One of the main tools is the widespread use of free zones to attract multinational export goods and services.
The Government of Guillermo Lasso trusts that a large part of the success in its economic goals will be a consequence of the application of the Investment Law. This regulation, sent to the Assembly as urgent economic projectseeks to provide a framework of legal certainty and incentives so that the $30 billion of private investments new until 2025.
Simón Cueva, Minister of Economy, explained that they are looking for companies and initiatives to arrive that otherwise would never have had Ecuador as a destination. But, above all, the goal is for the country to become a exporting power where they are installed multinationals with markets around the world.
“The law is designed to establish tax incentives in free trade zone, and to attract investments that otherwise would not come to the country. We want companies that export goods and services outside the country to arrive, not to compete with local companies because that would be unfair competition,” he said.
These are the main keys included in the Investment Law:
Free trade zone
1.- The project aims to create free trade zone in any zone of the country, according to the conveniences of the private investors. Logistics, industrial and service companies are sought to establish themselves in exchange for tax benefits and tariffs.
2.- The benefits include total income tax exemption for the first 10 years. After that period, 10 points less than the rate established for that tax will be paid. In addition, there will also be total exemption from the Currency Departure Tax (ISD) for the importation of capital goods and supplies; and 0% VAT rate and tariffs.
3.- As explained by Vianna Maino, Minister of telecommunicationsa major software manufacturer for the North American market is awaiting approval of the Investment Law to install a production point in the country.
4.- The focus is that companies are installed multinationals so that from Ecuador come out new products of export. The biggest advantage for small and medium-sized local businesses is that they will become providers of those multinationals.
Public-Private Partnerships
5.- It seeks to promote $10,000 million new investments on infrastructure, and another $20,000 million in areas such as hydrocarbons, energy, health and mining. The investment per inhabitant in Ecuador does not exceed $1,600; while the regional average is $2,180. The goal is to close that gap.
6.- The bill reduces, from 20 to 14, the steps necessary to structure and sign a contract of Public Private Partnership (PPP). In addition, it establishes a shield so that these contracts cannot be modified in the first and last three years.
7.- The PPP Law of 2015 is reformed so that not only the construction of the work can be controlled, but also its maintenance over the years. In addition, a single record of procedures delegated to the public sector (PPPs, concessions, etc.) for manipulations, overpricing or other irregularities is created.
8.- All information on the projects must be public and it is mandatory that all projects be awarded through public bidding.
Stock market
9.- The objective is that fraudulent operations are not repeated, as in the case of the investments of the Institute of Social Security of the Police (Isspol). For this, the control of the insurance market passes to the Superintendence of Banks, and the Superintendence of Companies is left with more space to dedicate itself to the supervision of the Stock market.
10.- A public registry is created with constant auditing of all operations. Public sector issues, contrary to what is happening now, should be done through public auction so that everyone knows in detail what institutions like the IESS invest in.
11.- The possibility that stock exchanges foreign companies invest in shares of national stock markets. The goal is for the Quito and Guayaquil stock exchanges to merge into one and even join, in the long term, others in the region such as those of Peru, Colombia and Chile.
12.- The Central Bank, in association with private parties, may establish compensation systems to internationalize and make transparent the national securities system.
telecommunications
13.- The restriction that all public data information must be physically housed in Ecuador is eliminated. The Investment Law allows clouds or outdoor storage to be used. According to Minister Maino, this opens the door to the arrival of technological multinationals.
14.- The concept of regulatory Sandbox is included. This mechanism will allow service providers to telecommunications and information and communication technology service providers can establish experimental productions without so many requirements and red tape.
15- The time required to obtain authorization to implement new technologies in the industry is reduced from months to days.
- The electronic signature is standardized as a legal mechanism applicable to all commercial transactions. All commercial contracts can be signed digitally; and at the same time, the Civil Registry must include the electronic signature in the identity card. (JS)
El proyecto de Ley de Inversiones tiene 259 artículos y reforma 18 normativas vigentes.
