investment guide of ecuador
TRANSCRIPT
ECUADOR:
The Business Gateway to South America
The Ministry coordinates 6 ministries and other public institutions connected to
production
The Coordinating Ministry of Production, Employment, and Competitiveness
The Ministry presides the Council of Production, which contains around 20 public institutions + the Committee on
Foreign Trade – COMEX (10 institutions)
The Coordinating Ministry of Production, Employment, and Competitiveness
Name: Republic of EcuadorGovernment type: DemocracyCapital: QuitoContinent: South AmericaBusiness Languages: Spanish (official) & EnglishArea: 256,360 sq Km Time zone: GMT -5 hoursCurrency: US DollarPopulation: 15.644 million (Nov. 2012)Median age: 26 years
.
PROFILE OF ECUADOR
PROFILE OF ECUADOR
Location: Between Colombia & Peru. The country enjoys a coast line with the Pacific ocean.
Coastline: 2,237 km
Biodiversity: Tropical coast, cloud forest, moorlands,
highlands, valleys, jungle, plus a wide arrange of flora
and fauna
Weather: Tropical along coast; mild weather at valleys
in the highlands, getting cooler at higher elevations; tropical in
the Amazon
Regions of Ecuador: Coast, Highlands, Amazon & Galapagos
Main cities w/ population: Quito (2.2 million) Guayaquil (2.4 million) , Cuenca (506,000) & Manta (226,000)
Source: Banco Central del Ecuador.
Exports 2008 2009 2010 2011Total 18,819 13,863 17,490 22,292
Oil 11,721 6,965 9,673 12,913Non-oil 7,098 6,898 7,817 9,379
In millions of dollars
Imports 2008 2009 2010 2011Total 17,552 14,701 19,279 22,946
Consumption Goods 3,852 3,094 4,116 4,743Raw Materials 5,828 4,670 5,915 7,231Capital Goods 4,501 3,927 5,129 5,845
Fuels 3,358 2,338 4,043 5,087Other 13 43 76 41
In millions of dollars
TradeECUADORIAN ECONOMY
Source: Banco Central del Ecuador
Main Trading Partners
10,025 million
Exports (US$) Imports (US$)
5,782 million
1,724 million 1,096 million
1,443 million 905 million
1,036 million 1,903 million
1,023 million 2,142 million
USA
PERU
VENEZUELA
PANAMA
COLOMBIA
ECUADORIAN ECONOMY
ECUADORIAN ECONOMY
Source: Banco Central del Ecuador
GDP (2011)
GDP p/c 2011
Inflation (Sep. 2012)
Economically active population (Sep. 2012)
Unemployment(Sep. 2012)
2009 2010 20111.00%
3.30%
8.00%
Gross Domestic ProductGDP growth
Ave. GDP growth rate 2006-2011:
4.21%
US$ 61.1 billion
US$4,220
4.94%
51.1%
4.6%
Macroeconomic Variables
El SalvadorJamaica
BrazilCuba
HondurasParaguay
MexicoGuatemalaVenezuelaCosta Rica
Central America (9 countries)Latin America and Caribbean
Dominican RepublicSuriname
NicaraguaBolivia
HaitiUruguay
ColombiaChilePeru
EcuadorArgentina
Panama
0 2 4 6 8 10 12
1.51.5
2.72.7
3.63.83.93.9
4.24.24.24.34.54.54.7
5.15.65.75.96
6.97.8
8.910.6
GROWTH RATE GDP (2011)
LATIN AMERICAN & CARIBEAN
Source: Economic Commission for Latin America and Caribbean
Colo
mbi
a
Vene
zuel
a
Perú
Arg
entin
a
Chile
Para
guay
Uru
guay
Bras
il
Ecua
dor
Méx
ico
Pana
má
-2%
0%
2%
4%
6%
8%
10%
12%
11.5% 8.3% 7.7% 7.2% 7.1% 7.1% 6.3% 6.0% 6.0% 6.0% 5.4%
Source: Economic Commission for Latin America and the Caribbean , 2011.
