Ecuador: Newly enacted law overhauls immigration scheme

In a major new piece of legislation, the Ecuadorean government has enacted a major overhaul of its immigration scheme, in an attempt to better systematise processes.

Relocate Editorial

1 March 2017

While Ecuador remains a challenging environment for international business, its corporate immigration system is relatively open and simple. In a major new piece of legislation, effective February 6 2017, the Ecuadorean government has enacted a major overhaul of its immigration scheme, in an attempt to better systematise processes. Changes include restructuring of visa categories, new rules for foreign nationals traveling both within and outside the country, conditions on both temporary and permanent residency, and revised application procedures.

Business climate and immigration

While many vestiges of South American-style socialism remain, in recent years Ecuador has made a steady, albeit slow, move toward more free market policies. At the time of this writing, final tabulation of the votes from Sunday’s general election had just finished, and it appears the left-leaning Lenin Moreno and the right-leaning challenger Guillermo Lasso are headed to a second-round electoral show-down in April. The result will likely determine the speed at which the market reforms will continue, but regardless of the new President taking office, the slow trend toward free market reform will surely continue.Still highly dependent on oil production, Ecuador’s economy has in recent years suffered a deceleration from its previous four percent plus GDP growth due primarily to the weaker oil market, but further exacerbated by the infrastructure loss in the devastating April 2016 earthquake. Analysts recently scaled back growth projections for 2017 to a 1.7 per cent GDP contraction after virtually no-growth in 2016. Nevertheless, there is still a perceptible effort to diversify its economy into the increasingly global market, notably in tourism and the telecommunications and information technology fields.However, Ecuador remains a challenging environment in which to do business. A high propensity for market intervention and a seemingly persistent level of corruption has made government tax and regulatory measures unpredictable and steers major foreign investment elsewhere. Ecuador’s labor market laws are among the world’s most restrictive, placing it 123^rd of 138 nations in terms of Labor Market Efficiency in the World Economic Forum’s Global Competitiveness Report.Much of the recent immigration to Ecuador from the more developed world has been the result of efforts to promote it as an affordable tourism and retirement destination. Corporate immigration remains low compared to growing Brazil and Argentina, and future efforts to diversify the economy will depend on attracting more highly skilled foreign talent. This increasing expat population, and the seemingly reluctant realization of the need for more foreign money and talent, may be behind the recent immigration reforms, which are extensive and largely positive.

What's changed?

Effective February 6, a new far-reaching piece of legislation entitled “Ley de Movilidad Humana” (Law on Human Mobility) overhauled Ecuador’s immigration scheme, superseding the previous Migration and Immigration Law and Naturalisation Law and extensively reorganizing available visa routes. The driving philosophy in the legislative debate behind the new law was the simple principle that people should have the right to move freely throughout the world without undo barriers and restrictions. The new law systematizes Ecuador’s immigration requirements, making them simpler in some instances and stricter in others, but also confirms foreign residents’ rights to work and their access to essential services such as social security and healthcare. These changes to the laws and systems applicable to foreign residents are wide-reaching; however, Pro-Link GLOBAL attempts to highlight the most significant aspects with immediate impact on corporate immigration below. Note that, as is often the case with broad legislative action, more detailed administrative regulations will follow in the coming weeks as the changes are implemented.

Two new visa categories

The current myriad of visas is being simplified and reorganized into two new primary visa categories:

Temporary residence visas – This category, with 13 subcategories, replaces the previous non-immigrant visas and will contain the traditional business, tourist, and temporary work visa routes. Temporary residence visas will be valid for two years, renewable once. There are specific separate subcategories now for foreign workers on a local employment contract and those remaining on an employment contract with a foreign company. There is also now a specific subcategory for dependent family members who accompany a foreign worker temporarily working in Ecuador.
Permanent residence visas – This category replaces the traditional immigrant categories and will contain the visas applicable to foreign nationals working long-term in Ecuador on a local employment contract, investors, and the growing number of retired expats. There is also now a specific subcategory for dependent family members seeking permanent residence. In order for temporary residence visa holders to apply for permanent residency, applicants must first maintain temporary residency for 21 months.

