Ecuador

Market overview

The virus was reported to have spread to Ecuador on 29 February 2020. Through a Ministerial Agreement issued on the 11 March by the Minister of Health, a State of Health Emergency was declared in the National Health System. On the 13 March the National EOC was activated for the coordination of the emergency and the country closed its borders on the 18th March.

In April the World Health Organisation (WHO) classified Ecuador as one of the worst affected countries in the region both for rate of infection and fatality rate.

As of 18 August, the Ministry of Foreign Affairs and Trade has temporarily closed the physical premises of the New Zealand Embassies in Brazil and Colombia (also accredited to Ecuador). The Ministry will be reviewing the temporary closure of these Embassies at regular intervals. The diplomatic staff will continue to perform their roles remotely. 

Guayaquil was described as the "epicentre" of the pandemic in Latin America, however the recent rate of infection in the country has been decreasing.

The pandemic, which led to a fall in oil prices, had severe economic repercussions for the country.

The Government has responded with a series of quarantine measures to protect the population and support the economy. These include closing schools and universities, public spaces and non-critical commercial activities, halting public transport, and imposing a curfew. Quarantine started on 12 March and from 12 April a traffic light system was implemented by provinces, defining the restrictions that apply in each province. During the months of May and June, some provinces have been changing to yellow and green states, with less restrictions being applied.

International flights started operating again on 9 June. However, some airlines like Air Canada and Air France have postponed their return to Ecuador.

It has been difficult for many Ecuadorians to follow the quarantine measures. It is estimated that 400,000 Ecuadorian families derive their income through selling goods on a day-to-day basis. One of the measures to alleviate the economic losses is the introduction of US$120 contingency bonus for these families and the delivery of food rations and necessities.

For more information on doing business in Latin America, visit myNZTE - our free online portal for curated, in-depth information and guidance. 


Government support

President Moreno has announced a series of fiscal tightening measures to counter the sharp fall in oil prices. The President said that the crisis has "hit Ecuador hard" because "8 million dollars in income are being lost daily", due to the decreasing oil revenues.

The first measure was to create a National Humanitarian Emergency Account with the objective of guaranteeing food, health and avoiding the wave of bankruptcy of local businesses. One of the sources of this fund will be the companies that generate income over US$1 million, which will have to contribute 5% of their profits in three monthly payments.

The account will also receive resources from the salaried sector, which must make contributions according to its income during the following nine months. Those who earn less than US$500 will not be required to contribute to the fund. The National Humanitarian Emergency Account, according to Moreno, will help about two million families in serious difficulty.

During the months of April and May the Government provided Family Protection Aid to circa 400.000 families.

This fiscal package also includes revenue-enhancing measures as well as expenditure cuts of about 2.5% of GDP with respect to the 2020 original budget, and some 2.5% of GDP in new financing and refinancing of some current obligations.

These measures focus on a reduction of state spending, a tax on vehicles, a contribution from public sector workers and decreasing foreign debt, amongst other fiscal decisions. The measures will not include elimination of gasoline subsidies nor an increase in taxes for lower income population.

The World Bank has approved a US$20 million loan for managing the COVID-19 pandemic in Ecuador. The funds will be oriented to strengthen the national public health system through the procurement of medical supplies needed to treat COVID-19 cases and the equipping of a larger number of intensive care and isolation units. Additionally, the funds will contribute to finance the national communication strategy and the dissemination of prevention and protection messages for the short and medium term.

The Government has also enacted the following tax relief package:

  • Payment of corporate income tax for fiscal year 2019 and VAT for the months of April, May, and June 2020 can be deferred and paid in six instalments by certain taxpayers.

  • A regime for "self-withholding" of income tax at a rate of 1.75% of monthly taxable income has been established for financial entities and mobile phone service providers.

  • A "self-withholding" income tax at a rate of 1.5% of monthly taxable income has been established for entities involved in exploration and exploitation of non-renewable resources and hydrocarbons, including entities that transport crude oil.

  • An extension of certain tax formal obligations and compliance deadlines.


Additional resources

Below you can find information and contact details for other New Zealand government and international agencies regarding their response to COVID-19.

New Zealand Government agencies

Covid19.govt.nz
COVID-19 helpline for businesses
Business.govt.nz
New Zealand Customs
Ministry for Primary Industries (MPI)
New Zealand Export Credit (NZEC)
MFAT Export Helpline
MFAT Safetravel
Callaghan Innovation
Immigration
Ministry of Health
WorkSafe New Zealand
myNZTE

Global agencies

World Health Organization (WHO)
Centers for Disease Control and Prevention (CDC)

Contact NZTE

We're available to talk to you about any issues your export business is facing due to COVID-19.

For existing NZTE customers, please contact your New Zealand-based Customer Manager.

If you're unsure who to contact or haven't worked with us before, you can call NZTE on 0800 555 888 or email below and one of our Customer Advisors will help you.