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SOVEREIGN MAN

Six reasons to consider Ecuador

April 20, 2010
Cuenca, Ecuador

Ecuador is not one of those places on everyone’s radar. In fact, when I recently announced that I would be returning to Ecuador, I received a handful of subscriber emails like this one:

“Why are you wasting your time in that communist money pit? [SB: strange choice of words...]”

Clearly, Ecuador suffers from a similar reputational stigma as Colombia, and this keeps that majority of gringos away. The country’s president Rafael Correa is aligned with Venezuela’s widely disparaged Hugo Chavez, both of whom focus their policies on a pro-social agenda.

Just recently, in fact, Correa announced that he would be taking steps to nationalize foreign oil companies who don’t agree to limit their profits based on a government mandated ceiling.

These sorts of things tend to make foreigners run away like a scalded dog.

Politically, Ecuador is a disaster. The country saw seven presidents from 1996-2007, which makes it about as stable as Thailand. But while I wouldn’t take the political risk in Ecuador as an institutional or resource investor, I have no problems being an expat there.

Why? Just because the government is going after oil profits doesn’t mean that they want the title to your house in Cuenca. Dispossessing foreigners of their property would do absolutely nothing for the government, or for ‘the people’ that Correa so desperately wants to please.

Would I buy a nice house with a small farm in Ecuador? Sure. Would I buy 10,000 acres of land adjacent to an impoverished village? Doubtful. You see the difference.

Today, my goal is to provide you with a short, balanced overview of Ecuador, with the intention of providing more details later this week.

The bottom line is that Ecuador is definitely worthy of consideration. Specifically, based on how I define the “7 expat categories“, Ecuador is great for retirees, hermits, nomads, and internationalists. It’s terrible for hedonists.

Here are six reasons why:

First, as you’ve probably heard, cost of living is dirt cheap in Ecuador… and by cheap, I mean that you actually feel guilty that it’s so cheap.

Quality housing, for example, can easily be had for less than $1,000 per square meter (which is my line in the sand for ‘CHEAP’), and $350 to $500 per month for a nice rental is quite common.

Labor costs nothing, so you can have a whole staff at your hacienda for the equivalent of a Mercedes payment; and food prices are generally 20% to 60% less than in North America or Europe.

It’s also worth mentioning that the US dollar is the official currency, which has several advantages and disadvantages that I’ll get into in a future letter.

Second, life is slower and much more traditional in Ecuador. The common analogy is that it’s like the United States in the 1950s (which is a similar analogy used in Uruguay and Paraguay).

Well, I wasn’t around in the 50s, but I certainly agree that life is very simple in Ecuador.

For example, the government typically does not pass invasive laws designed to save people from themselves; the concept of ‘family’ is still of tremendous importance; and people spend more time hiking and picnicking than sitting in front of a computer.

Third, medical care is of reasonable quality; I have never had any issues with minor medical care here (both western and aboriginal), and there are a variety of high quality anti-aging clinics in the country. For major medical issues, though, I would probably seek aid elsewhere.

Fourth, English language penetration is satisfactory in the larger cities like Quito and Guayaquil (pronounced ‘why-uh-KEEL’), but once you get into the smaller towns, you’d best be able to speak some basic Spanish.

Fifth, food quality is typically excellent; many of the southern valleys have impeccably grown organic food, and the soil quality often yields enormous proportions… I’m talking about fruits and vegetables the size of your head.

As a warning, however, there is some credible evidence of substantial pesticide usage in many parts of the country, as well water pollution from oil spills over the last several decades in the Amazon basin.

In fact, there is a $27 billion lawsuit pending in an Ecuadoran court at the moment against Chevron for substantial environmental damage without proper attention to clean-up.

Sixth, despite the negative attention that the oil sector receives, the country is quite open and friendly to foreigners, and the government makes it easy for them to come to Ecuador with a variety of retirement and investment schemes.

Overall, if you’re looking for deep discount living, a slower lifestyle, and only minor sacrifices to modern convenience, I would strongly recommend that you check out Ecuador.

I will be here for the rest of the week, so if you have any specific questions that you want me to find out about, drop me a comment here.

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

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Comments on this entry are closed.

  • Ray

    Any “leader” who aligns himself with the Racist-Fascist who “leads” Venezuela… immediately eliminates his country from consideration!

    • LocalHero

      You’ve got to be joking. The Bush’s are racists & fascists & I’ll bet you still live in the US.

      • Gubment Cheez

        Lets not be selfish with our accusations, the entire U.S. political system, including former AND current administrations, are racist and fascist.

      • Scout987654321

        I have to say that since Obama has been in charge while I have been living here, I fear for my daughters future unlike the way I thought I did when Bush had control…talk about the way socialistic countries are run?

  • Anonymous

    How is the education system in Ecuador?How safe is it for a gringo to live with adolescent children?

    • sdca

      I think you probably need to search ecuador expat forums, to see if and where there are international schools, or other alternative schools that may have sprung up. And homeschooling is always an option, if you are just looking for a year or two abroad with your family. I’m guessing the educational system is similar to mexico, and perhaps worse off-ie,old school systems that are a bit, how does one say, oppressive, with this being desirable to not attending school at all. ’50′s style schooling’ Think 50′s in the U.S. I’m sure the norm is rote learning and uniforms, and in some areas, especially rural, kids probably only attend mornings.

      You might google the topic, and find a university student’s thesis or research project ont he subject, too.

