The President of Ecuador, Guillermo Lasso, signed Tuesday the decree-law for the “Attraction and Promotion of Investments for Productive Development” to promote the creation of new free trade zones.
This is the second urgent economic decree-law signed by the President after last May 17 he applied the constitutional figure of “cross death” and dissolved the National Assembly (Congress).
Said decree-law will be sent to the Constitutional Court, which must issue a favorable opinion for its entry into force.
The President signed the decree in a ceremony at the Government Palace in Quito, together with the Ministers of Economy and Finance, Pablo Arosemena, and of Production, Foreign Trade, Investments and Fishing, Julio José Prado.
“Today, we are taking an important step in the path outlined by the President to create an environment conducive to investment, production, and employment generation in the country,” said Arosemena.
He noted that the decree law promotes the creation of Special Economic Development Zones (ZEDE) to strengthen Ecuador’s export and production capacities through a modern legal framework.
The bill was submitted two years ago by the Government of Ecuador to the outgoing National Assembly but was not analyzed; however, this Tuesday, it was resubmitted to the Constitutional Court with improvements that include tax benefits and legal certainty, the minister added.
Free trade zones are special geographic areas where any productive sector may be established and will be subject to tax and customs incentives for the development of economic activities with a view to exports.
Minister Prado added that through the decree law, “an exceptional regime is generated in customs, tax, and foreign trade matters”.
Among the benefits are a 10-year exemption in the payment of Income Tax and a zero rate in the Value Added Tax (VAT) for the acquisition of imported inputs, raw materials, and capital goods, which are exclusively destined for the authorized zone.
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