitte’s latest Global Shared

Services Survey, 265 leading global firms from

all sectors, rank Argentina as the fifth best

location for outsourcing services for it’s labor

quality and availability, just below the US,

India, UK and China (2009)

✓ Buenos Aires as the 14th most attractive city

in the emerging world for outsourcing

activities (“Global Services” index)

✓ A location with the presence of leading

companies: Globant, Atento, Teletech,

Teleperformance, Motorola, Microsft, HP,

IBM, Citibank, Repsol, CapGemini, Tata

Consulting and Nextel

Record Levels of Exports of Value Added

Professional Services = US$4.9 billion(2008)


Professional Value Added Services Strong advantages make Argentina a global center for skilled outsourcing

55

Source: ProsperAr based on Balance of Payments data, INDEC, ATKearney Consulting and Global Services Magazine

Minimal time difference with the

US and main European cities✓ High penetration and best English levels in

the region (Cambridge ESOL exams)

✓ Other languages spoken: Italian, German,

Portuguese and French

✓ Cultural similarities with European markets

✓ Competitive costs

✓World renowned creativity

(advertising and design)

✓ Native Spanish speakers reaching out to a

population of 500 million people that speak

the language worldwide

Argentina Time Zone = GMT -3 hours


Growing Software Production & Exports

(in millions of US$)

Source: ProsperAr based on Cessi and INDEC

0

500

1,000

1,500

2,000

2,500

2003 2004 2005 2006 2007 2008

SALES EXPORTS

+364%

+152%

✓ 1,600 software companies

(60% SMEs)

✓ Young and dynamic sector:

40% of the SMEs started operations

after 2002 and 85% after 1991

✓ In 2008 exports accounted for

28.6% of total sales and 55% of all

software companies export

✓ Leading international presence:

IBM, NEC, Siemens, Google, Oracle,

SAP, Intel, Motorola and Sabre

Holdings

✓ According to The Economist's

technological ranking, Argentina

surpasses Mexico, Colombia and

Peru and ranks 3rd in Latin America

after Brazil and Chile (2009)

Software and IT Industry Thriving growth driven by innovative local firms and leading global companies


Software and IT IndustryTalented labor force and public support

57

Source: ProsperAr based on Cessi and other sources

Córdoba

Santa Fe

Mendoza

Tandil

Mar Del Plata

Buenos Aires

Gualeguaychú

Rosario

✓ Available and affordable high skilled

labor force

✓ 243 IT degrees offered locally

✓ Some 70,000 students enrolled in

university-level informatics programs

✓ Public-Private cooperation networks

✓ Software Promotion Law (2004)

✓ Diverse attractive locations

IT Industry Investment Incentives:

10-year tax stability; tax credit up to

70% of employers’ contributions;

60% reduction in income taxes.

IT Hot Spots


Creative IndustryDiverse and attractive segments

58

HOTSECTORS

AdvertisingAdvertising

PublishingPublishing

AudiovisualAudiovisual

DesignDesignFashionFashion

VideogamesVideogames

MusicMusic


Creative IndustryA flourishing cluster

59

The Gunn Report 2008

The most awarded countries in the world in 2008

TV &

CinemaPrint Interactive

Gunns

Blazing(*)Total

U.S. (1) 149 52 91 39 331

Great Britain (2) 124 39 45 4 212

Argentina (3) 99 21 2 7 129

Germany (4) 47 35 31 6 119

Japan (5) 42 1 60 14 117

Advertising

2005 2006 2007

Annual growth rate 19.6% 18.6% 15.0%

As a % of total GDP 2.6% 2.8% 3.0%

Export boom:

US$500 million in 2007,

double 2002 values

Cultural GDP

Source: ProsperAr based on The Gunn Report 2008. (*) Note: Gunns Blazing tallies all

awards given under the various labels of Integrated, Mixed Media, Innovative,

Content and Contact, Titanium, and other advertising award categories; Frapa

(The Format Recognition and Protection Association)

Source: ProsperAr based on SINCA.

Argentina, leading television

content exporter: 4th exporter in

TV contents wordlwide

Argentina in Top 3 :

One of the three best places in

the world to look for ideas. And

one of the three best to produce

them, according to

The Gunn Report.


