LATAM: Foreign Investors Survey 2017
Costa Rica can boast of having a lower average level of corruption in the Region,” says Eric Scharf, Partner of Sfera Legal. Other countries have recently approved measures, such as Guatemala, Argentina and Brazil.
As a result of the political crisis of 2015, Guatemala has strengthened its fight against corruption and the promotion of transparency,“ a phenomenon that is reflected in the trend towards the creation of new laws and the reform of certain existing laws related to the subject: State Procurement Law, Probity Law, Preliminary Proceedings Law, among others,” said José Guillermo Bonilla, Partner of Bonilla, Arguta, Zarceño & Alvarado( Signature Regional Law Group).
“ The transparency and anti-corruption framework is being promoted in Guatemala. This has been the big change over the last two years.”
ALFREDO RODRÍGUEZ MAHUAD, PARTNER, CONSORTIUM LEGAL
In Argentina, the current government has announced and implemented various regulations aimed at improving the existing framework both in transparency and anti-corruption.“ There is, however, a reasonable legal framework, and enforcement is being pursued both at the judicial and administrative levels,” said Carlos María Tombeur, Partner of Severgnini Robiola Grinberg & Tombeur.
From its part, Brazil has made great progress in recent years in the fight against corruption, updating its regulatory framework through the adoption of a new law and its regulations. For Andoni Hernández Bengoa, Counsel in Foreign Law of Demarest Advogados,“ this is strong proof of the commitment of the competent authorities and the independence of the judiciary when implementing measures, which is always good news for investors- and a magnificent signal especially for the international ones.”
“ In Ecuador, there was a recent legal reform where a Comprehensive Criminal Code was adopted, which brings a complete regulation on Compliance and anti-corruption.”
Are fiscal frameworks suitable for foreign investment?
This is a complex point and the answers differ by country. Bolivia, Chile, Costa Rica, Honduras, Mexico, Nicaragua, Panama, Paraguay, the Dominican Republic and Uruguay appear to garner the maximum number of positive opinions, while Brazil, Colombia, Ecuador and Peru are the worst valued, with a highly complex tax system( Brazil and Colombia), a heavy burden on foreign investment( Ecuador), and a competent authority( Peruvian) that lacks clear guidelines and objective criteria to determine clearly what should be the role of companies as taxpayers.
Among the countries with the best rating by their lawyers, Bolivia has a very attractive tax regime compared to other countries in the Region. The IVA amounts to 13 % and the Corporate Tax to 25 %.
“ The regulation on foreign investment in the Dominican Republic ensures equality of treatment with national investment in tax matters, without any restriction on the repatriation of dividends or on the ownership of real property.”
JUAN ALCALDE, PARTNER, OMG
Chile has a law for foreign direct investment of more than $ 5 million, while Honduras is creating a broad and attractive fiscal framework for foreign investors. Nicaragua and Panama offer tax incentives in some sectors: free zones, tourism, mining and forestry, as well as Uruguay, which offers promotional regimes with significant tax benefits.
In Paraguay,“ foreign investments have the same treatment as domestic ones, and Paraguay has the lowest tax pressure in the Region for investors, both domestic and foreign( among other interesting regimes, one can mention the maquila- which allows companies located in Paraguay to produce goods and services for export),” comments Carlos Codas, Partner of Ferrere.
JUAN MANUEL MARCHÁN, PARTNER, PÉREZ BUSTAMANTE & PONCE
8 www. attitude-consulting. com