Medical Tourism Sector 2009-09-10

MEDICAL
TOURISM
SECTOR
www.investincolombia.com.co
Volume I – No. 1
July 2009
Bogotá D.C.
ISSN 2145-1184
No matter which way you look at it, Colombia
is your investment destination because
we create everything with our best natural gift
– the Passion of Colombians.
www.colombiaespasion.com
This document is constantly updated on its online version:
www.investincolombia.com.co
www.investincolombia.com.co
6
Proexport
Services
Table of Contents
World Class Services For Investors
Preface
The Colombian government creates favorable conditions and offers the best support for investors. Proexport occupied
position 16 in the list of the best Investment Promotion Agencies of the world and provides the following services to foreign
investors:
• Information requests (economic, sector specific information, legal, procedural, etc.).
• Contacts with public and private sectors.
• Set up of agendas when investors decide to visit Colombia.
• Aftercare services for investors that are already established in the country.
• Assessment and improvement of business climate.
All services are free of charge. The primary goal is to create an efficient and friendly process for the development of new
businesses. All information will be handled with discretion.
1.
2.
3.
4.
5.
6.
Health Sector in Colombia
Why Colombia is an opportunity to invest in Medical Tourism?
Opportunities to Invest in Medical Tourism in Colombia
Investment Incentives
Related Entities
Proexport Services
Proexport has Investment Promotion Teams in 21 cities around the world. We will be delighted to assist you.
www.investincolombia.com.co
Publishing Company:
Fiducoldex - Fideicomiso Proexport Colombia
Foreign Investment Office
[email protected]
Publisher:
Schalma Diazgranados Abadía
Foreign Investment Advisor
Teléfono: +57 (1) 5600100 - Fax: +57 (1) 3415689
[email protected]
Cover Design: Sancho BBDO
Printed in: Offset Gráfico
Bogotá D.C., Colombia - July 2009
The digital version of this document can be found on:
www.investincolombia.com.co
Preface
This is a great time to invest in Medical Tourism in Colombia
We are experiencing a historical moment in growth and development. Years of innovation and top quality
medical care have consolidated our health sector. We are ready to make the leap and become a worldwide
health care provider. Your investment will help us reach this goal faster.
Colombia offers unique conditions for your investment and a package of benefits specially designed to improve
your business options, including the possibility of establishing a Free Trade Zone for Health Services, with
excellent taxes and operations incentives.
In this document you will discover our competitive advantages, our achievements over the years, the
experiences of people who have dealt with us in the past and the benefits favoring your investment. You will
also understand how Proexport can support you when you invest in Colombia and how we can help you
consolidate a better project.
Some of the reasons you will find in this document include:
• Colombia has the best health system in Latin America, and it is ranked 22 in the world.
• Colombia allocates 7.3% of its GDP and 13.9 % of its public expenditure to healthcare.
• Colombia is only 3 hours away by plane from Miami and less than 6 hours from New York, Washington,
Houston, São Paulo, Mexico and Buenos Aires.
• In Colombia, medical procedures cost between 10% and 35% of the prices in the United States.
• Colombia has a history of medical innovation and achievement, resulting in the current international
recognition of the country and its doctors.
• Colombia has 5% of the world market share in tourism for curative medicine. With our work plan we hope
to reach between 20% and 30% of this share by 2032.
• The Pacemaker, Hakim’s Valve and the vaccine against Malaria were invented in Colombia. The first trachea
transplant in the world was also performed in Colombia.
There are millions of reasons. Here we will only present a few ones so you can find the best opportunity of
investment in Medical Tourism in Colombia.
5
Related
Entities
1
Health Sector
in Colombia
Colombia has the best health system in Latin America and it is ranked 22 in the world.
ENTITY
OFFICIAL TOURISM WEBSITE OF COLOMBIA
WEB PAGE
www.colombia.travel
PROEXPORT
www.proexport.com.co
PRESIDENCY OF THE REPUBLIC
www.presidencia.gov.co
MINISTRY OF TRADE, INDUSTRY AND TOURISM
www.mincomercio.gov.co
SOCIAL PROTECTION MINISTRY
NATIONAL HEALTH SUPERINTENDENCY
ASSOCIATION OF HOTELS OF COLOMBIA
COLOMBIAN SOCIETY OF PLASTIC,
AESTHETIC AND RECONSTRUCTIVE SURGERY
COLOMBIAN SURGERY ASSOCIATION
COLOMBIAN ASSOCIATION OF TRAVEL AGENCIES AND TOURISM
According to figures from the World Health Organization, the Colombian health system is one of the best in the
developing world. It is at the same level as Sweden or Belgium, and in fact it is better than the health systems
in the United States and Canada.
