trade guide of the republic of ecuador

Transcription

2012
Elaborated and Revised by:
Trade and Investment Intelligence
Direction
PRO ECUADOR
TRADE GUIDE OF THE
REPUBLIC OF
ECUADOR
This document has the relevant information about the Republic of Ecuador,
socioeconomic situation of the country, economic structure and its main sectors.
Market access requirements, customs tariff, regimes, logistic, distribution,
transport and investment.
Content
1.
GENERAL PANORAMA ............................................................................................... 1
a. Gegraphic situation, agricultural areaand weather ....................................... 1
b. Demography and society................................................................................... 1
i.
Population, ethnic, demographic density y growth rates ......................... 1
ii. Urban population and main cities ................................................................ 2
iii. Population distribution for ages and genre .................................................. 3
c.
Active Population (total, by sectors, unemployment)................................... 4
d. Political Administrative Organization ............................................................ 5
i.
Government, political parties ........................................................................ 6
ii. Administrative, economical and territorial State Organization.……………..7
e. Internacional/regionalRelationships (Attached Agencies, Signed
Commercial Agreements)....................................................................................... 11
2.
ECONOMICFRAME ...................................................................................................... 15
a. Structure of Ecuador economy (GDP evolution; GDP sectorial
distribution; GDP per capita, Inflation)................................................................ 15
b. Main sectors of Ecuador economy (evolution andcurrent situation) ....... 15
i.
c.
Agricultural and Consumption, Industrials, services .................................. 15
Foreign sector .................................................................................................... 16
i.
Foreign trade.................................................................................................. 16
o
Exports to the world .................................................................................... 17
o
Imports from the world................................................................................ 17
o
Balanceof trade ............................................................................................. 17
o
Main exported products and tendencies ................................................... 18
Non-oil Exports .................................................................................................... 18
Traditional products............................................................................................ 18
Non traditional Primary Products .................................................................... 19
Non traditional Industrialized Products .......................................................... 20
Main Ecuador export products to the world in 2011...................................... 21
3.
o
Main export markets (Countries) ............................................................... 22
o
Main imported products and Tendencies ................................................. 23
o
Main suppliers (Countries) .......................................................................... 24
MARKET ACCESS ......................................................................................................... 25
a. General Market Access requirements ............................................................ 25
i. Import processing (customs clearance, necessary documentation) .......... 25
ii. Import prohibited products .......................................................................... 32
iii. Samples regimen ........................................................................................... 35
b. Specific Requirements for Import products:................................................. 35
i. Tariff Requirements (tariff sistem, average tariffs applied, Customs
Tariff Preferences of Ecuador) ........................................................................... 35
ii. Import License/Previous Authorization ................................................... 43
iii. Tariff Requirements: ..................................................................................... 44
o
Sanitary/ Phytosanitary requirements ...................................................... 44
o
Standards and technical regulations .......................................................... 44
c.
Requirements of the Buyer: ................................................................................ 47
i.
Purchase and Payment Conditons ............................................................. 48
d. Logistic, Transport and Distribution:.................................................................. 49
i. Transport Infraestructure (roads, railways, ports, airports and
waterways) ........................................................................................................... 49
ii. Main Channels of distribution, usual trade margins by sector .............. 58
4.
FOREIGN INVESTMENT ............................................................................................ 62
a. Legal Framework .............................................................................................. 62
b. Investment incentives (fiscal, secorial and local) ......................................... 63
c.
Foreign Investment Situation .......................................................................... 69
d. Repatriation of capital, exchange rate control / regulation of receipts and
payments abroad ..................................................................................................... 72
e.
Enterprise Establishment ................................................................................. 80
f.
Industrial and Intellectual Property............................................................... 80
Benefits and Rightsconferred by registration of a patent .............................. 82
g.
5.
Procurement / Public tender .......................................................................... 83
FISCAL SYSTEM ............................................................................................................ 88
a. General Structure .............................................................................................. 88
b. Tax system ......................................................................................................... 89
c.
Taxes ................................................................................................................... 89
d. Tax treatment of foreign investment ........................................................... 100
6.
FINANCING ................................................................................................................. 102
a. Financial system .............................................................................................. 102
b. Bank Loans, multilateral agreementsof financing ...................................... 103
7.
LABOR LEGISLATION .............................................................................................. 105
a. Contracts .......................................................................................................... 105
b. Foregin workers .............................................................................................. 106
c.
Salaries, Workday ........................................................................................... 106
d. Union Relationships ....................................................................................... 107
e. Social Security .................................................................................................. 109
a. Start up costs of opening an office .................................................................. 116
b. General Information....................................................................................... 117
i.
Entrance and Exit formalities .................................................................... 117
ii. Local Time, vacation and holidays ........................................................... 119
iii. Working hours, Banks, and Commerce ..................................................... 120
iv. Telecommunication System.......................................................................... 120
v. Currency, exchange rate evolution with respectto dollar ..................... 121
vi. Official Language and Religion ................................................................ 122
vii. Other useful information...……………………………………………….122
c.
Contacts and interesting links .................................................................... 128
d. Industrial and commercial Organizations ................................................ 128
e. Hotels, rentals, etc. ......................................................................................... 130
1. GENERAL PANORAMA
a. Geographic situation, agricultural surface and weather
Ecuador is located on the equatorial linein the northwest part of South America,
bounded on the north with Colombia, on the south and east with Peru and the
west with the Pacific Ocean. The size of the country is 256.370 square
kilometers.
The Republic of Ecuador is divided into 4 natural regions: the insular region,
where The Galapagos Islands are located, situated at 1.000 km. on the west of
the Ecuadorian cost; the Andean region, includes the entire central belt of the
country in which the volcano Chimborazo is located, considered the highest
pick of Ecuador (6.310 high meters above sea level); the coast, occupies the
entire littoral covered by the Pacific Ocean; and the east, comprising the
Ecuadorian Amazon. It is the country with the largest number of rivers by
square kilometers in the world.
The weather of the country due to the presence of the Andes pick, to the sea
influence and to the tropical location, presents two marked seasons: humid and
dry. On the coast and the east the temperature ranges between 20 °C and 33 °C,
while in the Andean mountains, ranges from8 °C to 26 °C throughout the year.
In the Ecuadorian coast, the humid season is extended between December and
May, in the Andean from November to April and from January to September in
the Amazon region. While there is a mild weather in Galapagos Islands and its
average temperature ranges between 22 and 32 °C.
Ecuador has a strong agricultural orientation, basically for its land productive
characteristics, soil characteristics and its environment. According to the III
National Agricultural Census from 40% of the population living in the
ruralarea, 62% comprises households of agricultural producers and live in their
own Units of Agricultural Production (UPA in Spanish).
Some of the crops in Ecuador are meant to be temporal, such as: rice, corn,
potato and soy; while 63% of the production volume, measured in metric tons
corresponds to permanent crops, for example, banana and plantain, coffee,
cacao, palm, sugarcane, among other products. Ecuador is considered as one of
the world’s main exporters of banana for its world production, as well as
flowers and cacao, recognized for their quality.
b. Demography and society
i.
Population, ethnics, demographic density and growth rates
According to preliminary data from Census of Population and Housing done in
1
2010, the population of Ecuador reached 14,483,499 inhabitants 1, and it is
estimated that demographic density is 55.80 inhabitants per square kilometer.
Ecuador approaches a yearly census growth rate of 1.95% according to
estimations from the National Institute of Statistics and Census (INEC in Spanish).
The country is characterized for being multiethnic and multicultural; there are
several races and a large number of indigenous groups, settled in three regions
of the country, except the insular region.
Main Ethnics 2




Mestizos 65% (Amerindian and white)
Indigenous 25%
White 7%
African 3%
The following are main detailed indigenous and cultural groups settled in
Ecuador by regions
Chart No.1
INDIGENOUS AND CULTURAL ECUADORIAN GROUPS
Andean
Kichwa Kara
Kichwa kitucara
Kichwa Puruhá
Kichwa Kanari
Kichwa Palta
Pupo
Chagra
South Chagra
Chazo
Afro-Ecuadorian of
Chota
Coast
Awá (Caiquer)
Chachi (Cayapas)
Épera
Tsa’chilas (Colorados)
North Montubio
Montubios
Cholo
African of Esmeraldas
Peasant (Manaba)
Amazon
Ai’ cofán
Amazon Kichwa
Sionas-secoyas
Huaorani
Shiwiar
Zápara
Achuar
Shuar
Source: Ministry of Culture of Ecuador
Elaboration: Trade and Investment Intelligence Direction, PRO ECUADOR
ii.
Urban population and the main cities
According to INEC data, 75% of the population lives in the urban centers, while
25% lives in the rural part of the country. Ecuadorians are mainly concentrated
in the Coast and Andean regions.
_____________________________________
1National Institute of Statistics and Census - Ecuador (INEC in Spanish).
2 National Institute of Statistics and Census - Ecuador (INEC in Spanish).
2
The annual growth rate of the urban population is estimated in 2.3%, while the
percentage of the rural population has descended due to internal migrations to
the cities and the eminent external emigration.
The main cities of Ecuador, considered so by the number of inhabitants and by
the economic activity developed are the following:
Chart No.2
MAIN CITIES OF ECUADOR
Year 2010
City
Guayaquil
Quito
Cuenca
Portoviejo
Machala
Santo Domingo
Ambato
Population
3,050,728
2,551,993
400,000
257,000
250,000
231,000
224,000
The 3 major cities of Ecuador stand out by different political, financial and
commercial activities, indicated as follows:

Guayaquil, stands out for its commercial activity, here is located Sea Port
Simon Bolivar, being the entrance and exit spot more important of the
country, moving more than 70% of the Ecuadorian foreign trade.

Quito is the host city of central Government, as well as the main
institutions of the public sector and numerous private enterprises thus
domestic as foreign.

Cuenca, is the third most populated city of the country, attracts many
tourists for its cultural and colonial richness, thus as for its tranquility;
here the handicraft and ceramic industry is mainly developed
iii.
Distribution of the population for age and genre
According to the demographic projection performed in year 2003 by the
National Institute of Statistics and Census (INEC in Spanish), according to the
average hypothesis recommended the following distribution was estimated,
thus by genre as by the age of inhabitants:
Chart No.3
3
PROJECTION OF
Ages
0-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80+
THE ECUADORIAN
BY GENRE
YEAR 2010
Men
729,658
732,520
733,902
697,754
659,047
598,999
532,857
473,855
420,767
362,447
307,863
259,636
188,298
146,500
113,430
81,878
76,572
POPULATION
Women
699,286
704,218
706,269
674,976
674,976
591,994
532,362
477,168
426,866
369,661
316,652
269,964
198,069
158,308
126,816
95,278
97,625
According to data projected for 2010 by INEC (in Spanish), within demographic
groups the most numerous is that of age between 0-14 years old with 30.31%,
followed by the group between 15-64 years old with 63.38%, and finally 65
years old onward represent 6.31%
c. Active Population (total, by sectors, unemployment)
In year 2010, the Economically Active Population (PEA in Spanish) according to
data from National Institute of Statistics and Census (INEC in Spanish), overcame
4.3 million people, representing 30% of the population according to the total of
the country census in 2010.
The official number of official unemployment in December 2010 was 6,11%, that
is to say 1,82 points less to December 2009, for 2011 it registered a rate of
5,07%the lowest in the last 5 years 3. While the sum of the sub employed and
unemployed population was ranked around 58,4% and to 53,2% in 2009 and
2010, respectively. The migratory phenomenon has contributed for this
situation not to impact with higher impact in the analyzed indexes.
________________________________
3 Central Bank of Ecuador
By production sectors, the Ecuadorian population engages in the following:
4
Graph No.1
ECONOMICALLY ACTIVE POPULATION BY SECTORS
OF PRODUCTION
Year 2010
Industries
Industries
18.60 %
Agriculture, hunting
and fish
Services
Services
53.00 %
Agriculture, Hunting and fishing
28.40 %
d. Political Administrative Organization
i. Government, political parties
The Government of Ecuador is led by economist Rafael Correa Delgado,
Constitutional President of the Republic of Ecuador, since 15 January 2007 and
was reelected in his position with 55% of the valid votes on April 26, 2009.
After reaching the mandate, he subsequently convened a referendum for the
acceptation and installation of the Constituent Assembly, which was held on
April 15, 2007 counting with an 81.72% acceptance by the Ecuadorian
population. The intention of the Constituent Assembly, based on their full
powers, was to transform the institutional frame of the State and elaborate the
new Constitution.
The country has three types of procedures in its electoral system, which
functions as follows:



The presidential election is based on a formula of absolute majority with
the resource to move to second round.
The legislative election is based on a formula of simple majority and it is
composed by 15 assembly members nationwide, 2 assembly members for
each province and one more for every 200,000 inhabitants in case the
population overcomes 150,000 inhabitants.
For the election of provincial prefects and municipal majors, the formula
of simple majority is used.
5
During eight months of duration of the Constituent Assembly, besides
redacting the new Constitution, the Assembly became the only legislative
power, approving 21 mandates, 6 laws, 8 regulations and 23 resolutions.
The new Constitution entered into force the 20 October 2008, became the
twentieth Political Letter of Ecuador, since that date new organs appeared for
example: the National Assembly which replaced the National Congress, the
Electoral National Council, the Electoral Contentious Tribunal and the National
Court of Justice.
In addition to functions Executive, Legislative and Judicial ruling the
government, in this mandate those of Citizen Participation, Social and Electoral
Control have been created. In the following table, the number of appointed
authorities that rule the Ecuadorian Government are indicated according to
electoral elections of 26 April, 2009.
Chart No.4
AUTHORITIES WHO RULE THE
ECUADORIAN STATE
No.
Dignities
1
1
5
23
15
103
6
221
1039
542
President
Vice-president
Andean Parliamentarians
Prefect and Vice-prefect
National Assembly members
Provincial Assembly members
Abroad Assembly members
Municipal Majors
Urban Counselors
Rural Counselors
Source:Electoral National Council, CNE in Spanish
Elaboration: Directorate of Commercial Intelligence and Investment, PRO ECUADOR
The main political parties and associations acknowledged in the country are the
following:
Chart No.5
6
MAIN POLITICAL PARTIES
MPAIS
PSP
PSC
PRIAN
Country Grouping
Patriotic Society Party
Social Christian Party
National Action Institutional Renewal Party
Number of
Assembly
members
59
19
7
7
PRE
MPD
RED/MIPD
MCND
MMIN
ID
Other
Roldosista Ecuadorian Party
Popular Democratic Grouping
Left United Alliance
Democratic National Concertation Grouping
Municipal Grouping for National Integrity
Democratic Left
Minority Parties
5
5
4
4
3
2
9
Acronyms
Political Party
Electoral National Council, CNE in Spanish
In addition, there are other influential and important forces in the country like:

CONAIE (in Spanish), the main social indigenous grouping, represented by
the political party Pachakutik
Armed Forces
National Unity of Educators (UNE in Spanish)
The Catholic Church
The Commerce and Industry Chambers (Guayaquil and Quito)




ii.
Administrative, economic and territorial Organization of the State
The Ecuadorian political and administrative division acknowledges the
following organization: regions, provinces, counties and rural parishes.
The Andean region is composed by 10 provinces, the Coast region by 7
provinces, the Amazon region by 6 provinces and the insular region by 1
province, totaling 24 provinces in the Ecuadorian territory.
With the purpose of reforming the productive regimens and search for a higher
participation of the public sector, the Presidency recuperated the National
Secretary of Planning and Development (SENPLADES in Spanish), responsible for
establishing the goals and the national policies, in the economic and general
ambit.
In this Government the National Plan of Development was created, also known
as National Plan for Good Living, indicating the guidelines to be followed by
the Ecuadorian administration in policies of management and public
investment.
7
The National Plan for Good Living (2009 – 2013), in the frame for the territorial
planning developed a strategy to disconcert the administration of the central
government, thus creating seven zones of planning gathered for the following
provinces:







Region 1, Esmeraldas, Carchi, Imbabura and Sucumbíos. Administrative
headquarters: Ibarra
Region 2, Pichincha, Napo and Orellana. Administrative headquarters:
Tena
Region 3. Chimborazo, Tungurahua, Pastaza and Cotopaxi.
Administrative headquarters: Riobamba
Region 4, Manabí, Galápagos and Santo Domingo de los Tsáchilas.
Administrative headquarters: Ciudad Alfaro
Region 5, Santa Elena, Guayas, Los Ríos y Bolívar. Administrative
headquarters: Milagro
Region 6, Cañar, Azuay and Morona Santiago. Administrative
headquarters: Cuenca
Region 7, El Oro, Loja y Zamora Chinchipe. Administrative
headquarters: Loja
Additional, there is the zone of the counties Guayaquil, Duran, Samborondon
and the Metropolitan District zone of Quito.
Image No.1
Source: The National Plan for Good Living (2009 – 2013)
The new model of the State includes four big challenges:

The territorialization of the public policy to meet specific needs
from different territories.
8

The establishment of criteria of regional planning from specific
functions and roles.

The foment of zonal dynamics that contribute to the realization of
the National Plan for Good Living.

The accumulation and redistribution strategy in the long term; in
addition to propitiate a new administrative structure that
articulates the public intervention management in the zonal
territories.
The current Government has 8 coordinator ministries, 20 grouped ministerial
portfolios depending on their functions in the ministry of coordination and 7
secretaries of state.
Chart No.6
MINISTERIES COORDINATORS OF THE ECUADORIAN GOVERNMENT
Ministry of Coordination of Social Development
Ministry Coordinator of the Strategic Sectors
Ministry of Coordination of Economic Policy
Ministry of Coordination of Production, Employment and Competitiveness
Ministry Coordinator of Natural and Cultural Patrimony
Ministry of Coordination of the Politic and Decentralized Autonomous Governments
Ministry of Coordination of Security
Ministry Coordinator of Human Talent
Source: Cabinet of the Presidency of the Republic of Ecuador
Existent Ministries as follows:
Chart No.7
9
MINISTERIAL PORTFOLIO OF THE REPUBLIC OF ECUADOR
Ministry of Education
Ministry of Economic and Social Inclusion
Ministryof Urban Development and Housing
Ministry of Foreign Relationships, Commerce and Integration
Ministry of Finances
Ministry of Sport
Ministry of Tourism
Ministry of Labor Relations
Ministry of Public Health
Ministry of Culture
Ministry of Environment
Ministry of Non Renewable Natural Resources
Ministry of Renewable Natural Resources
Ministry of Telecommunications and the Information Society
Ministry of National Defense
Ministry of Agriculture, Livestock, Aquaculture and Fishery
Ministry of Transport and Public Works
Ministry of the Interior
Ministry of Justice, Human Rights and Worships
Ministry of Industries and Competitiveness
Source: Cabinet of the Presidency of the Republic of Ecuador
The main ministries that form the economic cabinet nucleus are the Ministry of
Finances and Ministry of Non Renewable Natural Resources. The Central Bank
of Ecuador is the responsible to execute the monetary regimen of the Republic,
the maximum authority of this institution is designated by the President of
Ecuador.
In addition, with the purpose of promoting exports and investments of the
country, the Institute of Promotion of Ecuadorian Exports and Investments was
set up, PRO ECUADOR, attached to the Chancery according to Official Record
No.351
e. International Relationships/regionals
Commercial Agreements)
(Attached
Bodies,
Signed
10
Ecuador is part of important international body like the World Commerce
Organization (OMC in Spanish), International Monetary Fund (FMI in Spanish),
Andean Foment Corporation (CAF in Spanish), Interamerican Development Bank
(BID in Spanish), World Bank (BM in Spanish), Economic Commission for Latin
America and Caribbean (CEPAL in Spanish), United Nations Fund for Agriculture
and Feeding (FAO in Spanish), American States Organization (OEA in Spanish),
United Nations Organization (ONU in Spanish), Oil Exporting Countries
Organization(OPEP in Spanish).
In the following list other economic and commercial international organizations
are detailed in which Ecuador is member:
Chart. No.8
ECONOMIC AND COMMERCIAL ORGANIZATIONS
ARPEL – Reciprocal Oil Assistance Latin-American
CECON – Special Consulting and Negotiation Committee
CIEP - International Center of Public Enterprises in Developing Countries
CIES – Economic and Social Inter-American Council
CII – Inter-American Corporation of Investments
COA – Council of Customs Cooperation
United Nations Commission for the International Trade Law
Committee of Economic, Social and Cultural Laws
COPAL – Cocoa Producers Alliance
Andean Monetary Fund
OIA –International Organization of Sugar
OIC – World Organization of Coffee
OMPI – World Organization of Intellectual Property
ONUDI – United Nations Organization for the Industrial Development
SIAT – Inter-American Society for Tropical Tuna
UNCTAD – United Nations Conference for Commerce and Development
Source: Foreign Trade and Investment Council
Elaborated:Directorate of Commercial Intelligence and Investment, PRO ECUADOR
In addition, Ecuador is part of regional agreements like the Latin-American
Association of Integration (ALADI in Spanish), Andean Community (CAN in
Spanish), Bolivarian Alternative for the Americas (ALBA in Spanish), Union of South
American Nations (UNASUR in Spanish) and Bank of the South. Also, Ecuador is
11
an associate country of MERCOSUR (in Spanish) through CAN (in Spanish) by ACE
59.
For being a founder member of the Andean Community since 1969, Ecuador
counts with a Custom Union with Bolivia, Colombia and Peru. Among the
main commercial goals of CAN stand out the creation of a free trade zone and a
customs union. The Andean free trade zone was completed in January 2006
when Peru finished the process of tariff elimination, after having followed a
gradual process of incorporation since 1997. Venezuela denounced the
Cartagena Agreement in April 2006; the Andean preferences negotiated
between Ecuador with the other members of CAN will have validity for 5 years
after the denunciation of the Agreement.
In the frame of ALADI, Ecuador has signed the following Trade Agreements:



The Agreement of Partial Scope of Renegotiation No.29 was signed on
May 31, 1993 between Ecuador and Mexico, its Additional Protocols
were signed on December 20, 1993, December 2, 1994 and August 16,
2002; on this Agreement were incorporated the resulting preferences of
the renegotiation, revision and updating of the advantages granted in the
national lists of Ecuador and Mexico, in the frame of ALAC 4, as well as
those contained in the list of non-extensive advantages in favor of
Ecuador.
The Agreement of Partial Scope of Economic Complementation ACE
No.46 was signed on May 10, 2000 between Ecuador and Cuba. The
Agreement has among other goals to strengthen the reciprocal
commercial interchange through the granting of tariff and non-tariff
preferences.
No.59 between CAN and MERCOSUR. This agreement was signed on
October 18 2004 and entered into force depending on the signatory
country, between February and April 2005 and its members are:
Argentina, Brasil, Colombia, Ecuador, Paraguay, Uruguay and
Venezuela. This Agreement has, among other goals, to establish the
judicial and institutional frame of cooperation and economic and
physical integration that contributes to the creation of an expanded
economic space that tends to facilitate the free circulation of goods
andservices and the full utilization of the productive factors, in
conditions ofcapability between the Contracting Parts, well as to create a
free trade area between the Contracting Parts through the expansion and
_______________________________
4 Free Commerce Latino-American Association was the Latin-American regional body existed
during 1960-1980 by the Treaty of Montevideo and later was replaced by the Latin-American
Association of Integration (ALADI)
12

