Tobar ZVS > Quito, Ecuador > Firm Profile

Tobar ZVS

Ecuador > Energy and natural resources Tier 2

Tobar ZVS advises on the full life cycle of projects in the energy and natural resources sector, from planning and initial bidding agreements through to construction and transactional matters, alongside a strong regulatory practice. The mining sector is of particular significance to the firm’s practice, with a range of high-profile foreign clients instructing the team, including SolGold, Aurania Resources and Lumina Gold, among others. César Zumárraga heads the team and advises clients in a wide range of transactional work, recently handling Challenger Exploration’s acquisition of Torata Mining. Juan Fernando Larrea Savinovich, who was raised to the partnership in March 2021,  is another key figure in the team (assisting Zumárraga with mcuh of the practice group’s work) and heads up the firm’s new environmental and sustainability unit); while Andrés Paz y Miño Borja, in turn promoted to senior in Septemeber 2021, handles mining, energy and infrastructure matters, associated finacing and regulatory issues, and arbitration.

Practice head(s):

César Zumárraga


‘In addition to having extensive knowledge of the law and vast experience in legal procedures, each of the team members is extremely kind and professional, and provides excellent client service. There is a very high level of commitment, internal organisation and efficiency.’

‘Accessibility, prompt communication and responses, and cordiality. César Zumárraga and Juan Fernando Larrea have these qualities and it makes working with them very pleasant.’

‘They have extensive knowledge of the mining sector, especially in regulatory and permitting matters. They also have good relationships with highly strategic players at the national and provincial level.’

‘César Zumárraga and Juan Fernando Larrea stand out for their effective, positive and strategic advice.’

‘The team are highly specialised in mining law. They know the subject and delve deeply into complicated situations before giving advice. They have an excellent network of contacts to confirm the progress of the processes and use solid arguments to defend or clarify situations.’

‘Their level of knowledge of mining law is one of the highest in the country, and their analytical capacity is well known. When complex problems arise, they make use of group analysis or call in experts to give their opinion, so that the decisions made are correct.’

‘The digital system they use for internal and external coordination with the client in each case is efficient. This platform facilitates the monitoring of cases and makes the information and time dedicated by lawyers to each client transparent.’

‘They really care about their clients and treat you like a friend.’

Key clients

Minera Mesaloma

Challenger Exploration


Aurania Resources

Lumina Gold

Condomining Corporation


Work highlights

  • Advised Minera Mesaloma on a $3.3m letter of intent with Salazar Resources for the development of the Los Santos 2.1 project.
  • Advised Challenger Exploration on the acquisition of Torata Mining, holder of the El Guayabo mining concession.
  • Acted as lead counsel for SolGold on the structuring and closing of a $150 m project financing for the development of the Cascabel mining project.

Ecuador > Corporate and M&A Tier 3

Bernard Tobar heads the corporate practice at Tobar ZVS, which handles a range of structuring, transactional and governance matters. The firm is particularly notable for franchising work, having recently acted as local counsel for US firm Haynes and Boone, L.L.P. in relation to a franchise agreement for Hilton Worldwide Holdings. Other key members of the team include Alvaro Sevilla, who provides a range of regulatory advice, and René De Sola, who is particularly experienced in the insurance industry, but also handles restructurings and real estate acquisitions. Since publication the firm has also announced an association with Kennedys as regards insurance matters - effective as of May 2022.

Practice head(s):

Bernardo Tobar


‘It is a dedicated team that keeps on top of transactions.’

‘The team members are highly skilled and know the local legislation well.’

‘They are experts in M&A. It is a great team that is very well rounded, with strengths in many different areas of law.’

‘The lawyers have a lot of technical and administrative experience. They have an excellent understanding of how a business operates from various perspectives, such as corporate, tax and compliance, and so are able to provide joined-up solutions.’

‘Tobar ZVS stand out for the depth of their legal analysis – they have a strategic vision that is not limited solely to the matter under consultation. The response times are efficient.’

Key clients

Flower Investment Capital Fund


Aromas y Sabores del Ecuador Aromacacao


Luminex Group

Marvicnet (GoNET)

Haynes and Boone

JA Garrigues/Telefonica

Federal Expres – Fedex/Grupo Entregas Especiales

The Coca-Cola Company

Work highlights

  • Acted as lead counsel for Solgold on the structuring and closing of a project financing for the development of the Cascabel mining project.
  • Advised Flower Investment Capital Fund on two acquisitions.
  • Advised Marvicnet on the development of a franchise network for its expansion in Ecuador.

