Background
When speaking of foreign investments in Ecuador, reference must be made to the framework of the Andean Pact. The first rules dictated on this subject were contained in Decision 24 of the Cartagena Agreement Commission, approved in December 1970.
It is a fact that in the case of Ecuador, compliance with Decision 24 as of June 1971 meant an excessive control of foreign investments by the State ; this was a negative factor in aspects such as technological contributions, new trade opportunities, generation of jobs, innovation in managing and administrative techniques, etc.
Later these rules were also challenged because they implied a series of restrictions that were incompatible with the trends observed in other countries around the world since the 70's. In this context, in the mid 80's , Decision 24 was replaced by another provision that opens the possibility to channel foreign investments to each country in a wider and more flexible way.
The Andean Legislation
Under this open-door policy, the Cartagena Agreement Commission issued Decision 220 in May, 1987 later replaced by Decision 291 in March 1991, which contains the Common Treatment Regime for Foreign Capitals and Trademarks, Patents, Licenses, and Royalties. This regime gave the Andean countries greater access to foreign capital and know-how.
Likewise, the Commission approved Decision 292 containing the Uniform Regime for Andean Multinational Corporations. These Decisions are part of the Ecuadorian legislation, after their publication in Official Registry N"682 of May 13, 1991.
Decisions 291 and 292 are the legal guidelines applicable to member countries of the Andean Group with respect to foreign investments and technological transfer within the sub region or from third countries.
