Ecuador Law Firm

Company registration in Ecuador is relatively simple, taking 10-15 business days. The minimum registered capital is US$400 for a limited liability company (LIA LTDA) and US$800 for a joint stock company (SA). A minimum of two shareholders (who may be foreigners) is required. A legal representative who is an Ecuadorian resident must be appointed. The registration fee is approximately US$1,500-2,500.

Ecuador has used the US dollar as its legal tender since 2000, making it one of the few dollarized countries in Latin America. Advantages: no exchange rate risk, low inflation, and ease of international trade. Disadvantages: no independent monetary policy and reliance on US dollar liquidity. For Chinese companies, dollarization simplifies financial management and capital allocation.

Ecuador's corporate income tax is 25%, and its value-added tax is 12%. New investments in basic industries and strategic sectors enjoy preferential treatment: a 12-year tax exemption for new investments, an 8-year tax exemption for other productive investments, and a tax exemption for the first three years for small and micro enterprises. Signing an investment contract guarantees tax stability. Ecuador and China have a double taxation avoidance agreement.

Ecuador has virtually no restrictions on foreign investment, with foreign investors enjoying national treatment. Strategic sectors (oil, mining, and telecommunications) require special licensing, but foreign investment is not prohibited. There are no foreign exchange controls, and capital and profits can be freely remitted. Investors with investments exceeding US$1 million can apply for an investor visa. China and Ecuador enjoy good relations, and Chinese investment is active in infrastructure, mining, and energy.

The minimum wage in Ecuador is $460 per month (as of 2024). Employers are required to contribute 11.15% to social security contributions. Mandatory benefits include 13th and 14th salaries (education subsidies), 15% profit sharing, and paid vacations. Severance pay is calculated based on length of service. Labor laws are relatively flexible, allowing for a 90-day probation period and overtime pay of 150-200%.

Ecuador's advantageous industries include petroleum and minerals (copper and gold), agriculture (bananas, flowers, cocoa, and shrimp), tourism (Galapagos Islands), and fisheries (tuna). Emerging opportunities include renewable energy, infrastructure PPP projects, agricultural product processing, and tourism development. The government actively attracts foreign investment and offers a variety of preferential policies.