Ecuador > Dispute resolution Tier 3

Tobar ZVS has a particular focus on mediation, but also handles litigation and domestic and international arbitration. The team has recently expanded its practice to act alongside the firm’s insurance department in cases for clients in the insurance sector. Other areas of strength include mining, food and beverages, plant breeding and construction. Oscar Vela leads the team, and is experienced in commercial, IP and constitutional cases. René De Sola is noted for insurance-related cases, and associate Andrés Larrea has wide-ranging litigation and arbitration experience.

Practice head(s):

Oscar Vela Descalzo

Key clients

Lumina Group


Coca Cola del Ecuador

Rosen Tantau and Rosen Tantau del Ecuador

Fundación Guayasamin

Francisco Serrano

International Rose Breeders


Plantas Técnicas (Plantec)


Work highlights

  • Acted for Exploraciones Novomining in relation to a petition brought by a group of citizens before the Constitutional Court, seeking to prohibit mining activities in three areas in the Imbabura province, where the client has mining concessions.
  • Representing Plantas Técnicas (Plantec) in administrative actions before the IP authority (SENADI), seeking to impose sanctions on companies growing rose varieties developed by the client.
  • Represented Fundación Guayasamín in a complex inheritance dispute over the estate of Ecuadorian artist Oswaldo Guayasamín.

Ecuador > Intellectual property Tier 3

Alfonso Rivera leads Tobar ZVS' intellectual property team, which provides advice on both domestic IP laws and issues affecting the broader Andean Community. The firm handles a wide range of matters, including patents, trade marks, design rights and copyright, but is particularly notable for plant variety work, acting for some of Ecuador's largest agricultural players. Rivera is highly experienced in anti-piracy work, while at the associate level, Hipatia Donoso focuses on IP portfolio management.

Practice head(s):

Alfonso Rivera


‘The team is very organised, responsible and punctual.’

‘Alfonso Rivera and Hipatia Donoso are very professional, responsible, hardworking and friendly.’

‘I have received good treatment from the Tobar ZVS team. I feel like they do the job well and professionally. Response times are good.’

‘Alfonso Rivera is a good lawyer and always on top of matters.’

‘Hipatia Donoso is a very dedicated and professional lawyer who is thorough in the work that she does.’

‘They are very effective and promptly respond to the client’s requirements. They are friendly and well prepared.’

‘Tobar deal with both day-to-day work and more complex cases in a very satisfactory and effective way.’

‘Alfonso Rivera is a very responsive partner, who personally deals with cases and strives to find creative solutions to solve disputes in Ecuador. He is a very dynamic attorney and is really focused on problem-solving. It is always a great pleasure to work with him.’

The firm is recognized as one of the preferred choices for corporate clients with an international presence in Ecuador as well as local clients and entrepreneurs. Tobar ZVS strives to become a strategic partner of its clients through a comprehensive, business-oriented and strategically conceived product with distinctive elements. With recognized expertise in major business sectors, the firm’s philosophy is based on teamwork and the use of technology with specialized professionals within industry-focused units. Tobar ZVS’s heart is its people, therefore the firm seeks to retain its best talent and offer them all the necessary tools to develop their personal and professional potential.

This full-service law firm was founded in 1993 as Tobar & Tobar and changed its name to Tobar & Bustamante in 1996. In 2016 it merged with Spingarn & Marks, a leading firm in tax and finance, adopting the name of Tobar ZVS Spingarn. In 2021 the firm’s name changed to Tobar ZVS.

Main areas of practice

Antitrust and competition: renowned practice in M&A approvals by the antitrust authority, successfully initiated and defended clients in unfair competition actions, counseling on antitrust law in Ecuador for food, beverages, medical devices, educational books, and advisory and defense in all matters related to this field.

Corporate, M&A: focuses on overall legal risk management, corporate structuring and investment protection, project financing, commercial contracting, corporate governance, compliance for international clients locally operating, and for local companies working abroad. The unit’s culture is becoming a key supporter to clients’ in-house teams in achieving strategic goals and operational priorities. Teaming up with the tax and corporate/M&A division, the practice offers a full range of services for international business transactions, including IPOs, project financing and access to capital markets in the last ten years. Also deals with major investment agreements; recently closed as lead counsel the major concession deal for road infrastructure in Ecuador.