diversification of commercial interchange and the elimination of the
tariff and non-tariff restrictions that affect the reciprocal commerce.
No.65 signed on March 10, 2008 between Ecuador and Chile and entered
into force on January 25, 2010. This new Agreement replaced ACE No.32,
keeping the same exception lists expressed in NALADISA 2007.
In April 2011, Ecuador signed with Venezuela an Agreement of Cooperation
and Economic Complementation, which will have 5 years duration and could
be extended on substitution of the commercial agreement that ruled the
economic relationships of both countries in the Andean Community (CAN)
frame and expired same way on that date due to Venezuela exit from CAN in
2006.
Furthermore, on April 15, 2011 the governments of Ecuador and Guatemala
signed an Agreement of Economic Complementation of Partial Scope (AAP),
which began to be negotiated in August in August 2010 with the purpose of
reducing the tax on 700 tariff codes gradually for the next 5 years. This
Agreement still doesn’t come into force until internal paperwork of ratification
is fulfilled from each Part.
Ecuador is currently negotiating Trade Agreements with Nicaragua and
Turkey. Also, it is expected to specify negotiations with United States and the
European Union, important commercial partners of Ecuador.
With relation to the tariff preferences:
 The United States of America count with the Promotion Law of
Commerce of Andean Countries and Drugs Eradication, ATPDEA, with
which a custom tariff franchise treaty is granted to a wide range of
products of Colombia, Ecuador and Peru. This is a unilateral system
which eligibility depends on established criteria by the grantor country.
ATPDEA allows the free tariff entry to around 4.180 products, including
flowers, plastic products, steel tubes, brooms, jewelry, chemical
products, garments under some conditions, shoes, petroleum and its
derivatives, watches and its parts, purses, and leather manufactures,
vacuum packed tuna in paper or aluminum envelopes with a content no
greater than 6.8 Kilos among others.
 The Generalized System of Preferences (SGP in Spanish) is a commercial
program in which some developed countries help developing countries
to improve their economic condition through the import of products
from beneficiary countries which enter free of tariffs. The particularity of
SGP is to be renewed annually and because it is an unilateral program of
preferences, it is subject to eligibility criteria of the grantor country that
could vary from year to year.
13
The granted preferences by United States to Ecuador (ATPDEA and SPG) have
been renewed in several occasions; currently those preferences will have
validity until July 31, 2013.
14
2. ECONOMIC FRAME
a. Structure of Ecuador economy (GDP evolution; sectorial distribution of
GDP; GDP per capita, Inflation)
GDP of Ecuador has presented an increasing tendency; therefore the annual
average growing rate in the period 2007-2011 is 12.14%
In 2011, the GDP was USD 65,945 million and GDP per capita reached USD
4,578.
Chart No.9
GROSS DOMESTIC PRODUCT
YEARS: 2007 - 2011
(USD thousands and %)
Indicators
GDP at current prices (thousands
of dollars)
Rates of annual variation
GDP per Annual Capita
2007
2008
2009
2010
2011
45,503,563
54,208,524
52,021,861
57,978,116
65,945,000
2.04%
7.24%
0.36%
3.58%
6.50%
3,411
4,021
3,818
4,052
4,578
Source: Central Bank of Ecuador/BCE
Elaboration: Directorate of Commercial Intelligence and Investment/PRO ECUADOR
The registered inflation in Ecuador from February 2011 to February 2012 was
5.53%, placing as the seventh economy of greater annual inflation, though is
kept under the average (6.61%) and under the medium (5.04%). It is placed
under that of Argentina, Uruguay (7.94%) and Brazil (5.84%)
b. Main sectors of Ecuador economy
i.
Agricultural and consumption, industrial and service
Construction is the main sector that compounds GDP, representing 9.28% of
participation in 2011. Other important sectors include Services, Commerce
Wholesale and Retail and Manufacture Industry.
The following chart presents GDP disaggregated by economic sectors in 2010
Chart No. 10
15
GROSS DOMESTIC PRODUCT COMPOSITION
BY TYPE OF ECONOMIC ACTIVITY
Year 2011
A. Agriculture, Livestock, forestry, hunting and fishing
B. Mines and Quarries Exploitation
C. Manufacture Industries (excluding oil refining)
D. Electricity and water supply
E. Construction
F. Wholesale and Retail Business
G. Transport and storage
H. Services of financial intermediation
I. Other services
J. Public administration and defense; social security plans of
compulsory affiliation
K. Housework
L. Service of financial intermediation measured indirectly
M. Manufacture of Products of oil refining
N. Other elements of GDP
GROSS DOMESTIC PRODUCT
6.27%
16.75%
9.06%
0.78%
10.74%
11.44%
6.03%
2.70%
26.55%
5.01%
0.12%
-2.67%
2.01%
5.21%
100.00%
c. The foreign sector
i.
Ecuador Foreign Trade
Country Exports to the world
The total exports of Ecuador to the World in the last five years have presented
an increasing tendency, except 2009 where there was possibly a fall alleged to
the world economic crisisof that year. For 2011 exports reached USD 22,345
million, which meant USD 4,835 more millions than 2010. La annual average
growing rate of Ecuadorian exports in the last five years has been positive, of
11.76%.
Chart No.11
ECUADOR EXPORTS TO THE WORLD
FOB amount / USD thousands
2007
14,321,316
2008
18,818,326
2009
13,863,055
2010
17,489,923
2011
22,345,205
2012 *
2,094,421
*Until January 2012
Country Imports from the world
16
Imports of Ecuador from the world have has a growing tendency in the last five
years, reaching USD 22,945 million in 2011. The annual average growing rate
correspond to 15.50%
Chart No.12
ECUADOR IMPORTSFROM THE WORLD
FOB amount / USD thousands
2007
12,895,241
2008
17,551,930
2009
14,071,449
2010
19,278,702
2011
22,945,794
2012 *
2,011,429
*Until January 2012
Ecuador Balance of trade
The balance of trade of Ecuador has presented negative balances in the last
years, for 2009 presented a deficit of USD 208.4 million, for 2010 a deficit of USD
1,788.8 million and for 2011 a deficit of USD 600.59 million, but as it can be
visualized in chart No. 2 the balance of trade has been constantly recuperated
getting a positive balance of USD 82.99 million on the first month of 2012.
Graph No.2
USD Thousands
Trade Balance Ecuador-World
2007-2012 Jan-Mar
USD Thousands
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
-5,000,000
2007
2008
2009
2010
2011
2012 JanMar
Exports
14,321,316
18,818,326
13,863,055
17,489,923
22,345,205
6,188,850
Imports
12,895,241
17,551,930
14,071,449
19,278,702
22,945,79
5,722,132
Trade Balance
1,426,075
1,266,396
(208,394)
(1,788,77
(600,589)
466,717
*Until March 2012
Main exported products and tendencies
17
Oil and its derivatives constitute the main export product of Ecuador, thus in
2011 represented the 58% of the total exported.
The following graph shows the tendency of oil and non-oil exports of Ecuador
to the world, and must be noted that oil exports each time have a greater
participation from total exports; this is how for 2010 the oil exports represented
55% from the total and for January 2012 represented 66%.
Graph No.3
Ecuadorian exports behaviour
2007-2012 Ene-March (Sharing %)
Oil X
42%
38%
58%
62%
2007
2008
Non Oil X
38%
50%
42%
42%
50%
55%
58%
62%
2009
2010
2011
2012
*Until March 2012
Non-Oil Exports
Traditional Products
The products that traditionally Ecuador has exported to the world have had a
growing tendency in the last five years, this is how Banana and plantain USD
1,302 million in 2007, for 2011 it was exported USD 2,245 million. For January
2012 it was exported USD 172 million.
There has been a similar tendency in case of shrimps, from USD 612.89 million
in 2007 to USD 1,174.77 in 2011. Exports registered in January 2012 are USD
86,799 million.
18
Cocoa and elaborated has had a gradual export growing in 2007 it was exported
USD 239.36 and in 2011 it was exported USD 584.23 million. For January 2012
exports on that itemtotalized USD 33.06 million.
Tuna and fish represent one of the main export products of Ecuador, from USD
169 million in 2007 to USD 295.74 million in 2011 and in January 2012 they were
of USD 30.16 million.
Coffee and elaborated have also had a growing export tendency in the last five
years, from USD 123.30 million in 2007 to USD 258.59 million in 2011 and of
USD 15,02 in 2012.
Graph No.4
Ecuadorian Exports of Traditional Products
FOB value/USD thousands
2007-2012*
USD thousands
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
Shrimps
Cocoa and
elaborated
Tuna and
fish
Coffee and
elaborated
2007
Banano
and
plantain
1,302,549
612,887
239,361
168,996
123,300
2008
1,640,528
712,724
290,259
192,451
130,137
2009
1,995,654
664,419
402,634
233,602
139,716
2010
2,032,769
849,674
424,912
237,405
160,946
2011
2,245,308
1,174,769
584,232
295,742
258,592
2012*
172,895
86,799
33,062
30,157
15,017
*Until January 2012
Non-traditional Primary Products
The primary non-traditional products exported from Ecuador to the world are
mainly constituted by natural Flowers, Abaca, Wood, Mining products, Fruits
and raw Tobacco. The export tendency of these products has been kept
increasing during the last five years, mainly on natural Flowers and wood as
shown in the following graphic
19
Graph No.5
USD thousands
Evolution of Ecuadorian Exports of Non Traditional primary
Products
2007-2012*
USD thousands
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Natural
flowers
Abaca
Wood
Mining
products
Fruits
Raw
Tobacco
Other
primaries
2007
469,424
9,192
92,994
69,942
66,250
30,642
163,346
2008
557,560
14,928
113,942
98,089
57,800
29,803
109,723
2009
546,701
12,888
99,473
62,714
73,612
38,429
124,452
2010
607,765
13,126
131,476
89,139
66,070
37,142
98,222
2011
740,421
13,810
162,163
179,534
82,690
44,161
146,225
2012*
70,941
1,297
9,042
17,261
7,815
2,757
7,020
*Until January 2012
Non-Traditional Industrialized Products
In period 2007-2011 and January 2012, the main non-traditional industrialized
products exported by Ecuador to the world are constituted mainly for canned
fish, vehicles, metal manufactures, extracts and vegetable oils, juices and
canned fruits, textile manufactures and fishmeal.
Graph N.6
20
Exports of Non Traditional Industrialized products
USD
thousands 2007-2012*
Canned fish
Vehicles
Extracts and vegetable oils
Leather, plastic and rubber manufacture
Other textile manufacture
Plywood and pressed
Banano elaborated
Other sea products
-
Othe
r sea
prod
ucts
200,000 400,000 600,000 800,000 1,000,000
Leath
Paper
Othe
er, pl
Extra Othe
Garn
and Plyw
r Che astic Juice
Bana
cts
r
cardb ood
textil mical and s and
ment
Fish
and metal Vehi
no
s of
oard and
e and rubb cann
elabo
Flour
veget manu cles
manu press
manu Medi er ed
textil
able factu
rated
e
factu ed
factu cines manu fruit
oils re
re
re
factu
re
Othe
r Cann
indus ed
trializ fish
ed
2012* 1,5
2011 23,
780
6,3
5,1
8,1
7,3
27,
85,
68,
51,
132 167 219 228 176 410 319 416 590 935
2010
18,
22,
38,
47,
48,
97,
169 190 159 197 196 332 374 572 603
2009
17,
21,
36,
34,
43,
74,
141 118 128 180 210 276 256 331 632
2008
19,
29,
32,
49,
50,
65,
105 122 158 166 254 338 411 438 906
2007
15,
30,
41,
46,
56,
61,
52,
6,6
19,
12,
8,8
27,
23,
18,
34,
76,
115 154 150 158 303 382 403 670
*Until January 2012
Main Ecuador exported products to the world in 2011
The following chart shows the main Ecuador exported products to the world.
The main export products have a similar tendency of the last five years
including Oil, Banana, Shrimps, Roses, Cocoa and Tunas.
Chart No.13
21
MAIN ECUADOR EXPORTED PRODUTS TO THE WORLD
2011
USD thousands
FOB USD
Subheading
Description
thousand
2709.00.00.00
RAW OIL OR BITUMONOSO MINERAL BITUMINOUS
11.802.653
0803.00.12.00
BANANA «CAVENDISH VALERY» TYPE
2.145.034
0306.13.91.00
SHRIPMS
1.097.052
2710.19.22.00
FUEL OILS
1.027.032
1604.14.10.00
TUNA
563.741
0603.11.00.00
ROSES
503.580
1801.00.19.00
OTHERS CRUDI COCOA
471.082
1604.20.00.00
OTHER PREPARATIONS OF FISH AND CANNED
243.283
1511.10.00.00
BULK OIL
220.460
OTHER TRANSPORT GOODS VEHICLES OF PISTON ENGINE, ON
8704.21.10.90
DIESEL TOTAL WEIGHT 4,537 T.
160.387
2101.11.00.00
EXTRACTS, ESSENCES AND COFFEE CONCENTRATES
143.157
7108.12.00.00
THE OTHER SHAPE OF GOLD IN THE ROUGH
131.305
2301.20.11.00
FISH FLOUR WITH A FAT CONTENT OVER 2% BY WEIGHT
117.151
0901.11.90.00
OTHER UNROASTED COFFEE DECAFFEINATED
115.165
1511.90.00.00
OTHER PALM OIL AND ITS FRACTIONS
81.715
Other products
3.522.406
Products Total
22.345.205
% share
2011
52,82%
9,60%
4,91%
4,60%
2,52%
2,25%
2,11%
1,09%
0,99%
0,72%
0,64%
0,59%
0,52%
0,52%
0,37%
15,76%
100,00%
Main Export markets (Countries)
United States is the main export market representing 44.48% from total exports
in 2011, including oil. Other important markets of Ecuador are Panama (4.64%),
Peru (7.62%), Venezuela (6.60%), Chile (4.02%), Colombia (4.58%), Russia
(3.13%), Italy (2.60%), Dutch Antilles (2.11%), and Spain (1.86%).
Graph No.7
Main export markets of Ecuador
%Share 2011
2.11%
2.20%
2.60%
3.13%
4.02%
1.86%
15.77%
4.58%
44.78%
4.64%
7.72%
6.60%
UNITED STATES
PERU
VENEZUELA
PANAMA
COLOMBIA
CHILE
RUSSIA
ITALY
GERMANY
NETHERLANDS ANTILLES
SPAIN
OTHER COUNTRIES
Total exports, including oil
Main Imported Products and Tendencies
22
The following graph shows the composing of imports of Ecuador in 2011,
having raw materials the greatest percentage (31.51%), of which 76%
correspond to industrial purposes, 13% to agricultural purposes and 11% to
construction materials.
The 25.47% of Ecuadorian imports correspond to Capital Goods of which 1.7%
is destined to agricultural purposes, 69.1% to industrial purposes and 29.2% to
transport equipments.
Consumer Goods represented 20.67% from total imports of 2011, from which
57.6% corresponded to non-lasting goods and 42.4% to lasting goods.
Fuels and lubricants represent another important item from Ecuadorian imports
representing 22.17% in 2011
Graph No. 8
Detail of Ecuador Imports
% Share 2011
Detail of Raw Material
% Share 2011
0.18%
11%
Industrial
13%
22.17%
31.51%
Agricultural
76%
20.67%
25.47%
Construction
Material
Raw material
Capital Goods
Consumption Goods
Fuel and Lubricants
Various
The Ecuadorian imports reflect a growing trend between 2007 and 2008 period,
with a slight fall in 2009 that can be alleged to the world crisis in this year,
recovering in 2010 and 2011. But in the first month of 2012 a decrease on
imports was registered.
Graph No.9
23
USD thousands
Ecuador Imports by Use or Economic Destination
USD thousands
2007-2012*
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
-
Capital
Goods
3,319,344
Consumpt
ion Goods
2,901,330
Fuel and
Lubricants
2,578,324
Various
2007
Raw
Materials
4,093,484
2008
5,827,571
4,501,472
3,852,039
3,357,830
13,017
2009
4,669,806
3,926,591
3,094,035
2,338,309
42,715
2010
5,914,771
5,129,089
4,116,470
4,042,823
75,560
2011
7,231,015
5,844,619
4,742,920
5,086,539
40,713
2012*
638,117
549,495
382,764
436,128
4,926
2,759
*Until January 2012
Main suppliers (Countries)
When making an analysis per continent must be noted that America is the main
supplier of Ecuador representing 66.8% from the total imported. Asia is the
second continent from where Ecuadorian imports come fromrepresenting
21.1%, Europe 10.7%, Africa 0.6% and Oceania 0.1% in 2011.
The unbundled of imports by economic Areas and countries are shown in the
following chart
Chart No.14
24
MONTHLY IMPORTS BY CONTINENT, ECONOMIC AREA AND COUNTRY
Millons of dollars/FOB Value
2010
CONTINENT, ECONOMIC AREA AND COUNTRY
Jan.-Dec.
2011
%Share 2010
Jan.-Dec.
%Share 2011
GENERAL TOTAL
19.278,7
AMÉRICA
13.310,3
69,0%
15.339,2
66,8%
5.389,9
28,0%
5.782,6
25,2%
96,9
0,5%
82,7
0,4%
LATIN AMERICAN ASSOCIATION OF
INTEGRATION (ALADI)
Argentina
Brasil
Chile
México
Venezuela
Other countries
6.078,0
529,2
805,8
533,9
691,3
510,9
61,3
31,5%
2,7%
4,2%
2,8%
3,6%
30,7%
2,2%
3,9%
2,6%
3,6%
2,6%
7.047,9
503,1
889,1
588,7
822,7
904,8
94,1
ANDEAN COMMUNITY
Bolivia
Colombia
Peru
2.945,6
17,9
1.950,0
977,6
15,3%
0,1%
10,1%
5,1%
3.245,6
8,0
2.141,6
1.096,0
14,1%
0,0%
9,3%
4,8%
REST OF AMERICA
1.745,6
9,1%
2.426,0
10,6%
EUROPE
1.895,5
9,8%
2.460,0
10,7%
EUROPEAN UNION
Belgium and Luxemburg
France
Netherlands
Italy
Unided Kingdom
Germany
Spain
Other countries
1.727,7
283,3
85,0
124,5
259,6
73,4
451,7
253,1
197,1
9,0%
1,5%
0,4%
0,6%
1,3%
0,4%
2,3%
1,3%
1,0%
2.186,6
299,4
130,4
220,3
268,7
137,9
539,4
306,9
283,5
9,5%
1,3%
0,6%
1,0%
1,2%
0,6%
2,4%
1,3%
1,2%
84,8
0,4%
133,9
0,6%
UNITED STATES (2)
COMMON CENTRAL AMERICAN MARKET
(MERCOSUR)
ASOC.EUROPEAN ASSOC. OF FREE TRADE
REST OF EUROPE
22.945,8
0,4%
66,4
0,3%
139,5
0,6%
3.846,5
155,4
652,9
1.438,4
826,7
773,1
20,0%
0,8%
3,4%
7,5%
4,3%
4,0%
4.837,0
185,6
623,4
2.129,8
861,9
1.036,4
21,1%
0,8%
2,7%
9,3%
3,8%
4,5%
AFRICA
83,8
0,4%
OCEANIA
26,6
0,1%
OTHER COUNTRIES NEP.
116,1
0,6%
141,6
27,9
140,1
0,6%
0,1%
0,6%
ASIA
Taiwan
Japan
China
South Korea
Other countries
25
3. MARKET ACCESS
a. General Market Access Requirements
i.
Import Processing (customs clearance, necessary documentation)
Export Processing5
Both Ecuadorians and foreigners resident in the country can perform imports,
as individual or corporate.
Statement of Export
For every export the Single Custom Statement of Export must be presented and
filled in according to instructions contained in the Export Dispatch Manual 6 in
the custom district where the export is transacted.
Documents to present
Exports must be accompanied of the following documents:






Exporter RUC (in Spanish)
Original commercial invoice
Previous authorizations (when necessary)
Certificate of Origin (when necessary)
Registry as exporter through the web page of the Customs National
Service of Ecuador
Document of Transport
The paperwork of an export inside Customs comprises two phases:
Pre-shipment Phase
Starts with the transmission and presentation of the Shipping Order (code 15),
which is the document that records data with the previous intention of
exporting. The exporter or his Customs Agent must electronically transmit to
the National Service Customs of Ecuador the data of export intention, using for
that effect the electronic format of the Shipping Order, published on the
customs web page, in which data related to export is registered such as:
________________________________
5Referencehttp://www.aduana.gob.ec/contenido/procExportar.html. Considerate that from April 2012,
the new system called ECUAPASS will take effect, its complete implementation will be ready in 2013, with
this some procedures would change in so far exports and imports
6 The manual can be downloaded from the customs web pagewww.aduana.gob.ec
26
exporter data, goods description, quantity, weight and provisional invoice.
Once the Shipping Order is accepted by the Interactive System of Foreign Trade
(SICE in Spanish), the exporter is enabled to move the shipment to the custom
precinct where the entrance to Primary Zone will be registered and goods will
be shipped to be exported to the final destiny.
Post – Shipment Phase
Definitive DAU, in Spanish, is presented (Code 40), which is the Customs
Statement of Export made, after shipment.
After goods have entered to Primary Zone for their export, the exporter has 15
working days to regulate the export, with the transmission of definitive DAU of
export.
In case of air exports of perishable products in fresh condition, the deadline is
15 working days after the due date (last day of the month) of the shipping
order.
Previous to electronic sending of definite export DAU (in Spanish), the cargo
carriers must send data on export cargo manifests with respective transport
documents.
SICE 7 (in Spanish) will validate DAU information against with that of Cargo
Manifest. If process of validation is satisfactory, a message of acceptation will be
sent to the exporter or customs agent with the endorsement of DAU.
Once DAU numerated, the exporter or customs agent will present before the
Export Department of the District from where goods exited, the following
documents:






Printed DAU
Printed Shipping Order
Definite Commercial Invoice(s)
Document(s) of Transport
Original of Previous Authorizations (when applicable)
Payment to CORPECUADOR (for banana exports)
Customs Broker
According to the new Customs regulation disposed on the Organic Code of
Production, Commerce and Investments, it is not necessary the use of a customs
agent service for the import and export paperwork, except the consumption
imports.
______________________________
7 SICE Interactive System of Foreign Trade, currently SENAE is working to change the system, project that
will begin its first phase in December 2011
27
Customs Requirements to be an Exporter



HaveSingleRecord of Taxpayers (RUC in Spanish), granted by Internal
Revenue Service (SRI in Spanish),
Be registered on the Web Page of Customs National Service of Ecuador
(SENAE in Spanish)
The National Council of Foreign Trade and Investment (COMEXI)8
established that exporters additionally be registered with the Ministry of
Industries and Competitiveness when are referred to:
- Exports of scrap and ferrous and nonferrous waste
Resolution 400 of September 13, 2007 and published in the
Official Record Supplement 223 of December 17, 2007
- Leather and fur exports. Resolution 402 of September 13, 2007
and published in the Official Record 222 of September 29, 2007
Import Requirements 9
A consumption Import is the nationalization of foreign goods entered to the
Country for its free disposition; definite use or consumption, once respective
payment of foreign trade taxes done. Every individual or corporate,
Ecuadorians or foreigners based in the country are allowed to import.
Before importing must follow the following steps:
1. Get the Single Record of Taxpayers (RUC in Spanish) expedited by the
Internal Revenue Service (SRI in Spanish)
2. Be registered as importer before the Customs of Ecuador, entering the
web page: www.aduana.gob.ec, link: OCE’s (Foreign Trade Operators),
menu: Register of Data. Once its registered approved, you can access to
services offered by Interactive System of Foreign Trade (SICE in Spanish)
3. Within SICE, register your authorized signature of Andean Statement of
Value (DAV in Spanish), option: Administration, Modification of General
Data
4. Once previous steps are done, you are enabled to import, however it is
necessary to determine that the product to import meets the Law
requirements. This information is established in Resolutions No. 182,
183,184 and 364 of the Council of Foreign Trade and Investment
(COMEXI in Spanish), www.comexi.gov.ec, link: Resolutions.
If required, you can search the advice and services of a Customs Agent, who
will do the paperwork of customs clearance of your goods. The list of Customs
Agents authorized are found in the web page: www.aduana.gob.ec
__________________________
8 Currently named COMEX by the code of Production, which executive secretary office is in charge of the
Ministry Coordinator of Production, Competitiveness and Employment.
9 Taken from web page of customs, procedures on how to import www.aduana.gob.ec
28
As a result of your import, the Customs Agent or the Importer must do the
Single Customs Statement (DAU in Spanish); send it electronically through SICE,
and physically present it in the District of arrival goods.
The following documents attached to the Customs Statement are the following
10:
a) Accompanying documents, and
b) Supporting documents
Accompanying Documents
Constitute accompanying documents those called previous control that must be
processed and approve before shipment of the goods of import. This demand
must be known in the legal dispositions that the regulator body of foreign trade
establishes for that effect. The accompanying documents must be presented,
physically or electronically with the Customs Statement, when they are
demanding.
The penalty application established in article 190 literal i) from the Organic
Code of Production, Commerce and Investment, not exempt from the
presentation of the accompanying document for the release of goods,
consequently punishment will be imposed alongside with the Customs
Statement.
Supportive Documents
The supportive documents will constitute the base of the information of the
Customs Statement to any regime. These original documents, whether
physically or electronically, must be kept in the declarant file or his Customs
Agent at the moment of presentation or transmission of the Customs Statement
and will be under his responsibility according to what is determined by law.
a) Transport Document.- Constitutes before Customs the instrument that
credits the property of goods. This could be endorsed until before the
transmission or presentation of Customs Statement to consumption
accordingly. The endorsement of the transport document, implies the
endorsement of other accompanying documents except those of personal
character like CONSEP (in Spanish) authorizations, Ministry of Defense,
among others.
________________________________
10 Art. 71, 72 and 73 of the Regulation of Title V of Customs Facilitation for Trade
29
b) Commercial Invoice or document that credits the commercial
transaction.- The commercial invoice will be for the Customs the support
that credits the commercial transaction for the goods import or export.
Therefore, must be an original document even if it is digital, definite,
issue by the seller of imported or exported goods and contain the
provided information in the pertinent rules and his data could be
checked by the customs administration. His acceptance will be subject to
valuation norms and others related to Customs Control. For import of
goods purposes that do not have a commercial invoice, will show instead
the document to prove the amount of imported goods at customs,
according to the nature of import. The lack of presentation of this
supportive document before the customs administration, will not
prevent the release of goods, however the application of the first method
will be discarded according to the international rules in force.
c) Certificate of Origin.- It is the documents permitting tax liberation to
foreign trade in cases related to protection of agreements or international
treaties and supranational rules. Its format and information contained in
such documents will be given according to regulations of enabled and
acknowledged bodies on the respective agreement.
d) Documents that the General Direction of the National Customs Service of
Ecuador or the regulating competent foreign trade body consider
necessary for the control of the operation and verification of the
compliance with the corresponding regulations, and provided they are
not accompanying documents.
These supporting documents must be transmitted or be presented alongside
with the Customs Statement of Goods, according to the corresponding mode of
dispatch and dispositions that the General Direction of National Service of
Ecuador dictates to that effect. Notwithstanding the previously mentioned
supporting documents, the Customs Statement must attach the rest of necessary
documents for the application of provisions regulating the declared customs
regime and those mandatory according to domestic and international norms
that might arise.
The Customs National Service of Ecuador could request the declarant, when
necessary, the translation of the information established on the supporting or
accompanying documents.
Regarding the insurance policy, it is not an accompanying document neither
supportive and won’t be required in office, but it will be part of the calculus of
the tax base. If doesn’t count with the physical document nor a stated value by
this concept or the policy doesn’t cover the entire import, a presumptive
30
amount equivalent to 1% of the non-covered imported goods value will be
calculated.
Important Data
Once accepted the electronic transmission of the Single Customs Statement
(DAU in Spanish) in SICE, determining the way of gauging through the application
of risk analysis criteria; being this: physical, documentary or automatic (green
way)

“In the imports, the statement will be presented at the Customs of
destiny from 7 days in advance to 15 working days after the arrival of the
goods” In case of not presenting DAU within that term, goods will be
considered into tacit abandonment.

