The new one investment lawwhich will be delivered shortly by the Executive has three main parts, assured the Minister of Production, Julio José Prado, during a television interview.
The first is the reform Stock market to attract more international and local capital and thus develop a powerful stock market in Ecuador. A major reform to Law of Public-Private Partnerships it is the second part. In that sense, Prado said, this will be that shock of investments that will be made available to international companies in the coming months.
This week the Executive will send the urgent project on investment promotion
The third part addresses the free trade zone. On this subject, the head of Production explained that in Ecuador free zones have generated very little impact in terms of attracting international investment at the level that Costa Rica, Colombia or Uruguay have done.
In the bill, Prado explained, significant reductions will be observed from 0% to income tax (IR) for ten years for companies that are placed in free zones and then a reduction of 10 percentage points of the same tax for those same companies.
“The free zones are not going to be created by political will, rather if there is a business project they can be created in two types, single-company and business”, explained the head of the State portfolio.
The deal with China
Eliminate subheadings from the negotiation and agree on longer tax relief periods for sensitive sectors They would be two of the points that would be established to reach an agreement with China, pointed out the Minister of Production, Julio José Prado.
The minister pointed out that non-oil exports to China would benefit once the agreement is signed. This benefit would represent around an additional $1,000 million in foreign currency for the country. The terms of reference for the negotiation are being defined. pic.twitter.com/CupnVWoXM1
– Ministry of Production (@Produccion_Ecu) February 16, 2022
The authority indicated that they are based on the best international practices of the three countries that already have agreements with China, which are Costa Rica, Peru and Chile.. In that sense, he explained, that those countries presented items that were very sensitive and were eliminated from the negotiation. “That is what we have to agree on in the terms of reference. There are certain sectors that may not be included in the negotiation, they are going to be tariff subheadings of the manufacturing sector,” Prado said.
The Minister of Production compared that with Mexico no item was allowed to be excluded, but that with China it could be done due to the level of sensitivity that exists. “Even for the industrial and manufacturing sectors, being able to bring more technology, parts, pieces and supplies will allow them to be more competitive.”
Optimism in the business sector due to the signing of a Memorandum with China, the first step towards the Free Trade Agreement
With China, in the last trip of a delegation of authorities from Ecuador, a memorandum of understanding was signed with that country, which gave way to the start of talks to define the terms of reference of that agreement, which is expected to be finalized until the end of the of year.
According to Prado what is going to be proposed is that there be longer terms for tax relief in the negotiation for very sensitive sectors and work on an internal competitiveness agenda that allows the country to advance.
The head of the Production portfolio recalled that with the current Government there is a pragmatic policy, which implies having ten commercial agreements in the next three and a half years. “We are looking for a commercial agreement with China and also with Russia and the United States. The great benefited sector is the exporter that has a direct relationship with these countries”, he said.
With China, the United States and Russia, as well as with other countries, it is signing modern agreements that not only have to do with trade, but also with investment, protection of environmental rights
In the case of China, today, the shrimp enters in an important way. But since this country is a nation with more than 1.4 billion inhabitants, Prado said, it should have a higher import capacity. China imports about $2,800 million from Ecuador, the potential with an agreement is to increase an additional $1,000 million with an opening to the export of fruits, agribusiness and some manufacturing products that could be interesting.
On the subject of investments, an agreement is going to be sought that provides legal certainty, that is, that has a regulatory framework on which it can be based. (I)
Source: Eluniverso
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