Natural resources, energy and infrastructure: recognized as a leader in mining practice in Ecuador. Clients’ portfolios represent more than half of the mining concessions granted in Ecuador since 2016. Moreover, at least four of these have been categorized as second-generation projects due to their importance within the mining sector. The team has multidisciplinary expertise in mining, energy, environment and sustainability, advising on complex legal issues and sustainable practices including concession acquisition, permitting, environmental compliance and licensing, land acquisition, consultation, aboriginal rights, negotiation of investment protection agreements and general regulatory matters. Drawing on this broad experience, the firm has successfully expanded its practice to renewable energy, oil and gas.

Tax and finance: its main proposition is a deep understanding of the clients’ operations, cost structure, financial needs and key drivers of growth and profitability. Articulates domestic and international tax law in providing tax advice/planning services. Also, transaction assessment/design, international tax planning, corporate structure design, tax litigation, tax modeling, international financial planning, liquidity management, transfer pricing, business valuation and risk and econometric studies.

Intellectual property: the specialized team provides a full range of IP services both locally and internationally, including consultancy, protection and enforcement of IP rights of all kinds, monetization of intangible assets. The firm has been a trailblazer in systematic enforcement campaigns to protect the IP rights of the world’s largest software producer and reputed entertainment firms. As to plant breeders rights, the firm’s combined portfolio of clients represents 65% of local rose varieties with a presence in international markets.

Conflict and dispute resolution: firm members are strong and successful litigators, however negotiation and alternate dispute resolution practice have grown considerably. It has several qualified arbitrators for arbitration centers, and members have been expert witnesses in numerous international arbitrations, mainly investor-related cases.

Insurance: experienced specialists and industry insiders offer assistance in all aspects of insurance.


Corporate/M&A Bernardo
Corporate/M&A Alvaro
Natural Resources and Infrastructure Cesar
Environment & Sustainability Juan Fernando
Dispute resolution Oscar
Intellectual Property Alfonso
Insurance Rene De
René De Sola  photo René De Sola Partner
Hipatia Donoso photo Hipatia DonosoAssociate
Carla Grefa  photo Carla Grefa Lawyer
Andrés Larrea  photo Andrés Larrea Senior Associate
Juan Fernando Larrea Savinovich photo Juan Fernando Larrea SavinovichPartner
Agustín Mora-Bowen photo Agustín Mora-BowenSenior Associate
Andrés Paz y Miño Borja  photo Andrés Paz y Miño Borja Andrés is a member of the Natural Resources, Energy and Infrastructure Unit.…
Alfonso Rivera photo Alfonso RiveraPartner and Head of the  Intellectual Propety and Anti-Piracy Unit
Alvaro Sevilla photo Alvaro SevillaPartner
Bernardo Tobar photo Bernardo TobarManaging Partner. Bernardo usually advises investors and corporate clients in cross-border, multi-jurisdictional…
Oscar Vela photo Oscar VelaPartner
César Zumárraga  photo César Zumárraga Partner
Other fee-earners : 21
Total staff : 47
English (fluent)
ABA (American Bar Association)
AIPPI (Association for the Protection of Intellectual Property)
INTA - International Trademark Association
Terralex Network
Partners : 8



The World has changed dramatically during the last decade. Politically it has deteriorated almost everywhere, and symptoms of mounting social unrest, institutional weakness, economic uncertainty, governments struggling to keep themselves in office, let alone fulfilling their mission in any degree, are no longer the exclusive traits of undeveloped economies, but can increasingly be seen in jurisdictions that were considered until recently the examples of mature democracies, economic welfare and the overarching prevalence of civil liberties and the rule of law. Indicators used just a few years ago in assessing the general business environment of a jurisdiction should be adjusted to the new realities.

Notwithstanding this global climate, aggravated by the global covid pandemic, the last decade has also witnessed many exponential technologies reaching the market and evolving from a concept into unicorn companies. Innovation has been unprecedented along with the many benefits it is bringing about in health, education, sustainability, social mobility and other global challenges. Political institutions are marching backwards or in circles, at best, while entrepreneurship and market forces are creating a world of abundant opportunities.

