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The Law to attract Investments reached the National Assembly
Posted On 23 Feb 2022
Finally arrived. On the afternoon of February 22, 2022, the Executive sent the project called Law for the attraction of Investments, Strengthening of the Stock Market and Digital Transformation.
The legal proposal was delivered to the Assembly on the afternoon of February 22, 2022.
Guillermo Lasso’s proposal has 260 articles and consists of three books. The project, which came with an urgent economic nature (30 days for discussion, approval or filing), seeks to reform 18 legal bodies.
What does the legal proposal contain?
The Government has summarized that the project consists of nine points:
- Reforms to promote Public-Private Partnerships
- Creation of Free Zones
- Tax incentives for free zones
- Correction of structural problems for various sectors (sale of land under concession to shrimp farms)
- digital transformation
- Soundness of the financial system
- Stock Market Reform
- Real estate development
- Competence
Public-Private Partnerships
One of the objectives is to promote the construction of infrastructure in the country, assured Patricio Salas, Technical Secretary of the Public-Private Associations.
This modality seeks to promote long-term contracts and reduce paperwork; the number of steps in the procedure is reduced from 20 to 14.
According to Salas, there is a potential of $10,000 million in infrastructure construction that can be built under the modality of public-private partnerships.
Free trade zone
Another of the objectives of the legal proposal is the implementation of free zones, which will be created by private initiative, in the area that suits the investing company, assured Lorena Konanz, Minister of Production and Foreign Trade (in charge).
The free zones will be in defined geographical spaces in order to create jobs in that specific sector. Among the benefits that companies will have are the exemption from Value Added Tax (VAT), they will be able to import inputs and raw materials without taxes and then export finished products.
The free zones will only be for private projects that seek to export their products or services, so that there is no unfair competition in the internal market. The goal is to attract multinationals.
Changes in the stock market
The goal is to modernize the local stock market after the scandals of recent years. The modifications that are planned to be made, explained Simón Cueva, Minister of Economy and Finance, are summarized in five aspects: changes in supervision; adjustments to the public sector’s participation in the system; the change in the shareholding structure of the stock market; creation and custody of securities; improvements in compensation and new parameters for risk ratings.
