Banking in Ecuador

LLGM wrote:

If the US moved to residency-based taxation, they would restrain themselves to look at only US-residing "tax-cheats" who are hiding money overseas, rather than spending time and manpower criminalizing all US citizens who choose to live outside the homeland.  Besides, most of the wealthy US-citizen money-hiders/tax cheats live IN THE US....

Having ALL USA citizens report and pay taxes on their world wide income is NOT criminalizing them.  The fact that most wealthy tax cheats live in the USA is because they owe the taxes no matter where they live.  If it were based only on residency, then the tax cheats would legally set up a foreign address and never pay USA income tax again.  This would be the ultimate result of your campaign, wealthier people paying less or no taxes. How Republican of you.

LLGM wrote:

But I still contend that the Canadian case will be closely watched by other countries ...

The only Canadian thing closely watched by other countries is hockey

The "Overseas Republicans" or whatever they are called are as powerful and influential as a gnat. FATCA and taxation of worldwide income of US citizens is one of the few things Democrats and Republicans agree on!  There is no support among Americans to create new rules exempting non-US based income from taxation (other than of course the tax-free foreign earned income amount).

From my reading, I disagree.  It seems to me there is a strong urge to revamp and simplify the US tax system which is overwhelmingly complex and patchwork.  Whether or not this will eliminate citizen-based in preference for residence-based taxes (to come in line with all other countries in this 21st century global world), and whether this will be something tackled soon into 2015 is yet to be seen.  However, it seems there is movement in the direction towards revamping the US tax code that is so complex even expert accountants can't be sure they absolutely know the law in all it's 9000-page glory.

LLGM wrote:

However, it seems there is movement in the direction towards revamping the US tax code that is so complex even expert accountants can't be sure they absolutely know the law in all it's 9000-page glory.

Politicians have been saying this for decades, while making the taxes even more complicated.
Why would anyone base their opinion on what the politicians say, not what the politicians do?

LLGM wrote:

From my reading, I disagree.  It seems to me there is a strong urge to revamp and simplify the US tax system which is overwhelmingly complex and patchwork.  Whether or not this will eliminate citizen-based in preference for residence-based taxes (to come in line with all other countries in this 21st century global world), and whether this will be something tackled soon into 2015 is yet to be seen.  However, it seems there is movement in the direction towards revamping the US tax code that is so complex even expert accountants can't be sure they absolutely know the law in all it's 9000-page glory.

There's certainly been lots of chatter about revamping the corporate tax code, but I don't think for a second that the U.S. won't tax its citizens on their worldwide income.  Someone will pose the question aloud:  "Do you believe it is a good idea that rich people living abroad should not have to pay taxes?"  Whether that's a fair characterization or not doesn't matter. That will be the end of the debate.

For those predicting the demise of FATCA in Canada for U.S. expats living there, it appears Canada thinks it's a pretty good idea and has adopted its own "mini-FATCA" imposing reporting requirements on Canadian citizens.  The excerpt below comes from Toronto-based law firm WeirFoulds, LLP.  (If interested, I posted the full article on the Canada forum as most of the article except the excerpt below really pertains only to U.S. expats living in Canada.)

The Canadian Initiative

FATCA appears to have influenced the Canadian government to implement its own initiative aimed at identifying tax evasion and aggressive tax avoidance. Effective January 1, 2015, the CRA's electronic funds transfer rules came into force requiring certain financial intermediaries to report incoming and outgoing transfers of CAD$10,000 or more to the CRA. The rules require that a qualifying electronic funds transfer be reported within five business days of the transaction. For this purpose, multiple transactions occurring within a 24-hour period conducted by, or on behalf of, a single entity will be aggregated to determine if the transfer is CAD$10,000 or more. This new requirement applies to financial intermediaries defined in the Income Tax Act as “reporting entities” including: banks, credit unions, caisses populaires, trust and loan companies, money service businesses and casinos. If Canada's response to FATCA is any indication of the tone in Canada, the era of transparency, enhanced regulation and strong sanctions for offshore financial management is here to stay.

Could you tell me what the interest rate is for a fixed term deposit@ Banco Pichincha.  Also is it a good idea to hold money in Ecuador?

sonjavdm wrote:

is it a good idea to hold money in Ecuador?

In a word, no.

Just keep enough for living and anticipated expenses, potential proof of funds for medical emergency, and some "pad."

There have been too many instances of people losing big bucks. 

The worst case in the last several years was the failure of Coopera of Cuenca, an institution that didn't bother to obtain bank insurance from the EC government.  Numerous Expats got stung, and without recourse.

During the EC bank-closures crisis of Y2K, some insured bank customers got some of their money back.

At that time, the government offered Gary A. Scott of Ecuador Living a full return of his 30K bank account over six years, or he could choose 60 percent restitution immediately (one year after the bank closure).