Since Ecuador adopted the US dollar as official currency two decades ago, the economy has remained to some extent dissociated from political changes, particularly those that could have otherwise unleashed inflationary forces. After the 2015 collapse of oil prices, which fed much of the public treasury, an economy that was impacted significantly by government spending has come to rely again on private sector growth and market forces, and in the last few years, Ecuador has adopted more investor-friendly policies and laws. In any case, and spite of political noise, for the last 20 years Ecuador has maintained with minor variations certain key elements relevant to the cost and opportunity of doing business, including an economy that is market driven for its most part, with State intervention and regulatory pressures in strategic economic sectors, and a relative stability of the essential components of corporate taxes, labor regimes, and a dollarized economy that depends increasingly on the need to promote foreign investment and international trade.

Ecuador has developed its infrastructure -energy generation, road, ports, airports, telecom, oil pipelines- significantly over the last two decades, to the point where energy and oil transportation excess capacity have been sold to neighboring countries; nonetheless, the Country needs to continue investing in order to keep up to speed with increasing demand. In terms of business opportunities, Ecuador has become the next mining exploration frontier and many major companies have set up local operations. Due to its geographical position and rich biodiversity, it is also a hot spot for green energy projects and power plants. The Country is also home to many companies working in the digital space, and applications for financials, fintech and logistics produced in Ecuador can be found throughout the Americas and other parts of the World, so there is an emerging tech sector adding and diversifying an international trade basket. The current economic downturn and Pandemic related pressures have increased the pace of acquisition of distressed businesses and assets.

When it comes to investing in large infrastructure projects or highly regulated sectors, political risk should be assessed -as when investing in similar projects in other jurisdictions-, and a strategy should be carefully designed and implemented. We believe that these kinds of projects can be successfully developed in Ecuador with the proper strategy, genuine corporate social responsibility practices, and a sound and transparent stakeholder engagement philosophy.


Official Name: Republic of Ecuador

Capital: Quito, Metropolitan District

Geography: The Republic of Ecuador is located on the Northwest Coast of South America and lies on both the Northern and the Southern Hemispheres, divided by the Parallel 0, or the Equator line. Colombia to the North, Peru to the South & East, and the Pacific Ocean to the West border Ecuador’s continental territory. Despite its small size, Ecuador is one of the most geographically, biologically, ethnically and culturally diverse countries in the world.

Currency: US Dollars

Official Language: Spanish is the official language. Native languages –such as Quechua- are spoken by specific groups of the population. English is commonly used for international business relations.




In general terms, private equity investments, whether from local or foreign sources, are allowed in any industry sector, with the exception of investments in the so-called strategic sectors, where State participation and control are subject to special rules, as discussed in section III.II. Ownership of local media companies has some specific limitations as well.

As the Ecuadorian economy is dollarized, there are no foreign exchange controls or any restrictions or limitations regarding the free flow of funds, whether in connection with debt or equity contributions coming into the system, or debt payments, import payments and dividends flowing out of it. There are certain regulatory registrations that should be affected, particularly for availing of applicable tax exemptions in the service of qualified foreign debt related operations, including typical credit facilities, factoring, project finance, securitization, and net smelter return agreements, increasingly used in the resource sector to finance mine development.

There are certain tax incentives designed to attract investment in certain industry sectors; in particular, the Organic Law for the Promotion of Production and Investment (“LPP”) provides an income tax exemption of 12-years from the date in which income is generated for investments made in economic priority areas, including agriculture, fresh frozen and industrialized produce; pharmaceutical; petrochemical; tourism; film production; renewable energies; biotechnology; software, amongst others. If such investments are made within the cities of Quito and Guayaquil, the income tax exemption is reduced to 8-years. Payments made abroad by companies covered by investment protection agreements are exempted from the currency outflow tax (“COT”, currently at a rate of 5%), provided that they are made for the import of goods and raw materials for the development of the investment project and dividends distributed by local companies (after payment of income tax) to shareholders that are natural persons, whether they are domiciled in Ecuador or abroad. Dividends distributed abroad to non-Ecuadorian tax residents are exempted from COT, regardless of whether there is an investment agreement in place.

On the other hand, the LPP provides an income tax exemption of 15-years from the date in which income is generated for investments that are made in the following economic areas considered as basic sectors: smelting and refining of copper and aluminum, iron and steel foundry for the production of flat steel, oil refining, petrochemical industry, pulp industry, and construction and repair of naval vessels. The exemption shall be extended for an additional period of 5-years when the investment is made in border cantons.

