Author Archives: Jorge Cadena

By means of Resolution COMEX No. 017-2025, adopted by the Foreign Trade Committee (COMEX), Article 4 of Resolution COMEXI 376-2007 has been amended, prohibiting any form of endorsement, assignment, or transfer of Health Registrations and Sanitary Notifications that has not been formally processed and authorized by the National Agency for Health Regulation, Control and Surveillance (ARCSA).

As of the date of entry into force, importers are not allowed to use a Health Registration or Sanitary Notification belonging to a third party through an authorization letter, contract, power of attorney, mandate, endorsement, or any informal transfer mechanism. Only authorizations that are expressly and formally approved by ARCSA will be valid.

The use or modification of a Health Registration or Sanitary Notification in favor of an importer will only be accepted when ARCSA has formally authorized it, pursuant to the procedures established by the agency.

According to the transitory provisions of the Resolution, SENAE and ARCSA have a period of 30 calendar days from the effective date to coordinate the operational and regulatory implementation measures required.

Likewise, importers currently using Health Registrations or Sanitary Notifications belonging to third parties have 120 calendar days to carry out the corresponding procedure before ARCSA, in order to obtain formal authorization for their use. After this period has elapsed, control authorities will not accept any Health Registration or Sanitary Notification that does not have ARCSA’s authorization in favor of the importer.

From CorralRosales, we will keep you informed regarding the mechanism and procedure that ARCSA may issue for the inclusion of importers. It is our understanding that this process will require the modification of previously issued Health Registrations and/or Sanitary Notifications in order to incorporate the authorized importer.

It is important to note that this mechanism does not apply to cosmetic products, where the parallel importer scheme is used.

This Resolution will enter into force on December 9, 2025, without prejudice to its publication in the Official Gazette.

Felipe Samaniego, partner at CorralRosales
felipe@corralrosales.com
+593 2 2544144

Ignacio Espinoza, Associate at CorralRosales
ignacio@corralrosales.com
+593 2 2544144

On August 22, and November 21, 2025, the Ministry of Labor issued Ministerial Agreement MDT-2025-102 and Ministerial Agreement MDT-2025-186 respectively, through which mandatory guidelines were established for the prevention, response, and eradication of acts of workplace discrimination, violence, and harassment in the private sector, as well as, the applicable process for the registration and approval of the Protocol for the Prevention of Harassment, Discrimination, and Violence (hereinafter, the “Protocol”).

We highlight the following:

• Scope of Application:

The provisions are mandatory for employers and workers subject to the Labor Code and apply when acts of harassment, discrimination, or violence occur:

1. At the employer’s premises.
2. Outside the workplace.
3. During work-related activities (travel, training, events, etc.).
4. Through physical or digital communications arising from the employment relationship, including telephone communications.

• Employer Obligations:

Employers, depending on the size of their workforce, must comply with the following:

Employers with 1 to 9 employees:

Comply with the guidelines for the prevention and eradication of workplace discrimination, violence, and harassment issued by the Ministry of Labor.

The Ministry of Labor has 60 days since the issuance of the Reform to publish said guidelines.

Employers with 10 or more employees:

Prepare, implement, and register the Internal Protocol for the Prevention and Eradication of Workplace Discrimination, Violence, and Harassment.

Prepare and implement the Psychosocial Risk Prevention Program.

All employers:

Regardless of the number of workers, all employers must manage psychosocial risk prevention in accordance with current technical regulations.

• Approval and Oversight: Approval of the Protocol will be the responsibility of the Regional Directorate, which may issue observations that must be addressed within 15 days.

The Ministry of Labor will conduct random audits to verify legal compliance and application of the Protocol.

For newly established employers, the deadline to register the Protocol will be July 31 of the year following the beginning of activities.

• Complaint Procedure before the Ministry of Labor: A formal procedure was established for handling complaints related to workplace discrimination, violence, or harassment before the Ministry of Labor. Although minimum requirements are established for filing a complaint, the lack of formalities will not be considered grounds for rejecting it.

The process will be handled by a labor inspector, who must resolve and finish the process in 15 days from receipt to resolution.