Latin America and the Caribbean average 6,7%
UNEMPLOYMENT RATE IN URBAN AREAS (2010)
LATIN AMERICAN & CARIBEAN
ECUADORIAN DEVELOPMENT
UNICEF Statistics EcuadorGNI per capita (US$), PPP US$, 2010 9,270Life expectancy at birth (years), 2010 75Total adult literacy rate (%), 2005-2010* 84
Primary school net enrolment ratio (%), 2007-2009* 97
% of population using improved drinking water sources, 2008, total 94
Youth (15-24 years) literacy rate (%), 2005-2010*, male 97
Youth (15-24 years) literacy rate (%), 2005-2010*, female 97
http://www.unicef.org/infobycountry/ecuador_statistics.html
ECUADORIAN DEVELOPMENT
EcuadorUpper-middle
incomeLife expectancy (years) 75 73
GNI per capita 3,850 5,884
Gross primary enrollment (% of school-age population) 114 111
Access to improved water source (% of population) 94 93
Source: World Bank
Development Diamond – Ecuador 2010
4 Investment Ethics:
1. Ethics with employees
2. Ethics with environment
3. Ethics with the state
4. Ethics with consumers
INVESTMENTS WITH VALUES
REASONS TO INVEST IN ECUADOR
Diverse Country with Diverse Tourism
Stable and Growing Economy
Strategic Location and Logistics Hub
Qualified Human Resources
Easy Access to Andean and World Markets
Protection and Incentives to Investors
Dollarized economy
7 Strategic Reasons:
INVESTMENTS PROMOTION
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Investments Promotion
Inviting Business Environment
INVESTMENTS PROMOTION
Productive Bilateral Cooperation
Andean Trade Promotion and Drug Eradication Act (ATPDEA)
and GSP with the USA
Andean Comunnity: Perú, Bolivia, Colombia
General System of Preferences (GSP) plus with the EU
Economic Complimentary Agreement (ACE 59) with MERCOSUR (Venezuela, Brasil, Argentina, Paraguay, Uruguay and Bolivia)
Market Access BUSINESS ENVIRONMENT
Economic Complimentary Agreements , Market Access Agreements, and Tariff Agreements with the Latin-American Integration Association (ALADI)
General System of Preferences (GSP) with Japan, Russia and Canada
General MotorsSinopecNestléPetrobrasTelefónica de España (Movistar)Repsol YPFJohnson & JohnsonUnilever MicrosoftPfizer
BUSINESS ENVIRONMENTFortune Global 500 companies 2012
BayerSanofi AventisNovartisPepsi CoCoca ColaKraft FoodsFedExAmerica MovilAbbott Laboratories3M
Schlumberger HolcimMapfre GroupKimberly-ClarkSABMillerGlaxoSmith KleinVeolia EnvironmentMerckLafarge
In Ecuador there's around 50 fortune Global 500 Companies, that operate in Ecuador. The following is a list of some of the companies that operate in our territory:
• USA 4.5 h• Europe 11 h• Panama 1.5 h• Caracas 2 h• San Jose 2 h• Guayaquil 35 min • Bogota 1 h• Medellin 1.5 h• Cali 1 h• Lima 1.5 h
BUSINESS ENVIRONMENTConnectivity to the rest of the world
Flight time from Quito:
Airport: 20 · 4 international · 11 domestic
· 5 local
BUSINESS ENVIRONMENTMarket Access
2010 – 20116,2 MM passengers97.000 operations198.000 tons of air cargo5% annual growth
201220 airlines (related with 12 countries)28 airports in operation
Manta
Loja
Lago Agrio
Esmeraldas
Macas
Tulcán
Salinas
Latacunga
Taisha
Riobamba
Tena
Ambato
Baltra
San CristóbalIsabela
COLOMBIA
PERÚ
Santa Rosa
Sto. Domingo
Quito
Cuenca
Coca
Guayaquil
Aeropuertos en ejecución.
Aeropuertos intervenidos.
Aeródromo.