As new technologies are disrupting the financial markets, enabling cross border payments, remittances and digital accounts and transactions outside the traditional banking infrastructure, it should be mentioned that there are regulations applicable to some of the Fintech operations, particularly payment processing companies and other digital service providers considered ancillary to the financial system. These types of companies require special operating licenses and are subject to specific regulatory obligations, and a number of these are already operating in the jurisdiction. Recent reforms also referred specifically to crowdfunding and other technology enabled financings, but the limits on the project amounts make it hardly practical beyond very small ventures.


Strategic sectors -non-renewable natural resources, energy, telecom, oil refining and transportation, biodiversity, water, radioelectric spectrum-, should be managed by the State- or State-owned companies. Private investment and operation are allowed by the laws governing each specific strategic sector, subject to the net benefits of the State being no less than those of the investor. The State share is calculated by adding taxes, royalties when applicable, and other fiscal payments.

In an effort to promote public-private partnerships (“PPP”) in areas of general interest and strategic economic impact (infrastructure, urban development, real estate, roads, ports and airports), the Organic Law for Public-Private Partnerships (“PPP Law”) was enacted in 2015, which establishes some legal and tax incentives including the legal stability on the regulatory aspects that were declared as essential in the contract and certain tax exemptions (income tax, foreign currency tax, foreign trade taxes, among others). In practice, this PPP Law has been of little application, due to the cumbersome requirements, lengthy process and the political risks that come from partnering with State-owned entities.


Ecuador has a civil law system, inherited from continental Europe, particularly Spain and France. The Political Constitution is the highest-ranking body of law. International human rights agreements ratified by Ecuador enjoy the same legal ranking as the Constitution, and treaty provisions on human rights that provide for greater or improved protection can take precedence over the constitutional provisions. Public authority and Government powers can only be sourced in the Constitution and primary legislation -that is laws passed by the National Assembly-, as opposed to secondary and implementing regulations. So far the theory, as in practice Ecuador is not an exception to the global trend of governments extending its powers through implementing regulations, which has come to blur the limits established by the rule of law. That said, there are many legal resources to challenge the validity and effectiveness of Government decisions that are inconsistent with the Constitution or the laws.

Arbitration, whether local or international, is specifically recognized by constitutional rule as a valid dispute resolution mechanism, and usually it is provided in investment protection agreements with the State. While it is true that the State has lost some arbitration proceedings initiated by investors, it is also fair to mention that the State has honored international arbitration awards without enforcement in most of the cases.

Civil and commercial contracts are subject to party autonomy and to the pacta sunt servanda principle. In general, contracts can be submitted to foreign law as well as foreign jurisdiction. The enforcement of foreign judgements and international arbitration awards is specifically recognized and regulated, with the caveat that contractual provisions, judgements or awards that violate public order laws cannot be enforced. Such public order laws are very rare in the context of commercial contracts, but less so in the case of labor laws, family laws and other non-commercial matters.


Investors starting up a business in Ecuador most frequently establish local corporations or local branches of offshore entities. The business entity types most frequently used are the Stock Corporation -sociedad anonima-, and increasingly the Simplified Shares Corporation -SCC- for the reasons explained below. There are other alternatives that are less suitable for business purposes, such as the limited liability company, the mixed economy company (where the State or State-owned entities have participation) and other types of legal vehicles contemplated in the Companies Law. All types of companies, except financial companies, are registered with and controlled by the Superintendence of Companies, Securities & Insurance (“SC”) and governed by the Companies Law regarding the life and structure of the legal vehicle, as there will be other laws impacting the company’s business activities depending on the industry sector. Local branches of offshore entities also need to obtain authorization by the SC to start operations in Ecuador.

As a general rule, foreign companies may hold equity interests in any Ecuadorian company or industry sector; exceptions apply to foreign companies the equity of which is represented in bearer shares. There are also certain ownership thresholds applicable in a few industry sectors, such as mass media companies and businesses operated by a mixed economy company.

