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Skuad’s Employer of Record Ecuador (EOR) solutions make business expansion to Ecuador easy and hassle-free. Our unique HR platform allows companies to hire exceptionally talented employees in Ecuador, without having to set up a separate legal entity. It streamlines the process of hiring and onboarding a remote team by handling payroll management, taxation, and other legal compliances. To learn more about Skuad, Book a demo today.
Reach out to us today to know more about how Skuad’s Ecuador EOR services can help you expand your business successfully.
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Hire and pay talent globally, the hassle-free way with Skuad
Talk to an expertEcuador, a country rich in cultural and ecological heritage, is a thriving market to expand into. Ecuador depends on the export of agricultural, petroleum, and aquaculture products and is a developing economy. It holds the distinction of being the eighth-largest economy in Latin America. The Government of Ecuador is also encouraging participation from the private sector.
The labor in Ecuador is unionized. Most labor laws in Ecuador focus on preserving employee rights. These ensure that the employees get a fair share of the work they put in.
Though not mandated by employment laws in Ecuador, the best practice would be to document every employment contract. The contract of employment in Ecuador should be articulated and inclusive of all terms and in Spanish as per the employment contract law in Ecuador. As per employment contract laws in Ecuador, contracts should include
Completed contracts should be submitted to Ecuadorian Social Security for Employees.
Ecuador takes employee wellbeing seriously. All employment terms must comply with Ecuador’s labor laws. Some of the stipulations include.
Skuad can help you discover exceptional talent and onboard them. Using our tailor-made HR solutions, you can undertake expansion while remaining compliant with the employment laws of Ecuador.
Speak with a Skuad expert today to learn more about hiring in Ecuador.
When choosing between contractors and full-time employees in Ecuador, do keep the following in mind. In Ecuador, all laws related to employment favor the employee in case of a dispute. Also, labor hiring intermediation is not allowed. So, Professional Employer Organizations (PEO) cannot operate in Ecuador.
However, incorporating a holding company in Ecuador is not mandatory for hiring. Companies can hire teams in two ways.
Hire full-time employees on the company payroll: All you need is to generate a permanent commercial establishment for your company. This ensures that your company falls under and operates under Ecuador's employment laws.
Hire contractors through civil services: Companies can hire contractors in Ecuador to provide consulting services and other specialized services. But, the services by these contractors should not form the core of the business. Also, only service providers can be contracted. The contractors need to provide services on their premises only.
Be it, party contractors or full-time employees, Skuad can take care of the hiring process for you. To learn more, book a demo with Skuad experts today.
Hiring can be a huge challenge expanding into a different country. For hiring in Ecuador, companies can publish their openings on local radio and local publications or use job search platforms.
Some of the popular job search platforms are:
The background check also varies from employer to employer. With the lack of a global database, a pre-employment background check is not an easy feat. However, some checks commonly included are:
One of the best ways to conduct a background check is from an unbiased third party.
Also, Ecuadorian labor laws mandate:
Ecuador is very strict about preventing discrimination at the workplace and in the hiring process. Employees and prospective employees are protected against discrimination by the employer, including discrimination against
Any violation can lead to serious consequences for the business.
Skuad’s EOR services can help you avoid encountering all these challenges. We take care of the compliance, hiring, payroll, onboarding, and other HR-related processes for you while you focus on business expansion. Book a demo today to learn more!
In Ecuador, all employee contracts may include a 90-day probation period. Upon completion of the probation period, the contract comes into effect. During the probation, either parties can terminate the contract without notice.
Ecuador’s labor laws favor the employees. Usually, employees can only be terminated in cases of breach of contract. Even in these cases, the employers need approval from the local labor inspector to take action.
Contracts can also be terminated for economic reasons. For fixed-term contracts, employers need to provide at least 20 days of prior notice to the employee. In almost all cases of termination of employment in Ecuador, the employer may need to pay severance to the affected employees.
Note: Managing Directors are not bound by any Civil Code, so there are no specific rules applicable to dismiss them. Also, Union leaders and pregnant women cannot be terminated either. (Source: Deloitte)
Business expansion is a long-drawn process that calls for extensive planning, especially when expanding to a foreign country. It is complicated and can take up to several months to complete but by choosing the EOR route for hiring employees in Ecuador, you can fast-track the expansion process. Employer of Record Ecuador (EOR) solutions by Skuad can make expansion to Ecuador much simpler and a lot quicker for business. Our global outreach and a tech-enriched HR platform ensure compliance with local labor laws by managing employment responsibilities such as monthly payroll, work permits, employment contracts as well as taxation for your employees in Ecuador.
Broadly, there are three types of visas in Ecuador.
Types of Work Visas in Ecuador
The type of work visa depends on the kind of work that you need to perform and the time you need to spend in Ecuador.
The documents required to get an Ecuador work visa may depend upon the type of work visa needed. The requirements could also vary based on the kind of work. The requirements for getting an Ecuadorian work visa include:
Skuad experts recommend connecting with the nearest Ecuador Embassy or Consulate for the visa. You can get a list of all the necessary documents from here before applying for a visa. The final approval for the visa may take a little time, so please apply with enough time in hand.
