Foreign Investment

Ecuadorian legislation offers broad facilities to establish foreign investment in a wide range of activities. From the
type of business entities accepted in Ecuador corporations and branches of foreign companies to the special
systems for investment in certain areas, Ecuador offers flexible, clear, stable norms that ensure a very attractive
climate of economic freedom.

Direct foreign investments can be made in any sector of the economy without prior authorization from any state entity,
under the same conditions in which those investments can be made by Ecuadorian natural persons and corporations.
The owners of direct foreign, sub regional and quasinvestments shall have the right to transfer, in freely convertible
foreign currency, the net profits originating from their registered investment.
Foreign corporations will have access to all export promotion schemes encouragement mechanisms under the same
conditions provided for national or joint ventures by foreign and national companies.

Goods produced by national or foreign companies that comply with special standards or specific requirements of
origin, will enjoy all the advantages of the Free Trade Area of the Cartagena Agreement. Income originating from a
local source earned by any domestic or foreign company is subject to a 25% income tax. The repatriation of profits
that have previously paid the applicable 25% income tax is not subject to additional duties.

The Ministries of Industries and Competitivety and Foreign Affairs coordinate the promotion of foreign investments to be
made in Ecuador. Direct Foreign Investments and Subregional and neutral foreign investments can be effected in all
economic sectors without restrictions or previous authorization from Government entities, in the same conditions
as those applicable to Ecuadorian investments.

Licensing agreements concerning technology, technical assistance, technical services, basic and detailed engineering,
and other technological contracts shall be registered with the Ministry of Industries, Commerce, Integration and Fisheries.
Concerning the protection of intellectual property rights, in October 15, 1993, Ecuador signed an Agreement on the
Protection and Enforcement of Intellectual Property Rights with the Government of the United States, being the
first Latin American country to sign this type of agreement, which is expected to ensure a climate of transparency and
security for foreign investors.