Global Upside helps businesses expand into Ecuador by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with laws and regulations of Ecuador.
The hiring and incorporation processes in Ecuador are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in Ecuador. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.
Situated in the northwestern part of South America, Ecuador is considerably reliant on its petroleum resources, crude petroleum is one of the major export items. The other major export products are shrimp and cut flowers.
- Ecuador ranks as the 61st largest economy in the world in terms of nominal GDP.
- Ecuador ranks as the 6th largest economy in South America.
- Ecuador is the biggest exporter of bananas in the world.
- Ecuador ranks as one of the top 100 best countries, in the world, for business.
A limited liability company, in Ecuador, can be set up with 3 investors and 1 director who can either be a local or a foreigner. A limited liability company needs to appoint an auditor to prepare and submit financial reports to the authorities.
It takes around three months to establish a legal entity set up in Ecuador.
The Labor Code and the Ecuadorian Constitution lays out the fundamental values of labor law.
The terms that need to be stipulated in an Ecuadorian employment contract are:
- Details of the employer and employee
- Date of commencement of the job
- Job description
- Schedule of the work
- Determination of the type of contract
- Probationary period
- Leaves and holidays
- Remuneration and mode of payment
The payroll frequency, in Ecuador, is bi-monthly or monthly.
There is a standard practice to give 13th and 14th-month salaries. The former is usually paid on 22 December and the latter is paid between March and August and is equivalent to a monthly wage.
For all accounting, auditing practices, and financial reporting all companies in Ecuador use the International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA).
The adoption of Normas Ecuatorianas de Contabilidad (NEC) also known as the Ecuadorian Accounting Standards and Normas Ecuatorianas de Auditoría (NEA) or the Ecuadorian Auditing Standards in 1999-2000 signified a momentous step forward for the nation in refining the quality of its standards.
In Ecuador, there is no specific data privacy law, and laws concerning data privacy are controlled by various legislations and regulations.
At present, a Draft Law has been ratified for the Protection of Personal Data which is a preliminary law and available in Spanish here. However, it has not been introduced yet to the National Assembly.
Anti-Bribery & Anti-Corruption Law
The primary pieces of legislation that criminalizes corruption-related crimes are the Criminal Code and the Constitution of Ecuador.
Penalty for bribery includes imprisonment from 1 to 5 years which can be extended to 7 years if the bribery leads to another crime.