U.S. Embassy and Consulate in Ecuador

Exporting to Ecuador

Market Overview

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 presents many investment opportunities, particularly in agriculture, aquaculture, mining and critical minerals, energy, telecommunications, security, and electricity. Economic and political uncertainty, interventionist policies, fiscal challenges, and persistent economic stagnation have prevented the country from maximizing its potential. Business planning, can be a challenge because of frequent changes in Ecuador’s tax, commercial, regulatory, 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 partner, and Ecuador seeks to deepen those ties.

· 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.

Market Challenges

· Ecuador’s overall business 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 doing business and 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 the 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 includes 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.

Travel Advisories

Make sure to check the current State Department travel advisories.