Aeropuertos nuevos
Aeropuertos Concesionados
9 Transfronterizos4 Internacionales
AEROPUERTOS NACIONALES
Nuevo Rocafuerte
Cumbaratza
Shell
Macara
PORT CONTAINERS/YEAR TOTAL CONTAINERS/YEAR
IMPORTS % EXPORTS % TOTAL %
Esmeraldas 33.673 4.35 33.091 4.39 66.764 4.37
Manta 284 0.04 629 0.08 913 0.06
Guayaquil 484.397 62.61 460.947 61.16 945.344 61.89
Puerto Bolívar
25.568 3.30 28.375 3.76 53.943 3.53
Private 229.750 29.70 230.669 30.60 460.419 30.14
TOTAL 773.672 100 753.711 100 1’527.383 100
Cargo from the main ports of Ecuador
BUSINESS ENVIRONMENTMarket Access
Port of Disembarkation
DistanceNautical miles
Approx. Time(14 knots)
Miami 1.996 5 days, 23 hrs
Houston 2.340 6 days, 23 hrs
Los Angeles 3.416 10 days, 4 hrs
Rotterdam 5.633 16 days, 18 hrs
Shanghai 8.834 26 days, 7 hrs
Singapore 10.665 31 days, 18 hrs
Port of Guayaquil
Port of Manta Port of Disembarkation
DistanceNautical miles
Approx. Time(14 knots)
Miami 1.809 5 days, 9 hrs
Houston 2.153 6 days, 10 hrs
Los Angeles 3.036 9 days, 1 hr
Rotterdam 5.446 16 days, 5 hrs
Shanghai 8.602 25 days, 14 hrs
Singapore 10.583 31 days, 12 hrs
BUSINESS ENVIRONMENTMarket Access
UNIFIED SYSTEM FOR REGIONAL COMPENSATION (SUCRE)
System of payments using an electronic currency denominated “Sucre”, for foreign transactions between the member states of the Bolivarian Alliance of the Americas (ALBA).
Ease on payments for exports and imports between Ecuador and Venezuela, as well as wire transfers between both nations using this system. Companies in Ecuador receive payment in US Dollars from transaction with Venezuela.
BUSINESS ENVIRONMENT
Minimum wage + benefits:Cost of imports by container:Cost of exports by container:Basic basket of goods:Active interest rate:Income tax:V.A.T.:Commercial real state price:Office rent space:Energy cost:Gas prices:Water Cost:
US$ 4,770 (annual)$ 1,432$ 1,455$ 424.408.17-9.43%22% (2013)12%$ 750 - $ 1,000 per sq m $ 4 - $ 15 per sq m$ 0.089 per Kw/h$ 1.31 - $ 1.68 per gallon$ 0.29 – $ 2.54 per cubic m
BUSINESS ENVIRONMENTReferential Costs for Operating a Business 2012
Projects Sectors Franchises
Our Focus
Investment Portfolio of Ecuador
INVESTMENTS PROMOTION
INVESTMENTS OPPORTUNITIESManta-Manaus Commercial Route
New commercial route that connects trade with Asia and the pacific to Ecuador, Peru, Colombia and Brazil, and vice-versa
Manta-Manaus Commercial Route
Closest port to Asia on the west coast of South America
• 15,244 km from Asia to the Port of Manta• 3,522 km from Manta to Manaus in the multi-modal
route (Land and River) taking 16.45 days
Projection: first year 5.000 containers (teus)Goal 40.000 containers (teus) per year
Days saving (Time): from 22 to 28 days faster than the Panama Canal
Transport cost reduction: On Average 12% less than going through the Panama Canal from Asia to Brazil
INVESTMENTS OPPORTUNITIES
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INVESTMENTS PORTFOLIOPort of Manta
Concession of the Port of Manta, for its operation as well
as the expansion of the dock
Location: Manta, EcuadorContracting Party: Autoridad Portuaria de Manta
(Manta's Port Authority)
Levels of study: • Design• Pre-Feasibility• Market study
Investment: US$ 281 million$ 175 million private investment$106 million public investment
Project model: Landlord Port ModelPhases of Investment: Building, Operation and
Transfer (BOT)
INVESTMENTS PORTFOLIOAirport of Manta
Investment in the re-design of the passenger terminal, expansion of the
cargo terminal, and construction of the new control tower