To reduce the time of customs clearance of your goods, it is
recommended to use the Early Release. For more information about
Early Release check the web page: www.aduana.gob.ec
Taxable Value11.- The taxable value of the customs duties is the customs value
of the imported goods. The customs value of the goods will be the transaction
value of them plus transport and insurance costs, determined according to
dispositions that rule the customs valuation.
The insurance cost will be part of the customs value but the insurance policy
won’t be a compulsory supportive document exigible to custom statement.
When the taxable value of the customs duties cannot be determined, according
to the value of transaction of the imported goods, it will be determined
according to secondary methods of valuation provided in the norms regulating
the customs value of goods. For the calculation of taxable value, the amounts
expressed in foreign currency will be converted to currency of legal use at
exchange rate in force at date of presentation of the customs statement.
For tax calculation the sum of the following values are considered




FOB PRICE* (Value supported with invoices)
FREIGHT (Value of International Transport)
INSURANCE (Premium value)
PLUS OTHER ADJUSTMENTS DETERMINED BY ARTICLE 8 OF THE
AGREEMENT ON VALUATION OF THE WTO (OMC in Spanish)
Once the value is obtained, the calculation of the following taxes could be done:
_______________________
11 Art.109 from the organic code of Production, Trade and Investments
31
-
AD-VALOREM (Tariff charged to goods)Tax managed by Customs of
Ecuador. Variable percentage on the customs value of imported goods,
according to type of goods.
-
FODINFA,in Spanish (Development Fund to Infancy) Tax managed by
INFA (in Spanish) 0.5% of CIF value
-
ICE, in Spanish (Tax to Special Consumptions)Managed by SRI, in Spanish.
Variable percentage according to imported goods (Check SRI web page:
www.sri.gov.ec, link: Taxes)
-
SAFEGUARDS FOR BALANCE OF PAYMENT12
There are three kinds:
(Ad-Valorem Surcharge, Special Additional Duty Surcharge to the
current duty tariff, and Quantitative Restriction Value - Quota) Tax
administrated by the Ecuadorian Customs.
Temporary restrictions
applied only to some imported goods.
- IVA in Spanish (Value Added Tax) Administrated by the SRI. 12% of
thetotal from:VALUE IN CUSTOMS + ADVALOREM + FODINFA + ICE
+ SAFEGUARD
- TAX ON THE CAPITAL OUTFLOW
Tax administered by the SRI, 5%of the Value in Customs.
The total amount to be paid by the importer is the total of the before
mentioned taxes.
ii.
Import Prohibited Products
Import prohibited products are those established by the COMEXI, now known
as COMEX, in its resolution 18213. It is important to look at the COMEXI, now
COMEX14 resolutions, which contain modifications to the list of this kind of
goods. The SENAE´s website may be consulted for further details regarding
any specific product.
____________________________
12these are taken as trade defensive measures when they meet the conditions for their application, which should be
notified to the OMC opportunely.
13 Resolution 182 contains the list of Import prohibited goods, however it is advised to check the website
www.comexi.gob.ec resolutions link, in order to find more information.
14 Links: COMEX:
http://www.mcpec.gob.ec/index.php?option=com_content&view=article&id=1287:resolucionescomex&catid=9:mcpec&Itemid=57. COMEXI: http://www.comexi.gob.ec/comexi/resoluciones2008.shtml
32
Chart No.15
List of tariff subheadings of Import Prohibited Goods
CODE
EXCECUTIVE
DESCRIPTION OF GOODS
REMARKS
Ord. No. 2429
2524,00,90
2903,51,10
2903,59,10
2903,59,20
2903,62,10
- Other
- - - Lindane (ISO) gamma isomer
- - - Chlordane (ISO)
- - - Aldrin (ISO)
- - - Hexaclorobenzene
2903,69,00
- Other
2908,90,00
2910,90,10
2910,90,20
2918,90,30
2919,90,90
2920,10,10
2920,10,20
Other
- - Diedrin (ISO) (DCI)
- - EndrÍn (ISO)
-2,4,5-T (ISO) (2,4,5-trichlorophenoxyacetic acid
-Other)
For PhosphateTris (2,3Dibromo Propyl Only
- - Methyl Parathion (ISO)
- Ethylic Parathion
- From the kind used in tourism vehicles including
los family type {<<break>> or <<station wagon>>} and racing
cars)
- - For the kind used in buses or trucks
- - Other
- Used Tires
- Reptile
E
-Reptile
Reptile
Worn Clothing
Only worn clothing and shoes
Only for equipment containing CFCs using
- -With refrigerating unit not exceeding 30,000 BTU/hour
R-12 o R-502 refrigerants
- - Other
- From the kind used in vehicles for their occupants
- - - With refrigerating unit not exceeding 30,000
BTU/Hour
4012,11,00
4012,12,00
4012,19,00
4012,20,00
4103,20,00
4106,40,00
4113,30,00
6309,00,00
8415,10,10
8415,10,90
8415,20,00
8415,81,10
For Crocidolite only
For PolichlorinatedBiphenyls; PolybrominatedByphenils;
PolichlorinatedTerphenyls Only
For Pentachloro Phenol Only
;
-
-
Source: Ecuador Foreign Trade and Investment Council. COMEXI for its acronym in Spanish
Chart No.16
List of Subheadings of Import Prohibited Products
33
CODE
EXCECUTIVE
REMARKS
ORD.No.2429
8415,81,90
-
- - Other
8415,82
-
- Other, with cooling equipment
8415,82,20
8415,82,30
-
:
- - Not exceeding 30.000 BTU/Hour
- - - Exceeding 30,000 BTU/hour but not exceeding
240,000 BTU/hour
8415,82,40
- - - Exceeding 240,000 BTU/hour
8415,83,00
- - without cooling equipment
8418,10,00
Combined refrigerator-freezers with separate
outside doors
8418,21,00
- - Of compression
8418,22,00
- - Of absorption, electrical
8418,29,00
8418,30,00
8418,40,00
8418,50,00
8418,61,00
8418,69
-
- - Other
- Horizontal Freezers (Chest type), with
lesser or same capacity as 800 I
- Vertical Freezers (cabinet type) with capacity
of 900
- Other cabinets, chests and similar furniture for
theproduction of cold.
- - Compression refrigeration units in which the compressor
is constituted by an heat exchange.
-
- - Other
-
s R-12 o R-502 refrigerants
Source: Ecuador Foreign Trade and Investment Council. COMEXI for its acronym in Spanish
Chart No.17
List of Subheadings of Import Prohibited Goods
CODIGO
DECRETO
EJE. No. 2429
8418,69,11
- -- Of compression
8418,69,12
- - - Of absortion
8418,69,91
8418,69,92
8418,69,99
8418,91,00
-
- - - For the production of cold
- - - Water fountains
- - - Other
-
- Furniture created for the production of cold
-
8418,99,10
- - - Pate evaporators
8418,99,90
- - - Other
REMARKS
9502,10,00,10 - - Doll called "Mary dead row”
9601,10,00
- Ivory and its manufactures
9601,90,00
- Other
Source: Ecuador Foreign Trade and Investment Council. COMEXI (in Spanish)
34
iii. Samples regime
Samples are defined in the Production Code as free of taxes within the limits
imposed by Customs. Express mail or courier shipments, categorized as B,
cannot exceed USD $400 of value and 4 Kg of weight, following conditions
contained in the Courier Regulation15.
The Regulation for the Book V de Production Code16 notes:
“Art. 14.- Definition.- Samples without commercial value are any imported or
exported goods, which customs value won’t exceed four hundred dollars, or
three units per item or per commercial presentation, considering the
correspondent unit of measure of the specific subheading of the National
Import Tariff; which is not intended for sale and meet the following conditions:
a) That it is clearly identified as sample without commercial value or that it
can be shown that the goods are not intended for sale; and,
b) That it is intended to be used in market studies, research, development,
laboratory tests, trials, or for obtaining prior control documents or any
similar requirements”
“Art. 15.- Procedure.- The Importer shall submit the Single Customs
Declaration (DAU for its acronym in Spanish) together with the supporting and
accompanying documents according to the legal norms in force.
If as a result of Customs Control it is determined that the goods are not meeting
characteristics contained in the previous article, a new liquidation will me made
for those taxes that were not declared opportunely, regardless of the sanctions
that may correspond.
b. Specific Requirements for Import products:
i.
Tariff Requirements (tariff system, average tariff applied, Tariff
preferences to Ecuador)
Ecuadorian Tariff System
Ecuador, as a member of the World Trade Organization, notifies this organism
the consolidated tariff from the correspondent tariff universe for goods destined
to the national territory. In the past three years, as a policy of incentive to the
____________________________
15 http://www.aduana.gob.ec/contenido/resoluciones.html Revisar resoluciones 4-2008-R4/24-2008-R1 / 1-2008 R3
16 Book V regarding Foreign Trade facilitation, which governs the Ecuadorian National Customs Service SENAE (for its
acronym in Spanish).
35
country’s production, nearly 3000 subheadings have been deferred to pay 0%
tariff 17.
There are also Import Quotas for several subheadings as it happens with tires
according to the COMEXI Resolution 541 2010, in which a tariff deferral to 0% is
granted for some companies for a specific number of tires.
In Ecuador mixed tariffs are also applied within its tariff structure. As the case
of the televisions sets, COMEXI Resolution 575/2010, in which a direct fixed
value and an ad valorem are established. Tires, footwear and fabrics are some
of the goods these measures apply to.
Ecuador applies the Andean System of Agricultural Price Bands with the main
purpose of stabilizing the import costs of a special Group of agricultural
products, usually characterized by a striking instability of their international
prices, or serious distortion of the same. To that end member countries shall
apply to imports from third countries of such products, variable taxes in
addition to the Common External Tariff (AEC for its acronym in Spanish), when
international reference prices are below certain minimum levels. At the same
time, member countries shall apply discounts to the AEC to reduce the import
costs when the international reference prices are above certain maximum levels
18.
Tariff preferences in Ecuador
Ecuador maintains a system of tariff preferences with the Andean Community,
conformed by Peru, Colombia and Bolivia; and with Venezuela, even though
this country Leith the Group in 2006. Preferences with Ecuador were renewed
in April 2011 in COMEX Resolution No 7, from April 22 2011 until a bilateral
treaty is signed.
The Generalized System of Preferences GSP is granted by several developed
countries, as The United States of America, The European Union states and
Japan, covering member countries of the Andean Nations Community (CAN
for its acronym in Spanish), the Central American Common Market (MCCA for
its acronym in Spanish) and Panama. These benefits, however, are not
extended to all the export offer of a given country, but are unilaterally selected
by the most developed country and subject to review periodically.
Another scheme of Tariff Preferences is the Andean Trade Preference for Drugs
Eradication Act) ATPDEA, which is a tariff benefits program that seeks to
______________________________
17 Check Comexi website www.comexi.gob.ec
18 Taken from the Andean Nations Community’s Decision 371, Art 1 In regard of the Andean System of Price Bands
36
increase the trade flow between the beneficiary countries and the United States
and to generate employment and investment. Afore mentioned, in order to
strengthen the economies of the recipient countries and to promote political,
economic and social stability in the area, to implement development
alternatives sustainable in the long term.
In the same way such Preferences shall contribute to consolidate democratic
values, principles and practices in the region, as well as continue the fight
against drug trafficking and terrorism. The program grants preferences to
almost 3947 subheadings at the 6 digits level19. There is also in force a GSP
Plus with the European Union until 2014 granting additional preferences to a
diversity of products in benefit or our country.
Ecuador maintains other Trade Agreements, such as the CAN-MERCOSUR,
conformed by Argentina, Brazil, Uruguay and Paraguay. The Economic
Complementation Agreement, under the ALADI with Mexico ACE 29, with
Cuba ACE 46, with Chile ACE65, with MERCOSUR 20ACE 59.
Currently, there are completed negotiations with Guatemala but those are not
yet in force. There are formal conversations also with the European Union,
Canada, Russia, Turkey, and Countries in the Middle East and Central America.
Regarding to imports made by Ecuador, it shall be able to apply to agreements
in force between the ALADI countries, through the Economic Complementation
Agreement, CAN –MERCOSUR, or any other of regional nature, even with
deferred tariffs, which must be specified Customs Declaration using codes or
Tnan (Additional codes used for different trade measures).
To search the tariff to be paid for each imported product as well as the required
documentation prior shipment or customs clearance, the Foreign Trade
Integrated System SICE (in Spanish) must be consulted, typing the national
subheading which corresponds to the good to be imported. Information
available at following link:http://sice1.aduana.gob.ec/ied/arancel/index.jsp .
Economic Customs Procedures
Import Procedures.21
_____________________________
19 In order to find goods with tariff preferences, following websites must be visited:
http://exporthelp.europa.eu/thdapp/index_es.html / ; www.comunidadandina.org ; www.aduana.gob.ec
20 To read more about Trade agreements go to: http://www.aladi.org/nsfaladi/textacdos.nsf/vpaises/ecuador
21 Taken form theBook V “About the systemic competitiveness and Customs Facilitation”, of the Production Trade and
Investments Code; Art. 147 and the following ones.
37
Imports for consumption .- It is the Procedure under which goods imported
from abroad or from an Special Economic Development Zone may circulate
freely inside the customs territory, with the purpose of staying there in a
definitive way, alter paying all taxes and duties, surcharges and sanctions if
any, and alter fulfilling all the customs obligations and formalities.
Temporary Admission for re-exportation in the same condition.- the present
customs Procedure allows the introduction to the customs territory of
determined imported goods to be used with a determined end, with partial or
full exemption of payment of import taxes, duties and surcharges; that must be
re-exported without experimenting any alteration, excepting the normal
depreciation caused by the use of the same, within a determined term,
according to the Regulations22.
Temporary Admission for active improvement.- the present customs
Procedure allows the entry to Ecuadorian customs territory of goods,
exonerated of the payment of import taxes, duties and surcharges; which are
destined to be re-exported once they have been subject to an improvement
operation, under the form of compensating goods.
Industrial facilities can be authorized to operate habitually under this
Procedure, general warranty provided, fulfilling requirements specified in the
Production Code Regulations.
The compensatory goods obtained from the application of present Procedure
can be subject to Procedure change, to import for consumption, paying taxes for
the imported component of the before said compensatory product.
Replacement of goods with tariff franchise.- Customs Procedure that allows to
import of goods identical or similar in kind, quality and technical
characteristics, with exemption of duties, import taxes, and surcharges,
excepting of applicable fees. These goods have been in free circulation and
have been used to obtain goods previously exported permanently.
Transformation under Customs control.- the present customs Procedure
allows the entry to Ecuadorian customs territory of goods to be subject of
operations to modify their condition or kind, for the farther import for
consumption of the obtained products of such operations, exonerated of the
payment of import taxes, duties and surcharges; with the application of taxes,
duties and surcharges corresponding to the tariff nature of the finished product.
Customs Warehouse.-Under this customs Procedure imported goods are stored
for a period of time under customs control in a facility enabled and
_____________________________
22Regulations to the Title of Customs Facilitation for the Trade, f book V of theProduction Trade and Investments
Code; access at: http://www.aduana.gob.ec/archivos/S452_20110519.pdf
38
acknowledge to this end, without payment of taxes, duties or applicable
surcharges.
Re-Import in the same condition.- the present customs Procedure allows the
import for consumption, exonerated of the payment of import taxes, duties and
surcharges, of goods that have been exported, only if these goods have not been
subject to any transformation, elaboration or repairing abroad, and subject to
the payment of every amount due for refund or return of any conditional
exoneration of taxes and fees or any subsidy or other amount granted at the
time of the export.
Exports Procedures
Definitive Export.- the present procedure allows the definitive departure of
goods of free circulation, out of the common customs territory or to an Special
Economic Development Zone located within Ecuadorian customs territory.
Temporary Export for re impart in the same condition.- the present Procedure
allows the temporary departure of goods of free circulation with determined
end and term, during this period they shall be re imported without been
subject to any alteration, excepting the normal depreciation caused by the use
of the same.
Temporary Export for passive improvement.- .- the present Procedure allows
goods in free circulation in the customs territory to be temporarily exported out
of customs territory or to an Special Economic Development Zone located
within same territory, to its transformation, elaboration or repairing and then re
imported as compensatory products, with exemption of correspondent taxes
according to the conditions foreseen in the Regulations to the Organic Code of
Production, Trade and Investments23.
Other Customs Procedures
Conditioned Return.- Conditioned Return is the Procedure that allows to get
total or partial automatic return of the taxes to the foreign trade paid by the
importer of the goods that are exported within the terms and percentages
foreseen in the regulations to the Organic Code of Production, Trade and
Investments, in the following cases:
a. Those used in the country in a transformation process;
b .Those incorporated to the goods; and,
c. The packages or conditionings.
____________________________
23 Check the Regulation to the Organic Production, Trade and Investments Code, .in regard what contained in Book V,
published in the Official RecordNo 452 of May 19th 2011
39
The process of conditioned devolution return of taxes will be conducted
completely by the Customs National Service. This way, the customs authority
will return all foreign trade taxes that correspond, and then will settle
accounting wise those amounts with the other authority holder of the returned
taxes, who must be part or the interconnected system of foreign trade single
electronic window.
The National Customs Service of Ecuador through its Electronic system will
make the correspondent return, without prejudice to the tax payer to make an
administrative claim, if it considered itself injured by this act.
Free Stores.- The Free Stores Procedure allows the storage and sale of national
or foreign goods to passengers leaving the country or arriving from abroad, at
International ports and airports, without paying any foreign trade taxes.
Special Stores
According to the applicable international legislation, special stores of goods
destined to theprovisioning, repairing and maintenance of vessels, aircrafts and
cargo units destined to provide public service of transportation of passengers
and cargo can be authorized. Spare parts and for the repairing, conditioning or
adjustment o such vessels may also enter these stores free of all foreign trade
taxes.
The General Director will have the attribution to establish simplified
formalities.
International Trade Fairs.- present customs Procedure allows the entry of
goods of permitted import, exonerated of the payment of import taxes, for a
determined term, destined to be exhibited in previously authorized
compounds, as well as imported to consumption goods with end of
degustation, promotion and decoration, free of foreign trade taxes, prior to the
fulfilment of the formalities foreseen in the Regulations.
Customs Transit.- Under this procedure, goods are transported under Customs
Control from a district office to its final destination abroad.
Back Shipment.- Manifested goods that remain in a temporary deposit waiting
to Procedure or customs destination assignment may be shipped back from
customs territory under this Procedure.
Even though the goods have already been declared to a customs Procedure,
they can be shipped back when customs control determine a change in the tariff
classification that leads to the requirement of prior control documentation or
other kind, which were not required according to the originally declared by the
importer, when this not become an obstacle to the legal import of the goods.
40
No back shipmentshall be authorized when a well based presumption of a
felony has arisen regarding the import goods.
Back shipment will be mandatory in case of goods of prohibited import with
exception of clothing, perishables and educational material, which shall be
donated to the State Secretary in charge of Social Policy. This Procedure will be
executed through simplified procedures according to what stated in the present
Regulations.
Transfer.-It is the customs procedure which under the goods that have been
picked up from the arrival mean of transportation are transferred and loaded to
the vessel for its departure of the customs territory. This transfer must take
place under customs control and will be executed by through simplified
procedures according to what stated in the Regulations.
Procedures of Exception
Postal Traffic.- The import or export for consumption of the shipments of
postal packages which customs value does not exceed the limit established in
the Regulations will be dispatched trough simplified formalities complying the
correspondent International agreements undersigned, according to what
established by the National Customs Service. Shipments or packages exceeding
the established limit shall be subject to the general customs regulations.
Express mail or Courier.- Mail, documents and goods that fulfils what foreseen
in the Regulations dictated by the General Director of the National Customs
Service and not exceeding the limits in it contained, and carried by Express
mails, shall be dispatched through customs with simplified formalities,
according to the rules given by the National Customs Service. Shipments of
Packages which exceed the established limit shall be subject to general customs
regulations.
Border traffic.- In compliance to International agreements, interchange of
goods destined for the use or domestic consumption among the border villages,
will be allowed free of formalities and foreign trade axes, within the geographic
limits determined by the National Customs Service.
Vehicle for a tourists private use.- This is the Procedure that allows the entry
of a Vehicle for private use of a tourist, free of taxes within the terms and
conditions foreseen in the Regulations for the present Code.
Other Exception Procedures.- Passenger’s luggage, household goods and
provisions for vessels or aircrafts will be subject to simplified procedures
according to the Regulations to the present Code and the regulations given by
the National Secretary of the National Customs Service.
41
Change of Procedure.- Goods that have been declared to a Procedure free of
foreign trade taxes can be declared to any other Procedure, before the granted
term concludes. Prior to the fulfilment of the legal requirements, the Procedure
change shall be authorized by competent public servant. The change of
Procedure of goods declared to consumption to any other Procedure is
prohibited.24
Special Zones of Economic Development
The National Government authorizes the establishment of Special Zones of
Economic Development (ZEDE for its acronym in Spanish) as a customs
destination, in delimited spaces of the national territory, for new investments to
settle), with incentives that will be conditioned to the fulfilling of specific
targets established in the COPCI (Organic Production, Trade and Investments
Code).25
The Special Zones of Economic Development will be installed (located) in
delimited geographic areas of the national territory, considering conditions
such as: Environmental preservation, territoriality, potential of each locality,
road infrastructure, basic services, connection with other parts of the country,
among others, previously determined by the governing organism in matter of
productive development and in coordination with the body in charge or the
national planning, and will be subject to an special foreign trade, tax and
financial treatment.
The Special Zones for Economic Development can be of the following kinds:
a. To execute activities of transfer and disaggregation of technology and
innovation. In these zones al kind of venture will be allowed, y
b. To execute operations of industrial diversification that may consist in all kind
of innovating industrial enterprises mainly oriented to the exports of goods
with the use of quality employment. In these zones all kind of activities or
active improvement will be allowed, such us transformation, elaboration
(including installation, assembly and adjustments of other commodities) and
repairing of goods (including restoration or conditioning), of all kind of goods,
mainly with the end of exportation and strategic substitution of imports; y,
c. To develop logistic services such as cargo warehousing with intend to
consolidate, classify, labeling, packaging, repackaging, refrigerating, inventory
administrating, dry dock or interior cargo terminals Management,
______________________
24Special and exemption Procedures have been take from the Production, Trade and Investments Organic Code. Title V.
25 Art. 34 of COPCI
42
coordination of operations of national or international distribution; as well as
maintenance or repairing or vessels, aircrafts and vehicles of inland transport
of goods. This kind of zones shall be established within or adjacently to ports
and airports, or border zones. The exclusive storage of goods shall not be
authorized within this kind of zones.
All logistics services shall be oriented to maximize physical facilities in ports,
airports and border crossings, to increase foreign trade net volume and local
supply, under the allowed parameters in regard to requirements established
present Code. Commodities involved in these processes will diversify the
export offer, nevertheless, it will be authorized their clearance for consumption
in the country, in percentages of production established by the Regulations to
the present Code. These limits do not apply to the products obtained in the
process of technology transfer and technological innovation.
Individuals or legal entities located the special zones will be able to operate
exclusively in one of the above mentioned kinds of venture or will be able to
diversify its operations within the same territory with operations of several of
the above mentioned kind of ventures, provided that they can prove that the
diversity of kinds are necessary to facilitate the productive enchainment of the
sector developed in the authorized zone; and that the ZEDE foresees in its
constitutional deed the authorization to operate under the kind that
corresponds to the activity they intend to start.
ii.
ImportLicenses / Previousauthorizations
The COMEX, formerly called COMEXI, is the body responsible for setting
policies and trade rules. Through resolutions legislated, measures that will be
taken and which affect the Ecuadorian Foreign trade. In the case of prior
authorizations and import licenses, there should be a distinction in imports that
use a special customs regime; it shall only be presented the document of prior
control as a condition for the nationalization and/or local sale of the goods.
The exception of this provision is the prior control that is required for:



hazardous wastes,
the agricultural goods subject to phytosanitary and animal health
requirements,
and the chemicals subject to control of CONSEP.
For these three cases, prior control procedures must be processed and approved
prior to shipment for any customs procedure26.
_________________________
26Resolution 364 of COMEXI
43
For other cases, applicable documents to the list prepared in resolutions 450,
465,585,59527 and other modifications; the documents must be submitted at
destination prior to the nationalization of the goods and before boarding, as in
the case of the first mentioned, they shall be sanctioned with the reshipment in
the event of failure to comply with the provision.
iii.
Tariff requirements:
o Sanitary / Phytosanitary Requirements
Imports of agricultural and animal origin products (other than industrialized
products) can only arrive at ports and airports where the Ecuadorian Agency of
Quality Assurance of the Agriculture (Agencia Ecuatoriana de Aseguramiento
de la Calidad del Agro28, AGROCALIDAD in Spanish) has provided officers of
animal and plant quarantine in relation to the Animal Health Law and plant
health law, and Food Safety Act respectively.
With regard to industrialized food products, the relevant agency to extend
certificates to present to customs, is the National Institute of Hygiene (Instituto
Nacional de Higiene Leopoldo Izquieta Pérez29), who is in charge of granting
health records for all products for human consumption, including medicines,
cosmetics, processed foods, natural products and alcoholic beverages. The
goods set out in resolutions 450-465-585-595 and other modifications; indicate
subheadings that are obliged to submit a control document of registration of
product or importer.
Other institutions such as the armed forces, the Atomic Energy Commission,
among other identified in the above-mentioned resolutions, also issue
documents relating to the goods that are within its competence and that they
must be submitted and attached to the procedure for clearance, otherwise the
nationalization of the goods will not be allowed.
o Standards and Technical Regulations
The Ecuadorian Institute for Standardization (Instituto Ecuatoriano de
Normalización, INEN in Spanish) is the official agency of the State in charge of the
technical standards. INEN is member of the International Organization of
Standards, the Pan American Standards Commission, the International
Organization of Legal Metrology and point of contact of the commission for
CODEX ALIMENTARIUS.
_________________________________
27 In the above resolutions, they point to the competent authority which issued the enforceable documents for customs.
28http://www.agrocalidad.gov.ec/popups/noticia.htm
29http://www.inh.gob.ec/index.php?option=com_content&view=frontpage&Itemid=232
44
The following products require an INEN 1 certification, without prejudice of
what point resolutions 450-465-585-595 and other modifications:
a. vehicles
b. refrigerators
c. kitchens
d. tires
e. electric generators
f. labeling for Textiles, Footwear and accessories
g. construction materials such as cement, ceramic tubes
h. vehicle components such as spark plugs
i. brake fluids
j. contraceptives
The OAE certifies and recognizes laboratories certified in accreditation of
international technical standards organizations. Certificates of conformity
granted to INEN by the importer or manufacturer must be validated and
approved by the OAE.
INEN informs the public through its website30 on the judgments and
enforceable standards for goods, these rules are published in the official gazette
of Ecuador (Registro Oficialin Spanish) to become enforceable.
INEN as the OAE, are subject to the supervision of the Committee of the
Quality Ministry (Comité Interministerial de la Calidadin Spanish), whose
Executive Secretary will reside in the Ministry of Industries and Productivity
(Ministerio de Industrias y Productividad, MIPRO in Spanish).
o Packing, packaging and labeling Requirements
Packaging and packing containers31
The regulation points out the following guidelines for food packaging:

The container must have a shape, capacity and closing seal suitable
for its content. There is no further explanation of what “suitable”
means in this case.

The container must be made of the correct materials, in relation to the
physical and chemical nature of its content.
_____________________________
30 http://www.inen.gov.ec/
31 Ecuadorian Institute for Standardization:http://www.inen.gov.ec/index.php
45

The containers should guarantee the protection, conservation and
appropriate labeling during storage life.
The materials used for containers and packaging for processed foods must be
according to the conditions laid down for each product or group of products in
the Ecuadorian Technical Standards (Normas Técnicas Ecuatorianas, NTE in
Spanish). On the other hand, the regulations for the handling of solid waste
provide that all the material used in the packing containers and packaging must
allow the recycling.
Labeling
INEN sets the requirements concerning the labeling of products. The labeling
must be in Spanish and must include the name of the company, phone, address
and registration number of the company, country of origin, unit, net weight and
health record (when required).
The label must contain the following information and details:













name of product
the ingredients should appear in descending order of predominance
in the products content
trademark
lot identification
business name of the company
net content in units of measurement according to the International
system of Units
health registration number
Creation date
Maximum time of consumption
Storage methods
Retail Price
City and country of origin
Others that the health authority deems appropriate, such as:
alcoholic strength if it is an alcoholic beverage and necessary
warnings according to the nature and composition of the product.
The procedure for obtaining this label is based on presenting the label of the
country of origin and a copy of it to the Institute, adding all the above data
forming the new label, which will be used for the marketing of the product in
Ecuador.
46
c. Requirements of the buyer32:
The behavior of the consumer when choosing products that meet their needs
has changed. Price savings are sought instead of quality; especially in the low
socio-economic sector exist where restrictions on the consumption of certain
items exist. However, there is a demanding population when choosing a
product, specifically the population of high income. For ecological or organic
products, the trend of consumption is not expanded in the national market
since green products have higher costs.
It is important to indicate the growth of the sale of products in the self-service
business. Supermarkets and shopping centers have opened throughout
Ecuador, in which consumers prefer to go to these places to buy products that
they require. Geographically, they are concentrated in large cities with the
largest number of population.
Currently, attending these places produces pleasant sensations because they
offer spacious well-lit rooms, a convenient access, meeting of standards of
hygiene and quality, cold storage for perishable food, attractive displays to
display their products, and modernized information and communication
systems.
The groups that belong to high, medium and typical income generally visit the
supermarkets. According to the volume of sales, consumption in the traditional
channel is 71% and in supermarkets is 29%.
Other important aspects of retail
Shopkeepers are a key aspect to the mass consumption industry since they
promote their brands. The daily relationship between shopkeepers and
customers establishes a more humane link, different from what you experience
in self-service procurement.
Large companies carry out specific strategies for advice and specialized care to
shopkeepers because the choice of the products to be exhibited in their
businesses belongs to them.
The importance of the shopkeepers transcended to the attention of financial
institutions because in many neighborhoods, the markets are the instruments to
do banking transactions.
The influence of the retailer at the moment of the purchase is decisive, since the
customer only acquires the products that the owner of the market decided to
have in stock.
__________________________
32Source Ipsa Group – Store audit
47
Every time, Ecuadorians are spending more in cellular telephony, internet,
alcohol consumption, cigarettes, paid television, movie theaters and fast-food
restaurants.
i.
Purchase and Payments Conditions
The choice of payment method that is going to be used in an international sales
transaction is influenced by the level of knowledge that the foreign buyer has,
and the size and frequency of the transactions.
The main international means of payments are the following:

Payment in advance: the importer sends to the exporter’s account the
amount of the sales transaction prior to the shipping. This payment
method poses many risks to the purchaser, who is totally at the mercy of
the good faith of the seller. The latter could eventually and even
deliberately unduly delay the dispatch of the goods, or simply, in the
worst case scenario not send the goods at all.

