Exemption from import duty is attracting traders.

HE CITY of Guayaquil is becoming a major commercial hub thanks to a pro-business local government that is intent on creating a tax-free and business-friendly environment for both domestic and international companies. Indeed, the recently adopted national tax incentive law provides the legal framework for tax exemption for those companies that establish themselves in Guayas Province, of which Guayaquil is the capital. The law grants a tax-free period of ten years and applies to companies with activities in the electricity and hydroelectric sectors, oil refineries, high technology, foreign trade, airports, deep-sea ports and container transfers and agro-industry products.

Considering the ongoing upgrading of both Guayaquil’s Simón Bolívar International Airport and the Port of Guayaquil, the law bodes well for new companies interested in investing now. In addition, the city is working to establish a new TechnoPark with the aim of boosting regional know-how and expanding its technological base. The TechnoPark will be a resource pool for highly qualified national and international companies and personnel trained by Ecuadorian universities in high-tech fields. The Park will provide the proper infrastructure to develop and manage the latest technologies and will provide a comfortable base for companies interested in developing products for export.

Along these same lines and also contributing to Guayaquil’s efforts to create a strong advanced technology sector, the Guayaquil Incubating Foundation for Innovative, Competitive and Value-Added Companies (Incoval) has been established in the city to promote the creation of regional technology-based businesses. Incoval provides physical space for new companies in the sector to operate in, as well as access to business support such as legal, financial, market, and management guidance in addition to technical support and help in launching the activities of the new company.

All of these new technology companies will enjoy the benefits of Guayaquil’s tax exemptions, including the additional incentives that will be provided in the city’s proposed free zones, which will be established in the Port of Guayaquil and in the airport. These areas will come under the nationally established free zone regulations, which include 100 percent exemption on all import duties of raw materials, equipment, parts, components, samples and capital goods involved in production of final products. Exemption is also granted from import duties on vehicles necessary for operations and sales tax of local purchases of all goods and services. In addition, companies will be free of restrictions on sales to local exporters and enjoy completely autonomous management from the local banking system of foreign currency.