Location: Manta, EcuadorContracting Party: Dirección General de Aviación Civil
(Civil Aviation Authority)
Levels of study: • Feasibility• Pre-Feasibility
Investment: Private Financial InitiativeProject model: Concession Phases of Investment: Design, Building, Operation and
Transfer (DBOT)
INVESTMENTS PORTFOLIOAirport of Latacunga
Investment in the logistic infrastructure of the airport - perishable goods cargo
center and maintenance facilities
Location: Latacunga, EcuadorContracting Party: Dirección General de Aviación Civil
(Civil Aviation Authority)
Levels of study: • No studies
Investment: Private Financial InitiativeProject model: Concession Phases of Investment: Design, Building, Operation and
Transfer (DBOT)
INVESTMENTS PORTFOLIOShipyard of the Pacific
Design, construction and operations of a repair and building shipyard
Location: To be determined Contracting Party: Astinave EP (Shipyard Public
Company)
Levels of study: • Location studies• Pre-feasibility
Investment: US$ 460 million$174.8 million Public Investment (38%)$285.2 million private investment (62%)
Project model: Public-Private CompanyPhases of Investment: Design, Building, Operation and
Transfer (DBOT)
INVESTMENTS PORTFOLIOIron & Steel
Construction of steel and iron plants, to supply raw materials to the construction
industry, as well the industrial sector
Location: Different locations across the countryContracting Party: None. Private Initiative
Levels of study: • No studies
Investment: US$ 2,000 millionProject model: Direct InvestmentPhases of Investment: Design, Building, Operation and
Ownership (DBOO)
INVESTMENTS PORTFOLIOPetrochemical Plants
Construction of petrochemical plants to supply raw materials for the production of plastics, rubber and urea (fertilizers
industry)
Location: Guayaquil's Gulf (Posorja) and Aroma in the Manabí ProvinceContracting Party: None. Private Initiative
Levels of study: • Pre-feasibility
Investment: US$ 1,300 millionProject model: Direct InvestmentPhases of Investment: Design, Building, Operation and
Ownership (DBOO)
INVESTMENTS PORTFOLIOCement plant
Become the strategic partner of Cementos Chimborazo, with Investment
in the facilities and production line of clinker as well as cement
Location: Chimborazo ProvinceContracting Party: Cementos Chimborazo
Levels of study: • Market study• Company info
Investment: US$ 200 millionProject model: Strategic PartnershipPhases of Investment: Design, Building, Operation and
Ownership (DBOO)
• Government incentive of 40% discount on jet fuel prices for 3 years, each way, to the first airline to operate a new non-stop route (approved by the Council of Production) that combines passengers and cargo, and operate at least 3 times a week
INVESTMENT OPPORTUNITIESCommercial Flights and Air Cargo
• Government incentive of 40% discount on jet fuel, for operations from airports under the General Direction of Civil Aviation (DGAC)
• Applies to air cargo routes for domestic and international destinations, as well as for passenger commercial flights (domestic and international
100% of the cost of establishing a tree plantation and the maintenance costs for the 1st year (based on the survival percentage).
Re-forestation Incentive
Companies and Individuals
75% of the cost of establishing a tree plantation and the maintenance costs for the 1st year (based on the survival percentage).
Associations, Communities, Decentralized Governments
75% of the maintenance cost of the 2nd and 4th year.
100% of the maintenance cost of the 2nd and 4th year.