In 2020, a reform was passed modernizing the Companies Law. Key reforms include the validity of on-line AGMs, corporations surviving with one shareholder, management and board members fiduciary duties, and the recognition of the business judgement rule as a presumption that management has acted correctly provided that the decision was made in good faith, without conflict of interest, with sufficient information, and following adequate corporate approvals.

a) Corporations

These are labeled as sociedades anonimas. Shares issued by a sociedad anonima are freely negotiable as a general rule, and the transfer of shares is perfected upon the execution of rather simple forms and registration of the share transfer in the company’s books. Shareholder agreements are valid and can be enforced against the company if notified and registered. Only corporations are allowed to list its shares in the stock exchange, following a closely regulated and controlled public offering procedure. Any person, either natural or legal, local or foreign, may become a shareholder of a corporation.

The Corporation figure offers the same major advantages to investors as does this corporate entity in other jurisdictions, including (1) limitation of shareholders’ liability; (2) shareholders are free to negotiate their shares without restrictions; (3) corporations are represented by managers who may be freely removed; and (4) continuity of the business as an ongoing concern is assured, regardless of changes in management or ownership.

One of the important recent legal reforms introduced the concept of share subscription at a premium price, which is common and widely used in other jurisdictions. The premium over the nominal price -that is the price that would reflect the nominal capital contributions of the existing shareholders- is registered as a voluntary reserve account of the company and not as a patrimony account of the subscribing shareholder. This allows for private equity transactions at a premium over the share price without exposure to capital gains taxes.

b) Simplified Shares Corporation

This corporate form (“SSC”) was introduced in 2020 and has accounted for 48% of all new companies formed in Ecuador in 2020 . This type of corporation aims to promote entrepreneurship by facilitating and expediting the incorporation process. SSC do not need to comply with certain incorporation formalities applicable to other type of corporate forms. The incorporation of a SSC can be done by one shareholder and requires only a private agreement setting out the by-laws. Currently, the expected timeframe for the incorporation of SSC is about seven to ten days.

The SSC shares with Corporations the advantages mentioned above and there are also other relevant additional features regarding the operation of a SSC, most notably the introduction of convertible notes -a convenient tool to structure venture capital investments-, the validity and enforceability of shareholder agreements -now also recognized with respect to the sociedad anonima, the procedures for capital increases, modification of statutes, among others, are simpler and do not require notarial acts or the payment of registration fees.

c) Branch Office

A branch office is an extension of its offshore parent company and for legal purposes, it is not considered as a separate and independent legal entity; consequently, the liabilities assumed by a branch extends to its parent company without restriction. However, branches are considered independent entities for tax and accounting purposes only, and hence they shall keep separate accounting records, have their own local tax ID number, and comply with local financial and tax regulations based on the branch office financials.

Branches authorized to operate in Ecuador are subject in general to all the regulatory and compliance obligations applicable to legal entities doing business in Ecuador.

While branch offices may offer certain advantages in terms of the point evaluation system of most public bidding processes, and hence may be an alternative to be considered by investors interested primarily in securing contracts with the public sector, it is not otherwise an advisable choice, due to the exposure of the parent entity to liabilities incurred by its branch office.

d) Limited Liability Companies

This type of corporate form (“LLC”) is a closed partnership in which the identity of the shareholders is key. The capital contributions made in LLCs are represented by participation certificates, subject to burdensome transfer requirements and approvals, and not by shares. An LLC is characterized by (1) having a minimum of two and up to 15 members; (2) members have limited liability; (3) financial organizations and insurance companies cannot be members of a limited liability company; and (4) any transfer of participation certificates must have the unanimous approval of all the shareholders. While the label is the same as the US LLC, the Ecuadorian LLC is not a pass-through company, and offers no particular tax or operational advantage compared to any other type of company. The governance rules of an LLC are less flexible than those applicable to a Corporation or an SSC, so there are exceptional circumstances under which the use of an LLC would be advisable.

The procedure for incorporating a limited liability company is the same followed for a corporation.

e) Mixed Economy Company


Public entities may incorporate mixed economy companies when they partner with a private investor. According to Ecuadorian law, the State’s participation in this type of companies must be at least 51%. This corporate form is not extremely popular as many investors prefer other forms of association with public entities, such as strategic alliances, PPPs and other legal forms that do not give rise to an incorporated joint venture.

These types of companies are not a convenient alternative for investors, and in reality, they are of little use. Besides, Government controls on public funding and resources place this type of entities under cumbersome regulatory requirements and audits and exposes the private sector investors to unnecessary economic and political risk.



1. Get a Tax ID number (RUC) and maintain accounting records according to the International Financial Reporting Standards (IFRS).

