Ecuador tax authorities say they are clamping down on the practice of money intended for commercial projects within Ecuador being deposited in foreign banks.
Last week the country’s internal revenue agency, SRI, said it is looking into investments for two projects near Quito being deposited in Caribbean banks. It said that investors in a real estate and an agricultural business were given an off-shore account number to wire money to by project managers.
The SRI, in conjunction with the Central Bank of Ecuador, says that, “It is the policy of the government to keep money that will be used for businesses operating within Ecuador in the country.” It adds that the practice of sending investments off-shore is frequently used as a method to avoid taxes and government oversight. It says there are limited exceptions to the rule but these must be approved prior to money going to foreign banks.
SRI says that the rule also applies to money wired from one foreign bank to another if it is an investment to be used for an Ecuadorian business.
“Anyone who invests in a commercial venture should make sure that the it is legitimate and meets all government requirements,” the SRI says. “Keep in mind that if you send money out of the country for business to be conducted within Ecuador you could lose your investment.”
SRI said that its focus will be on large real estate, agricultural and mining projects.