Exporting to Ecuador
For more detailed information see: Ecuador Commercial Guide for US Companies
Traditionally, U.S. companies have proven to be successful in Ecuador. Ecuador is a natural market for the United States given geographical proximity and our long-standing economic and cultural history. Product familiarization and brand awareness are not barriers, and the quality of U.S. products are highly valued. The fact that Ecuador is a dollarized economy is an advantage in business negotiations and facilitates transferring payments to the United States.
Ecuador is open to foreign investment in many sectors. The industries that attract inward investment are: mines and quarries (44 percent), manufacturing (11 percent), agriculture (10 percent), and transportation and storage (10 percent).
Business planning, however, can be a challenge because of frequent changes in Ecuador’s tax, commercial, investment, and economic policies. It is strongly advisable that U.S. companies take the time to visit Ecuador frequently to develop long-term relationships with local Ecuadorian business partners. Likewise, businesses should select a law firm early on to have legal support available in areas like taxes, political/economic changes, contracts, sanitary registrations, and law reforms. U.S. companies may consider appointing a local agent or distributor to service the Ecuadorian market. Given the small territory, one distributor often suffices.
Top reasons why U.S. companies should consider exporting to Ecuador:
- The United States is Ecuador’s top trade and investment partner, and Ecuador seeks to deepen those ties.
- S. companies can take advantage of the fact that Ecuador allows 100 percent foreign equity ownership without the need for authorization or prior screening.
- Ecuador has no limits on royalties that may be remitted when it comes to license and franchise transactions. Remittances are subject to a capital exit tax, currently set at five percent.
- There are no foreign exchange challenges. In 2000, Ecuador adopted the U.S. dollar as the country’s official currency.
- The Ecuadorian market has high U.S. brand familiarity and a strong demand for U.S. goods.
- Ecuador’s overall investment climate remains challenging as economic, commercial, regulatory, and investment policies are subject to frequent changes. Regular updates to Ecuador’s tax code make business planning difficult. Please see the Investment Climate Statement for additional information on this subject.
- Systemic weakness in the judicial system and its susceptibility to political pressures create challenges for U.S. companies investing in Ecuador. The legal complexity resulting from the inconsistent application and interpretation of existing laws complicates the enforcement of contracts and increases the risks and costs of doing business in Ecuador. Business disputes with U.S. companies can become politicized, especially in sensitive areas such as the energy sector. Several high-level investment disputes involving U.S. companies are under international arbitration. Ecuador terminated its Bilateral Investment Treaty with the United States in 2017.
- Ecuador has weak, though improving, intellectual property enforcement. The United States Trade Representative includes Ecuador as one of 33 countries on its Watch List in its annual Special 301 Report on Intellectual Property. The Special 301 Report identifies trading partners that do not adequately or effectively protect and enforce intellectual property (IP) rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights.
- Ecuador does not have a free trade agreement (FTA) with the United States. The recently signed Protocol on Trade Rules and Transparency included annexes in four areas: Trade Facilitation and Customs Administration, Good Regulatory Practices, Anti-Corruption, and Small and Medium-Sized Enterprises (SMEs).
- Ecuador maintains certain protectionist trade policies favoring import substitution. Ecuador has imposed a broad range of tariff and non-tariff restrictions on trade in goods and services over last decade.
Investors: Getting Started
If you are considering investing in Ecuador, here are some steps you may wish to consider as you get started:
- Contact your local U.S. Export Assistance Center for advice and support on exporting to Ecuador. Contact a Trade Specialist near you.
- Contact local U.S. business support organizations, such as the Ecuadorian-American Chambers of Commerce in Quito, Guayaquil, Cuenca, Ambato, and Manta.
- Contact your local Small Business Development Center (SBDCs). Starting a business can be a challenge, but there is help for you in your area. Small Business Development Centers (SBDCs) are partnerships primarily between the government and colleges/universities administered by the Small Business Administration and aims at giving educational services for small business owners and aspiring entrepreneurs.
- Subscribe to our embassy Facebook page or Twitter feed
Visa Requirements to Enter Ecuador
If you are a U.S. citizen wishing to enter Ecuador, you must present a U.S. passport with at least six months remaining validity. Ecuadorian immigration officials also sometimes request evidence of return or onward travel, such as an airline ticket. Ecuador has imposed additional COVID-19 testing requirements for entry, which are subject to change.
Under Ecuadorian law, U.S. citizens traveling for business or tourism on a tourist passport can enter Ecuador for up to 90 days per calendar year without a visa. Extensions for up to another 90 days can be requested through provincial offices of the Ministry of Health and Human Mobility.
If you are planning a visit longer than 90 days, you must obtain a visa in advance of your arrival.
More detailed information and requirements for visas in Ecuador can be found at the website of Ecuador’s Ministry of Foreign Affairs and Human Mobility. You can also visit the website for the Embassy of Ecuador in the United States for the most current visa information, or for further information regarding entry, exit, or customs requirements. If you stay in Ecuador beyond the terms of your visa, you may be barred from re-entering Ecuador in the future. A substantial fine may be imposed by Ecuadorian Immigration prior to your departure.
Make sure to check the current State Department travel advisories.
The Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act (FCPA) is an important anti-corruption tool designed to discourage corrupt business practices in favor of free and fair markets. The FCPA prohibits promising, offering, giving or authorizing giving anything of value to a foreign government official where the purpose is to obtain or retain business. These prohibitions apply to U.S. persons, both individuals and companies, and companies that are listed on U.S. exchanges. The statute also requires companies publicly traded in the U.S. to keep accurate books and records and implement appropriate internal controls.
For more information please visit: FCPA