Employer Of Record in Ecuador

We make it easy and painless to expand your business into Ecuador. Forget about dealing with local regulations, confusing tax laws and international payroll management. We take care of all that so you don't have to.

Accelerate your growth into Ecuador Compliantly and hassle-free

At Serviap Global we handle all employee onboarding, payroll, compliance, risk, mitigation and benefits, so you can focus on what matters most – your business.

How we can help you expand in Ecuador

As your EOR in Ecuador we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary. 

Your candidate is hired by a PEO in Ecuador provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team. 

Expand to Ecuador with Serviap Global

Through our PEO and EOR services, you can hire qualified talent in your industry without the trouble of opening your own legal entity. 

In just a few days, you can easily and safely build a presence in Ecuador, being sure that your staff will be hired in compliance with labor and tax regulations

Table of Contents

Quick Facts

United States Dollar (USD)


Payroll Cycle:


With improved national security levels, education, infrastructure and social development, Ecuador is welcoming increasing numbers of foreign businesses to its shores. Ecuador’s switch to the U.S. dollar as the official currency has created stability and an improved economy. Furthermore, Ecuador is quite rich in culture and the people of Ecuador are some of the friendliest in the world. They are always quick to greet you whether they know you or not, are never in a rush, alway take time to appreciate life and show kindness to others.

The Economy

Ecuador boasts one of the most consistent, steady growth rates on the continent. The government is forward-thinking on the steps to take to attract foreign investment. Ecuador continues to invest in its people, infrastructure and facilities to capture foreign investors, such as free trade zones. Improved national security levels have also boosted the country’s reputation and market viability with commercial actors abroad. Knowing they have government backing and a largely untapped market is ample incentive to consider an expansion into this foreign investment-friendly country. This is an opportune moment in Ecuador’s development for national and foreign investors who want to undertake technological ventures in Latin America, whether existing or new.

The Importance of Small and Medium-sized Companies

In Ecuador, 99.2% of all businesses are small- or medium-sized enterprises (SME). The smallest businesses, which have 1 to 9 workers and belong to micro-enterprises, are the ones with the highest number of institutions registered in the country with 94.9%. According to data from the National Institute of Statistics and Census (INEC), Ecuador has 511,130 businesses (including branches) which include micro, small, medium and large enterprises located in the country’s 24 provinces.

Population Characteristics

17.6 million people live in Ecuador and its skilled labor force is readily available at affordable salaries. The average age in Ecuador is 27 years old and the government is putting emphasis on funding good educational opportunities to improve the country.

Economic Opportunities

Ecuador is growing in popularity as an attractive country to do business in Latin America. As the government’s support for foreign investment increases, so do opportunities for foreign companies looking to expand into Ecuador. Although Ecuador is open to foreign investment in most sectors, foreign direct investment (FDI) has always been lower in the country compared to in other Latin American markets. Ecuador remains an attractive country to do business in because foreign investors may keep up to 100% of net profits and capital.

Key Sectors of the National Economy

Ecuador’s main source of income derives from major exports that include bananas, shrimp, canned fish, flowers, gold and petroleum oil. Tourism Investors have particularly begun to hone in on Ecuador’s luxury tourism potential. Drawing upon the backdrop of the Andean region and its indigenous cultures, agencies promote entertainment, immersion and relaxation to travelers. Agriculture Regular rainfall and temperate climates support one of Ecuador’s longest standing market staples: agriculture. With a drive for developing sustainable agriculture, Ecuador is also welcoming a higher level of sustainability projects and initiatives from innovative foreign researchers and investors. Fintech Professional accounting and other financial services are in high demand in Ecuador. This is due in part to an ever-evolving financial regulatory system in the country. Ecuador’s financial technology (Fintech) industry continues to develop in the wake of Latin American technological innovation. This combination of technological and legal modernization in finance has boosted Ecuador’s financial service sector.

Human Talent

Ecuador’s skilled labor force is readily available at affordable costs. With the American dollar as its currency, foreign exchange logistics are made easier when entering Ecuadorian markets. There’s a high literacy rate which remains around 94% of the country’s citizens. And many computer science students in Ecuador are educated in a combination of software engineering and systems engineering. In fact, some universities have separated those areas into two different programs.

Prominent Cities for Business

Quito Quito is the headquarters of the Union of South American Nations. Quito’s international airport, Mariscal Sucre International Airport is one of the busiest airports in South America. Guayaquil Guayaquil is a beautiful coastal city and is Ecuador’s most populated city, furthermore, Guayaquil is the commercial center for Ecuador. It is home to the country’s most important port (Port of Guayaquil) and most of Ecuador’s import/export goods pass through here. Manta Manta is a city built on tuna fishing, not coincidentally, it is also where encebollado (tuna/onion soup) originated. Because of this it has a large sea port, Primer Puerto Marítimo del Ecuador. A lot of manufacturers make their business homes in Manta, especially when making numerous consumer goods, like cleaning supplies and cooking oils. Machala Machala is known as the Banana Capital of the World. It is home to Ecuador’s second-largest port, after Guayaquil. Ambato Given its central location, Ambato is an important industrial hub for Ecuador. The city is the center of marketing of agricultural products from the surrounding region. Its industrial production is based on textiles, flowers, canned fruit, leather, rubber, wine and furniture.