ForestryINVESTMENT OPPORTUNITIES
Area for ForestryFORESTRY OPPORTUNITIES
PROVINCE AREA (Hectares)
ZONAS NO DELIMITADAS 12.068
AZUAY 120.186
BOLIVAR 149.999
CARCHI 72.308
CAÑAR 23.745
CHIMBORAZO 81.131
COTOPAXI 99.644
EL ORO 184.497
ESMERALDAS 154.759
GUAYAS 342.020
IMBABURA 56.593
LOJA 159.321
LOS RIOS 105.374
MANABI 315.027
MORONA SANTIAGO 163.907
NAPO 68.402
ORELLANA 49.158
PASTAZA 42.082
PICHINCHA 179.360
SANTA ELENA 7.397
SANTO DOMINGO DE LOS TSACHILAS 82.152
SUCUMBIOS 45.099
TUNGURAHUA 27.865
ZAMORA CHINCHIPE 99.238
TOTAL AREA 2.641.333 FOR FORESTRY
Species Use Extension (hectares) %
Balsa, Eucalyptus globulus, Eucalyptus urograndis, Teca Exports 8,200 41%
Aliso, Chuncho, laurel, melina, Fernán Sánchez, Neem, algarrobo Construction 4,000 20%
Cutanga, jacaranda, pachaco, Pinus patula, Pinus radiata y Ciprus Industry 7,800 39%
TOTAL 20,000 100%
ForestryINVESTMENT OPPORTUNITIES
2008 2009 2010 2011 2012 $ -
$ 50,000
$ 100,000
$ 150,000
$ 200,000
$ 250,000
Rest of the worldFranceDenmarkJapanGermanyBrazilChinaIndiaPeruColombiaUnited States of America
Thou
sand
s of U
S$
Wood exports by EcuadorFORESTRY OPPORTUNITIES
Source: trademaps.org
Wood Exports of Ecuador
Due to the geographic location of Ecuador, the country possesses absolute advantages in the output of agricultural production
CoffeeFlowers
Rice Potatoes
Corn Bananas
CacaoPalm trees
Sugar caneFruitsShrimp
Fish
AGRICULTURAL AND FISHERY OPPORTUNITIES
ProductsProduction
RegionsOutput
(Tons per Hectare)
banana Coast 35,36
rice Coast 3,12
cornCoast and highlands 2,77
Approximately 30% of the soil of the country is good for crops = 7.3 million hectares 61% of the soil constitutes natural reserves
AGRICULTURAL OPPORTUNITIES
Products Actual Markets Expansion to other markets
Bananas United States, UKEastern Europe: Czech Republic, Letonia,
Poland, Hungary, Japan
Fish (preserved or canned) United States, Italy, Spain, France
Venezuela, Canada, Egypt, Australia, Saudi Arabia
Non-traditional fruitsUnited States, Russia, Germany,
Holland, UK, Canada, China, Belgium, Italy, Japan,
Spain
Shrimp United States, Spain and Italy Canada, Russia, China
Cacao United States, Belgium Spain, France, Italy, UK, Turkey
CoffeeUnited States, Russia, Spain,
Belgium Canada, Norway, Italy, TurkeyFlowers United States, Russia Belgium, UK, Norway, Italy
Corn Venezuela, Panama, Spain European Union
Trade Overview
AGRICULTURAL OPPORTUNITIES
AGRICULTURAL OPPORTUNITIES
2008 2009 2010 2011 2012 $ -
$ 500,000
$ 1,000,000
$ 1,500,000
$ 2,000,000
$ 2,500,000
$ 3,000,000
$ 3,500,000
Vegetable plaiting materials, vegetable products nesOil seed, oleagic fruits, grain, seed, fruit, etc, nesMilling products, malt, starches, inulin, wheat glutenCerealsCoffee, tea, mate and spicesEdible fruit, nuts, peel of citrus fruit, melonsEdible vegetables and certain roots and tubersLive trees, plants, bulbs, roots, cut flowers etcDairy products, eggs, honey, edible animal product
Thou
sand
s of U
S$Agricultural exports
Source: trademaps.org
Agricultural Exports of Ecuador
1% 23%
4%
68%
4%0% 0% 0% 0%
Agricultural Exports of Ecuador - 2012Dairy products, eggs, honey, ed-ible animal productLive trees, plants, bulbs, roots, cut flowers etcEdible vegetables and certain roots and tubersEdible fruit, nuts, peel of citrus fruit, melonsCoffee, tea, mate and spicesCerealsMilling products, malt, starches, inulin, wheat glutenOil seed, oleagic fruits, grain, seed, fruit, etc, nesVegetable plaiting materials, vegetable products nes
Agricultural exports: US$ 3.2 billion
Source: trademaps.org
AGRICULTURAL OPPORTUNITIESAgricultural exports
With vast agricultural products, qualified labor, markets and economic stability, there are wide opportunities to produce:
ChocolateDairy ProductsConned foodSausages and hamPalm oilEthanol / biodieselSoft drinksElaborate products of exotic fruits
AGRICULTURAL OPPORTUNITIES
TOOLS FOR INVESTMENTS PROMOTION
General
Prioritized Sectors
Specific
Organic Code of Production
Incentives
Customs Support
Support in customs
procedures for companies
Finance Support
Public Banking
Human Capital Development
Government
INVESTMENTS PROMOTION
LEGAL FRAMEWORK FOR INVESTMENTS
Organic Code of Production - COPCIQuito- December 29th of 2010
Official Registry N°351
MAIN CHARACTERISTICS OF THE CODE OF PRODUCTION
• An organic law with specific regulations for each area.
