Low Unemployment Rate

(December 2015)

2

ECUADOR PROFILE

Yearly average GDP growth at 4.2%,

higher than LATAM at 2.8%

Controlled Inflation rate, lower than Latin

America (2015)

3.4%

5.0%

ECUADOR LATAM

ECUADOR

LATAM

4.5%

7.5%

ECUADOR LATAM

ECUADORLATAM

29%

22%

ECUADOR LATAM

High Investment in Ecuador versus LATAM as % of GDP (2015)

ECUADOR

LATAM

48% private

52% public

0.6%

3.5%

7.9%

5.6% 4.6%

3.7%

0.3%

-1.9%

5.9%

4.3%

3.1% 2.7%

1.1%

-0.3%

2009 2010 2011 2012 2013 2014 2015

Ecuador Latin America and the Caribbean

3

SO

CIA

L-P

OL

ITIC

AL

C

OM

PE

TIT

IVIT

Y

The president was re-elected with 70% of

popular support.

9 YRS OF POLITICAL STABILITY

Reducing poverty in 23% (incidence per

income), 11% reduction of inequality

(Gini index) and investment of 2% of the

GDP in scholarships for forth level

education

SOCIAL DEVELOPMENT

Strong investment: telecommunication

(45.7 km of optic fiber coverage), energy

(USD 5.9 billions invested), road

infrastructure (USD 8 billions invested)

and water network (USD 1.7 billions)

INFRASTRUCTURE

Development of sea ports and airports

(USD 350 millions invested), ideal for

commercial use

LOGISTICS

ECUADOR PROFILE

Incentives for new investments

Photo: Cotopaxi Volcano

PRIORITY SECTORS FOR NEW

INVESTMENTS

Metalwork

Petrochemicals

Tourism

Pharmaceuticals

Renewable Energy

Biotechnology and

applied software

Fresh, frozen

and processed aliments

Forestry value chain and

its processed goods

Logistics services for

international trade

Radio, TVs and cell phones

Chemicals

Ceramic products

Textiles

Leather and footwear

Domestic Appliances

Basic chemicals

Pesticides and products for

agricultural use

Soaps , detergents, perfumes

and toilet preparations

Cement Production

IMP

OR

T S

UB

ST

ITU

TIO

NS

PR

OD

UC

TIV

E S

EC

TO

RS

Double tax deduction in the depreciation costs of productive

fixed assets, for 5 years (within UIO – GYE)

Income Tax:

•5 year exemption for new companies (outside UIO - GYE)

•Up to 12 year exemption for selected primary sectors

•17% tariff in Special Economic Development Zones

(ZEDE)

INCENTIVES FOR NEW INVESTMENTS

10% reduction of the Income Tax rate on the profits

reinvested on acquisition of new productive assets

ZEDE: Exemption of tariffs and custom duties for imported

merchandise and 0% VAT for imported goods

Photo: Galápagos Islands

Benefits of the investment

contract

Photo: Galápagos Islands

Disputes may be submitted to international

arbitration

8

INVESTMENT CONTRACT

Once the investment contract is signed, the

company can request a total or partial

reduction of customs duties for imported

capital goods

Stability over the tax incentives up to 15 years,

and renewable once (maximum validity 30

years)

Available for investments of more than USD 1

million, that also generate new employment

Photo: Historic Center of Quito

Incentives for

Financing and Investment

Photo: Ecuadorian Amazonia

For term deposits and fixed-income

instruments longer than 1 year:

• No Income Tax on profits and

capital

• No currency outflow tax on money

transfers (profits and capital)

INCENTIVES FOR FINANCING AND

INVESTMENT

For external financing operations

from financial or not financial

institutions longer than 1 year:

• No income tax retention on

interests

• No currency outflow tax on

money transfers (interests and

capital)

Photo: Los Frailes Beach

Incentives for Public – Private

Partnerships (PPP)

Photo: City of Cuenca

PUBLIC-PRIVATE PARTNERSHIP

Shared risk between the public and private

parties

Income Tax exemption for 10 years,

starting from first year of operation

Currency Outflow Tax exemption (5 %)

on imports, service payments, financing

and dividends

Exemption from customs duties and VAT

on imported products

Legal stability on various aspects

affecting the investment, and on tax

incentives

Incentives: Principal characteristics:

Financed totally, or partially, by the private

party

Covers the whole life cycle of the project

Investment recovered by final users’

payments, deferent payments by the state, or

a combination of the two

Photo: City of Loja

THANK YOU / GRACIAS