      But an expat forum will probably do the trick (:

  • Kim

    Very encouraging Simon…I’ve been chatting on facebook with some expats that live in Ecuador now. I’ve been considering a move for a while and I’m leaning toward Ecuador, whether or not it comes to pass we shall see. Thanks for your article

  • http://micahstubblefield Micah

    Interesting article. I lived in Ecuador and a missionary for 2 years. I lived in Guayaquil, La Libertad, Portoviejo, Manta and Quevedo. It is a nice country and I enjoyed it but when I brought my wife to vist several years later she hated it and doesn’t care to go back. You need an open mind to enjoy a country like Ecuador.

  • David

    Thanks Simon. Are there any real estate agents you trust in Ecuador?

  • David

    Simon

    I am seriously considering changing my life dramatically. I am 49 years old have a good career but I want a more relaxed lifestyle. I want out of the rate race but I still want to work.

    I am in the process of getting my TELF certification where I can teach English in a foreign country. One of the countries I’m interested in is Ecuador. I know a little Spanish. What I have read I like especially low cost of living.

    What cities in Ecuador would you recommend for someone like me who still wants to work? Or is there another country you would recommend.

    David
    Houston Texas
    832-671-8686

    • sdca

      Cuenca. Though of course check out Quito and Guaya.,too.
      And in S.A. you typically don’t make any money teaching english. You *may* earn enough to pay expenses. Think $5 an hour, and that is not a typo. With private lessons on the side, under the table, you can boost that a bit.

  • strega

    Simon:

    Greatly enjoy your emails, reviews of the countries and grading them for their viability as investments or escapes. You write for “grown-ups”. Refreshing and thought-provoking. Also appreciate your candid appraisal of Correa and Chavez.

  • P Riehl

    Haven’t been there but would like to go at some point. Living in a highly superstitious (i.e., religious) country goes against my grain a bit (I’m not a hedonist), and when push comes to shove I’d appreciate not being able to be pegged as an outsider at 500 meters, which certainly would be the case for a tall pink person in Ecuador.

  • Jai

    International Living touts Ecuador as cheap – really cheap, as in budget of under $600/mo for 2. That includes housing, utilities, household help, food, entertainment, health insurance, et alia. Is your budget high end, or is $500-600/mo for 1 (or 2?) realistic?

    Income earning prospects? Either internet biz for sales/clients outside of Ecuador, or on-the-ground opportunities?

    For those disinclined to high altitudes, will you be exploring the coast, e.g. Manta, etc?

    Have fun!

  • Tomás

    Please comment on how and what process is necessary for becoming a legal resident of Ecuador. En otras palabras, ¿Cuál es el trámite? Tomás

  • Janine

    Hi Simon,

    We hope your are enjoying Ecuador.
    We moved here to Los Ranchos, Cricita, Manbi about 4 years ago.
    If are visiting the coast, we would love to meet you and chat.

    Regards,

    Janine & Rob

  • http://tablelampslighting.net Patrick

    Hi, you mentioned that Ecuador for the hedonist it’s terrible. I am curious as to your thoughts as a single guy in specifically Cuenca?

    How is the dating there?
    Do the women like traditionally older men (I E if your 50 are you good to go)?

    And any other “details” that you might like to elude to in this area (not that you yourself would…. But?)

    • Don

      For hedonist its not terrible. Its just not as ridiculously easy as Colombia or Brasil. Ecuadors still much better then any place in North America to date hot girls.
      As for dating in Cuenca, . better to spend a weekend in Samborondon or Urdesa. Meet a dozen young girls and invite them to vist you in Cuenca.
      Women love older men anywhere in latin american.

  • Bob Hays

    Ecuador has just come to my attention, and I know little yet. I’m basically interested in all the usual questions, and intend to visit there in the next 2-3 months. Four questions for now though: safety vs crime, gun controls? Second is there a local source for precious metals? Third, taxes on expats? Fourth, you going to put out a “black paper” of contacts there?

    All the best!

    • Don

      Its quite safe here, mostly due to the heavy security. but also the people here try to set a good example being next to Colombia and Peru.
      the most Ive heard about is someone will rob your cell phone.

      no shortage of precious metals . check out fruta de norte
      http://www.kinross.com/operations/dp-fruta-del-norte-ecuador.aspx
      theres more gold in that mine, then anywhere in the world.

      taxes on expats is very low. but depends on your income source. a restaurant owner I know in Manta is paying 5%. which works out to be 150 bucks a month

    • Kenny Cantrell

      Gun control is heavy. Kidnapping is very high in the Guayaquil area. The American Consolute here does not even allow there workers to take taxis.

  • Dan Barr

    Simon

    My wife’s parents were born and raised in Quito, and of Lebanese descent. When my wife’s grandparents (both maternal and paternal) moved from Lebanon to Quito it was around the late 1920′s. I have been married for 26 yrs and have heard the “stories” about how they all lived like KINGS, and got to see a MANSION my wife’s maternal grandfather built in OLD quito after “winning” some country wide “lottery”….”villa sadika”…which has now been torn down. MASSIVE.

    I’ve been there myself (mostly in quito and the surrounding country side) about 8x over my married life, and found the terrain of the “Serranos” to be really beautiful …Lago San Pablo (and vulcan Imbabura, lago mojanda, etc) is an area unlike any I have seen.

    With all that said, my wife’s aunts and uncles have ALL lost property there in some form or another to SQUATTERS…meaning that the “law” somehow entitles the “indigenous” to simply setup a shack on land that is vacant and uninhabited, and to then, after some period of time, make a declaration to the government in which they claim title to it.

