Economic Information

CORPEI is a private, non-profit institution whose main goal is to contribute to the economic growth of Ecuador through the design and execution of programs to promote exports and investment and through the leadership and coordination of the activities of private and public entities involved in exporting and promoting foreign investment.

LIBERALIZATION OF THE ECONOMY

As with many other Latin American countries, the process of economic development in Ecuador has not been easy. However, the problems of the past have gradually been resolved allowing Ecuador to keep pace with the economic changes and the opening of markets occurring on a global basis. The economy is being modernized and barriers that impeded economic progress in the past are being removed.

Early in 1996, following certain of these changes “The Economist” magazine ranked Ecuador among the 35 most liberal countries in the world in terms of commerce and investment, ahead of Colombia, Chile and Mexico. The international business press has described the changes in Ecuador’s business climate as a “silent revolution” in foreign commerce.

These results stem from the State’s modernization process which commenced in 1993. The modernization process has deregulated certain industries by allowing privatization or the granting of private concessions, primarily in the area of oil and gas production, electrical power generation, telecommunications and mail and port services. Several state-owned enterprises have already been privatized including Ecuatoriana Airlines, the flagship airline.

Foreign investors can establish joint ventures with the purpose of investing in opportunities with successful local companies. Duty free zones offer exemption from taxes such as the value added tax (IVA), taxes on profits, customs duties, special consumer products taxes and municipal taxes. The State has started to grant concessions for road and highway construction, an area previously the exclusive responsibility of the State. A new regulation has been enacted providing for a very robust form of contract to guarantee legal and tax stability for foreign investment projects. New laws are in place to regulate the Stock Exchange and Financial System. New changes have been introduced to the laws governing labor rights. As well, significant progress has been made in stream-lining Customs processes and procedures.

In the oil and gas sector, $200 million in private investment has been made in the exploration of 17 oil fields and an agreement has been signed for the construction of a second major oil pipeline by private investors. The retail fuel monopoly has ended with the entry of large trans-national companies such as Texaco, Mobil, Exxon, Shell, Castrol and Occidental Petroleum. Capital has been invested in the production of lead-free gasoline to preserve the environment.

Ecuador has gradually improved the environment for foreign investment by opening duty free zones and by allowing and encouraging “maquilla” activities (the processing, assembly, conversion or repair of temporarily imported products to be shipped abroad after processing) with the following incentives:

- Tax exemption on the import of products to be processed in Ecuador.

- An exemption from obligations to register imports with the Central Bank.

- Unlimited right to expatriation of profits.

- Flexibility in the terms of labor contracts.

CORPEI TORONTO

Sr. Agustín Fornell

151 Bloor St. West, Suite 470

Toronto, Ont. M5S 1S4

Tel.: (416) 413 9569 FAX: (416) 413 4877

OCE: corpei@idirect.ca
Web site: http://webhome.idirect.com/~ctoronto/corpei

THE FOREIGN TRADE AND INVESTMENT LAW (LEXI)

The Foreign Trade and Investment Law (LEXI), which was brought into force in 1997, establishes that international trade is a national priority. As a result future laws or regulations must be consistent with this priority. The LEXI has the following objectives:

- To regulate and promote foreign trade and foreign investment.

- To increase Ecuador’s economic competitiveness.

- To encourage the efficient exploitation and sustainable development of the country’s resources.

- To promote the integration of the Ecuadorian economy into the world economy.

The LEXI forms the legal basis for the development of foreign trade and foreign investment as national priorities, particularly the increase and diversification of exports and the promotion and attraction of investments.

The LEXI creates the governing body called COMEXI which has overall responsibility for establishing policies to promote trade, economic integration and investment and for implementing the regulations necessary to carry out such policies. COMEXI is made up of five representatives from the public sector and five representatives from the companies main business associations. A representative of the President presides over COMEXI.

The LEXI also creates the Export and Investment Promotion Corporation (CORPEI). CORPEI is a private entity financed with levies imposed upon exports and imports. CORPEI is responsible for the implementation of export and trade promotion activities. One of its main objectives is to provide information and assistance to Ecuadorian exporters in finding markets for their products overseas. CORPEI’s Board of Directors is made up of nine representatives from the private business sector and four representatives from the public sector. In addition, associations representing major export sectors are entitled to non-voting representation on the Board of Directors.

The LEXI also creates the Ecuadorian System of Foreign Promotion which is made up of the Foreign Commercial Service (through its representatives in Embassies and Diplomatic Missions abroad) and CORPEI.

Fuente: Sistema Integrado de la Legislación Ecuatoriana "SILEC",
propiedad de la Compañía LEXIS S.A.

· Afiliación De Compañías A Las Cámaras De La Producción

· Apoderados De Compañías Extranjeras

· Aprobación De Corporaciones Y Fundaciones, Sector Microempresarial

· Área Pesquera Reservada Para Pesca Artesanal

· Aumento De Capital Suscrito Y Autorizado De Compañías

· Bienes Que Deben Cumplir Con Las Normas Inen

· Cambio De Nombre De Compañías Extranjeras

· Capital Mínimo De Compañías, 1999

· Certificación de calidad del INEN, productos de fabricación nacional.

· Código De Comercio

· Codificación del código del trabajo.