If the violation is confirmed, the inspector will issue a report, and the regional director may impose the corresponding sanctions.

The testimony of the alleged victim will not be considered sufficient evidence on its own, and during the process the employer must demonstrate that the Protocol was applied.

Edmundo Ramos, partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

María Victoria Beltrán, Associate at CorralRosales
mbeltran@corralrosales.com
+593 2 2544144

The Internal Tax Regime Law (LRTI) establishes that, for purposes of determining the taxable base of Income Tax, losses incurred by the taxpayer during the fiscal year are deductible.

Article 28 of the Regulations for the Application of the LRTI (RALRTI) provides that losses resulting from destruction, damage, disappearance, obsolescence, or other events that economically affect the taxpayer are deductible, provided that the procedure set out in the applicable regulations is followed.

The RALRTI requires that losses arising from inventory write-offs be supported by a sworn statement executed before a notary or judge, and signed by the legal representative, the warehouse custodian, and the accountant. This sworn statement must detail the final disposition of the goods, whether destruction or donation to public entities or legally recognized private non-profit institutions.

This procedure must be completed before December 31 of each year. Contact us to prepare and manage the sworn statement and ensure a properly supported and compliant deduction.

Andrea Moya, Parner at CorralRosales
amoya@corralrosales.com
+593 2 2544144

Mateo Bravo, Associate at CorralRosales
mbravo@corralrosales.com
+593 2 2544144

The new Regulations to the Public Procurement Law (hereinafter, the “Regulations”) were published in the Official Gazette No. 153 of October 28, 2025.

Below is a summary of the main provisions of the Regulations:

 

1. Value for money. “Value for money” is defined as the outcome of considering efficiency, effectiveness, economy, competition, and sustainability throughout all stages of the procurement process, in order to obtain the desired results, optimize public resources, and achieve the best cost–benefit ratio.

 

1. Financing of SERCOP. For contracts equal to or exceeding one million U.S. dollars (USD 1,000,000), contracting entities shall withhold 0.4% of each invoice or work statement and transfer it to the National Public Procurement Service (hereinafter, “SERCOP”) for its financing.

 

1. Open data. A public policy of open contracting and access to open data is established, led by SERCOP, aimed at reducing corruption and increasing competition. Information related to national security or classified as confidential by law is exempt from disclosure.

 

1. Exceptions to the RUP. Contractors will not be required to be registered in the Single Registry of Suppliers to participate in: (i) contracts financed with loans and international cooperation; (ii) contracts abroad; (iii) acquisition or lease of real estate; (iv) fuels; (v) airline tickets; (vi) minor purchases (“ínfima cuantía”); and (vii) social communication services.

 

1. Electronic signature. Documents related to public procurement procedures must be signed electronically using a signature issued by a locally accredited entity and through the official application of the telecommunication’s regulatory authority. Procurements carried out abroad are exempt from this requirement.

 

1. Technical commission. For contracts with a reference budget equal to or greater than USD$ 100,000, entities must form a Technical Commission responsible for evaluating and qualifying bids. If the amount is lower, this function may be performed by a public officer designated by the highest authority of the contracting entity.

 

1. In bids submitted by entities, the contracting entity shall ensure that majority shareholders are not subject to any of the disqualifications established by law. A majority shareholder is any individual or entity holding fifty-one percent (51%) or more of the shares in the entity.

 

1. The awarded bidder shall sign the contract within fifteen (15) business days following the date on which the award becomes final and binding, with the possibility of requesting an extension in cases of force majeure.
2. Technical warranty. As part of the technical warranty, it may be required that if the contractor breaches the agreement, the manufacturer or authorized distributor will take on the corresponding obligations. For contracts valued at five million USD or more, the contractor must provide a financial guarantee equal to the value of the goods supplied.

 

1. Advance payments. To execute the contracts, an advance payment of between twenty percent (20%) and thirty-five percent (35%) of the total contract amount may be granted to the contractor. Advance payment is mandatory for works contracts.

 

1. Bank transactions. The contract administrator may verify that the contractor’s banking transactions are related to the use of the advance payment or the execution of the contract. Upon request of the administrator, the contractor shall provide the bank statements issued by the corresponding financial institution for verification purposes.

