OFFICIAL GUIDE TO SHIP & YACHT REGISTRIES

Ecuador

Shipowner Eligibility 

As to the acquisition and registration of vessels, foreigners are seen as Ecuadorians, and as consequence, have the same rights and obligations as to eligibility, without prejudice of certain permissions, patents or authorization that certain Special Regimen might particularly impose to foreigners. The only requirement concerning local ownership is that the Purchase and Sale Agreement of the vessel and/or parts must be performed by public deed.

About the Flag

The Republic of Ecuador is located in western South America between Colombia and Peru on the Equator bordering the Pacific Ocean. It is divided into 21 provinces distributed throughout four different regions: Coast, Sierra or Mountains, Eastern Regions or Amazon, and the Insular Region or Galapagos Islands.

Ecuador is a full member of the UN, the OAS, Andean Community, and the IMO. The legal system is based on civil law. The President is the Chief of State and Head of Government, and there is a unicameral National Congress. The capital is Quito, and the official language is Spanish.

Ecuador’s main exports are crude oil, bananas, shrimp and other sea products, oil derivatives, coffee, cocoa, and non-traditional products such as fruits and flowers. The United States and Latin America are its chief trading partners.

The main port is Santiago de Guayaquil. Other ports are Puerto Bolivar, Manta and Esmeraldas, where the main oil terminal is located.

The currency unit is the sucre, although most transactions with foreign entities are carried out in US dollars.

The legislation governing Ecuadorian Ship Registry is conformed by the Code of Maritime Police, the Regulation for Maritime Activities issued by the Merchant Marine National Office (DIGMER), the Regulations for Inscriptions for the Harbormaster's Office, the Law for the Development of Maritime Transport and Related Activities, the General Law of Registration, and the Law for Facilitation of Exports and Maritime Transport and its Rules and Regulations.

Company Formation

The following companies may be established in Ecuador: stock companies; general partnerships; limited partnerships; limited liability companies, partially government-owned corporations; holding companies; and unincorporated associations or joint ventures.

There is no established number of officers or directors required. Each company by-laws is to establish the necessary administrative structure and the number of officers considered as convenience. The only legal requirement is a legal representative. As to incorporation purposes only, the limited liability company requires at least three stockholders while the other types of companies require a minimum of two stockholders. However, during the existence of the Stock or Limited Liability Company, these companies can perfectly survive with only one partner or stockholder, respectively. At least two companies must participate for the incorporation of a holding company.There are no restrictions as to the nationality and addresses of the shareholders (individuals or companies), officers, or directors, nor are there any requirements or authorizations for the capital to enter the country as foreign investment; however, foreign stock companies (S.A.) cannot be shareholders of Ecuadorian limited liability companies since the Companies Law prohibits so. The investment amount must only be registered with the Central Bank for statistical purposes. All of the above mentioned types of companies are under the control of the Superintendency of Companies and are required to submit annually the following filings: a Statement of Financial Position and the payment of the corresponding annual contribution in accordance with its assets; Income Tax statement, statement for the payment of 1.5 per thousand tax on assets, and the Trade and Industrial Registration.

Domestic and foreign companies may act as shareholders provided they act through their legal representative qualified by the respective appointment or power of attorney or by means of an authorization granted by the corresponding corporate entity, stating the capital to be invested, number of stocks to be subscribed, means of payment, and the name of the receiving company.

Taxation

Transfer of property of a vessel performed in Ecuador produces a Value Added Tax of 12% of the price of transfer.

