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Immigrate to Ecuador: Residency, Citizenship, Living, Investment and Taxes

How to get residency in Ecuador

New immigration law, living, doing business and taxes in Ecuador

immigrate to ecuador

On January 31st 2017, the President of the Republic of Ecuador, Rafael Correa, signed the Ley Orgánica de Movilidad Humana (Human Mobility Law). The event was at Barcelona (Spain), surrounded by more than one thousand Ecuadorian emigrants. The law was published in the Registro Oficial on Monday, February 6th 2017. The new regulation establish new rules to immigrate to Ecuador. And as we are going to see, Ecuador is one of the most welcoming countries to foreigners worldwide, where residence and / or citizenship can be faster and more easily obtained. But first, to get warm, let’s know a little bit more the country.

About Ecuador

Ecuador is a small portion of land located to the northwest of the South American continent, inhabited by just over 16 million people. Its just over 283,000 sq. Km are big enough for much.

Bordered by Colombia and Peru by land and Costa Rica by sea, its territory is split by a volcanic section of the Andes mountain range. To the east lies the leafy Amazon Rain-forest. To the west, the Gulf of Guayaquil, bathed by the Pacific Ocean, and overlooking the incredible natural landscapes of the Galapagos Islands. Colonial old towns, multiculturalism, volcanoes and an exciting flora and fauna. Ecuador is the most bio-diverse country in the world.

immigrate to ecuador
Islas Galápagos, Ecuador

Its capital is Quito, but its most populated city is Guayaquil. Despite being a Spanish-speaking country, there are more than 13 recognized indigenous languages. Its industry is based on exports, mainly oil, but also bananas, processed fish and gold. In addition to the rise of the tourist industry in the last five years.

The Ecuador economy is officially dollarized. The American currency is the only legal tender since 2001. The measure to replace its former currency, Sucre, was taken to stop the serious economic crisis of 1996-2000. 1999 was devastating, a GDP fall of about 7% measured in Sucre and 30% measured in dollars. Derived primarily from falling oil prices, crop floods and a devastating financial crisis. Sucre devalued by more than two-thirds of its value. Hyperinflation, deteriorated public finances, high unemployment and a fall in the purchasing power of the population to unbearable levels (reaching poverty levels above 70 %). The measure partially managed to stop the strike.

Late 1990s crisis and subsequent years of slow recovery meant the massive Ecuadorian emigration. Between 2000 and 2008 about one and a half million Ecuadorians emigrated to Italy, the United States and especially Spain. The remittances of these emigrants avoided the bankruptcy of the Ecuadorian economy, reaching annual quotas of 7% of the GDP.

In addition to facilitating immigration. The new law will serve as a framework to recognize the rights of Ecuadorians living abroad, promote integration and entrepreneurship programs, and provide economic and fiscal incentives for their return.

Migration experience may be one of the factors for its inclusive migration policies. They understand the phenomenon. In spite of the exodus, the population has been growing thanks to the reception of Peruvian and Colombian citizens.

These policies have culminated in the new Human Mobility law. The first three principles of the law are premonitory:

Defines Universal Citizenship, as the recognition of the power of the human being to freely mobilize and the portability of their human rights regardless of their immigration status, nationality and place of origin, leading to Progressive end of alien status.

It recognizes the right to exercise universal citizenship, which implies the protection of the State to the mobilization of an individual with the intention to remain in the place of destination in a temporary or definitive manner.

And it prohibits the criminalization of such mobility, with the absence of criminal sanctions for an individual immigration status

Immigrate to Ecuador, Residency, Citizenship & Visas

Residence Visa in Ecuador

The new Ecuador Human Mobility Law, in addition to simplifying the process to obtain the residence permit by foreign citizens, reduces to three types of Ecuador residence permit:

Temporary Residence Visa

The visa is granted with a duration of two years with the possibility of a single renewal for two more years. As long as the holder is not absent from the country more than 90 days per year cumulative within the period of residence. This visa includes all non-immigrant and immigrant residency visa categories of the previous law.

It must be credited sufficient means of subsistence and a certificate of absence of criminal record of the country of origin or of the country where the applicant has resided the last 5 years.

Applicants may apply for this visa: any foreigner, as a worker (employee or self-employed), rentier, retired, investor, entrepreneur or professional, among others. The spouse or children of the applicant can request their inclusion.

Applicants must join the public social security system or purchase a private health insurance.