Ranking of the Health Systems in the World
www.minproteccionsocial.gov.co
www.supersalud.gov.co
www.cotelco.org
www.cirugiaplastica.org.co
www.ascolcirugia.org
www.anato.org
1. France
2. Italy
21. Belgium
22. Colombia
23. Sweden
25. Germany
30. Canada
33. Chile
36. Costa Rica
37. United Estates
39. Cuba
47. Thailand
61. Mexico
75. Argentina
125. Brazil
0.994
0.991
0.915
0.910
0.908
0.902
0.881
0.870
0.849
0.838
0.834
0.807
0.755
0.722
0.573
0.000
0.200
0.400
0.600
0.800
1.000
Source: WHO World Health Report: Health Systems. Improving Performance.
The government provides great support to the healthcare system. Colombia allocates 7.3% of its GDP and
13.9% of its public expenditure to healthcare.
Health Expenditure has grown systematically in Colombia over recent years, largely due to the commitment of
the central government. The healthcare system in Colombia receives strong public investment ensuring its
operation and outstanding coverage; the government provides 86% of the total expenditure for healthcare.
Colombia allocates 7.5% of its GDP to health, one of the highest ratios in Latin America.
Health Expenditure as Percentage
of GDP (2008)
Argentina
9.5%
Brazil
8.4%
Colombia
7.3%
Chile
7.1%
Mexico
Peru
Venezuela
6.6%
4.3%
3.9%
Public Expenditure on Health
(2008)
Colombia
85.8%
Peru
47.3%
Chile
47.1%
Argentina
46.9%
Brazil
46.3%
Mexico
45.5%
Venezuela
42.9%
Source: Economist Intelligence Unit and World Competitiveness Yearbook 2009.
Reforms in the healthcare sector have increased the coverage to 85% of the population, and life
expectancy to 72.5 years
Permanent Free Trade Zone of Services
Various companies may open in a Free Trade Zone. All the companies must comply with the following ranges of
investment and employment.
Total Assets
Less than 500 M.M.L.W. (USD124.000)
501 to 5,000 M.M.L.W. (USD124.000 – USD 1.2 million)
5001 to 30,000 M.M.L.W.
(USD 1.2 million - USD 7.5 million)
Over 30,001 M.M.L.W. (USD 7.5 million)
Investment
None
None
5,000 M.M.L.W.
(USD 1.2 million)
11,500 M.M.L.W.
(USD 2.9 million)
Direct Jobs
None
20
Law 100 of 1993 reformed the healthcare sector increasing the coverage of healthcare services from 30% to
85%. Likewise, life expectancy -an indicator reflecting the quality of the healthcare sector in a country,
increased from 68.2 to 72.5 years. Healthcare expenditure per capita has also increased.
30
Expenditure in Healthcare and Life Expectancy
50
USD per capita
Investment required having access to the Free Trade Zone benefits are calculated in Minimum Monthly Legal Wages (M.M.L.W.).
The information is given in US Dollars, at an exchange rate of COP $ 2,000 = USD 1 and the minimum monthly legal wage for 2009
is COP $ 496,900. Both the M.M.L.W. and the exchange rate may vary.
Current Investors
These are some of the main entities working in Medical Tourism already operating in Colombia.
Years
Coverage 85%
400
370
Law 100 Reforms
to the health
sector
350
323
286.1
300
245.8
250
165.8
200 68.4
72
70.9
254.1
70
187.5
69.1
171.9
72.5
256.3
162.4
150
100
50
0
82.9
75
73
71
69
67
96.3
Coverage 30%
65
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Health Expenditure (per Capita)
Total life expectancy (years)
Sources: EIU, Fedesarrollo.
63
Frequently Asked Questions
Which are the tax benefits for the tourists?
• Tourists living abroad benefit from VAT exemptions for the tourism packages sold in foreign countries.
• Foreign tourists may request reinstatement of 100% of the VAT for purchases of the following goods: confections,
shoes, perfumes, leather goods, compact discs, hand crafts, liquor, and food for humans, toys, emeralds and
Colombian handcraft jewelry.
• Tourists have a differential VAT rate of 10% for accommodation.
Which are the tax benefits for the investors?
• Apart from the benefits mentioned, Investors can enjoy an income tax deduction up to 40% of the value of their
investments in real productive fixed assets.
• Investors have the possibility of importing capital goods used to provide tourism services which are then exported,
with total or partial suspension of the duty and they can defer payment of VAT. (Plan Vallejo for Services).
Can a hotel open in a Free Trade Zone?
A hotel may open in a permanent Free Trade Zone of Services and have an income tax rate of 15% and not pay VAT
or duties for goods brought in from abroad.
2
Why Colombia is an
opportunity to invest in
Medical Tourism?
“Former football player Diego Armando Maradona underwent a “gastric bypass” surgery in Colombia
to loose weight”
Source: BBC World1
Colombia has outstanding connections for treating international patients
Over 600 flights per week connect Colombia with North, Central and South America and Europe, and 30% of
these flights arrive directly to cities like Medellín, Cali, Barranquilla, Cartagena and Bucaramanga so it is
extremely easy to reach important medical centers in these cities. There are 187 flights a week directly to the
United States.
