ECUADOR Trends and Developments Contributed by: Félix Reyes, Lorena Barrazueta, Jorge Sicouret Zea and Karla Condo, Coronel & Pérez
the deduction of up to 140% of the income tax payment for the creation of new jobs for women. This benefit allows companies and individuals to deduct an additional 140% of the expenses for salaries, social benefits and contributions to the Ecuadorean Institute of Social Security for the creation of new jobs for women. Companies that implement equality policies may apply for the “Violet Seal” . For companies with this seal, the Ministries of Labor and Produc - tion will put in place joint strategies, both locally and internationally, to strengthen their corporate image, increase the national and international consumption of their products and directly pro - mote their exports. Enhanced protection of arbitration jurisdiction and enforcement M&A transactions in Ecuador frequently include clauses requiring confidential arbitration. Over the past two years, the Constitutional Court of Ecuador has issued significant rulings on arbitral proceedings, reducing the risk of judicial interfer - ence and strengthening arbitration’s autonomy as a dispute resolution mechanism. Recent case law upholds strict application of the kompetenz-kompetenz principle, affirming that only arbitrators have the authority to determine the validity and scope of an arbitration agree - ment. State courts are expressly prohibited from assessing its subject matter or scope, or from declaring it null, invalid or defective. These matters fall exclusively within the jurisdiction of arbitrators. In a 2024 decision, the Constitutional Court set - tled a debate regarding the need to homologate – ie, validate – the authenticity of an international award before its enforcement. It concluded that homologation is no longer required by Ecuado -
rean law and that international awards can be directly enforced. This will provide a significant cost reduction and shorten the time required to enforce an international award in Ecuador. Sectors To Watch for M&A Activity Mining Ecuador is an attractive destination for mining due to its significant geological potential. In recent years, medium- and large-scale mining has become one of the country’s fastest-grow - ing economic sectors. However, in 2024, mining exports declined due to falling international min - eral prices and power cuts caused by an energy crisis that disrupted production. Despite this, the Ecuadorean Chamber of Mining anticipates a recovery in 2025, driven by multiple projects transitioning from exploration to exploitation and the execution of new investment contracts in 2024. Further optimism stems from the negotiation of a trade agreement between Ecuador and Can - ada, concluded in February 2025, which is cur - rently under review for signature by both states. Canada plays a crucial role in Ecuador’s mining industry as one of its largest sources of foreign investment. Currently, seven Canadian mining companies operate in Ecuador, including Atico Mining Corporation, Aurania Resources, Barrick Gold, Curimining (Silvercorp), Dundee Precious Metals, Lumina Gold Corp and Lundin Gold. This number could increase following the agree - ment’s ratification. Amid these developments, the mining sector is emerging as a key area for M&A activity. Howev - er, growth may be hindered by challenges such as new environmental and social regulations and the ongoing closure of the mining cadastre since 2018, which prevents the issuance of new con - cessions.
632 CHAMBERS.COM
Powered by FlippingBook