SAHIC 2019 / EN

Ecuador

and its four Worlds

It extends over an approximate area of 120,000 km2 of exuberant vegetation, typical of the humid - tropical forests. This region covers an altitudinal range that varies between the northern and southern regions.

• The Pacific Coast.- it is located at west of the Andes The average height ranges from 180-190 meters above Mountains, where we find three ecosystems: tropical sea level in the lower part of the Amazon plain, and forests at north, tropical savannas of the center and 2,900 at the summits of the Amazon mountain range. southwest, and the dry forest of the central area.

• Insular Region.- it is located at a distance between The vegetation of the area is very varied, which include: 900 and 1,200 km of continental Ecuador. The mangroves, ceibos and carob trees. It is formed up of Galapagos Islands are formed by a group of 13 major 6 provinces: Esmeraldas, Manabí, Los Ríos, Guayas, islands, the most important are: San Cristóbal, Isabela, Floreana and Santa Cruz.

Santa Elena and El Oro. Ecuador has 4 natural regions, all with particularities of relief, climate and vegetation; clearly manifested in the diversity of landscapes:

• Andes.- it is located between the Nudo de Pastos in the north, up to Loja in the South, it occupies an area of 600 km long and from 100 km to 400km wide, it is formed by 11 provinces. In Ecuador there are a total of 84 elevations between volcanoes and mountains nationwide, and most of them are located in the interAndean alley, the average height is 4,000 meters.

Due to the endemic diversity of this area, the islands have received several international awards; including among them the declaration as a Natural Patrimony of Humanity by UNESCO.

Due to the geographical location, Ecuador has a privileged and spring climate throughout the year.

The country is located in the Equator, so its territory is • Amazonia.- it is located east of the Andes Mountains, located in the two hemispheres. In addition, it crosses it is mostly formed by protected areas. This area the Andes Mountains, and the influence of the sea is formed by the provinces of: Sucumbíos, Napo, with the warm and cold sea currents of Humboldt, Orellana, Pastaza, Morona Santiago and Zamora fragmented in micro climate.

Chinchipe.

A megadiverse country with privileged conditions

A MEGADIVERSE COUNTRY

Ecuador is the most mega-diverse country en the world per square meter.

In just 256.370 square kilometers *0,2% of the landmass of the planet), home:

4

WORLDS

1680 species of birds (1/5 of the total species of the World)

434 species of mamals, 42 endemics.

20% of the country are protected areas

4.032 species of orchids, 1714 endemic species.

Around 27 volcanoes potencially actives.

590 species amphibians.

of

International Connectivity 2017

NEW YORK ATLANTA HOUSTON MIAMI FORT LAUDERDALE MÉXICO EL SALVADOR

18

AIRLINES with direct connections to

17 DESTINATIONS

OPEN SKIES POLICY STARTS

CARACAS

PANAMÁ ECUADOR

BOGOTÁ CALí

LIMA SAO PAULO SANTIAGO

4

INTERNATIONAL AIRPORTS QUITO / GUAYAQUIL / MANTA / LATACUNGA

AMSTERDAM

PARIS

MADRID ECUADOR

Infrastructure and Public Investment

Infrastructure Ecuador has 4 international airports (Quito, Guayaquil, Manta and Latacunga), and 18 local airports, of which 9 have air passenger transport operation on a regular basis.

Baltra-Seymour Cuenca-Mariscal Lamar Coca - Francisco de Orellana Esmeraldas- Colonel Carlos Concha Torres Isabela - General Villamil Macas- Colonel Edmundo Carvajal Nueva Loja- Lago Agrio Riobamba- Chimborazo San Cristóbal- San Cristóbal Santa Rosa- Regional Santa Rosa Santo Domingo- Santo Domingo San Vicente- Los Perales Loja- Catamayo Salinas- Ulpiano Páez Shell- Amazon River Taisha- Taisha Tena - Jumandy Tulcán- El Rosal Tcrn. Mantilla There are also 4 international ports in Ecuador: Manta, Guayaquil, Esmeraldas and Puerto Bolívar. For the 2018-2019 season, the arrival of 24 cruises is expected. The port of Manta receiving the highest number of cruises per season, followed by the port of Guayaquil, it is worth mentioning that the Ecuadorian ports are considered as cargo and passengers.

Public Investment

USD 329 millions.

Airports investment, it includes 2 new airports, 10 renewed with international standards.