Colombia is only 3 hours away by plane from Miami and less than 6 hours from New York, Washington,
Houston, Sao Paulo, Mexico and Buenos Aires
Our strategic location near the United States, along with major Latin American capital cities, makes us the best
option for treatment of the highest quality – with only a very short trip from home.
Flight times to Colombia
5:30 New York
3:00 Miami
1:40 Caracas
4:30 Mexico City
2:30 Lima
5:00 Santiago
6:10 Buenos Aires
1
BBC World. March 6, 2005.
5:45 São Paulo
Medical procedures in Colombia cost between 10% and 35% of the prices in the United States
The enterprise that applies for the implementation of the Vallejo Plan acquires the following commitments:
Costs in Colombia are among the most competitive in Latin America in terms of surgery, medical treatment and
medication. It is possible to receive treatments for only 10% of the cost in the United States.
• Export services worth at least 1.5 of the FOB price of the imported capital goods.
• Constitute a global guarantee of a bank or an insurance agency that is worth the 20% of the FOB price of the
authorized imports in the program.
2
Examples of Costs for Medical Procedures
Procedure (USD)
Kidney transplant
Augmentation Mammoplasty
Rhinoplasty
Abdominoplasty
Blepharoplasty
Colombia United States
$25,000
$2,600
$1,900
$3,000
$1,700
$120,000
$8,500
$6,500
$8,500
$7,500
India
Mexico
$2,600
$2,100
$3,400
$1,850
$45,000
$5,000
$2,800
$4,500
$4,000
Legal Stability Agreements
Thailand Costa Rica
$5,700
$2,000
$4,000
$1,400
$2,700
$2,500
$4,000
$2,500
Entities receiving medical tourism patients have over 80% occupation, thus an opportunity for new investments
A recent survey done by Proexport of leading institutions who receive Medical Tourism patients shows a high
occupancy rate for beds, operating rooms and intensive care units, indicating an opportunity for new
investments to take advantage of the good moment of the sector.
2
Costs may vary depending on the quality and infrastructure of the medical center. Average prices in tourism operators.
Include surgery and post surgery treatment. Proexport estimates.
Through these agreements, the Colombian Government guarantees investors that if during the life of a contract,
legislation is passed adversely affecting any of the rules identified in the agreement as having been “a determining
factor to make the investment”, they will be entitled to continue operating under the prior rule during the term of the
corresponding agreement.
The period of such agreements may vary between 3 and 20 years, and they may cover new investments or increases
of existing ones for amounts equal to or above 150,000 UVT – Units of Tax Value equivalent to COP $3.6 billion
(approximately USD 1.8 million based on a COP$2,000 = USD 1 reference rate of exchange). The investor must pay
the Government a premium equal to 1% of the amount of the investment made every year, or 0.5% thereof during
non-productive periods.
If the project is developed throughout various geographical areas, it may exceptionally apply to have
such additional areas also declared as Special Free Trade Zones.
Average Occupation in Leading Entities in Medical Tourism
100%
90%
80%
70%
60%
Free Trade Zone enjoy the following legal benefits:
• Single Income tax rate of 15%.
• Customs Fees are not generated or paid (VAT, CUSTOMS TARIFFS), for merchandise brought from mainland.
84%
65%
50%
40%
30%
Value-Added Tax (VAT)
20%
10%
• Differential 10% VAT rate for hotel services.
0%
• VAT exemption applicable to tourism services provided in Colombia to residents abroad through packages
sold either in Colombia or by foreign agencies, operators or hotels registered with the Colombian national
tourism registry.
Special Import - Export System for Services: "Plan Vallejo"
88%
Beds
Operating Rooms
Intensive Care Units
Source: Proexport: Survey of entities.
Colombia has a history of medical innovation and achievement, resulting in the current international recognition of
the country and its doctors
The investor can import capital goods that are used for providing the tourism service that is going to be exported with
total or partial exempt from customs duties and deferred VAT payment.
Colombia has been a pioneer in healthcare service exports in Latin America. Entities like the Instituto
3
Barraquer de América founded in 1963, has a great name for treating international patients. Also Colombian
medicine has achieved great innovations.
The tourism services that can be exported under this mechanism are the following according to the ISIC
(International Standard Industrial Classification) adapted by Colombia:
Some of the innovations achieved in Colombia include:
“6.9 Tourism services and those related to traveling, and lodging services (CPC classification 631), ISIC:
5511 Hotel, Hostel and Apartment - Hotel Lodging.
5513 Holiday Centers and Camping Zones Lodging".
•Heart Pacemaker. 1963, Dr. Jorge Reynolds Pombo
•Hakim Valve. 1964, Dr. Salomón Hakim
•Malaria Vaccine. 1986, Dr. Manuel Patarroyo
3
The Instituto Barraquer de América is one of the most famous optical surgery facilities in the world.
