Business laws in ecuador

International business

Legal Environment and Business in Ecuador

Fernanda Calahorrano

Nowadays most of us are worried about business opportunities, talking about commercial topics are common when you go to the work, in a family meeting or other daily situations, but to understand the market you need to be aware of the environment where you want to access.

To capture a new market youshould analyzed different topics for example cultural, economical, political and legal factors that influenced directly your choice. The decision to invest in any place is not easy especially because each country has a type of legal system which determines your rights and your obligations with the state and all the members of it. Along the development of this text I will explain specific articleswhich refer to the laws of the country regarding to commerce, the companies, foreign investment, benefits and taxes.

According to the political history, Ecuador has been a partially unstable country which security depends on the current government trend. Since1997, the country had experience the fall of several administrations. In ten years we had had 6 presidents until January, 2007 whereRafael Correa was elected as the president of the republic for four years. Correa won the elections because he had based his campaign on the proposal to improve the country's constitution through a constituent assembly. The members of this assembly were elected by the people but most of them are also extremely close to the government, they are from the same political party, “Alianza Pais’, that is whymany people believe that some laws were manipulated at convenience of the president Correa.

The first of our new constitution defined our country as

“A constitutional State of rights and justice, a social, democratic, sovereign, independent, unitary, intercultural, multinational and secular State. It is organized as a republic and is governed using a decentralized approach. Sovereigntylies with the people, whose will is the basis of all authority, and it is exercised through public bodies using direct participatory forms of government as provided for by the Constitution. Nonrenewable natural resources of the State’s territory belong to its inalienable and absolute assets, which are not subject to a statute of limitations. “
Constitution 2008

The constitution is basedon the civil law, this system charged political officials (assembly members) with responsibility of specifying accessible, detailed and written law that applies to all Ecuadorians. We find several rights and regulations to be followed.

We are in a free country where people have the right to property in all of its forms, with social and environmental function and responsibility. We are alsofree because all of Ecuadorians born free, there is a prohibition of slavery, exploitation, bondage and smuggling and trafficking in human beings in all their forms..
no person can be incarcerated for debt, costs, fines, taxes or other obligations, except in the case of alimony payments. 

Regarding of trade policies:

“The State shall promote environmentally responsible exports, givingpreference to those creating more employment and added value, and in particular the exports of small and medium-sized producers and the artisan sector. The State shall support the imports necessary for development objectives and shall discourage those that negatively affect domestic production, the population and nature. Contracts entered into by the State with foreign natural persons and legal entitiesshall implicitly entail the waiver by these persons of any diplomatic immunity, except in the case of contracts with the foreign service.”
Constitution 2008

Regarding of commerce and fair trade:

“The State shall regulate, monitor and intervene, as necessary, in commerce and trade; and shall punish exploitation,and the speculative practices of middlemen for goods and services, as well as...