Our industry experts at Skuad are happy to assist you with all your visa requirements. Please reach out to us today to know more.
To work overseas, foreign nationals generally need to carry a visa and a work permit. Are they the same? No, they are not. (Source: Differencebetween.net)
By definition, a work permit is a letter issued by a company wanting to hire a foreign national. These could be as laborers, for professional services, or technical services.
A Work Visa is a document issued by an immigration authority permitting foreign nationals to enter the country. You may need a work permit while applying for a work visa.
For work in Ecuador, you need a work visa to enter the country and work there. Speak to our experts to learn more about visa requirements in Ecuador.
To set up payroll in Ecuador:
As per Ecuador labor laws, unskilled laborers need to be compensated at least USD 400 a month. The Ecuador employment law mandates 13th- and 14th-month bonus payment as well. Also, employees are generally paid at least once a month, but usually twice a month. Common practice is to pay 40% of pay by mid-month and the balance 60% by the month-end. A part of the profits also needs to be shared with the employees as a bonus.
Ecuador follows a “Pay As You Earn” income tax model. The structure is progressive, so you pay a higher tax as your income increases.
For the year 2021, the income tax rates are as follows: (Source: Orbitax)
Also, it is mandatory to contribute a part of your income toward the Social Security program. Employees need to contribute 9.45% of their salary toward Social Security. The contribution for employers is 12.15%.
Get in touch with Skuad experts, and let us take over payroll and taxation duties for you.
Incorporating a holding company or a subsidiary in Ecuador can help in expanding your business into Latin America. A subsidiary is the first step to set up operations here. Working on expansion can be daunting even for the most experienced businesses. By partnering with Skuad’s EOR solutions, you can dedicate your attention solely to the business side of expansion. Our team will take care of hiring, onboarding, managing payroll, taxation, and probation, and other benefits for you. With our deep knowledge of Ecuador’s labor laws, we ensure all our work is compliant with the local laws.
With limited or no knowledge about Ecuador and its laws, setting up a subsidiary can be tricky. It can take up time and also lead to financial challenges. We recommend working with experts in the HR field to take care of your business needs to expedite expansion.
The easiest route for registering your subsidiary here would be as a Limited Liability Company (LLC.) This will limit the liability for the parent company and also offer freedom to the subsidiary to operate in Ecuador.
Some of the key considerations under the subsidiary laws in Ecuador are:
Setting up a subsidiary in Ecuador may include:
Setting up a subsidiary in a foreign country is profitable, but can lead to a lot of frustration. It takes time, money, and patience to expand to a foreign country. Before venturing into expansion, we recommend studying the new market and your preparedness to expand.
Partnering with Skuad’s EOR solutions can help expand into Ecuador faster. Connect with us to learn more about setting up your subsidiary in Ecuador.
Like EOR, Skuad's Professional Employer Organizations (PEO) too can help expand across geographies. They can help you with your HR outsourcing customized as per your needs. This customization of services can also help you bring down your costs. Some of the primary services they offer include
PEO collaborations are good for medium or small organizations looking at expansion. The major challenge with this collaboration is that you are still liable as an employer. Even though you may have a PEO partner, the onus of compliance is always on you. You may still need to set up a legal presence wherever you have your employees.
When it comes to Ecuador, it is illegal to take up services of PEO's.
Skuad's EOR solution is a good way to expand your business in Ecuador without setting up a separate entity. Our solutions help you to stay focused on your business and leave all business compliances, payroll processing and complete management work to us. Connect with Skuad to know more.
Do you think you are ready to expand your company’s business operations in Ecuador? Skuad’s Employer of Record Ecuador services can make the process fast and easy by handling your Employment requirements in compliance with the local labor laws. If you want to discuss how Skuad’s Employer of Record solution can help you, get in touch with us today!
An Employer of Record (EOR) in Ecuador is a third-party entity that legally employs workers on behalf of foreign businesses without setting up a local subsidiary. The EOR manages employment contracts, payroll, and taxes and ensures compliance with Ecuador’s labor laws.
An Employer of Record (EOR) takes full legal responsibility for the employment of workers, including payroll, taxes, and compliance. A Professional Employer Organization (PEO), on the other hand, co-manages HR functions with the company but does not take on the legal employer role.
An Employer of Record for foreign employees helps companies to legally hire workers in countries where they do not have a local entity. The EOR manages all aspects of employment, such as contracts, payroll, taxes, and legal compliance, ensuring that the business remains in adherence to local regulations while operating efficiently with a global workforce.
Some of the leading EOR providers are Skuad, Multiplier, Deel, Papaya Global and Remote. The best Employer of Record depends on your business needs, the country of operation, and the level of service required.
EOR services typically charge a monthly fee per employee, ranging from $100 to $1,000 or even more, depending on the scope of services and country-specific regulations. The cost of an EOR in Ecuador varies depending on the complexity of local labor laws, the number of employees, and the specific services required.
Using an EOR in Ecuador allows companies to build a quick market presence without a local entity, ensure compliance with local labor laws, reduces administrative burdens, and mitigates legal risks.
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