TourismMagnificent cultural experiences and a striking geography attract global tourism

60

1,0521,476

1,883

2,472

3,0603,295

2001 2004 2005 2006 2007 2008

Rising Tourism Expenditures(in millions of US$)

Source: Tourism Secretariat

0.93

1.511.79

2.062.30 2.33

2001 2004 2005 2006 2007 2008

Tourist arrivals(in millions of people)

✓ One of the most exciting and diverse tourist

destinations in Latin America offering from

wine tourism to eco-friendly adventures

✓ Buenos Aires ranked in the top 5 cities to

visit in the world for 3 consecutive years

(Travel & Leisure, 2009)

✓ Buenos Aires ranked #1 gay friendly city by

Out Traveller Magazine

✓ Excellent hotel infrastructure throughout the

country

✓ Exquisite gourmet dining & restaurants


Mining IndustryNatural advantage and strong incentives

61

Source: Mining in Numbers 2008, Mining Secretariat

In figures…

Mining Investment Incentives:

30-year tax stability, exemption from

tariffs on imports of capital goods

among other tax benefits

2003 2008

Accumulated

growth rate 2015 projected

Investments (millions of US$) 224 1,771 748% 10,079

Exports (millions of US$) 1,119 3,558 241% 7,330

Exploration (meters drilled) 170,000 500,000 201% NA

Direct employment (inhabitants) 19,000 40,000 110% 87,250

Production (GPV in millions of US$) 1,383 4,554 253% 9,476


ForestryGrowing opportunities

62

648

821 842

9891,0481,032

2003 2004 2005 2006 2007 2008

Source: ProsperAr based on INDEC Trade database..

Timber exports (in millions of US$)

✓ Endowed with large and varied

extensions of primary forests,

ranging from subtropical forests

in the North to coniferous forests

in the South.

Forestry Investment

Incentives: 30-year tax

stability, extendable to up to

50; early VAT return; special

depreciation for income tax

63

Rich cultural heritage and remarkable quality of life


Create, Experience, Enjoy!Exciting and dynamic culture

64

✓Rich urban life with an endless arrayof cultural activities: 928 museums, 2,813 theaters and 448 cinemas.

✓Buenos Aires chosen World Book Capital 2011 by UNESCO with 2,191 public libraries.

✓Argentina is the World Capital for enjoying Soccer and Polo, and has talents such as Ginobili in the NBA, Del Potro in Tennis and Los Pumas in rugby.

✓ For golf lovers, the country offers golf courses amidst mountains, on sea coasts, in jungle regions, in the forest or even in the city.


Live ArgentinaRemarkable living standards

✓Argentina has the highest quality of life index in the region, right after Canada and the UK, taking the 21st position from a total of 194 countries surveyed (International Living 2009)

✓Argentina is ranked in the High Development category of the Human Development Report and is ranked 2nd in Latin America (UNDP 2009)

✓Buenos Aires was nominated as the best city to live in Latin America (The Economist 2009)

✓Buenos Aires, together with Berlin and Montreal, was appointed as City of Design under the UNESCO Global Alliance's Creative Cities Network

65


Share ArgentinaCelebrating cultural richness and diversity

✓Ranked first in the region in UNDP

Gender-related development Index

(2008)

✓Buenos Aires ranked as the number

one worldwide gay friendly city in

Out Traveler Magazine (2008)

✓ The country offers world-class health

services at the most competitive

costs and caters for international

education with bilingual schools and

universities responding to numerous

cultures.

66


Explore ArgentinaBreathtaking views, magnificent natural scenes

67

Source: ProsperAr based on UNESCO

UNESCO World Heritage Sites

✓Iguazu Falls & National Park, recently

chosen as world best attraction (The

Guardian, 2009)

✓The Perito Moreno Glaciers

✓Jesuit Missions of the Guaranis

✓Archaeological site Cueva de las Manos,

and the Pinturas River Canyon

✓Valdes Peninsula

✓Ischigualasto and Talampaya

Natural Parks

✓Jesuit Block and Estancias of Cordoba

✓Quebrada de Humahuaca

Modern infrastructure and quality connectivity


A Road to SuccessModern infrastructure connecting Argentina within and beyond its borders

Source: ProsperAr based on CIA world fact book and Ministry of Federal Planning, Public Investment and Services

69

✓31,909 km of railways, 9th in the world

✓231,374 km of roadways, 23rd in the world

✓25 sea ports and 38 river ports

✓11,000 km of waterways, 12th in the world

✓58 airports, 23 of them international

✓Pipelines:

• Gas: 28,138 km

• Oil: 5,939 km

• Refined products: 3,629 km


Source: ProsperAr based on CIA world fact book , National Communications Commission, and iEco survey conducted with Marco Marketing Consultants.

