Ecuador:
Change of Government in Ecuador: Investment Opportunities
June 28, 2021
Corral Rosales
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Ecuador has passed Guillermo Lasso’s first month of presidency, and as our partner tax law specialist Andrea Moya says for LexLatin, “the fundamentals of its administration are in place”. Given the benefits created by the new president’s proposals during the last two administrations and the return to ICSID, the outlook for foreign investors is very interesting.
CorralRosales is at a time when a large number of overseas companies are seeking advice on investing in Ecuador and on mergers and acquisitions. It is important to understand the incentives available to invest in Ecuador and the different mechanisms used to protect such investments.
Andrea points out that the main tax benefits are the income tax exemption (25%) which, depending on the location of the investment, can be 8 or even 12 years, and the drain tax exemption on imports of raw materials and capital goods required for the project are needed.
It is also important to know the size of the investment contracts that can be entered into with the Ecuadorian government. These instruments make it possible to protect the investment, agree to arbitration and keep the applicable benefits immovable despite a later legal reform.
To sign this contract, there is one basic requirement: the investment must be at least $ 1 million, of which $ 250,000 must be made in the first year.
The most important thing to attract investment to Ecuador, however, is a comprehensive reform of the tax and labor system.
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Originally published by LexLatin
The content of this article is intended to provide general guidance on the subject. Expert advice should be sought regarding your specific circumstances.
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