It is recognized for its quality and innovation.
4
Colombia has also been the pioneer in high complexity surgeries:
Incentives
Colombia offers special characteristics that make us a great potential destination for your investment in tourism;
particularly in terms of the incentives package we are offering to investors in the sector.
• First trachea transplant in the world. 2003, Dr. Luis Fernando Tintinago.
• Second larynx transplant in the world. 2002, Dr. Luis Fernando Tintinago.
• First bone marrow transplant in Latin America.
• First liver transplant in Latin America.
Income tax exemption on:
• 30 years of income tax exemption for new hotels built between 2003 and 2018.
Medical Tourism is one of the industries with highest growth rate in the world. Over the next 3 years, 15 million North
Americans will undergo procedures abroad.
Medical Tourism is a fast growing industry throughout the world. In 2007, 750,000 Americans received
4
treatment abroad and between 6 and 7 million are expected to do the same by 2010 . Colombia has great
potential to receive this flow due to its geographic proximity to the United States and because of remarkable
cost differences.
Patients from the United States who
will Undergo Procedures Abroad
Million Patients
25
Investment
• Hotel services provided in hotels remodeled and/or expanded up to 2018, prorated to the amount that the cost of
remodeling and/or expansion represents with regard to the total taxable cost of the remodeled or expanded piece
of real estate, the tax exemption applies for a 30 years period.
• Ecotourism services, during 20 years beginning in 2003.
Income Tax deductions
Likewise, investors in the tourism sector are entitled to a 40% deduction on the amount of their investments made
only in real fixed productive assets acquired.
Special Free Trade Zone for Services
20
The Free Trade Zone status is granted to an individual company undertaking a new investment project. In order to
qualify, the company must meet one of the following investment and job creation ranges:
15
Investment (in USD million)
USD 2.5 - USD 11.4
USD 11.4 - USD 22.9
More than USD 22.9
10
5
0
2007
2008
2009
2010
Base
2011
2012
2013
2014
Low estimate
Source: Deloitte Development LLC. 2008.
4
Deloitte. Medical Tourism. Consumers in Search of Value.
2015
2016
High estimate
2017
Number of Direct Jobs
500
350
150
The investment amounts required to obtain the Free Trade Zone status are calculated in Minimum Monthly Legal Wages (M.M.L.W.). This
information is presented in dollars using a USD 1 = COP $2,000 exchange rate. For 2009, the M.M.L.W. is COP $496,900. The M.M.L.W., as well
as the exchange rate, are subject to variations.
Colombia has 5% of the market share in tourism for curative medicine. With our work plan we hope to reach between
20% and 30% of this share by 2032
Medical Tourism seeking curative medicine carries around 80 thousand passengers per year in the world.
Colombia attracts more than 4 thousand of them, but with the productive transformation program for the
5
sector, it may reach between 20% and 30% of world tourism by 2032.
Medical Tourism for Curative Medicine Purposes in the World
Thousand Travelers
800
700
600
500
400
300
200
100
0
2008
2009
2010
Low estimate
2011
2012
2013
2014
High estimate
Source: McKinsey & Company. 2009.
Colombia has agreements with international health insurance companies who send patients from abroad, pursuing
top quality procedures at lower costs.
Around 40% of the medical tourists seeking curative medicine arrive through agreements with international
health insurance companies (HMO’s). European insurance firms –mainly Dutch based- having coverage in the
Caribbean, consider Colombia as an alternative for their patients to receive first level treatment at a lower cost
and shorter waiting times.
5
Estimates of McKinsey & Company.
“Australian Pop Star Kylie Minogue underwent a dental whitening procedure in Colombia performed by dentist
Christian Salazar”
6
3
Opportunities to Invest
in Medical Tourism
in Colombia
There are four types of Medical Tourism with great investment potential:
Source: El Tiempo Newspaper, 2008
Curative
Preventive
Aesthetic
Wellness
• Curative: Patients seeking medical treatment abroad for diseases they already have, as well as transplants
or nonelective surgeries.
• Preventive: Patients trying to prevent potential diseases. In their country they have to wait for a long time to
get an appointment or their costs are very high. This includes Executive Medical Check-Ups.
• Aesthetic: Patients wishing to undergo elective surgery, essentially to improve their looks. They are looking
for better quality than the one available in their countries or lower costs. These include orthodoncy and dental
esthetics.
• Wellness: Passengers who want to relax and have a change of routine. These include spas and tourism to
thermal spring waters.
Additionally investment in infrastructure supporting tourism of this type like special hotels, tailored services,
training centers, tourist operators and rehabilitation centers also have a high chance of success.
