Ecuador is a small country in the northwest of South America, and its economy has undergone radical changes in recent years. These changes have led to it becoming an attractive site of investment for foreign businesses. There are loads of great investment opportunities in Ecuador, and many ways a business can benefit from its growing economy.
Why invest in Ecuador?
There are a number of reasons why people might want to do business in Ecuador, including:
Free trade zone
Since 2017, Ecuador has been a member of a free trade agreement with the European Union. This entitles Ecuadorian businesses to import raw materials duty free, and also export finished or unfinished products without paying taxes. Businesses operating under the free trade agreement in Ecuador also have relaxed labor laws, which allow them to hire workers on temporary contracts, rather than an annual one. This makes it an attractive prospect to those thinking of investing in industry or production.
In March 2000, the Ecuadorian government adopted the US dollar as its national currency. This was preceded by much political and social outrage, and was generally thought to be a bad idea. However, abandoning the sucres currency and switching to the US dollar stabilized the economy, and got it growing again. Not only is this stable economy better for potential investments, using the US dollar means less risk of currency conversion.
It’s great for export
Ecuador is the perfect place to set up your export business, as the country is rich not only in agricultural goods, but also in handicrafts and traditional products. These are popular worldwide, and can be an attractive source of income. It’s not difficult to research the best locations for these products, but you should be able to find things including alpaca wool goods, gold and silver jewelry, leather goods, and much more. Everything can be bought considerably cheaper than it’ll sell for elsewhere.
What are the best business opportunities?
There are business opportunities in almost any sector of the economy, however some are growing faster than others. The most obvious choices are:
Agriculture and forestry
Ecuador has the ideal climate for fast and easy production of most agricultural goods. It’s the leading exporter of bananas worldwide, and roses are also popular. It’s also common to see production of other popular goods, such as sugar cane, cotton, coffee, corn, and shrimp. Agriculture is Ecuador’s longest established industry, and also its most developed. Business opportunities are always available though, and it’s an industry the government invests a considerable amount of money in.
Ecuador is a fast grower in the worldwide tourism industry, particularly since its economy stabilized. There are thousands of popular tourist destinations across the country, including sites for seeing its incredibly diverse plant and animal life. The business opportunities for the tourism industry are endless, from boat and jungle tours, to restaurants and hotels. Although it’s already a popular market, there’s always room for a savvy business owner looking to get ahead.
As previously mentioned, Ecuador is a perfect choice for those looking to export goods worldwide. The country is rich in goods that are desirable across the world, from agriculture to traditional crafts. The current economical climate means these goods are cheap and easy to export. Not only that, but they can be sold for quite a high profit, and it’s possible to start your business small and work up. In fact, with the right knowledge, you could even go it alone.
Although these are the most popular areas of investment in Ecuador, here are some other suggestions:
Whether this be raw materials under the free trade agreement, or something else, importing is another good business idea. Ecuadorians enjoy many American foods, including beer, snacks, and dairy products. These are sometimes available in supermarkets, but ever since the economic crisis they have been expensive and harder to get. While this will take time to recover, it can be smart to jump ahead of the curve and start importing them yourself. There are tariff reductions available on some goods, and this makes them an attractive prospect.
Electronic goods production
This also goes back to the free trade agreement. Because you’re able to import raw goods and export unfinished products without paying tax, Ecuador is the perfect place to produce electronic goods. Many products are assembled from parts that are made across the globe, with companies taking advantage of different trade and labor laws. The construction of Ecuador’s free trade agreement makes it an ideal choice for electronic goods because the components can be made in the country and shipped elsewhere.
During the early 21st century, Ecuador made a conscious effort to improve its infrastructure. This included building new roads, houses, and towns. The money for this came from the export of crude oil, and so many of the buildings are quite luxurious. The current state of the economy, its predicted upward trajectory, and the national currency, all make it an attractive place for investment. House prices are currently low compared to other countries, and so now is the ideal time to buy. Whether you want to do this as an investor, or set up your own real estate business is up to you.
A growing economy leads to people spending money. Ecuadorians know how to have a good time, and are enjoying the economic climate. This makes it an ideal time to invest in a hospitality business, such as bar, restaurant, or nightclub. It’s really easy to set up a new business, and providing you pick the right spot, you’ll have customers in no time.
According to Craig Dempsey, CEO of the Biz Latin Hub Group Ecuador is fast becoming an attractive destination for both investors and expats looking lifestyle change. The free trade agreements and related labor laws make it a great place for production businesses, but it’s also a desirable location for import/export companies. Whatever sort of business you decide to start in Ecuador, make sure you take full advantage of the current economic climate and desirable national currency.