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
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 held in 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 establishes new rules to immigrate to Ecuador. And as shall be seen, Ecuador is one of the most welcoming countries to foreigners worldwide, where residence and/or citizenship can be faster and more easily obtained than many other options. But before jumping into the technicalities, let’s get to know the country a little better.
Ecuador is a relatively small country located to the northwest of the South American continent, inhabited by just over 16 million people. However, its just over 283,000 sq. km contains a lot to be seen.
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 Rainforest. To the west, the Gulf of Guayaquil, bathed by the Pacific Ocean and beyond, 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.
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, the rise of the tourist industry in the last five years has also seen the sector become a major contributing sector.
The Ecuador economy is officially dollarized; the U.S. 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, with a GDP fall of about 7% measured in Sucre and 30% measured in dollars. The roots of the crisis derived primarily from falling oil prices, crop floods, and a devastating financial crisis. Sucre devalued by more than two-thirds. Hyperinflation, deteriorated public finances, high unemployment, and a fall in the purchasing power of the population to unbearable levels (with poverty levels reaching above 70 %) all followed. The dollarization measure partially managed to stop the free-fall.
The crisis of the late 1990s and subsequent years of slow recovery resulted in 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 sent home by these emigrants essentially prevented the bankruptcy of the Ecuadorian economy, and reached annual levels 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.
Its experience with outward migration may be one of the factors for its inclusive immigration policies. They understand the phenomenon. In spite of the exodus, the population has been growing thanks to the reception of Peruvian, Colombian and Venezuelan 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 a progressive end of alien status.
It recognizes the right to exercise universal citizenship, which implies the protection of the State to the mobility 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’s immigration status.
Immigrate to Ecuador, Residency, Citizenship & Visas
Residence Visa in Ecuador
The new Ecuador Human Mobility Law, in addition to simplifying the process for obtaining a residence permit by foreign citizens, reduces the types of Ecuadorean residence permits to three:
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 for 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.
Sufficient means of subsistence and a certificate of absence of a criminal record of the country of origin, or of the country where the applicant has resided the last 5 years, will also need to be proven.
The following 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 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 Ecuadorean permanent residence permit 21 months after obtaining the temporary residence permit, and prior to its expiration.
Foreigners who have married or legally engaged in a de-facto union with an Ecuadorian person may also apply without any previous visa requirements.
Also qualifying for permanent residency are foreigners who are minors or disabled who depend on an Ecuadorian or permanent resident. Relatives within the second degree of consanguinity or affinity of an Ecuadorian citizen or permanent resident are also eligible.
Permanent residence permits permit one to leave and return to 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 incur 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 proving an absence of criminal records is required for applying 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.
Would you like to move to Ecuador? Apply now at residencies.io/ecuador and our immigration experts will contact you.
The Ecuador naturalization by residency process is one of the fastest worldwide. After completing three years of legal temporary/permanent residence, a foreigner can 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 a valid passport, duly legalized.
- Knowledge of the patriotic symbols of Ecuador.
- Participate in an interview, explaining the reasons for the motivations for acquiring Ecuadorian nationality.
- Prove 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 they have 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.
Visa Requirements for Ecuadorians
Once Ecuadorian citizenship has been acquired, you can request your Ecuadorian passport. With it, you can travel to 81 countries without the need for 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
Travel to Ecuador – Tourist Visas
Ecuador’s visa policy is one of the most lenient in the world, perhaps the most so. Only nationals of Afghanistan, Bangladesh, Cuba, Eritrea, Ethiopia, Haiti, Kenya, Nepal, Nigeria, Pakistan, Senegal, and Somalia require a visa to enter the country.
The allowed stay is 90 days in one year, with the ability 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 overstaying 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 will be enough.
For those who want to visit the country for a period exceeding 180 days, they can apply for a special tourist visa from the Human Mobility Authorities, which will allow for a stay of 6 more months, for a total of one year. This 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 a legal means of subsistence, which 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 has something for all tastes, whether you are looking a tropical beach lifestyle in its undeveloped Pacific beaches, an eco-friendly, cooler and oxygenated existence in its Andes mountain range, an Amazonian jungle bungalow, or an urban lifestyle in its cosmopolitan cities.
Ecuadorian cities have all the comforts that you could find in a western city. Although crime and security is a perennial problem in many Latin American metropolises, Ecuador has improved greatly in this regard. It is currently one of the safest countries on the continent.
With regard to health, resident aliens can be included in the Ecuadorian social security system, which is one of the best in Latin America. In addition, expat private health insurance packages are affordable. A standard medical coverage costs around USD 50-70 a month.