“The famous sexologist from Puerto Rico, Alexandra Rampolla, had a successful bariatric surgery in Colombia
with outstanding results”
Official website of Alexandra Rampolla
www.tusexologa.com
6
www.eltiempo.com
“Australian Pop Star Kylie Minogue underwent a dental whitening procedure in Colombia performed by dentist
Christian Salazar”
6
3
Opportunities to Invest
in Medical Tourism
in Colombia
There are four types of Medical Tourism with great investment potential:
Source: El Tiempo Newspaper, 2008
Curative
Preventive
Aesthetic
Wellness
• Curative: Patients seeking medical treatment abroad for diseases they already have, as well as transplants
or nonelective surgeries.
• Preventive: Patients trying to prevent potential diseases. In their country they have to wait for a long time to
get an appointment or their costs are very high. This includes Executive Medical Check-Ups.
• Aesthetic: Patients wishing to undergo elective surgery, essentially to improve their looks. They are looking
for better quality than the one available in their countries or lower costs. These include orthodoncy and dental
esthetics.
• Wellness: Passengers who want to relax and have a change of routine. These include spas and tourism to
thermal spring waters.
Additionally investment in infrastructure supporting tourism of this type like special hotels, tailored services,
training centers, tourist operators and rehabilitation centers also have a high chance of success.
“The famous sexologist from Puerto Rico, Alexandra Rampolla, had a successful bariatric surgery in Colombia
with outstanding results”
Official website of Alexandra Rampolla
www.tusexologa.com
6
www.eltiempo.com
Colombia has 5% of the market share in tourism for curative medicine. With our work plan we hope to reach between
20% and 30% of this share by 2032
Medical Tourism seeking curative medicine carries around 80 thousand passengers per year in the world.
Colombia attracts more than 4 thousand of them, but with the productive transformation program for the
5
sector, it may reach between 20% and 30% of world tourism by 2032.
Medical Tourism for Curative Medicine Purposes in the World
Thousand Travelers
800
700
600
500
400
300
200
100
0
2008
2009
2010
Low estimate
2011
2012
2013
2014
High estimate
Source: McKinsey & Company. 2009.
Colombia has agreements with international health insurance companies who send patients from abroad, pursuing
top quality procedures at lower costs.
Around 40% of the medical tourists seeking curative medicine arrive through agreements with international
health insurance companies (HMO’s). European insurance firms –mainly Dutch based- having coverage in the
Caribbean, consider Colombia as an alternative for their patients to receive first level treatment at a lower cost
and shorter waiting times.
5
Estimates of McKinsey & Company.
4
Colombia has also been the pioneer in high complexity surgeries:
Incentives
Colombia offers special characteristics that make us a great potential destination for your investment in tourism;
particularly in terms of the incentives package we are offering to investors in the sector.
• First trachea transplant in the world. 2003, Dr. Luis Fernando Tintinago.
• Second larynx transplant in the world. 2002, Dr. Luis Fernando Tintinago.
• First bone marrow transplant in Latin America.
• First liver transplant in Latin America.
Income tax exemption on:
• 30 years of income tax exemption for new hotels built between 2003 and 2018.
Medical Tourism is one of the industries with highest growth rate in the world. Over the next 3 years, 15 million North
Americans will undergo procedures abroad.
Medical Tourism is a fast growing industry throughout the world. In 2007, 750,000 Americans received
4
treatment abroad and between 6 and 7 million are expected to do the same by 2010 . Colombia has great
potential to receive this flow due to its geographic proximity to the United States and because of remarkable
cost differences.
Patients from the United States who
will Undergo Procedures Abroad
Million Patients
25
Investment
• Hotel services provided in hotels remodeled and/or expanded up to 2018, prorated to the amount that the cost of
remodeling and/or expansion represents with regard to the total taxable cost of the remodeled or expanded piece
of real estate, the tax exemption applies for a 30 years period.
• Ecotourism services, during 20 years beginning in 2003.
Income Tax deductions
Likewise, investors in the tourism sector are entitled to a 40% deduction on the amount of their investments made
only in real fixed productive assets acquired.
Special Free Trade Zone for Services
20
The Free Trade Zone status is granted to an individual company undertaking a new investment project. In order to
qualify, the company must meet one of the following investment and job creation ranges:
15
Investment (in USD million)
USD 2.5 - USD 11.4
USD 11.4 - USD 22.9
More than USD 22.9
10
5
0
2007
2008
2009
2010
Base
2011
2012
2013
2014
Low estimate
Source: Deloitte Development LLC. 2008.
4
Deloitte. Medical Tourism. Consumers in Search of Value.
2015
2016
High estimate
2017
Number of Direct Jobs
500
350
150
The investment amounts required to obtain the Free Trade Zone status are calculated in Minimum Monthly Legal Wages (M.M.L.W.). This
information is presented in dollars using a USD 1 = COP $2,000 exchange rate. For 2009, the M.M.L.W. is COP $496,900. The M.M.L.W., as well
as the exchange rate, are subject to variations.
