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Pros and cons of the investment law, which reaches the final stretch in the National Assembly

Pros and cons of the investment law, which reaches the final stretch in the National Assembly

Capture $ 30,000 million in investment as is the goal of the Government and hook investors in a region in which many countries are turning to the left while they, according to economic analysts, seek the opposite are criteria that are measured to the questions that arise from political and productive sectors in this final stretch of the debate on the draft Law for the Attraction of Investments, Strengthening of the Stock Market and Digital Transformation.

This bill enters its second and final debate. The vote will take place on Thursday, March 24.

The report for the second debate has more than 260 articles, in which 18 regulations are reformed.

Among the points that stand out are the public-private partnerships to develop areas of interest to the country, but that the State does not have the resources to do so.

But part of the discussion of this project has focused on the locks that are needed to prevent the proposed scheme of public-private partnerships from privatizing.

Public-private partnerships

  • They are defined as a contractual modality of long-term delegated management between a public sector entity and a subject of private law, for the development and management of a public asset, a public service or strategic sectors. The private manager assumes significant risks and responsibilities during the term of the contract, and the consideration is linked to the performance regarding the level of service and availability of the existing or new infrastructure.
  • It is prohibited in this modality to privatize or dispose of public or state assets or infrastructure, new or existing.
  • And an exceptionality article is included: the delegation of strategic sectors or public services is exceptional, that is, when there is a justified lack of technical or economic capacity or when the demand for the service cannot be covered by public or mixed companies. or when the law of the sector has not determined it in a general way, it will correspond to the President of the Republic, in accordance with the provisions of the Organic Administrative Code, said qualification by executive decree.
  • Decentralized autonomous governments may also do so “when local legal regulations have not determined it in a general way, said qualification will correspond to their highest administrative authority.”
  • In addition, the possibility of establishing confidentiality clauses in the contracts of these alliances that were in the original project sent by the Executive is eliminated.

Free trade zone

  • The single-company and multi-company free zones stand out in the project, since they would last at least 20 years.
  • Taxpayers who are administrators or operators of free zones or special economic development zones (ZEDE), created under the Organic Code of Production, Trade and Investment, will be exempt from paying income tax for the first ten years, counted from the fiscal year following the one in which it is granted.
  • Once this exemption period has ended, administrators or operators will enjoy a 10% reduction with respect to the corporate income tax rate in force at the time of granting, for the rest of the duration of the free zone or ZEDE authorization. . In case of extension, said discount may be extended, but there will be no new exemption.

Casinos in free zones, one of the ideas proposed for the Investment Law that awaits its first debate in the plenary session of the Assembly

Insurance and stock market

  • Another point of the project passes the insurance sector to the Superintendency of Banks as part of a new institutional control scheme for the insurance and financial sectors.
  • Regarding the stock market issue, reforms are also offered, but these do not satisfy the Guayaquil Stock Exchange, the Quito Stock Exchange and the Association of Brokerage Houses (Asocaval), which propose reforms to articles 162 and 154 of the project, since they do not consider the modifications exposed in their participations before the Commission, especially the participation of the public sector in the stock market.
  • They assert that separating public sector securities trading from those of the private sector means creating parallel markets that do not favor transparency or price formation in a growing market.

The stock market insists on reforming the Investment Law project that this Tuesday seeks 70 votes for its approval

audiovisual activity

  • Another of the points you have spoken about is Title III of the audiovisual sector, which in Article 79 indicates that “as part of the digital transformation and promotion of investment, audiovisual activity is established as a priority sector, including the development , pre-production, production, post-production and distribution of audiovisual content”.
  • In addition, an Audiovisual Investment Certificate (CIA) is created that will be issued by the Internal Revenue Service (SRI) in favor of national and foreign production companies for up to 37% “of the costs and expenses incurred in Ecuador in audiovisual services. and logistical requirements as long as they are supported by valid sales receipts and prior signing of the filming contract entered into with the Ministry of Culture”.
  • It will be a security that can be used as a tax credit for the payment of income tax. And the income from the transfer of the certificate obtained by a national or foreign natural or legal person will not be taxable or subject to income tax withholding at the source.
  • Personalities from the audiovisual sector have welcomed this issue of incentives and believe that it would be a good option for producers from other countries to see Ecuador as a filming point, as they have done for years with Colombia.

According to the national government, if the law is approved, work could be done to attract around $30 billion in investment until 2025.

The economic analyst Jorge Calderón indicates that having more legal guarantees to attract investment is necessary for the country, since Colombia and Peru already have a long tradition of attracting investment.

He adds that there is an international situation that favors Ecuador and that is that many countries in the region are turning to the left, and investors usually look for the opposite, but the results will not be seen immediately but through a process in which the The Government must do a lot because they must link it to the tax aspect and to the actions of different sectors that could be affected and generate inconveniences. (I)

Source: Eluniverso

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