Working in Ecuador?
Working in Ecuador
At a Glance:
- Ecuador’s economy mostly depends on oil and agriculture, however increasing numbers of multinational corporations provide opportunities for expats.
- Certain paperwork is required for an Ecuadorian work permit; this needs to be done before you can start working.
- Ecuador has a comprehensive taxation and social security system which applies to anyone who resides in Ecuador for more than 183 days a year.
- Ecuadorians tend to be more people-focused when it comes to business, compared to the strict scheduled routine that many English-speaking expats may be used to.
In the past decade, doing business in and with Ecuador has become increasingly popular. Having recuperated from the crippling effects of a recession in 1998–99, the national economy grew by an average of more than 5% annually. Despite a dip in 2016, the growth trend returned in 2017, albeit being somewhat slower, making working in Ecuador a viable option for expats.
Ecuador: Oil and Agriculture
Ecuador’s economy mainly rests on two pillars: oil and agriculture. The agricultural sector contributes a sizeable portion of the national GDP and is also one of the country’s biggest employers, providing jobs for more than a quarter of the population. The focus of Ecuadorian agriculture is bananas, coffee, and cocoa.
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 drawing expats to the country. Other growth sectors include chemicals, machinery, construction, and electronics.
Ecuador’s main economic strengths are ample reserves of natural resources, a stable banking system with the US dollar as the national currency (see below), and access to the Pacific Ocean. Weaknesses, however, include its dependence on the world market and exports, and the nation’s topography. 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 to be a disadvantage.
Following a deep recession in the late 90s, the nation introduced the US dollar as its official currency in 2001. Dollarization is partly credited with bringing the national economy back on track, considerably improving the conditions and opportunities for everyone working in Ecuador.
As the national economy relies heavily on oil and other exports, job opportunities for expats tend to be limited. However, Ecuador has attracted a fair share of multinational corporations which have established branches or offices to try to benefit from the relatively low production costs and wages.
Free Trade Zones
The four free trade zones (FTZ) in the country give companies and expats numerous incentives for investment and lasting cooperation. Among the benefits for foreign companies in the free trade 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 offices and storage buildings.
Any company that’s planning on working in Ecuador’s travel, industry, import/export, or services sectors is eligible to establish a branch or office in one of the free trade zones. For a detailed insight, read the Ecuadorian Ley de Zonas Francas, which is the legal framework for all FTZs in the country.
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