1. A minimum investment. 



2. A substantial deposit with the Goveniment to assui'e 

 compliance with contract. 



3. A provision for fines in case of noncompliance. 



U. Permission to use foreign vessels for 1 year. These 

 must then come under Ecuadorean registry. The vessels 

 can be used by the Government in case of armed conflict 

 with another nation. 



5. The type and nuiaber of plants and boats to be erected 

 or used. 



6. A time limit within which obligations must be carried 

 out. 



7. Exemption from certain export taxes. 



8. Specific lists of items by quantities that can be imported 

 free of duty. These are of tvjo types — machinery and 

 equipment for plant or boat installations that are more 



or less permanent in nature, and materials and supplies 

 that are needed for the continued operation of the business. 

 The first group are allowed a one-time free import. The 

 second group which usually includes cartons, strapping, 

 webbing, nets, etc., are imported free of duty up to certain 

 amounts, specified in the contract, on an annual basis. 

 In applying for a contract one must have a pretty 

 good advance idea of what one's requirements will be; 

 otherwise import duties will have to be paid on unfore- 

 seen items or on uncalculated amounts. Only those items 

 specified in the contract can be entered free of duty, 

 and only in the amounts specified. 



9. A selling price to the public to be fixed by the Ministry 



of Economy that will provide a maximum profit of 15 percent, 



10. Exemption from income tax on capital used for importing 

 machineiy, equipment, and supplies and for expansion and 

 development of the business. 



11. The company paying the Governinent a certain percentage of 

 the net profits of the business, during the period that 

 certain taxes have not been imposed or increased. 20 / 



12. The percentage of foraign technical personnel that can be 

 employed while no nationals are available. 



Ecuador, like many countries with limited industries, to a 

 great extent uses import and export taxes to finance the Qovemment. 

 Considerable concessions, contained in the contracts, have been granted 

 the shrimp industry on import taxes and to a lesser extent on export 

 taxes. No other assistance has been provided. 



20/ The percentages varj'-. One contract, published in 195!?, calls for 



i~of one percent for the first five years and 1 percent for the remaining 



time. Another contract, published only 1 month later, requires twice 

 the amount, or 1 percent and 2 percent. 



?9 