    Still another relative (cousin of my wife with her “gringo” husband) moved back to an area just outside of Cuenca, and literally built, with assistance of some hired help, their “finca”. A beautiful home site, with ALL of the necessities to be self sufficient. I visited the property myself and can say it was really special. At some point, they realized they could NOT leave the property alone even for a few days without vandalism occuring, and had to hire “house sitter(s)”, who eventually ripped them off as well. Subsequently, they got the idea to SELL and move back to the states. Needless to say, they took a beating on the price they received.

    Not to mention that almost all of my wife’s relatives who still live there have their bank accounts in Panama, outside of the country, and are selling apts, land, etc., downsizing to their primary residence only…with the idea that if things keep going the way they are…ANYTHING could happen to property right laws, etc.

    So in summary, I would suggest potential investors who do NOT have the business acumen and vast experience which you apparently have when it comes to these types of “international” business activities…take their time and be careful…as the cost of mistakes can quickly add up.

    • Don

      I would suggest potential investors who do NOT have the business acumen and vast experience which you apparently have when it comes to these types of “international” business activities…take their time and be careful…as the cost of mistakes can quickly add up.

      That advice can be applied anywhere.
      South America is a gold mine. investment opportunities and return on your investment supersede anything you will find in North America. and the best part is, it costs a lot less to invest in the South

  • Walt

    Can you easily import your personal car and furniture without duties, taxes and bureaucratic inspections and use them there if you wanted to stay? Are there Visa limits on residence there?

  • T Culhane

    Simon:

    Regarding Ecuador, do you have any recommended books/websites/people you would suggest for someone looking to move to Ecuador?

    Thanks and keep up the great work!!!

  • David Davari

    Hi Simon,

    Thank you so much for the time you’re spending to educate us.
    I’m retired, separated and need to get away soon and have been thinking about Ecuador for a long time.
    Could you tell me how to get more info about a seaport with no or few oil, manufacturing and industrial establishments, no international airport, around 20,000 to 40,000 population and close to traditional fishing villages please?
    Wishing you all the best,

    David Davari

  • http://www.AllAboutHealthNetwork.com john william johnson

    Hi Simon
    i appreciate your letters. I spent time in Ecuador about 5 years ago, and i agree with your assessment.
    The coastal area is pretty undeveloped, and ripe for cheap land, but who knows how long before it will be populated.
    i loved Cuenca, went bicycling and rafting there.
    The best part of my trip there was actually going to the Galapagos, a must see for any human being. I prefer sailing vessels over engines, we got to swim with dolphins in the middle of the ocean.
    You’ve got me ready to go to Medellin! Colombian women are the most beautiful of all of South America, imo. Do you have any idea why? Must be some amazing mix. I found that in Guadalupe also, the French and the African and the native combination was staggering. Too bad I spoke no French! That was back in the ’70′s. I truly found out what it’s like to be somewhere that no one speaks your language.

  • Marv Anderson

    Hi, Simon,

    Your timing on this is wonderful, as my wife and I are seriously considering Ecuador. There are two items that I would love for you to look into.

    One, I love to play golf. It seems that there are no public courses, and only a few private country clubs. I wonder if I will be able to join one of them. Could you find out how difficult it would be, as an expat, to joint of the clubs near Quito or Cuenca?

    Second, we have a small dog that my wife would have a hard time leaving behind on what we plan as a 3-month fact finding trip. Do you think it would be possible to travel with a dog and still have any reasonable flexibility to get a flavor of the entire country?

    I really enjoy your articles. I have not traveled outside the US in any meaningful way, and your snapshots of your travels make it seem much less daunting to consider leaving the US where I have lived for 65 years before it completely goes to hell.

    Thanks so very much.

    Marv Anderson

  • http://www.ultimatetrains.com Jaded Iris

    I read your first Ecuador report with great relish.
    We can now feel easier to be a sometimes banker for Ruben Fernandez Hernandez. We will probably have him invest in a retirement property for us that he can over see and his family can use . What better way to transfer wealth from a rich country to a poor warm one! MY QUESTION ………”Is this a good way plant another flag ?”
    I hope that you got my previous email telling you about him . I also told him that you may contact him so he would know who you were. I do believe he would be a perfect candidate for your “vision ” in Panama……..being an inventor, well educated, eager and young. Being from Cuba a real survivor ! His email

  • Alvise

    Hi Simon, you’re perfectly right about Ecuador. I’d also suggest you to consider Peru. It’s a wonderful country, rich of places to visit, life is cheap, cuisine is excellent, and quality of life is improving day by day. Lima is well worth living there, and usually foreign people like me feel comfortable with living in Peru. Terrorism of the ’90s has been completely defeated, and Peru is politically stable since say ten years at least. Inflation, compared to dollars, is currently stable. Regards. Alvise.

    • Don

      Peru is great for investing and for touring , but as for Living you just cant compare it to Ecuador.
      I lived and invested in Peru for 2 years before coming to Ecuador, made a small fortune there,than after discovering Ecuador , I would never go back to Peru.

  • Jack Hearn

    Do you think that Belize is a good expat haven? If so why? and if not why? Thanks for your article’s i read them religiously.
    Jack

  • Mike

    Hi, I’ve been interested in Ecuador for some time. I’m a widower with two young sons(15&10). I’m looking for a safe place where there are still some personal liberties and a nice climate as I have some health issues. I’m a Chiropractor and may want to work on a limited basis. What type of visa would I need and would you suggest a trip there? Would there be specific areas of ex-pats that would be family friendly(for my sons)?

