Articles
Business intelligence and analysis on Ecuador
SRI Reports $267.2B in 2025 Sales (+9%), $21.5B in Tax Collection (+6.8%)
Ecuador's tax authority SRI reported 2025 economy-wide reported sales of $267.2 billion (+9% YoY) and tax collection of $21.5 billion (+6.8% YoY). Enforcement-generated revenue totaled $578.6 million, roughly 2.7% of collections. Digital channel usage hit 167 million portal visits and 3.5 million credentialed transactions.
Ecuador Finance Ministry Issues Directive for Debt Settlement Using Unproductive State Real Estate
Ecuador's Finance Ministry has published an operational directive allowing government debts to public and private creditors — including GADs and suppliers — to be settled using unproductive state real estate. The protocol requires signed dación de pago agreements, technical reports, and cadastral verification. Inmobiliar held 469 state properties as of December 2024.
Noboa Signals Openness to US Military Presence — Security and Investment Climate Implications
President Noboa's announcement that Ecuador would welcome US military troops to fight organized crime — provided they operate under Ecuadorian command — signals a deepening US-Ecuador security alignment. Joint operations are already active, including Pacific naval exercises with the USS Nimitz and a border strike against Comandos de la Frontera.
Ecuador-UAE BIT: Constitutional Court Blocks Fast-Track, Mandates Legislative Approval
Ecuador's Constitutional Court ruled unanimously (9-0) that President Noboa cannot fast-track the bilateral investment treaty with the UAE via executive decree. The ISDS provisions trigger mandatory legislative review under Article 419(7). The ruling adds delay and uncertainty to the UAE investment corridor and reinforces constitutional limits on executive authority in trade agreements.
CAF Launches Economic Forum 2026 in Quito — Signs Competitiveness Agreement with Ecuador
The Development Bank of Latin America (CAF) held a high-level event in Quito to formally launch the II International Economic Forum and the Latin America and Caribbean 2026 Business Roundtable. CAF simultaneously signed a non-reimbursable technical cooperation agreement with Ecuador focused on developing a new national competitiveness policy.
Labor Reform: Agreement 059 Allows 10-Hour Workdays — Mass Protests
Ecuador's Ministry of Labor issued Ministerial Agreement 059 on March 10, 2026, allowing employers and workers to redistribute the standard 40-hour workweek across fewer days with shifts of up to 10 hours. The measure has triggered mass protests in Quito led by CONAIE and labor unions, who characterize it as a rollback of worker protections. Business chambers have expressed cautious support, citing operational flexibility benefits for manufacturing and services sectors.
SRI Cracks Down on ISD Tax Evasion in Foreign-Financed Imports
Ecuador's tax authority (SRI) has intensified enforcement of the 5% Impuesto a la Salida de Divisas (ISD) on foreign-financed imports, targeting evasion schemes that have proliferated since the tax credit elimination in January 2025. The crackdown focuses on split-invoicing structures and offshore financing arrangements used to minimize or avoid the capital outflow tax. An estimated $150-$250 million in annual revenue is at stake.
SRI Clarifies: 94 of 115 Basic Basket Foods Retain 0% IVA
Ecuador's Internal Revenue Service (SRI) published a granular breakdown confirming that 94 of the 115 items in the national basic food basket (canasta básica) retain the 0% IVA treatment. Only 21 items — concentrated in processed and packaged categories — now carry the 15% IVA rate. The detailed classification reduces interpretation risk for retailers and provides a clearer framework for consumer price index modeling. Estimated CPI impact from the reclassification is contained at 0.3-0.5 percentage points.
CAPIA Elects Mónica Ortega Pacheco as President for 2026-2029 Term
The Azuay Small and Medium Industry Chamber (CAPIA) elected Mónica Ortega Pacheco as its new president for the 2026-2029 term, according to El Mercurio. The leadership transition occurs as Azuay province reports 22%+ sales growth in Q1 2026 — significantly outpacing national recovery rates. The SMI sector represents approximately 60% of Azuay's industrial employment and is a critical channel for workforce absorption in the southern highlands.
SRI Clarifies IVA on 60+ Processed Foods — Consumer Price Impact Analysis
Ecuador's Internal Revenue Service (SRI) issued a clarifying circular on March 26 confirming that approximately 60 processed food items now carry the standard 15% IVA rate. Affected categories include processed dairy, baked goods, pre-cooked proteins, instant noodles, and flavored beverages. Raw and natural food products maintain the 0% rate. Analysis of the reclassification suggests a 200-400 basis point margin compression for food retailers and a measurable upward pressure on Ecuador's consumer price index in the processed food segment.
Profit-Sharing (Utilidades) Deadline April 15 — Compliance Framework for Employers
Ecuador's annual profit-sharing (utilidades) distribution deadline falls on April 15, 2026, requiring all employers with net profits to allocate 15% to their workforce. The distribution follows a two-tier structure: 10% divided equally by time worked and 5% allocated by number of family dependents. Foreign workers in dependent employment relationships qualify on equal terms. Non-compliance carries penalties of $1,446 to $9,640 per affected worker, with verification available through the Superintendencia de Compañías portal.
EU-Europol Security Agreement — Ecuador Becomes First Latin American Signatory
Ecuador has become the first Latin American country to sign a security cooperation agreement with Europol, the European Union's law enforcement agency. Published in Ecuador's Official Register on March 30, the agreement enables joint operations, intelligence sharing, and coordinated investigations against transnational organized crime. The partnership has already been operationalized: authorities dismantled a cocaine trafficking network linking Ecuador's Los Lobos cartel with Albanian criminal organizations operating across Belgium and the Netherlands. For international investors, the agreement represents a significant institutional credibility signal in a country where rule-of-law concerns remain a primary risk factor.