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New regulations for travelers entering Ecuador

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1. Regulation NAC-DGERCGC19-00000078 establishes the Special Consumption Tax (ICE) specific tariffs applicable in 2021:
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1. Tariffs for calculating and paying income tax applicable to income received by Individuals and Undivided Inheritances in the fiscal year 2021:
2. Tariffs for calculating and paying income tax applicable to patrimonial increase derived from inheritances, legacies, donations, discoveries and any type of act or contract by which the ownership is acquired free of charge of goods and rights in the fiscal year 2021:
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1. Regulation NAC-DGERCGC20-00000074 issued by the Internal Revenue Service established that the terms and deadlines in all administrative processes and the statute of limitations for collecting debts are suspended from December 24, 2020 up to and including January 1, 2021. Later the term of suspension was extended up to and including January 17, 2021, by regulation NAC-DGERCGC20-00000081.
2. Regulation SENAE-SENAE-2020-0062-RE issued by the Customs Authority established that terms and deadlines in all administrative processes and the statute of limitations for collecting debts are suspended from December 22, 2020 up to and including January 20, 2021.
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a) Permitted activities outside the corporate purpose: Companies are allowed to occasionally or in an isolated manner enter into acts or contracts for investment, research or experimentation purposes, or as reasonable contributions of a civic or social nature.
b) Elimination of the opposition process: The process of opposition by third parties to the reduction of capital, change of name, early dissolution and change of domicile is hereby eliminated.
c) Single shareholder: The stock company and the limited liability company may subsist with a single shareholder. For its incorporation, at least two contracting parties must participate. Consequently, the cause for dissolution is hereby eliminated if a second shareholder is not incorporated within six months.
d) Corporate acts that do not require approval: The voluntary and anticipated dissolution does not require previous authorization of the Superintendence of Companies, Securities and Insurance. Therefore, the direct inscription of the corporate act in the Mercantile Registry is allowed for the beginning of the liquidation, which will be supervised by the control entity.
Neither does the change of name, change of domicile and modification of the corporate term require prior authorization.
e) Indefinite term: Stock and limited liability companies can be set up for an indefinite term.
f) President of the board of directors and legal representative: In the companies in which the bylaws provide for the existence of a board of directors, the legal representative of the company may not be the president or representative of that body.
g) Share premium: When non-shareholders participate in a capital increase, it may be decided the new shares to be issued with a value greater than the nominal value (share premium) to be paid by the new shareholders. The issue premium will be part of the voluntary reserves and will be freely agreed upon by the investor and the company.
h) Voluntary control: Stock companies may or may not have commissaries as a control body.
i) Loss absorbency: When a company registers operational losses and has reserves, these will be automatically called to be wiped out.
j) Cause of dissolution for losses: A company will incur in a cause of dissolution for losses when these represent 60% or more of the assets and this situation is maintained for more than 5 continuous years.
k) Transfer of the registered office abroad: The transfer of the registered office of an Ecuadorian company abroad is allowed if the receiving country allows the maintenance of the legal status of the company.
l) Global assignment of assets and liabilities to liquidate a company: A company may transfer in block all its assets to third parties, shareholders or other parties in exchange for a consideration. The global transfer of assets and liabilities must be approved unanimously by the general meeting of shareholders, granted by public deed and will not require the approval of the Superintendence of Companies, Securities and Insurance. The global assignment of assets and liabilities will have the effects of the transfer of companies as economic units as provided in the Code of Commerce. The assigning company will cancel its registration in the Commercial Registry without any additional procedure once the total value received from the global assignment of assets and liabilities has been distributed among its shareholders. The joint and several obligations that under the Commercial Code are attributable to the person transferring the company will be assumed by the shareholders of the extinct company in proportion to their participation in the share capital.
m) Association or Joint Purse Agreements: The regulations regarding this figure, with some modifications, are excluded from the Law of Companies and are incorporated as reforms to the Code of Commerce.
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By virtue of this reform, the judiciary servants of Ecuador will enjoy their annual vacations in two fifteen-day periods each:
Please note that general and specialized criminal courts, tribunals and chambers, as well as courts for family, women, children and adolescents will not be subject to these recesses.
During the time of the vacancy, actions for jurisdictional guarantees may be filed, and after a draw these will be heard by those judges who continue working during this time.
Exceptionally, in cases of fortuitous event or force majeure, the Judiciary Council may change the dates of these recesses.
In order to guarantee permanent services to the citizens, the Judiciary Council will coordinate the annual vacations system with the rest of the auxiliary and autonomous bodies of the Judiciary.
The Plenary of the Judiciary Council determined, by Resolution 141- 2020 issued on December 14, 2020, that the annual vacations for judiciary servants nation-wide and the Judicial Function recess for 2020 will be applied in accordance with the above-mentioned reform. Consequently, there will be a judicial recess from December 23, 2020 to January 6, 2021. Therefore, any the hearings and proceedings that were scheduled within these dates will be rescheduled.
The Director of the Judiciary Council shall issue the resolution corresponding to the vacation system for the administrative servants of the Judiciary, in coordination with its other autonomous and auxiliary bodies.
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Other competences of the Committee: to approve projects proposed by a delegating entity; to establish the projects that can be delegated to a private manager for the use of the existing infrastructure; to establish institutional coordination mechanisms.
Regime of delegated management contracts and PPP projects
Self-financed projects: those whose income comes from the price paid by the final users; and Projects with public financing, those that require the participation of public investment. The projects will distribute the risks between the public and private sectors; preferably they will be integral, trying to make the private manager in charge of the execution of the project. The results of the projects will be evaluated through specific indicators.
Public projects of private initiative: By public invitation or by their own initiative, private companies may propose to the Administration the execution by delegated project management. The delegating entities will determine the public interest of the project within a maximum term of six months. Once the private initiative project has been incorporated into the PPP Project Program, the private proponent will have a term of six months to prepare the feasibility study. The private proponent will intervene on equal terms with the other interested parties, with the only exception of a bonus of up to ten percentage points in the evaluation of its offer. He will not have the right to match or improve the offer of the best qualified bidder.
Participants in a PPP project: the delegating entities will be the public administrations that own the competence that will be delegated, public companies are not considered delegating entities; the private manager may be a corporation constituted according to Ecuadorian legislation, with a specific purpose to attend the public project. The private manager may adopt another authorized figure in the legal system according to the specifications of the application.
Economic-financial terms: the private manager, as consideration for the activities assumed, may receive contributions from the public budget, payments made by the final users, or a combination of both. The income of the PPP project will be used to cover the investment and operating costs and expenses of the PPP project and the remuneration of the private manager. When the private manager does not have a direct relationship with the users or beneficiaries of the PPP project, the public administrations may constitute a trust business to guarantee the respective payments. In its relationship with third parties that finance the PPP project, the private manager will have the necessary autonomy and sufficiency to provide the guarantees required on the estate and rights of the delegated management contract that are their exclusive property, without the need for prior authorization of the entity, except in cases where their acts or contracts may imply that the third party is able to suspend public service or affect service levels.
PPP project cycle and administrative procedure
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