Direct payment: It is done when the importer makes payment directly to
the exporter and/or uses an entity to make this payment without greater
commitment by that entity. The most common means of payment for
direct payments are by checks, payment orders, bank drafts or transfers.
Direct means of payment are normally used when the conditions of
payment are cash, by checking account or consignment.
Direct payment represents a form of advance payment with the variant that the
buyer receives all the benefit. It is the seller who stays in absolute disadvantage
since payment is received once the goods are sent and have arrived at
destination.
It may be that the importer remove the goods and deliberate and unduly delay
the payment, or not do it ultimately, causing heavy losses for the exporter who,
in the best of cases will have to return the goods to their destination, assuming
costs not provided for, who will have suffered an actual loss. In this mode,
there are no guarantees; the intervention of a bank is limited to facilitate a bank
draft under the customer's instructions.

Documentary collection: Defined as the management of financial or
commercial documents by the banks, whereby according to the
instructions received, the payment and/or acceptance of financial
documents is achieved. The exporter entrusts the collection of a payment
to the remitting bank, which sends documents to a collecting bank along
with instructions payment. Funds are received from the importer and
remitted to the exporter through the banks involved.
48
Payment at sight (document against payment): in this case, the collecting bank
submits the documents to the buyer, who makes the payment and obtains the
documents for the delivery of the goods. This method favors the exporter who
indirectly maintains control over the documents until the buyer makes the
payment.
Acceptance at sight of bill of exchange (documents against acceptance): In this
case the collecting bank delivers the documents to the buyer who accepts the
Bill of Exchange, i.e. obliged to make the payment at a set date.
The documentary collection represents less risk than the direct and the advance
payments since this mode involves one or more banks, but such intervention is
not a guarantee in the fulfillment of the obligations derived from the purchase
agreement between the parties.

The Letter of Credit: The letter of credit or documentary credit is
privileged among the means of payment for operations of International
sales of goods, not only by the assurances offered, but because using it
achieves a balance of commercial risks assumed by the parties involved
in the international trade.
The letter of credit is a guarantee of payment, because it is a commitment of
payment backed by a bank. These warranties extend according to the letters of
credit being irrevocable and confirmed. This method of payment is considered
low-risk because the buyer’s bank has the legal obligation to pay, provided all
required documents are submitted and all the terms stipulated in the contract
are met.
d. Logistics, transport and distribution:
i.
Transport infrastructure (roads, railways, ports, airports and
waterways)33
Ecuador has a transport infrastructure composed by 43,197 km. of roads, of
which 6,467 km are paved. Road transport is the main means of communication
in the country and there are many trucking companies that cover the whole
territory.
The road infrastructure is constituted basically by a road that runs along the
coast, joining Ecuadorian territories La Tola, Lagarto, Montalvo, Rocafuerte, Rio
Verde, Camarones, Tachina and San Mateo; other ways are: Esmeraldas-
__________________________
33 To consult for current state of roads go towww.mtop.gov.ec
49
Atacames-Sua-La Union-Muisne; Esmeraldas-Rosa Zarate (Quininde) towards
to Santo Domingo de los Colorados and Quito; in the sector of La
Independencia, the latter joins the new track coming from the province of
Pichincha, passing by San Miguel de los Bancos and Pedro Vicente Maldonado.
Railways 34
Ecuador has more than 966 kms. of railways, that unite the highlands (Sierra)
with the coast and it is mainly used for tourist purposes. These are state-owned.
Routes covered are:
Quito – Machachi – Quito
Quito – Boliche – Quito
Machachi – Boliche –Machachi
Alausí –Sibambe – Alausí
Ibarra – Salinas – Ibarra
Durán –Yaguachi –Durán
Sea Transport
The port system of Ecuador is composed of seven state ports and ten private
ports specialized in general cargo and oil.
Port of Guayaquil 35
Guayaquil is the main port of the Republic of Ecuador, whereby 70% of foreign
trade is mobilized handled by the national port system. It was built during the
period 1959 to 1963.
The privileged location of the port is an incentive for the uptake of traffic routes
of the Far East and the Americas, especially those relating to the Pacific coast.
Furthermore, it is highly convenient for the concentration of Latin American
cargo destined to cross Panama Canal with destination to the East coast of the
continent or to Europe and Africa.
The legal framework on which carries out its activities, allows private
companies to access port activity without restrictions. Ecuador is immersed in a
successful modernization action for both ports and customs, generating a high
degree of reliability for investments carried out in the country.
_____________________________
34 www.ferrocarrilesdelecuador.gob.ec
35 Chamber of Shipping of Ecuador http://www.camae.org
50
The port of Guayaquil has an adequate infrastructure for the development of
international trade, for which it has optimum means for the execution of the
operations. The port provides all the services required by the ships and goods
through private operators of high specialization. They are under the
supervision of the port authority and act in open competition to meet the
requirements of the most demanding users achieving high efficiency and cost
reduction.
Geographical location
The seaport of Guayaquil is located on the West coast of South America, on a
delta river the Estero Salado, ten kilometers to the South of the commercial
center of the city of the same name and whose geographical situation is as
follows:
Latitude 2° 16' 51'' S
Longitude 79° 54' 49'' W
Characteristics and docks
The seaport of Guayaquil has a modern infrastructure that allows you to
provide services to all types of ships, as well as handling and storing cargo
containers or any kind of dry or refrigerated cargo.
The main features of the ports are as follows:


Total area of the port: 200 hectares.
Total length of the docks area: 1,625 meters.
The docks are distributed in the following manner:
Multi-Purpose Cargo
 Number of piers: 5 piers
 Total length: 925 meters.
 Loading dock apron width: 30 meters.
 First line warehouses : 4
 Second line warehouses: 20
 Hazardous Cargo warehouses: 4
Container Terminal
 Number of berths: 3
 Loading dock apron width: 30 meters.
 Containers storage modules: 4 for 7,500 TEU
51




Warehouses for Consolidation and deconsolidation of goods: 3 of 7,200
square meters each.
40-Ton gantry crane: 1 crane
Container terminals: 2
Container gantry crane: 2
Bulk Terminal Cargo
 Number of piers: 1
 Grain warehouse: 1 (30,000 metric tons)
 Number of silos: 3 of 6,000 metric tons each
 Pneumatic system for loading and unloading of bulk: 1
Tanks for heavy liquids cargo
 Storage area: 4,278 square meters
 Storage capacity: 30,000 metric tons.
 Metal tanks of heavy liquid: 3 with 3,200 metric tons each
Vegetable Oil
 Storage capacity: 240 tons.
Port of Esmeraldas36
The port of Esmeraldas is a facility located on the coast of the Pacific Ocean that
receives vessels of different sizes and has required facilities for loading and
unloading of merchandise.
Commercial Port
The commercial port facilities are within a closed enclosure that has adequate
conditions of safety and security.
The ground where the port works has been formed with a compacted fill that
comes partly from the same dredging of the port and partly from material from
quarries.
It is the main terminal for the export of oil.
The main facilities of this port are:


Paved access roads.
Areas of parking for light and heavy vehicles.
__________________________
36 Chamber of Shipping of Ecuador http://www.camae.org
52







Internal circulation paved routes in very good condition.
Entry and exit controls
Full closure of the premises
Complete infrastructure of public services: electric light service,
telephone network, drinking water and sewerage.
Buildings for areas of: administration, services, monitoring of workshops
and others.
open paved container-handling areas
three docks: main dock, service dock and roll on – roll off dock
The seaport has an approximate area of 40 HA., according to plans, with a
depth of 11mts.
Within the planning areas of the port there is the possibility of growth of
number of docks, traffic routes, covered and uncovered storage areas, etc.
Currently existing facilities are not used to the maximum capacity, because the
current movement of the port will not allow the total use of them and the
outsourcing of some services has left without use other facilities that are now
vacant.
Port of Manta
Currently it is potentially the country's most important port, since it presents
excellent conditions to achieve a competitive port development with real
success.
It has access to open sea within 25 nautical miles of the international route of
maritime traffic without channels and with a natural depth of 12 meters at low
tide, which allows the admission of ships of great depth at any time of the year.
One of its objectives is to become the first port of international transfer of cargo
containers from Ecuador.
In addition, the city of Manta has an international airport less than 5 km away
from the port facilities, which has one of the best tracks from South America
that allows the arrival of aircrafts of large tonnage, as the Antonov.
It also has two zones, which ensures the existence of huge tracts of storage areas
located a few kilometers from the port in the main access roads to the city.
Characteristics
53
Being a natural depth of 12 meters and an open port, it does not present
problems at the arrival of ships to the international and marginal docks; inner
Rada 300 hectares and operates 365 days of the year
It is the port of deep waters of the Ecuador, 150 m from the port facilities it has
a depth of 15 m and at 400 m it has 18 m.
Between the main routes of access to the port are the side step, the boardwalk,
and 4 de Noviembre Avenue that connect it with the roads to Quito and
Guayaquil.
As an open port and natural draft, it has direct access and does not present
problems to the arrival of ships at the marginal docks.
It has communication with the main ports of the Ecuadorian coast, on the West
coast of South America to Central and North America, as well as the ports of
the Asian, Australian, Atlantic, etc. coast.
Manta is located 190 Km of Guayaquil, 400 km of Quito, 466 km to the southern
border with Peru and 687 km from the northern border with Colombia.
It has 2 zones, the ZOFRAMA with 75 acres and the free zone of Manta with 18
acres.
Port of Puerto Bolivar
Puerto Bolívar is more engaged in the export of bananas (90%).
After the signing of the peace agreement between Ecuador and Peru in 1998, the
trade between the two countries increases. Since then, transit cargo on the docks
of Puerto Bolívar increased, especially from the Peruvian North, to the North
American and European markets.
The Binational group to promote private investments (Grupo Binacional para la
promoción Inversión Privada, GBPIP in Spanish) encourages the creation of a
binational port axis of complementarity ports of Paita in Peru and Puerto
Bolivar in Ecuador, within the framework of the Binational Plan of Ecuador, to
increase land and sea trade between the two countries
With a privileged location, Puerto Bolivar, the second port of the Ecuador, is
located in the prosperous El Oro Province. It is protected by the Jambelí
archipelago, only 4.5 nautical miles in distance, from the sea buoy to its
mooring.
54
Its strategic position in the banana capital of the world, allows it to be only 13
miles of international traffic routes, near the Panama Canal that communicates
to the rest of the world.
Puerto Bolívar is more engaged in the export of bananas (90%)
Characteristics
Physical Installations
Breakwater pier, marginal dock of cabotage, areas of storage, parking spaces
and a counter-narcotics building.
The pier with two fronts of berthing, length of 130 m, width of 30 m, depth of
10.5 m. Structure: 1 slab and piles of concrete, the Marginal wharf with a length
of 365 m, width of 25 m. depth of 10.5 allows simultaneous arrival of 2 ships up
to 27,000 TB. Structure of reinforced concrete, pier of cabotage for tourism
service, extension 60 m openwork 5.70 m
Storage Areas
Puerto Bolívar has 27,104 m2 of warehouses and service yards for the storage of
goods. 10.152 m2 for multi-purpose cargo, 14,592 m2 for pallets of bananas,
2,360 m2 for bulks.
Airways
Ecuador has an excellent network of airports, of which three are international.
They are located in the cities of Quito, Guayaquil and Manta.
Mariscal Sucre International Airport
It is the airport of the capital city of Quito located to the North of the city which
receives local and international flights. It is expected to mobilize to a free zone
in Puembo which is a parish of the Metropolitan District of Quito, 25 km to the
East of the current airport.
The construction work for the new Quito International Airport recorded a 78%
advance and would be concluded in April 2012. From that date and for a period
of six months, actual tests shall be carried out, so in October, it will begin
operations.
From April 2012 there will be actual landings and take-offs to test the
equipment and routes of access to the new airport.
The new airport’s runway covers an area of 4,100 meters, one of the longest in
Latin America. The current airfield is 3,600 meters.
55
The terminal of Tababela will have more security and better conditions than the
Mariscal Sucre airport.
The municipality plans to build a Convention Center on the grounds where
Mariscal Sucre airport sits (to the North), and adapt pathways that connect the
city from East to West what would solve one of the problems of mobility that
affects the inhabitants of Quito at the moment.
Technical Data
The new airport will have a track of 4,100 meters long and 45 meters wide,
accommodating an average of 44 operations per hour.
Track is associated with two taxiways. Passenger terminal in an area of 38
thousand square meters, with services in line with IATA standards. Six
passenger boarding bridges. Remote parking capacity for 20 aircraft. 50 airline
counters for attention to travelers. Modular facilities that expedite upgrades
according to the needs.
Spacious, modern and safe space for parking, services with technology for
airport operations, safety standards with closed circuit television, according to
ICAO standards.
The intelligent building as regards to energy, lighting and communication
services will have capacity for more than four million passengers per year and
270 thousand tons of cargo.
José Joaquín de Olmedo of Guayaquil International Airport37,
Formerly known as Simón Bolívar airport, it was remodeled and started
operations on July 27, 2006 with the same track of the previous airport, but in a
new and very functional modern building. It receives local and international
flights from around the world.
The airport is located within the city limits to the North of the city of Guayaquil.
It is 6 meters height above level sea; referential temperature is 31 degrees
Celsius. The geographical coordinates of point of reference of the airport, is
located at the center of the track 03 / 21.
Latitude: 02º 09´ 29. ´´ S
Length: 079º 53´ 02´´ W
Runway length: 2790 m
Runway width: 45 m
____________________________
37www.tagsa.aero
56
Platforms
It has 15 parking positions.
8 aircraft parking positions with 7 passenger boarding bridges (these positions
vary according to the type of aircraft being handled)
8 cargo aircraft parking positions (remote)
7 multipurpose aircraft parking position.
Operating Equipment
2 fire engine make OSHKOSH T-12; Capacity: 3000 gal of water and 410 gl of
AFFF.
1 fire engine makes OSHKOSH T-1500: Capacity: 1500 gal of water, 190 of AFFF
and 500 lbs. of PQS.
1 fire engine makes OSHKOSH T-2500: Capacity 2500 gal of water, 410 of AFFF
and 500 lbs. of PQS. It has a Snozzle equipment.(hydraulic arm nozzle that
punctures aircrafts fuselage, unique in South America).
1 rapid response team F-350: Capacity: 500lbs of PQS, 94 gl of water and 6gl of
foam concentrate at level 6
1 truck for logistical support
2 ambulances
Eloy Alfaro International Airport
It is located in the city of Manta, on Manabí province and is and alternate
airport for Quito and Guayaquil to receive international passenger and cargo
flights.
The airport runway has the following features:
Width: 45 meters
Length: 2,854 meters
IATA code: MEC
On March 15, 1994, Eloy Alfaro airport is enabled as an international airport,
category that it currently maintains.
In 1999, the Government of the Ecuador signed an agreement with the United
States of America, which established the use of part of the aerodrome Eloy
Alfaro by US military forces. In the year 2000, within the framework of this
agreement concluded in 2009, the US Government rebuilt the runway,
improved resilience, implemented modern Visual AIDS (lighting) and installed
a new VOR (radio support), with an investment of approximately US $ 60
million.
Reconstruction ended in October of 2001, since that date to the present day Eloy
Alfaro International Airport of Manta is considered as the best airport in the
57
Ecuador to offer 99.9% performance to aircraft operating in it. An extension of
the track as part of the infrastructure of the interoceanic shaft Manta - Manaus
in Brazil is expected.
River Access
Ecuador has several navigable rivers, including the Guayas River, which has an
extension of 26,000 km and ends in the Gulf of Guayaquil, on the Pacific Ocean.
There are also the Daule and Vinces rivers, which have great depth without
having to be dredged.
ii.
Main distribution channels, common trade margins by sector38
In Ecuador, traditional commercial formulas like neighborhood shops and
markets coexist with innovative formulas such like shopping malls and
supermarkets.
There are food transfer terminals in each region, which distribute to all
municipal markets in different cities of the country. In these markets, several
merchant retailers of different types of products of mass consumption, such as
fruits, vegetables, rice, etc., the basic family basket products are concentrated.
Likewise, there are great channels that serve consumers, between major
supermarkets like Supermaxi, for a segment of the population of high income,
Mi Comisariato, to a medium-high segment, and others as AKI, Tia, Santa
Clara, for a low income segment of the population.
Concentration in the marketing of the food, pharmaceutical and the hardware
industry will disappear in favor of a situation of greater competition in the
market, while economic agents with greater resources are those who are more
likely to have reasonable market shares. The shopkeepers are the most exposed
to these new trends and will have a similar behavior occurred in other places:
shops will disappear and those that survive will become specialized. The
informal sector will maintain at current levels provided the economic situation
will not change.
A brief review of the relevant characteristics of the Ecuadorian commercial
distribution is followed:
Logistics:
___________________________________
38http://www.icex.es/staticFiles/Id%20370685%20EM%20Distribucion%20Alimentaria%20Ecuador_9438_.pdf
58
High turnover of products. Distributors and wholesalers design routes to
supply to customers. They normally have their own fleet and subcontract in
specific situations, as it is the case of Christmas campaigns.
Commercial policy
Product:
The larger distributors often have a character of exclusivity for imported
products. The imported product has a main competitive advantage over local
which is a good image in the market; gives confidence and the consumer
appreciates the quality of the product by itself and other set of attributes as the
packaging and presentation, labeling, composition, and expiration date.
Promotion:
Dealers that have final points of sale perform promotional activities, such as
discounts on purchase, tastings and coupons in the case of oversupply of stocks.
The small distributors and wholesalers are only intermediaries of marketing
activities, financed by the manufacturers. The retailer conducts promotion
campaigns if stocks are maintained.
Price:
The distributors purchase large volumes of goods (especially in the case of
imports) and get discounts of up to 5% on average. Distributors often apply
some commercial utilities on the order of 10%. It may seem a low gain but it
compensates with enormous amounts of purchase (with volume discounts). In
the case of imported products, the benefit exceeds 30 per cent on average and it
also depends on exercised exclusivity or not on the goods. When there is the codistribution prices are set tacitly. The retail sector applies margins ranging from
20 to 50%.
Financing:
Payment to suppliers usually extends over a period of 30 days, extending the
time limit in the case of imports, to 90 or 120 days. The rate of interest applied is
the interbank rate applied to the distributors and customers. Customers often
establish credit lines based on their credit worthiness; the commercial
relationship and interest rates may be preferential or less advantageous.
Customers do not have many credit facilities; credit cards recognized in the
country are accepted, and at prestigious points of sale, membership cards are
required for purchase to "enjoy" a discount percentage.
At a general level, referring to the consumer goods sector, the distributors have
a structure of logistics developed, both in the mountains and on the coast.
59
The Ecuadorian market is characterized for being a market price, so the
commercial strategy is fundamentally based on being price competitive. On
other occasions, the differentiation in products using the exclusivity or
additional services is a business strategy, especially in those cases in which the
distributor applies exclusivity in the sale of the product.
In Ecuador, the trade accounts for 19.5% of the GDP of the country and employs
11% of the population. The distribution sector is small and tends to the
concentration. In the Ecuadorian market, the commercial distribution chain has
two levels of intermediaries between the manufacturer and the consumer.
The first level of intermediaries corresponds to the figures of the importerdistributor and wholesalers:

The importer-distributor acts on behalf and for their own account,
assuming all the commercial risks. Importing firms with a turnover of
more than 100 million USD have a very extensive range of goods: liquor,
food, cars, appliances, hardware, perfumery, cosmetics. Other smaller
importers tend to specialize in a sector or several complementary ones;
goods of consumption and food, construction and hardware, medicines
and cosmetics. All the importers distribute its products between regional
distributors and retail sector. Due to the financial capacity, availability of
resources, and the solvency of undertakings, these are the most powerful
group at this first level of intermediaries. Aggressive trade policies apply
because the Ecuadorian market moves by prices. Its efforts are focused
on getting very competitive prices on their supplies.

The second figure, at this first level of intermediation, is wholesale. It
supplies the local manufacturer and importer. It specializes in food and
consumer goods. Wholesalers are more numerous than the importers
group but do not have as much force. It is a more disaggregated subsector, few companies have a considerable size and consequently have
little power of negotiation against manufacturers and retailers
The second level of intermediaries corresponds to the retail sector. It is a sector
very atomized; almost 95% of the sectors have a single point of sale. There are
several commercial formulas in the retail sector;



The shops, commercial formula with a high density, with 210 stores per
100,000 inhabitants.
The surface chains of intermediate size with a 85% share of the urban
population of upper-middle class.
The large surfaces, which are poorly introduced in the Ecuadorian
market, with a single hypermarket of these features.
60

Finally we have the informal sector, which is the most widespread
commercial formula for the lower-middle class, with great weight in the
Ecuadorian economy, around 60% of the Ecuadorian population.
There are other commercial modalities such as the figure of the agent
representative who acts on its own behalf and on behalf of the represented.
Typically found in the machinery sector: wood industry, construction,
agricultural and food. Although there is no official data, the sector of the
representatives is highly concentrated. They work with few lines and just to
manage stocks. A common problem to all of them is the lack of after sale service
that has negative repercussions on the commercial brands represented.
Another modality that has experienced a slight increase in recent years is
franchises. In Ecuador, there are about 30 foreign franchises. 90% of the
business belongs to American companies. This mode is slowly entering the
country. The most numerous are in the fast food industry, but it also exists in
other sectors, such as the Martinizing dry cleaners, Heel Quick shoe repairs,
Post net private mail, or clothing as Benetton.
61
4. FOREIGN INVESTMENT
a. Legal Framework
The organic code of the commerce production and investment (Código
Orgánico de la Producción Comercio e Inversiones39in Spanish) published in
official register no. 351 of December 29, 2010 is the legal framework governing
foreign investment in the Ecuador. This 2010 code replaced the law of
promotion and guarantee of investments (Ley de Promoción y Garantía de las
Inversionesin Spanish), in December 1997, as well as other 13 laws that previously
regulated foreign investment, in an effort to improve the coherence of policies
in certain areas. The sectoral council of production (Consejo Sectorial de la
Producciónin Spanish), is who defines the policy of investment in the country.
Within the purposes40 of the organic code of production, trade and investment,
in regards to investment literals g and h are highlighted:
.. g. Incentivize and regulate all forms of private investment in productive
activities and services, socially desirable and environmentally acceptable;
h. Regulate productive investment in strategic sectors of the economy,
according to the National Development Plan...
Foreign investment is defined as an investment which is of property or
controlled by natural persons or legal foreign domiciled abroad or involving
capital that has not generated in Ecuador41.
From the validity of the production code (Código de la Producciónin Spanish), it
collects the constitutional principle of non-discrimination42 by establishing that
national and foreign investors, shall enjoy equality of conditions with respect to
the management, operation, expansion and transfer of their investments, and
will not be subject to arbitrary or discriminatory measures in which foreign
investors will enjoy protection and full assurances, in such a way that they will
have the same protection that Ecuadorians receive within the national territory.
It also establishes the so-called rights of the investor43, among which is the
freedom of production and marketing, administrative access to the procedures
and control measures established by the State to prevent practices of unfair
__________________________________
39 Known as production code ( “Código de la Producción”)
40 Article 4 of the Organic Code for production, trade and investment (Código Orgánico de la Producción, Comercio e
Inversiones)
41Article 13 of the Organic Code for production, trade and investment(Código Orgánico de la Producción, Comercio e
Inversiones)
42 Article 17 of the Organic Code for production, trade and investment (Código Orgánico de la Producción, Comercio
e Inversiones)
43 Article 19 of the Organic Code for production, trade and investment (Código Orgánico de la Producción, Comercio
e Inversiones)
62
competition, the freedom of import and export of goods and services, as well as
the free transfer abroad of foreign currency generated. Naturally these
investments are consistent with the policy of the Ecuadorian State to prioritize
social and environmentally sustainable investment, i.e. to generate
employment, and it does not cause damage. The production code generates
greater coherence between policies, commercial activity and instruments that
support this activity. Moreover, it establishes the possibility that investors seek
the signing of contracts of investment, which lays down the conditions for the
treatment of your investment by creating a safer environment.
The 2008 Constitution stipulates that the State shall promote domestic and
foreign investment and that foreign direct investment will be complementary to
the national and is oriented according to the needs and priorities defined in the
National Development Plan.44
Foreign investment should reflect the priorities of the National Plan for 20092013 development and complement domestic investment. The 2008
Constitution provides that public undertakings work exclusively, or through a
majority stake in joint ventures, in the so-called strategic sectors of the
economy.45
b. Investment incentives (fiscal, sectoral and local)
Benefiting from the incentives established in the organic code of the production
trade and investments 46, companies do not require authorizations of any
nature, as stated in article 14, except those that are specifically appointed by law
and which are derived from the corresponding legal land plan.
Detailed mechanisms application for investment incentives are found in the
structure and regulation of production development institutions, investment
and development mechanisms and instruments of production47.
These incentives may be summarized as follows:
GENERAL:
For all the productive investment of the country
 Reduction of three points of the income tax, 1% annual, in such a way
that in 2013, this will be 22%.
_________________________
44 Article 339 Constitution of Ecuador (2008)
45 Article 313 2008 Constitution of Ecuador. The following are considered strategic sectors: energy in all its forms,
telecommunications, nonrenewable natural resources, oil and gas transport and refining, biodiversity and genetic heritage,
the radio spectrum, water and others as established by law.
46 Title III Organic Code of Production, Trade and Investments
47 Executive Decree N°757 of May 6, 2011
63

Exemption from the Exit foreign currency tax (2%) for external funding
of over one year period with rates less than the maximum rate approved
by the central bank of Ecuador (BancoCentral del Ecuador, BCE in Spanish).

Exemption in the calculation of the minimum tax from 2011 and
onwards of: incremental costs for new employment or wage
improvements, acquisition of new assets for productivity and
technology improvements, cleaner production and all the incentives of
this code.

