- Biotechnology is any technological application that uses biological systems, living organisms or derivatives to make or modify products or processes for specific use.
- Biotechnology is used widely in agriculture, pharmacy, food science, environment and medicine. It impacts mainly in pharmacy, medicine, food and agriculture.
- There are still no specific tariff rate for biotechnology products. The reason is very simple: biotechnology has a very broad spectrum of applications.
Biotechnology allows wider use of the genetic potential of the animal, and serves a greater number of breeding females.
- In natural mating, a bovine male can impregnate up to 80 females per year.
- With artificial insemination is theoretically possible to obtain up to 14,600 offspring a year.
Male utilization· Large numbers of offspring are derived from the same male· Prevents disease transmission· Increases fertility
- Using stallions who are in poor physical condition
Development of bio – fertilizers and organic fertilizers· Composting , bio – herbicide· Biological control , pheromones· Bio – pesticides , bio – repellents, bio – fungicides
- Bio – nematicides , bio – bactericidal
- Transgenic: A procedure that allows the incorporation of genes from one species to another.
Avoid the use of highly toxic herbicides· Lowers input costs· Reduce production costs· Decreases release of greenhouse gases
Investment in the sector
The main investor is the United States with USD 1.295 million in 2013 with an average annual growth of 2.89 %. Second is Switzerland, with USD 725 million in 2013. The two countries account for 70.29 % share of the investments made in 2013.
- 10-point reduction in the rate of income tax for reinvestment in productive assets.
- Exemption from payment of tax (ISD) on the outflow of currency and interest on foreign
Incentives for green areas
- Additional deduction of 100 % for the calculation of income tax (IR) depreciation of machinery used for cleaner production.
- Depreciation for purchase of cleaner production machinery, for the declaration of income tax. (Acuerdo 027 del Ministerio del Ambiente)
Medium Business Incentives
They will have an additional 100 % deduction on expenses incurred for:
- Technical training , research and innovation (up to 1% of spending on wages)
- Market research and competitiveness (up to 1% of sales)
- Travel, lodging and commercial promotion for opening new markets (up to 50 % of costs and advertising costs)
Incentives for the sector
The biotechnology sector is a priority sector, which enjoys the following incentives:
- Non-payment of income tax for 5 years from the income generated
- New investments made in priority sectors and import substitution (between them totaling 18 sectors)
- New Companies (incorporated after issuance of COPCI – December 29 of 2010)
- New investments developed outside urban areas of Quito and Guayaquil
- Investments in Prioritized sectors, or Imports substitutions
- Exemption of Currency Outflow Tax in case of loan payments (principal & interests) given to financial institutions located abroad.
- The loan period shall be over 1 year, the interest rate shall be lower than the referential active interest rate given by the Central Bank of Ecuador in the date of the loan registration. Does not apply for loan given by related parties or financial institutions located in tax heavens.
- Total or partial reduction of tariffs on import of capital goods, classified as goods not produced locally /or whose technical standards are not generated in the country (Resolution 082, COMEX).
- Single Window for Foreign Trade (VUE)
- Ease of tax payments
- Customs interconnected –ECUAPASS
- Foreign investors have the option of applying to an investment contract with the Ecuadorian State.
- The contract guarantees the implementation of the detailed COPCI incentives and grants the tax stability for 15 years extendable to 15 additional years.
Minimum investment to develop a contract: USD 1 million.
- New investments with investment contracts with the state have reduced tariffs on imported capital goods not produced in the country ( Resolution 82 COMEX Art. 1)
- Incentive 40% less than the price of a gallon of fuel for three years from the first airline to operate a new route. (Executive Decree N. 1283)
Relevant factors in Biotechnology sector
Ecuador compared with the other countries have easier access credit, excellent legal framework, intellectual property protection, better infrastructure, among others.
The Government has a special interest in encouraging bio-knowledge and productive applications. The country believes that research and development of new technologies form a main pillar to carry out the change of the productive matrix. Thus, in the country two key programs dedicated to promoting biotechnology research are made Yachay and Ikiam.
Ecuador is one of 17 regions of great biodiversity in the world.
- Plant species: 22000-25000
- Reptiles: 407
- Birds: 1,559
- Mammals: 324
These species are a huge potential source for generating value, wealth and welfare.