6. the human being is not just another factor in production, it is in itself the reason for production
7. Necessary reform of the State Actions Results Constituent Assembly Tax amendments Elimination of extreme outsourcing Production Code Modern institutional framework Fiscal stability Fair labor relations Incentives and a clear framework for investment Área cuadroso información
8. Development model and the role of the State The Production Code sets out a new, modern legal framework, encouraging private investment. The code specifically highlights the Government's model for economic development and transformation of our production matrix Monetary policy based on dollarization. General incentives for private investment to make our country more competitive. Plus additional Incentives in specific sector with high potential to serve internal and external markets and to shift in productive matrix from the export of primary products to that of added value products. To consult list of sectors go to www.mcpec.gob.ec Área cuadroso información
9. Protection for Private Investment Legal incentives Investment contracts Safe investment Agreed arbitration Área cuadroso información Production and Investment Code allows for the protection of private investment with all these instruments.
10. An intelligent investment Korea 7 Strategic reasons Área cuadroso información Mega-diverse country and tourism Growing and stable economy Strategic location and logistic axis Human talent 5. Access to Andean and world’s markets.. 6. Protection and Incentives for the investor. 7. Dollarized economy.
11. ECUADOR: Why invest in Ecuador? The most megadiverse compact country of the world, rich and diverse culture and unique tourist attractions 1
12. Hoja para Texto Información extenso Área cuadroso información The eco-centre of the world: the most compact an mega diverse per m2
13. The eco-centre of the world : multiple peoples of different cultures live in peace
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17. The Constitution of Ecuador is the first one that recognizes the nature’s rights (pacha mama: mother Earth)
22. Ecuador International Living´s Top 1 country to Retire in 2010 In terms of cost of real state, special benefits, cost of living, culture, health, infrastructure, safety/stability and weather. Source: International Living magazine
25. NON OIL GDP GROWTH Provisional data Source: BCE
26. Public Investment Evolution/ Nominal GDP Capital expenses of SPNF/GDP Others from capital Gross fixed capital formation
27. Dynamism of Investment: FBKF/Nominal GDP Gross fixed capital formation Capital expenses of SPNF/GDP Non-financialpublic sector
28. Solvency: Debt/GDPSince 2002, the ratio between public debt to GDP has been decreasing, placing the DEBT/GDP ratio as favourable compared to the levels of other countries in the region. Internal Public Debt External Public Debt External Public Debt/GDP Internal Public Debt/GDP Source: Central Banks of each country Source: BCE
29. Manufacturing: Annual growth per quarter(Excludes petroleum refinement) 8,0% growth in the first, second, and third quarters of 2010 compared with 2009. Source: BCE
30. Manufacturing: Annual growth per quarter(Excludes petroleum refinement) 8,8% growth in the first, second, and third quarters of 2010 compared with 2009. Source: BCE
32. Dynamic private consumer activity Ecuador has a vigorous economy, backed by an increase in disposable income and by credit growth. Source: Central Banks of each country
33. Lowest unemployment rate of the Andean Region National Urban Rural Source: INEC, ENEMDUR 2003-2010 Production: MCDS-SIISE
34. Less leveraged economy: Businesses, households, Government, IFI’s Ecuador offers a solid and solvent economy with low levels of public and private debt. Foreign investment should complement domestic investment, thus reverting the substitution (crowding out) process. External Private Debt/GDP Credit /GDP Source: Superintendence of Banks
35. A healthy financial system The Ecuadorean financial system is a healthy one with robust growth in capital formation and credit allocation. LOAN PROTFOLIO OBLIGATIONS WITH THE PUBLIC OBLIGATIONS WITH THE PUBLIC LOAN PROTFOLIO Source: Superintendent of Banks
36. Big opportunities for ethical and responsible investment. * Relation between total volume of foreign debt and GNI (information from countries as of 2009) Source: World Bank
40. Ground transport infrastructure National Airport International Airport Ship piers (in study) Connectivity in Ecuador Fuente: MINTUR (Plan de Marketing Internacional) Source: Ecuador´s Ministry of Tourism
44. Decrease in poverty (by income) Source INEC, ENEMDUR 2001- June 2010 Production: MCDS-SIISE Note: in 2002 the poll sample was only from urban areas
47. Access to Regional and Global Markets • Agreement with Mercosur Provides Ecuador with the potential to export approximately 4.000 products with no tariffs to Brazil and Argentina. • GSP PLUS – European Union Provides Ecuador with the potential to export approximately 7.800 products with no tariffs.
