Transcript ECUADORIAN STRATEGIC SECTORS

INVESTMENT
OPORTUNITIES
ECUADOR
INVESTMENT
LAWS
AND
REGULATIONS
INVESTMENT LAWS AND REGULATIONS
•Constitutional Principles
Promote a new trade and
investment regime between States
on the basis of justice, solidarity,
complementarily (…) Deny the
possibility that dispute resolution
with foreign companies becomes a
conflict between Governments.
•Production, Commerce and Investments Act
Establishes a legal regime which all foreign and
domestic commerce agents must abide.
PRINCIPLES, RIGHTS
AND GUARANTEES
Non Discrimination:
Foreign Investors have
the
same rights and obligations as national investors.
Transfers. Investors have the right to transfer overseas the
complete or partial amounts gained through their
commercial activities, if and when all fiscal obligations are
met.
Rule of Law. Possibility of subscribing investment
contracts which can lead to international arbitration.
Taxation Stability. Long term applicable taxes when a new
investment is presented.
Rule of Law. Possibility of subscribing investment
contracts which can lead to international arbitration.
No Seizures. Investments shall no be seized, expropriated
or nationalized, directly or indirectly, with the exception of
those cases which respond to public interest and only
when the required legal procedures have been taken into
account (…) non discrimination as well as fair and equal
treatment must be observed.
Financing. Liberty to access the national financial system
and stock market in order to obtain the necessary
resources for the short, medium and long term
development of investment projects.
INVESTMENT PROTECTION
1.
Foreign
investors
and
investments will benefit from
protection under the rule of law.
2. They shall receive the same
legal
treatment
as
Ecuadorian investors within
the national territory.
3. Investors rights are recognized.
4. Investment Contracts can be signed.
INVESTMENT PROTECTION
•
•
INVESTORS
RIGHTS
•
•
To produce and commercialize all
licit goods and services.
To access to all administrative
procedures in order to control
speculative behaviors.
To import and export goods
To transfer overseas all dividends
obtained periodically.
INVESTMENT PROTECTION
Arbitral Clauses may be enacted in order to
resolve controversies between the State
and the private investor.
MECHANISM:
•
ADMIN.
VENUE
• AMICABLE
SOLUTION
• 60 DAYS
•
MEDIATION
3
•
MONTHS
ARBITRATION
RULE OF
LAW
• FINAL
SOLUTION IS
INSTATED AND
ENFORCED
• TAXATION
MATTERS ARE
NOT ADMISIBLE
APPLICATION OF INCENTIVES
(GENERAL, BY SECTOR & SPECIFIC)
GENERAL
•
•
•
•
•
Gradual corporate income tax reduction
(from 25 to 22%)
New enterprises receive a 5 year tax cut.
No tax applicable for foreign money
transfers.
Expenditure tax cuts on all investments for
productivity, innovation and eco - efficiency.
ZEDES:
•
•
•
•
Additional 5% tax reduction
Exemption of VAT for imported goods
Exemption of ISD payment of credits and for
purchase of raw materials, production goods and
services.
Fiscal credit for VAT paid on purchase of raw
materials, production goods and services
Tax Incentives Application
Sectors
d. Production of fresh, freezed or industrialized
goods.
e. Forest industry, Agro-forest chain & its products
f. Metal mechanics;
d. Petrochemicals;
e. Pharmaceutical;
f. Tourism;
g. Renewable Energies;
h. Logistical Services;
i. Biotechnologies and software;
j. Defined areas for import substitution.
Tax Incentives Application
SPECIFIC
In addition to “general” and “sector”
incentives: all investments
undergone in under developed
areas shall receive a 100% tax
deduction on all new workers for a 5
year time frame.
SPECIAL ECONOMICAL
DEVELOPMENT AREAS (ZEDES)
Geographical areas within the
national territory which take
into
consideration
infrastructure conditions, the
environment and electricity,
water
and
telecommunications access.
Shall be designated for:
1.- Technological transfer and innovation;
2- Diversify the industrial production frame.
3.- Logistical services.
SPECIAL ECONOMICAL
DEVELOPMENT AREAS (ZEDES)
•Source for public, private
and mixed capital
investments.
• Amount of the investment
in accordance to the projects
undertaken.
• Projects aligned with the
national strategy for
productive transformation.
•Impact of technological transfer on local and
regional production. Increments on add value
exports in prioritized areas.
THE MAJOR TRANSFORMATIONS IN
INVESTMENT REQUIRED FOR ECUADOR
The main objective of the Government of
Economist Rafael Correa is to build
infrastructure works to attend the
demands of 14 million Ecuadorians, to
exploit strategic areas in the country to
generate resources that will benefit the
entire population, as well as the
acquisition of resources that will allow
developing these and other works.
To achieve this objective we have
The National Plan for Good Living
which seeks the development of
Ecuador, through effective planning
processes, with particular emphasis
on execution and integral
management of strategic sectors.

Ecuador offers a stable
regulatory framework.