 

1. In case of delay in the execution of the contract, the contracting entity may impose a daily penalty equivalent to one per thousand (1×1000) of the value of the unfulfilled obligation. If such obligation cannot be quantified, the calculation shall be based on the total contract amount, provided that the penalty does not exceed five hundred U.S. dollars per day.

 

1. Substitution of goods. In the event of force majeure, the contractor may propose to the entity the delivery of goods of a different brand than that offered, provided that they are of equal or superior quality and condition, without generating any additional cost. Acceptance of such proposal shall be at the sole discretion of the contracting entity.

Procurement procedures initiated up to October 27, 2025, will continue to be governed by the prior regulations.

Hugo García Larriva, Partner at CorralRosales
hgarcia@corralrosales.com
+593 2 2544144

Mario Fernández, Associate CorralRosales
mfernandez@corralrosales.com
+593 2 2544144

On November 7, 2025, through Resolution No. SPDP-SPD-2025-0041-R, the Data Protection Authority (hereinafter, “DPA”) issued Regulations for the Application of Legitimate Interest as a Lawful Basis for the Processing of Personal Data (hereinafter, the “Regulation”).

 

The Regulation is mandatory whenever a legitimate interest is relied upon as a legal basis for processing personal data.

 

Below we highlight the most relevant aspects of the Regulation:

 

1. Characteristic of legitimate interest

 

The Regulation establishes that legitimate interest must be:

 

i. Lawful: the processing activity must not pursue a purpose that is prohibited by law.

ii. Certain and specific: it cannot be substantiated upon hypothetical circumstances and must be clearly identified responding to concrete and verifiable needs.

iii. Proportionate: the processing must be adequate, necessary, timely, and not excessive.

iv. Within the data subject’s reasonable expectations: before carrying out the processing, the controller must provide the data subject with relevant information on the entire processing activity and must also include such information in the applicable privacy notice/policy.

 

2. Balancing Assessment

 

Any controller intending to rely on legitimate interest as a lawful basis must first carry out a balancing assessment with respect to the processing activity. This assessment, along with its outcome, must be available for review by the DPA and data subjects.

 

The balancing assessment will have to determine whether the interest relied upon by the controller prevails over the rights and freedoms of the data subjects. Failure to carry out such an assessment constitutes a serious infringement under the Data Protection Law.

 

The balancing assessment must include the criteria set out in Annex 1 of the Regulation, which, among other aspects, requires:

 

i. Identification and justification of the legitimate interest.

ii. Justification of the necessity, demonstrating that the processing is indispensable to achieve the intended purpose and that there are no less intrusive means available.

iii. A balance between the purpose pursued and the potential impact on the data subject’s rights.

iv. Implementation of technical, organizational, and mitigation measures, as well as documentation of the outcome of the assessment.

 

Controllers must maintain an up-to-date record of the balancing assessments they have performed. This record must be reviewed at least once every year, or whenever the purpose, the type of data, or the level of risk associated with the processing changes.

 

3. Permissible Scenarios

 

The DPA has limited the use of legitimate interest to the following purposes:

 

i. Direct marketing provided that no special categories of data or children’s data is used, and that a free and immediate mechanism to object to such processing activity is in place.

ii. Prevention, detection, reporting of fraud, money laundering, terrorism financing, and related crimes.

iii. Internal data sharing within a corporate group, limited to legitimate purposes and subject to transparency towards data subjects.

iv. Security of networks and IT systems, through the implementation of appropriate technical and organizational measures.

v. Video surveillance for the security of individuals, property, or facilities. The capture or recording of audio is not permitted in systems relying on legitimate interest.

 

In all cases, each processing activity must successfully pass the balancing assessment required under the Regulation. Data subjects may exercise their rights under the Data Protection Law at any time, in particular their rights to object and to access.

 

4. Prohibitions

 

Legitimate interest may not be relied upon in the following cases:

 

i. Processing of special categories of personal data, unless the processing is strictly indispensable, and reinforced security measures are in place.

ii. Processing involving automated profiling that produces legal effects concerning the data subject or significantly affects them similarly, except in cases expressly provided for the financial or insurance sectors with additional safeguards.

iii. Processing of personal data of children or adolescents, unless it can be justified based on the best interests of the child.

iv. Large-scale processing or further use of personal data for purposes that are different from, or incompatible with, the original purpose.

