Through Executive Order No. 252, published in the Supplement to Official Gazette No. 158, dated January 11, 2018, the Strategic Committee for Investment Promotion and Attraction is created in Ecuador.
President Lenin Moreno, aware of the urgency to adopt measures to sustain the Dollarization in effect in Ecuador since January 2000, has declared investment attraction and promotion as a State policy, in an attempt to foster the economic development of the country, creating employment and increasing foreign currency entering the country.
Executive Order No. 252 establishes the following attributes for the Ministry of Foreign Trade and Investments, among others:
- Issue legal and technical reports on investment projects jointly with the governing body of the sector subject to said investment, with prior approval from the Strategic Committee;
- Monitor compliance with legal or contractual obligations taken on by investors through investment contracts;
- Perform joint control with the Internal Revenue Service to verify compliance with the criteria used as a basis for applying the incentive, with respect to the investment made;
- Notify the taxpayer of non-compliance with the requirements, amounts or terms for making investments and/or commitments taken on by the investor through the investment contract;
- Stipulate revocation of benefits granted to investors through the incentives system.
The governing bodies of foreign investments must be responsible for the following, among others:
- Previously approve the contractual undertakings that are necessary for making the new investment;
- Sign investment contracts, with prior approval from the Committee;
- Verify compliance with the terms agreed upon in the investment contract and with the specific undertakings that the investor has agreed to.
The Strategic Committee for Investment Promotion and Attraction has the following attributes:
- Define investment development, promotion and attraction policies;
- Establish the parameters that the investments subjected to the incentives system established in the standard in effect must meet;
- Approve the investment projects and authorize the signing of investment contracts;
- Approve the extension of investment contracts;
- Review and resolve on appeals lodged by sanctioned investors with respect to the revocation of benefits granted under the incentives system, according to the law in force;
- Adopt measures to prevent eventual lawsuits related to investment matters;
It is expected that this legal framework will help the growth of Foreign Investments in Ecuador, thereby preventing the country from once again adopting a local currency to substitute the Dollar.
Do you want to learn more about opportunities to invest in Ecuador? Contact our members ILP Global – Gallegos, Valarezo & Neira.