GIBF E Magazine AUG-SEPT-2019 GIBF The Business Tycoons Magazine Aug-Sept | Page 44

Investment in Ecuador
Almost 80% of foreign investments target the oil sector. For the first time since 2015, FDI inflows have
reached to a record level, USD 1.4 billion in 2018 (from USD 618 million compared to last year)
(UNCTAD, World Investment Report 2019). The drop in oil prices and the country's high dependence on
this sector have thus strongly impacted FDI. The stock of FDI increased to USD 18.6 billion in 2018, or
17.4% of GDP. According to Central Bank of Ecuador, FDI flows have rised on the last quarter of 2018
and showed an improvement compared to previous years. Nevertheless; business access in Ecuador
continues to be a challenge: labour regulations are very complex and government policies tend to be
very interventionist, especially in the oil sector. FDI inflow remains very low when compared to other
countries in the region.
%
SMARTER
INVESTING:
Experience &
Discipline
IMPORT-EXPORT
Productive Promotion and Attraction of Foreign Investment Law
The Productive Promotion and Attraction of Foreign Investment Law was passed on August 21, 2018,
and is one of the major statements made by the Ecuadorian government that express their intention to
grow the economy, reduce unemployment, cover the fiscal breach and achieve continuous
development.
To help achieve these objectives, the law addresses the condonations of interest, charges and fines of
outstanding tax obligations and other obligations with different types of authorities. However, the most
salient reforms included in the law refer to specific benefits to new investments in Ecuador.
The main commodities
exported by India to Ecuador:
tractors, rodenticides,
motorcycles
The major commodities
imported by India from
Ecuador: aluminium waste and
scrap, zinc waste
What are the benefits for new investments in basic industries?
Additionally, the new productive investments that begin as of the effectiveness of the law in the stated
economic sectors determined, are entitled to the exemption of income tax for 15 years. The period of
exoneration will be counted from the first year that income is generated directly.
The basic industries can be seen below:
Casting and refining of copper and/or aluminium;
Steel foundry for the production of flat steel;
Refining of hydrocarbons;
Petrochemical industry;
Cellulose industry;
Construction and repair of naval vessels
INDIA ECUADOR TRADE
RELATIONS :
Bilateral trade between
Ecuador and India rose from
US$98.9 million in 2009 to
$1.29 billion in 2014-15.
Bilateral trade declined to
$553.14 million in 2015-16.
India exported $415.45 million
worth of goods to Ecuador, and
imported $137.69 million in
2015-16.
CONSULATE
GENERAL OF
ECUADOR
Gayatri Plaza 301, 3rd floor,
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Mumbai 400 050
India