 

Rafael Serrano, Partner at CorralRosales
rserrano@corralrosales.com
+593 2 2544144

On October 27, 2025, the President of the Republic of Ecuador issued the Law on Social Transparency Regulations. Below, we summarize the provisions regarding the Advance Payment on Undistributed Profits:

 

1. General Regime

 

a. Calculation Formula

 

The advance payment will be calculated as follows:

 

1. Profit (+) or loss (–) from the immediately preceding fiscal year: accounting profit or loss, minus employee profit-sharing, minus income tax expense, minus legal reserve.
2. To this amount, the accumulated profits (+) or losses (–) from prior fiscal years (other than those mentioned above) shall be added or subtracted.

• (–) The value of dividends distributed between January 1 and July 31 of the fiscal year in which the advance payment is determined shall be subtracted.

1. (–) The capitalization of profits made between January 1 and July 31 of the fiscal year in which the advance payment is determined shall also be subtracted.
2. Adjustments for income valuation under the equity method for the previous period (+/–) shall be added or subtracted.
3. The progressive rate established in Article 39.2.1 of the Internal Tax Regime Law shall then be applied to this base to determine the amount payable.

 

b. Payment Methods and Dates

 

Taxpayers must declare and pay the applicable value in the month of August according to the ninth digit of the tax ID:

 

 

• Special taxpayers must make the payment by the 11th day of the due month.

 

• Payment may be deferred up to three equal installments to be paid in August, September, and October of each year.

 

• Entities that do not exceed the exempt threshold of USD 100,000.00 are not required to file the declaration.

 

c. Offset and/or Refund for Dividend Distribution or Capitalization

 

The amount paid in advance may be offset if dividends are distributed or profits are capitalized, following this order of priority:

 

1. Dividend Distribution:

 

• Offset first against the withholding tax payable on dividends derived from accumulated profits.
• If not fully offset, it may be credited against the income tax of the fiscal year in which dividends are distributed, or against income tax of other periods, within 3 years from when the credit became enforceable.
• If not offset, the taxpayer may request a refund of the remaining balance within 3 years from the date of payment.

 

2. Capitalization:

 

• Offset first against income tax of any fiscal year.
• If not fully offset, a refund may be requested within three years from the date of payment.

 

Holding companies and entities subject to a single income tax regime may request the refund from the first day of the month following the capitalization or dividend distribution, for the portion of the credit not offset, within 3 years.

 

The offset or refund shall be made in the same proportion as the amount distributed and/or capitalized.

 

d. Capitalization of Profits

 

For the purpose of offsetting or refunding the advance payment due to capitalization of profits, the capitalized value must be used for any of the following activities:

 

• Acquisition of new productive assets purchased as of August 28, 2025, such as property, plant and equipment, intangible assets, and biological assets, intended for the taxpayer’s productive or commercial process. The change of ownership of operating assets or those located abroad shall not be considered.
• Acquisition of new inventories as of August 28, 2025, such as raw materials, supplies, intermediate goods, and finished goods forming part of the business operating cycle.
• A net increase in employment of at least 5% compared to the fiscal year preceding the investment year. The net employment growth will be calculated as:

 

Net employment growth = (total jobs – previous jobs) / previous jobs

 

e. Non-Deductible Expense

 

Taxpayers that neither distribute nor capitalize their accumulated profits within the two fiscal years following the year in which the advance payment was made shall not be entitled to offset or request a refund. Consequently, the paid amount will become a non-deductible expense in the fiscal year when that term expires.

 

1. Special Regime for the Advance Payment on Undistributed Profits for Fiscal Year 2025

 

f. Calculation Formula

 

To calculate the taxable base for fiscal year 2025, taxpayers will use the information included in the 2024 income tax return filed by July 31, 2025, disregarding any amended returns filed after that date:

g. Payment Methods and Dates

 

Only for the 2025 fiscal year, taxpayers must file and pay the obligation in two equal, interest-free installments during November and December, according to the following schedule:

 

First Installment:

Second Installment:

Holding companies are not subject to this payment for fiscal year 2025.