If the project is developed throughout various geographical areas, it may exceptionally apply to have
such additional areas also declared as Special Free Trade Zones.
Average Occupation in Leading Entities in Medical Tourism
100%
90%
80%
70%
60%
Free Trade Zone enjoy the following legal benefits:
• Single Income tax rate of 15%.
• Customs Fees are not generated or paid (VAT, CUSTOMS TARIFFS), for merchandise brought from mainland.
84%
65%
50%
40%
30%
Value-Added Tax (VAT)
20%
10%
• Differential 10% VAT rate for hotel services.
0%
• VAT exemption applicable to tourism services provided in Colombia to residents abroad through packages
sold either in Colombia or by foreign agencies, operators or hotels registered with the Colombian national
tourism registry.
Special Import - Export System for Services: "Plan Vallejo"
88%
Beds
Operating Rooms
Intensive Care Units
Source: Proexport: Survey of entities.
Colombia has a history of medical innovation and achievement, resulting in the current international recognition of
the country and its doctors
The investor can import capital goods that are used for providing the tourism service that is going to be exported with
total or partial exempt from customs duties and deferred VAT payment.
Colombia has been a pioneer in healthcare service exports in Latin America. Entities like the Instituto
3
Barraquer de América founded in 1963, has a great name for treating international patients. Also Colombian
medicine has achieved great innovations.
The tourism services that can be exported under this mechanism are the following according to the ISIC
(International Standard Industrial Classification) adapted by Colombia:
Some of the innovations achieved in Colombia include:
“6.9 Tourism services and those related to traveling, and lodging services (CPC classification 631), ISIC:
5511 Hotel, Hostel and Apartment - Hotel Lodging.
5513 Holiday Centers and Camping Zones Lodging".
•Heart Pacemaker. 1963, Dr. Jorge Reynolds Pombo
•Hakim Valve. 1964, Dr. Salomón Hakim
•Malaria Vaccine. 1986, Dr. Manuel Patarroyo
3
The Instituto Barraquer de América is one of the most famous optical surgery facilities in the world.
It is recognized for its quality and innovation.
Medical procedures in Colombia cost between 10% and 35% of the prices in the United States
The enterprise that applies for the implementation of the Vallejo Plan acquires the following commitments:
Costs in Colombia are among the most competitive in Latin America in terms of surgery, medical treatment and
medication. It is possible to receive treatments for only 10% of the cost in the United States.
• Export services worth at least 1.5 of the FOB price of the imported capital goods.
• Constitute a global guarantee of a bank or an insurance agency that is worth the 20% of the FOB price of the
authorized imports in the program.
2
Examples of Costs for Medical Procedures
Procedure (USD)
Kidney transplant
Augmentation Mammoplasty
Rhinoplasty
Abdominoplasty
Blepharoplasty
Colombia United States
$25,000
$2,600
$1,900
$3,000
$1,700
$120,000
$8,500
$6,500
$8,500
$7,500
India
Mexico
$2,600
$2,100
$3,400
$1,850
$45,000
$5,000
$2,800
$4,500
$4,000
Legal Stability Agreements
Thailand Costa Rica
$5,700
$2,000
$4,000
$1,400
$2,700
$2,500
$4,000
$2,500
Entities receiving medical tourism patients have over 80% occupation, thus an opportunity for new investments
A recent survey done by Proexport of leading institutions who receive Medical Tourism patients shows a high
occupancy rate for beds, operating rooms and intensive care units, indicating an opportunity for new
investments to take advantage of the good moment of the sector.
2
Costs may vary depending on the quality and infrastructure of the medical center. Average prices in tourism operators.
Include surgery and post surgery treatment. Proexport estimates.
Through these agreements, the Colombian Government guarantees investors that if during the life of a contract,
legislation is passed adversely affecting any of the rules identified in the agreement as having been “a determining
factor to make the investment”, they will be entitled to continue operating under the prior rule during the term of the
corresponding agreement.
The period of such agreements may vary between 3 and 20 years, and they may cover new investments or increases
of existing ones for amounts equal to or above 150,000 UVT – Units of Tax Value equivalent to COP $3.6 billion
(approximately USD 1.8 million based on a COP$2,000 = USD 1 reference rate of exchange). The investor must pay
the Government a premium equal to 1% of the amount of the investment made every year, or 0.5% thereof during
non-productive periods.
2
Why Colombia is an
opportunity to invest in
Medical Tourism?
“Former football player Diego Armando Maradona underwent a “gastric bypass” surgery in Colombia
to loose weight”
Source: BBC World1
Colombia has outstanding connections for treating international patients
Over 600 flights per week connect Colombia with North, Central and South America and Europe, and 30% of
these flights arrive directly to cities like Medellín, Cali, Barranquilla, Cartagena and Bucaramanga so it is
extremely easy to reach important medical centers in these cities. There are 187 flights a week directly to the
United States.
