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Changing Regulations

When governments arbitrarily make rules, there are consequences. Some people get hurt, some profit from the changes. For example, if you did some market analysis, identified a need/opportunity, and invested to create a business, and after you made your investment, government decides to subsidize entry (or change the playing field in whatever way), competition will increase, margins will fall, and very likely your business will fail. Unfortunately, the mentality of helping those who ‘need’ it often ends up hurting those who would otherwise succeed.

This is certainly the case here in Ecuador. The government has their hands in everything. They love to ‘help’.

As a result rules change with regularity and the opportunities to work and do business become less and less as more and more ‘help’ arrives.

However, in the rarest of moments, the government lessens its ‘protective’ grip and as a result of a more open marketplace, entrepreneurs can take advantage of those changes.

In 2016 a trade agreement with the European Union takes effect in Ecuador. It will be phased in in 3 stages. Fully implemented by September of this year.

What does that mean and what are the resulting opportunities.

It means the outrageous import taxes Ecuador levies go away for many goods from the EU countries.

For consumers it means European consumer goods will be available for much closer to market prices (now many imported consumer goods can be 3X or more than what you would find in the US or much of the world).

For business people there is tremendous opportunity as well. The government has hurt importers greatly with their tax policy. With the implementation of this trade deal, importers who act quickly will be able to take advantage of what will be an insatiable thirst for high quality European goods for prices Ecuador hasn’t seen in years.


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