Legal market overview in Ecuador

The assassination of presidential candidate and anti-corruption campaigner Fernando Villavicencio in August 2023 sent shockwaves through Ecuador and drew international attention, highlighting the eruption of violence and organised crime that is a key focal point for voters in the run-up to the general election. The first-round vote in August failed to produce an outright winner, giving Ecuadorians a choice between Luisa González, an ally of former leftist president Rafael Correa, and Daniel Noboa, the son of a prominent businessman, in October. In another consequential vote in 2023, Ecuador voted against drilling in the Yasuní National Park in the Amazon, a decision that forces the state oil company to end its operations in the protected area.

Despite the fraught political scenario, law firms in the South American country have continued working against the backdrop of an economy which continued to grow in 2022. Commentators noted a fair economic recovery from the impact of the Covid-19 pandemic, with firms seeing an increase in cross-border cases and discussions around constitutional law. There has also been an uptick in the number of post-merger proceedings. More widely in dispute resolution, there has been a rise in arbitration concerning concession agreements. In the M&A market, there was a downturn at the beginning of 2023, but activity is increasing once again, with investment from European countries growing.

There has been a welcome move towards sustainability among firms, with sustainability-focused finance instruments, blue and green bonds, and sustainability projects more generally emerging as key areas of interest. However, oil and gas projects continue to represent a significant proportion of the firms’ work in relation to energy, and oil still forms a large part of the country’s GDP.

In tax, Ecuador's tax authority, the SRI, began carrying out audits for natural persons, which brought law firms a lot of business. There was also an important development regarding inheritance tax, with the Constitutional Court declaring a certain type of tax unconstitutional, and as of November 2021, an alternative dispute resolution mechanism was incorporated to the tax system, which has been reflected in some of the work being undertaken by lawyers in the country. In the face of political instability, President Guillermo Lasso announced a proposal to cut tax for middle-income earners and small businesses in May 2023, and it remains to be seen how this will impact the work of firms in the tax space going forward.

In the legal market, Flor Bustamante Pizarro Hurtado Abogados continues to make progress in the market following the 2021 merger of Bustamante Bustamante with Fabara & Compañía (which had already made strides in the market given its size). The newly merged firm was bolstered again in 2022 when leading competition boutique Antitrust Consultores split: former partner David Sperber founded a new firm, Sperber & Álvarez, but the majority of the team, headed up by former partner Gilberto Gutiérrez, joined FBPH, increasing its presence in the competition space.

Ecuador is home to a number of other full-service firms, including Pérez Bustamante & Ponce, Robalino, Carmigniani Pérez Abogados, Lexvalor Abogados and Dentons Paz Horowitz, as well as specialised boutiques, particularly in the field of intellectual property.

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