Winds of change in Investment Regulations in Ecuador 

September, 2015 - Josemaria Bustamante, Alejandro Pérez Arellano

Since the Executive Decree N°1793 that was enacted in June of 2009, the investment regulations in Ecuador suffered a 180 degrees change. The limitations of classification to become a supplier to the state, and the mandatory authorization by the public entity for approving the transfer of the shares of the contractor to another company, limited the participation of foreign investors in the economy.

Nowadays, the Executive Decree N°1793 was repealed by the Executive Decree N°774, and with this repeals, the following restrictions were eliminated:

  • A contractor can have a shareholder incorporated in any Tax Haven country.

  • The mandatory authorization by the public entity for approving the transfer of shares of the contractor to another company, as well as the mandatory advance notification. 

However, the obligation to disclose all of the members in the shareholders chain of the contractor is established in other laws such as the Companies Law, Monetary and Finance Code, and in the resolution N° 777 of the Internal Revenue Service. Notwithstanding, the elimination of this regulations and the commitment of the government to enact a Public Private Partnership Law by the end of the 4th quarter of this year, will allow to increase the participation of national and foreign companies.

 

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