Without prejudice of special provisions or duties contained within bilateral or multilateral Trade Agreements, vessels being imported to Ecuador must pay the following taxes:
1. Customs duties: The Tariff Item for the importation vessels depends on the Vessel's Gross Tonnage and also, on the purpose of its utilization (transportation of goods, passengers, salvage, tug operations, tourism etc). It is usually calculated by a percentage of the CIF value of vessel. In addition to payment of customs duties, it must be paid the following: a) FODIN (Children's fund) of 0.5% CIF value; and, b) CORPEI (Ecuadorian Corporation for the importation promotion) of 0.025% FOB value.
2. I.V.A. (Value-Added Tax): The percentage is 12% calculated on the amount that results for adding to the CIF value of the vessel, the following: a) Custom duty; plus, b) FODIN (0.5% CIF value); plus, c) CORPEI (0.025% FOB value).
3. There is also a tax called ICE (Special Consume Tax) only for luxury goods, usually imposed to the importation of yatchs and pleasure private boats. Subject to the fulfillment of certain requirements, some dispositions contained in various Law provide the possibility of Draw Back of Custom Duties, e.g. the Tourism Law.

Notwithstanding, since the enactment of the recent Law for Development of Maritime Transport and Related Activities, individuals and corporations, national and foreign, previously obtaining the respective "qualification" that to this purpose is to be issued by Merchant Marine National Office (DIGMER), are entitled to exemptions of taxes and custom duties. The recent Law for Development of Maritime Transport and Related Activities was enacted in order to promote the modernization and development of the Maritime Transportation, vessels construction industry and related activities. She is intended to provide the following benefits as to individuals or corporations devoted to commercial maritime carriage of passengers, goods or/and fishing commercial activities:
1. Tariff 0 of Valued-Added Tax and no Custom Duties for the importation of vessels devoted to commercial transportation (cargo or passengers) that have less than 10 years of construction.
2. Tariff 0 of Valued-Added Tax and no Custom Duties for the importation of equipment, engines, communication system devices, radios and other related devices that may be used within the commercial operation of vessels.
3. Tariff 0 of Valued-Added Tax for the construction, maintenance and repair of vessels.
4. Tariff 0 of Valued-Added Tax for bareboat charter, no matter if it is with or without "purchase option".
The respective "qualification" is valid for four years. Once obtained, the beneficiary is subject to the benefits afore mentioned, and afterwards, it would only be needed to provide the documentary requirements, depending of the activity desired, to make effective the importation, construction and repair of vessels, or bareboat charters.

Individuals or corporations obtaining the said "qualification" are entitled to get fuel at international prices for its commercial operation.
Vessels chartered in "bareboat modality" that are intended to have these benefits, must use the Ecuadorian Flag and hire Ecuadorians for at least 70% of the crew.

Vessels imported for bareboat charter purposes under this Law, although require using the Ecuadorian Flag, might not require to be registered within Ecuadorian Registry; however, it should be noted that Customs Authorities has not yet clarified which Special Customs Regimen is to be applied. We expect that this be resolved in the next few months.

It is to be underlined that at this present moment, benefits above mentioned are not being put in practice by Customs Authorities, since the latter considers that the prevailing Law - Customs Law - does not contain exemptions as such detailed within the Law for the Development of Maritime Transport and Related Activities. We also expect that this hurdle be resolved within the next few months.

In regards to registration purposes, the importation of vessels can be basically subcategorized as follows: a) Importation for purposes of Nationalization; and, b) Temporary importation for further exportation in the same condition.

What concerns to the first, the importation for nationalization implies that the vessel will be registered within the Ecuadorian Registry; notwithstanding, as above mentioned, vessels imported for bareboat charter purposes under the Law for the Development of Maritime Transport and Related Activities might have a Special Customs Regimen, but this is still subject of clarification by Customs Authorities.
As to the second case, that is to say, the Temporary importation for further exportation in the same condition, this is specially addressed for vessels being used as part of a concession public contract previously entered with the Government or with privates having public delegation to provide such public services. This is a special regimen whose main idea is that the Temporary Importation of the vessel depends on the duration of the pertaining Concession Public Contract. The Temporary Importation can also be applied to vessels entering to Ecuador for private interests; however, the time period of temporary importation is limited to 180 days, extended only for one 90 day period.

Since the present analysis is basically addressed to registration matters, the information that is detailed below will only refer to Importation for Nationalization.