Gary took the immediate cash, losing 12K in the process, and never trusted Ecuadorian banks again.

cccmedia in Quito

cccmedia wrote:

sonjavdm wrote:

is it a good idea to hold money in Ecuador?

In a word, no.

Just keep enough for living and anticipated expenses, potential proof of funds for medical emergency, and some "pad."

There have been too many instances of people losing big bucks. 

The worst case in the last several years was the failure of Coopera of Cuenca, an institution that didn't bother to obtain bank insurance from the EC government.  Numerous Expats got stung, and without recourse.

During the EC bank-closures crisis of Y2K, some insured bank customers got some of their money back.

At that time, the government offered Gary A. Scott of Ecuador Living a full return of his 30K bank account over six years, or he could choose 60 percent restitution immediately (one year after the bank closure).

Gary took the immediate cash, losing 12K in the process, and never trusted Ecuadorian banks again.

cccmedia in Quito

This is the prevailing banking wisdom for USA citizens, with USA banks being more stable and insured up to $250,000 plus easy enough to transfer to Equador.  You need to research the banks of South Africa, how safe and if there are any transfer problems.

rick4321 wrote:

looking for basic info on living/working/banking, etc. in ecuador, i'm 53

Since at least three books could be written on these broad topics, we looked to the brief profile at your Expat.com avatar to see if we might narrow things down to your specific situation.

You tell us you need to work. 

Although it's more difficult to advise when we don't know what you do, and thus whether or not it might be transferable to Ecuador, this much we can tell you:

You're handicapped by these facts:

1.  The nationwide policy is to give preference to Ecuadorians over Expats for any job for which EC nationals are qualified.

2.  If you don't invest 25K, and you want to work here, you'll normally need a job offer in order to apply for the relevant residency visa.  And that offer must be in the form of a formal contract that would -- for visa purposes -- need to be approved by an Ecuadorian government agency.

3.  You may need to participate in a job interview to be held in Ecuador to demonstrate competence and compatibility.  Are you planning to visit....

4.  You have not given us any indication of ability to speak, write and understand espanol.

If you respond here at Expat.com, consider telling us more about your experience, job interest classification and language abilities.

Also consider starting a New Topic, as it appears your main issues are not really about Banking.

cccmedia in Quito

rick4321 wrote:

I have the 25k. I don't suppose residency is as easy as transferring the 25k and getting a lawyer? R we talking years and jumping through 100 hoops or.....?

Thanks for giving us more to go on.

Before coming to Ecuador, it's recommended that you get the paperwork going by querying an EC-based attorney via email or phone about the residency visa requirements.  The government's visa information website is cancilleria.gob.ec and the English-language option often works

At the minimum you'll want to get an apostilled (internationally certified) criminal background check and apostilled birth certificate, plus doing whatever the attorney advises to set up the investment.

The 25K investment can be a real estate purchase, but usually the easier route is a bank CD.  I went the real-estate route, having bought a condo years before I applied for residency.

Once you have the residency visa, in this case an investment visa, you have the right to get an Ecuadorian ID or "cedula" the next week and legally work in Ecuador.

There are anecdotal reports of the visa process taking a month-and-a-half or less.  Your paperwork would have to be pristine to pull that off.

In my case, it took about six months, largely because I didn't have my second apostille before arriving in Ecuador and the U.S. State Department then refused to grant it -- causing lengthy delays until they essentially changed their mind.  (I still don't understand the initial refusal.)

It's conceivable that some poster(s) will tell you that you can do the visa process yourself -- without an experienced attorney or non-attorney visa specialist.  But IMO that's for a special "breed of cat" -- not for folks like you and me who think we have better things to do than negotiate a complicated foreign bureaucracy

cccmedia in Quito

rick4321 wrote:

What types of businesses/work are expats getting into down there?

Of the Expats I know or have met, the occupations they have are as follows:

1. English teacher

2. Rental property owner-manager-investor

3. Expat club manager

cccmedia in Quito

If you wire money out of Ecuador the government will tax you 5% when money leaves and also you're taxed another 5% when money gets to its destination, Ecuador doesn't want you to take your dollars away, you can only take max 10K in cash on your person when traveling, NO EXCEPTIONS SO BE AWARE !!!

Pablo Acosta wrote:

If you wire money out of Ecuador the government will tax you 5% when money leaves and also you're taxed another 5% when money gets to its destination....BE AWARE !!!

Welcome to the Ecuador forum, Pablo.

Actually, I am not aware that someone wiring money will be taxed an additional five percent at the destination.  Your post does not make clear who is taking the back-end money.

Who will be taxing the wire sender at the destination, Ecuador or the destination country?

If the latter, do all 200 countries impose the same tax?