    Thank you, Mike

  • elai

    Hey Simon, seeing how you might look at other blogs, which blogs and websites do you read frequently? I’m finding it difficult to find other blogs of similar quality and topics without them having some tax protester, survivalist or equally semi-irrational slant.

  • Don

    Simon I couldnt agree more.
    Ecuador is fantastic to set up a home base. Ive been in Guayaquil for the last year and love it. For me compared to Panama , Colombia, Peru, Costa Rica, Chile, Ecuador doesnt have a slower lifestyle at all, nor do I have to make any sacrifices to modern convenience.
    If your around Guayaquil it would be great to meet up.
    Don.

  • marbely

    how do the ecuadoran coast cities like manta and salinas compare to cartagena or santa marta for an expatriate to spend some months a year.

    regards

  • RichMc

    Simon – A very informative article, however I noticed you did not comment
    on levels of street crime in Ecuador. I have read from multiple sources that crime is very bad, especially in the larger cities, to the point where people are afraid to venture out at night without security, bodyguards, etc.
    Does this conform with your experience?

    • Alvise

      RichMc: street crimes are widespread all over the world, even here in a “civilized” country like Italy, the place where I live. You should always take the proper countermeasures, according to each and every local habits, or you’ll be hijacked anywhere.

      • sdca

        Um, c’mon!!!
        I really can’t believe when people give this generic answer, like they do when people ask about Mexico, for example, as well.

        Yes, the media portrays things dramatically, but really now-you can be carjacked and killed anywhere in the world?

        NOT.

        I have lived in taiwan, nairobi, caribbean, and 6 US states, rural and urban. And visited indonesia, mexico, israel, italy, etc. You cannot say it is the same everyone.

        In Nairobi for example, the level of anxiety and ill at east one would feel, even during the day, is measurably higher than walking around Dublin Ireland or San Diego, CA.

        And you know full well there is a big different between being a foreigner in a 3rd world country, and a resident of a place where you do not stand out.!!!!

        That said, is Ecuador more on par with Mexico, or Kenya, as far as safety? Now, if you had compared in that way, I’d believe you that it’s safe in Ecuador. Or, if you had said ‘hey, the cities are rough,but many of the rural areas of Ecua. are safer than most places in the US’, I would also have believed you.

        That defensive stance of ‘hey,it’s unsafe everywhere’, is not useful or accurate. Shades of grey everyone….and those shades ARE important.
        What I witnessed in certain places I lived or visited, I would never witness anywhere else. Good and bad, at that.

  • adam

    Simon, thanks for all of your great insights and education. I would love for you to expand on the advantages and disadvantages of countries, specifically equador and panama that use the US dollar. thanks!

  • dergel

    Hi Simon!
    I’m interested in some more detailed climate information. Specifically average hours of sunshine comapred to hours of rain and hours cloudiness in the differrent areas. Any idea where to find it?

    • Don

      Dergel,
      For nine months I didnt see a drop of rain between Guayaquil and the coast. salinas, manta.

      Don

    • Scott

      The wife of a couple who write a well-known newsletter about Ecuador, do tours there, own properties there – you can’t avoid reading their stuff if you have followed Ecuador at all – advised me PERSONALLY that although they love the place, it is CLOUDY much of the time. And cold in the winter. In fact, the southern part of the coast is cloudy ALL year long. Still do their business there, but they have moved to Florida where they enjoy the sunshine and warmth, not to mention getting residency in a no-income tax state. No free lunch – there’s a reason its so cheap

    • Josie Weir

      The weather is better here in Ecuador than Canada.Jan – April is rainy season. The Temp is 18 to 28 Cecilius. 5 degrees colder in Quito and Guayaquil is hotter and humid. I’m living in the Sate of LOJA Ecuador

  • Ross Goodwin

    Hello Simon,

    We are trying to decide whether to check out Ecuador or Uruguay this season. We’ve already extensively travelled Panama and Belize looking for a place to settle. We are Canadian Expats now living in Bermuda and have been spoiled by the weather here. I see that there is a lot of rain in Uruguay. This makes sense of course being mountainous and on the Pacific coast next to the Amazon jungles. But reading that there is only two months of good (read sunny) weather is a bit of a turn off. Could you reply to this?

    Ross Goodwin

  • Danielle

    Hello Simon,

    Thank you for the wonderfully informative letters. I look forward to them every day. I have been considering a move to Cuenca with my husband and 10 year old daughter. I would love to purchase a three-story building (perhaps the bottom is a store front) and live in the top and rent out the lower floors. Can you comment about the rental returns in Cuenca as well how landlord-friendly (or unfriendly) it is. You mentioned Colombia is great for those with property to rent out, is it the same in Ecuador?

    Thank you so much for your great letters!

    Danielle

  • Kenny Cantrell

    My wife and I are Missionaries living in Guayaquil at this moment. There are a few things that are very expensive. Cars are very expensive here, but like any where else you can find some good deals. Electronics are very expensive and cheap made (We are on our third blender in two years).

    A lot of things are really cheap in price. We have found some good mechanics who work really cheap. Example: I just had some car work done about two weeks ago and it cost me $350 for parts and labor; the work would have cost me up around a $1,000 back in the States.

    Food for the most part is cheaper, especially fruits and vegetables.

