BUSTAMANTE FABARA
  December 18, 2015 - Ecuador

New Law of Incentives for Public Private Partnerships and Foreign Investment
  by Josemaria Bustamante, Alejandro PĂ©rez Arellano

On December 18th was enacted the Organic Law of Incentives for Public Private Partnerships and Foreign Investment. This law is intended to promote synergies between the private and the public sector. It is based in the principles of fiscal sustainability, Risk allocation, Value for money, respect to interests and rights of the users, property rights and social inclusion. All of the projects can be part of this regime, whether they are new public works (construction, equipment, operation and maintenance) or existing public works (rehabilitation).The areas which can be develop PPP projects are: Infrastructure, urban development, ports and airports. On an exceptional basis can be granted projects in public services. There are no subject of this lay the projects that are related with strategic sectors (oil, electricity, telecommunications and water) Regarding the tax incentives are highlight: Exemption of the Income Tax for 10 years, since the first year of revenues related to the operation. Exemption of the Tax on the Remittance of Currencies for 10 years, for payments of imported goods related with the project, as well as the payment of services, finance and profit distribution. Exemption in all of the taxes on foreign trade. Furthermore, it grants legal stability, which extends to all regulation issues that must be declared as essentials in the contracts.