Latin America has become the most attractive and lucrative growing market and business opportunity in the world, and the second most important trade partner with China and Asia. A $4.8 trillion economy, US $26 Billion in China’s investment projects and US $261.000 million reached with China´s trade last year are numbers that talk from themselves.

Latin America offer one of the most attractive equity investment opportunities given the big Infrastructure investments in Ecuador and Peru, growing energy and mining investments in Mexico, Ecuador and Colombia, Brazil World Cup Soccer 2014 and Olympic Games 2016 and Chile’s stable economy, new companies IPOs and growth.

Ecuador is a medium-sized market with great potential and the US Dollar as the national currency. The World Bank’s Doing Business Report 2012 has ranked Ecuador as an upper middle-income country.

The market opportunities in Ecuador (Leading Sectors for Foreign Investment) are Commercial Sectors, Petroleum, Oil and Mining, Electricity, Natural resources industry, Hydroelectric industry, Plastics Machinery, Automotive Parts, Water Resources Equipment, Orthopedic Equipment, Telecommunications Equipment, All technologic equipment and the Agricultural Sector.

The Ecuadorian government is currently undertaking a large-scale program to increase the opportunities in the area of renewable energies and expand the country’s generation capacity by over 60 percent, building 10 large wind and hydroelectric projects. The mining industry is preparing to move from exploration to extraction in the coming years. This will create opportunities for foreign firms to supply machinery, services, or technologies.

The government benefits the economy through a new Production Code that includes a variety of measures such as investment incentives, legal protection for investors, clear rules and incentives for national and international investors, Stability and predictability, Legal security, confiscation or nationalisation are not permitted by law, Profitability: with More than 20 tax and non-tax incentives (cumulative), income tax exemption and deductions, Freedom to invest without conditions, International regulations: Fair and equitable treatment, high level of protection, non-discriminatory or arbitrary treatment.

China and Ecuador have signed several Treaties and Agreements. These treaties guarantee Chinese investments in Ecuador, and offers Chinese companies legal and economic advantages and benefits in Ecuadorian projects. With its application, several Chinese companies have signed public contracts with Ecuadorian public entities and Chinese products imports have duplicated in the past years (approx. US $200 hundred millions)

With the actual legal framework, the traditional entry strategy in Ecuador is to first appoint an agent, law firm and stocking distributor. When appointing a local distributor, foreign firms should seek counsel from an Ecuadorian law firm to ensure appropriate protection. The procedure for establishing an office is usually entrusted to local lawyers. Foreign investors starting up a business in Ecuador most frequently establish local corporations, or local branches of offshore entities. Alternatives include limited liability companies, partnerships, and mixed economy companies (when including government participation).

For sales to the government, a local agent or representative is legally required, and is often a practical requirement when first entering the Ecuadorian market. Bidding for government contracts can be a very good opportunity for foreign firms. It is always advisable to conduct first due diligence.

The Law Firm CORPORACIÓN LEGAL that I represent, encourages Asian companies interested in government contracts or in business activities requiring government licensing or approvals, and to other business and legal aspects in Ecuador and Latin America, to consult with us early in the procurement process.

CORPORACIÓN LEGAL provides a complete, dynamic and efficient legal sponsorship in the following areas of Law: Administrative Law, Intellectual Property, Corporate Law, Stock-exchange Market Law, Public Procurement Law (Public sector contracts), Tax Law; and, especially within first, in the Not-renewable Resources Law (Hydrocarbons and Mining). In addition to these specialties, our Legal Firm serves in other branches of Law.

The company was founded and has its offices in Quito, capital of Ecuador, also has an office in Miami, Florida, USA; nevertheless, it has a series of international legal offices correspondents in Latin American countries, with the capacity to offer its clients a complete legal service in the region with high quality standards.

We will wait for you in Ecuador and Latin America!

Daniel Lopez Suarez is a Partner and Attorney with Corporación Legal CL Ecuador

Posted by Daniel Lopez Suarez

Daniel Lopez Suarez is a Partner and Attorney with Lexvalor Abogados

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