Ecuador- Tag Archives - Business News and Updates

Find the latest Legal updates and changes, industry reviews, regulatory updates, expert legal and accounting advice, Q&A with experts, and much more content.

Overview of Ecuador’s Double Taxation Agreements

by Legal Team Ecuador | Oct 9, 2020

Ecuador's double taxation agreements prevent taxes from being applied to commercial transactions that have been taxed in another jurisdiction, representing a financial incentive to foreign companies and individuals considering investing. Ecuador has double taxation agreements in force with 23 countries around the world, which have bolstered trade and secured greater foreign direct investment. If you are considering starting a business in Ecuador, or expanding your commercial operation into the Andean nation, you will undoubtedly want to know how Ecuador's double taxation laws could benefit you. Ecuador's double taxation agreements in LatAm Enjoy Ecuador's double taxation agreements Ecuador is part of the Andean Community (CAN), which also includes Bolivia, Colombia and Peru. In 2004, an agreement to eliminate double income taxation was signed by CAN. Only citizens, residents or companies legally established in any of the member countries can access those benefits. Argentina, Brazil, Chile and Mexico have all also maintained double taxation agreements with Ecuador for more than a decade. The most recent of Ecuador's double taxation agreements to be signed with a Latin American country was with Uruguay in 2013. Ecuador's double taxation agreements in Asia People's Republic of China Ecuador signed a double taxation agreement with China in 2015. The agreement includes gains derived from the sale of real estate or movable property, and taxes on the total amount of wages paid by companies. Almost $6 billion (USD) of goods pass between Ecuador and China each year, according to...

When do you need a Legal Representative in Ecuador?

by Legal Team Ecuador | Oct 7, 2020

Appointing a legal representative in Ecuador is required if you are planning to establish a company in the country. That representative will be responsible for acting on your behalf and undertaking all regulatory procedures. Your legal representative in Ecuador will be the face of your organization in the local business community, so it pays to choose wisely. What does a legal representative in Ecuador do? Choose a good legal representative in Ecuador Ecuador's labor legislation recognizes legal representatives as agents appointed by legally established companies. That means they are not considered workers and, therefore, they do not have the right to receive the same labor benefits as most employees in Ecuador. However, a legal representative in Ecuador will still have to contribute to the National Social Security Institute -- Ecuador's compulsory public insurance. This contribution equates to 17.6% of the payee's income tax. Your legal representative will represent your organization before local authorities. They will fulfill all legal requirements, attend all appointments and respond to any demands on your behalf -- a particularly useful service for anyone who doesn't speak the local language. Some of the most essential duties of a legal representative in Ecuador include: Signing contractsHiring new staffActing as a representative in company trials and lawsuits.Agreeing or conclude commercial agreementsSigning any obligation authorized by the shareholdersActing as a representative in banking arrangements When do you need a legal representative in Ecuador? You...

Amb Todd Mercer on Australia’s ‘bright future’ working with Chile and Ecuador

by Cristhian Hernandez | Oct 6, 2020

In the latest interview for our Q&A series, Biz Latin Hub's Chelsea Heywood connected with Todd Mercer, Australian Ambassador to Chile and Ecuador, to learn about his experience strengthening Australian relations in the region. Todd shares his insights on his experience engaging with Latin America, and the development of Australia's relationships and activity in Chile and Ecuador through the work of the Embassy. Learn about Ambassador Todd Mercer’s professional diplomatic career and the Embassy in Santiago’s efforts to further develop Australian ties with Chile and Ecuador. 1. You have previously worked in Latin America, as Deputy Head of Mission in both Chile (2003-2006) and Mexico (2012). What drives your interest in supporting Australia’s diplomatic and trade relationships with the region? Todd Mercer, Australian Ambassador to Chile and Ecuador Setting aside my personal interest in, and family connection to, Latin America -- I studied Spanish at university and my wife is from Chile -- I am enthusiastic about promoting Australia’s interests in Latin America, because I can see enormous potential for us to build on what is already a set of positive and substantial relationships. For trade-dependent countries like Australia and Chile, diversification of our markets is more important than ever as we recover from the economic impact of Covid-19. To illustrate what is possible in Latin America I would point to our experience with education services in this part of the world. In the 20 years to 2018-19, the value of Australian education services in Latin America increased...