    Housing is cheaper in other parts of the Country than they are in Guayaquil. The articles you see in International Living will not apply to Guayaquil, you will have to live in the smaller towns up near Quito to get those prices.

    You can hire people for lower wages here, but you just do not run out and hire people. I have to know them and they must come recommended from a friend. I usually hire people from our Church, because I have known them for a while.

    We enjoy living here and have a lot of friends. My nickname is “Sargento” and I have made a lot of friends that way.

    • denverover

      Sargento, you’ve got a handle on it. I have lived in Nicaragua for 6 years now, and it is not much different than there. There are good and bad people and you must be careful whom you let into your house.
      “Desiterata”, has helped me to get along well here and make many friends, some very dear to me. I recommend anyone moving to a Latin country read and learn their about customs and way of life. We should all try to remember, they have been living this way for centuries(customs and culture that is) and we are guests in their home.

  • Al

    Hey Simon,
    I am a commercial farmer in Canada. Is it possible to to grow vegetables year round and make a good living at it.
    Would there be export potenial. I would rent or lease the land.
    Love your daily reports.
    Al.

    • Don

      check out south ecuador and north peru.
      the possibilities are huge. you can rent the land.
      the best place would be Puira and Chulicanas in Peru for all year around harvest .grapes are a boom there too. you can get two crops a year
      and for vegetables like onions , 4 crops a year.
      to export from the port in peru you can use paita
      or from Ecuador , the Guayaquil. port. its about $1300 in port fees. 5k in shipping to anywhere in North America. plus taxes on cargo.

  • Scott

    Simon,
    My wife and I love your emails. We’re new to this website and to the idea of expatriation. We’re american citizens who do not like to way things are heading in the states and we’re looking to leave in the next year or two. However, we’re struggling to figure out what to do as far as income and how to earn a living. What exactly do you do and how can we go about developing a strategy for earning income outside the US?

  • dieter

    You cannot be serious. The situation in Ecuador is not stable, and people are nice as long as they can get something from you.
    Ecuador has NO legal security. No reliable law system and if yiou have a problem, you are a foreigner, you will loose.
    I know Latin America from Mexico to Peru. Ecuador would be the last one I would consider.
    And it has the worst Coffee in America, worse than US coffee and that is already something a human being can´t drink.,

    Regards
    DIETER
    DIETER

    • Don

      last year due to some heavy rain Colombia had to buy a portion of their coffee for export from Ecuador and Peru.
      I bet you didn’t even notice.
      and the people in Ecuador exceptionally nice here. without having to get something from you. that would be Colombian and Peru. mind you once an Ecuadorian gets behind the wheel of a car , thats a whole new ball game

      • Kenny Cantrell

        I have a lot of friends here in Ecuador. I guess it is like any where else in the world, it depends on who you hang around with. Also your outlook on things has a lot to do with it.

        I have been here for several years now and the only time I have had any trouble is when a stoned out of his mind man grabbed my arm and said he wanted to talk to me. This was in a very high crime neighborhood; the only reason I was there was to visit an elderly woman. I quickly got out of his grasp and told him later and that was the end of that.

  • Rafael Picart

    Hi Simon Black,

    I have a wife who is blind and 5 young children the eldest being almost 8 and the youngest an newborn. Would any place in Equador be suitable to raise a family (education, safety, playmates, etc)?

  • Karl Loren

    Dear Simon,

    I understand your antipathy about Belize, but personal friendship and business take me there to explore and I would sure like to see your comments on Belize, notwithstanding its laws about guns and, therefore, freedom.

    Karl Loren

  • Steve

    Check out Cotacachi and The Valley of Longevity Vilcabamba..Thanks

  • Youssef

    Hi! Simon,

    First of all I want to thank you for all the information I received until now for so many months about say investment freedom and free living. I’m an engineer and investment consultant from Casablanca Morocco. I also have an IP office well known under “Genirex Group & Associates”, dealing with patents, trademarks, …etc. Right now on the subject of Ecuador I only want to mention that I am in permanent contact with a marvellous man “Mike Adams (www.naturalnews.com) who seems to have definitely adopted Ecuador as his main residence, creating an interesting community in Vilcamamba (“The Valley of Longevity”). If you already know him, sorry for the buzz… But in any case and again: thank you for everything and I expect we may be in close contact in a near future for some really big business. Best & Best Regards
    Youssef

  • Rene

    Hi Simon,
    Another big thank you for all your researches and analyses; very useful.
    Indeed a Black Paper on Ecuador, similar to the one you wrote on Panama would be most welcome.
    Any way for you to find out if there are Panamanian banks with offices in Guayaquil to facilitate operating an account in Panama from Ecuador? And what is your personal take on the plus/minus of Cuenca vs. the smaller coastal towns in terms of retirement location? Thanks again.

  • Doug

    Simon,

    Can you recommend a couple of Banks that an American citizen can easily open a Panamain Company account at?

    Thanks

    Doug

    Love you daily emails (very informative)

  • Peter

    The first question I always ask – and rarely seem to find – is what are the technical situation re internet, high speed, wireless, etc. Without those, no country goes on my list.

  • John Evanoff

    If you happen to pass through Same on the Ecuador coast, stop in and see my friends Gabriel and Rudy Gruen, expat owner/operators of Casa de Amigos Hotel and Restaurant for over 4 years. They probably don’t know you, but I know they will show you great hospitality and will share their experiences and knowledge of the area with you. Attached here is an article just published about Expats. Good read.
    http://www.time.com/time/world/article/0,8599,1983238,00.html?hpt=C2

  • http://PanamaandtheOECD Steve Loy

    any news on the sustainable community in Panama?

