A Guide to Investing and Living in Ecuador for Expats

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Living in Ecuador, located on the equator, offers a blend of cultural richness and natural diversity, with diverse landscapes and an affordable cost. Its warm communities and blend of tradition and modernity make it an attractive destination for expatriates.

If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or WhatsApp (+44-7393-450-837).

This page has numerous discussion points, such as:

• Living in Ecuador 101
• Cost of living in Ecuador
• How to move to Ecuador
• Ecuador investment visa
• Investing in Ecuador
• Ecuador Economy

Living in Ecuador 101

Lifestyle in Ecuador

Ecuador’s rich culture, ancient customs, and variety of leisure activities make expat life alive. The bulk of Ecuadorians are Mestizo, followed by Amerindian and European-descended Ecuadorians.

Ecuador culture emphasizes family, religion, and sports, especially soccer and horseback riding. Dance and music are popular in the country’s nightlife, with karaoke bars and dance clubs in many towns. Ecuador’s food is diverse, with fanesca, a highland-lowland soup, and seviche, a seaside dish, being popular.

Ecuador Currency

The USD is recognized as the official currency of Ecuador.

Ecuador Weather

The country’s varied terrain and height cause weather changes. Climates vary in the country’s four main regions:

1. Located in eastern Ecuador, the Amazon Rainforest has a tropical climate with high temperatures and humidity year-round. Rainfall is copious, with wet and dry seasons. From March to July is the wet season, while from August to February is the dry.
2. Located in the Andean area, cities like Quito and Cuenca enjoy a milder temperature due to their elevated topography. Daytime temperatures vary, but days are moderate. At higher altitudes, evenings are cool.
3. In Ecuador’s Pacific Coast, cities like Guayaquil and Manta have a tropical climate with distinct wet and dry seasons. December–May is the wet season, with higher temperatures and humidity. Air temperature and rainfall are lower in the dry season, June to November.
4. Located in the Pacific Ocean, the Galápagos Islands have a different climate. Seasons are warm and wet from December to May and milder and drier from June to November throughout the archipelago. Different islands have mild temperatures. Water temperatures affect marine life and underwater activity.

Ecuador violates four-season weather because of its equatorial position. Most people describe the country’s climate as damp and arid.

Ecuador Official Language

Ecuador has Spanish as its official language, spoken by the majority of the population. Nevertheless, it should be mentioned that many indigenous languages are spoken in different parts of Ecuador. Quechua, Shuar, and a few more are among these languages.

Some residents of multicultural areas, particularly those from indigenous populations, speak Spanish in addition to their native tongue. Being fluent in Spanish is usually enough to get by in most urban areas and professional settings. Learning some simple Spanish phrases or the native language of the area you’re visiting could come in handy if you’re planning a trip to a more rural or distant location.

Is Ecuador safe for expats?

Expats should feel comfortable relocating to Ecuador, although there are certain things to watch out for in any country. The significance of being selective in one’s location is shown by the fact that larger cities like Guayaquil and Quito may have greater crime rates.

Petty crime, such as pick-pocketing, is a real concern for expats, particularly in busy places and popular tourist destinations. Staying alert to common scams is essential, especially those involving imposter police officers or taxi fraud.

Furthermore, expats should have emergency supplies on hand in case of natural calamities, as Ecuador is frequently hit by volcanic eruptions and earthquakes. There should also be thought given to traffic safety, especially in certain regions.

Although the general danger to health is minimal, it is nonetheless recommended that water and food be handled with absolute care. Furthermore, it is advised to remain updated on political stability and any possible developments, despite the fact that the country has been largely stable in the past several years.

Cost of living in Ecuador

Is it expensive to live in Ecuador? A monthly outlay of almost $2,386 is anticipated for a family of four, while an individual can expect to shell out about $1,017, according to Expatistan. Compared to 84% of the rest of the world and 75% of Latin American countries, the cost of living in Ecuador is lower.

A typical studio apartment in a typical neighborhood would run you about $292 a month when it comes to housing costs. The same flat in a more posh neighborhood, though, would set you back around $502 each month. Utilities in a 45-square-meter studio apartment add about $45 to the monthly rent, while internet costs about $25.

Related content: Expat cost of living in Ecuador 2021

Ecuador Jobs for expats

Expats have unique obstacles when trying to find work in Ecuador; most options are in the hospitality sector, agriculture, or English language teaching. One of the most common career paths, considering the high need for English teachers, is teaching the language. There is a sustained demand for language instruction, as evidenced by the availability of paid posts at a variety of educational institutions.