✓ Showcases the highest broadband

penetration in the region with 8.8%

according to Cisco's Barometer (2008)

✓Modern and competitive network, in a

highly deregulated market

✓ Highest mobile and fixed-line density in

South America

✓ Ranked 18th worldwide in terms of

Internet usage, with 3.8 million hosts and

more than nine million users

✓ Buenos Aires, WiFi capital with the highest

wireless density per inhabitant in Latin

America, surpassing Sao Paulo, Mexico

City and Santiago (iEco, 2009)

Broadband Penetration in Latin America(in %)

Modern ConnectivityAdvanced and competitive telecommunications

Venezuela: 3.6%

Brazil: 5.2%

Uruguay: 7.6%

Argentina: 8.8%

Colombia: 4.1%

Peru: 2.7%

Chile: 8.8%


Committed to ImprovementNational Plan to boost infrastructure capacity

71

Source: ProsperAr based on Ministry of Federal Planning,

Public Investment and Services

The National Strategic Plan for Infrastructure 2003-

2011 aims to increase:

� Gas transport-distribution by 30%

� Electric energy generation by 72%

� Transport network by 69%

The Key Investment areas are:

✓Energy

‣ Gas transport

‣ Electricity generation & transport

✓Transport infrastructure

‣ Roads

‣ Railways

‣Waterways

‣ Ports

‣ Airports

✓Living conditions

‣Water works, sewage and irrigation

‣ Homes

‣ Health and Education

Increasing Infrastructure Budget(in billions of US$)

0.31.1

1.7

3.2

4.75.8

8.0

16.0

2002

2003

2004

2005

2006

2007

2008

2009p

Public sectorsupportive of investment


Welcoming InvestorsProtection and equal rights for foreign investors

73

Equal treatment and rights extended to foreigners, guaranteed by the

Argentine Constitution

✓Equal treatment for local and foreign investors

✓Foreign investors may:

�Remit abroad liquid profits arising as a return on their investment as

well as repatriate their investment

�Avail themselves of any of the legal forms of incorporation foreseen by

Argentine legislation

�Make use of domestic credits and loans with the same rights and under

the same conditions as domestic companies of domestic capital

�Access all sectors of economic activity as there are no activities

reserved exclusively for local enterprises


Horizontal Incentives:

Apply to all economic sectors or activities

✓Investment Promotion Law (No. 26,360): early VAT return and/or accelerated

depreciation for capital goods and infrastructure projects

✓0% tariff on imports of capital goods

✓0% tariff on imports of goods which are part of a large investment project

✓For every new job created, 50% reduction on employers’ contributions during the

first year of employment and a 25% reduction in the second year

✓Others: FONTAR, FONSOFT, SEPyME programs, plans to foster employment, and

export promotion plans (for further details please see “Investment Incentives”

published by ProsperAr)

Attractive IncentivesSupport for your investments

74


Regional Incentives:

Local stimulus programs and support for infrastructure investments

✓Exemptions from provincial taxes for a determined period of time

� Gross income

� Stamp taxes

� Property tax

✓Financial support for infrastructure investments and purchase of relevant

equipment

✓Subsidized rates for public utilities


75



76

Sectoral Incentives:

� Automotive industry: cash reimbursement based on local content; tariff free access to Brazil and Mexico.

� Software: 10-year tax stability; tax credit up to 70% of employers’ contributions; 60% reduction on income taxes.

� Biofuels and biotechnology: accelerated depreciation of income tax and early return of VAT for capital goods and equipment intended for the project.

� Mining: 30-year tax stability; exemption from tariffs on imports of capital goods among other tax benefits.

� Forestry: 30-year tax stability, extendable to up to 50; early VAT return; special depreciation regime for income tax.

� Infrastructure: incentives for public-private partnerships (PPP´s).

� Oil and gas exploration and exploitation: early VAT refund, income tax reductions.

77

ProsperArProfessional assistance for your business to succeed in Argentina

✓Providing timely and relevant information on

business sectors and geographical locations in

Argentina

✓Help identify investment and innovation

opportunities in strategic sectors

✓Troubleshoot red tape and obstacles; facilitate

the whole investment process

✓Assist in building partnerships between foreign

investors and local companies

Our group of professionals will gladly assist you by:

Argentina’s Investment Development Agency 77

78

To learn more about how investing

in Argentina can benefit you,

please contact us:

www.prosperar.gov.ar

[email protected]

+ 5411-4328-9510

ArgentinaNaturally Talented to Meet Global Market Needs

Argentina’s Investment Development Agency 78

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