Most importantly, what is your source for the back-end five-percent tax?  Preferably some source we can check online.

cccmedia in Quito

Hi there, I was born and grew up in Quito so I still have most of my family living there, one of my relatives that  lives in the US gave me the info on the 5% tax that is charged when the money enters the US, I myself tried to find the source of the extra 5% on the back end online but I could not find it, my relative has rentals in Quito and lives here so now he just brings the money in person when he goes on vacation to Quito, he got tired of getting reamed everytime he was sent money, 10% is too much to loose.

Please let me know if you find out differently, thank you .

The U.S. does not impose any tax on money wired from a foreign country.

Pablo Acosta wrote:

one of my relatives that  lives in the US gave me the info on the 5% tax that is charged when the money enters the US, I myself tried to find the source of the extra 5% on the back end online but I could not find it, my relative has rentals in Quito and lives here so now he just brings the money in person when he goes on vacation to Quito, he got tired of getting reamed everytime he was sent money, 10% is too much to loose.

Let the record show that the poster from Tacoma's claim of five percent back-end taxes on money wired from Ecuador was challenged and he could not substantiate it with a reliable source.

Even his hear-say source was supposedly referring to wired money going only to one country, the U.S.

The Home Office will determine whether this thread will be allowed to stand or if it should be handled in another manner.

cccmedia in Quito

Never said it was the U.S. charging the second five percent.

Pablo Acosta wrote:

Never said it was the U.S. charging the second five percent.

Then perhaps your relative should switch banks.

That's not up to me or you to do, if you really want to find out with certainty have some money wired from any bank in Ecuador to a bank in U.S.

The Home Office has decided to give Pablo the benefit of the doubt and to give him more time to provide the source for the back-end five percent claim.

Pablo, the burden of proof is on you at this point to demonstrate timely that your claim is correct and properly sourced.

IMO he would have provided a source by now if the claim was accurate.

cccmedia in Quito

Ok and thank you, I'll see what I can do, just hate to see people getting ripped off.

IL just published stats on USA citizens receiving Social Security benefits deposited into foreign accounts.   The total worldwide jumped from 248,000 in 2003 to 373,000 last year.  The total in Ecuador jumped from 1,614 to 2,836.  This does not include expats who have  their SS benefits deposited into a USA account to and then transfer to Ecuador as needed.  Panama went from 579 to 1870.  The Philippines went from 8,317 to 16,808.  I know of many expats in the Philippines who also transfer money in from their home countries, not many Canadians but plenty of British and Australians.    It would appear that the Philippines is more desired than Ecuador for USA retirees.  Many in the Philippines are Filipinas born in the Philippines but became USA citizens and are now retiring to the Philippines as dual citizens married to a USA citizen.  The 16,808 would include these people originally Filipino citizens, but even if the number is cut in half, 8,404 is probably as many as all the USA citizens living in Ecuador.  Does anyone know how many USA citizens are currently living in Ecuador?

Mug: Are those stats (as stated) only of SS benefits, or do they also include military retirement? Angeles and Subic areas are full of retired military.

mugtech wrote:

how many USA citizens are currently living in Ecuador?

Excuse me, Bob.

We now interrupt the discussion about retired military personnel in the Subic and Angeles areas of the Philippines in order to answer mugtech's question immediately....

There are 39,000 U.S. Expats living in Ecuador.

How did I get that number?

Ah, it turns out that the answer to that is too juicy to spill on this obscure banking thread.

Please join us at the new thread titled "The Migration Map: 39,000 USA Expats Live in Ecuador, 849K in Mexico"....

https://www.expat.com/forum/viewtopic.p … 64#2829763

We now return you to the discussion about retirees in the Philippines.

cccmedia in Quito

BobH wrote:

Mug: Are those stats (as stated) only of SS benefits, or do they also include military retirement? Angeles and Subic areas are full of retired military.

Only SS benefits.  It surprises me that 16,808 of 36,000 in the Philippines have SS deposited into a Filipino bank while such a smaller percentage of the 39,000 in Ecuador have SS deposited into an Ecuador bank.  Perhaps the total of US expats collecting SS is less, more people working or having other sources.  In addition they could trust Ecuador banks less than expats in the Philippines trust the banks there.

BobH wrote:

Mug: Are those stats (as stated) only of SS benefits, or do they also include military retirement? Angeles and Subic areas are full of retired military.

It would be interesting to know how many retired military chose Ecuador.

mugtech wrote:

BobH wrote:

Mug: Are those stats only of SS benefits, or do they also include military retirement? Angeles and Subic areas are full of retired military.

It would be interesting to know how many retired military chose Ecuador.

No contest between EC and the Philippines.  The large U.S. military bases that existed until the 1990s in the Angeles and Subic areas introduced thousands of American men to tropical freedoms previously unknown to them.  Post-tour they stayed on or came back to places such as Angeles, Baguio and suburban Manila.

However, we do have some retired military on this forum who somehow figured out that Ecuador is the place in the Western Hemisphere.

cccmedia in Quito

Agreed, there are at least a few of us retired mil on the various blogs…...