Colombia is only 3 hours away by plane from Miami and less than 6 hours from New York, Washington,
Houston, Sao Paulo, Mexico and Buenos Aires
Our strategic location near the United States, along with major Latin American capital cities, makes us the best
option for treatment of the highest quality – with only a very short trip from home.
Flight times to Colombia
5:30 New York
3:00 Miami
1:40 Caracas
4:30 Mexico City
2:30 Lima
5:00 Santiago
6:10 Buenos Aires
1
BBC World. March 6, 2005.
5:45 São Paulo
Frequently Asked Questions
Which are the tax benefits for the tourists?
• Tourists living abroad benefit from VAT exemptions for the tourism packages sold in foreign countries.
• Foreign tourists may request reinstatement of 100% of the VAT for purchases of the following goods: confections,
shoes, perfumes, leather goods, compact discs, hand crafts, liquor, and food for humans, toys, emeralds and
Colombian handcraft jewelry.
• Tourists have a differential VAT rate of 10% for accommodation.
Which are the tax benefits for the investors?
• Apart from the benefits mentioned, Investors can enjoy an income tax deduction up to 40% of the value of their
investments in real productive fixed assets.
• Investors have the possibility of importing capital goods used to provide tourism services which are then exported,
with total or partial suspension of the duty and they can defer payment of VAT. (Plan Vallejo for Services).
Can a hotel open in a Free Trade Zone?
A hotel may open in a permanent Free Trade Zone of Services and have an income tax rate of 15% and not pay VAT
or duties for goods brought in from abroad.
Reforms in the healthcare sector have increased the coverage to 85% of the population, and life
expectancy to 72.5 years
Permanent Free Trade Zone of Services
Various companies may open in a Free Trade Zone. All the companies must comply with the following ranges of
investment and employment.
Total Assets
Less than 500 M.M.L.W. (USD124.000)
501 to 5,000 M.M.L.W. (USD124.000 – USD 1.2 million)
5001 to 30,000 M.M.L.W.
(USD 1.2 million - USD 7.5 million)
Over 30,001 M.M.L.W. (USD 7.5 million)
Investment
None
None
5,000 M.M.L.W.
(USD 1.2 million)
11,500 M.M.L.W.
(USD 2.9 million)
Direct Jobs
None
20
Law 100 of 1993 reformed the healthcare sector increasing the coverage of healthcare services from 30% to
85%. Likewise, life expectancy -an indicator reflecting the quality of the healthcare sector in a country,
increased from 68.2 to 72.5 years. Healthcare expenditure per capita has also increased.
30
Expenditure in Healthcare and Life Expectancy
50
USD per capita
Investment required having access to the Free Trade Zone benefits are calculated in Minimum Monthly Legal Wages (M.M.L.W.).
The information is given in US Dollars, at an exchange rate of COP $ 2,000 = USD 1 and the minimum monthly legal wage for 2009
is COP $ 496,900. Both the M.M.L.W. and the exchange rate may vary.
Current Investors
These are some of the main entities working in Medical Tourism already operating in Colombia.
Years
Coverage 85%
400
370
Law 100 Reforms
to the health
sector
350
323
286.1
300
245.8
250
165.8
200 68.4
72
70.9
254.1
70
187.5
69.1
171.9
72.5
256.3
162.4
150
100
50
0
82.9
75
73
71
69
67
96.3
Coverage 30%
65
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Health Expenditure (per Capita)
Total life expectancy (years)
Sources: EIU, Fedesarrollo.
63
The government provides great support to the healthcare system. Colombia allocates 7.3% of its GDP and
13.9% of its public expenditure to healthcare.
Health Expenditure has grown systematically in Colombia over recent years, largely due to the commitment of
the central government. The healthcare system in Colombia receives strong public investment ensuring its
operation and outstanding coverage; the government provides 86% of the total expenditure for healthcare.
Colombia allocates 7.5% of its GDP to health, one of the highest ratios in Latin America.
Health Expenditure as Percentage
of GDP (2008)
Argentina
9.5%
Brazil
8.4%
Colombia
7.3%
Chile
7.1%
Mexico
Peru
Venezuela
6.6%
4.3%
3.9%
Public Expenditure on Health
(2008)
Colombia
85.8%
Peru
47.3%
Chile
47.1%
Argentina
46.9%
Brazil
46.3%
Mexico
45.5%
Venezuela
42.9%
Source: Economist Intelligence Unit and World Competitiveness Yearbook 2009.
5
Related
Entities
1
Health Sector
in Colombia
Colombia has the best health system in Latin America and it is ranked 22 in the world.