Temporary Residence Visa of Exception

Exceptional cases in which the Human Mobility Authority of Ecuador authorizes the stay in the territory to a foreigner for up to two years, renewable for two more years.

Permanent Residency Visa

Those interested may apply for an Ecuador permanent residence permit after 21 months since obtaining the temporary residence permit and prior to its expiration.

Foreigners who have married or legally engaged a de-facto union with an Ecuadorian person may also apply without any previous visa requirement.

Also qualify for permanent residency, foreigners who are minors or disabled who depend on an Ecuadorian or permanent resident. Or relatives within the second degree of consanguinity or affinity of an Ecuadorian citizen or permanent resident.

Permanent residence permits permit to leave and return in the country freely, as long as, during the first two years, the holder resides at least 180 days per year in the country. Failure to comply with the minimum period required will impose a sanction, and in the case of recidivism, the loss of the resident status.  After this period, the resident may be absent no more than 5 years.

Sufficient economic means to survive in the country and submit an absence of criminal records must be proven to apply for Ecuadorian Permanent Residency.

Nationals and their non-national direct relatives of the Union of South American Nations (USAN) do not require proof of sufficient income for subsistence in the country and any period of temporary residence.

Are you willing to immigrate to Ecuador? Apply now at passports.io/ecuador and our immigration experts will contact you.

Ecuadorian Citizenship

Ecuador naturalization by residency is one of the fastest worldwide. After completing three years of legal temporary/permanent residence, a foreigner might request a naturalization letter. If following requirements are met, Ecuadorian nationality will be granted to the applicant.

Ecuador’s Citizenship requirements:

  • Continuous and legal residence of at least three years in Ecuador.
  • Be an adult / consent of minor’s parents or legal guardians.
  • Birth certificate or supplementary test duly legalized and translated into Spanish.
  • Copy of the identity document or copy of the valid passport, duly legalized.
  • Knowledge of the patriotic symbols of Ecuador.
  • Assist to an interview, explaining the reasons for the will to acquire Ecuadorian nationality.
  • Accredit sufficient economic means for subsistence in the country.

The Human Mobility law also contemplates other naturalization options:

  • Naturalization for having rendered relevant services to the country: At the discretion of the President of the Republic, citizenship will be granted after the first year of legal residence to a foreigner, if it is considered that he has rendered relevant services to the country.
  • Naturalization by marriage or de facto union: a foreigner may apply for citizenship two years after the marriage or de facto union with an Ecuadorian person.
  • Naturalization by adoption.
  • Naturalization of minors born abroad with an Ecuadorian father and / or mother.

Dual Citizenship
Ecuador allows dual-nationality. Know what countries allow or not dual citizenship here.

Visa Requirements for Ecuadorians

Once acquired the Ecuadorian citizenship, you can request your Ecuadorian passport. With it, you can travel to 81 countries without the need of a visa or with visa on arrival.

On the one hand, traveling to North America, the Schengen area or Australia will require the prior visa application. On the other hand, the Ecuadorian passport is one of the few in the world that allows its holders to travel to China and Russia without visa requirements. According to the Visa Restrictions Index, the Ecuadorian passport ranks the 58th of 104.

Ecuador Passport Visa-Free / Visa on Arrival Map

residence visa in ecuador
You can check passports.io/ecuador for further information

Travel to Ecuador – Tourist Visas

Ecuador’s visa policy is one of the most lenient in the world, maybe the most. Only nationals of Afghanistan, Bangladesh, Cuba, Eritrea, Ethiopia, Haiti, Kenya, Nepal, Nigeria, Pakistan, Senegal and Somalia will require a visa to enter the country.

The allowed stay is 90 days in one year. With possibility to request a single extension for 90 days more, in any immigration office within the country. The extension costs USD 250 plus USD 50 for consular fees. Fines for overstay carry a year of entry ban and fines of up to USD 2,000.

Citizens of USAN countries will be able to visit the country for a period of 180 days without needing to request the extension, nor to bring with them the passport, an ID card may be enough.

For those who want to visit the country for a period exceeding 180 days, they can apply for a special tourist visa to the Human Mobility Authorities. Allowing the stay of 6 more months with a total of one year. It may only be issued once every 5 years. The visa fee is USD 230, plus USD 30 as an application fee and USD 40 for the income letter, which should prove the legal means of subsistence, around USD 800 per month.