Individuals or Corporations willing to import a vessel to Ecuador must fulfill requirements from both, Ecuadorian Customs Office (CAE), and Merchant Marine National Office (DIGMER), without prejudice that other Governmental Departments imposes some specific permission or authorization according to the purpose of the importation of vessel, e.g., tourists operation purposes.

In regards to Customs matters, it must first be performed the approval of DUI, which is the document wherein is indicated the class and type of the goods subject of importation to Ecuador. Once the DUI is approved, it proceeds to hire a verification enterprise so that she performs the verification in origin of the vessel.

Concurrently to the fulfillment of the above, it should be performed all steps that concerns to Ecuadorian Maritime Authorities. Vessels being imported to Ecuador are to obtain from DIGMER a provisional Certificate of Registry and a Sea Letter, in order to perform the voyage to Ecuador. These documents are valid for six month, being renewable only once.

If the Sea Letter is obtained for the first time, it must be presented before Maritime Authorities the title of property of the vessel, as well as the previous Certification of Registry or Register duly cancelled. Once is obtained the provisional Sea Letter, it is granted the provisional Certificate of Registry.

Once the verification in origin is effected, and provided that the provisional Sea Letter and the provisional Certificate of Registry is obtained, the vessel is available to sail to any Ecuadorian Port, exempting Galápagos Islands which have a special regimen whether for entrance as for commercial operation.
At the moment of the arrival of the vessel to the respective Ecuadorian Port, she must be received by Customs, Marine, Sanitary and Immigration Authorities with the purpose to verify if the documentation on board is according to respective International and Local Rules and Regulations.

The Registration of the title of property can be effected even before the vessels sails towards to Ecuadorian Port for its nationalization. According to the General Law of Registration, if the pertaining title of property is granted abroad, prior to its registration, a judicial order must be issued declaring the validity of the document as to formalities and its authenticity. After the registration, it proceeds to commence the steps to obtaining the definitive Certificate of Registry and the Navigation Patent.

Once the vessel is registered, it proceeds to request to DIGMER the Navigation Patent by addressing petition enclosing the respective Certificate of Registry. The said Patent should also be registered within the Harbor Master's Office whereby she is registered.

Registration and Documentation

The authority in charge and in custody of Records of Registry is the respective Harbor Master Office, whether for property, mortgages, injunctions, encumbrances or preventive and definitive arrests. Mayor Offices are in Guayaquil, Manta, Esmeraldas and Puerto Bolívar. Minor offices are in Bahia de Caraquez, Salinas, San Lorenzo, Puerto Baquerizo Moreno, Puerto Ayora, Puerto Villamil, Puerto Alfaro and others located in the Amazon Jungle.

The Ecuadorian Ship Registry is basically considered closed. Ecuadorian Registry does not accept the registration of double registry vessels nor those with open flags, therefore, it is compulsory to cancel the previous foreign registry in order to register the vessel in Ecuador. Likewise, if further the vessel is intended to be registered in a foreign Registry, its cancellation will be requested from the respective Ecuadorian Harbor Master's Office.

Without prejudice of any other permission, patent or authorization that might be required according to the specific operation intended for the vessel, e.g., tourists and cruise operation - vessels registered in Ecuador are obligated to obtain, renew and maintain valid the following Registration documents:
Certificate of Registry (Matri­cula in Spanish) (Although the registration is permanent, the Certificate must be annually renewed).
Patent of Navigation (Patente de Navegacion in spanish) (Minor vessels, that is to say, vessels with less than 50 GRT (Gross Register Tonnage) are not required to obtain this Patent).

