The draft of the Organic Law on Economic Efficiency and Employment, which the President of the Republic Daniel Noboa presented to the National Assembly on November 27, seeks to attract digital nomads by establishing a temporary tax residence.

This was reported by the Minister of Production, Foreign Trade, Investments and Fisheries, Sonsoles García, according to EFE. The aim of this measure is to “manage to attract those digital nomads, of whom there are a hundred million in the world to date, and who will reach one billion by 2050,” said the minister.

García reiterated that with the bill – which must be analyzed this month, since it came to the Assembly as an urgent matter – they want to be “one of those countries that attract digital nomads, who come and invest; that they can come to buy goods, that they can come to make productive investments.”

In addition, it is expected that these eventual digital nomads can also contribute to the Ecuadorian Social Security Institute (IESS), the minister said in an interview with teleamazonas, emphasizing the importance of expanding the existing membership base.

“That’s why this regime is interesting, that it can attract digital nomads, return migrants, investors who during a five-year period can have this special regime, where they don’t have to lose their residence in another country, but pay taxes on what they produce in Ecuador,” he said. As of March 2022, Ecuador is issuing “Remote Worker Rentista” temporary residence visas.

Ecuador has officially launched the ‘Digital Nomads’ campaign to promote the new nomadic visa

Noboa sent the bill shortly after his economy minister, Juan Carlos Vega, warned of a “serious economic situation” and pointed out that the projected fiscal deficit for the end of 2023 will exceed $5 billion, or 5% of gross domestic product.

“We have the worst fiscal fund history with barely $184 million in the single treasury account,” Vega lamented when reviewing the situation found when taking over the economy and finance portfolio.

The minister indicated that they inherited outstanding payments worth $2.872 million from the previous administration with IESS, local authorities and other public and private sector institutions. He also pointed out that the total national debt is 63 billion dollars, between internal and external debt, which is equivalent to 54.7 percent of the gross domestic product.

He also regretted that the risk premium is close to 2,000 basis points, which “precludes (Ecuador’s) access to normal debt markets and further complicates attracting investment.”

Guillermo Lasso reacted to Daniel Noboa’s statement that ‘Ecuador is in the worst moment’

Vega noted that the country is also “extremely impoverished” due to a 9 percent drop in per capita income over the past decade, due to “little real growth.” “We receive an economy that does not create formal employment (that pays taxes) or adequate employment (equal to or above the minimum wage), which becomes a big seed for insecurity and violence, and labor legislation that encourages informality,” he added. minister

And he warned that 2024 will have additional complications for the national economy such as “the end of equity contribution, further reduction of ISD (foreign currency outflow tax) and reversal of tax reform.” Added to this will be new needs such as the El Niño phenomenon, which may cause severe flooding in the coming months, the energy crisis currently occurring with power outages due to power shortages and “increased costs to combat insecurity”.