No employment or economic activity is allowed. A valid passport for at least six months and documentation proving the possession of medical insurance must be presented at border controls.

 

Living in Ecuador

Living in Ecuador

Ecuador may be your place, whether you are looking a tropical beach lifestyle in its undeveloped Pacific beaches, an eco-friendly lifestyle in an Andes mountain cooler harbourage or an Amazonian jungle nook, or a urban lifestyle in their cosmopolitan capitals. 

Ecuadorian capitals have all the comforts that you could find in a western city. Although crime and security is a pending subject of many Latin metropolis, Ecuador has improved greatly in this regard. It is currently one of the safest countries on the continent.

immigrate to ecuador
Plaza San Francisco, Quito, Ecuador

With regard to health, resident aliens can be included in the Ecuadorian social security system. Which is one of the best on the continent. In addition, expat private health insurances are affordable. A standard medical coverage would be around USD 50-70 a month.

The gastronomy is very varied, there are four different types of cuisines with great Spanish influence. Based on native ingredients such as seafood, fish, banana, corn, beef, lamb, chicken and goat, and cacao.

Good food and good quality of life. All this at a very affordable price as we will see below. If you want to know more about how is living in Ecuador, in this website you will find more information and tips.

Cost of living in Ecuador

There is a considerable difference between major cities such as Quito, Guayaquil or Cuenca, and small towns and rural areas. In large cities, the cost of living can be twice as high. However, it is still much more affordable compared to Europe or the United States. Taking into account that the average net salary of an Ecuadorian barely reaches USD 500, with a monthly budget of 1,500-1,800 dollars a month, one may have a considerably comfortable life.

In Quito and Guayaquil downtown, the average rent for a 3-bedroom apartment is USD 600-700 per month. The basic utilities cost around USD 30-50 and the internet connection about USD 30. Rents in beach towns as San Clemente, Canoa and Ancon are quite cheap too. In Bahia de Caraquez, the most popular tourist and expat beach town, rents run quite more expensive between USD 1,000 and 1,500 and utilities USD 100-130 per month. For those looking to hide between mountains, in Cotacachi or Yunguilla you may find nice 3-bedroom houses under USD 600 per month.

The weekly supermarket purchase for one person could cost around USD 25-30. For USD 15 you can eat in a mid-range restaurant, have a pint of beer for USD 1.10 and watch a movie premiere for USD 5.

Transportation in Quito is very affordable. The monthly pass for public transportation is only USD 10 and the taxi ride costs USD 0.40 per km, starting at USD 0.50. In Guayaquil is a bit more expensive, but still cheap.

The imported products, tend to be quite expensive due mainly to the high taxes.

As we see, living in Ecuador is very affordable, giving the possibility to expats to boost their lifestyle. Retirees or those seeking tranquility away from the busy cities can make the most of their pension living a rustic lifestyle in undeveloped rural areas.

 

Invest in Ecuador

Ecuador Economic Situation

Ecuador has been the South American miracle. Baptized as the Latin American Jaguar, analogy of  the Asian tigers. Its economy, heavily dependent on oil exports, recorded an average annual growth of 3.86% during the last decade. The high oil price allowed for expansive fiscal policies (public expenditure reached 44% of GDP) which were the engine of the growth.

But these last two years have not been precisely good for the Ecuadorian economy due mainly to three factors.

The black gold price fall has led to a considerable cut in public spending affecting the economic development of the country.

In addition, with the appreciation of the dollar, non-oil exports are estimated to have decreased by 7%.

This coupled with the natural disasters and the Russian crisis and China’s slowdown, its two main clients, have been the icing on the cake. In 2015 the economy stagnated and in 2016 entered into recession, -2% of GDP.

In 2017, forecasts are more optimistic. According to ECLAC, the recovery of oil prices, foreign financing and the completion of several energy sector infrastructure projects may lead a 0.7% economy growth.

Despite the fact that the picture may not be encouraging. As any emerging economy, there are interesting investment opportunities in Ecuador. 

This 2017 is an important year for the politic future of the country, know about it here.

Investment Opportunities in Ecuador

Ecuador is the South American country that receives the least foreign investment and almost 80% resides in the oil sector. That is why the Government has launched initiatives and programs to attract foreign investment. Especially in strategic sectors such as mining, renewable energy and hydrocarbons. Other sectors that present good business opportunities are agro industry, telecommunications, logistics infrastructure, tourism, biotechnology, software, plastics and waste treatment and management.