2. Annual filings with the SC, containing financial statements and other relevant information required by the Companies Law.

3. Annual General Shareholder’s Meeting within the first 3-months of each year to approve inter alia financial statements, management and audit reports, profit distributions.

4. If the shareholder of a local company is a foreign entity, the following information must be provided and updated annually:

a) Certificate of Existence, duly legalized or apostilled.
b) A list of the company’s shareholders, together with a detail of their full name, address, nationality and, if the shareholder is an individual, his/her marital status, or if the shareholder is a company listed in a stock exchange, a sworn declaration regarding the listing.
c) A Power of Attorney (“POA”), legalized and apostilled, granted to an, Ecuadorean resident for the purposes of representing the Shareholders regarding the regulatory filings.
d) Certified copy of the appointment of the legal representative of the foreign shareholder, duly legalized or apostilled.

5. Payment of annual contribution to the SC equivalent to 0.1% (1 per thousand) of the real assets of the company.

6. The transfer of shares should be notified to the SC. This regulatory obligation has ex-post informative purposes but does not affect the perfection of the share transfer.


The procurement of civil works, goods and services –including consulting services- carried out by public entities is performed pursuant to the Organic Law of the National Public Procurement System (“LNPP”), its General Regulations, and the relevant Rules of Procedure issued by the National Public Procurement Service (“SERCOP”), which is the entity responsible for the overall supervision of public procurement processes.

Contracts regulated by the LNPP should include mandatory legal provisions in favor of the Public Entity dealing inter alia with fines and remedies upon breach, performance guarantees, unilateral termination rights, limits on change orders, dispute resolution by Ecuadorian courts and application of Ecuadorian laws. Contractors should give careful consideration to the qualification of events of default, the definition of force majeure, political risk provisions, caps on fines, limitation of liability provisions, termination and indemnity provisions, and the form and substance of performance guarantees.



All companies operating in Ecuador shall be subject to the following main taxes:

a) Corporate Income Tax

Ecuadorean and foreign companies with local branches in Ecuador are subject to income tax. This tax is applied to the company’s profits (calculated after deducting from the annual earnings 15% of labor profit sharing that is distributed to the employees). The current income tax rate for corporations is 25%. The rate is increased by 3 points when (1) the company fails to disclose its share structure up to its ultimate beneficial owner; or (2) when the company has a person domiciled in a tax haven within its ownership structure.

Dividends distributed to foreign shareholders are subject to a 10% income tax withholding, except if the dividend is distributed to shareholder with fiscal residency in tax haven jurisdiction, in which case the withholding rate is 14%. The use of a tax haven at any layer of the corporate structure is highly penalized.

b) Value Added Tax

VAT on the sales of goods and services and import payments is generally subject to a 12% rate. Exports of goods or services is VAT exempt. The purchase of medicines, raw materials, basic products, food in the natural state and veterinary products are subject to VAT at a 0% rate.

The taxable base amount for VAT is the value of the goods transferred or the services rendered. In the case of imports, the taxable base amount is the sum of the CIF (cost, freight and insurance) amount, taxes, customs tariffs, fees, charges, surcharges and other expenses appearing on the importation documents.

As a general rule, VAT paid in the process of aggregating products that will be exported is subject to reimbursement.

c) Tax on Special Consumptions (ICE)

It is levied on the consumption of cigarettes, soft drinks, alcoholic beverages, perfumes and toilette waters, video games, firearms, sports weapons and ammunition, motor vehicles and hybrid or electric vehicles, paid television services, shares or subscriptions to social clubs and luxury goods, according to the rates determined by the Tax Administration.

d) Currency Outflow Tax (ISD)

Any transaction or operation that involves the transfer of funds outside of Ecuador pays a 5% tax over the amount transferred abroad. Transfers made by Governmental financial institutions, special economic development zones (ZEDE’s), and the distribution of dividends, are exempted from the Currency Outflow Tax. Also, payment of principal and interest under qualified loan operations are exempt from the currency outflow tax provided that some conditions are met, namely that the loan has been duly registered in the Ecuadorean Central Bank, the lender has been qualified by the Superintendence of Banks, the loan term is at least 180 days, and that the interest rate does not exceed the referential interest rate published by the Central Bank from time to time.