The Ecuadorian
Government has as priority in
public and private, national
and foreign sectors.
The new legal framework includes:
National Assembly, Constitution, Public Companies
Law, Public Procurement Law, Production Code,
Planning and Public Finance Code, Mining Law,
New Hydrocarbon Law
ECUADOR STRATEGIC
SECTORS


Objectives: ACHIEVE self sufficiency in
electric generation, by-Products refining,
access to information technology, and
management of water resources.
TO BE PRODUCTIVE, with quality in electric
services and telecommunications; extraction
of hydrocarbons and minerals, and water
resource development.
TO BE INCLUSIVE, in the provision of
public services accessible to all people.
Goals: Develop infrastructure, Employment
generation, Technology transfer,
Consolidating investments in strategic
sectors, improving systemic competitiveness
Chinese Companies Investment
in Ecuador

Oil & Mining
TONGLING Acquired two
projects in 652 miners
Cooper MM USD to the
Canadian company ECSA.
Estimated Investment $2,
000 million USD to 2014.
PETRO
ORIENTAL,
operates blocks 14 and
17,has
invested since
2006 until 2009 - 200MM
USD.
This
company
produces 12.812 barrel
per day .
Chinese Companies Investment
in Ecuador
ANDES
PETROLEUM,
operates Tarapoa field ,
has invested since 2006
until 2009 – 392 MM USD.
This company produces
36.025 barrel per day .
SINOPEC (Lease
Petroleum Rigs);
and others.
Signed Contract Agreements
With Ecuador
Coca Codo Sinclair
Hydroelectri c.
China Eximbank Financing
of USD 1.682 million.
Sinohydro built and
equipped by 2000 millio
n USD.
Construction and
equipment of the
Sopladora
Hydroelectric for 700
million USD.
Construction and
equipment of the
Sopladora
Hydroelectric for 700
million USD.
CHINA Strategic partner of
Ecuador
Chinese construction companies Gezhouba
and Sinohydro will build two of the largest
infrastructure projects in the history of
Ecuador: Sopladora and Coca Codo
Sinclair. The budgets for the construction
of hydroelectric plants are USD 700 million
and
USD1.700 million for
Sopladora and Coca Codo Sinclair,
respectively.
The implementation of these projects will generate savings of $ 3
million per day approximately, supplying the thermal energy.
They will cover 37% of the power and 35% of the energy demand
in Ecuador
Why to Invest in Ecuadorian
Projects?

Opportunity for Chinese Companies
to develop and execute projects without the
requirement to participate in a long bid process,
when the offerings include financing on favorable
terms.


Growth and profitability for Chinese
Companies.
Chinese Banks need to allocate
their economical resources in order to
increase their profits and diversify your portfolio.
(CDB, EXIMBANK, BANK OF CHINA, ICBC) support the financing
for the Ecuadorian strategic projects.
SINOSURE support.
INVESTMENT PROJECTS IN
ECUADOR











Pacific Refinery
Airport and Port of Manta
Cement Factory
Cocoa Processing Plant
Mine silicon, polysilicon
Solar panels factory, microchips,
ceramics.
Glass plant
Milk Processing Plant
Manufactures of metal bridges
Auto assembly plant
Factory of TV's and decoders
Why to Invest in Ecuadorian
Electricity Projects?






Opportunity for Chinese companies to build
infrastructure projects overseas.
Priority projects that allow us to decrease the
generation cost.
Significant economic saving to the State by
reducing the fuel imports diesel ) and export the
fuel refinery .
Change on the energetic matrix through the use of
clean technology reducing CO2 emissions.
Minimum risk of electric black out.
Energetic sovereignty.
Why To Invest In Ecuadorian
Water Projects?





Risk Reduction caused by drought and
floods.
To protect the life of the population.
More hectares available for irrigation
to be used in the agriculture sector
(alimentary Sovereignty and
exportation)
Savings to the State and population
through disaster prevention.
Opportunity for Chinese companies to
build infrastructure projects overseas.
Why Invest In Ecuadorian Mining
Projects?











High potential for prospecting
(Unexplored country)
Current concessions represent only
4.31% of the country surface.
96.83% are in exploration phase and
3.17% in exploitation
High Probabilities of success
KINROSS : Most important world wide
gold discovery in the last 10 years
Adequate business conditions
Negotiation contracts underway
(KINROSS, ECSA, IMC and IAMGOLD)
Legal framework
New incentives
Guarantees of investment through
contracts
Adequate infrastructure and
geographic location
Why Invest In Ecuadorian oil
projects (Pacific Refinery)?







Only high conversion refinery of
crude oil in South America’s Pacific
Coast.
Strategic location for receiving raw
material and world wide distribution.
Ecuadorian Oil by-products captive
market.
Highly unsatisfied demand of Oil
derivatives in the region.
Placement of total excess of
electrical generation in National
market.
Highly profitable investment sector.
New Oilfields development (SouthEast)
Ecuadorian New Cement
Projects
AMAZONAS
AMAZONAS
0.75
ISIMANSHI
0.5
CHIMBORAZO NEW
1
LINE
Millions of tons per year
CHIMBORAZO NL
Aditional Needs for 2011
1 million tons for:
ISIMANSHI
1.1.600 Km of concrete roads
2.800.000 houses
3.1 electrical power dam
26
Ecuadorian New Cement Projects
Share Holders
Shares
Private Partner
51%
Social Security
22%
State entity (EPCE)
17%
Employees
5%
Communities
5%
MANTA MEGA PROJECT
Total Overhaul
Flight Coverage:
Domestic and International
Location:
Manta, Manabí Province
The project consists of developing a modern passenger terminal
building with an approximate surface area of 4.466m2; with a
technical block of 254m2 construction; a SCI hangar of 3.780m2; and
6.425m2 for vehicle parking, runway extension to reach 3700 mts.,
cargo terminal and training centre.
FUTURE RUNWAY 3700m x 46m
DIMENSIONS:
REFERENTIAL
AMOUNT:
US$40.000.000,00
EXECUTION TIME: 18 months
MANTA AIRPORT MEGAPROJECT
The following is required to execute this Mega
Project:
 Significant Passenger and Export-Import cargo to
and from Asia.
 Investors under the strategic alliance figure,
capable of complying with domestic and
international airline requirements.
 Creation of Pilot Training School for Latin
America.
CHARACTERISTICS OF THE STRATEGIC PARTNER
 Ample experience in executing development projects for the
aviation sector.
 Extensively trained in operation and marketing of airports.
 Know-how in transfer-airport management (HUB).