According to a new proposal that will be presented to the National Assembly, casinos might be allowed in newly established free trade zones. This idea is part of a larger package aimed at attracting foreign investment.
The concept is one of several proposed in the so-called “Investment Law,” which was approved by the Economic Development Commission and will now be debated in front of the entire House for the first time. The bill’s first discussion has yet to be scheduled by lawmakers.
During the initial review of the initiative, the Commission’s President, Daniel Noboa Azn, declared that casinos and gaming houses might operate in trade free trade zones for tourism services because free trade zones technically do not qualify as Ecuadorian territory. After a vote held in 2011 during the administration of left-wing populist Rafael Correa, Ecuador prohibited all forms of gaming.
According to the commission’s study, casinos paired with resort investment have proven to be effective vehicles for attracting foreign investment and economic development. The paper used Japan as an example of casinos that may be permitted in certain areas while being forbidden to others.
Taxpayers operating in free trade zones will be immune from tax for the first ten years under the new regime, followed by a ten-percentage-point reduction in the corporate income tax rate in effect at the time of ratification. The construction of a free trade zone will be authorized for a minimum of 20 years, with the option of extensions, in which case the 10-percentage-point reduction will be prolonged, but no new exemption will be provided.
In order to recuperate some of the losses incurred as a result of the pandemic, fundamental changes in the way the tourism industry is governed are on the way. Casinos would be consistent with President Guillermo Lasso’s broader pro-market economic agenda, particularly in the tourism sector.