Other remittances sent abroad (i.e., foreign transfers, payments, royalties) that constitute income to the beneficiaries are subject to the regular Corporate Income Tax rate.

e) Municipal Taxes

e.1) Patents (Commercial Business Authorization)

All individuals executing commercial or industrial activities or any other activity of economic nature in each jurisdiction must obtain on a mandatory basis a patent and make the corresponding payment.

The Municipal Council through an Ordinance shall determine an annual tax rate based on the operating capital of the taxpayers within the specific jurisdiction. The minimum rate shall be ten dollars of the United States of America and the maximum twenty-five thousand dollars of the United States of America.

e.2) 1.5‰ over Total Assets Tax

Shall mean the tax payable by all individuals, legal entities, sole proprietorships, either national or foreign– resident in Ecuador and performing economic, financial or industrial activities. Their taxable basis shall be the difference between current assets and current liabilities.


Ecuador has DTAs in place with the following countries:

  • Argentina
  • Belgium
  • Belarus
  • Brazil
  • Canada
  • Chile
  • China
  • South Korea
  • France
  • Germany
  • Italy
  • Mexico
  • Rumania
  • Spain
  • Switzerland
  • Uruguay
  • Japan
  • Qatar
  • Russia
  • Singapore
  • Colombia
  • Perú
  • Bolivia


Currently Ecuador terminated all bilateral investment protection treaties (“BIT”). However, foreign investments may be protected under the survival periods of the applicable BIT.

Notwithstanding the aforementioned, the COPCI provides that investors with investment exceeding US$ 250,000 in the first year of investment, can execute an investment agreement with the Government. Investment agreements can set forth and develop investor rights and provide for international arbitration.


There are special customs regimes (Temporary Admission for Active Improvement, or Transformation under Customs Control) that provide for exemptions on custom duties for imports destined to the manufacturing of products to be exported. These regimes apply even if such operation is not developed under a ZEDE.

Likewise, exporters are entitled to refunds for the Income Tax paid for imports of goods or services used in the elaboration of products to be exported.

These incentives may also apply if the investor qualifies as an operator within a ZEDE zone. The main difference is that in a ZEDE, there is a permanent 5% income tax reduction.

Special Economic Development Zones (“ZEDE”) due to its Spanish acronym), grant tax breaks to administrators or operators within such zones. These zones are aimed to promote investments in exports of high value-added goods and services. Tax benefits include: i) a 5% reduction in income tax; ii) imports are exempt from customs duties and VAT; iii). VAT refund in local purchases; iv) and no Currency Outflow Tax is payable on any payments made abroad by such administrators or operators, for imports as well as for payments of credit facilities under certain conditions.


The employment legislation in Ecuador is quite regulated and operates under the general principle that the employee should be protected. Thus, the employee cannot waive any of its rights under the employment relationship, and in case of doubt on the application of a labor provision, an in dubio pro employee applies.

There are several types of employment contracts in Ecuador. The most usual form is the indefinite employment contract, which operates by default unless the parties agree otherwise. Nevertheless, the parties may agree on other type of employment contracts. In general terms, employment contract per hour is not permitted, but partial working hours are permitted under some conditions. Also, outsourcing of activities that are within the line of business of the employer are not permitted; nevertheless, the employer may contract specific services from third parties (such as accounting, legal, technical, etc).

Considering that employment law is highly regulated, the law establishes a maximum daily shift of 8 hours, for a maximum of 40 hours a week. If an employee works in addition to such limit, the employer has to pay the labor wages plus a premium; likewise, if the employee works on a night shift, or during weekends, the employer must pay the labor wages plus a premium. In addition, employees are entitled to a share of the profits of the employer. The law provides that 15% of the profit generated by the employer shall be distributed amongst all employees.

Another important feature of employment law is that it intends to provide stability for the employee. This is a principle that underlies the entire labor legislation. Thus, employment contracts can be terminated by mutual consent or for specific causes provided in the law, following an authorization by the labor authority. If the employer terminates an employment contract without cause, the employer is liable and has to indemnify the employee for damages. The significant portion of the indemnification formula comprises one monthly salary for each year of employment after the third year (if the contract is terminated before the third year, the indemnification is equivalent to three monthly salaries). There are some exceptions to this general rule, and the law also permits a trial period of 90 days.

Finally, the employer has the obligation to affiliate all its employees in the Social Security. The employee must contribute with 9.45% of its monthly salary to the Social Security, and the employer must contribute with a sum equal to the 11.15% of the employee salary to the Social Security.