Its gastronomy is very varied, there are four different types of cuisines with great Spanish influence, and based on local ingredients such as seafood, fish, banana, corn, beef, lamb, chicken, goat, and cacao.
Good food and a good quality of life, and all at a very affordable price, as shall be seen below. If you want to know more about how is living in Ecuador, this website provides 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 as in the countryside. However, its cities are 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. Basic utilities cost around USD 30-50 and an internet connection is 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 will reach between USD 100-130 per month. For those looking to hide in the 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 it’s a bit more expensive, but still cheap.
Imported products tend to be quite expensive due mainly to high import taxes.
So, living in Ecuador is very affordable, giving the possibility for expats to enjoy a comfortable lifestyle for a fraction of what it would cost in the west. Retirees or those seeking tranquility away from the busy cities can make the most of their pension living a rustic life in undeveloped yet stunningly beautiful (and cheap) rural areas.
Invest in Ecuador
Ecuador’s Economic Situation
Ecuador has emerged as something of a South American miracle, and has been baptized as the ‘Latin American Jaguar’, in the same vein as the Asian tigers. Its economy, heavily dependent on oil exports, recorded an average annual growth of 3.86% over the last decade. The high oil price allowed for expansive fiscal policies (public expenditure reached 44% of GDP) which have been the engine of growth.
However, the country did experience a dip in growth from 2015 to 2016, due mainly to three factors.
A global drop in the price of oil, which 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, natural disasters, and the economic slowdown of its two main clients, Russian and China, were the icing on the cake. In 2015 the economy stagnated and in 2016 entered into recession, -2% of GDP.
In 2017, the situation started to look more optimistic, and by the end of the year, the economy had once again entered positive territory. A recovery in the price of oil, foreign financing and the completion of several energy sector infrastructure projects led to an impressive 2.7% rate of GDP growth, which was much higher than had been forecast. It has since maintained growth along these levels.
Investment Opportunities in Ecuador
Ecuador is the South American country that receives the least amount of foreign investment, and almost 80% of what does reach the country ends up in the oil sector. Hence why the Government has launched initiatives and programs to attract FI to the country, 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 and an abundance of rich, fertile land and coastline. This varied topography presents interesting investment 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 2016, 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 its capital market, the Quito Stock Exchange (ECU) suffered some major drops in the 2015-2016 period, before recovering over the last two years. However, it is down by around 5.4% since the beginning of 2019.
Its 10-year government bonds yield at a rate of 10.75% and are rated by Moody’s as B3 with a negative outlook and B- by S&P with a stable outlook. Currently, the interest rates applied to bank deposits are around 3.6%.
Invest in Real Estate in Ecuador
Ecuadorians and foreigners have practically the same rights with regards 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 Ecuadorean real estate market has walked hand in hand with broader economic developments over the last decade. From 2010 to early 2014, due to the economic rise and the high oil prices that led to an increase in the dollar supply, there was an increase in the availability of loans. Consequently, the sector grew more than 300% and prices appreciated at an annual rate of 10-12%.
As has already been mentioned, the Ecuadorean economy’s reliance on oil exports meant that the fall in oil prices in 2014-2016 led to a slowdown and subsequent recession of the economy, which led to restricted liquidity and a severe contraction of loan availability. By 2014 sales fell by 20%, and in 2015 the fall was huge, reaching 70%. In 2016 the sector stabilized, and it has since been in an upward trajectory.
Ecuador still has 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 1,300-1,600, 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 fishing towns such as Canoa and Ancon, you may find real bargains, with sea view villas for under USD 150,000.
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. This ranges 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).
Setting up a Company in Ecuador
Both locals 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 an 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 for 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 up to at least 50%. The 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 into quotas and cannot be constituted nor increased by public subscription. Its quotas cannot be traded freely; to do so 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, these are made up of 2 or more partners, although they 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 number 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 the 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 an 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. Just 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 will usually be at least USD 1,500.
To register and start activities of a CIA LTDA, the following steps are mandatory:
- Online reservation of the name of the company in the Superintendence of Companies. Less than one day with no associated costs.
- Hire an attorney to prepare the constituting contract, the articles of incorporation, the company’s bylaws, and the formation of capital. This takes 1 day, and may cost USD 800-100.
- 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.
- Register the company with the Superintendencia de Compañías, Valores y Seguros. 1 day and a 1% share of the assets.
- 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.
- 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.
- 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.
- Sign up online for Instituto Ecuatoriano de Seguridad Social -IESS- (Social Security) and present documents to the agency to obtain the password. 2 days.
- Enroll all employee contracts with the Inspectoría de Trabajo (Ministry of Labor). 2 days and no associated costs.