Reduction of 10% of the income tax for the reinvestment of the utility in
productive assets of innovation and technology.
Democratization for the productive transformation
Companies that decide to open their capital and sell shares to their
employees will have the following benefits:
 Defer payment of the income tax and its advance payment, for 5 years.
 In case they opt for a credit for funding for the purchase of shares, the
interest shall be exempt from the income tax.
For the Greener Production
 For the calculation of the income tax, it shall be considered an additional
deduction of 100% of the expenditure on purchase of machinery and
equipment for cleaner production, and the implementation of systems of
renewable energy (solar, wind, or similar), or the mitigation the
environmental impact.
SECTORIALS:
For the new companies in special sectors:
For new companies total exemption from the payment of the minimum
tax rate and from the payment of the income tax to the rent for the first
five years in priority sectors which are later mentioned to the good
health of the trade balance and sustainability of the dollarization.
Investments must be developed in any jurisdiction in the country, except
for urban Quito and Guayaquil. It includes the rural sector in these cities.
Priority Sectors48
a. fresh, frozen and industrialized food.
b. agroforestry chain and fabricated products.
c. metalworking.
d. petrochemical.
e. pharmaceutical.
______________________________
48 See details of each sector on Article 17 of the structure and regulation of production development institutions,
investment and development mechanisms and instruments of production.
f. tourism.
64
g. renewable energies including bio-energy or energy from biomass.
h. foreign trade logistics services.
i. biotechnology and applied software.
Import substitution and export promotion sectors49:
a. Manures and fertilizers
b. agrochemicals, pesticides and fungicides
c. soaps, detergents, and cosmetics.
d. other chemical products.
e. ceramics, tiles and floors.
f. manufacture of radio, television, mobile phones receivers and
electronic in general.
g. clothing and textile materials.
h. footwear and leather.
i. appliances.
INNOVATION:
Investment in innovation in medium-sized enterprises
In order to promote innovation, the code brings multiple incentives such
as the ten point reduction of the income tax if utility is reinvested in
innovation and in particular to medium-sized companies the following
incentives:
•Additional deductions for the calculation of the income tax, for
expenses and investments in the following areas:
Technical training aimed at research, development and technological
innovation. (Up to 1% of the cost of wages and salaries per year).
Expenses on the improvement of the company productivity. (Up to 1% of
sales).
Expenses for international promotion of the company and its products.
(Up to 50% of the costs of promotion and advertising).
INCENTIVES FOR SMES AND AEPS ACTORS 50:
• In the absence of a real guarantee of small productive actors, the State
co-guarantees through the national guarantees fund (Fondo Nacional de
Garantías), so that they have access to private financing.
• Special regime for the financing of small productive actors through the
stock market.
• Mandatory state inclusive purchases to SMES and AEPS.
• Temporary state investment in companies with high value, through
venture capital programs, to democratize the participation of providers,
AEPS and workers.
_______________________
49 See details of each sector on Article 18 of the structure and regulation of production development institutions,
investment and development mechanisms and instruments of production.
50 Actors in the Popular and Solidarity Economy (Actores de la Economía Popular y Solidaria, AEPS in Spanish)
65
• Government programs of co-financing of improvements in
productivity, entrepreneurship, innovation, quality, exportables and its
promotion as:
- Fondepyme of the Ministry of industries and productivity (Ministerio
de Industrias y Productividad, MIPRO in Spanish).
-EmprendEcuador of the Ministry of coordination of production,
employment and competitiveness (Ministerio de Coordinación de la
Producción, Empleo y Competitividad, MCPEC in Spanish).
- InnovaEcuador of the MCPEC.
- Programs of the Ecuadorian Institute of the popular and solidarity
economy (Instituto Ecuatoriano de Economía Popular y Solidaria).
Graph No. 10
Type of
Enterprise
Number
of workers
Annual
Sales
Micro
enterprise
1 to 9
Up to
$100,000
Type of
Incentives
Non tax
small
enterprise
10 to 49
$100,001 to
$1,000,000
medium
enterprise
50 to 199
$1,000,001 to
$5,000,000
tax
FOR DEPRESSED ZONES:
Establishment in areas of greater poverty
Besides that these investments will benefit from the General and sectoral
incentives before described, new investments will be prioritized in these
areas giving a tax benefit by an additional deduction of 100% for five
years of the cost of hiring new workers.
SPECIAL ECONOMIC ZONES DEVELOPMENT (Zonas Especiales de
Desarrollo Económico, ZEDES in Spanish)
The ZEDES can be of three types: technology transfer, industrial development
for export and logistics. They have the following incentives:
66
• Further reduction of five percentage points of the income tax for
administrators and operators of the ZEDES, with the character of permanent
(17%). If they are in a preferred sector and it is new investment 0% rate applies
to the income tax for 5 years (outside urban area of Quito and Guayaquil).
• Imports of goods will have 0% VAT rate.
• Foreign goods shall enjoy the suspension of duty payment as long as they
remain in that territory.
• Managers and operators will have tax credit of the paid VAT on their local
procurement of services, supplies and raw materials for their production
processes.
• Exoneration of the Exit Foreign Currency Tax in the payment of imports and
for payments abroad by external financing.
The ZEDES 51 will be installed in delimited geographical areas of the national
territory, whereas such conditions as: preservation of the environment,
territoriality, potentiality of each locality, road infrastructure, basic services,
connection with other parts of the country, among others, previously
determined by the governing body in terms of productive development, and in
coordination with the agency in charge of national planning and subject to a
special treatment of foreign trade, tax and financial.
Logistics services are geared to enhance the physical facilities of ports, airports
and border crossing, which serve to enhance the favorable net volume of the
foreign trade and the local supply under the allowed parameters.
Individuals or legal entities installed in the special zones can only operate in
one of the above-mentioned modalities, or may diversify their operations in the
same territory with operations of several of the above types, provided that it is
justified by the variety of activities responding to the facilitation of productive
chains of the industry developed in the area authorized; and that, the ZEDE has
in its constituent instrument the authorization to operate under the type that
responds to the activity wished to install.
People and means of transport entering or leaving a ZEDE, as well as its limits,
points of access and exit, must be subject to the surveillance of the customs
administration. Customs control may be done prior to the entry, during the
stay, or after the departure of the goods in the area.
Authorization for a ZEDE shall be granted for a period of twenty (20) years,
which may be extended, subject to the assessment procedure laid down in the
regulation, and it may be revoked before the established deadline having
verified any of the offences that generate the revocation of the authorization.
____________________
51 Title IV of the Organic Code for production, trade and investment
67
The establishment of a ZEDE may be requested by an interested party, on the
initiative of institutions in the public sector or decentralized autonomous
governments. The investment that is used for the development of these zones
can be public, private, or mixed. Similarly, both the administrative company
and the operators to be installed in these areas may be individuals or legal
entities: private, public or mixed, domestic or foreign.
Administrators may not simultaneously hold the operator qualification, or have
any economic or corporate connection with other operators of ZEDE, under
penalty of revocation 52
Graph No. 11
Incentives
Prior requirements
General
None
ZEDE
Article 45 and ss Regulation
New enterprise
Sectorials
Innovation
None
Clean Production
it may not be to comply to the
requirements of the Ministry of
Environment
Issues of shares
None
SMES
Territorial Development
None
Be a part of the depresssed zones approved and
published by the Consejo Sectorial 15
____________________________________
52 More details in paragraph I of the structure and regulation of production development institutions, investment and
development mechanisms and instruments of production.
68
c. Foreign InvestmentSituation
ChartNo. 18
DIRECT INVESTMENT BY BRANCH OF ECONOMIC ACTIVITY
Period: 2007 - 2011 (IIIT)
Thousands of dollars
Branch of economic activity/ period
Agriculture, forestry, hunting and fishing
2007
2008
25.479,8
20.602,3
2009
2010
2011 III
TRIM
51.605,2
9.378,1 1.490,6
Commerce
92.184,7 120.750,8
70.505,6
69.748,0 37.970,5
Construction
19.632,3 49.352,2
(13.897,9)
27.774,2 29.042,3
Electricity, gas and water
11.898,5 (7.127,5)
Mining and quarrying
Manufacturing Industry
Community, social and personal services
Services provided to companies
Transportation, storage and
communications
TOTAL
(102.795,4) 244.199,6
98.960,0 206.125,9
16.667,7
15.233,6
84.591,0 139.404,2
(52.460,1)
217.274,9
2.590,0 (6.497,7)
(9.182,3)
(6.406,5)
159.065,5 282.465,2
127.710,1
123.155,6 56.170,4
20.333,2
22.506,1 22.493,5
(24.416,0)
66.096,2 6.595,5
92.938,2
194.158,5 1.005.816,0 320.961,9
(313.819,7) (41.438,4)
157.406,3 385.607,2
Source: Central Bank of Ecuador/BCE in Spanish
Elaboration: Directorate of Commercial Intelligence and Investments/PRO ECUADOR
69
Chart No. 19
INVERSIÓN DIRECTA POR PAÍS DE ORIGEN
Período: 2007 - 2011 (IIIT)
Miles de dólares
País / Período
AMÉRICA
2007
(130.223)
2008
558.558
2009
2010
2011 III TRIM
269.611
80.895
278.923
(37.547)
6.742
49.596
ESTADOS UNIDOS
49.848 (14.637)
COMUNIDAD ANDINA 2/
39.475
87.551
5.782
39.439
26.709
1
21.081
2.603
15.790
11.265
24.974
31.726
19.585
(11.144)
(5.470)
14.421
7.975
7
12.623
13.181
13.628
46
8.634
2.918
15.111
RESTO DE AMERICA
Antillas Holandesas
Argentina
(219.546)
5.294
3.645
485.643
346
6.264
301.377
(4.945)
15.022
34.714
243
8.160
202.618
(4.126)
9.572
Bahamas
Barbados
Belice
Bermudas
Brasil
Canadá
Chile
Costa Rica
Curazao
(116.815)
280
486
2.245
99.526
48.521
11.788
1.334
-
(25.284)
(3.984)
22
3.197
46.300
43.586
5.007
(146)
2.600
(1.927)
(297)
8.890
2.417
2.923
52.511
25.951
(5.719)
4.115
38.810
8.524
3.536
10.104
79.270
7.590
2.019
-
6.735
8.573
1
852
445
187.667
13.422
168
Islas Caimán
Islas Vírgenes
(356.628)
41.900
2.093
62.218
14.806
40.068
(25.662)
12.100
(64.673)
1.961
(40.235)
76.546
1
302.567
73.152
1
38.906
119.923
1
(286.113)
136.130
9
12.472
13.317
1
2.315
251
(32.378)
82
(11.753)
486
39.760
234
960
15.271
231.685
3.480
397.587
9.154
(24.696)
(1.410)
30.310
(368)
45.688
2.579
27.255
115.306
(139.863)
(1.888)
0
Bolivia
Colombia
Perú
Venezuela
México
Panamá
República Dominicana
Uruguay
Otros países
EUROPA
Alemania
Austria
70
Bélgica y Luxemburgo
Dinamarca
Eslovenia
España
3.353
(500)
15.210
(11.531)
67.896
(8.944)
3
1
16.106
85.220
128.225
Finlandia
Francia
Holanda
Inglaterra
Irlanda
Islandia
Italia
Noruega
Rumania
Suecia
Suiza
Otros países
26.550
67.954
7.766
4.871
(1.321)
ASIA
China
Chipre
Corea del Sur
Filipinas
Israel
Japón
Rusia
Singapur
Taiwán
Otros países
27.257
50.751
30.401
(4.119)
3.953
(280)
30.500
(2.814)
4.602
3.878
(280)
(7.780)
545
16.659
154
(195)
(11.025)
68
5.644
1.965
(55)
10.833
1
1
(4.541)
671
92
16.784
543
1.325
87
10.532
0
18.933
19
351
31.287
21
(1.563)
24.057
419
(1.350)
6.782
51
(1.499)
1.712
547
92.104
84.840
49.392
46.538
22
423
1.900
123
2.866
241
(2.923)
(3)
206
69.524
56.297
4.672
518
12.750
(76)
68
63
(5.294)
252
274
44.865
44.960
60.308
58.552
381
87
0
(60)
200
177
1.092
63
195
6.060
1.202
800
9.999
181
10
(5.407)
1.184
498
AFRICA
Argelia
Guinea Ecuatorial
Liberia
Otros países
149
OCEANÍA
Australia
Samoa
Otros países
(813)
(813)
(400)
480
58
11
(1.537)
(294)
805
(469)
12
0
1
149
(400)
0
5.145
915
646
(26)
670
2
1.201
0
21
1
0
20
118
75
651
2
43
649
OTROS
1.256
32
442
17
37
TOTAL
194.159
1.005.816
320.962
157.406
385.607
Source: Central Bank of Ecuador/BCE in Spanish
Elaboration: Directorate of Commercial Intelligence and Investments/PRO ECUADOR
71
d. Repatriation of Capital / Exchange control / Regulation of receipts and
payments abroad
Tax to outflow of foreign exchange
It is the tax charged on the value of all operations and monetary transactions
to be made abroad, with or without the intervention from institutions that
integrates the financial system. The fee of the Outflow of Foreign Exchange
Tax, also called ISD in Spanish, is 2%.
ISD must be paid for individuals, undivided inheritances and private
national and foreign associations. The Financial Institutions (IFI’s) are
constituted as tax retention agents when clients transfer foreign currency
abroad. The Central Bank of Ecuador (BCE in Spanish) are constituted astax
retention agent when make abroad transfer by order and behalf of IFI’s.
Courier enterprises that send foreign currency abroad are constituted as
perception agents when they remit money abroad under customer’s request.
Transfers, shipping or transportation of foreign currency abroad made by
state entities and bodies are not subject to Tax on Outward Foreignexchange Transfers, even public companies or international bodies and
foreign officials duly accredited in the country; diplomatic missions,
consular offices or foreign officials of those entities, duly accredited in the
country and under the reciprocal system, according to International
Agreements in force and the “Law on immunities, privileges and diplomatic
franchises, consular and international organizations”
The Tax on Outward Foreign-exchange Transfersburdens the amount of all
monetary operations and transactions that are made abroad, with or without
intervention from institutions of the financial system or on the payments
value done from abroad accounts by imports to Ecuador with the purpose of
trading the imported goods. Retention and Perception Agents must receive
from their clients, at the moment they request foreign currency burdened
with this tax, the application form of “Declaration informative of
transactions subject to Tax on Outward Foreign-exchange Transfers through
financial institutions or couriers”
Cash transfers are exempt from this tax up to a basic fraction reduced the tax
on from Income Tax of individuals (USD 9.210), effectuated by Ecuadorian
or foreign citizens who abandon the country, having to pay the
corresponding tax on the exceeding amount through the application form
106, consigning the code 4580 in the box “tax code”. The Ecuadorian
Customs Corporation will verify ISD payment respect to foreign currency
that carries passive individuals leaving the country.
72
Same way, transfers up to USD 1,000.00 assuming not using credit or debit
cards, are exempt of Tax on Outward Foreign-exchange. Those transfers
over USD 1,000.00 are burden on the exceeding amount.
Also abroad payments are exempt by managers and operators of the Special
Economic Development Zones (ZEDEin Spanish) related to import of goods
and services, provided that they are directly linked with their activity
authorized by the corresponding regulator entity.
Finally, abroad payments are exempt of ISD for capital and interests
amortizations generated over loans granted by international financial
institutions, with a term greater than a year, for investment developments in
the country provided in the Production Code. The interest rate of those
transactions must be lower than referential active interest rate. Institutions
of domestic financial are exempt of this benefit and payments made when
the loan had been conceded by relating parts or by a financial institution
constituted or addressed in tax havens or jurisdictions of less imposition.
When foreign currency are exempted of ISD payment are sent abroad,
through financial institutions or courier enterprises, the payer must
compulsory attach to his request the application form of “Statement of
exempt transaction of Tax on Outward Foreign-exchange Transfer”,
provided to that effect by the Internal Revenue Service.
Retention and perception agents of ISD must declare and pay the retained
and/or perceived tax to their clients, alongside with the possible tax caused
by the transfer, move or sending of their own funds, as the case, in the same
terms provided for the declaration and payment of withholdingtaxes of
Income Tax.
This statement will be done only via Internet, using the application form
established for that effect (application form 109).
When passive individuals transfer or send foreign currency abroadwithout
using the financial system or courier companies, must declare and pay tax in
any institution authorized to receive declarations, in the maximum term of
two days from the date the transfer or sending was done, in the application
form 106 with the tax code “4580”.
When packages, parcels or closed envelopes through couriers, expressed
messaging companies or fast post are sent, these will receive a statement
from clients indicating foreign currency abroad are not being sent.
This informative statement of Tax on Outward Foreign-exchange
Transfermust be compulsory presented when envelopes, packages and/or
abroad parcels are sent.
73
The Financial Institutions and Courier companies using services of other
retention and perception agents of ISD for the sending of foreign currency
abroad under client’s request must present the “Informative Statement of
the sending of foreign currency ordered by Ifi’s and Courier” with the
purpose of not being ISD retaining objects on values that send on behalf of
their clients who are exempted.
It will presume as foreign exchange outward and consequently this taxed
will be generated, in case of imports be made by individuals of Ecuadorian
institutions or domiciled in the country having the import and trading of
imported goods as business, when payments are generated from abroad.
Every import of individuals or Ecuadorian or foreign companies domiciled
or resident in Ecuador will be considered paid with resources that cause Tax
in Ecuador, even when payments are not only made by remittance or
transfer, but with abroad financial resources of the importer or a third party.
Only for the purpose of this presumption the following rules must be
considered:




In payments by consumption imports, tax will be generated at the
moment of goods’ nationalization.
In special customs regimes, tax will be generated at the moment of
shift to consumption regime, except the commercial deposit and free
stores generated at the moment of the statement to special regime.
In the particular regime or exception of international postal traffic or
fast mails regulated by National Tariff of Imports, Tax on Outward
Foreign-exchange Transferwill not affect categories A, B and E; for
categories C, D and F, tax is caused at the moment of nationalization
when meet law budgets.
For the country introduction of classified goods on the national tariff
as “traveler luggage non tax exempt” which nationalization is
allowed on the Passengers International Hall, Tax on Outward
Foreign-exchange Transfers is not caused.
If the Import of goods payment for trading was done totally or partially from
abroad, the foreign currency tax will be declared and paid over the paid part
from abroad, the same day of nationalization of goods; importers must pay tax
through the application form 106, consigning the code “4580” in the box “Tax
code”. In case payment is not made on same date of nationalization, interests
will be generated corresponding according to what is provided in the Tributary
Code.
e. Enterprises Set up
According to Article 2 of the Company Law, there are 5 types of enterprises:
74
*The company in commandite classified by stocks;
*The company of limited liability;
*The stock company; and,
*The company of mixed economy;
*The accidental company or accounts in participation
These 5 types of companies constitute corporates.
STEPS FOR SETTING UP OF ENTERPRISES53
COMPANIES OF LIMITED LIABILITY
Requirements:
The name.- In this type of companies consists on a business name, an objective
denomination or of fantasy. Name must be approved by the General Secretariat
of Headquarters from the Superintendence of Companies, or by the General
Secretariat from the Intendancy of Company of Quito or by the functionary that
for the purpose was designated in the Intendancy of Companiesfrom Cuenca,
Ambato, Machala, Portoviejo and Loja. (Art. 92 of Company Actand Resolution
N°. SC. SG. 2008.008 (R.O. 496 of December 29, 2008).
Social denominations are rules by principles of “property” and of “distinction”
or “peculiarity”. (Art.16 LC)
The “principle of property” consists on the name of each company being of its
power or property and cannot be adopted by any other company. The
“principle” of distinction or peculiarity consists on the name of each company
must be clearly differentiated of any other society subject to the control and
vigilance from the Superintendence of Companies.
In accordance with prescribed in Art.293 of the Law of Intellectual Property, the
holder of a right on trademarks, commercial names or vegetable obtaining that
verifies that the Superintendence of Companies had approved one or more
names of associations under its control that include identical signs to such
trademarks, commercial names or vegetable obtaining, will be able to request
the Ecuadorian Institute of Intellectual Property – IEPI in Spanish -, through the
corresponding resources, the suspension to use the referring denomination or
business name to eliminate all risks of confusion or undue use of the protected
sign.
Request of approval.- The presentation to Intendant of Companies or his
delegate of three certified copies of the deed of company creation attached to
the request, subscribed by a lawyer, requiring the approval of the establishing
contract ( Art.136 of Company Act)
__________________________________
75
53Intendancy
of Companies, Partnership Instructive, www.supercias.gob.ec
Partners
Capability: It is required civil capability to hire, it won’t be allowed among
parents and children unemancipated or among spouses. Article 99 of the
Company Act.
Minimum and Maximum number of partners.- The company will be set up
with a minimum two partners, according to first subsection from Article 92 of
the Company Act, reformed by Article 68 from the Act of Personal Enterprises
of Limited Liability, published in Official Record No. 196 from January 26, 2006
or with a maximum of fifteen and during its judicial existence happen to exceed
this number, must be transformed in other type of company or be dissolved
(Art.95 of the Company Act)
Capital
Minimum capital.- The company of limited liability is constituted with a
minimum capital of four hundred dollars of United States of America. The
capital shouldsubscribetotallyand be paid at least at 50% from nominal value of
each share. The contributions may consist on figures or movable and
immovable property goods and intangible or even on cash and goods at the
same time. Anyway, movable and immovable property goods must correspond
to the activity or activities that comprise the object of the company. If the
contribution was in movable and immovable property goods, the consisting
goods will be known in the respective deed, its value, the power transferin
favor of the company and the corresponding shares in return of the movable
and immovable property goods contributed. These will be evaluated by
partners or experts designated by them and appraisals incorporated into the
contract.
Partners will respond in a solidary way towards the company and with respect
to third parties by the assigned valueto the movable and immovable property
goods provided. (Articles 102 and 104 of the Company Act).
Shares.- Include contributions of capital, are equal, accumulative and
indivisible. The company will deliver each partner a certificate of contribution
in which necessarily is known, its non-negotiable character and number of
shares that correspond for its contribution.
The purpose.- The company of limited liability, could have as a goal the
realization of all type of civil or trading acts and commercial transactions
allowed by the Law, except bank transactions, insurance, saving capitalization.
Article 94 of the Company Act.
76
Previous report of the National Commission of Land Transport, Traffic and
Road Safety.- If the company is going to devote itself to land transport of
people or goods, according to the provisions in article 29, numeral 25 in
accordance with the General Disposition, Nineteenth of the Land Transport Act
and Road Safety (no number Act, Magazine of Official Record 398, July 7, 2008),
it is indispensable getting the previous favorable inform of the National
Commission of Land Transport, Traffic and Road Safety.
Fulfillment of other requirements related to the Purpose:
Companies devoted themselves to Complementary Activities, of Vigilance –
Safety, food, messaging or cleaning, various of own and regular duties of the
productive process of the user.- These companies will have a single and
exclusive goal and must have a minimum capital of ten thousand American
dollars. Regarding companies devoted themselves to activities of Vigilance –
Safety- This type of companies must adopt, exclusively, the legal regime of the
limited liability company and the purpose should be exclusive.
Companies, Shipping Agencies.- The capital should be equal or higher to four
thousand American dollars.
Investment’s Origin:
Galapagos.- According to the Twelfth General Disposition of Organic Act of
Special Regime for the Conservation and Sustained Development of Galapagos
Province, published in the Official Record 278, March 18, 1998, non-resident
individuals and legal entities not having their residence in Galapagos could
perform investments in the province as long as they be associate with a
permanent resident.
Foreign.- If during the creation of the company individuals or legal entities
invest money, it is indispensable to declare the type of investment, this is,
foreign direct, sub regional or national, in terms of Decision 291 of Commission
of Cartagena Agreement, published in the Magazine of Official Record 682,
May 13, 1991.
JOINT STOCK COMPANIES
Requirements:
Requirements established for limited liabilities companies are applicable to
stock companies regarding to name, approval application, purpose and origin
of investment. However, it is made clear that joint stock companies cannot have
a name as a purpose, with some exceptions clearly identified.
Form of Creation
Simultaneous Creation.- It is constituted in a single act by agreement between
those who grant the deed and subscribe stocks, who will be the founders.
Articles 148 and 149 of the Company Act.
77
Successive Creation.- By public stocks subscription, initiators of the company
who sign the deed of promotion will be promoters.
Stockholders
Capacity: To intervene in the creation of a joint stock company as a promoter
(successive creation) or founder (simultaneous creation) the civil capacity to
hire is required. However, cannot be done among spouses or non-emancipated
children. Article 145 of the Company Act.
Number of stockholders.- Companies must be constituted with two or more
stockholders, according to Article 147 of the Company Act, substituted by
Article 68 of the Act of Single Enterprises of Limited Liability. The joint stock
company cannot subsistwith less than two stockholders, unless companies of
total or most capital belong to an entity of the public sector.
Capital
Minimum capital.- The minimum capital of companies must be eight hundred
American dollars. Capital must be integrally subscribed and be paid to at least
25% of the nominal value of each stock. Such capital can be integrated asfigures
or as movable and immovable property goods and intangibles as long as, in any
case, correspond to the activity type of the company.
However, if intended to set up a company which its goal be the working of
services of national and international air transport, it will be require that such
company specifically is engaged to that activity with a capital not less than
twenty times the amount appointed by the Company Act for Joint stock
companies (Sixteen thousand American dollars), according to established in
Article 46 of the Act of Civil Aviation, reformed by Act No. 126 published in
official record 379 of August 8, 1998.
Also, if willing to set up a health and prepaid medicine company, as provided
in article 4 of the Law regulating the functioning of Private Enterprises of
Health and Prepaid Medicine published in Official Record 12 of August 26,
1998, must be national or foreign Joint Stock companies. Their purpose will be
the financing of health and medicine services and will have a minimum capital
of eighty thousand (80,000) UVC’s in Spanish (two hundred and ten thousand
twelve American dollars.
Joint Stock companies permit to establish a capital, consisting on a maximum
quota. That quota cannot exceed twice the amount of the capital. (Art. 160 of the
Company Act). What is establish for the quota and power transfers of tangible
and intangible goods, as well as quotas consisting on immovable property
goods subject to propertydescribed on the limited company set up, is valid for
the joint stock company set up.
Shares.- The share gives its legitimate owner the name of shareholder and
attributes, minimum, the basic rights that derive from it and settle in the Act.
78
The shares can be ordinary or preferred, according the statute establishes,
article 170 of the Company Act, can be freely negotiated, according article 191 of
the same Act determines. The company could issue provisional certificates or
definite titles, article 168 of aforementioned law.
COMPANIES OF MIXT ECONOMY
Requirements:
To set up these companies it is indispensable to hire legal entities of public law
or semipublic legal entities with legal entities or individuals of private law Art.
308 of the Company Act.).
In this type of companies the administrative multi personal entity called
directory cannot missed. Also, on the statute if the State or entities or bodies of
the public sector that participate in the company, so it arises, it will be
determined the requirements or especial conditions adequated respect to
transfer of shares and participation of increasing capital of the company. (Art.
312 of the Company Act).
To set up these companies, it will be normed in Section VIII of the Company
Act, related to Joint-stock companies.
COMMANDITE BY SHARES COMPANIES
Requirements:
The same that the Law demands for the setting up of Joint-stock companies,
with the own modification presented as follows.
The capital of the company will be divided in nominatives shares of an equal
nominal value. The tenth part for the capital, at least must be provided by the
members solidarily responsible (commandite), to which by their shares
untransferable nominative certificates will be handed in.
The exclusion or separation of the member in commandite is not reason for
dissolution, unless that had agreed expressively.
The company in commandite by shares will exist under a purpose to be created
with names of one or more solidarily responsible partners, followed by the
words “commandite companies” or their abbreviation.
The company administration corresponds to the partners in commandite who
could not be fired of the social administration of their incumbent but for their
established causes in the following article. In the social contract, the
administration could be limited to one or more of them. Partners in
commandite obliged to manage the company will have the right for that reason,
without taking into account the corresponding profits as shares dividends, to
the additional part of profits or salaries established on the social contract and in
case of not establishing, at a quarter of that distributed among partners. If there
79
are several, this participation will be divided among them according to
agreement and if not, equally.
ASSOCIATIONS OR PARTICIPATION ACCOUNTS
Requirements:
The association or participation accounts consist when a trader gives profits to
one or more people or losses from one or more transactions or every trade. Can
also take place in mercantile transactions done by non-traders.
The association or accidental company is ruled by conventions of its parts and
is exempt of formalities established by companies of corporate character as they
lack of it.
f. Industrial and Intellectual Property
The official body in charge of the registration of trademarks, patents, designs
and licenses is the Ecuadorian Institute of Intellectual Property IEPI in Spanish54
Trademarks
Trademark: A trademark is a sign that distinguishes a service or product from
other of its same type or branch. It can be represented by a word, number,
symbol, logotype, design, sound, smell, texture, or a combination of them. For
registry of trademarks, the type and sort of a trademark must be differentiated.
Certification Trademark: That sign which certifies the common characteristics,
the qualityin particular, the components and the origin of products or services
manufactured or distributed by authorized persons.
Collective Trademark: That sign good to distinguish the origin or any other
common characteristic of products or services of different enterprises using the
trademark under the holder control.
Tridimensional Trademark: That sign which occupies a determined space
(high, wide and deep)
Trade Name: It is the sign or trade mark which identifies a business premises
and its activities.
Trade Tagline: It is the publicity phrase which goes alongside a trademark.
Origin Denomination: It is that sign which identifies a product coming from a
particular region and meet specific requirements like human and natural
factors.
All individuals or Joint-stock companies, national or foreign can register a
trademark.
It is a trademark any sign that can by itself distinguish products or services
traded in the market from others already existent, for which shall be subject of
graphic representation.
80
_________________________
54
www.iepi.gob.ec
Benefits and Rights conferred by registration of a Trademark











