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The Meeting Point in Central America: 

The Meeting Point in Central America

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2005 in numbers Population : 6.7 million GDP : $16.2 Billion GDP per capita: $2,400 GDP Growth: 2.8% Inflation rate: 4.5% Economically Active Population: 2.8 million Average Interest Rate for > 1 year loans: 7% yearly Record in Tourist visits: 1,154,386 Growth Rate in tourist visits : 19.8%

Why invest in El Salvador?: 

Why invest in El Salvador? Variation 2003-2004 NO DEVALUATION RISK

Why invest in El Salvador?: 

LOWEST INTEREST RATES IN CAFTA REGION Why invest in El Salvador?

Why invest in El Salvador?: 

ONLY COUNTRY IN THE CAFTA REGION THAT OFFERS LONG TERM LOANS Loans granted for over 10 years represent 58% of the new loans Why invest in El Salvador? New Loans: As % of total loans registered in the period 2001-2004

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MOST COMPETITIVE COUNTRY IN CENTRAL AMERICA, and fourth in all Latin America *Global Competitiveness Report 2005, World Economic Forum. Competitive El Salvador

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STRONGEST INSTITUTIONS (World Economic Forum) MOST TRANSPARENT ECONOMY IN THE CAFTA REGION (Transparency International) AMONG THE THREE CLEANEST ECONOMIES OF LATIN AMERICA (Transparency International). Soucrce: Transparency International Transparency and Strong Institutions

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ONE OF THE MOST LIBERALIZED COUNTRIES IN THE WORLD SECOND FREEST ECONOMY IN LATIN AMERICA, only after Chile. (The Heritage Foundation) Source: The Heritage Foundation Economic Freedom in El Salvador

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ONLY THREE COUNTRIES IN LATIN AMERICA: CHILE, MEXICO AND EL SALVADOR Investment Grade

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Strategic location Only two hours away from Miami In the heart of the Americas

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23rd Best infrastructure among 117 countries Competitiveness Report 2005, World Economic Forum. Safest in Central America Only country in C. A. certified category 1 by Federal Aviation Administration Best Airport In Central America

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THE SEAPORT Under construction. To become a world class seaport for POST PANAMAX and POST PANAMAX PLUS vessels. It is expected to be completed in 2008. La Unión seaport

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THE DRY CHANNEL An interoceanic 371 km highway, will connect the Pacific ocean with the Atlantic side of Guatemala and Honduras Seaports. Transportation from one ocean to the other will take 7 hours.

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The best road infrastructure in Central America BEST MAINTAINED HIGHWAY AND ROAD SYSTEM IN CENTRAL AMERICA, and one of the best in Latin America. (Interamerican Development Bank) This could be accomplished through FOVIAL, a fund destined to maintaining the highway and road system. FOVIAL has been used as model by other countries in Latin America.

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Competitive Telecommunications More than 1 million phone lines with an average annual growth rate of 13.7% during the last 5 years. More than 2 million mobile active phones with an average annual growth rate of 158% during the last 2 years. Optic fiber is available throughout the country, with broad band capabilities. Use and Access of Information Technology. Classified no. 59 of 115 countries (leader in the C.A region. ) Source: World Economic Forum

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Electricity System Privatized generation and distribution of electricity Diversified sources of generation: 21% Geothermal, 28% Hydroelectric, 40% thermal, 11% Imported Electricity shortage close to zero. The lowest energy rate in Central America to the industrial sector

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Who invest in El Salvador?

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DECLARED: Policy of State Priority Industry Budget Priority Tourism

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El Salvador has an extended labor force: 70% of population is less than 34 years old 60% of the GDP comes from services English is spoken widely throughout the country Salvadorans are known as hard working and cordial. Key factors for the hospitality industry Service Driven

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1,154,536 visitors * $644.2 MM in currencies * 3.8% GDP * 19.8% growth vs 2004 Emerging destination

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Fiscal Incentives Package - To foster Supply Markerting and Promotion fund - To foster Demand National Tourism Registry - Ordering of the Industry Decentralization – Local Tourism Development Comittees Tourism Law

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Full Import tariffs and VAT exemption for the introduction of goods, equipment, accessories, machinery, including construction materials for the implementation of the project. Full exemption of taxes on Real Estate transfers, for the acquisition of the real estate to be used in the project Full exemption on Income Tax, for a period of ten years beginning the first year of operations. Partial exemption of Municipal taxes up to a 50% of its value during a 5-year period, beginning the first year of operations. Fiscal incentive package

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US$7.00 Special Contribution

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5% Special Contribution

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5% Special Contribution

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Tourism National Plan 2014 Objectives

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Qualitative and Quantitative Objectives OBJETIVES 2014 – TURIST ACTIVITIES Constant growth of the tourist activity Prioritize the improvement of qualitative tourist arrivals with respect to the quantitative. Increase of tourist sector contribution to the GDP Consolidate El Salvador among the top 3 tourist destinations in the Central America region 2005 1,154,386 2014 2,000,000 Tourist arrivals: Tourist average stay and expenses: 2005 91.60$ 2014 140$ 5.5 days 7 days

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Distribution based on traveling motivations: Tourists distribution based on place of origin OBJECTIVES 2014 – TOURIST DEMAND Increase the share of international tourists, against Central American arrivals. Define and consolidate the brand awareness of El Salvador's. 2005 2014 2014 2005

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OBJECTIVES 2014 – Tourism offer . Increase the receptive capacity as a tourist destination and foster a high quality service offer. Promote National and Foreign Investment in the sector. Link fiscal incentives to the completion of at least 1000 investments in the lodging offer, restaurants and complementary services. 2014 12,000 Rooms 2004 5,000 Rooms Increase in offer of tourist lodging: 200 new establishments 90% “Boutique hotels” with an average capacity (<50 rooms)

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Products and Tourist Resources Congress and Conventions Beach and Sun Surfing Sport Fishing Scuba Diving Relaxing Culture and Archaeology Nature and Adventure Rural and Eco-Tourism

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San Salvador: “Is the favorite city for businessmen in Central America.” (Latin Trade, February 2006 edition )

Room availability: 

Room availability Total rooms 5,757 In San Salvador 36% International chains 25% Convention Centers 12,516 mts2 in hotels >142,000 mts2 in fairground

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Air Connections American Airlines Continental Delta Grupo TACA Aeromexico COPA United Airlines (Over 32 direct flights daily from and to major cities in the US, Canada, Central America & South America) Road infrastructure 35 minutes to a surfing beach 20 minutes to a volcano 20 minutes to a volcanic lake 4 hours to Antigua Guatemala, Guatemala 6 hours to Tela & Ceiba, Honduras 8 hours to Managua, Nicaragua Connectivity

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Fully booked since DAY 1. Building 180 additional rooms Most recent success story

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Unspoiled Unexploited Hard working and nice people The freest country in Central America The only country in C.A. certified Category 1 by the FAA EL SALVADOR IS:

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The country with the best road system in C.A. The country with the shortest distances between destines The country with the most convenient geographical location The only dollarized country in C.A. The only country with Investment Grade in C.A. EL SALVADOR IS:

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The country with the strongest banking system in C.A. The country with the lowest interest rates in C.A. A country with attractive Fiscal Incentives for Tourism Investors The fastest emerging destine in C.A. Ready for your business EL SALVADOR IS:

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Thank You !