Hospitality and agriculture are additional major expat employment sectors. Hotels, lodges, and hostels offer hospitality jobs. The  agriculture sector, which emphasizes bananas, coffee, and cocoa, offers jobs to expats living in Ecuador.

Employees in Ecuador need a non-immigrant work visa. Before starting a job hunt in Ecuador, expats must apply for a work permit from the Ecuadorian mission in their home country.  Spanish is typically required for work in the country, especially for jobs outside of teaching English and hospitality, emphasizing the necessity of language skills in the job market.

Banking for expats in Ecuador

For foreign nationals, popular banks in Ecuador include Banco Pichincha, Banco Guayaquil, Banco Internacional, and Banco del Pacífico.

Expats can open an Ecuadorian bank account or keep their home country’s. Each bank has different account opening requirements, so research them well.

Ecuador has limited banking hours from 9 am to 1 pm. Before visiting, check working hours as some branches may reopen after lunch.

To open an account, visit a branch and ask an advisor. This process requires clearly discussing whether to open a savings or checking account.

Opening a bank account in Ecuador requires a passport, evidence of residence, letters of reference, and other documents depending on the bank.

Related content: Banks in Ecuador: Best 4 Banks for Foreigners

Where do expats live in Ecuador?

Some of the best Ecuador cities for expats include:

1. Cuenca is known for its cultural scene, agreeable weather, and exceptionally well-preserved colonial architecture.  Many expats move to the city for its inexpensive cost of living.
2. Quito, Ecuador’s capital, has modern amenities. Its mixed communities, historical sites, and international services and amenities attract many foreign residents.
3. The bustling Guayaquil is Ecuador’s principal port and home to a large expat community. Expats like the city’s economic prospects, Malecón riverbank, and seaside attractions.
4. Cotacachi, a little hamlet in the Andes, is recognized for its artistic community and peaceful settings. Expatriates love the handcrafted leather goods, scenic surroundings, and slower pace of life.
5. Salinas, a vacation town on the Pacific coast, attract retirees due to its seaside-lifestyle, amenities, and aquatic activities.
6. Expats like the mild climate, tranquil surroundings, and organic food Vilcabamba offers. Many 100-year-olds live in the area.
7. Loja, located in the southern Andes, offers cultural diversity and excellent weather. Educational institutions, arts and music culture, and friendly atmosphere are valued by expats.

Healthcare in Ecuador for expats

Expats in Ecuador have access to public and private healthcare. All people, even foreigners, can use public healthcare, though quality varies and wait periods are considerable.

Many expats prefer private healthcare, which offers better care, especially in major cities like Quito, where private hospitals are well-equipped and staffed by English-speaking doctors. Ecuador’s healthcare is cheaper than in many Western countries, making routine and specialized services inexpensive.

Ecuadorian expats usually buy private health insurance from multinational insurers that specialize in expats. These plans often include doctor visits, hospitalization, medicines, and emergency care. Expats may choose cheaper Ecuadorian insurance carriers, but they must understand coverage, including pre-existing condition exclusions. Due to Ecuador’s unique topography and natural calamities, expats should acquire medical evacuation insurance to ensure emergency medical care.

Pension system in Ecuador

The Ecuadorian Social Security Institute (IESS) may pay expat pensions. But they have to check off a few boxes. They must have been a legal resident of Ecuador and a contributor to the IESS for a minimum of 20 years. Also, they can’t be working and must be 65 or older.

Even if an expat does not correspond to these criteria, a private pension plan may nonetheless allow them to receive a pension. These plans are provided by various private companies and are not regulated by the government.

Related content: How To Retire in Ecuador: 7 Keys to a Thriving Retirement

Taxes in Ecuador for expats

According to PwC, Ecuador taxes its citizens and foreigners largely on Ecuador-source income, which is any money from Ecuadorian activity, regardless of where it is earned or paid.

Ecuadorians, native or international, pay taxes on foreign income. Income tax credit is up to Ecuador’s income tax on such income.

Non-residents’ Ecuador-sourced income is taxed regardless of residency. Non-residents pay 25% withholding income tax on local income. When not charged to an Ecuadorian corporation or branch of a foreign entity, payments to non-residents occasionally working in Ecuador are not subject to income tax. Resident visa holders must pay income tax on their wages and cannot deduct income for temporary absences from Ecuador.