 

h. Offset and/or Refund for Dividend Distribution or Capitalization

 

For the purposes of offset or refund for fiscal years 2025 and 2026 related to profit capitalization, the acquisition of new productive assets, property, plant and equipment, biological assets, and/or inventories made during the two fiscal years immediately preceding the publication date of the Law shall be considered, provided that they are incorporated into the productive process.

 

Andrea Moya, Parner at CorralRosales
amoya@corralrosales.com
+593 2 2544144

Mateo Bravo, Associate at CorralRosales
mbravo@corralrosales.com
+593 2 2544144

The Law Reforming the Law on Public Procurement (“LOSNCP”) was published in the Official Gazette No. 140 on October 7, 2025.

Below is a summary of the main amendments.

1. The concept of “best value for money” is incorporated as one of the guiding principles of public procurement.

 

1. The LOSNCP does not apply to Public-Private Partnership (“PPP”) projects, unless expressly referred to in the relevant PPP regulations, bidding documents, or contracts.

 

1. The National Public Procurement Service (“SERCOP”) may issue models and methodologies, but is no longer authorized to issue secondary regulations governing the National Public Procurement System.

 

1. Inter-administrative contracts. Public contracting entities may not associate with private companies or subcontract them for more than 30% of the total contract value. Any subcontracting requires prior authorization from SERCOP.

 

1. Electronic Catalog. Contracting entities should preferably procure goods and services listed in SERCOP’s electronic catalog (the “Electronic Catalog”).

 

1. Electronic Reverse Auction and Bidding. The Electronic Reverse Auction shall be used when the required good or service is not listed in the Electronic Catalog and the award is based solely on the lowest price. When evaluation criteria other than price are considered, the Bidding procedure shall apply.

 

1. Consulting services are excluded from the Electronic Catalog and must be procured through a Public Tender when the reference budget exceeds US$10,000. Contracts at or below this threshold may be awarded under the Minimal Amount (“Ínfima Cuantía”) procedure.

 

1. Response to contractors. During contract execution, public entities must respond to contractor requests within a maximum of 10 business days from notification.

 

1. Any penalty imposed on the contractor shall be calculated based on the value of the unfulfilled obligation.

 

1. Payments to contractors must be made within a maximum of 2 months after fulfillment of the contractual conditions precedent.

 

1. Termination by mutual agreement. When a contract is terminated by mutual agreement, the contracting entity may directly procure the pending obligations within 2 months from the termination date, provided that such obligations are not contracted with the same contractor.

 

1. Administrative appeals in public procurement matters shall be governed by the provisions of the Administrative Code (“Código Orgánico Administrativo”).

 

1. During the pre-contractual phase, a bidder may file a complaint before SERCOP if the contracting entity fails to comply with applicable regulations. SERCOP or the complainant may request suspension of the procurement process, subject to the requirements established in the forthcoming regulations to the LOSNCP.

 

1. Audit Fines (“glosas”). Before making the final payment, contracting entities must consult the Office of the Comptroller General of the State to determine whether the contractor has any enforceable and unappealed fines (glosas). If such fines exist, the corresponding amounts shall be withheld and offset against the final payment.

 

Public procurement procedures initiated before October 7, 2025, will continue to be governed by the prior regulations.

 

The President of the Republic must issue the new regulations on the LOSNCP by November 21, 2025.

Hugo García Larriva, Partner at CorralRosales
hgarcia@corralrosales.com
+593 2 2544144

Mario Fernández, Associate CorralRosales
mfernandez@corralrosales.com
+593 2 2544144

On October 2, 2025, through Executive Decree No. 172, the president of the Republic, Daniel Noboa, ordered the suspension of the workday corresponding to Thursday, October 9, 2025, for both the public and private sectors. Consequently, the national holiday for Guayaquil Independence Day will extend from October 9 to October 12, 2025.

The workday will not be recoverable.

Edmundo Ramos, partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

María Victoria Beltrán, Associate at CorralRosales
mbeltran@corralrosales.com
+593 2 2544144