The agricultural sector is its oldest and most developed sector. The country has a mild climate and varied geography an abundant fertile rich land and coast. With interesting investments opportunities in the agricultural and seafood production.

Although its domestic market is relatively small, thanks to its trade agreements, Ecuador provides direct access to a market of 300 million inhabitants. In addition, at the end of last year, it joined the EU free trade agreement with Colombia and Peru. The agreement will phase out tariffs for industrial and fisheries products and increase market access for agricultural products.

Regarding the capital market, the Quito Stock Exchange (ECU) has registered falls throughout the last year. A total balance of a decrease of 10% of its value. Now the outlook is more optimistic. It has grown of almost 4% these last two months.
The 10-year government bonds yield at a rate of 9.65% and are rated by Fitch in B with a negative outlook. Currently, the interest rates applied to bank deposits are around 4%.

Invest in Real Estate in Ecuador

Ecuadorians and foreigners have practically the same rights in the purchase of real estate, both land and residential buildings. To purchase properties less than 50 km from the coast or an international border, foreigners must apply for a permit (which is usually granted).

The Ecuador real estate market has gone hand in hand with economic developments in the last decade. From 2010 to early 2014, due to the economic rise and the high oil prices that led to the increase the dollar supply, increasing the loan availability. The sector grew more than 300% and prices were appreciated at an annual rate of 10-12%.

After that, sales have been reduced. The fall in oil prices, the slowdown and subsequent recession of the economy, bad prospects and the consequent restriction of loan. By 2014 sales fell by 20%, and in 2015 the fall was huge, reaching 70%. In 2016 the sector stabilized.

The demand decline was also accentuated, because it did not result in a fall in prices of the same intensity, being between 5-10% depending on the area. Due to increased taxes, material prices and construction costs and the fact that most homeowners and builders prefer to wait to sell. They have been confident in an oil price recovery.

Ecuador still have low real estate prices. Currently, the average price per square meter in the downtown of the main Ecuadorian cities of Quito, Guayaquil and Cuenca is USD 1,100-1,400, with rental yields ranging between 5.5 and 6.5%. Out of the center the current average price is USD 1,000-1,150 and the rental yields use to be a bit lower, between 4.8-6.5%.  In fisher’s town such as Canoa and Ancon, you may find real bargains, as sea view villas for under USD 150,000.

Immigrate to Ecuador
Canoa, Ecuador

Real Estate Taxes

There is a residential property tax, which is based on a percentage of the value of the property, which depends on the municipality. From 0.025% to 0.3% for rural properties, and from 0.025% to 0.5% for urban properties. There are discounts for owners over 65 years old.

Capital gains from the sale of real estate and rental income are taxed on corporate and personal income tax.

In addition, at the end of 2016 the Parliament approved the Ley de Plusvalías (Capital Gains Law). Capital Gains from the second sale of a property will be taxed at 75%, with a minimum exempt of 24 basic salaries (currently about USD 8,784).

Set up a Company in Ecuador

Both local and foreigners have the same business entry rights. The two main company forms are the Compañía Limitada (CIA. LTDA), and Compañía Anónima (C.A. / S.A.). Both are supervised by the Superintendencia de Compañías, Valores y Seguros (Superintendency of Companies, Securities and Insurance).

  • Compañía de Responsabilidad Limitada: Equivalent to a LLC. Consists of a minimum of 2 partners and a maximum of 15. The partners may be natural or legal persons, except for banks, insurance companies, capitalization and savings (activities not allowed to CIA LTDA) and foreign public limited companies. Liability is limited to the capital contributed by each partner.
    The minimum capital required is USD 400. The capital must be fully subscribed and paid at least 50%. Remaining balance must be paid within a period of no more than twelve months. The contributions may consist of money or species, related to the economic activity of the company.
    The capital is divided in quotas and can not be constituted nor increased by public subscription. Its quotas can not be traded freely, it requires the unanimous approval of the shareholders of the company to allow a third party to invest as a partner.
  • Sociedad Anónima: Equivalent to a Corporation. It is made up of 2 or more partners. Although it may continue to operate with a single shareholder, without incurring any cause of dissolution. Its capital is divided into shares, freely tradable. Shareholders are solely liable for the amount of their shares.
    The minimum capital required is USD 800. The capital must be subscribed in full and paid-in at least 25%. Disbursed in a term not greater than 24 months. The contributions may consist of money or species, related to the economic activity of the company.

