Description of the sector in Ecuador
- The TIC´s sector generated 29,000 jobs in 2013
- This year , the sector reached 3.1 % of GDP
- 3,026 companies make up the TIC´s market in Ecuador
- Software, Hardware, Internet service providers and telecommunications companies are other sectors.
Sector development in Ecuador
- During the last decade, it has been essential to implement TIC´s in the world, as it has contributed to the socioeconomic development and generation jobs.
- Ecuador is among the first countries in Latin America and the Caribbean rank Availability Index for Connectivity 2014 (NRI), on a scale of 1-7 (with 7 being the highest score), performance of 148 economies the use of information and communication technologies to boost competitiveness and welfare.
- We have identified the following areas where incorporating ICT development aid them, providing increased productivity, competitiveness.
- TIC´s contribute to the development of strategic sectors, including 8 sub-sectors are a priority for the State: Agriculture, Petrochemicals, Mining, Banking & Finance, Pharmaceuticals, Construction and Transportation, Tourism, Environment, Sea, Energy, Industrial Automation and Services public.
Investment in the sector
- The main investor is the United States with USD 12,130 million in 2014 and an annual average growth rate of 9.53%.
- The second is the United Kingdom with USD 1,650 million and a 2.23 % TCPA. These two investors totaling 55.96 % share of capital investment in 2014.
Foreign Direct Investment in Ecuador
- The Central Bank of Ecuador recorded investment in the sector of Transport, storage and communications, which includes some industries, including the TIC´s sector. This sector in 2014 shows a divestment of USD 51.64 million.
- The Greenfield investment in Ecuador, capital for starting new businesses by constructing new facilities and create jobs, recorded in 2014, one investor: United States totaling $ 2 million.
- Total investment Greenfield of 2010 -2014 is USD 26 million.
Production cost of the sector
- Ecuador enjoys an advantage over others in terms of operating costs in the sector; estimates of the annual operating costs are based on labor costs.
- As displayed in the table below, the costs of operating in Ecuador are 16% less than the average annual cost of competing countries. Which would provide an opportunity to save costs and have a margin of expected profit.
Incentives for the sector
The TIC´s sector is a priority sector, which enjoys the following incentives:
- Non-payment of income tax for 5 years, since income is 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 from payment of income tax on dividends paid by companies established in Ecuador to companies abroad and non-resident persons in Ecuador (except tax havens) -Art. 18 Law on Environmental Development.
- No payment in goods imports ISD special regimes for export.
- New investments with investment contracts with the state, will reduce tariffs on imported capital goods not produced in the country (Art. 1)
Single Window for Foreign Trade (VUE). 1
- Simplifies procedures, time and costs
- Electronic documentation
Ease of tax payments
- Paying taxes to imports of capital goods (most cost USD 10,000) to 24 months with competitive interest rates.
Customs interconnected –ECUAPASS
- Electronic procedures
Exports of TIC´s sector in the world
The export sector has changed in recent years, registering significant growth in recent years. The exports in 2014 were $ 2,091,683 million, giving an annual average growth of 4.51% in the period 2010 to 2014.
The main products exported in 2014 is headed including mobile phones with 11.86%, followed by other electronic integrated circuits with 9.28% and processors and controllers: electronic integrated circuits with 8.50%. These three products account for 29.64% of participation.
Destination of exports of TIC´s sector in Ecuador
Ecuadorian exports in the sector have presented a steady increase, giving a TCPA of 2010 – 2014 of 23.06%.
The main markets for the TIC´s industry products produced in Ecuador in 2014 were Colombia with 35.49%; United States 22.04%; Mexico 8.26% 7.23% Peru 1.88% and Hong Kong accounting for 74.89% of exports, among other markets.
Ecuador imports of TIC´s sector
Ecuadorian imports in the sector have reached the TCPA 2010 – 2014 of 11.50%.
In 2014 the main suppliers of ICT were:
Colombia with USD 13 million with a share of 35.49%, the US with US $ 12 million with a share of 22.04%.
In the period, 2010 – 2014 Vietnam reached 407% TCPA.
Ecuador imports of TIC´s sector
In 2014, the main imported products were ICT: Automatic devices for data processing with a share of 12%, Phones with current carrier with a share of 7%, other monitors and projectors with LED screen technology with the participation of 5%.
The rest of the products represented 77%, indicating that imports of Ecuador in this sector is decentralized.
- Service and advice to exporter
- Export promotion
- Business Intelligence
- Investment promotion