These two documents conform altogether the Certification of Ecuadorian Nationality of the vessel.
If the vessel was constructed in Ecuador, for the purposes of obtaining the Certificate of Registry, it should be presented before the respective Harbor Master's Office the petition enclosing the following documents:
Title of property registered in the respective Harbor Master's Office.
Construction plan of vessel, duly approved by DIGMER.
Certificate of Class and Tonnage.
Appointment of legal representative if the shipowner is a corporation.
If the vessel is constructed abroad, in addition to the documents afore mentioned, it should be presented before the respective Harbor Master's Office the following documents:
Certificate of cancellation of the foreign registry.
Certificate of customs clearance of the vessel.
According to the Law, every vessel registered in Ecuador is obligated to register again in the following cases:
Change of Shipowner;
Change of the name of the vessel;
Change of the Port of Registry;
Change of her technical characteristics; and,
Change of class

Bareboat Charter Registration

For many years the Ecuador Vessel Registry has been conceptualized on a property basis, which means that the registry is given only if the title of property of the vessel is registered within the Records of the respective Ecuadorian Harbor Master's Office. According to the recent Law for the Development of Maritime Transport and Related Activities enacted on year 2003, it has been established a "bareboat charter registry"; however, this has not been put in practice yet. So far, every company or individual chartering a vessel must inform to the Merchant Marine National Office about the charter and submit a photocopy of the respective contract within 15 days following the date of signing.

Vessel and Yacht Eligibility & Survey Requirements

Vessels of national traffic can be registered in any of the Ecuadorian Harbor Master's Office, depending on the interest of the Shipowner. However, vessels of international traffic will only be registered in the Mayor Harbor Master's Offices.

The Ecuadorian Ship Registry is correlative with the Ecuadorian Flag. Only vessels registered in Ecuador - as well as her title of property - can use the Ecuadorian Flag and accordingly, be entitled to the benefits that the Ecuadorian flag provides, exempting vessels chartered by public or mixed public enterprises, and those imported under the scope and regulation of the recent Law for the Development of Maritime Transport and Related Activities. However, there are a few cases where although the vessel has a foreign flag and registry, she is "considered" to have an Ecuadorian Flag.

Merchant Marine National Office (DIGMER) reserves the right to conduct a survey upon arrival of the vessel to an Ecuadorian port. Depending on the status or condition of the vessel, it may or may not authorize the nationalization of the vessel.

The survey requirements in Ecuador are the same which are required by the international classification societies, in compliance with the various international agreements ratified by Ecuador, including the ISPS Convention.

Crewing

Ecuadorean law requires that the crew members of Ecuadorean flag vessels keep a proportion of 75% of Ecuadorean seafarers and 25% foreign seafarers. This ratio or the percentages may vary if there are no able Ecuadorean merchant seafarers to crew the area of expertise of the vessel which is being nationalized. The master of the Ecuadorean vessel must be Ecuadorean.

In order to be registered and obtain for the first time the corresponding Matricula at the Harbormaster's Office, the personnel of the National Merchant Marine shall submit before the General Bureau of the Merchant Marine and the Coast, the following documents:
Army Certificate, Exemption Certificate, Receipt of Payment of the Corresponding Fine, or photocopy of the Police Captain's List of the Report, for all citizens born on and after 1924
Identity Card
The last elections' Voting Certificate, payment receipt of fine or sanction, or Exemption Certificate, conferred by the respective Elections Committee
Health Certificate which states the individual's health is compatible with life at sea or the particular activities of the area of expertise, as the case may be, conferred 30 days prior to applying for the Matricula, in addition to a certificate that no symptoms of tuberculosis are present, the Anti-Smallpox Vaccination Certificate, and the Blood Type Certificate.
Certificate of Good Conduct, preferably from the shipowners, shipping companies, headmasters or the last employer, approved by the General Bureau of the Merchant Marine and the Coast or Harbormaster's Office
Two Able-Bodied Seafarer Certificates conferred by masters, pilots, or engineers, or by the President of the Maritime Trade Association, or by the last employers stating that the seafarer is able to do the job for which he is applying; officers must submit the degree which credits them as such; and radio operators must submit the diploma and corresponding license
Certificate of Approval of the OMI courses
Clean police record
Two Ecuadorean Seafarer's Identity Cards, with all the data indicated in them (Only one is needed when the registration is done at the General Bureau of the Merchant Marine and the Coast)
Two wallet size pictures

