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.

Strategic sectors

  • 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.

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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)

Who apply?

  • 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

Other incentives

  • 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)

Customs facilities

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%.

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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.

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Ecuador imports of TIC´s sector

Ecuadorian imports in the sector have reached the TCPA 2010 – 2014 of 11.50%.

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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%.

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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.

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Services

  • Service and advice to exporter
  • Export promotion
  • Business Intelligence
  • Investment promotion