Technological Ecosystem

According to recent studies, the ecosystem of technological entrepreneurship in Ecuador is on the rise. Ecuador’s technological landscape consists of ventures or startups that can be divided into the following categories, according to the service they are focused on:
  • Fintech
  • Healthtech
  • Legaltech
  • Agritech
  • Edtech
  • Tourism
  • E-commerce
  • Human resources
  • Business solutions
  • Logistics
  • Real estate
  • Collaborative economics
Facilities for Foreign Investment The adoption of the US dollar as Ecuador’s official currency brings stability to the country, the US dollar has curbed inflation and reduced recession in Ecuador. Free trade zones in the country also enable the duty- and tax-free flow of raw materials, machinery, and semi-processed goods. Businesses operating inside these free trade zones can also repatriate their profits without restrictions or financial impingements.

Business Culture in Ecuador

Flexible Time Non-compliance with deadlines and running late is common. Ecuadorians often focus on people and relationships rather than strictly adhering to schedules. While arriving late to work probably won’t be tolerated, expect meetings, both for work and leisure will likely have start times that are just a basic suggestion. Status Matters Indications of status, such as academic titles, are valued.  It’s not considered appropriate to immediately begin by using someone’s first name. Bring a Gift for the Host When invited to an Ecuadorian home, a gift such as flowers or wine is appreciated.

Ecuador Gastronomy: regional and traditional cuisines

Ecuador’s cuisine varies with the altitude which affects the different agricultural conditions. Pork, chicken, beef and cuy (guinea pig) are popular in the mountainous regions and are usually served with rice, corn and potatoes. Langostinos are one of the many fresh and delicious seafood options on offer in Ecuador. And llapingachos are potato patties made with cheese and cooked on a griddle until golden brown. They’re often served as a side, along with chorizo, a fried egg, avocado, and salad.

General Highlights

Num. States/Provinces24 provinces
Principal CitiesQuito, Guayaquil, Manta, Machala and Ambato
Local CurrencyU.S. Dollar (USD)
Major ReligionCatholic
Date Formatdd/mm/yyyy
Thousands Separator Format999,999,999.99
Country Dial Code+593
Time ZoneUTC/GMT – 5 hours
Border CountriesColombia to the north and Peru to the east and south
Continental surface248,360 Km2
Fiscal YearJanuary 1st to December 31st
VAT %12.00% is applied to imports and transfers of goods and services
Minimum Wage400 USD per month
Taxpayer Identification Number Name in the countryTaxpayer Unique Registry (RUC)
Current PresidentGuillermo Alberto Santiago Lasso Mendoza
What you need to know about employing personnel in Ecuador:

Laws and Agencies that regulate labor relationships

The Ecuadorian state strongly supports employees.
LawsBrief Description
Constitution of the republic of EcuadorEcuador is 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.
Labor CodeMinistry of Labor Relations
Tax CodeInternal Revenue Services (SRI)
Social SecurityEcuadorean Social Security Institute (IESS) Citizens affiliated to the IESS enjoy various benefits in terms of health, retirement, unemployment, old age, among others, as long as they comply with their monthly contribution.

Key Tax and Labor Authorities

Ecuador has a comprehensive taxation and social security system which applies to anyone who resides in Ecuador for more than 183 days a year.
Internal Revenue Services (SRI)The Ecuadorian tax system is friendly for foreigners since they are only taxed on income earned within Ecuador. In Ecuador, International Financial Reporting Standards (IFRS) are applied and financial statements must be submitted annually to the Internal Revenue Services and the superintendence of companies.

Labor Contracts

Labor Ministry and Social SecurityContracts for employees include a probation period of three months. During this probation period, employers can terminate the contract without severance. Companies can offer short-term contracts up to six months, as well. However, be aware that employers must pay people on these contracts an additional 35% of the agreed salary
Contracts Article 21Requirements of the written contract – The written contract shall necessarily include clauses relating to: 1. The type or types of work which are the object of the contract; 2. The manner in which it is to be performed: whether by units of time, by units of work, by task, etc.; 3. The amount and form of payment of the remuneration; 4. The duration of the contract; 5. The place where the work or labor is to be performed; and, 6. The statement of whether or not penalties are established, and if so, the manner of determining them and the guarantees for their effectiveness. A contract may be fixed term, indefinite term, seasonal, temporary or occasional
The International Labor OrganizationThey have been a member since 1934
Work HoursThe standard working week in Ecuador consists of 40 hours a week, typically 8 hours a day for a five-day working week


