1. OILAND GAS, EOLICAND SOLAR PROJECTS, LOCATIONSAND CONDITIONS.Business Opportunities with the Energy Reform in MexicoBY XAVIER HURTADOMEXICOS ENERGY BUSINESS FACILITATORFACILITATOR@ENERGYBUSINESSINMEXICO.COMWWW.ENERGYBUSINESSINMEXICO.COM

2. About the Energy reform in Mexico and what it means for your businessLocations and projects where you can start and grow your business in MexicoHow to start business operations in MexicoHow to find skilled human resources for your projectHow much it will cost you to start doing business in MexicoContents 3. EnriquePeaNieto,presidentofMexicopushedaverystrongreformtotransformPEMEX(OilStateCompany)andCFE(EnergyStateCompany)tobecomeincompetitiveStateunitsbeforeDecember2015.Thereformanditssecondarylawsallowprivatecompanies,domesticandforeigntoinvestinexplorationandextractionofoilandgasthroughcontractswiththegovernment(licensing,serviceprovidingandsharedprofitorproduction).Additionally,itallowsprivateinvestorstogenerateandprovideenergytoendusers.Asfarasoilandgas,in2014thereare2importantmoments:RoundZeroresolutionswherePEMEXwilldeterminewhatkeyprojectsandareastheywillcontinuetocontrolandtheonestheywillletgo.RoundOneresolutions,wherethetenderingprojectswillbeannouncedsothatprivateinvestorscanparticipateandbidforprojectsallthroughoutMexico.AbouttheEnergyreformin Mexicoand whatitmeansforyourbusinessAre you ready to participate and take a share of this business? 4. KeyregionsinMexicobystate: Chihuahua,Coahuila,NuevoLeon, Tamaulipas,Veracruz,Tabasco, Campeche.Keyprojectswhereyoucanparticipate:100newindustrialplants63marineplatforms129marinepipelines43terrestrialpipelines5On-deckprojects17Storage,distributionandPumpterminalsExplorationprojectsAmongmanyotherprojectsaccountingforapurchasingpoolof$200,000MillionUSDinthenext10years.Locations and projects where you can start and grow your business in Mexico: Oil and GasAre you ready to participate and take a share of this business? 5. Locations and projects where you can start and grow your business in Mexico: Solar and Eolic EnergyKeyregionsinMexicoforSolarEnergy: MostnorthernMexicoincludingChihuahua,Sonora,Coahuila,BajaCalifornia,Durango.Thisregionproducesmorethan2timesthesolarenergygeneratedinGermany.KeyregionsinMexicoforEolicEnergy: Chihuahua,Coahuila,BajaCaliforniaandsomeregionsintheSouth-EastpartofMexico:Chiapas,Yucatan,Campeche, QuintanaRoo.Inthepreviousregionsyouwillbeabletoproduce,generate,transform, distributeandsellenergytoendusersintheindustry,oreventotheStateownedcompany:CFE(ComisionFederaldeElectricidad.Solar EnergyMapAre you ready to participate and take a share of this business? 6. ONCE YOUDECIDE TO STARTYOURBUSINESS, WHATMODELWILLBE THEBESTFORYOU?5 Business models to start business operations in Mexico 7. 5 Business modelsFinding a Joint Venture PartnerAcquiring an existing operationStarting up with a Stand Alone operationContract ManufacturingStarting up with a Shelter Program 8. 5 Business modelsFinding a Joint Venture PartnerAcquiring an existing operationStarting up with a Stand Alone operationContract ManufacturingStarting up with a Shelter ProgramThey might be experts to do business in MexicoThey might speed up the start up process due to local networkingThey might be well connected to help you import & exportYou do not have full control of your operationYou have the risk of losing your intellectual propertyYou will face liabilities in Mexico in case of any mistakes or problems with the operations 9. 5 Business modelsFinding a Joint Venture PartnerAcquiring an existing operationStarting up with a Stand Alone operationContract ManufacturingStarting up with a Shelter ProgramEmployees will already have the needed training for your processLegal and operational permits might already be compliantHigh entrance costYou will be responsible for all the previous and ongoing legal and operational liabilities 10. 5 Business modelsFinding a Joint Venture PartnerAcquiring an existing operationStarting up with a Stand Alone operationContract ManufacturingStarting up with a Shelter ProgramYou will have full control of your operationHigh entrance costHigh and costly learning curveLack of local networkingHigh risk and liabilities for all legal, labor, fiscal and customs start-up and operational permits (functions that are not your core business) 11. 