Right to exclusive use, only the holder can use the sign
Protection in the whole Ecuadorian Republic and right to priority in
countries of Andean Community of Nations (Colombia, Peru and
Bolivia) within first six months of presenting the application form in
our country.
Right to present legal, civil, criminal and administrative actions
against offenders.
Discourages the use of histrademark by pirates
Protect its priority of the registry of these trademarks in other
nations.
Allow to restrict the import of goods using trademarks that infringe
rights.
Right to grant licenses to thirds and to collect royalties.
Right to franchise his product or service.
Cede the rights over his trademark to thirds.
Possibility to assure a loan with his trademark.
By registering his trademark it is turned as intangible asset, which in
several occasions it becomes in the most valuable asset of his
enterprise.
Registry Procedure
Once the application is presented, it goes to a pattern examination, checking all
requirements are achieved, if so, it is published on the Industrial Property
Gazette, with the finality that thirds have knowledge of the performed requests.
If no opposition is presented, the test of registrabilityis done for the later
emission of the resolution which accepts or rejects the registry and in case of
concession; the process is concluded with the emission of the title registry.
Fee for registration of the trademark
Process for trademark request, trade name, trade tagline, distinctive appearance
is the sum of USD 116.
Process of request of collective trademarks, certifying trademarks, totalizes the
sum of USD 252.
Process of registry of origin denominations totalizes the sum of USD 228.
Process of registry of a tridimensional trademark, totalizes the sum of USD 336.
In case of an improper use of a trademark, the holder may initiate legal,
criminal and administrative actions.
Patents
81
A patent is a set of exclusive rights conceded by the state to an inventor or his
assignee, for a 20 year term by exchanging the divulgation of an invention.
Patents are of a product or a procedure. Patents sort out an existing problem.
The inventors / holders and/or assignees may be show up before the
Ecuadorian Institute of Intellectual Property and register the patents, the
models of usefulness and industrial designs.
The Unity Management of Patents is in charge of protecting Holders’ right and
besides it is committed with education and socialization of the Intellectual
Property in the country since early age for the development of scientific
investigation.
Benefits and rights conferred by registering a patent
The patent grants the right of excluding thirds to manufacture, reproduce,
trade, among others your product, conferring exclusivity for 20 years.
It offers you the right to initiate legal actions against everyone who, without
your permission manufactures or sells the invention of the holder of the patent.
Otherwise, he could not demand and claim his rights.
The holder may grant the license(s) of his invention to thirds for his patent’s
exploitation.
It offers you priority related to thirds who wish to register inventions similar to
countries where protection is possible to get.
Author Rights
The Author Right is the legal system to concede authors moral and patrimonial
rights on their works, in compliance with the provisions for Ecuador’s
Constitution and the Universal Declaration of Human Rights.
The works protected include the following among others: novels, poems,
theater works, newspapers, computing programs, data bases, films, musical
compositions, choreographies, paintings, drawings, photography, sculptural
works, architecturalworks, publicity, maps, technical drawings, works of art
applied to the industry.
The author’s right lasts all creator’s life plus 70 years after his death.
The use of a work without express authorization of its author is considered
illegal and could be punished with penalties and even imprisonment.
The author’s right protects his works for the simple fact of its creation; however
it is recommended to register the works in the IEPI’s Unity of Registry, so the
author will benefit from the presumption of authorship that law acknowledges
to his favor.
82
The protection of the System of Author’s Right is based on the power to
authorize or prohibit the use of his works.
The validity term of the protection is given without moral right’s prejudices
that are protected indefinitely.
The author could authorize or prohibit:
 The production or setting of any means or by any procedure of the
works.
 The public communication of the work
 The distribution of work’s copies
 The translation, adaptation, fix or any other transformation of the
work
g. Procurement / public tender
In 2008 a thoroughly reform to the system that rules the procurement and
public tender was done, and being the legal frame the Organic Act of the
Procurement National System 55
The Procurement National Institute is a public, technical, and autonomouslaw
body, with own legal presence and administrative, technical, operative,
financial and budget autonomy. Its top ombudsman and legal representant is
the Executive Director who is appointed by the President of Ecuador. Its
headquarters are located in Quito, having national jurisdiction, being able to
establish deconcentrated offices throughout the country.
The Institute serves the Principalship of the Procurement National System
The State Suppliers and Procurement Entities are subject to the Organic Act of
the Procurement National System (LOSNCP in Spanish).
Numeral 28 from article 6 of LOSNCP defines supplier as follows: “it’s the
individual or national/foreign legal entity, being registered in RUP 56,
according to this Law, enabled to provide goods, execute works and provide
services, including consulting required by the Contracting Entities.
In accordance, article 1 of LOSNCP stipulates as contracting entities the
following dependencies:
a. The bodies and dependencies of the State Functions
b. The Electoral Bodies
c. The Control and Regulation Bodies
d. The entities integrating the Autonomous Sectional Regime
_________________________________________
83
55 Official Record 395 del 04/08/2008
56 RUP: Registro único de Proveedores (in Spanish), Single Registry of Suppliers, it’s the Data Base of
suppliers, works, goods and services including consulting, enabled to participate on established
procedures in the LOSCP. Its administration is in charge of the Procurement National Institute and it is
necessary in order to hire with Contracting Entities.
e. The bodies and entities created by the Constitution or the Law to the
exercise of state power for the provision of public services or for
developing economic activities assumed by the State.
f. The legal entities created by sectional legislative act for the offering of
public services.
g. The corporations, foundations or civil associations in any of the
following cases:
a. Be integrated or be conformed mostly with any of the bodies and
entities appointed from number 1 to 6 of this article or by State
Institutions in general
b. To own and manage goods, funds, securities, shares, assets,
incomes, profits, surpluses, subsidies and all rights belonging to
the State and its institutions, whatever the proceeding source,
inclusive from loans, donations and deliveries made in favor to
the State or its institutions; as long as its capital or assigned
resources are involved with fifty (50%) per cent or more from
state participation; and in general every procurement using public
resources for more than fifty (50%) per cent of the respective
contract cost.
h. The trade companies whatever had been or is its origin or creation
that own or manage goods, funds, securities, shares, participations,
assets, incomes, profits, surpluses, subsidies and all rights belonging
to the State and its institutions, whatever the proceeding source,
inclusive from loans, donations and deliveries made in favor to the
State or its institutions; as long as its capital, patrimony or assigned
resources are involved with fifty (50%) per cent or more from state
participation; and in general every procurement using public
resources for more than fifty (50%) per cent of the respective contract
cost. Except legal entities stated in numeral 8 from article 2 of this
Law, that shall be submitted to the regime established by this rule.
The main goals of the State, related to procurement are:
a. Ensure the quality of public expenditure and its realization according
to the National Plan of Development;
b. Ensure the total realization of the contracts and the effective
application of the contractual standards;
c. Ensure transparency and avoid discretionality in procurements;
d. Convert procurement into a stimulus for domestic production;
e. Promote the participation of artisans, professionals, micro, small and
medium enterprises with competitive offers, within the frame of this
Law;
f. Expedite, simplify and adapt the processes of acquisition to the
different needs of public policies and their timely implementation.
84
g. Boost social participation through processes of citizen oversight to be
developed nationally, according with the Regulation;
h. Keep an effective and permanent subjection of procurement with
systems of planning and budgets of central Government and sectional
bodies.
i. Modernize procurement processes to be a tool of economic
management efficiency of state resources;
j. Ensure permanency and effectiveness of management control systems
and transparency in public spending; and
k. Encourage and ensure participation of reliable and competitive
supplier in the SNCP.
The process of purchasing and procurement can be summarized in the
following steps:
a. Through the platform57 provided by the INCOP are inscribed all
contracting institutions and all those who want to be suppliers, this
record is for a single occasion and in this way is enrolled either to
contract or to provide to the various state institutions.
Graph No. 12
Record of
Suppliers
Procurement
Platform
Record of
Contracting
Authorities
b. The contracting institutions publish on the public purchases system
their requirement of goods and services alongside the bases, these
demands are notified via e-mail to suppliers although it is
recommended to enter to the portal and check periodically the
published requirements. All requirements are public and free of
access, that is to say that registered suppliers can access to the site
and check what’s being required, without waiting for an e-mail.
c. From the requirement list being published, suppliers may select those
they are interested to offer and be enrolled in the process, on bases
that were published feature the time and technical requirements that
proposal must meet.
85
_____________________________
57 Procurement platforms in www.compraspublicas.gob.ec
d. Once the term grantedto qualify and present proposals have elapsed,
the contracting entity makes a review through a check list to
determine suppliers who meet the bases. Suppliers who don’t meet
the checklist may appeal the decision to the Institute of Public
Purchases who has the power to include it or to dismissthe whole
process.
e. When having the definite qualification of suppliers, you get into a
process of reverse auction 58 through the platform of public purchases
where qualified suppliers bid during a specific time. At the end of the
day the contracting entity chooses the supplier who bid the lower
price.
f. If there was only one qualified supplier, there is no reverse auction;
therefore the supplier is called by the contracting authority to a
negotiation meeting where the contractor tries to get price cuts.
As it can be noticed, the Institute of Public Purchases only gives the virtual
platform assuring transparency and efficiency and only intervening in the
process when there is an impugnation by the suppliers who hasn’t been
qualified by the contracting authority.
Graph No. 13
ADJUDICATION PROCESS VIA REVERSE AUCTION
Contracting
Authorities publish
their requirements on
the portal.
Registered Suppliers
choose which
requirements to apply
for
Suppliers send the
information according
to the published bases
Contracting Authority
revises checklist of the
suppliers who applied
Qualified Suppliers get
in process of reverse
auction through the
portal
Contracting Authority
adjudges the supplier
who bids the lowest
price on the reverse
auction
___________________________
86
58 Article 47 LOSNCP: For the procurement of standard goods and services that are not in the electronic
catalog, the Contracting Entities must perform reverse auctions in which equivalent suppliers of goods
and services bid down the price offered, in a public act or by electronic means through the Portal
COMPRASPÚBLICAS.
There is another purchase mechanism, the so called “Purchases by Catalog”
This procedure allows Contracting Entities to buy directly goods and/or
services from suppliers who publish their products in this module.
Basically the state has published a list of standard goods and services 59, which
are of common purchase or procurement and suppliers registered in RUP may
register in the catalog presenting their price honestly offering the possibility to
contracting entities to select directly from this catalog without accessing in
processes of reverse auction.
Once agreements Marco are done with the suppliers for the purchase of
standard goods and services that be constantly required by the Contracting
Entities, this tool allows creating an electronic catalog of goods and services
from where they may buy directly.
Its main features are:
 Program the processes of tender for model agreement
 Register Marco agreements in force
 Elaborate the electronic catalog, a virtual shop
The benefits of this tool are:
 Minimum time of procurement process, 1 or 2 days
 Direct purchase of standard goods and services with greater
demand
 Decrease inventory costs
 Decrease delivery terms
 Better market prices, for all state entities
 Service available 24 hours, 365 days
Graph No. 14
87
PURCHASE SCHEME BY VIRTUAL CATALOG
Public
Contracting
Authority
Standard goods
and services
Registered
suppliers
publish their
offers
Virtual
catalog on
Public
Purchases
portal
_________________________
59 Subject to procurement whose characteristics or technical specifications are homologated and cataloged
5. FISCAL SYSTEM
a. General Structure 60
Taxes, besides being means to collect public incomes, they will serve as an
instrument of general politic economic, stimulating investment, reinvestment,
savings, and its destination towards the productive goals and national
development; they will meet stability demands and social progress and will
intend a better distribution of the national income.
The tax laws will determine the order of assessment, active and passive
subjects, the amount of tax or how to establish, exemptions and deductions,
claims, appeals and other matters reserved for the law to be granted under this
Code.
The tax regime will be ruled by principles of legality, generality,
equality,proportionality and non-retroactivity.
It is duty of the President of Ecuador to dictate the regulations for the
application of tax laws. The General Director of Internal Revenues and the
General Manager of Ecuadorian Customs Corporation will dictate memos or
general dispositions necessary for the application of tax laws and for the
harmony and efficiency of their administration. The same will occur with the
authorities of municipalities and provincial councils, when the law grants these
institutions the regulatory power.
88
No regulation could modify or alter the purpose of the law neither creating tax
duties or establish exemptionsthat are not registered on it. Performing this duty
the application of laws could not be suspended, or add them, or reform them,
or not meeting them with the excuse of interpreting them, being responsible for
the abuse of authority that is exercised against the administered, the official or
authority that issue the illegal order.
The tax management corresponds to the body established by law and comprises
the duties of determination and tax collection, as well as claim resolutions and
forgiveness of tax inquires.
________________________
60 Tax Code
The tax laws, their regulations and general memos will rule in all the territory,
in the seas and air jurisdictional space or part of it, since the following day of
their release in the Official Record, unless special validity terms are established
after that publication.
However, standards referred to taxes which determination or clearance shall be
performed in annual terms, will be applied since first day of the following year
and since first day of the following month, when short terms are referred to.
The Internal Revenue Service (SRI in Spanish), is a technical and autonomous
entity whose responsibility is to collect internal taxes established by Law
through the application of current standards. Its goal is to consolidate a tax
culture in Ecuador in order to constantly increase the voluntary fulfillment of
tax liabilities by the taxpayers.
b. Tax system
Tax system of Ecuador includes state and local taxes. The first are assigned by
State Authorities and the local taxes are established by the Municipality.
It is considered as municipal taxes the following: a) Tax on urban property; b)
Tax on rural property; c) Tax on alcabalas; d) Tax on vehicles; e) Tax on
registrations and patents; f) Tax on public shows; g) Tax on profits from urban
land transfers and their windfall profit; h) Tax on dalliance; i) Tax of 1.5 per
thousand on total assets.
89
And among state taxes are: Income Tax, Value Added Tax (IVA in Spanish) and
Tax on Special Consumptions. In addition there is a special tax regime for oil,
mining and touristic companies. Law in Ecuador establishes other taxes in
addition to IVA and Income Tax; for example you pay taxes when granting a
heritage, by owning a vehicle and for luxury articles or some products
damaging the health (ICE in Spanish).
c. Taxes 61
i. Income Tax
This tax is established to the global income obtained by individuals, undivided
inheritances and national or foreign associations, according to current law
dispositions.
______________________________
61 Organic Act of Internal Tax Regime
For this tax purposes, it is considered as income.1.- Incomes of Ecuadorian source freely or profitable obtained from both, work
or capital consisting on money, movable and immovable property goodsor
services; and
2. Incomes obtained abroadby individuals domiciled in Ecuador or by national
associations, according to article 98 of this law.
In case of incomes coming from abroad, it will be considered from Ecuadorian
source incomes coming from exports performed by individuals or national/
foreign associations with permanent domicile or establishment in Ecuador,
whether directly performed or through special agents, commission agents,
subsidiaries, affiliates or representatives of any kind;
Subject to tax relationship.The active subject of this tax is the State. It will be managed through the Internal
Revenue Service. Passive subjects of this income tax are individuals, undivided
inheritances and national or foreign associations, domiciled or not in Ecuador,
obtaining taxable incomes according to current law dispositions. Passive
subjects,who are obliged to register the accounts, will pay the income tax based
on result outcomes.
90
The tax period is yearly and comprises the term from January 1 to December 31.
When the activity creator of income starts later than January 1, the tax period
will compulsory end on December 31 of each year.
Rates.√ To pay the income tax of individuals and the undivided inheritances, rates
are applied on the tax base within the following income chart:
Chart No. 20
INCOME TAX - YEAR 2010
Basic
Fraction
-
Excess
Up To
8,910
Basic
Fraction
Surplus
Fraction
Tax
Tax
-
0%
8,910
11,350
11,350
14,190
0
122
5%
10%
14,190
17,030
406
12%
17,030
34,060
34,060
51,080
747
3,301
15%
20%
51,080
68,110
68,110
90,810
6,705
10,963
25%
30%
17,773
35%
90,810 hereinafter
Source and Elaboration: Organic Act of Internal TaxRegime
For the employers to make deductions from the income tax of employees
remaining in a dependency relationship the following table will be considered
for the year 2011:
Chart No. 21
INCOME TAX - YEAR 2011
Basic
Basic
Excess
Fraction
-
To
Fraction
Tax
Tax
Fraction
9,210
Surplus
-
0%
9,210
11,730
0
5%
11,730
14,670
126,000
10%
14,670
17,610
420,000
12%
17,610
35,210
773,000
15%
35,210
52,810
3,413
20%
52,810
70,420
6,933
25%
70,420
93,890
11,335
30%
18,376
35%
93,890 hereinafter
Source and Elaboration: Organic Act of Internal TaxRegime
91
The revenues obtained by individuals who do not have residence in the
country, for occasional services rendered in Ecuador, will pay the one-time fee
of 24% over the whole of the income received for the year 2011 62.
 Corporations created in Ecuador as well as branches of foreign
___________________________
62 This information is periodically updated and published by the Internal Revenue Service (SRI in Spanish)
www.sri.gob.ec
corporations domiciled in the country and permanent establishments of foreign
corporations not domiciled who obtain taxable income are subject to the tax rate
of 24% on their taxable base by the year 2011.
The corporations which reinvest their profits in the country may obtain a
reduction of 10 percentage points from the rate of the income tax on the amount
reinvested in productive assets, provided that they are intended to the
acquisition of new machinery or new equipment to be used for its productive
activity, as well as for the acquisition of goods related to research and
technology that will improve productivity, generate productive diversification
and increase of employment, for which the corresponding increase in capital
shall be carried out. In the case of private, cooperatives and credit unions and
similar financial institutions, may also get this reduction, provided they
intended the granting of credits for the productive sector, including small and
medium-sized producers, and carry out the corresponding increase in capital.
Any individual or company resident in Ecuador which derives income abroad,
and has been subject to taxation in another State, will be excluded from the
taxable base in Ecuador and therefore are not subject to taxation. The exemption
shall not apply in the case of income from tax havens and pensions will be part
of the overall income of the taxpayer.
ii. VAT
The tax to the added value (VAT), imposed to the value of the transfer of
ownership or the importation of tangible personal property, at all stages of
marketing, as well as the rights of copyright, industrial property and related
rights; and to the value of the services rendered, in the manner and under the
conditions provided for the law. There are basically two tax rates that are 12%
and 0% rate.
For the purposes of this tax, the term transfer is considered.92
1. Any act or contract made by individuals or companies that aims to
transfer the domain of tangible personal property, as well as copyright,
industrial property and related rights, even when the transfer is effected
free of charge irrespective of the designation given to contracts or
negotiations resulting from the transfer and rights of the conditions that
the parties agreed.
2. The sale of tangible personal property that has been received in
consignment and the lease with option to purchase, including the
commercial lease, under all its forms; and,
3. Use or personal use by the taxable person of tangible personal property
which are result of its production or sale.
VAT will not be levied in the following cases 63. Contributions in kind to companies;
 Awards by inheritance or liquidation of partnerships, including the
marital;
 Sales of businesses in which assets and liabilities are transferred;
 Mergers, demerges and transformation of companies;
 Donations to entities and agencies in the public sector, including public
companies; and private non-profit institutions legally constituted, as
defined in the regulation;
 Transfer of shares, shares and other securities.
 Fees or contributions made by condominium owners for the
maintenance of condominiums within the horizontal property regime, as
well as fees to the financing of common costs on developments.
Transfers will have zero tariffs and imports of these goods 64. –
The transfers and imports that are 0% VAT rate are the following:
 Food products of agricultural, poultry, livestock, beekeeping, rabbit, bio
aquatic, forest, meat in natural state and sausage origin; and fishing.
 Milk in natural state, pasteurized, homogenized or powder of national
production, cheeses and yoghurts. Infant formula, infant protein.
 Bread, sugar, sugarcane, salt, butter, margarine, oatmeal, corn starch,
noodles, flour for human consumption, national canned tuna, mackerel,
sardines and trout, edible oils, except the olive.
 Certified seeds, bulbs, plants, cuttings and live roots. Balanced, prepared
food and fishmeal. Fertilizers, pesticides, insecticides, fungicides.
 Tractors tires up to 200 HP including the type Kangaroo and which is
used in the cultivation of rice; plows, harrows, furrows and weirs,
combines, harvesters, seeders and other elements of agricultural use.
 Drugs and medicines for human use
 Bond paper, books and supplementary materials.
 Exported ones.
 Those who are introduced in the country by foreign diplomats and
officials of international, regional and sub-regional bodies in cases that
are released from duties and taxes, and passengers entering the country,
93

up to the value of the franchise known by the organic customs law and
its regulations.
Donations from abroad are carried out in favor of institutions and
agencies in the public sector and public enterprises; and institutional
cooperation with entities and agencies of the public sector and public
companies, as well as goods that are inside the country, with the nature
of temporary admission or transit, while non-target of nationalization.
_________________________________
63 Reference: Article 54, Internal Revenue Tax Law (Ley Orgánica de Régimen Tributario Interno.)
64 Reference: Article 55, Internal Revenue Tax Law (Ley Orgánica de Régimen Tributario Interno.)






