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Many web sites tout the low cost of living in Ecuador. Many assume that because it’s a poor country in South America, it somehow might be cheaper than where ever else they are. And Ecuador does have lower overall living costs than many other countries in South America, especially if you live outside of the major urban centers of Guayaquil or Quito. But living in Ecuador is still not cheap. Operating a business in Ecuador, despite lower labor costs, is not as cheap as one might expect. Everything has its price. And the low prices in Ecuador are long gone. Sure, fresh fruits and vegetables are very cheap. But most everything else isn’t. Why not? The costs of doing business are passed on to consumers in the form of higher prices. These costs include:

  • 24 hour armed guards needed at most business locations (or paid for through higher per square meter costs for commercial space) are a given nearly anywhere, driving up the cost of doing business.
  • The same goes for living in a decent neighborhood, especially in Quito or Guayaquil-24 hour guard service or at least a daytime presence of a caretaker is required in many areas to fend off crime, and this cost is added to your HOA or condo fees.
  • High tariffs on many imported goods and machinery drive up production costs and thus overall cost of goods.
  • Low productivity, onerous labor laws, and obligatory “13th” and “14th” salaries per year make low labor costs much higher than they appear at first glance.
  • Small user pools make health insurance costs high for very little maximum coverage (most policies max out at $19,000 per year). While medical care is generally much cheaper than say in the US, it is still a heavy burden.
  • Obtaining licenses and permits is time-consuming and onerous, often taking several entire days. Businesses are often forced to close while obtaining these permits, and thus can only make up the lost income but adjusting prices.

Think twice and plan carefully for your next trip or if you are planning on moving to Ecuador for an extended period or permanently.

Welcome to Destination Ecuador!

Welcome to Destination Ecuador! My family and I have been living in Ecuador for the last four and a half years. We’ve dealt with the worst kinds of red-tape, searched out or ended up making hard-to-find ingredients ourselves, imported equipment for making chocolate confections, learned the import-export business...Continue >>

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