  • http://rcthink.com Ross Collicutt

    Love the reports Simon. Wondering if you’ve had a chance to check out the WIFI connections in these places you’re going. As a web programmer, I’d need to connect to work in these places and knowing before hand would be extremely helpful. Thanks!

  • Angela

    Internet Service – how reliable is it? High Speed/DSL? In cities or everywhere? Any info on availability of internet services would be appreciated.

    • Kenny Cantrell

      Angela, my wife and I live in Guayaquil, Ecuador. We have High Speed internet and it works very well. The only problem here is the electricity is produced in Hydro plants; no rain means electricity rationing. For example: last year our electricity was shut off for 8 hrs a day for the first month and then 4hrs a day day for about three months. Now the electricity is back on full time. This does not happen every year.

      We are very happy with our internet service through the company called TV Cable. We have the triple package that includes internet, TV and a phone service. It is a very reliable company.

  • Rubén

    Greetings to all …

    My name is Ruben, I’m the person to whom Jaded Iris refers, my mother tongue is Spanish and I do not write to convince one or another point of view because I respect the right of everyone to speak up. I only want to give a reference from my point of view. I live for 7 years in Ecuador (in Quito) and not link it to political reasons… It is very interesting for me to find a blog with these features because I only frequent the blogs in English by purely technical issues related to my profession. Ecuador’s certainly is not a paradise, I think that somehow all those involved in this blog have said something true. But the truth .. is that no country is it… it all depends on what you are looking for.

    Some references:

    - My daily work is to assist companies in automation issues and I can assure that a significant proportion of companies have Foreign owners or partners

    -Next to the apartment I rent is a language school to teach foreigners to speak Spanish. I think that 90% of people who attend are from the USA. The groups are growing significantly each year.

    -On more than one occasion, either for tourism or for work, I visited the ecological reserves … Places definitely impressive though decades have lacked the attention of governments and the average Ecuadorian. 4 years ago, during an academic excursion I found Inca ruins that did not appear on the map from the National Institute of geodesy and cartography.. The number of farms, residences and vacation homes with foreign owners in these areas increases

    -Today I did my inspection to the mechanic shop where I order the production of certain parts, and I found a group of English speakers, certainly Americans, interested in quickly developing machines to process national exotic fruits to export to U.S..

    -Ecuador has a much more representative of climates, its territory extends from the coast (sea level) to the icy peaks to more than 5911m above sea level. Along its length can be found sparsely populated areas where the price per square meter of soil is below $ 60 usd.

    As problems can mention the quality of education and corruption, Dieter is right about the legal system.

  • John

    Simon-
    Byron King (Outstanding Investments from Agora Financial, Bill Bonner’s company) has written extensively about the Chevron lawsuit and his take is it’s a questionable suit. The officials in Ecuador are attempting to take advantage of Chevron’s deep pockets to cover for the failures of the Ecuadoran national oil company. Please check this out.

    • denverover

      Yeah, right, destroying eco-systems and killing or maiming entire villages(several) should only warrant a slap on the wrist and Chevron shouldn’t have to clean it up properly either. After all they get away with that sort of thing in the USA, don’t they, that’s how they got those “deep pockets”, buying senators, congressmen, judges and an army of high priced lawyers to twist laws to protect them from their misdeeds.
      Ecuador isn’t a colony of the USA, and the US judges can’t protect Chevron from justice in Ecuador the way they do in the States, thank goodness..

  • Kevin Kordes

    Doesn’t sound so cheap to me! I’m lived in nice country houses in Thailand for about $75/month. Of course these homes are not like western homes. just concrete block walls.

    I’m renting office space in Malaysia for about the same price.

    Or course you’ve gotta shop around for these deals. Otherwise, it’s the gringo tax!

  • LocalHero

    Hi Simon,
    You mention that the country isn’t for “hedonists.” Isn’t there ANY kind of nightlife in Ecuador?

    • Don

      plenty of night life in the major cities and beaches.

  • Patrick

    Hi Simon,
    You say “Quality housing, for example, can easily be had for less than $1,000 per square meter” Are you talking about the cost of construction? 1000 US seems VERY expensive per square meter.

    • Josie Weir

      Depends where you buy. Vilcabamba yes becuase its become popular. You can buy 15 minutes out side and pay less.

      Small Houses Start at 30,000 Custom is more

  • nix

    dude, dont know who u are and it doesnt even matter, but man u r a big inspiration and motivation to me personally.Thanx a shit load….keep up da good work mad.Peace n Love.

  • JT

    Are there any reputable real estate agents that you can recommend in Ecuador abd Malaysia?

  • Victor Gonzales

    Hello Simon,
    I trade the Forex market on-line.
    Are there any concerns with conducting business via the net regardng connectivity and reliability in Ecuador?
    Regards,
    Victor G

  • Darlene Foster

    I’m a 58 yr.old female from Canada.
    Would this Country be a safe place for a single lady to live in?
    I liketo roam around the city or Country side by myself,would this be a good idea?
    Darlene

  • http://gerycraig.com Gery

    Hi Simon, Thanks for consistently exceptional information and education. Truly appreciated!

    How is the internet service in the cities and out in the countryside there in Ecuador? I spend several months at a time here in Turkey and am used to the ADSL here although frustrating at times. Is it similar, worse or better in Ecuador?

    Thanks in advance!