Living in Ecuador pros and cons

Living in Ecuador has several benefits. The cost of living is low, making it appealing to people seeking financial security compared to Western countries. Another hallmark of Ecuador is its eclectic culture, influenced by indigenous, mestizo, and Afro-Ecuadorian civilizations.

Ecuador’s diverse geography, from the Andes Mountains to the Pacific coast, allows citizens to experience several locations. Modern hospitals in major cities and a combination of public and private facilities make healthcare accessible and inexpensive. Expatriates can easily settle in Ecuador through its residence programs.

However, residents of Quito and Guayaquil may worry about increasing crime rates. Heavy traffic and uncertain road conditions make city transportation and public works difficult. Expats may struggle to communicate with locals because Spanish is the main language in business, government, and daily life. Ecuador also experiences earthquakes and volcanoes. Foreign residents may likewise find government procedures frustrating due to bureaucratic red tape.

Related content: Living in Ecuador: 5 Positive Changes You’ll Experience

How to move to Ecuador

Visa in Ecuador

Those moving to Ecuador can choose from the visas being offered in the country:

• Tourist visa – For 90-day visits or less, US citizens are not required to obtain a visa unless they’re staying longer.
• Work visa – Those who have received a job offer or employment contract from an employer in Ecuador can get this visa.
• Student visa – In order to obtain this visa, applicants must provide proof of enrollment or admission to a school that is officially recognized by the Ecuador government.
• Digital nomad visa – This visa, sometimes called a rentista visa, allows remote workers to work out of Ecuador for two years.
• Retirement visa – Foreign nationals who have amassed sufficient wealth to retire in Ecuador are required to apply for a Jubilado Visa. Permanent residency is an option after 24 months.

A passport, a copy of the passport, a certificate of police clearance, evidence of income, a receipt for the payment of fees, and proof of health insurance are all required documents for visa applicants.

A temporary resident visa holder must remain in Ecuador for a total of twenty-one months before applying for permanent status. The initial validity of this visa is for 24 months, with the possibility of an extension granted if the necessary conditions are met.

Contacting the Ecuadorian Embassy or a consulate in your nation will provide you with all the necessary details regarding the visa application and its criteria.

What’s the Ecuador investment visa?

The Ecuador Investment Visa grants residency to overseas investors. Minimum investments are required for many investment options. Main Ecuador Investment Visa options:

• Invest $45,000 in Ecuadorian houses, flats, condominiums, or offices. Register the property in the property registration.
• A $25,000 bank deposit in Ecuador must stay in the country for four years.
• Buy shares in a local Ecuadorian company to invest at least $45,000.
• Set aside $45,000 in Ecuadorian firm shares.

The following documents are required for an Ecuador Investment Visa:

• Passport having at least six months left.
• Authorities in the applicant’s current and former countries conduct background checks.
• Investment proof that meets Immigration’s standards.
• Background check for crime.
• Certain birth certificates.
• If applicable, marriage certificate.
• Application and cover letter completed.
• Fingerprints.

Ecuador Investment Visas take 2-3 months to process.

Moving to Ecuador from US

Those considering moving to Ecuador from the US must have a passport with at least six months left. US citizens rarely need a visa for visits under 90 days, but those planning longer stays must apply in advance.

Temporary resident visas are required for long-term residence in Ecuador. Foreigners spending more than 90 days in the country receive this visa. Travelers and expats can get employment, student, and digital nomad visas for extended stays.

Multiple documents are required for visa applications. Your passport, a photocopy, a police clearance certificate, proof of income, a fee receipt, and health insurance are examples. These materials help conduct a thorough visa application examination.

Investing in Ecuador

Ecuador warmly welcomes international investment in real estate, bank savings, business operations, and shares. Foreign investment is drawn to the country’s diverse agriculture industry, which provides significant revenue. The mining industry, with its mineral, oil, and gas reserves, attracts Latin American investments. Ecuador’s unique environment and tourism potential attract ecotourism and hospitality investment.

Private firms can invest in infrastructure and public activities through Public-Private Partnerships (PPPs). Duty-free imports of raw materials and machinery makes free-trade zones attractive for manufacturing and other investments.

