Apart from being ensured by the commitments between the Ecuadorian and Chinese governments, the business of Chinese companies in the country was juicier in alliance with the State operating independently. This is what the economic figures reported by Asian companies to the Superintendency of Companies in recent years reflect. However, all -the public contractors and those operating only in the private sector- pay in income tax an amount lower than the one they take out of the country, in line with the tax incentives that encourage the arrival of foreign investment based on tax exemptions.
This explains why the Chinese branches that have contracts with the Ecuadorian State will report in the last decade 195 million dollars in the Income Tax and at the same time, they will pay 113.5 million of Excise Tax, which is equivalent to have removed from the country, at least 2.27 billion dollars, taking into account that 5% of ISD is paid.
EXPRESO has reviewed the 2017 accounts of the 64 foreign branches originating in China, as a sample of the income and profits obtained from their activities in Ecuador. At the same time, we have accessed and calculated what was written off in Income Tax and Foreign Currency Exit Tax for each of them according to their complete history and thus extract a sum of figures.
When comparing the revenues for the state coffers left by the activity of Chinese companies, the difference in amounts between public providers and those dedicated to the private sector stands out. Not having a contract means lowering the level of income, profits and, also, the tax contribution. The Chinese branches that do not have business with the State, declared in the last years 1.1 million dollars in Income Tax. And 1.6 million dollars in ISD, which is equivalent, at a rate of 5% of the expatriate money, to an amount of 32 million dollars that they took out of the country.
Also agree all, contractors and non-contractors, to harvest negative profit results, as declared to the Superintendency of Companies in 2017. The benefits of the former gave a figure of $ -35.8 million and, the non-suppliers, $ -1.07 million, despite having revenues of 990.1 million and 15.1 million, respectively.
However, Ecuador not only welcomes in its economic fabric the business of foreign branches, there are also companies, of Asian origin, but with headquarters in the country. And companies that have received Chinese capital or with shareholders from that country. The latter are almost 2,000 companies, which have received 32.4 million dollars since the first contribution was registered in 1938 until 2018. Most of them are in Guayas (1,239), Pichincha (459) and El Oro (121). Also national importers who buy the Chinese partner goods for their activity. For more details, read the fifth final installment tomorrow.
In 2017, Chinese branches in Ecuador reported more than $ 1 billion in revenue, between contractors and non-state contractors.
The 64 Chinese branches installed in Ecuador employ 2,500 people, in an approximate figure reported to the corporate authorities.
The Chinese branches left in the public coffers $ 196.1 million in Income Tax and 115.1 million by ISD, so they repatriated at least $ 2,300 million.
The last year (2017) was not profitable for the branches, as reported to the Superintendence of Companies. They reaped losses of $ 37 million.
From 1938 to 2018, Ecuadorian companies received 32.4 million dollars of Chinese investment. Although FDI, it reports $ 1.7 million since 2002.
The Chinese yuan is the third currency that most Ecuadorian financial entities buy and remittances to China, in 2017, reached $ 17.5 million.
Highest investment received from China, according to the Superintendence of Companies:
Cute Quito (1998)
$ 5.7 million, from China Road & Bridge Corporation. Food and accommodation.
Fiberhome Telecommunication Technologies
$ 3.8 million (2014), from Latamfiberhome Cable. Manufacturing industry.
$ 3.3 million, from Li Xinqian. Commerce
China Tecnocore Petroleum Equipment (2011)
$ 3,008 million, from Shandong Fervi Petroleum Equipment. Mining
Heng Xin Cía (2010)
$ 1 million, from 8 investors. Forestry.
Best Doctors SA (2008)
$ 999,999, from Tamsin HK Limited. Medical insurance
Minera Cerro Dorado Cedoming (2015)
$ 720,000, from Xuening Cao. Mining
Zhao Jin Group Sputh America Service (2016)
$ 605,000, from Liu Yongsheng. Mining
Shrimp farm DNC (2016)
$ 573,200. 2 inverters: Lin Ping and Li Hua. Forestry.
Sinopec International Petroleum Service Ecuador (2002)
$ 301,980, from Sinopec International Petroleum Service Corporation. Mining. (I)