Other corporate forms include: Compañía Colectiva (General partnership), where all its partners are subject to unlimited liability.  Compañía en Comandita (Limited Partnership), with unlimited and limited liability  partners. Compañía en Comandita dividida en acciones (Limited partnership by shares), with at least 10% of the capital contributed by an unlimited liability partner/s. There is also the Economía Mixta, formed by a public-private consortium.

Foreign companies can establish a branch, without legal personality with at least USD 2,000 of assigned capital. They will require a representative with resident status in Ecuador.

Companies with more than USD 500,000 in assets are required to contract external audit.

Company Registration Process in Ecuador

Establishing a company in Ecuador involves a time consuming bureaucratic process. On average, it takes about 50 days to complete. Only the pertinent inspection and the issuance of the operating permit by the corresponding municipality takes a month. The cost will depend on the type of company, its size and the legal assistance hired. But it may be at least USD 1,500.

To register and start activities of a CIA LTDA, it is must:

  1. Online reservation of the name of the company in the Superintendence of Companies. Less than one day with no associated costs.
  2. Hire an attorney to prepare the constituting contract, the articles of incorporation, the company’s bylaws, and the formation of capital. 1 day, it may cost USD 800-100.
  3. Notarize the documents. 2 days, USD 245 for the first USD 25,000 of initial capital + 0.2% for the rest of the initial capital.
  4. Register the company to the Superintendencia de Compañías, Valores y Seguros. 1 day and a 1% share of the assets.
  5. Inscribe the bylaws, resolutions of the company and the name of the legal representatives of the company in the Oficina de Registro Mercantil (Commercial Registry Office). 5 days and a fee of USD 80.
  6. Request the Registro Unico de Contribuyentes -RUC- (taxpayer registration) to the Servicio de Rentas Internas -SRI-  (National Tax Office). The process is free and takes about 4 days.
  7. Print one original and two copies of 100 pages-book invoices and VAT forms at an authorized printing shop. The cost is usually USD 40.
  8. Sign up online for Instituto Ecuatoriano de Seguridad Social -IESS- (Social Security) and present documents to the agency to obtain the password. 2 days.
  9. Enroll all employee contracts with the Inspectoría de Trabajo (Ministry of Labor). 2 days and no associated costs.
  10. Obtain Patente Municipal (Operation Permit) from the Municipality. Process is free and takes an average of 29 days.
  11. Pay USD 50 for tasa de habilitación (habilitation fee) at municipality.

Willing to incorporate to Ecuador? Set a consultation call or start the incorporation process now.

 

Taxes in Ecuador

Corporate taxes

Corporate Income Tax
Ecuador resident companies are taxed on their worldwide income. Non-resident companies are taxed on their income from Ecuadorian-source. However, foreign income taxed in another jurisdiction is not taxed in Ecuador, unless it is derived from a low-tax jurisdiction.

It is considered a resident company: a company which is incorporated in Ecuador, or maintains its main business activity in Ecuador and has central administration or control in Ecuador, or voting power controlled by shareholders who are Ecuadorian residents.

Corporate Income tax standard rate is 22%. If more than 50% of shareholdings are owned by shareholders or partners residents of a low-tax jurisdiction, income tax rate is increased up to 25%. If profits are reinvested for the purchase of certain capital assets, those are taxed at a lower rate from 12 % to 15%. Losses may be carried forward 5 years and offset up to 25% of profits earned each year.

Capital Gains are considered ordinary income and subject to Corporate Income Tax at normal rates.

Dividends received from resident and nonresident companies are tax-exempted, provided that profits distributed were subject to Corporate Income Tax on source. If dividends are received from a low-tax jurisdiction, they are subject to Corporate Income Tax at standard rates.

Dividends paid to non-resident companies are not subject to withholding tax, unless the recipient is resident of a low-tax jurisdiction, where a 10% withholding tax may apply.

Interests paid to non-residents are not subject to withholding tax, unless interest rate exceed rate set by the Central Bank. Excess on interest is subject to a 22% withholding tax, which may be reduced under a tax treaty. Interests paid to tax haven residents are subject to a 25% withholding tax.

Royalties paid abroad are subject to 22% withholding tax, unless a tax treaty sets a lower rate. Payments to tax haven residents are subject to an increased tax of 25%.