49. General Incentives for investments Reduction from 25% to 22% on the Income Tax (IT)rate: 1% each year from the date the Code will be in force Exemption from the minimum Income Tax calculation for incremental expenses new employment or salary increases, acquisition of new assets for productivity and technology improvements and cleaner production. For new companies: exemption from the minimum tax payment for the first 5 years. Exemption from Currency Outflow Tax (ISD)for payments sent overseas to pay foreign loans, with a term of over one year and at a rate not higher than that authorized by the Ecuadorean Central Bank (BCE). Área cuadroso información
50. General Incentives for investments Additional deductions in the calculation of income tax as mechanisms to encourage improvements in productivity, innovation and eco-efficient production. Benefits for the opening-up of capital, such as the deferment of Income Tax for companies that offer investment options to external parties. Those established for special development zones, providing they meet the qualifying criteria. Área cuadroso información
51. Incentives for New Investment In Priority Sectors Total exemption from income tax and advance payment thereof, for 5 years, for new investments made in priority sectors of the economy. Área cuadroso información Fresh and processed foodstuff sector Metalworking sector Petrochemical sector Forestry and agroforestry chain, and resulting manufactured products sectors Tourism sector Logistics services sector Biotechnology and applied software sector Renewable Energy sector Pharmaceutical sector + STRATEGIC SECTORS FOR EXPORT PROMOTION AND IMPORT SUSTITUTION
52. Incentives for green production For Income Tax calculation purposes, there will be an additional deduction of 100% from the expense of purchasing machinery and equipment for cleaner production, and for the implementation of renewable energy systems (solar, Aeolic, or similar), or for the mitigation of environmental impact. Área cuadroso información
53. Incentives for Investment in Economically Depressed Areas Companies making investments in economically depressed areas may take advantage, for the first 5 years, of the additional 100% deduction on expenditure for new jobs created in the area,.. A “depressed area” will be defined by indicators, such as lower human, economic, and social development. Área cuadroso información
54. Incentives for ZEDE (Special Economic Development Zones) A further reduction of 5 percentage points on Corporate Income Tax, for managers and operators of ZEDE (in Spanish), on a permanent basis (17% TOTAL). If said managers and operators are in a Preferential Sector and it is a new investment, 0% income tax applies for 5 years. The import of goods will have a 0% VAT rate. Foreign goods, while they remain in said territory, will not be subject to the payment of tariffs. Managers and operators will have tax credit on the VAT paid on their local purchases of services, supplies and raw materials for their production processes. Exemption from the Currency Outflow Tax (ISD in Spanish) for payments of imports and payments sent overseas to pay off foreign financing. Área cuadroso información
55. Incentives for private companies that open their capital structure Companies choosing to open up their capital structure and sell shares to their workers, will have the following benefits: Área cuadroso información Deferment of 5 years on Income Tax and IT Anticipated payments. Interest exemption on loans for financing the shares purchase.
58. ECUADOR Airport Development Area Surface : 70 Has. MANTA iNTER-CONTINENTAL LOGISTIC PLATFORM: MULTI MODAL OPERATION: PORT, AIRPOT, FLUVIAL, TRANSPORT
71. 100 METERS OF FISHINGBERTH TERM: 1 YEAR 225 METERS OF INTERNATIONALBERTH TERM: 1 YEAR 10 acres OF STORAGE YARDS TERM: 1 YEAR Operational Capacity : 200 mil TEUS/año EXTENSION 110 METERS OF INTERNATIONALBERTH 2 TERM: 1 YEAR 4 acres OF STORAGE YARDS TERM: 1 YEAR Operational Capacity : 50.000 TEUS/year EXTENSION 110 METERS OF INTERNATIONALBERTH 2 TERM: 1 YEAR Área cuadroso información 310 METERS OF CONTAINERBERTH TERM: 1.5 YEARS LEVEL: – 14 M . DREDGING TERM :1 YEAR LEVEL: -14 M. 550 METERS OF BREAKWATER TERM: 1 YEAR
72. PORT – AIRPORT INTEGRATED SYSTEM There is a fast way connecting the Port with the Airport in 6 minutes, making it a great comparative advantage with the region. PORT 8 km AIRPORT PORT – AIRPORT CONNECTION
83. Ecuador tourist routes Source: Ecuador´s Ministry of Transportation and Public Infrastructure. Source: Tourism Marketing Plan of Ecuador. Ministry of Tourism
84. A Paradigm for the 21st Century Thank You!!! Thank You!!! Embassy of Ecuador in the Republic of Korea EcuadorKoreaEmbassy@gmail.com
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