flag Ecuador Ecuador: Investing

FDI in Figures

Ecuador is open to FDI in most sectors, with strategic sectors reserved for management by state-owned or -controlled companies, including energy, telecommunications, non-renewable natural resources, transportation, hydrocarbon refining, water, biodiversity, and genetic patrimony. As such, FDI inflows remain relatively low compared to other countries in the region. According to UNCTAD’s World Investment Report 2023, FDI inflows increased to USD 788 million in 2022, up by 21.7% year-on-year, with the total stock of FDI estimated at USD 22.2 billion by the end of the same period, around 19.1% of the country’s GDP. Nearly 80% of foreign investment is in the oil sector, making the country heavily reliant on this industry, which strongly influences FDI.

Under President Guillermo Lasso, the government of Ecuador has pursued an ambitious economic reform agenda aimed at stimulating investment, with a goal of attracting USD 30 billion in investment throughout his four-year administration. However, political instability has undermined the investment outlook, with opposition to President Lasso's administration hindering attempts to enact investment and economic reforms. Violent protests in June 2022 led to an impeachment attempt against President Lasso and inflicted significant economic losses. In response, the Lasso administration imposed a 12-month moratorium on additional oil and mining concessions to quell protests, complicating investment in extractive industries. Ecuador faces challenges in structuring tenders and public-private partnerships that are bankable, transparent, and competitive, deterring private investment. Widespread corruption further complicates the investment environment. While Ecuador operates as a dollarized economy with relatively few restrictions on foreign investment and profit repatriation, apart from a currency exit tax, the 2008 Constitution retains the right for the state to oversee strategic sectors through state-owned or state-controlled enterprises. Despite these challenges, foreign entities are allowed 100% equity ownership in Ecuador, with sector-specific laws dictating private sector participation in strategic sectors. Ecuador currently lacks a centralized, national-level investment screening mechanism for FDI, with each government ministry evaluating investments independently. This absence exposes Ecuador to potential risks associated with unscrupulous companies and raises concerns about national security. Ecuador ranks 104th among the 132 economies on the Global Innovation Index 2023 and 115th out of 184 countries on the latest Index of Economic Freedom.


Country Comparison For the Protection of Investors

  Ecuador Latin America & Caribbean United States Germany
Index of Transaction Transparency* 2.0 4.1 7.0 5.0
Index of Manager’s Responsibility** 5.0 5.2 9.0 5.0
Index of Shareholders’ Power*** 6.0 6.7 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 1,095647788
FDI Stock (million USD) 20,763.221,410.522,198.5
Number of Greenfield Investments*
Value of Greenfield Investments (million USD) 680704254

Source: UNCTAD - Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.


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Tax Rates

Value added tax (VAT) - Impuesto al valor agregado (Local name)
12% (standard rate).
Exempt items include: sale of a business; mergers, spin-offs and conversions of companies; donations to charities; transfers of stock, shares and other negotiable instruments; real estate rental payments and related maintenance costs.
Zero-rated items include: education; health services; public supply of electricity, drinking water and sewerage services; rent for housing purposes; financial securities exchanges; electric kitchens with induction systems for domestic use; solar panels and plants for wastewater treatment; LED lamps; electric vehicle chargers; unprocessed food; agricultural goods (such as certified seeds, plants and roots) and equipment; drugs and veterinary products; paper, newspapers, magazines, books and publishing services; exported goods; transport of persons and materials and air cargo transport; provision of webpage domains, servers (hosting) and cloud computing.
Company Tax
Withholding Taxes
Dividends: 0% (non-resident)/10% (resident in a tax haven); Interest: 0 (on loansobtained from non-resident financial institutions, specialized non-financial entities qualified by the Ecuadorian authorities and multilateral organizations)/25%; Royalties: 25% (non-resident)/35% (resident in a tax haven)
Social Security Contributions Paid By Employers
12.15% of the minimum monthly taxable wages of each contribution category.
Other Domestic Resources
Internal Revenue Service of Ecuador
Overview of Ecuador's tax measures in response to Covid-19
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Individual Taxes

Personal income tax Progressive rates from 0% to 35%
Up to USD 11,212 0%
From USD 11,212 to USD 14,285 5%
From USD 14,285 to USD 17,854 10%
From USD 17,854 to USD 21,442 12%
From USD 21,442 to USD 42,874 15%
From USD 42,874 to USD 64,297 20%
From USD 64,297 to USD 85,729 25%
From USD 85,729 to USD 114,288 30%
Above USD 114,288 35%

Country Comparison For Corporate Taxation

  Ecuador Latin America & Caribbean United States Germany
Number of Payments of Taxes per Year 8.0 28.2 10.6 9.0
Time Taken For Administrative Formalities (Hours) 664.0 327.5 175.0 218.0
Total Share of Taxes (% of Profit) 34.4 46.8 36.6 48.8

Source: Doing Business - Latest available data.

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Investment Opportunities

Tenders, Projects and Public Procurement
Inter-American Development Bank, Tenders in South America
DgMarket, Tenders Worldwide
Setting Up a Company
Consult Doing Business Website, to know about procedures to start a Business in Ecuador.
Useful Resources
Corporation for promotion of exports and investment (only in Spanish)
Contact UK Trade & Investment in Ecuador.
Contact the British Embassy in Ecuador.
Contact the Embassy of Ecuador in the United Kingdom.

Business Setup Procedures

Setting Up a Company Ecuador Latin America & Caribbean
Procedures (number) 11.00 8.00
Time (days) 48.50 25.22

Source: Doing Business.


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Latest Update: May 2024