Non-resident technical services fees are subject to 22% withholding tax, unless tax is reduced under a tax treaty.

Transfer Pricing rules are based on OECD’s guidelines. Transactions between related parties must be carried out at arm’s length and supported with formal documentation.

Thin Capitalization rules are enacted, interests from loans between related parties may be deductible if not exceed the 3:1 ratio over equity. There are no Controlled foreign companies rules (CFCs) in Ecuador.

Companies that are not required to keep accounting records are subject to a tax advance of 50% of the previous year’s income tax.

Companies that must keep records must pay the tax advance equal to the sum of: 0.2% of total assets, 0.2% of total deductible costs and expenses, 0.4% of total assets and 0.4% of the total tax base.

Social security contributions
Employers and employees pay Social Security contributions at the rates of 12.15% and 9.45%, respectively.

Foreign Assets Tax
Cash deposits held in foreign entities by private entities registered in the securities market and regulated by the Superintendent of Banks and Companies are subject to the tax. The monthly tax rate is 0.25% (0.35% in jurisdictions considered tax havens) of the average monthly balance of deposits.

Value-added tax
Currently, the value-added tax in Ecuador is 14%. It was increased 2 percentage points in May 2016 to rebuild the areas affected by the earthquake. In May 2017, the rate is expected to be again 12%. Certain products and services are exempt.

Import duty tariffs
Most imports of consumer goods are taxed at 25% of the goods’ CIF value. Intermediate goods are usually imported at a rate of 10% or 15%. Raw materials and capital goods generally pay between 0% and 5%. Agricultural goods and equipment are exempt.  All imports are subject to VAT. Some goods are subject to the so-called “safeguards rate” that ranges between 15 and 45%.

Currency exit tax (ISD)
They are subject to the tax all money transfers abroad made by individuals, foreign banks, local and foreign private companies, with or without the intervention of financial institutions. The tax rate is 5%.

Local Taxes
There are several local or regional taxes: urban property, rainwater drainage, fire insurance, individual and corporate net worth, state university funds, firefighters, property transfer, etc.

Individual Taxes

Personal Income Tax
Residents are subject to personal income tax on their worldwide income, while non-residents on their Ecuadorian-source income.

A resident individual is a person who has his habitual domicile in Ecuador, or has spent more than half the year in Ecuador. Unless he has a habitual domicile outside the country and does not intend to reside in Ecuador.

The following are considered income subject to Personal Income Tax:

  • Business income
  • Income from work
  • Capital Gains, Rents and Interests

Currently, the Ecuador Personal Income tax rates are progressive from 5% to 35%:

Basic Fraction (USD) Excess Up (USD) Basic Fraction Tax (USD) Excess Fraction Tax (%)
0 11.290 0 0%
11.290 14.390 0 5%
14.390 17.990 155 10%
17.990 21.600 515 12%
21.600 43.190 948 15%
43.190 64.770 4.187 20%
64.770 86.370 8.503 25%
86.370 115.140 13.903 30%
115.140 Onwards 22.534 35%


Ecuador Inheritance & Gift Tax
Income from inheritances, bequests, donations, finds and any type of contract by which the free domain of goods and rights is acquired, are subject to inheritance & gift tax. Currently, it is applied a progressive tax rate from 0 up to 35%.

Other Taxes
Individuals are subject to Value-added tax, currency exit tax and some local taxes explained above.

Tax Treaties

Ecuador has concluded tax treaties with Argentina, Bolivia, Colombia, Perú, Venezuela, Belgium, Brazil, Chile, Mexico, France, Germany, Italy, Spain, Romania, Switzerland, Singapore, Canada, South Korea, China and Uruguay. You can check them at incorporations.io/ecuador.

 

Conclusions

If you have decided to immigrate to Ecuador, you are in luck. Ecuador is a welcoming country to foreigners. Its immigration policies are quite advantageous, proof of income and absence of criminal records should be enough for get your residence permit. And in only three years you can obtain your pasaporte. High life-quality, low cost and charming people. Those looking for a Latin country to build their nest, a rustic lifestyle or a hideaway to retire, they may consider Ecuador.