5 Business modelsFinding a Joint Venture PartnerAcquiring an existing operationStarting up with a Stand Alone operationContract ManufacturingStarting up with a Shelter ProgramYou will never have control of your productionYou risk your intellectual property 12. 5 Business modelsFinding a Joint Venture PartnerAcquiring an existing operationStarting up with a Stand Alone operationContract ManufacturingStarting up with a Shelter ProgramYou will have immediate access to the local networking and know- how to do business in MexicoYou have full control of your operationYou can start up in less than 9 weeksYou can choose to not have a legal entity in MexicoNo liabilities in Mexico: labor, fiscal, legal and other operational permitsNo VAT effectonyourcash flowNo Incometaxforthefirst4 yearsof operationsin Mexico 13. Our Value Proposition Why a Shelter Program?Because it facilitates de successful establishment of international corporations in Mexico. 14. You bring your industrial expertise, the shelter provides you with a comprehensive package of administrative functions required for your business to succeed in Mexico.In the Shelter ConceptYou Focus on your Business, Let the Shelter Manage everythingelse! 15. Services Covered Under a Shelter ProgramSite SelectionLegal, Operational & Environmental PermitsHuman ResourcesCustoms & Duties Optimization IMMEX PROGRAM SETUPAccounting &FiscalPurchasing of Office Supplies, Consumables & ServicesEmployee and/or Union Relationship ManagementFull Expatriate Support for your employees and their familiesAccess to AI network & relationships 16. Working FrameworkIncorporatedOperations are performed under clients Mexican Legal Entity. This requires a more robust organization and income tax obligations.American Industries is able to offer the same scope of services in either framework. Sales in Mexico can be done in both scenarios.Not IncorporatedOperations are performed under American Industries Mexican Legal Entity. It simplifies the compliance with Mexican regulations, translating into important cost savings. Client is exempt from income tax during the first four years of operation. 17. Responsibilities under a Shelter ProgramManagement to direct operations.Machinery & equipment.Raw materials.Full control overproduction and quality.ManufacturingMaintenanceClientAmerican IndustriesEngineeringDesignQualitySchedulingRaw MaterialsInventoryManagementPurchasingDirect MatPurchasingIndirect MatImport & ExportCustomsDuties OptimizationLogisticsOperationalPermitsAccountingFiscalAccounts Payables& ReceivableHumanResourcesRecruitment& SelectionTrainingcomplianceSalary & BenefitsAdministrationPayrollLaborManagementUnion RelationPlant ManagerGeneralAdministrationEnvironmentalcomplianceExpat Support 18. Flexible TermsTypical Shelter Terms:AmericanIndustrieshaswell-definedprocedurestohaveasmoothtransitionwhentheclientmovesoutsidetheShelterProgram.(Service#37)No entrance or exit fee.All size of projects.Most customers renew all or some services.Start-up1 yearStart-up & Run2 yearsStart-up & Growth> 3 years 19. Start Up ProgramIn summaryYou can count on American Industries expertise to start and maintain a successful operation by avoiding unnecessary problems and costly mistakes. 20. 10 things to look for in a Start up Partner or Shelter ProgramMakesureyougetthefollowingbenefits:1.Free CostModelSimulationcomparingdifferentregions2.Flexible commitment: on any size project (headcount or Sq. Ft.)3.No entrance or exit fee at the termination of your contract (with coordinated exit strategies)4.Fast and worry free start-up operations (9 weeks)5.Flexibility on how to operate in Mexico: incorporated or not Incorporated6.Tax Savings: No VAT and no INCOME TAX for the first 4 years of operations.7.Billing transparency & no mark ups on purchasing in Mexico8.Full Compliance Assistance: fiscal, customs, labor and environmental (no red tape and no administrative risk or liabilities)9.CustomsCertifiedProgram: quickprocessingoncross-bordertransactions10.Ask forfull administrativesupport: itwillallowyou to concentrate 100% on your operation, not on human resources recruitment, looking for suppliers and so on. 21. LEVERAGING ON EXISTING INDUSTRIES THROUGHOUT MEXICOHow to find skilled human resources for your project in Mexico 22. Finding skilled human resources for your project in MexicoDependingontheregionwhereyoudecidetoestablishyourbusiness,youcanleverageontheacademicprogramsalreadyestablishedtoserveotherindustriesoryoucanevenrequesttogetatailoredtrainingprogramforyouroperationasagovernmentincentive.Theseisasampleofwhatyoucanfindinoneoftheregionsthatwementionedasakeyregionforthe3energybusinessopportunitiesinMexico(shalegas,solarandeolicenergy)Skillset:Manufacturing:CNCMachining,highprecisionwelding,wireharnessing(automotiveandaerospace),assembly.Engineering&design:CatiaV5,SolidWorksandstartingtodevelopUnigraphics.Unemploymentrate3.5%Availablequalifiedworkforce77,000NOstrikesformorethan16years43,000kpeopleinemployedinmanufacturingsectorAcademicinfrastructure7publicand8privateuniversities4technicalschoolsAverageof3,000newengineersand1,500techniciansgraduateeveryyear 23. 1 STEP TO GET A FREE COST MODEL SIMULATION FOR MEXICOHowmuchwillitcostyouto operatein Mexico? 24. HereisalistofrangesofcostsofdifferentcriteriathatyoumightrequireforyouroperationsinMexico.Obviously,weofferyourangessincethecostsvaryfromoneregiontoanotherandtheywillalsobesubjecttothespecificprofileoftheskillsthatyourequireinyourhumanresources.DoyouwanttogetatailoredFreeCostmodelsimulationforyouroperationsinMexico?How much will it cost you to start doing business in Mexico? 25. WhenyourequestaCostModelSimulation,youwillbeabletocomparethetotalmonthlyoperatingcostandcostperhourofyouroperationsindifferentregionsinMexico,includingthefollowingcriteria:CostofdirectandindirectlaborCostofimportsandexportsincludinglogisticsCostofRealEstateFacilityandUtilitiesOthercostsofoperatinginMexicoGetyourFreeCostModelSimulationTODAY!Get a Cost Model SimulationRequest your free cost model today at:http://www.EnergyBusinessInMexico.com/request-help.html 26. AboutAmerican IndustriesGroupAmerican Industries Group is a private Mexican company that has helped over 200 global companies to successfully establish and run manufacturing operations throughout Mexico since 1976 through Site Selection, Administrative Shelter services and Industrial Real Estate. 27. 1) Site selection:we will help you find the right location to start your operations or we will help you get it built for your specifications. 2) Administrative start up:we will help you with all the legal, operational and environmental permits to start your operation 100% compliant. 3) Human resources recruitment:we will help you find the right human capital with the skills you need to run your operations in Mexico. 4) Payroll:we will help you process payroll, from getting your time and attendance movements to getting your personnel paid on time. 5) Customs: we will help you to import all your machinery, equipment and raw materials as well as to export the finished goods (if it applies). 6) Fiscal and accounting: we will help you with all your taxation processes and reports. 7) Expatriate relocation: we will help you to relocate your project managers, engineers and their families, including finding housing, schooling, and all they will need to have a great stay in Mexico.Howwehelpenergycompaniesto startdoingbusinessin Mexico 28. OurLocations& Score CardShelter& Start-up ServicesReal Estate50 Customers.Over 8,500 Customers headcountOver 30,000 trouble-free import and export transactions per year.We builta 12 M Sq. Ft. Portfolio.Full Mexican Market Coverage9 Industrial Parks90 Buildings89 Customers 29. What are the Next Steps?Request a FREE Cost Model Estimate of how much it would cost you to operate in MexicoJoin a commercial mission or request a tailored agendaRequest your free cost model today at:http://www.EnergyBusinessInMexico.com/request-help.html 30. HTTP://WWW.ENERGYBUSINESSINMEXICO.COM/REQUEST-HELP.HTMLRequestassistanceto startyourEnergyProject in MexicoBY XAVIER HURTADOMEXICOS ENERGY BUSINESS FACILITATORFACILITATOR@ENERGYBUSINESSINMEXICO.COMWWW.ENERGYBUSINESSINMEXICO.COM