USD 9.368 billions.

Public investment in more than 9.790 km of renewed highways.

60.000 Km.

Of optic fiber internet, Ecuador has become one of the countries with the highest access to internet in the region.

USD 8 billions.

Public investment in 6 multipurpose projects.

USD 5.9 billions.

Investment in hydroelectric plants.

8 projects in the last 10 years.

Free human mobility, Ecuador opens its borders to the world

Ecuador recognizes the principles of universal citizenship and free human mobility. Currently, 12 countries in the world need a visa to enter Ecuador and are the following: • AFGHANISTAN • BANGLADESH • CUBA • DEMOCRATIC POPULAR REPUBLIC OF KOREA • ERITREA • ETHIOPIA • KENYA • NEPAL • NIGERIA • PAKISTAN • SOMALIA • SENEGAL The period of stay for tourists will be up to ninety days in the period of one year from their first entry, extendable only once for up to ninety additional days, upon request and payment of the respective rate.

For tourists from member states of the Union of South American Nations (UNASUR), the term of stay will be up to one hundred and eighty days in the period of one year, counted from their first entry. In the case of specific international agreements, what is determined by these instruments will be observed.

Arrivals of foreigners to the country In 2018, there were a total of 2,427,600 foreign arrivals to the country, mainly from Venezuela, the United States, Colombia, Peru and Spain. Likewise, the arrival of foreigners was increased by 50.93% from 2017 to 2018, as can be seen below:

Foreigners arriving Year 2017

Continent All

Country All

Migration office All

Via All

Origin

Year Total

1.608.473

Arriving Ranking Colombia Venezauela United States PerĂş Spain Argentina Chile Germany China Canada Mexico United Kingdom

Age group 10 to 19 years old

5,7% 150 K

8,1% 24,4% 21,7%

30 to 39 years old

50 to 59 years old 60 years old and more

244.600 139.116 58.727 44.662 44.522 33.439 30.147 28.342 27.541 25.623

171.514

163.015

20 to 29 years old

40 to 49 years old

287.972

Seasonality

16,0%

149.884 136.149

Arrivals

0 to 9 years old

330.671

117.236

126.308

feb

mar

100 K

112.749

110.503

abr

may

135.915

124.638

140.493

oct

nov

119.966

50 K

12,4% 11,6%

0K jan

jun

jul

aug

sep

dic

Foreigners arriving Year 2018

Continent All

Country All

Migration office All

Via All

Origin

Year Total

2.427.660 Arriving Ranking Venezuela United States Colombia Peru Spain Chile Argentina Germany Canada Mexico United Kingdom France China

Age group 10 to 19 years old

243.149

200 K

8,5 % 26,4% 22,4 %

30 to 39 years old

146.788 102.996 45.860 40.956 35.509 34.333 30.422 28.235 27.593 26.113

197.219 179.141

200.091

191.532

218.470

181.130

176.511

153.921

224.101

215.530

216.865

100 K

15,4 %

40 to 49 years old

60 years old and more

322.810

Seasonality 6,7 %

20 to 29 years old

50 to 59 years old

351.704

Arrivals

0 to 9 years old

955.962

11,0 % 9,6 %

0K

jan

feb

mar

apr

may

jun

jul

aug

sep

oct

nov

dec

Benefits of Investing in Ecuador

INCENTIVES Income tax (25%) • 8 years of income tax exemption in the cities of Quito and Guayaquil.

• 12 years of income tax exemption in the rest of the country.

• 15 years of income tax exemption for Manabí and Esmeraldas, which can be extended for up to 20 years to the tourism sector.

• Tourism projects, micro, medium-sized community and / or associative tourism companies, will be exempt from income tax for 20 years.

• Note: the benefit will apply from the first year in which income attributable to the new investment is generated • Reduction of 10% of the Income Tax in the reinvestment of profits in the acquisition of new productive assets.

• Double tax deduction of depreciation costs of productive fixed assets for 5 years (includes Quito or Guayaquil).

Depressed Areas

• Tax benefit by additional deduction of 100% of the cost of hiring new workers, for five years.