Explaining Developments in Digital Tax in Latin America

by Team Latin America | Jul 28, 2020

Economies in Latin America are changing rapidly. One important regulatory development for many countries in the region is digital tax, because it captures services delivered online or electronically. The OECD claims that Latin American economies are making real progress to address the tax challenges arising from the digitization of the economy. This international entity also expects that further digital tax developments in Latin America provides stability and certainty in the international tax system. Managing your company while keeping a careful watch over new regulations is one of the challenges to overcome while doing business in Latin America. We provide an explanation of digital tax developments in several emerging and developing economies in Latin America, so your business understands its obligations when offering digital services in these markets. Digital tax developments in Argentina Latin American countries are adapting to a new digital age with the establishment of digital services taxes across the region. The Argentine government levied taxes for digital services under law 27,430 and on a general basis. This regulation includes services carried out through the Internet network or any adaptation or applications, platforms or technology used by the Internet or other networks through which equivalent services are provided. By their nature, these services are basically automated and require minimal human intervention, regardless of the device used for its download, display or use. The regulation of digital services in Argentina has been in place since 27...

Why Seek Commercial Representation Services in Ecuador?

by Legal Team Ecuador | Jul 16, 2020

When expanding to Ecuador it is important to understand the local commercial and trade legislation. It is therefore crucial to seek commercial representation services in Ecuador. Businesses of various sizes see Latin America as an attractive continent to do business in, with huge opportunities for growth and expansion in many sectors such as tech, tourism, and mining. The key to penetrating emerging markets such as Ecuador is to have a competent strategic business plan. Utilize local knowledge and experience in order to give you and your business the best start in the country. What are commercial representation services in Ecuador? Commercial representation in Ecudaor will help your company to meet its business objectives. Taking advantage of commercial representation services in Ecuador will ensure that your company reaches its business objectives when entering the Ecuadorian market. Experienced commercial representatives can enable businesses to succeed in Ecuador, by: Understanding your business needs: This means understanding what market your company is aiming to break into and what are the business objectives and aims.Conducting market validation: In order to validate the market, a detailed analysis needs to be carried to see what factors can be implemented to achieve successful market penetration. Performing a route-to-market review: The commercial representative in Ecuador can help you and your company develop a tailored brand positioning strategy and identify a route-to-market.Conduct commercial engagement: A commercial representative in Ecuador can also support...

Manage Business Risks With Due Diligence in Ecuador

by Legal Team Ecuador | Jun 29, 2020

When doing business in Ecuador, managing your business risks with due diligence is essential to achieve success. Entrepreneurship in a new market entails facing different barriers. These include linguistic or cultural barriers, as well as lack of local market understanding or know-how. Buying existing companies or partnering with locals are key ways to mitigate these challenges and obtain support for navigating an unfamiliar market. However, it is essential to protect yourself in Ecuador by conducting exhaustive due diligence controls on the companies and people your business works with. This process minimizes the risk in a transaction by conducting detailed and independent analyses. Here we outline information about due diligence in Ecuador and how to manage your commercial risks. Due diligence to prevent money laundering in Ecuador The Financial and Economic Analysis Unit of Ecuador defines due diligence as developing a set of actions, in the most efficient and diligent way possible, to adequately know your clients. As a result, your company can know who, due to their activity or condition, is more likely to conduct money laundering, finance terrorism or be part of other crimes. As a new investor in the country, it is important to take into account the sector that you enter. The regulatory body of the sector is the one in charge of reviewing procedures for preventing money laundering locally. Why is it important to conduct due diligence in Ecuador? Due diligence in Ecuador lowers your risk of partnering with companies that have questionable backgrounds and...

Teleworking Regulations to Continue Business in Ecuador

by Legal Team Ecuador | Jun 27, 2020

Teleworking has become a reality for Ecuadorians during the Covid-19 outbreak. However, it is also part of the regulatory framework supervised by the Ministry of Labour of Ecuador, defining teleworking as "the provision of legal and personal services, in a dependent relationship, of a non-present nature, during ordinary or special working days, outside the facilities of the place where the worker works". We describe Ecuador's new teleworking regulations established by the government to continue doing business in the country. Teleworking in Ecuador Teleworking is one of the measures implented during Covid-19 outbreak. It is important to consider that, in a country like Ecuador, many people still live from the profits obtained from informal jobs such as street sales or stalls in the food market. For this reason, the reactivation of the economy is a priority for Ecuador's government. While ensuring the implementation of all precautionary measures to stop the spread of Coronavirus - including teleworking - the country began with the reactivation of its economy since mid-May. However, many people living in the urban areas of Ecuador are still working from home. Reactivation of labour activities in Ecuador Since June 2020, Quito, the capital of Ecuador and the city where all main national and international companies operate, took the next step in the reactivation of its economic activities as a city. The government authorized citizens to stay out of their homes until 9pm, allowing companies to resume their work activities. Likewise, the local government emphasizes the...