Ecuador has some interesting long-term investment opportunities, especially in the real estate sector. It is possible to find nice residential properties and productive fertile farm-lands at bargain prices. In addition to its officially dollarized economy, without the exchanges risks of other volatile Latin American currencies. Currently its economy is not at its best, and it is excessively dependent on oil price and US dollar fluctuations. But the country has great potential and like any developing economy there are important lucrative business opportunities. Set up a company may be a tedious process and its tax burden is not particularly low, with multiple tax-forms. But at least, in practice, it is applied a territorial tax system, as foreign income are exempt if proved that is taxed on source.

 

At Flag Theory, we support individuals to obtain residence and second citizenship and companies to optimize their business setting an international structure. If you have in mind to immigrate, incorporate or open a bank account abroad, it may be helpful our jurisdiction comparison matrix: passports.io, incorporations.io and bankaccounts.io or join the Flag Theory Intel Society, our Do-It-Yourself offshore information center. Once you are ready to take the plunge, check how we can help you or contact us to improve your freedom, reduce liability and save money.

 

FAQs

How do I obtain a temporary residence visa in Ecuador?
It is quite simple. You just have to apply for it in any Ecuador consulate or embassy. Prove sufficient income for subsist in Ecuador and absence of criminal records.

How long can I live in Ecuador with a temporary residence visa?
2 years, renewable for 2 more years.

How do I get Ecuador Permanent Residence visa?
After 3 years of continuous legal residence and proving sufficient income and absence of criminal records.

How do I get the Ecuadorian citizenship?
After 3 years of continuous legal residence and proving sufficient income and absence of criminal records, besides other requirements.

Do I need a visa to travel to Ecuador?
Probably not. Unless you are citizen of Afghanistan, Bangladesh, Cuba, Eritrea, Ethiopia, Haiti, Kenya, Nepal, Nigeria, Pakistan, Senegal and Somalia.

Where can I travel visa-free with an Ecuadorian passport?
You can travel with visa-free or visa-on-arrival to 81 countries. Including China and Russia. You will need a visa to travel to United States, Canada, Schengen countries or Australia.

Is Ecuador a good place to live?
Yes, you can enjoy undeveloped beaches, modern cities, volcanic mountains and rainforests. Its gastronomy is healthy, varied and delightful. In the cities, you can find all comforts same as in the western. It is one of most safety Latin countries and its healthcare system is one of the best of the region.

How much money do I need to live in Ecuador?
Living in Ecuador is quite cheap. If you live in cities as Quito, Guayaquil or Cuenca, with USD 1,500-1800 you can have a comfortable non-worry lifestyle. In rural areas USD 800-1,000 may be enough.

What is the economic situation in Ecuador?
May be better. After a decade of continuous growth, during last two years Ecuador economy has entered a recession mainly due to the fall of oil prices and appreciation of USD. The outlook is more optimistic due to the recovery of oil prices.

What are the investment opportunities in Ecuador?
As all emerging economies, there are some good investment opportunities. The most interesting sectors are agricultural, real estate, mining, renewable energy, hydrocarbons, agro industry, telecommunications, logistics infrastructure, tourism, biotechnology, software, plastics and waste treatment and management.

What is the most common type of company in Ecuador?
The most common types of company are Compañía Limitada, equivalent to a Limited Liability Company and the Compañía Anónima, equivalent to a Corporation. 

How long to set up a company in Ecuador?
The process lasts around 50 days.

How much to set up a company in Ecuador?
Costs may vary according to the type of company, its size and the legal assistance hired. But it could be around USD 1,500.

What is the real estate sector doing in Ecuador?
Demand is falling due to the economic situation and increased taxes. Although prices are not falling at the same intensity, there are some low prices good opportunities. Ecuador is still one of the countries with the lowest real estate prices.

What taxes do I have to pay in Ecuador?
The tax burden in Ecuador is considerable. There are multiple tax forms. In addition to corporate tax (22%), personal income tax (up to 35%) and VAT (14% until May 2017, then 12%). In Ecuador are taxable, inheritances and gifts (up to 35%), money transfers abroad (5%), real estate assets (up to 0.5%), transfers of real estate assets (1%), imports (up to 25%), among others. There are also several local rates that affect urban property and property transfer, rainwater drainage, fire insurance, individual and corporate net worth, state university funds and firefighters.

Any other question?
Schedule a call with us and we will kindly solve any kind of doubt or question you may have about Ecuador.


This article should not be construed as legal, tax or investment advice. We have access to a global network of attorneys and accountants who can give you the proper advice for your specific case. Contact us for further information.

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