• Exoneration of the currency exit tax (ISD) for capital and interest on loans

• Exoneration of the currency exit tax (ISD) for capital and interest on loans abroad, whose financing is greater than 360 days and the rate must be lower than the Ecuadorian reference rate

Currency Exit Tax (5%)

• Exoneration of the tax on the exit of foreign currency (ISD) for the new productive investments that subscribe investment contract, for the payment of dividends or profits abroad • Exoneration of the tax on the exit of foreign currency (ISD) for the new productive investments that subscribe investment contract, for Imports of capital goods and raw materials necessary for the development of the project, up to the amounts and deadlines established in the referred contract. These amounts will be resettable in cases where there is an increase in planed investment, proportionally to these increases and with prior authorization from the national investment authority

The Investment Contract is an agreement to protect new productive investments, available for investments over USD 1 million, offering the following incentives:

Investment Contracts with the Ecuadorian State

Stability: • Stability over tax incentives up to 15 years.

• Renewable once (maximum validity of 30 years).

Exemptions: • The company may request the reduction of tariffs for capital goods to be imported.

• Exception of foreign exchange taxes on: profits and the importation of capital goods.

Security: • Establishes conflict resolution mechanisms.

Temporary deferral of the total payment of tariff rates.

Requirements:

Duty

• The merchandise to be imported must lack national production and / or its technical standards must not be generated in the country; NATIONAL PRODUCTION CERTIFICATE. • The merchandise must have the motivated certification of the Ministry of the sector where the activity is carried out, that the quantity and the merchandise to be imported are directly related to the activity to which they will be destined.

• Data of the company and / or project that must be delivered to the Foreign Trade Committee COMEX.

ZEDE Turística

• For tourism services.- The establishment of special economic development zones for the provision of tourist services may be authorized, only for the development of tourism projects according to the public policy of prioritization of cantons or regions issued for the purpose by the Production Sectorial Council.

• The ZEDES will enjoy the customs destination treatment granted by the customs legal regime, with the exemption from the payment of tariffs and VAT on foreign goods entering these areas.

• • The administrators or operators of the ZEDES will be exempt from paying the income tax and its advance payment for the first 10 years, counted from the first fiscal year in which operating income is generated.

The Public-Private Partnership (PPP) model allows a shared risk between the public and private sectors.

Public Private Partnerships

Incentives: • Income tax exemption for 10 years, from the first year of operation.

• Exemption of customs duties on imported products and services for the development of the project.

• Legal stability on various aspects that affect investment and tax incentives • Disputes may be submitted to international arbitration.

• ISD exemption for: 1. In the importation of goods for the execution of the public project, whatever the import regime used.

2. In the acquisition of services for the execution of the public project.

3. The payments made by the company to the financiers of the public project, including capital, interest and commissions, provided that the agreed interest rate does not exceed the reference rate at the date of registration of the credit. The benefit extends to subordinated loans, provided that the borrowing company is not in a situation of undercapitalization in accordance with the general regime.

4. Payments made by the company for distribution of dividends or profits to its beneficiaries, without prejudice to where they have their fiscal domicile.

5. Payments made by any person or company due to the acquisition of shares, rights or participations of the structured company for the execution of a public project in the modality of public-private partnership or for transactions that fall on securities representing obligations issued for financing the public project.

Financing For the financing of tourism projects, we have the National Financial Corporation, which grants credits for the following tourism activities:

Public Financing

• Accommodation (not less than 2 stars) • Food and drinks Under the following conditions: • Amount: from USD. 50,000 to 30’000,000 • Up to 4 years of grace • Term: up to 15 years fixed assets and up to 4 years working capital • Rate: 8.95% working capital and fixed assets • Guarantees: 125% of the requested amount

Applicable regulations • Organic Law for Productive Development, Attraction of Investments, Employment Generation and Fiscal Stability and Balance.

• Law on Incentives for Public Private Partnerships • Organic Code for Production, Commerce and Investments • Organic Law of Internal Tax Regime • Resolution 022-2018 of COMEX • Resolution 002-2019 of COMEX

Portfolio of tourism investment opportunities The Portfolio of investment opportunities: it is a database of projects, land, establishments, etc. focused on the tourism sector, which have financing needs, sale of shares, direct sale, public-private alliance, concession, joint venture, among others.

The Ministry of Tourism is responsible for carrying out continuous field work to develop and update the portfolio of tourism investment opportunities, which can be downloaded at the following link: INVEST ECUADOR

Contact information: Department of Investment and Conectivity Phone. +593 2 3999333 ext 1518 Email: inversiones@turismo.gob.ec