- Obtain Patente Municipal (Operation Permit) from the Municipality. The process is free and takes an average of 29 days.
- Pay USD 50 for tasa de habilitación (habilitation fee) at municipality.
Interested tin incorporating in Ecuador? Schedule a consultation call or start the incorporation process now.
Taxes in Ecuador
Corporate Income Tax
Ecuador resident companies are taxed on their worldwide income. Non-resident companies are taxed on their income from Ecuadorian sources. However, foreign income taxed in another jurisdiction is not taxed in Ecuador, unless it is derived from a low-tax jurisdiction.
A company is considered a resident company if it 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.
The Corporate Income tax standard rate is 22%. If more than 50% of shareholdings are owned by shareholders or partners that are 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 non-resident companies are tax-exempted, provided that profits distributed were subject to Corporate Income Tax on a 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.
Interest paid to non-residents is not subject to withholding tax unless the interest rate exceeds the rate set by the Central Bank. Excess on interest is subject to a 22% withholding tax, which may be reduced under a tax treaty. Interest paid to tax haven residents is 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 service fees are subject to 22% withholding tax unless the tax is reduced under a tax treaty.
Transfer Pricing rules are based on the 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 they do 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 a 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 (VAT)
Currently, the VAT rate in Ecuador is 12%. It was increased by 2 percentage points in May 2016 to fund the rebuilding of areas affected by the earthquake, but was returned to the 12% level in 2017.
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)
All money transfers abroad made by individuals, foreign banks, local and foreign private companies, with or without the intervention of financial institutions are taxed at a tax rate of 5%.
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.
Personal Income Tax
Residents are subject to personal income tax on their worldwide income, while non-residents are taxed on their Ecuadorian-source income.
A resident individual is a person who has their habitual domicile in Ecuador or has spent more than half the year in Ecuador, unless they have a habitual domicile outside the country and do not intend to reside in Ecuador.
The following are considered income that is 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 (%)|
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%.
Individuals are subject to VAT, currency exit tax and some local taxes explained above.
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.
If you have decided to immigrate to Ecuador, you are in luck. Ecuador is a welcoming country to foreigners, and its immigration policies are quite advantageous; proof of income and absence of criminal records should be enough to get your residence permit, and in only three years you can obtain your pasaporte. With a high quality of life at a low cost, charming people and an incredible, diverse natural habitat, those looking for a Latin country to build their nest, a rustic lifestyle or a hideaway to retire, should seriously 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 farmland at bargain prices. In additio, its officially dollarized economy does not suffer the same exchanges risks of some of the other, more volatile Latin American currencies. Its economy is growing at a stable rate, though it is excessively dependent on oil price and US dollar fluctuations. But the country has great potential and like any developing economy, there are very interesting, lucrative business opportunities. Setting up a company may be a tedious process and its tax burden is not particularly low, with multiple tax-forms. However, at least in practice, it applies a territorial tax system, and foreign income is exempt if proved that is taxed at its source.
At Flag Theory, we support individuals in obtaining residence and second citizenship, and companies in optimizing their business through international structuring. If you are considering immigrating, incorporating or opening a bank account abroad, our jurisdiction comparison matrix can probably help you narrow down your choices.
You can access these here: 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 your liability and save money through specialized internationalization strategies that our experts will help you implement.
How do I obtain a temporary residence visa in Ecuador?
It’s quite simple. You just have to apply for one in any Ecuador consulate or embassy, proving sufficient income for subsisting in Ecuador and an 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 an Ecuadorean Permanent Residence visa?
After 3 years of continuous legal residence and proving sufficient income and absence of criminal records.
How do I get 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 a 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 the United States, Canada, Schengen countries or Australia.
Is Ecuador a good place to live?
Yes, you can enjoy deserted beaches, modern cities, volcanic mountains, and rainforests. Its gastronomy is healthy, varied and delightful. In the cities, you can find all the same comforts as you would in the western world. It is one of most safe Latin American countries and its healthcare system is one of the best in the region.
How much money do I need to live in Ecuador?
Living in Ecuador is quite cheap. If you live in cities like Quito, Guayaquil or Cuenca, with USD 1,500-1800 you can have a comfortable, worry-free lifestyle. In rural areas, USD 800-1,000 may be enough.
What is the economic situation in Ecuador?
It’s growing, and the outlook is optimistic due to a recovery of oil prices.
What are the investment opportunities in Ecuador?
As with 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 does it take to set up a company in Ecuador?
The process lasts around 50 days.
How much does it cost 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 growing, as are prices. However, there are still some low prices and good opportunities, and the country still offers Ecuador some of the lowest real estate prices in Latin America.
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 (now at 12%). In Ecuador the following 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 questions?
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.