• Supports the production process in the stages of production, distribution, exchange, trade, consumption, externalities management and investment oriented to the productive realization of Good Living
• Provides tax and non-tax incentives to investments in the Ecuadorian Territory
FREEDOM TO INVEST
• Freedom to invest without conditions or authorizations of any kind
• National Treatment: no minimum requirements of % of domestic investment or joint ventures
• International Arbitration for Foreign Investments
• No confiscation or nationalization allowed
• Investment Contract for 15 years, renewable for 15 more
LEGAL SECURITY
GENERAL INCENTIVES FOR INVESTMENTS
GENERAL INCENTIVES
Who can apply? • Any company• Anywhere in the country, • In any economic sector,
prioritized or not
What are they?
Income Tax
• Reduction of 10 points of the Income Tax for investing the profits in productive assets.
• Modification of the calculation base for the advanced payment of Income Tax, for employment generation and purchase of productive assets.
• Additional deductions for payments of the dignified wage, for Income Tax
• Payment deferment of the Income Tax up to 5 years, for opening the stock equity of the company to employees
• Exemption of the advanced payment of Income Tax for 5 years for new investments by new companies (after December 29th of 2010)
GENERAL INCENTIVES
Monthly payments up to 2 years, on generated taxes over US$10,000, for imports on Capital Goods
Ease on Tax Payments
Currency Outflow Tax (ISD)
Exemption of the ISD on the re-payment of interest of foreign loans
GENERAL INCENTIVES
SPECIFIC INCENTIVES FOR INVESTMENTS
MEDIUM COMPANIES(between 50 and199 employees and sales between US$ 1 and 5
million
SPECIFIC INCENTIVES
Have an additional deduction 100% (double) on expenses incurred for
calculating the Income Tax:
• Technical training , research and innovation
• Market and competitive studies• Expenditure related to commercial
promotion, travel and hotel, for opening new markets
ENVIRONMENTAL
SPECIFIC INCENTIVES
Have an additional deduction 100% (double) on expenses incurred for calculating the
Income Tax:
Depreciation for purchasing machinery and equipment for cleaner production and for the implementation of renewable energy systems (solar, aeolic, or similar), or for the mitigation
of environmental impact. –Ministry of Environment Agreement 027
DEPRIVED AREAS(Zones with high indexes of unemployment and poverty)
Have an additional deduction 100% (double) on expenses incurred for calculating the
Income Tax:
Salaries, wages, and social benefits for new employment generation in
impoverished zones (outside Quito and Guayaquil), for 5 years
SPECIFIC INCENTIVES
DEPRIVED AREAS
There exists 89 cantons in Ecuador considered deprived areas
Ex: Cantón Pujilí, Cotopaxi• 16km (15 min) from the
Latacunga Airport• 9.7km (9 min) from the
Panamericana Sur highway• 99 km (1h20m) from Quito
Ex: Cantón Salitre, Guayas• 52 km (55 min) from the
port and airport of Guayaquil
• 38 km (24 min) from Babahoyo and E25 highway
SPECIFIC INCENTIVES
INCENTIVES FOR INVESTMENTS IN PRIORITIZED SECTORS
PRIORITIZED SECTORS INCENTIVES
Who can apply? 1. New company (Constituted after
December 29th of 2010)
2. New investment3. Outside the urban perimeter of
Quito and Guayaquil4. New investment in:
1. Prioritized Sector, or 2. Imports substitution
• No payment of Income Tax for 5 years, starting when income is generated, for:– New investments in a Prioritized Sector or
Imports Substitution (18 sectors as a whole)
Income Tax
PRIORITIZED SECTORS INCENTIVES
What are they?