ENTITY
OFFICIAL TOURISM WEBSITE OF COLOMBIA
WEB PAGE
www.colombia.travel
PROEXPORT
www.proexport.com.co
PRESIDENCY OF THE REPUBLIC
www.presidencia.gov.co
MINISTRY OF TRADE, INDUSTRY AND TOURISM
www.mincomercio.gov.co
SOCIAL PROTECTION MINISTRY
NATIONAL HEALTH SUPERINTENDENCY
ASSOCIATION OF HOTELS OF COLOMBIA
COLOMBIAN SOCIETY OF PLASTIC,
AESTHETIC AND RECONSTRUCTIVE SURGERY
COLOMBIAN SURGERY ASSOCIATION
COLOMBIAN ASSOCIATION OF TRAVEL AGENCIES AND TOURISM
According to figures from the World Health Organization, the Colombian health system is one of the best in the
developing world. It is at the same level as Sweden or Belgium, and in fact it is better than the health systems
in the United States and Canada.
Ranking of the Health Systems in the World
www.minproteccionsocial.gov.co
www.supersalud.gov.co
www.cotelco.org
www.cirugiaplastica.org.co
www.ascolcirugia.org
www.anato.org
1. France
2. Italy
21. Belgium
22. Colombia
23. Sweden
25. Germany
30. Canada
33. Chile
36. Costa Rica
37. United Estates
39. Cuba
47. Thailand
61. Mexico
75. Argentina
125. Brazil
0.994
0.991
0.915
0.910
0.908
0.902
0.881
0.870
0.849
0.838
0.834
0.807
0.755
0.722
0.573
0.000
0.200
0.400
0.600
0.800
1.000
Source: WHO World Health Report: Health Systems. Improving Performance.
Preface
This is a great time to invest in Medical Tourism in Colombia
We are experiencing a historical moment in growth and development. Years of innovation and top quality
medical care have consolidated our health sector. We are ready to make the leap and become a worldwide
health care provider. Your investment will help us reach this goal faster.
Colombia offers unique conditions for your investment and a package of benefits specially designed to improve
your business options, including the possibility of establishing a Free Trade Zone for Health Services, with
excellent taxes and operations incentives.
In this document you will discover our competitive advantages, our achievements over the years, the
experiences of people who have dealt with us in the past and the benefits favoring your investment. You will
also understand how Proexport can support you when you invest in Colombia and how we can help you
consolidate a better project.
Some of the reasons you will find in this document include:
• Colombia has the best health system in Latin America, and it is ranked 22 in the world.
• Colombia allocates 7.3% of its GDP and 13.9 % of its public expenditure to healthcare.
• Colombia is only 3 hours away by plane from Miami and less than 6 hours from New York, Washington,
Houston, São Paulo, Mexico and Buenos Aires.
• In Colombia, medical procedures cost between 10% and 35% of the prices in the United States.
• Colombia has a history of medical innovation and achievement, resulting in the current international
recognition of the country and its doctors.
• Colombia has 5% of the world market share in tourism for curative medicine. With our work plan we hope
to reach between 20% and 30% of this share by 2032.
• The Pacemaker, Hakim’s Valve and the vaccine against Malaria were invented in Colombia. The first trachea
transplant in the world was also performed in Colombia.
There are millions of reasons. Here we will only present a few ones so you can find the best opportunity of
investment in Medical Tourism in Colombia.
6
Proexport
Services
Table of Contents
World Class Services For Investors
Preface
The Colombian government creates favorable conditions and offers the best support for investors. Proexport occupied
position 16 in the list of the best Investment Promotion Agencies of the world and provides the following services to foreign
investors:
• Information requests (economic, sector specific information, legal, procedural, etc.).
• Contacts with public and private sectors.
• Set up of agendas when investors decide to visit Colombia.
• Aftercare services for investors that are already established in the country.
• Assessment and improvement of business climate.
All services are free of charge. The primary goal is to create an efficient and friendly process for the development of new
businesses. All information will be handled with discretion.
1.
2.
3.
4.
5.
6.
Health Sector in Colombia
Why Colombia is an opportunity to invest in Medical Tourism?
Opportunities to Invest in Medical Tourism in Colombia
Investment Incentives
Related Entities
Proexport Services
Proexport has Investment Promotion Teams in 21 cities around the world. We will be delighted to assist you.
www.investincolombia.com.co
Publishing Company:
Fiducoldex - Fideicomiso Proexport Colombia
Foreign Investment Office
[email protected]
Publisher:
Schalma Diazgranados Abadía
Foreign Investment Advisor
Teléfono: +57 (1) 5600100 - Fax: +57 (1) 3415689
[email protected]
Cover Design: Sancho BBDO
Printed in: Offset Gráfico
Bogotá D.C., Colombia - July 2009
The digital version of this document can be found on:
www.investincolombia.com.co
From all perspectives, Colombia is your
investment destination because in
everything we create we use the best raw
material, the Passion of Colombians
www.colombiaespasion.com
This document is constantly updated on its online version:
www.investincolombia.com.co
www.investincolombia.com.co
MEDICAL
TOURISM
SECTOR
www.investincolombia.com.co
Volume I – No. 1
July 2009
Bogotá D.C.
ISSN 2145-1184