Administrators and operators of ZEDES, where imported goods are
destined solely for the authorized areas, or incorporated in one of the
processes of productive transformation developed in such area.
Electrical energy.
Fluorescent lamps.
Aircraft, light aircraft and helicopters destined for the commercial
transport of passengers, cargo and services.
Hybrid vehicles.
Items brought into the country under the regime of the International
Postal traffic and courier services, provided that the FOB value of the
shipment is less than or equal to 5% of the basic fraction not veiled from
the income tax of individuals, and their weight does not exceed the
maximum established by Decree of the President of the Republic, and
that it is the case of goods for use of the recipient and non-commercial
purposes.
On local purchases and imports the exemptions under the tax code, nor those in
other organic, general or special laws shall not apply.
Tax Credit.Individuals and exporting companies who have paid and retained the VAT on
the purchase of goods exported are entitled to tax credit for those payments.
The same right shall be for tax paid in the acquisition of raw materials, supplies
and services used in products manufactured and exported by the manufacturer.
After the export, the taxpayer will ask the IRS for a refund with a copy of the
relevant export documents.
This right can be transferred only to direct suppliers of exporters.
They are also entitled to tax credit for manufacturers, for VAT paid on local
purchase of raw materials, supplies and services for the production of goods for
export are added to raw materials in the country admitted under special
customs regimes, although these taxpayers do not export the finished product,
94
provided that such goods are actually purchased by exporters and the transfer
to the exporter of the goods produced by those taxpayers who have not been
nationalized, are taxed at zero rate.
Similarly, taxpayers who have the rotation of their business as freight
transportation abroad, and have paid VAT on the purchase of aviation fuel, are
entitled to tax credit exclusively for such payment. Upon receiving the
transportation service, the taxpayer shall request the Internal Revenue Service a
refund in the form and conditions provided for in Resolution.
Operators and Administrators of Special Economic Zones Development (ZEDE)
are entitled to tax credit for VAT paid on the purchase of raw materials,
supplies and services from the national territory to be incorporated into the
production process operators and ZEDE managers. The taxpayer shall request
the Internal Revenue Service a refund in the form and conditions provided in
the accompanying resolution, once the technical unit responsible for operational
oversight and control of ZEDE certifies, under its responsibility that such
property is part of the process production of the acquirer.
Tax base. The VAT base is the total value of the intangible personal property that are
transferred or from services rendered, calculated on the basis of their selling
prices or service delivery, including taxes, service charges and other legal
expenses attributable to the price.
Price thus established may be deducted only the values for:
 The normal discounts and bonuses granted to purchasers by commercial
customs or usage and their appearance on the invoice;
 The value of goods and containers returned by the purchaser, and
 Interest and insurance premiums in installments sales.
Taxable income on imported goods.- The tax base on imports is the result of
adding the value for customs taxes, tariffs, taxes, fees, surcharges and other
expenses on the import declaration and other documents relevant.
In local transfers of ownership of goods, whether in cash or credit, the generator
event of VAT shall be verified at the time of delivery of the goods, or at the time
of full or partial payment of money or credit account, whichever comes first, a
fact for which, it must necessarily give the corresponding proof of purchase. In
the case of introduction of goods into the country, tax is due at the time of the
release by customs.
Subjects of taxation process 65.The active subject of the value added tax is the State. It will be administered by
the Internal Revenue Service (IRS). The product of the proceeds by the value
95
added tax shall be deposited in the account of the Internal Revenue Service
opened in the Central Bank of Ecuador for this effect. After the respective
accounting records are made, the values are transferred within 24 hours to the
National Treasury Current Account for its distribution to unit holders.
The passive subjects of VAT are:
o As taxpayers
 Those conducting imports taxed at a rate, either on their own or others.
a.1) as agents of perception:
____________________________
65 Artículo 62-63, Ley Orgánica de Régimen Tributario Interno
 Individuals and companies who usually carry out transfers of
encumbered assets with a fee;
 Individuals and companies who normally provide services taxed with a
tariff.
o As retention agents:
 Institutions and bodies of the public sector and public enterprises; and
companies, undivided shares and individuals considered as special
taxpayer by the internal revenue service.
 Issuers of credit cards for payments carried by the VAT to their
affiliated establishments.
 The insurance and reinsurance businesses for the payments they do to
for purchases and services taxed with VAT, under the same conditions
outlined on the above paragraph; and,
 Exporters, either individuals or companies
 Tour Operators who invoice inbound tour packages within and outside
the country,
 Individuals, undivided shares or companies who import taxable
services
 Petrocomercial and fuel marketers presumptive VAT on fuel sales.
Declaration, assessment and payment of VAT. The passive subjects will declare tax operations carried out monthly in
the following month of completed, except those for which a month or
more was granted for payment in which they may submit the tax return
in the subsequent month of carried out, in the form and deadlines
established in the regulations. Taxable persons which exclusively
transfer goods or services taxed at zero rate or not taxed, as well as
those that are subject to total retention of caused VAT, shall submit a
biyearly statement of such transfers, unless it is VAT-retention agent.
 Tax assessment. - The taxable persons required to file a tax return shall
pay the tax on the total value of taxable transactions. The value of the
96
tax credit will be deducted from the tax paid mentioned in article 66 of
this Act.
 The resulting difference, after the deduction indicated in the previous
article, is the value that must be paid in the same deadlines for filing the
return. If the declaration will cast the balance in favor of the taxpayer, the
tax credit balance will be considered, which will be effective in the tax
return of the following month.
In the case of imports, payment of VAT shall be in the import declaration and
payment shall be made prior to the delivery of goods by the customs office
concerned.
Individuals and companies that had paid value added tax on local purchases or
imports of goods that are exported, as well as those goods, raw materials,
supplies, services and fixed assets used in the manufacture and marketing of
goods that are exported, are entitled to this tax refund without interest, within a
period not to exceed ninety (90) days, through the issuance of the respective
credit note, check or other payment. Interests should be recognized after the
deadline referred to above if the VAT claimed has not been refunded. The
exporter must register in the Internal Revenue Service prior to the return
request and the IRS must return the amount paid to the formal submission of
the statement of the legal representative of the taxpayer.
iii.
Others
Special Consumption Tax
The Special Consumption Tax (Impuesto a los consumos especiales, ICE in
Spanish) shall apply to goods and services from domestic or imported, detailed in
article 82 of the Internal Tax Regime Law.
Passive subjects.1. Individuals and companies that manufacture goods subject to this tax
2. Those conducting import goods subject to this tax
3. Those providing services taxed
Tax base.The tax base of products subject to ICE, domestically produced or imported
goods shall be determined based on the retail price suggested by the
manufacturer or importer, minus the VAT and ICE or based on benchmark
prices that by order are set annually by the Director General of the Internal
Revenue Service. This taxable amount will be applied ad-valorem rates set forth
in this Act. This tax base obtained by calculating the retail price suggested by
the manufacturers or importers of goods subject to ICE will not be less than the
result of increasing the price ex-factory or ex-customs, as appropriate, 25% of
presumptive minimum margin trading. If products are sold with higher
97
margins to the minimum presumptive designated above more leeway should
be applied to determine the tax base with ICE. The ICE assessment and
payment of applying the minimum margin presumptive, when in fact the
respective products are sold with higher margins, be considered an act of tax
fraud.
ICE does not include Value Added Tax and will be paid for the products
mentioned in the preceding paragraph, by the manufacturer or importer in a
single step.
For cases in which no reference rates are applied, operations to be performed to
identify the tax base on which more shall calculate the Special Consumption
Tax on ICE are:
Based on RRP:
TAX BASE = RRP / ((1 +% VAT) * (1 +% CURRENT ICE))
Based on the price ex - factory or ex - Customs:
TAX BASE = (PRICE EX-FACTORY OR EX-CUSTOMS) * (1+ 25%)
Tax period.Manufacturers of goods subject to ICE, and taxable service providers will
submit taxable monthly statement, for the transactions subject to the tax, made
within the immediately preceding calendar month, in the manner and dates to
be established in the regulations. In the case of imports, payment of the ICE will
take place in the import declaration and payment shall be made prior to the
delivery of goods by the customs office concerned.
The following goods and services are subject to the special consumption tax. –
Chart No. 22
98
GROUP I
Cigarettes, tobacco products and
RATE
tobacco substitutes (covering products
entirely or partly using tobacco leaves
150%
as raw materials and intended to be
smoked, sucked, inhaled, chewed or
used
Beer,as snuff.)
Soft drinks
Alcohol and alcoholic products other
than beer
Perfumes and toilet waters
Videogames
Firearms, sporting weapons and
ammunitions except those acquired
by the public force
Incandescent light bulbs except those
used as automotive supplies
30%
10%
40%
20%
35%
300%
100%
Source and elaboration: Internal Revenue tax law
In the event of national or imported blonde cigarettes in no way may be paid,
by concept of ICE, an amount in dollars less than the payment for this tribute,
the best-selling domestic blonde cigarette brand. Twice a year, the internal
revenue service will determine on the basis of the information submitted by the
importers and domestic producers of cigarettes, the best-selling domestic blond
cigarette brand and the amount of tax that corresponds to it. In addition, a
minimum price is set, which shall be equal to the brand of blond cigarettes of
highest sale in domestic market.
Chart No. 23
99
Group II
1. Motor Vehicles up to 3.5 tons of cargo, as follows:
RATE
Motor Vehicles whose retail price is up to $20,000
5%
Pickups, vans, trucks and rescue vehicles whose retail price
Is up to $30.000
Motor vehicles except pickups, vans, trucks and rescue vehicles
whose retail price is more than $20,000 and less than $30,000
5%
10%
Motor Vehicles whose retail price is more than $30,000 and less than
$40,000
15%
$50,000
$60,000
20%
$70,000
30%
Motor Vehicles whose retail price more than $70,000
35%
25%
2.- Aircrafts, light aircrafts, helicopters except those for the
commercial transportation of passengers, cargo and services, jet
skis, three wheelers, four wheeler, yachts andpleasure boats
15%
Source and elaboration: Internal Revenue tax law (Ley Orgánica de Régimen Tributario
Interno)
Chart No. 24
GROUP III
RATE
Paid television services
15%
Casino services, gambling (bingo –mechanical
35%
Games) other games of chance
Source and elaboration: Internal Revenue Tax law
Chart No. 25
GROUP IV
Dues , memberships, affiliations, and
similar actions that social clubs provide to
charge its members, which together exceed
$1,500 per year
RATE
35%.
Source and Elaboration: Internal Revenue Tax law
100
Declaration, assessment and payment of tax. Passive subjects of the ICE will monthly submit a statement in
operations chargeable with the tax, carried out in the immediate
preceding calendar month, in the manner and date established in the
regulation.
 Passive subjects of the ICE will make the corresponding tax payment
on the total value of taxable operations.
 Paid tax must be done on the same deadlines for the submission of
the Declaration.
In the case of imports, the liquidation of the ICE it will be performed in the
import declaration and your payment will be made prior to release of the goods
by the Customs Office.
Destination of the tax.The tax product for the special consumptions shall be deposited into the
respective account of the internal revenue service that, for this purpose, will be
opened in the Central Bank of Ecuador. After the respective accounting records
are done, the relevant values will be transferred within a maximum of 24 hours
to the single current account of the National Treasury.
d. Tax treatment of foreign investment66
Tax, national and foreign investments are subject to the same tax regime, with
the exceptions provided for in the code of the production.
Incentives tax order that recognizes this legislation are incorporated as reforms
to the relevant tax rules, as reflected in the reformatory provisions at the end of
this code 67.
_____________________________
66 Organic Law of Tax Regime
67 Of the Incentives for Productive development, Chapter I, General rules on Incentives and Economic Development
Incentives (Normas generales sobre Incentivos y Estímulos de Desarrollo Económico), Articles 23-24
The tax incentives included in this Code are three:
1. General: Application for investments that run anywhere in the national
territory. They consist on the following:
i.
ii.
The progressive reduction of three percentage points in the
income tax;
The established for special developing economic zones, provided
that these areas meet the criteria for its formation;
101
iii.
iv.
v.
vi.
vii.
viii.
ix.
The additional deductions for the calculation of the income tax, as
mechanisms to encourage the improvement of productivity,
innovation and eco-efficient production.
The benefits for the opening of the share capital of the companies
for their employees;
The payment facilities in tributes to foreign trade;
The deduction for the calculation of the income tax of the
additional compensation for the payment of a living wage;
The exemption of exit tax foreign currency for financing external
operations;
The exemption of the advance to the income tax for five years for
any new investment;
The reform to the calculation of the income tax advance.
2. Sectorial and equitable regional development: for the sectors that
contribute to change the energy matrix, strategic substitutions of
imports, to the promotion of exports, and for the rural environment
throughout the country, and urban areas as specified in the second
reform provision (2.2), the exemption of the income tax for five years for
new investments that are developed in these sectors is recognized.
3. For depressed areas: Besides that these investments will benefit from the
General and sectorial incentives before described in these areas, new
investment will be prioritized giving a tax benefit by the additional
deduction of 100% of the cost of hiring new workers for five years.
6. FINANCING
a. Financial system68
The Ecuadorian Financial System consists mostly of Private Banks,
Cooperatives, Mutual Entities, Financial Corporations, Public Institutions,
Credit Cards, Offshore Companies and Financial Groups.
102
Chart N°26
NUMBER OF ENTITIES BY TYPE OF INSTITUTION
Type of Institution
General Bonded Warehouses
Of Shore Banks
Foreign Private Banks
National Private Banks
Credit Information Bureaus
Money Exchange Offices
Savings and Credit Unions
Operation Entities abroad
Financial Groups
Public Financial Institutions
Mutual
Entities
s
Foreign Banks Representative Offices
Financial Corporations
Credit Card Operators
Numberof
Active entities
4
2
2
24
2
1
41
7
17
8
4
6
10
2
Source: Superintendence of Banks
Elaboration: Management of Business and InvestmentIntelligence, PRO ECUADOR
The Financial System Control Agencies are Central Bank of Ecuador, Deposits
Guarantee Agency, State Bank, Superintendence of Banks, Superintendence of
Corporations and Stock Market. All these regulating bodies shall act according
to what stated in the General Law for the Financial System Institutions and in
the Bylaws.
The General Law for the Financial System Institutions regulates the
organization, activities, operation and extinction of the institutions of the
private financial system, as well as, the organization and duties of the
Superintendence of Banks, entity in charge of the supervision and control of the
financial system, looking upon the protection of the interests of the public. In
the present Law the Superintendence will be referred as “The
Superintendence”.
____________________________
68 General Law of Financial System Institutions
Public Financial Institutions as well as insurance and reinsurance companies are
ruled by their own laws in what regarded to their institution, activities,
operation and organization. They will be subject to present Law in what
regarded to the enforcement of standards of financial prudence and solvency as
well as to the control surveillance conducted by the Superintendence within the
legal frame, which regulates these institutions, in everything what applies
according to their legal nature. The Superintendence will enforce the laws
foreseen in the present Law regarding force liquidation, when grounds of
sufficient merit are proved.
103
Mutual Associations of Savings a Credit for Housing, as well as institutions for
financial services, such as general bonded warehouses, leasing companies,
Credit Cards operators, Money Exchange offices, Guarantee corporations,
Corporation for the development of the secondary mortgage market, shall have
exclusively the corporate purpose the performing or such activities, and shall be
subject to the standard of financial prudence and solvency and control of the
Superintendence, within the legal frame that regulates the above mentioned
institutions, and based on the laws issued for that matter.
Institutions of ancillary services of the Financial System such as: transportation
of securities and currencies, collecting services, ATMS, accounting and
computer systems, exports promotion, and
real state agencies, owners of
properties exclusively intended to the use of offices of a regulator institution or
a financial institution; and others authorized by the Superintendence of Banks,
without prejudice of the control to which the Superintendence of Corporations
is entitled; will be controlled by the Superintendence of Banks, who will issue
rules generally applied to these institutions.
Banks, Financial Corporations or Investments and Development Corporations
and Mutual Associations of Savings and Credit for Housing constitute,
according to the General Law for the Financial System Institutions, private
financial institutions. Banks and Financial Corporations or Investments and
Development Corporations are characterized mainly for being intermediaries in
the financial market, where they operate habitually, getting funds trough
deposits or any other way from the public in order to use such obtained
resources totally or partially, in credit or investments operations. Mutual
Associations of Savings and Credit for Housing are institutions with the main
activity of getting resources form the public to be used in the financing of
housing, construction and family well-being of their associates. This should be
evident from the composition of their assets69.
b. Credit options, multilateral financing agreements
At the present time, the Ecuadorian Government has focused its attention in the
________________________________
69 General Financial System Institutions Act Title I. About theextent of the Law. Art. 2.
search of agreements related to strategic sectors. For instance, on electrical
matter, an initial commitment with Japan for the financing of the Chachimbiro
Geothermic project (2010) has been accomplished. Recently, Ecuador obtained
Chinese credit destined to projects of public investment such as hydroelectric
and irrigation systems. Ecuador also maintains credit based relationships with
institutions like the Andean Development Corporation (CAF in Spanish) and
the Inter American Bank for Development (BID in Spanish).
104
Regarding credit options, Ecuador counts with several institutions focused on
financing projects, among these, there are the National Financial Corporation
(CFN in Spanish) and the National Development Bank (BNF).
The last mentioned (BNF) was founded with the name of Mortgage Bank of
Ecuador 74 years ago. From then on it has been subject to several modifications
in its structure, until October 14 1943 when the law that started its
transformation ended in march 28 1974 when the new Organic Law of the
National Development Bank was issued, still in force. This law was intended to
Grant the BNF with economic, financial and technical independence, however
this entity suffered the consequences of the economic recession of the nineties
and the constant political interferences that have blocked its actions as the
Development Bank for the agricultural sector, and faces financial liquidity
problems.
The CFM is a public financial institution with autonomy and legal capacity and
indefinite term that officially created in 1964. Its purpose is to become a
“financial institution for the industrial promotion”, becoming the main support
for many momentous transformations for Ecuador, as the proclamation of the
Law on Corporations and the foundation of the Superintendence of
Corporations, of the Stock Market of Quito and Guayaquil, the Fund for the
Promotion of Exports (FOPEX in Spanish) and the Andean Development
Corporation (CAF in Spanish).
The country also counts with private funding sources as Banks, Financial
Institutions, Mutual Associations for Savings and Credit, and Savings and
Credit Unions.
7. LABOR LEGISLATION
a. Contracts
The Law states that every relationship between employer and employee must
be agreed by both parties according to a contract.
Art. 11: Classification.- Employment contracts70 may be as follows:
105
a) Express or implied, and the first oral or written;
b) On salary, on daily wage, in participation and combined;
c) For Fixed Term, for indefinite term, for the season, eventual y occasional;
d) On trial;
e) For a certain job, for a task and by the piece;
f) By hitching;
g) Individual, for a group or for a team; and,
h) For the hours.
b. Foreign workers71
The Ministry of Labor Relations authorizes the labor activity of foreign citizen 72,
prior to the obtaining of a Labor Visa 12-VI and the Occupational identification
document. Forms73 to apply for these documents are given by the Direction of
Labor, and are divided in different Groups, as follows:
General.- The foreigner must have a labor authorization prior to the granting of
a Visa (non-immigrant), or 09-IV (Immigrants – residents);
Foreigners participating in Works of National Interest.- The foreigner must
have a labor authorization prior to the granting of a Visa 12 – VI (nonimmigrant);
Foreigners hired by International Entities to participate in Works of National
Interest.- The foreigner must have a labor authorization prior to the granting of
a Visa 12 – VI;
Foreign Sportsman.- The foreigner must have a labor authorization prior to the
granting of a Visa 12 – VI;
______________________________
70 Labour Code
http://www.mintrab.gov.ec/index.php?option=com_content&view=article&id=198&Itemid=165
71http://www.mintrab.gov.ec/index.php?option=com_content&view=article&id=155&Itemid=173
72 Acuerdo ministerial 00206
http://www.mintrab.gov.ec/index.php?option=com_content&view=article&id=315:autorizacion-de-aprobacion-deactividad-laboral-para-ciudadanos-extranjeros-servicio-privado&catid=91:textos-oficiales73 Requirements and forms for the application for the permit for foreigners to work in the private sector.
http://www.mintrab.gov.ec/index.php?option=com_content&view=article&id=315:autorizacion-de-aprobacion-deactividad-laboral-para-ciudadanos-extranjeros-servicio-privado&catid=91:textos-oficiales-
Foreign Artist.- The foreigner must have a labor authorization prior to the
granting of a Visa 12 – VI.
c. Salaries, work day.
Salaries
Stipulation of wages and salaries74.- Wages and salaries will be freely
stipulated, but in any case the shall be lesser that the legal minimums,
according to what stated in Art. 117.
106
Art. 117.- Unified Remuneration.It means the sum of the sector
remunerations applicable in force since January 1, 2000 to the different sectors
or labor activities, such as remunerations higher than the sector ones earned by
the workers, in addition to the salary components incorporated since the
validity of the Law for the Economic Transformation of Ecuador.
The State, trough the National Salaries Council (CONADES in Spanish), shall
annually set the unified basic stipend or salary for the private employees.
The setting of the wages and salaries made by the National Salaries Council, as
well as the revisions of the salaries for sectors or lines of work proposed by the
Sector Commissions75, will exclusively refer to the salaries of the Workers
subject to the Labor Code of the private sector.
In regard to what mentioned above, CONADES as the authorized entity to
establish the basic salary according to Ministerial Resolution76, set such
remuneration in USD 264 per month. This Resolution is in force since January 1,
2011.
Additional Remunerations
Every worker shall have a right to the following remunerations considered and
specified in the Labor Code.
Thirteenth remuneration or Christmas bonus77, is the equivalent of the twelfth
part of the remunerations received during the year.
Fourteenth remuneration78, workers shall receive an additional annual bonus
equivalent to a unified minimum basic remuneration and a minimum basic
remuneration to the workers of the household service, respectively, in force at
____________________________________________
74 EcuadorLabor Code, Art 81, page 44
75 Ministry Resolution 00255
http://www.mintrab.gov.ec/index.php?option=com_content&view=article&id=296:salarios-minimossectoriales&catid=56:salarios&Itemid=240
76 Ministry Resolution 00249
http://www.mintrab.gov.ec/index.php?option=com_content&view=article&id=296:salarios-minimossectoriales&catid=56:salarios&Itemid=240
77 Labor Code, Art. 111 – 112.
78 Labor Code, Art. 113, pag.53, Also read article 114 and 116
the time or the payment, which shall take place until April 15 in the Coast and
Islands Regions and until September 15 in the Oriental and Andean regions. For
the establishment of time limits for the payment of above mentioned bonuses,
the school regime of each region has been observed.
Craftsman operators and apprentices are excluded79 or these additional
remunerations
Work day
107
The maximum work day 80 shall be of eight hours a day, not exceeding forty
hours a week, unless otherwise stated in the Law.
Vacations
Yearly Vacations81, every Yorker shall have the right to enjoy yearly a noninterrupted period of fifteen resting days, including non-working days.
Employees who have worked longer than five years in the same company or for
the same employer shall enjoy an additional vacations day for each exceeding
year or shall receive the correspondent remuneration of those extra days in
cash.
d. Union Relationships
According to what stated in the Labor Code regarding union relationships we
must highlight the following articles:
Contract with a Labor Union82.- Contract with a Labor Union is the collective
bargained agreement made between one or more employers or employer’s
associations and one or more legally created unions, with the purpose of
setting conditions or bases that will rule the individual contracts that will be
signed between the same employer and the workers represented by the
contracting union from that moment on.
Associations with which Labor Union contracts shall be made.- In the private
sector, the contract with the labor union shall be made with the company
committee. If there is not any, the contract with the labor union shall be signed
with the union with more affiliated workers, provided that it will count with
more than 50% of the company workers.
____________________
79 Labor Code, Art 115, pag.54
80 Labor Code, Art 47, pag.34. Read first paragraph of workdays and rest
81 Labor Code Art 69, pag.41
82 Labor Code, Art 220, pag.100
In governmental institutions, entities and companies of the public sector or in
those of the private sector with a social or public purpose, the contract with the
labor union shall be undertaken with a single central committee, constituted by
more than 50% of those workers. In all cases its representatives shall not exceed
of fifteen principal and fifteen substitute, who shall credit for the referred
majority’s will, by submitting the document which have complete names an
surnames or the workers, their signature or fingerprints, identification or
citizenship numbers and workplace.
108
e. Social Security
The Management Departmentof Social Security was created through Resolution
No. ADM-2002-5983 on August 6, 2002; and it was upgraded to Social Security
National Intendance on February 24 2006, trough Resolution No.ADM-20067550. Its main purpose is to protect contributions and to look after the right use
of those funds paid by citizens to the Social Security; issuing regulations and
rigorously applying the Social Security Law, in a permanent process of
supervision and control of the entities that make the System.
Entities under control:
Armed Forces Social Security Institute 83
The creation of military pensions can be considered as one of the most
important social and professional accomplishments for the military institution.
This historical milestone ended on March 26, 1928 with the issuing of the Law
for the Military Retirement published in the official Registry 601 in the same
date with the Law with the military pension fund. This fact allowed our
country to become the first country in Latin America with a military social
security system.
Law 2001-55 Social Security, currently in force
The new Social Security Law 2001- 55 in force since November 30, 2001
regulates the accounting and administrative patrimonial distinction of the
funds for each of the five social securities.
Beneficiaries
Every individual who receives an income for executing a job or providing a
physical or intellectual service, with or without a employment relationship, is
obliged to request the protection of the Compulsory Social Security;
particularly:
_________________________
83 Social Security Institute Ecuador,www.issfa.mil.ec
a.
b.
c.
d.
e.
f.
g.
The worker in a wages,
The self-employed worker,
The professional in its private practice;
The business manager or owner;
The owner of a single member company;
The independent working minor; and,
The other insured obliged to the Mandatory General Social Security
according to the laws and special decrees.
109
Also obliged to request the protection of the special regime of the country social
security we find workers who do artisan fishing, and the rural inhabitant who
habitually works the fields, on its own or for the community it belongs to, who
does not receive payment from an employer, public or private, and does not
hire individuals out of its community, or third parties to perform economic
activities under its dependence (Article 2).
For the purpose of the protection of the Mandatory General Social Security:
a. Worker in a dependence relation is the employee, worker, public servant,
and every individual who provides a service or perform a task, under a
working contract, or especial power of attorney or a legally issued
appointment; who receives an stipend or salary, regardless to the nature
of the service or work, workplace, work day extent or the term of the
contract, special power of attorney or the appointment;
b. Self-employed worker is every individual who practices an occupation,
executes an work or performance an economic activity without a relation
for dependence, and receives an income in the form or fees,
commissions, shares, benefits or any remuneration other than a salary;
c. Professional in its private practice is every individual with a University
Degree, Polytechnic or Technologic who provides services to other
individuals, without a dependence relation, for itself or in association
with others, and receives an income in the form of fees, shares or any
retribution other than a salary;
d. Business manager or owner, is every individual who hires other to
perform a task o provide a service on its own or to others;
e. Owner of a single member company is every individual who starts an
enterprise or actual business to provide services or risk capitals;
f. Independent working minor, us every individual under eighteen (18)
years old who provides paid services to others, without a dependence
relation, for its own or in association to others in same condition;
g. Retired is every individual who has fulfilled every requirement of time
and contributions, and age, or that suffers a permanent injury, physical
or mental, total or partial and that receives a regular pension from the
State or the Social Security, or a life pension from an insurance company,
because of old age or disability; and,
h. Beneficiary, is the relative to the retired or deceased affiliate who meets
the requirements to receive benefits of rent for widowhood or orphan
hood; or any other who, in the absence of the above mentioned, will be
entitled to claim such benefits in compliance to the inheritance laws.
Covered Benefits
Mandatory General Social Security protects its affiliates from eventualities that
may affect their ability to work and to obtain an income from its habitual
activity, in case of:
a. Old age, death, invalidity, which includes disability;
110
b.
c.
d.
e.
Unemployment;
Disease;
Maternity; y,
Working risks.
Retirement due to old age
The Social Security Law 2001- 55 in force since November 30, 2001 indicates that
the affiliate shall have the right to old age retirement, once he counts 360
contributions and a minimum of 60 years old; or 480 contributions, this means
40 years of affiliation, regardless to age.
In the fifth temporary rule of the Law it is established that affiliates mandatory
and voluntary, who at the moment of the publication of this law, November 30,
2011; counts with 360 contributions and 55 years old, can exercise its right to an
ordinary retirement due to old age at any time.
Affiliates mandatory or voluntary may apply to ordinary retirement, once they
have reached a minimum of contributions of 360 at the time of the application,
if they have met following requirements:
- 58 years old, from January 1, 2004.
The retirement due to old age consists of a pension that the IESS pays on a
monthly basis to the beneficiaries that apply to it, after becoming of certain age
and fulfilling a certain number of contributions, mentioned above.
Disability Pension
For the purposes of the present insurance, disabled, is considered anyone who,
due to illness or physical alteration find itself unable to provide an income for
itself through a job, according to its capacity, strength and formation, a salary
equal to half the habitual salary of a healthy worker on the same conditions.
This benefit, known as retirement due disability, consists in the delivery
permanent or temporary of a monthly pension calculated on the basis of two
factors, time of affiliation and the average of its five best salary years.
IESS grants to retired due to disability the thirteenth and fourteenth pension, as
well as the compensation for the increase of life expenses granted to retired due
old age. To apply to the benefits of the pension due to disability must have
reached at least seventy monthly contributions.
Unemployment
111
Unemployment is defined as the separation of the affiliate of every service, for
any reason and for a period not shorter than ninety days.
Social Security System in our land considers unemployment, as a risk, with a
financial distributing system.
Illness and Maternity: Individual and Family General Health Insurance
The mandatory affiliation and contribution to the Individual and Family Health
General Insurance, grants the right to the following health benefits:
a. Programs for the development and promotion of health;
b. Preventive medicine actions, including doctor’s appointment and
professional information, auxiliary procedures of diagnose, medicines
and necessary surgeries;
c. Dentist attention both preventive and recovery;
d. Whole healing medical assistance and maternity including doctors
appointment, diagnose tests and procedures, surgeries, hospitalization,
delivery of medicines and other actions for the recovery and
rehabilitation of health;
e. Treatment of the chronic degenerative diseases, within the collective
insurance regime mandatory contracted by the administrator, under its
responsibility, to the opportune attention of the benefit, without
limitation of such benefit or exclusions to the insured, according to
present Law Regulations; and,
f. Treatment of the catastrophic diseases acknowledged by the State as
matter of public health, under the sort of common cause fund financed
by the mandatory contribution of affiliates and employers and the
mandatory contribution of the State.
In case of illness, the affiliate shall have the right to:
a. Medical assistance, surgery, medicines and rehabilitation, subject to
diagnose and therapeutic procedures created specialized doctors of the
IESS and the administrator of present Insurance; and,
b. A temporary monetary aid, when the illness produces inability to work.
Relatives of the affiliate shall not have right to the aid.
In case of maternity, the insured will have the right to:
a. Medical and Obstetric assistance during the pregnancy, labor and
newborn, regardless to the risk level of the pregnancy;
b. Monetary aid during the maternity leave period for the working woman;
and,
c. Medical assistance, both preventive and healing of the son, including
medicines and surgery during its first life year, regardless to the
medicine benefit until it is six (6) years old.
112
The employer will be responsible for the Illness and Maternity subsidies for
benefits contained in articles 42, number 9; and in article 153 of the Labor Code,
in case the worker does not reach the established minimums in present Law to
earn the right to Individual and Family Health General Insurance. It will be also
for the charge of the employer the payment of 50% of the salary to the worker
for its three (3) first days of non-professional illness.
Occupational risks
Workers are subject to eventualities as consequence of their activities, these are
considered occupational risks. Work accidents and professional illnesses are
occupational risks.
- Work accident is every unexpected and sudden event that causes the worker
any physical injury or functional disturbance or even death as a consequence or
the job it performs on behalf of others, or when they are heading straight from
home to workplace or vice versa.
- Professional illness is the severe or chronic condition caused directly by the
practice of a job or profession performed by the worker, which causes
incapacity. For purposes of occupational risks insurance, chronic professional
illnesses will be considered as work accidents.
Rural Social Security
Rural Social Security grants to its beneficiary health aids which includes
maternity and protects the head of the family from contingencies as old age,
death and invalidity, which includes disability.
Resources and Financing
Compulsory Social Security benefits are financed with following funds:
a. Individual mandatory contribution of the affiliates, for each insurance
type;
b. Mandatory contribution of the employers, public and private, for each
insurance type, when affiliates are subject to Labor Code;
c. Mandatory contribution of the public employers for each insurance type,
when affiliates are subject to the Law of Civil Service and Administrative
Career;
d. Mandatory financial contribution of the State, for each type of insurance
in cases established in present Law;
e. Technical reserves of the retirement regime for intergenerational
common support;
f. Balances of the individual accounts or the affiliates to the retirement by
individual mandatory savings;
113
g. Income coming from the payment of dividends of the national and debt
with the IESS, due to employers obligations;
h. Income obtained from the payment of dividends of the National
Government with the IESS;
i. Revenues of any kind produced by real estate properties, fixed assets
and stock shares of companies managed by the IESS;
j. Income from the selling of assets of each kind of Insurance, managed by
the IESS;
k. Income from health services provided by IESS´ medical units, which
shall be delivered to the Budget Fund for the General Health Insurance;
l. Funds from any kind assigned to each insurance under special laws for
the accomplishment of its purposes; and,
m. Inheritance, legacies and donations.
Heath services and benefits of the Rural Social Security are financed by the
following resources:
a. The contribution over levied subjects paid by the employers, the affiliates
to the General Compulsory Insurance, with or without dependence
relation, and the voluntary affiliates;
b. The Mandatory contribution of public and private insurances which are
members of the National Social Security System;
c. The differentiated contribution of the families under Rural Social
Security´s protection;
d. The mandatory financial contribution of the State over levied subjects of
the affiliates with dependence relation, to the General Compulsory
Insurance; and,
e. Other assignations delivered by the Executive for the financing of the
benefits of this insurance. .
Bank of the Ecuadorian Institute of Social Security
On May 11, 2009 the Law of the Bank of the Ecuadorian Institute of Social
Security was issued creating referred Bank it its first article, this is defined as a
public financial institution, with technical, administrative and financial
independence, with own legal capacity and with social and public service
purpose.
Its corporate purpose is to provide financial services under banking and
investments criteria, for the administration of the public funds of the
Ecuadorian Institute of Social Security, IESS; and, to provide financial services
in order to attend requirements of their affiliates, active and retired. For that
purpose, it will be able to perform the following operations:
- Investments through instruments offered in the stock market for long term
financing of public and private projects, productive and of infrastructure which
114
will produce financial revenues, added value and new sources of employment
to improve the social and economic development of the country;
- Investment in the stock market in securities of fixed or variable rent through
the primary and secondary market; and,
- Structure, improve and promote investment projects.
On the other hand, they will also be able to provide the following financial
services:
- Grant mortgage, pledge and chirographic credits, and other financial services
in favor of the IESS affiliates and retired, through direct operations or through
the national financial system; and, - Perform operations of further discount of
the mortgage debt portfolio of the financial institutions.
On April 30, 2010, the Banking and Insurance Supervisory Agency approved
the Banks Regulations, with the details of its internal structure, attributions and
responsibilities of its general manager, of the division managers and other
officials or the entity.
Complete information regarding services and benefits of the IESS is available
visiting the web site: www.iess.gov.ec
Closed Complementary Pension Funds (FCPC in Spanish)84
The Social Security Law 2001 establishes that the IESS affiliates, regardless their
level of income may make voluntary savings to improve the quantity or
condition of the correspondent benefits of the General Compulsory Insurance
or to protect themselves from safety contingences not covered by it.
Art. 220.- “…Voluntary savings will be deposited directly in the appointed
companies for the administration of the complementary savings and the this
way accumulated funds shall be handled as separate funds according to
Regulations.
_____________________________
84 Banking and Insurance Supervisory Agency of
Ecuadorhttp://www.sbs.gob.ec/practg/sbs_index?vp_art_id=46&vp_tip=2&vp_buscr=64#5
Private pension funds with purpose of retirement existing at present time,
regardless its origin or type of constitution, will be ruled by the same
Regulations in force to complementary funds, within the term in it granted,
respecting the rights acquired by the savers.”
Record and Operation of the Funds
The Social Security Law establishes that voluntary savings funds shall be
recorded in the IESS.
115
In addition to what contained in Resolution No. SBS-2004-740, issued by the
Banking and Insurance Supervisory Agency stated rules for the record,
constitution, organization, operation and liquidation of the complementary
pension funds.
8. PRACTICAL INFORMATION
a. Start-up Costs of Opening an Office
o Guidelines for the lease of housing, offices and Warehouses
In order to rent a house, an office or a warehouse it is necessary to contact the
owner and make sure he is its actual owner. This can be verified at the
signature of the lease. When agreeing the lease it is important to set the rent
116
amount to be paid, date for such payment, the term of the lease, as well as the
amount of the deposit or warranty required. If the property will be rented with
furniture it is important to check all pieces are in good condition and taking
some pictures of them could be also be convenient.
Legal and notary services for the lease contract are paid by the tenant and both
parties are free to decide which one will hire such services.
Generally, lease term are held for a calendar year, with the possibility of
renewal. Deposits may vary from one to two months’ rent. It is advised to sign
the contract with the legal owner of the property. Most of the real state
companies charge one month rent to the landlord for their rendered services.
b. General Information
i. Entrance and exit formalities.
Chart No. 27
Passports and visas
Entrance Requirements
When information related to passport is reviewed
please have in mind the period of time you will
stay in the country. A visitor passport must be
valid during his visit.
All Visitors immigrants and non-immigrants must
be registered in the Ministry of Foreign
Relationships and in the General Migration
Managing Office within 30 days from his arrival.
Passport required
excepting for:
1. Tourists with identification card issued for
Colombian citizens, as long as they submit the
international boarding pass and only for
travelling between Ecuador and Colombia.
2. Tourists holding passes issued by the United
Nations or the American States Organization
Visa required excepting
for:
3. Tourists in active service who belong to the
Merchant Navy.
1. United Kingdom Visiting Tourists up to 90
days.
117
2. Visitors up to 90 days, except for natives from
Afghanistan, Algeria, Bangladesh, North Korea,
South Korea, Costa Rica, Cuba, Peoples Republic
of China, Guatemala, Honduras, India, Iraq, Iran,
Jordan, Lebanon, Libya, Nicaragua, Nigeria,
Pakistan, Syria, Sri Lanka, Sudan, Tunisia,
Vietnam, Yemen, Palestine, Sikh Sect.
3. Since September 11, visa is required to all
citizens of Arab countries.
4. It has been removed the requirement of visa for
citizens from Venezuela and Panamá. Ref CE 46298 del 23-09-98.
Passengers in transit:
1. People travelling 12 hours in the same Aircraft
or connecting with other flights, provided that
they have previously confirmed reservations and
other documents to continue their travel.
2. Merchant Navy members (except people from
Democratic Korea)
with passport or log book
and a letter of the Shipping Company showing
the vessel name in which they will sail within 36
hours.
* Tourists are not allowed to work.
Customs85
-It is permitted to enter the country: For travelers
older than 18 years, maximum 3 litters of alcoholic
beverages and 20 flip packs of cigarettes with 20
units per pack. A reasonable quantity of
perfumes, gifts and personals effects are allowed.
-It is prohibited to carry weapons, munitions,
narcotics.
- Dried or fresh meat, plants and wild animals,
must carry permits previously granted by the
Agriculture Ministry.
Taxes
- There are no taxes in national flights.
85 For more information on allowed articles for travellers, check web page
of SENAEhttp://www.aduana.gob.ec/contenido/procViajeros.htmland for
knowing a restriction of an import product it is recommended to visit
COMEXI-COMEXResolutions, orthe following link de SENAE of product
tariff subheading: http://sice1.aduana.gob.ec/ied/arancel/index.jsp
118
- International exit Airport fee $ 31.00 inQuito
and $25.00 in Guayaquil.
- Protected areas Entrance fees: Entrance to the
National Park Galapagos and to the Marine
Reserve for citizens of the Andean Nation
Community or MERCOSUR, older than 12 years
pays 50 US Dollars (Equivalent to the 50% of the
foreign people fee). Within Continental protected
natural areas the taxes goes from $5 to $20
according to each National Park.
Sanitary Measures
In order to enter the country, no vaccines are
required; nevertheless passengers with high blood
pressure or heart conditions must seek advice
from a physician after visiting higher zones.
Malaria is a disease that has not been completely
eradicated and it is present in the Amazon and
the Coast zone in rainy weather season. This
illness is highly controlled.
Source: Andean Community Routes: Virtual Touristic Routes
http://www.comunidadandina.org/turismo/ecuador/requisitos.htm
ii.
Local time, vacations and holidays
Vacations are taken on different months depending on the Geographic zone. In
the highlands area (Quito) vacations are taken in August, in the Coast
(Guayaquil) are taken in January and February. When visiting highland cities
such as Quito it is recommended to take necessary measures considering it is
located at 2.760 Meters over the sea level. Altitude can cause fatigue, headaches
or sleepiness, it is not recommended to perform physical activities, nor eating or
drinking excessively. It is erroneously supposed that the whole country has a
warm weather. In Quito it changes from mild to cold.86
__________________________
86 How to Negotiate with Success in 50 Countries, Olegario Llamazares, Ed. Global Marketing Strategies
Chart No. 28
Dates
HOLIDAYS IN ECUADOR
Description
119
January 1
February 14
20-21 February
April 6
May 1
May 24
July 24
July 25
August 10
October 9
November 2
November 3
December 6
December 25
iii.
New Year’s Day
Valentine’s Day
Carnival
At the same time in Ambato is held the
Annual Great Festivity of fruits and
flowers. (Fruit and Flowers Festivity)
Holly Friday (Easter)
Labor Day
Battle of Pichincha Anniversary Day
Simon Bolívar Birthday
Foundation of Guayaquil
National Independence Day
Independence of Guayaquil
Day of the Faithfully Departed
Independence of Cuenca
Foundation of Quito
Christmas Day
Working hours, Banks, Commerce
Chart N°29
Public and Private enterprises working hours
Commerce
work
Hours
09:00 – 13:00 y 14:00 – 18:00. Mondays
to Fridays
09:00 - 14:00 Saturdays
08:30 – 17:00 Mondays to Fridays
Banking
09:00 – 14:00 Saturdays
hours
Museums
09:00 – 17:00 Tuesdays to Fridays
attention
hours
Offices work 08:30 – 16:30 Mondays to Fridays
Hours
09:00 – 20:00 Mondays to Fridays
Shopping
Malls
10:00 – 19:00 Saturdays and
10:00 – 18:00 Sundays
Source: Andean Community Routes: Virtual Touristic Routes
iv.
Telecommunication systems
Country code: 593 + City + Number
120
Codes of the 22 provinces of Ecuador are as follows: Azuay (072), Bolívar (032),
Carchi (062), Cañar (072), Chimborazo (032), Cotopaxi (032), El Oro (072),
Esmeraldas (062), Galápagos (052), Guayas (042), Imbabura (062), Loja (072),
Los Ríos (052), Manabí (052), Morona (072), Napo (062), Orellana (062), Pastaza
(032), Pichincha (022), Sucumbíos (062), Tungurahua (032), Zamora (072).
In order to call from out of the country there is no need to dial the 0 from the
provincial serial for example 59322507560, but if you are in Ecuador you must
dial the complete code, 072 to contact other cities.
Following are codes for principal cities in the country: Quito (022), Guayaquil
(042), Cuenca (072)
Public:
 The National Telecommunications Corporation of Ecuador CNT
http://www.cnt.com.ec/index.php
 Alegro
Alegro is the commercial brand name of Mobil Telecommunications of Ecuador
TELECSA in Spanish, EcuadorianState concessionary for rendering mobile
advanced phone service.
http://www.alegro.com.ec/
Private:
 Claro
Mobile services: rendered by CONECEL S.A.
Ground line services: services rendered by Ecuadortelecom S. A.
http://www.claro.com.ec/portal/ec/
 Movistar
http://www.movistar.com.ec/site/