PRIORITIZED SECTORS INCENTIVES
Fresh and Processed food
Metal Works
Petrochemical
Pharmaceutics
RenewableEnergy
Logistics services
Biotechnology and applied software
Forestry, resulting in manufactured products
Tourism
Prioritized Sectors
Soaps, detergents,perfumes and toiletries
Pesticides and other chemical products for
agricultural use
Ceramic products
Clothing and textile Home appliancesLeather and shoes
Chemical productsRadios, TVs and cell phones
Imports Substitution Sectors
PRIORITIZED SECTORS INCENTIVES
Chemical substances
INCENTIVES FOR INDUSTRIAL BONDED WAREHOUSES WITH INVESTMENT CONTRACT
Definition: A bonded warehouse is a defined area, under which imported goods go through a productive transformation to produce other goods, to later be nationalized or exported to another country.
INDUSTRIAL BONDED WAREHOUSE WITH INVESTMENT CONTRACT
Benefits: • Duty-free imports while on the industrial
warehouse• No VAT payments on imported products • No payment of Income Tax for 5 years for
prioritized sectors • Trade facilitation with Ecuadorian Customs• Income Tax deductions of the general incentives• Currency Outflow Tax (ISD) exemptions
OTHER INVESTMENT INCENTIVES
• Exemption of payment of ISD for dividends paid by companies established in Ecuador to companies established abroad or to non-residents of Ecuador abroad (except tax havens) – Art. 18 Ley de Fomento Ambiental
• Exemption of payment of ISD of imports for goods to special regimens to be exported– Executive Decree SRI Nro. 1180
Currency Outflow Tax (ISD)
OTHER INCENTIVES
• Resolution 82: – New investments with investment contracts
with the government, will have tariffs reduction on imported capital goods, not produced in the country (Art. 1)
COMEX Resolutions
Executive Decrees • Nro. 1283:
– Government incentive of 40% discount on jet fuel prices for 3 years, to the first airline to open a new air route
OTHER INCENTIVES
INVESTMENT CONTRACT WITH THE GOVERNMENT
INVESTMENT CONTRACT
Characteristics of the contract:
• Purpose: Establish the treatment of investment under the code of production and other provisions that are crucial for the activity
• Optional: Not an obligation to sign contract to access to the incentivesMinimum investment: US$ 250,000 for the first year, with a total of at least US$ 1 million for the total investment
• International Arbitration for FDI• Can be requested at any time• It lasts for15 years, and it's renewable
for 15 years more
Contract signature process:
INVESTMENT CONTRACT
• Signature request• Receive documentation
• Legal Information• Economic Information• Finance Information
• 30 days evaluation• Technical Secretariat report to the CSP
(Council of Production)• CSP authorizes the contract• Signature of the contract• Supervision stage
SwissGas EcuaCorriente SA (ECSA)
Tenaris Templavid SA
Mastercubox SA
1 2
3 4
5
INVESTMENT CONTRACTSuccess stories in 2013
Production of natural gases for its commercialization to other industries Investment amount: US$ 9 million
Mining company from China that has the concession of a copper mine in the south-east region of EcuadorInvestment amount: US$ 2,014 million
Production of steel pipes for the petroleum industry Investment amount: US$ 13 million
Production of tempered and float glassInvestment amount: US$ 3 million
Production of alfalfa pelletsInvestment amount: US$ 2.2 million
Holcim
6
Ciauto
Assembly plant of car chassis of the automobile brand Great WallInvestment amount: US$ 24 million
7
Surpapel
Production of carton and paper suppliesInvestment amount: US$ 130 million
8
Promopesca
Extraction, production and commercialization of sea products Investment amount: US$ 8.6 million
9
Total investment amount: US$ 2.5 billionTotal employment generated: 1,030 direct employees
Investment on a new plant to produce clinker Investment amount: US$ 300 million
INVESTMENT CONTRACTSuccess stories in 2013
INVESTMENT PROTECTION
Ecuador's Legal Framework
Investment Incentives
Business environment
Investment contracts
Safe and profitable
investment
Coordinating Minister of ProductionMr. Richard Espinoza
Undersecretary of InvestmentsJaime Albuja
Undersecretary of Productive TransformationJuan Carlos Gilbert
Undersecretary of Foreign Trade-COMEXDiego Caicedo
INVESTMENTS
PRODUCTIVE TRANSFORMATION
FOREIGN TRADE
COORDINATING MINISTRY OF PRODUCTION
ECUADOR:
The Business Gateway to South America