M & R

Integrals Projects

CUSCO - PERU

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Perú, opportunities for profitable investments

Foreign trade: Tariffs are levied on imports, at 9%, 17% and 20%; 48.5% of all imports enter the country duty-free, giving an average tariff of 5.8%. Most non-tariff barriers to trade have been eliminated. In 2007 merchandise exports totalled US$29bn and imports US$19.6bn.

Sectors regarded to be well suited for investments:

Sector regarded to be well suited for investments:
- Agriculture
- Agro Expor
Peru has 84 green zones of the total 104 existing worldwide.
8 million hectares of fertile land.
The location in the southern hemisphere enables us to access off-season windows in the most important markets at premium prices.
1st in the world in the production of mango, asparagus an sugar cane and in exportation of asparagus and dried paprika

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Sector regarded to be web suited for investments

Spanish

Sectors regarded to be well suited for investments:

AGRICULTURE

Agro exporter sector
Peru has 84 green zones of the total 104 existing worldwide.
8 million hectares of fertile land.
The location in the southern hemisphere enables us to access off-season windows in the most important markets at premium prices.
1st in the world in the production of mango, asparagus and sugar cane and in exportation of asparagus and dried paprika.
Free-tariff entry to US markets and in negotiations with the EU.

Mining sector

Worlds largest producer of gold, zinc, tin and lead in Latin America and largest producer of silver
. Different developed projects ready to be transferred to private investors.
. Foreign investors have achieved internationally recognized results (e.g. Alto
Chicama prize PDAC – Prospectors and Developers Association of Canada, for the best discovery in the world).
. Peru has received investments of US$ 1.3 billion (1992-2005), and additional
investment commitments for US$ 6.6 billion.
. Peru has an outstanding competitive position in worldwide mining, leading this sector in Latin America.

Textile Sector

. High quality Peruvian Pima cotton.
. Largest producer of fine Alpaca and Vicuna fibber.
. Opportunity to benefit from the ATPDEA - Andean Trade Promotion and Eradication of Drugs Act / Free Trade Agreement, to enter the US apparel market

Forestry sector

. Forest Reserves of 53.5 million hectares and 6 million hectares for reforestation.
. Seventh biggest forestry reserve in the world.
. Peru is a country with excellent conditions for forestry. Its rich natural resources place it 2nd in Latin America and 10th in the world

AQUACULTURE

The Aquaculture sector is considered to be especially interesting as Peru has one of the best geographic and hydro biological conditions in the world for fish farming.

The Peruvian Aquaculture - Current situation

Perú is known as one of the most important fishing countries in the World and is the main producer of fishmeal and fish oil, offering the best fish food for aquaculture purposes.

Perú is also one of the 12 “mega diverse” countries in the world along with Brazil, being one of the countries with the largest number of fresh and salt water fish varieties.

Peru has good conditions for developing aquaculture and counts with saline cold waters and fresh water for the development of a variety of species, which is a major competitive advantage compared to other countries of the region.

The rainbow trout is the main specie in Peru, its quality is better than the other species farmed in other countries in the region. In addition, farming is made in shorter time (8-10 months). At the moment this specie is being exported to Norway.

Although Aquaculture still is not highly developed in Peru, the sector has high focus at the moment and is considered to present good investment opportunities.

Peru - Potential farming zones

In Peru there are 18 towns available for aquaculture purposes.

Currently there are facilities in the North West of the coast, for farming shrimp (Litopenaeus vannamei). The warm weather is also suitable for the farming of tilapia and scallops, while the cold water in the south of the country is most suitable for farming for instance Rainbow Trout, Native Flounder (Paralichthys adspersus) and Turbot (Psetta Maximus). In the mountain lakes, such as Lake Titicaca, there are growing productions of high-quality trout (Oncorhynchus mykiss)

The following species can be farmed

. Rainbow Trout (Oncorhynchus mykiss)
. Tilapia (Oreochromis spp)
. Native Flounder (Paralichthys adspersus)
. Mussels (mytilus edulis) in researching.
. Scallops (Argopecten purpuratus)

Some reasons for investing in this sector

-Excellent conditions in marine zones, with high profiles and continental areas free of pollution and stable weather throughout the year.

-Investments are regulated by the Aquaculture Promotion and Development Law, that guaranties reduction on income taxes, suspension of payment of aquaculture rights, anticipated recovery of VAT (value added tax – in Peru called IGV), among other benefits.

-Exports are not taxed with VAT and there are other incentives that could be obtained like the drawback (the government give the company back 5% of the FOB value of the exports), in bond admission, and reposition of the franchised merchandise

-There is no limit in the concessions of territory for developing aquaculture activities and the concessions can be conceded up to 30 years (renewable).

-Local knowledge and experience