Legal Benefits in Ecuador:
Minimum Wage$400 per month
WagesWages are paid in USD and paychecks may be distributed Monthly or bi-monthly, and employers must make salary payments on the same day of the month. Payroll Taxes: 9.45% Social Security
OvertimeOvertime hours, more than 40 hours a week, are paid at an overtime compensation rate of either 150.00% or 200.00% of the employees’ regular salary; the rate depends on the work performed during overtime.
Christmas Salary Mandatory: – Art. 111 14th Month Salary MandatoryWorkers are entitled to receive one additional month’s salary as their Christmas Salary. The 14th month may be paid in installments or one lump sum by employee request. The total bonus should equal 15% of employer profits, subject to a cap of 24 times the minimum wage.
Vacations or PTO15 days per year, increasing to 16 days of paid leave after five years of continuous employment. An employee must have served one year of service to be entitled to the standard paid leave entitlement.
Leaves of Absence Employees have the right to paid absences for the following things:Employees who have 180 days of continuous contribution to the Ecuadorian Social Security Institute (IESS) within six months prior to the onset of illness, or 189 days of continuous contribution within eight months before the start of illness: Employees who are covered are paid by the employer for the first three days and by IESS after that.
Childcare LeaveEmployees are entitled to 25 days of leave should their child be hospitalized.
Bereavement LeaveEmployees who have suffered the loss of an immediate family member are entitled to one day of paid bereavement leave.
Maternity/Paternity LeaveMaternity Leave Duration: 12 weeks paid. In the case of multiple births, 10 additional days are provided Paternity Leave Duration: 10 days in cases of normal delivery, and in cases of multiple births or cesarean section, it can be extended for 5 days. When babies are born prematurely or in special care, an extension of 8 days may be given. When the child is born with a disability or degenerative, terminal or irreversible disease, the father may take up to 25 days of paid paternity leave. In the event of the mother’s death, the father may use the remaining period of maternity leave.

Employers Contribution or Labor Cost

Annual Taxable Income Foreign residents of Ecuador are taxed on their Ecuadorian-sourced income but not on income earned outside of the country. Income taxes are charged at progressive rates, ranging from 5% – 35% once over $11,310. Corporate Tax Rates Ecuadorian companies owned by residents or non-residents located in non-tax-haven jurisdictions are subject to a 22% to 28% CIT rate. The general CIT rate is 25%; however, a 28% rate should apply if non-resident shareholders are located in a tax haven jurisdiction and additionally there is an Ecuadorian individual shareholder in the ownership structure.
Taxable Gross IncomeTax Rate
Income from distributed or undistributed profits of local corporations and branches22 – 28%
Reinvested profits of local corporations and branches12 – 18%

Public Holidays

The Labor Code provides for public holidays that are observed in Ecuador:
DateHoliday Name
1 JanuaryNew Year’s Day
15 & 16 FebruaryCarnival
Friday before EasterGood Friday
30 AprilLabour Day Holiday
1 MayLabour Day
24 MayBattle of Pichincha Holiday
9 AugustNational Day Holiday
9 OctoberIndependence of Guayaquil
1 NovemberIndependence of Cuenca Holiday
2 NovemberAll Souls’ Day
3 NovemberCuenca Independence Day
25 DecemberChristmas Day


The termination process varies according to the employment agreement and collective agreements in place and is based on the type of contract and reason for termination.
Type of TerminationBrief Description
Justified Dismissal1. For repeated and unjustified failure to be on time or to attend work or for abandonment of work for more than three consecutive days without just cause, provided that such causes have occurred within a monthly work period; 2. For serious indiscipline or disobedience to legally approved internal regulations. 3. For lack of probity or immoral conduct of the employee. 4. For serious insults to the employer, his spouse or common-law spouse, ascendants or descendants, or their representative; 5. For manifest ineptitude of the worker, with respect to the occupation or work for which he/she committed himself/herself. 6. For unjustified denunciation against the employer with respect to his Social Security obligations. However, if the denunciation is justified, the stability of the worker will be assured for two years, in permanent jobs; and 7. For not complying with the safety, prevention and hygiene measures required by the law, by its regulations or by the competent authority; or for contravening, without due justification, the prescriptions and medical opinions.
Unjustified DismissalWithout legal cause, a company shall pay the employee an indemnity equivalent to fifty percent of the total remuneration, for all the time remaining for the termination of the agreed term. Likewise, when the worker does so, it will pay to the employer, as indemnity, twenty-five percent of the total remuneration, for all the time remaining for the termination of the agreed term.
Voluntary Resignation1. For serious insults made by the employer, his family members or representatives to the employee, his spouse or common-law spouse, ascendants or descendants. 2. For decrease or lack of payment or lack of punctuality in the payment of the agreed upon remuneration; and 3. For the employer demanding that the worker perform work other than that agreed upon, except in the cases of urgency provided for in Article 52 of this Code, but always within the terms of the contract or agreement.


Financial compensation is given for ending a worker’s employment without cause, the amount and calculation are determined in the Ecuadorian Labor Code. For severance the minimum financial compensation is three monthly payments (at the regular salary rate), and the maximum is 25 monthly payments. The employer can offer a sudden dismissal bonus at 25.00% of monthly wages for each completed year of service.
Length of EmploymentSeverance Amount
1-25 yearsOne month salary per year of employment

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