    Cheers, GC

  • E.B.

    Hey Simon,

    I was just going to suggest checking out the area of Vilcabamba – and there it is, first item on your letter today.
    To me, Ecuador appears to be an ideal place: immensely interesting, peaceful, friendly and CHEAP. There are various different climate zones to choose from, and on top of all that, the common language is not Thai, Malay, Tagalog or Mandarin, but beautiful, intelligible Spanish.

    It’s just too bad that the country got hammered with this gargantuan mess of oil spills (the world’s largest), spread over a vast swath of the eastern lowlands, polluting entire river systems and affecting thousands of indigenous people, with hundreds dead, sick or dying from cancer… the result of unbridled robber-baron capitalism at its worst.
    Just one more reason Ecuadorians (among others) see socialism as their saviour. Can’t blame them, can you.

    You said labour in Ecuador “costs nothing”. Hmm, how much is “nothing”? For those of us who like to lead productive lives, maybe you could quote some ballpark figures re. wages for domestics, farm labour, industrial workers & office staff?

    Thanks.
    E.B.

    • sdca

      well, he said in the article that you can hire a staff for a hacienda, an entire staff, for the price of a monthly payment on a mercedes. (maybe it was another post of his on Ecuador-there are a few). So, whats that? Maybe 5 or 600 a month? Ballpark? Depends on what year of mercedes and your down payment, tho’. lol

    • Josie Weir

      Lavbur costs. You can hire a worker for an average of 12 US dollars per day. I hired two workers to clean my property for one week and paid then 60 Us each.
      I moved to Vilcabamba in Jan.

  • Aaron

    Ecuador: Correa’s Play for Greater Influence in the Oil Sector

    April 21, 2010

    RODRIGO BUENDIA/AFP/Getty Images
    Ecuadorean President Rafael Correa (R) and Venezuelan counterpart Hugo Chavez
    at a press conference in Quito, Equador

    Summary

    Ecuadorean President Rafael Correa is pressuring foreign oil investors to change from production-sharing agreements to service contracts, or else face expropriation. Correa is looking to enhance the state’s authority over oil revenues and thus enhance his own political security, but is making the move at the expense of Ecuador’s long-term economic development.
    Analysis

    Foreign oil executives are making their way to Quito, Ecuador, to try to work out a compromise over oil production contracts with Ecuador’s left-leaning president, Rafael Correa. The small Organization of the Petroleum Exporting Countries (OPEC) member is pressuring foreign oil investors to change the terms of their contracts with the goal of bolstering the state’s authority over the oil sector. The foreign firms currently operating in Ecuador will likely acquiesce to the new terms to keep production running at a minimal rate, but these contractual changes are liable to come at the expense of Ecuador’s long-term investment growth.

    Correa is an economist by training who has frequently expressed his disillusion with market reforms in Latin America and believes economic power should reside within the state. He has been trying since 2007 to change foreign oil contracts from production-sharing agreements, under which the foreign producers can have partial ownership of the fields they operate, to servicing contracts, under which the producers would have to pay a production fee and then get reimbursed for the cost of their investment. In the latter scenario, the state ends up getting more revenue for itself and the producer ends up making less money overall since it can only make profits from remuneration fees – the amount per barrel that the government is willing to pay companies for producing its oil. In other words, the foreign companies incur the risk of investing resources into a project with none of the potential rewards associated with high oil prices. If the foreign oil companies do not agree to the government’s terms, Correa has threatened to push for new legislation that would allow the state to expropriate the oil fields.

    Naturally, the expropriation threats have spread concern among investors who have watched Ecuador expand state authority over the country’s resources to beef up its coffers, and thus politically insulate the regime with populist-driven handouts to the poor. Correa will certainly benefit from having more of Ecuador’s oil revenues at his disposal than in the bank accounts of foreign oil firms, but he also risks hampering the country’s overall economic growth. Balancing between the benefits of short-term political capital and long-term economic risks will not be easy, particularly when the president is already struggling to revive the economy as investment flows are declining and domestic consumption remains weak. Moreover, the indigenous community that Correa claims to represent is showing stronger signs of coordinated opposition to the already politically embattled president and are now latching onto a controversial water law to corner Correa on his environmental defense policies.

    Ecuador’s economy depends heavily on its oil sector, which accounts for roughly a quarter of gross domestic product, 68 percent of total export earnings and 35 percent of fiscal revenues. The country is exporting about 470,000 barrels per day (bpd) of oil this year – down from an average of 503,000 bpd in 2009 – and has proven crude reserves of about 6 billion barrels. Ecuador exports a heavy sour crude called Napo and a medium-heavy, medium-sour crude called Oriente that is produced in the northeast of the country. Though Ecuadorean crude is of a better grade than Venezuela’s, Ecuador has to incur a higher transport cost to ship the crude across the Andes to the Pacific coast for export. As part of its proven crude reserves, Ecuador has an estimated 900 million barrels (and 1.3 billion barrels of potential recoverable reserves) in the Ishpingo-Tapococha-Tiputini (ITT) block in the Amazon rainforest. The crude in this region, however, is a lot heavier than the country’s other grades and would thus require more technical skill to extract. The Ecuadorean government would also face heavy resistance from its well-organized indigenous community regarding the environmental cost of exploiting those reserves.