Latin American mobile Community
Ecuacel.net/Ecuacel.mobil
http://www.ecuacel.net/sms/ecuador/
Internet.- Internet is very popular especially in urban zones. There are
hundreds of coffee-net shops with net2phone, e-mail, internet and fax services
at very reasonable fares accessible all over most of the commercial and touristic
zones. Computers are rented by the hour and fares depend on the category of
the shop. Nevertheless, internet is expanding very fast and it is easy to find
systems centres, practically in each neighbourhood in the big cities.
v.
Currency, exchange rate evolution in relation to dollar.
Currency in Ecuador was one of the most controversial in Latin America. The
country accomplished its dollarization in the 2000 and big changes have
occurred since then.
121
Previously, the Sucre (S/.) (ISO 4217: ECS) was the legal currency in force in
Ecuador. On January 9, 2000 it was replaced for the United States Dollar at an
Exchange rate of 25.000 sucres for Dollar. The Sucre was divided in 100 cents
and it has been created on March 22, 1884.
Present currency in Ecuador is the United States Dollar that replaced the Sucre
on the 2000, our previous official currency. Bills of 100, 50, 20, 10, 5, 2 and 1
Dollar are issued, and coins of 50, 25, 10, 5 and 1 cent.
vi.
Official language and religion
The official language in Ecuador is Spanish; nevertheless in the indigenous
regions other languages are spoken, mainly quechua or quichua, language of
the Incas.
Indigenous population was indoctrinated with catholic religion after Spanish
conquer of Peru and Ecuador; at the end of the XIX Century, liberal revolution
established partial separation of the Church and the State. In 1906 an anticlerical
constitution was promulgated clerical properties were confiscated and total
freedom of religion was declared. Nowadays, more of the 95% of Ecuadorian
population are catholic and less than the 1% practice Protestantism.
vii.
Other useful information
Business Culture87
In Ecuador, when making Business, regional differences count, between
highlanders (from Quito, Cuenca, Ambato, etc.) and people from the coast
(Guayaquil, Manta, Esmeraldas, etc.) there are some differences, the first group
is more conservative, formal and reserved when dealing with other people.
People from the coast are open to new business, more flexible in commercial
relationships.
In Ecuador, especially in Quito, it is a need to have necessary contacts to make
Business. If a local Enterprise is not concerned, it would be more difficult to get
in such market. Import and Export Agencies and Law Firms would be of great
help.
It is recommended to settle Lawyer appointments two weeks in advance and to
confirm same two or three days before.
______________________________
87Cómo Negociar con Éxito en 50 Países, Olegario Llamazares, Ed. Global Marketing Strategies
Before getting to the principal Business topic, it is usual to have an informal
conversation(travels, culture, sports, etc.).It is usual to comment of personal
anecdotic experiences with no connection with principal topic to deal.
122
Conversation must be friendly avoiding any kind of comments can be
misunderstood. It is recommended to use a soft voice tone in order not to
sound aggressive.
In Ecuador, decisions are made based in past experiences more than in the
application of general rules or even logical principles; furthermore, Ecuadorian
negotiators do not change their mind easily.
For legal documentation purposes both surnames (from father and mother) are
used, for introduction purposes just the first one. For presentations it is
important to show specific data and numbers, the profitability of the proposed
business will be review before making any decision.
Negotiations are made in a rather slow pace. Decisions will be made in a high
executive level. Probably there will be some delays until the agreement is
finally closed.Ecuadorians consider that agreements are made with the
individuals more than with the companies they represent, that is why it is not
recommended to make changes in negotiation teams, because this may cause
delay or even the cancellation of the agreement.
Favorite conversation topics are: the natural beauty of the country (Galapagos
Islands), colonial architecture in Quito, the Amazon rainforest, or soccer, the
most popular sport in the country.
It is customary that men shake hands at the introduction as well as to say
goodbye. Women are greeted with a handshake and with a kiss in the cheek if
you have met her before.
Safety Tips88
To make your stay in Ecuador safe, it is advised to follow these tips:

Try not to carry important documents in original with you. It is much
safer to carry copies and to leave originals in a safe place. Regarding
money, it is best if you carry small amounts and you distribute them in
different bags, purses or pockets.

Try to avoid the excessive exposure of valuable objects like laptops or
digital cameras.
___________________________
88 Source: http://viajeaecuador.es/seguridad-en-ecuador/

It is safer to take guided tours to the touristic attractions though tourist
guides or agencies.
123

Registered taxi cabs are yellow with orange plates. There are also
companies of executive transport. It is strongly recommended not to use
other transports but the duly registered one to a transport company.
Transportation89
Urban Buses.- In big cities you can go practically anywhere on a bus. Service is
pretty cheap and there are a lot of units that carry only seated passengers. Buses
start to circulate from very early in the morning (05:30) but it is common that
they do not work until very late in the evening (10:00).
Trolley.- It is the most modern transportation and efficient transportation
system in the country. Big articulated buses circulate on exclusive ways with
fixed stops. Service is cheap (USD 0.25) and with the integrated buses service
(units that work in an integrated way with the trolley and the eco-way), all
across the city. It may be quite tight at the entrance and exit office hours.
Service works only in Quito, from 06h00 until 24h00.
Taxi Cabs.- Taxi cabs services is other way to transport yourself from one place
to another. This is a good service in general, units are new, and taxi drivers are
willing to help the tourists. The cost will depend of what shown in the
taximeter, an average ride may cost from USD 1.50 to USD. 2,00. Night fares
usually go from USD 2,00 a USD 3,00. At night it is much safer to use a taxi
company, units that count with radio frequency that can be reached by phone.
This taxi cab picks the individual in the exact place from which he called (it
does not take longer than five minutes) with no extra charge. This service
works efficiently 24 hours a day.
Buses.- The bus is the mean of transportation most commonly used to trips
within Ecuador. Practically you can go everywhere in the country by taking a
single bus or maybe two. Fares may vary according to the distance and the
service. Express Service takes you to your destination without making extra
stops on the road. Many companies offer new units, with bathroom, TV, and
reclining seats. Some of them even offer a snack for the road.
To take an inter provincial bus you should got to the Land Terminal of each
city, there you will find a huge offer or companies to reach the desired
destination, some of them have their own terminals. Frequency of the trips
varies and the services work 24 hours a day.
_______________________________
89 http://www.hotelesecuador.com.ec/disptxt2.php?menu=Tips viajero&tip=tips&idiom=1#
Ground Transportation
124



Ecuador
The International Pan American is a first class road, paved of
approximately 822 Km. It connects the North from Rumichaca on the
Colombian border, up to Huaquillas in the South on the border with
Peru. From Rumichaca to Macara: 1.081 km.
Peru
Tumbes border with Huaquillas - Machala - Quito: 578 km.
Tumbes border with Huaquillas - Guayaquil: 253 km.
Piura border with Macará - Quito: 837 km.
Piura border with Macará - Guayaquil: 402 km.
Colombia
Ipiales - Tulcán - Quito: 240 km.
Railroad.- There is a railroad service in the country but it is not used as a
mean of transportation but as a great tourist attraction. Once known by the
hardest train in the world as it crossed the Andes between picks and
prairies, avoiding wild rivers. This mean would not be of use in a case of
need or hurry, because it is antique and slow; however it is one of the most
entertained ways to know Ecuador. In any travel agency you may be
assisted with information about this adventure on railroad tracks.
Railroad
NATIONAL ENTERPRISE OF STATE RAILROAD (ENFE in Spanish)
OFFICES:
Quito:
Chimbacalle Station
Tel: (5932) 651752
Ofic. Bolívar 443 y García Moreno
Tel: (5932) 2582921 - 2582924 - 2513422 – 2656142 - 2582930
Riobamba:
Address: Avenida 10 de Agosto y Carabobo
Tel: (5933) 2930126, 2961909
Ibarra:
MainStation
Tel: (5936) 2950390, 2955959
Boats, motor boats, pangas, and canoes.- In Ecuador there are many places
specially in the Amazon to which you can only arrive by sea or river. In all
those destinations there are always small motor boats or canoes to provide
transportation services. Fares will depend on the distance and destination.
Before starting the voyage it is necessary to confirm the fare to be paid.
125
o Air way
International flights
 American Airlines
2 daily flights Miami - Quito, Hour: Departs 16:45 and arrives 20:50.
Next flight departs: 18:45 and arrives 22:50.
1 daily flight Miami – Guayaquil, Hour: Departs 19:02 and arrives 23:12
 Air Madrid
2 weekly flights: Tuesday and Saturday from Madrid to Quito.
 Avianca
3 daily flights from Bogota to Quito at: 09H05, 17H10 and 22H00
1 daily flight from Bogota to Guayaquil at 22H00
 Continental
1 daily flight from Houston to Quito at 17:00
2 weekly flights Thursday and Saturday From Houston to Guayaquil
 Iberia
1 daily flight from Madrid to Quito, hour: 18H30
 Santa Barbara
1 daily flight from Caracas to Quito(During the high season)
(During the low season) on: Monday, Tuesday, Thursday and Saturday.
 KLM – Air France
4 weekly flights: Monday, Tuesday, Thursday and Saturday from
Amsterdam to Quito
1 daily flight: Paris – Bogotá – Quito
 Lufthansa
1 daily flight from Frankfurt (via Bogota and Caracas) to Guayaquil and
Quito.
 TAME
3 weekly flights : Monday, Wednesday and Friday, from Cali to Quito
 Cubana de Aviación
1 or 2 weekly flights from La Habana to Bogotá and with Avianca to
Quito.
National Flights
There are six Airlines operating within Ecuador: AEROGAL, ATESA, ICARO,
SAEREO, TAME Y VIPSA, making daily flights between the most important
cities of the country.
 Airports
International airports:
José Joaquín de Olmedo - Guayaquil
Mariscal Sucre - Quito
Nationalairports:
Mariscal Lamar - Cuenca
126
Nacionales Luis A. Mantilla - Tulcán
Cotopaxi Air base - Latacunga
Chimborazo - Riobamba
General Manuel Serrano - Machala
General Rivadeneira - Esmeraldas
Baltra - Isla Baltra-Galápagos
San Cristóbal - Isla San Cristóbal-Galápagos
Atahualpa - Ibarra
Camilo Ponce Enríquez - Loja
Reales Tamarindo - Portoviejo
Eloy Alfaro - Manta
Los Perales - Bahía de Caráquez
Edmundo Carvajal - Macas
Francisco de Orellana - Coca
Río Amazonas - Puyo
Lago Agrio - Lago Agrio
Chart No. 30
Types of weather in Ecuador
In the Ecuadorian territory a variety of
weathers can be enjoyed, due to its
particular geographic characteristics.
Coast: Weather in the coast is warm, with
temperatures from 25 to 31 grades C. There
are two seasons: the rainy one from
December to May, which is humid and hot,
and the dry one, the rest of the year.
Highland: Weather varies according to the
altitude. During the year it presents a
subtropical weather, in the higher parts it is
cold, and in populated centers
temperatures go from 13 to 18 grades C.
Amazon: It generally has a warm, moist
and rainy weather. Temperatures go from
23 to 26 grades C. This region has a dry
season in October, November and
December.
Galapagos Islands: Weather is dry with
temperatures that go from 23 to 32 grades
C. With an annual average of 25 grades C.
Source: Andean Community: Virtual Touristic Routes
Chart No.31
127
According to the
Weather
In the Highland
In the Coast
Clothes to wear
Warm clothing is
needed. At nights
a not heavy coat.
In the Coast,
Galapagos and the
Amazon light
clothing is
recommended.
Source: Andean Community: Virtual Touristic Routes
c. Contacts and interesting links
Public Entities
http://www.vivecuador.com
Ministry of Tourism of Ecuador website
http://www.visitaecuador.com
Official site of tourism in Ecuador
Touristic Information
http://www.guayaquil.gov.ec
Official site of Guayaquil, one of the most important cities of Ecuador
http://www.exploringecuador.com
Site that offers detailed touristic information of Ecuadorhttp://ecuaworld.com/visitecuador/Visit.htm
Visit Ecuador. Touristic information of Ecuador, Galapagos and its provinces
http://www.virtualtourist.com/South_America/Ecuador/Guayaquil
Touristic Guide of Guayaquil
http://www.hotelesquito.com
Information about hotels in Quito
http://www.captur.com
Site of the Provincial Chamber of Tourism of Pichincha. Information of touristic
events in the area.
http://www.ecuadorecologist.com
Ecological Site of Ecuador
128
http://www.ecuadoriantours.com
Travel Agency of Ecuador
http://www.EcuadorVirtual.com
Virtual Tourism and Traveling Guide in Ecuador
http://www.hotelesecuador.com.ec
Hotels Federation of Ecuador (AHOTEC)
http://www.andes-adventures.com/
Adventures in the Andes
http://www.ecoandestravel.com
Andes Touristic Operators
http://www.galaeco.com
Cruises in the Galapagos & Ecotours – Galaeco
http://www.galapagos-cruises.com
Cruises in Galapagos
d. Industrialand Commercial Organizations

Ministry of Foreign Affairs, Commerce and Integration
Carrión E1-76 y Av. 10 de Agosto
(593 2) 299-3200
Quito - Ecuador
[email protected]

PRO ECUADOR, Institute for the Promotion of Exports and
Investments
Av. Francisco de Orellana, Edif. WorldTradeCenter, Torre A, piso 13.
Phone: (593) 42597980
Guayaquil - Ecuador
http://www.proecuador.gob.ec/

Ecuadorian Federation of Exporters
Edf. Torres Del Nte. Torre B. P-5 Ofc 501, Guayaquil, Ecuador
Phone(593) 4 2687242
Página web: www.fedexport.com

Ministry of Coordination, Production, Employment and
Competitiveness
129
Av La Coruña N2558 y San Ignacio. Edificio Altana Plaza Piso 4.
Phone. (593) 02 3815600
Quito - Ecuador
http://www.mcpec.gob.ec/
Commerce Chambers in Ecuador
Quito:

Commerce Chamber of Quito
Av. República y Amazonas, Edf. de las Camaras, Pisos 5 y 6
Quito, Ecuador
Ph: (593-2) 443-787; Fax: (593-2) 435-862
Email: [email protected]
Web: www.ccq.org.ec
Guayaquil:

Chamber of Commerce of Guayaquil
Cdla. Kennedy Norte, Av. F. de Orellana y Miguel H. Alcivar
"Centro Empresarial Las Cámaras", Piso 3
Guayaquil, Ecuador
Ph: (593-4) 682-771; 682-779, Fax: (593-4) 682-725
Email: [email protected]
Web: www.LaCamara.org

CENTRAL BANK OF ECUADOR
Av. 10 de Agosto N11-409 y Briceño. Casilla Postal 339 PBX. (593) 2 2572522
Quito-Ecuador
Av. 9 de Octubre y Pichincha # 200; PBX: (593) 04 2566333; Guayaquil - Ecuador
Calle Larga y Huaynacapac; PBX: (593) 07 2831255; Cuenca - Ecuador
Call Center IVR:(593) 2 2289488
www.bce.fin.ec
e.
Hotels, rentals , etc.
 AHOTEC
Federation of Hotels of Ecuador>
Quito: (02) 245 3945 ó (02) 244 3425
Main office: Quito, América N38-80 y Diguja ·
Phones: (593 2) 245 3942 / 244 3425 ·
[email protected]
Tourism National Associations
 ASOGAL
National Association of Touristic Enterprises in Galapagos
Quito: (02) 333 0942
130
Official Tourism Institutions
 Ministry of Tourism
Quito: (02) 333 0942
 Metropolitan Tourism Corporation
Quito: (02) 295 9632 (02) 295 9505
 Municipal Tourism Foundation
Cuenca: (07) 282 1035

(M.I.) Municipality of Guayaquil: (04) 252 4100 or (04) 252 4200

Car Rentals
Carmax
Avis
Drive
Guayaquil: (04) 239 8305
Quito: (02) 225 9333 / Guayaquil: (04) 239 5236 /
Cuenca: (07) 286 0174
Quito: (02) 292 3641
Ecuadorian Commercial Offices around the world:
Ecuador has 28 Commercial Offices in 24 countries, detailed as follows:
Image N°.2
Source: PRO ECUADOR, www.proecuador.gob
131

trade guide of the republic of ecuador

Transcription

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