Doing Business In Ecuador

  1. Ecuador is ranked 139th out of 185 economies in Doing Business 2013, recording a decrease of 5 points compared with last year.
  2. According to the latest Enterprise Surveys (2010), the top 3 obstacles to running a business in Ecuador are Political Instability, Access to Finance, and Practices of the Informal Sector. 65.7% of firms report competing with unregistered or informal firms, compared to the regional average of 62.3%.
  3. Of the 33 sectors covered by the Investing Across Sectors indicators, 28 are fully open to foreign equity ownership in Ecuador. While the manufacturing and primary industries are fully open to foreign investors, the country imposes ownership restrictions on a number of service sectors. There are no restrictions on foreign ownership in privately owned companies. However, prior consent must be obtained from the Electricity Authority. Notably, it takes 16 procedures and 68 days to start a foreign-owned limited liability company (LLC) in Ecuador (Quito). The process is slightly shorter than the regional average for Latin America and the Caribbean and longer than the IAB global average.
  4. Ecuador’s economic freedom score is 48.3, making its economy the 156th freest in the 2012 Index. Its overall score is 1.2 points higher than last year, with declining trade freedom offset by an improved score in government spending. Ecuador is ranked 26th out of 29 countries in the South and Central America/Caribbean region, and its overall score is far below world and regional averages.

Source: World Bank


Visa Information

Most travelers entering Ecuador as tourists, including citizens of Australia, New Zealand, Japan, the EU, Canada and the USA, do not require visas. Upon entry, they will be issued a T-3 embarkation card valid for 90 days. Residents from a handful of African and Asian countries (including China) require visas.
All travelers entering as diplomats, students, laborers, religious workers, businesspeople, volunteers and cultural-exchange visitors require nonimmigrant visas.
Various immigrant visas are also available.
All (nontourist) visa holders must register at the Dirección General de Extranjería (02-225-3082; Av Gaspar de Villaroel E10-288 nr 6 de Diciembre, edificio Karina; 8:30am-4:30pm Mon-Fri) in Quito within 30 days of arrival in Ecuador. If visa holders wish to leave the country and return, they need a salida (exit) form from the Jefatura Provincial de Migración, which can be used for multiple exits and re-entries. Visa holders who apply for residency need to get an exit permit from the immigration authorities in Quito before they leave the country.
Stay Extensions
New regulations mean it’s a real headache getting visa extensions. Unless you’re from an Andean Pact country, tourist visas are not extendable. If you wish to stay longer than 90 days, you’ll need to apply for a 12-IX Visa; you can also do this while in Ecuador, though it’s more time-consuming than doing it in advance through an Ecuadorian consulate in your home country. Pick up the necessary paperwork for the 12-IX Visa, and pay the $230 fee at the Ministerio de Relaciones Exteriores (02-299-3200;; Carrión E1-76 & Av 10 de Agosto, Quito).
No matter what, don’t wait until your visa has expired to sort out your paperwork, as the fine for overstaying can be hefty – $200 to $2000.

Business Etiquette

Meeting Etiquette

Ecuadorians are more formal in their business dealings than many other cultures.

Shake hands when meeting someone and also when leaving.

Handshakes are generally not very firm.

A man extends his hand to a woman.

Maintain eye contact when greeting people.

Professional or academic titles with the surname are used in business. Common titles are "Doctor" (medical doctor or Ph.D.), "Ingeniero" (engineer), "Arquitecto" (architect), and "Abogado" (lawyer).

If someone does not have a title, the honorific Senor or Senora is used with the surname.

Always wait until invited before moving to a first-name basis.

Business cards are exchanged during the initial introductions.

Try to have one side of your business card translated into Spanish.

The Ecuadorian Communication Style

Ecuadorians are known for being warm and polite. They can be quite tactile and tend to stand much closer to each other when speaking than in many other cultures. As a result they are highly tuned to body language and non-verbal communication. 
Ecuadorians need information in order to make their minds up on someone. As a result they will ask probing questions in order to assess how open, trustworthy or reliable you may be. One should not take this negatively or as an intrusion but rather be forthcoming with information. 
If you are from a culture is less reliant on relationships, trust and non-verbal cues then you need to watch what messages you may, or may not, be giving. Being distant on protective over personal information would be construed as being rude and closed. 
A good way of overcoming the initial deliberations your Ecuadorian counterpart may have is through using an intermediary to introduce you. This acts as a reference for your credibility. 
Ecuadorians are indirect communicators who speak diplomatically and with courtesy. They view blunt communication as extremely rude. If they want someone to do something, they will generally flatter the person so that it would then be difficult for them not to agree. Ecuadorians are non-confrontational and will go out of their way to avoid saying no. In fact, they will generally tell you what they think will please you rather than what they actually plan to do. They are also optimistic and have a positive outlook on life. They prefer to see the glass as half full and try to make the best of any situation. 

Business Meetings

As a visitor you may get by without speaking Spanish as senior personnel are usually fluent in English. It is however a good idea to learn some basic phrases to demonstrate an appreciation of their language. Some funny phrases can also help break the ice. 

Ecuadorians are essentially concerned with the people they are doing business with not the company. As a result they will spend time talking about issues that have nothing to do with business. This should be viewed as relationship building time and indulged in as much as possible. Wait for your counterparts to instigate a change in topics. 
Avoid confrontation and be careful not to embarrass people or public place them in awkward positions. Calling attention to someone’s error demonstrates a lack of finesse. Never let someone think that you do not trust them; since trust and personal relationships are the cornerstone of business you must ensure that this is solid. 
A person’s word is his bond. Never make promises you cannot keep. 

General Business Hours

Banks open at 8am and close sometime between 2pm and 4pm Monday to Friday (though money-changing services usually stops around 2pm). Andinatel, Pacifictel and Etapa telephone call centers are almost invariably open 8am to 10pm daily. Post offices are generally open 8am to 6pm Monday through Friday and 8am to 1pm Saturday. In smaller towns they’ll close for lunch.
In Quito and Guayaquil, most stores and businesses of interest to tourists stay open from 9am to 7pm Monday through Saturday, usually with an hour off for lunch (around 1pm). Government offices and businesses such as Amex are open from about 9am to 5:30pm Monday to Friday, also with an hour off for lunch around 1pm. In smaller towns, especially in the hotter lowlands, lunch breaks of two hours are not uncommon. On Saturday, many stores and some businesses are open 9am to noon. Stores in major shopping malls are open between 8am and 10pm daily.
Restaurants often close on Sundays and opening hours can vary widely. Bars usually open between 5pm and 7pm and close between midnight and 2am.