    The foreign companies currently operating Ecuador’s oil fields in the northeast include Brazil’s Petroleo Brasileiro (Petrobras), Spain’s Repsol YPF, Italy’s Eni and Chinese consortium Andes Petroleum (led by CNPC and Sinopec Corp). These firms produce 42 percent of Ecuador’s oil, while state firms Petroecuador, Petroamazonas and Rio Napo handle the rest of production, albeit with far less technical skill. Ecuador has yet to publicize the remuneration fee it would be willing to pay the foreign firms in new service contracts, but one draft agreement calls for the state to retain at least 25 percent of gross income from extracted oil sales. The details of these negotiations are now being worked out between foreign oil executives and state officials in Quito as the threat of expropriation lingers.

    Many of these companies have reason to take Correa’s expropriation threats seriously. After the state took over U.S. oil company Occidental Petroleum’s assets in 2006, claiming the firm’s contract had expired, Correa further raised investor fears in late 2007 when he imposed a 99 percent windfall revenue tax on foreign energy firms to help make up for the state’s commercial bond debt obligations. That move led to a number of arbitration suits at the World Bank’s International Center for Settlement of Investment Disputes. Ecuador has also expropriated two blocks belonging to Anglo-French oil firm Perenco over tax disputes.

    Now operating under the state’s growing shadow, foreign oil companies that have stuck it out in Ecuador thus far are measuring the costs and benefits of their future investments. The companies that do stay will likely do so for either geopolitical purposes or basic economic need, but will not be inclined to further Ecuador’s long-term oil growth.

    China’s Andes Petroleum consortium has a relatively simple and direct objective: It needs crude to support Chinese industrial growth, and is willing to go to the ends of the earth and into unappealing investment climates to get it. The Chinese do not bring substantial technical expertise to the table, but will be the most willing to negotiate terms with Quito so that they can continue extracting oil. Spain’s Repsol, on the other hand, is a heavily state-influenced company that will often make energy decisions that give more weight to Madrid’s foreign political interests than to its own economic rationale. Acting as a foreign policy arm, Repsol is likely to agree to Correa’s contractual demands to allow Spain to maintain a high level of engagement in Latin America. Brazil’s state-owned Petrobras sees itself as the continental energy power of the future and carries a geopolitical ambition to saturate the Latin American energy sector as a way of extending Sao Paulo’s influence. Profits are thus not likely to factor as heavily into Petrobras’ negotiations with Quito. Ecuador is likely to face the most resistance from Italy’s Eni, a firm that is far more politically independent and will be more concerned about its bottom line in Ecuador.

    The Ecuadorean government will use expropriation and extended operating contracts as the stick and carrot to try to coerce foreign firms into signing service contracts. Unless the government offers an attractive per barrel remuneration fee – and indications thus far suggest this is not the case – most firms are likely to settle reluctantly on the new contractual terms to remain in country and maintain minimal production. However, they will no longer have the incentive to invest further in exploration and deep drilling, particularly in the technically more complex fields in the Amazon. New investment will also be difficult to come by, as investors grow more skittish because of these regulatory shifts. These moves against foreign oil firms will affect the country’s future economic growth, particularly as oil production declines and harder-to-tap fields need to be extracted. But as Correa says, for every minute that passes without signing the new contracts, “there are millions of dollars going to these companies.” Those millions of dollars are political capital lying in wait for the Ecuadorean state.

    John F. Mauldin
    johnmauldin@investorsinsight.com

    Reproductions. If you would like to reproduce any of John Mauldin’s E-Letters or commentary, you must include the source of your quote and the following email address: JohnMauldin@InvestorsInsight.com.
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  • John Ware

    Hi Simon
    Many thanks for all your information. The one question I always have for any location you discuss: “Is it possible to get internet service. What kinds and how reliable.”

    Its a critical question in these wired days.
    –John

    • Josie Weir

      Yes you can get internet service but it is not as good as Toronto’s Service

  • Pingback: The 10 Cheapest Cities in the World

  • Sebsatian_mele

    Whatever you do, don’t fall in love with an Ecuadorian Women, my ex wife was Ecuadorian, and she assaulted my Mother.

    • Guest

       @Sebsatian_mele  Did she do it…before or after she was your ex wife?  What exactly is your definition of assault as American women hold the championship in that regard.

  • Fishytruth007

    I’ve been doing business here for 2 years and it is a real challenge (polite term) to keep up with the random rules, penalties (multas), permits and changing policies. This is a “guilty until proven innocent” system. The SRI (their IRS-note the initials) is Gestapo like in their presence and policies. They send their operatives into businesses to see if the business will issue facturas (receipts). The factura insures that the Correa government and bureaucrats receive the 12% IVA (national sales tax). Those who are caught not issuing receipts are automatically shut down (Clausardo) for six days for the first offense. No judge, no jury. So, contrary to some of the newsletters, this place is a TERRIBLE business environment. I pay $20.20 for the same tank of propane that a private person pays $2.50. Think twice about starting a business here. This country is not a developing country, it is a third world country (like the USA is becoming). Property values are rising as are UN Agenda 21 regulations. Our ownership of a water well requires that we pay over $240 per year as a “concession” to the government for nothing (no services other than regulation). Watch out for the “cheap labor” referred to. After a certain number of months of employment, even domestic help, (contract required so the govt can collect employer and employee share of “social security”) you also are required to pay a “13th and 14th month” salary. The climate and people are great here in the Loja Province. We grow our own food which is a blessing.

  • Thrivinginecuador

    We have lived in Cuenca for 18 months. We love it here, but are concerned about the effect of the dollar’s coming devaluation or worse.
    We are eligible for citizenship in 2 more years.

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