In the past decade, doing business in and with Ecuador gained a very favorable reputation around the world. Having recuperated from the crippling effects of a recession in 1998/99, the national economy grew an average of more than 5% annually. The trend continues, albeit somewhat slower, making working in Ecuador a viable option for expats looking for experience abroad in South America.
Ecuador’s economy mainly rests on two pillars: oil and agriculture. Ecuador’s agricultural sector contributes a sizeable portion of the national GDP and is also one of the country’s biggest fields of employment, providing more than a quarter of the population with jobs. The focus of Ecuadorian agriculture is on bananas, coffee, and cocoa. Chances are that within the past few days, many of you have enjoyed a product that went through the hands of people working in Ecuador!
The oil sector is still the most dominant by far. Ecuador’s oil producing sector has not only given many Ecuadorians a secure job, but is also a large factor in prompting expats to start working in Ecuador. Other growth sectors include chemicals, machinery, construction, and electronics.
The main strengths the nation brings to the table are ample reserves of natural resources, a stable banking system, having the US dollar as the national currency (see below), and the advantage of access to the Pacific Ocean.
The economy’s weaknesses, however, include its strong dependence on the world market, as being employed in Ecuador often means working in the export branch, and the nation’s topography, which we have discussed in detail in our article on moving to Ecuador. Another unfavorable factor is the relative scarcity of competing companies — there are a few big players, but far less than in many other countries. Some also consider the large role the government plays within the national economy a disadvantage.
Among the first things anyone with even a passing interest in becoming an expat in Ecuador will find out is that following a deep recession towards the end of the last millennium, the nation introduced the US dollar as its official currency in 2001. The process of adopting another currency, regardless of which one it actually is, is called Dollarization. The dollarization is partly credited with bringing the national economy back on track, improving the conditions and opportunities for everyone working in Ecuador considerably.
The four free trade zones (FTZ) in the country give companies and expats interested in working in Ecuador numerous incentives for investment and lasting cooperation. Among the benefits for foreign companies working in the free zones are near-universal tax and customs exemption, security personnel, logistical advantages such as proximity to airports and major cities (three of the four FTZs are located in the Costa region), and modern office and storage buildings. The nation’s free trade zones provide quite a powerful draw for expats.
Any company which is planning on working in Ecuador’s travel, industry, import/export, or services sectors can be eligible to establish a branch or office in one of the free trade zones. For a detailed insight on the matter of free trade zones, read the Ecuadorian Ley de Zonas Francas, which is the legal framework for all FTZs in the country.
Seeing how the national economy relies heavily on oil and other exports at the expense of other sectors, the possible job options for expats tend to be somewhat limited. However, Ecuador has attracted a fair share of multinational corporations which have established branches or offices here, and try to benefit from the relatively low production costs and wages for employees in Ecuador-based factories and other workplaces. If you are employed with a large multinational company and would like to give Ecuador a try, just inquire if there are any openings or opportunities in the country.
We do our best to keep this article up to date. However, we cannot guarantee that the information provided is always current or complete.