Narayan AmmachchiEcuador has overhauled its free-zone regulations in an effort to attract foreign technology companies and build a knowledge economy, moves that could position the nation as a regional hub for digital services exports.
On May 18, President Daniel Noboa signed Executive Decree 387, amending the regulations under the Organic Law on Economic Efficiency and Job Creation, which provides the legal framework governing the country’s free zones.
The reforms redirect a regime that has traditionally served manufacturing toward technology sectors including software development, cybersecurity, blockchain, fintech, artificial intelligence, and cloud services.
The new rules introduce operational flexibility designed specifically for digital industries. Companies operating inside free zones must maintain at least 51% of working time on-site. Staff may also move equipment such as laptops, phones, hard drives, and cameras in and out of free zones without paying import duties, provided the devices are used exclusively for free-zone operations.
The approach mirrors similar policies adopted by Costa Rica, Colombia, and Uruguay to court foreign technology investment by tailoring their regulatory frameworks to the nature of digital work.
The reform arrives at a difficult moment for Ecuador. The country has absorbed significant economic losses from recurring power outages caused by prolonged droughts that depleted water levels at hydroelectric plants, adding urgency to the government’s push to diversify beyond commodities and traditional exports.
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