However, frequent economic, commercial, regulatory, and investment policy changes make Ecuador’s business climate difficult. To navigate the changing business scene, investors should visit the nation periodically and form long-term connections with local enterprises.

Ecuador Economy

The oil industry drives Ecuador’s economy. Agriculture, mining, and manufacturing also work in Ecuador’s economy, but oil is the mainstay. Agriculture and tourism are being used to diversify the economy away from oil.

According to The World Bank, Ecuador’s economy still has some serious flaws like its reliance on oil exports, its lack of access to finance markets, and the informality of its workforce, albeit it is beginning to show signs of recovery from the pandemic-induced downturn.

Recent difficulties, including political unpredictability and insecurity caused by organized crime, have caused a considerable economic downturn. All of these problems need fixing, and the next government needs to do it by talking about how to build development that is inclusive, sustainable, and resilient.

Can foreigners buy property in Ecuador?

Yes, Ecuadorian real estate is available to foreigners. Real estate in Ecuador, including land, condos, and houses, can be purchased by foreigners with the same rights enjoyed by Ecuadorian citizens. There is no requirement to involve a third party or establish an Ecuadorian trust in order to hold property, unlike in other nations.

One piece of identification that is required to finalize a purchase is a valid passport. Fee simple ownership is the legal status in Ecuador for both the land and any improvements constructed on it. This means that the buyer or seller can keep all improvements forever.

Buying and owning property is simpler and cheaper than in many other countries. Do take note of legal fees as well as agent charges of up to 6%. Home and condo sellers may choose to raise their asking prices to cover the expenditures, even if the fees are paid by the seller. A major selling point for Ecuador is its low property taxes.

Related content: 7 Things Expats Should Know Before Purchasing Property In Ecuador

Can foreigners get a mortgage in Ecuador?

Foreign nationals can get mortgages from Ecuadorian banks and lenders, although it could be difficult because lending laws aren’t as well-developed as they are in other nations. Extended, high-debt loans are generally frowned upon by Ecuadorian banks, and the interest rates that accompany them are notoriously high.

A good credit history, proof of income, and a legal Ecuadorian residence or visa are some of the requirements that foreign individuals seeking a mortgage in Ecuador may face.

Taking all of this into account, it is wise to look into other finance options. If you’d rather pay for your new house in installments than all at once, one good alternative is direct seller financing. It seems like a good idea for people who want a more conventional mortgage to apply for loans in their home country. By building a credit history, not only is the approval probability higher, but this strategy also has the potential to provide more competitive interest rates.

Benefits of investing in Ecuador

• Investors have the same rights and incentives to invest as Ecuadorian investors, which includes access to markets in the Andes and a number of trade agreements.
• Ecuador provides new and current businesses with significant advantages through its tax perks and incentives program. Free trade zones and stronger incentives for investments in domestic businesses are just two examples of how the government has been gradually opening up its investment landscape.
• Among the most dynamic economies in the region, Ecuador’s shows great promise for future expansion and improvement. Promoting an inviting atmosphere for investment and commerce, the country has systematically eliminated tariffs and economic barriers with nearby nations.
• Ecuador takes center stage as an investment hotspot thanks to its strategic position and cutting-edge infrastructure. Exports of completed or partially processed items are also eligible for duty-free treatment, while imports of raw materials and equipment are allowed in the country’s free trade zones.
• Ecuador’s large pool of potential workers increases the country’s attractiveness as a market. In its pursuit of more FDI, the government is focusing on promising industries including agriculture, forestry, tourism, mining, real estate, fishing, and aquaculture.
• Despite the difficulties and unknowns in the business climate, Ecuador remains an appealing location for international investment due to its diversified climate, abundant natural resources, and high potential for tourism.

Risks of Ecuador investment

• Ecuador’s oil dependence makes economic, commercial, and investment policies change frequently, making corporate planning difficult.
• Ecuador’s political volatility may affect business and investment decisions.
• Investors face systemic vulnerabilities and political pressures in Ecuador’s judicial system.
• Ecuador’s seismically active region puts businesses and investors at danger of property damage and disruptions through volcanic eruptions and earthquakes.
• Ecuador’s informal economy and low workforce qualification might hurt productivity and attract international investment.
• Ecuador’s sovereign default history may worry investors.
• Conflicts in Ecuador’s corporate environment impede foreign investment.
• In Ecuador, small and medium-sized firms have limited access to capital, which can hinder corporate growth and investment.

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