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Investment & Legal Framework
Andean Community. Neutral investments are not
considered to be either foreign or local investments.
Foreign investors are entitled to the free remittance
of profits.
REQUIRED NATIONAL PARTICIPATION
In principle, Ecuadorian corporations wholly owned
by foreigners are free to operate in all economic
sectors, without prior authorization, except those
reserved for the state (unless The State has
delegated the activities to the private sector). The
Ecuadorian State may grant to the private sector the
performance of the following activities:
1. The production, transportation, storage, and
commercial use of hydrocarbons and minerals
2. The generation, distribution, and commercial use
of electric power
3. Telecommunications
REGISTRATION AND LICENCING
For tax purposes, every new entity must be registered
with the local tax office of the Internal Revenue
Service (Servicio de Rentas Internas—SRI) and
obtain a taxpayer registration number (Registro
Único de Contribuyentes— RUC). For company
law purposes, registration with the Commercial
Registry is required in the circumstances outlined
in Chapter 6. Every new business must also apply
to the municipal authorities to obtain a license to
commence business. Trading or manufacturing
licenses as such are not required, but specific permits
may be necessary for some activities. Registration
for social security purposes with the Ecuadorian
Social Security Institute (Instituto Ecuatoriano de
Seguridad Social—IESS) is required. Businesses in
Ecuador are required to join a production chamber
as per their specific line of business (i.e., chamber of
commerce, of industries, of mining, etc.)
IMPORTS AND EXPORTS
Ecuador is committed to liberalizing commerce.
Many commercial restrictions have been eliminated,
and import and export procedures have been greatly
simplified. Ecuador is a signatory of economic
integration agreements implemented to increase
commerce under tariff conditions, as well as to
promote the economic and social development
of the member countries. Apart from the Andean
Community, Ecuador is a signatory of the ALADI
(Acuerdo Latinoamericano de Integración), whose
other members are the countries in the American
Continent including Canada and United States.
Ecuador has been a member of the World Trade
Organization (WTO) since January 2, 1996. It is also
a member of the Pacific Basin Economic Council
(PBEC).
Imports All companies importing goods into
Ecuador must be registered with the Foreign Trade
Department (Departamento de Comercio Exterior),
which is controlled by the Central Bank. The
import and export paperwork can be undertaken
by private banks. Special imports (agricultural and
pharmaceutical products) are subject to additional
controls from the Agricultural Ministry and Health
Ministry (Ministerio de Agricultura y Ministerio de
Salud).
The special regimes for imports are as follows:
- Temporary admission with reexportation in the
same state—suspended regime of customs duties
and value added tax if the imports are reexported
within the stated term.
- Temporary admission for active improvement
suspended regime of customs duties and value
added tax if the foreign merchandise is reexported
after a transformation or amendment process.
- Customs transit—suspended regime of taxes for
the local transport of merchandise to another country
- Customs deposit—suspended regime of taxes
for the storage of merchandise in a commercial or
industrial storage house.
- Temporary export with reimport in the same state—
suspended regime of taxes that allows the departure
of merchandise.
- Drawback—total or partial refund of taxes paid
on the import of merchandise to be subsequently
exported.
- Special transformation regime—Merchandise is
subject to a special regime if it undergoes a
transformation process; is incorporated into other
merchandise or packaging; is used in the production
or transformation process; or is replaced with
identical or equivalent merchandise, which is allowed
to be imported tax free and is reexported after a
transformation process.
- Free Trade Zone—Allows entrance of merchandise
free of customs duties to authorized areas.
- Maquila—Allows entrance of mercandise into
Ecuador for their transformation in order to reexport
them.
Ecuador has adopted a classification and a
merchandise coding system for Andean Pact
members (Nomenclatura Arancelario Común de los
Países Miembros del Grupo Andino—NANDINA).
The NANDINA is based on a designation system