New business and tourist visa rules

Nationals of other MERCOSUR Treaty countries – Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay, and Venezuela – continue to be eligible for entry and stays of 180-days for business and tourism without a visa. The new law likewise confirms that nationals of most other nations (except for a designated list of eleven) are eligible to enter and remain visa-free for up to 90-days; but in a welcomed addition, those nationals may now extend their stay in-country for an additional 90 days. For the list of the eleven countries whose nationals must have a visa to enter Ecuador, consult the Ministry of Foreign Affairs and Human Mobility website hereFor those foreign nationals who are required to have a visa, or for exempt nationals desiring a longer stay, a new “exceptional tourist visa” has been added in the Temporary Residence Visas category. The new legislation is somewhat lacking on details regarding this new visa, but reportedly it will take the form of a multiple-entry visa available every five years. The permissible activities for this new visa have yet to be defined; however, it is expected to cover tourism and traditional business activities. Some observers anticipate that this visa may also allow some limited short-term work activities, but such details have yet to be established by immigration authorities. Pro-Link GLOBAL is watching for additional administrative regulations and guidance in order to properly advise our clients of potential opportunities here.

Other important changes

The new legislation also brings a number of other changes applicable to foreign nationals living and working in Ecuador, including:

Identification documents – All foreign nationals must carry their travel identification documents or passports with them at all times. Citizens of Mercosur Treaty countries are permitted to enter and exit Ecuador using their national identification cards, without need to carry their passports.
Health insurance – It is now mandatory for all foreign nationals, on both temporary and permanent visas, to maintain private health insurance or register for Ecuadorian Social Security coverage once their visa is issued.
Absences from Ecuador – Temporary residence visa holders may now be absent from the country for no more than 90 days in a year. Permanent residents may be absent from the country for no more than 180 days annually in the first two years, but may remain outside the country for up to five years thereafter without losing permanent residency.
Registration – Permanent residence visa holders must register their addresses into the Ecuadorian Civil Register.
Application requirements – The legislation also calls for immigration authorities to establish clearer application processes and document requirements.

As with any broad new legislative action, much of the practical aspects of implementation will follow when authorities publish the administrative regulations and policies putting the new law into practice. Pro-Link GLOBAL expects these details to take shape in stages over the coming weeks and will continue to monitor the developments in Ecuador for official announcements.

How these changes affect you

Ecuador continues its slow shift toward free market principals and more openness to international business. Barriers to foreign investment and trade remain, but the business climate is improving and opportunities for international companies will become more available. The current Presidential election will potentially determine at what speed pro-business reforms will continue.While corporate immigration to Ecuador is relatively open, this latest overhaul of Ecuador’s immigration scheme should make the process even more systematized and user-friendly. Companies with foreign employees in Ecuador should take note of these various changes, as they are extensive and do place new requirements on foreign nationals regarding identification, health insurance, entry and exit rules, and coming application requirements.Pro-Link GLOBAL expects to see follow-up administrative regulations and guidance issued over the coming weeks and will continue to keep abreast of the changes for our clients currently operating – or considering operating – in Ecuador. For specific questions and guidance regarding individual cases, please feel free to reach out to your Pro-Link GLOBAL Immigration Specialist.^{Caveat Lector/ Warning to Reader}^{This is provided as informational only and does not substitute for actual legal advice based on the specific circumstances of a matter. We would like to remind you that Immigration laws are fluid and can change at a moment's notice without any warning. Please reach out to your immigration specialist or your client relations manager at Pro-Link GLOBAL should you require any additional clarification. This alert was prepared by your Pro-Link GLOBAL Knowledge Management team. We worked with our PLG | KGNM Ecuador Office “Corral & Rosales” to provide you this update.}_{Information contained in this Global Brief is prepared using information obtained from various media outlets, government publications and our KGNM immigration professionals. Written permission from the copyright owner and any other rights holders must be obtained for any reuse of any content posted or published by Pro-Link GLOBAL that extends beyond fair use or other statutory exemptions. Furthermore, responsibility for the determination of the copyright status and securing permission rests with those persons wishing to reuse the materials. Interested parties are welcome to contact the Knowledge Management Department (km@pro-linkglobal.com) with any additional requests for information or to request reproduction of this material.}