Mortgages

The Maritime Liens and Mortgages Convention of 1993 (MLM 1993) has been in force in Ecuador since September 5th 2004, however, most of its dispositions were already in force since they were incorporated in 2001 within the Resolution No. 487 related to "Maritime Liens and Mortgages and Arrest of Vessels from Andean Community Commission (CAN)." Although the source of the CAN Resolution is basically the MLM 1993 Convention, some aspects differ as to the preference order between maritime liens and mortgages. Constitutional regimen in Ecuador puts International Conventions or Treaties of which Ecuador is part in second place of preponderance after The Constitution of the Republic of Ecuador, provided that the terms of these International Conventions or treaties do not contrary any disposition of her. However, it should be taken in mind that in accordance with CAN decisions, in general terms, if any contradiction exists between an International Convention and a CAN resolution, the latter might prevail within the Andean Community territory. According to the above, the order of preference can be detailed as follows:
1) Maritime liens
Credits for salaries and other amounts due to Master, officers and other crew members in virtue of their roll on board the vessel, including the expenses for repatriation and social security contributions to be paid in their name. Expenditures caused as consequence of vessel's arrest or auction and further judicial sell of vessel are within this first category of preference, and likewise those expenditures and charges assumed for the maintenance of vessel and the crew.
Credits to or in connection with death or corporal injury produced in land or water, as consequence of the exploitation of the vessel.
Credits for the payment of vessel salvage reward.
Credits for Port and Channel dues, and for other navigable via, and pilot.
Credits to or in connection to material damages and looses produced as consequence of the exploitation of the vessels, different to the damages and losses of cargo, containers and luggage carried on board the vessel. The above mentioned are the only maritime liens established in the Ecuadorian legislation. In despite that the MLM 93 International Convention permits the possibility that a Contractual State incorporates some others liens to its local law and subject to the conditions of the said Convention, this has not happened in Ecuador yet. All liens contained within article 728 of Ecuadorian Commercial Code are no longer in force.
2) Maritime Mortgage credits. - Maritime mortgages registered in Ecuador do not constitute a maritime lien, but are preferred on credits of constructors or repairers of vessels, according to article 35 Resolution No. 487 of the CAN, and considering the force of these Resolutions within the Andean Community. Some mortgage credits will prefer others, according to the respective order of inscription in the Port of Registry of the vessel.
3) Credits of the constructor or repairer of vessel. - In Ecuador, a right of lien on the vessel in favor of the constructor and the repairer is established in article 35 of Resolution No. 487 of CAN. For many years, maritime mortgages were only regulated by the dispositions of the Civil Code in absence of detailed rules in our old Code of Commerce. However, since the enactment of Resolution No. 487 of CAN, maritime mortgages are required to fulfill some basic requirements established in such resolution, which are:
Names, surnames, nationality and domicile of both creditor and debtor; if these are corporations, its respective denomination, location and the place where she is registered;
Name, number, classification, call number and registry of vessel;
Gross Tonnage, maximum length and other principal particulars of the vessel;
Those agreements in virtue of which is expressly convened that the guarantee is intended to cover also the freight, compensation amounts, or those agreements that anyhow limits the object of the guarantee;
Date and nature of the contract in virtue of which the mortgage is granted, or nature of the credit guaranteed by the mortgage;
The amount or the maximum amount of the obligation in virtue of which the mortgage is granted, as well as the agreed interests, term period, place and mean of payment; or the proceedings to fix that maximum amount in case is guaranteed an amount not determinate; and,
Other valid agreements.
According to article 3 of the said Resolution No. 487 of CAN, mortgages must be granted by public deed. In Ecuador this capacity of faith is delegated only to Public Notaries; however, there is no inconvenient that the mortgage is granted abroad, but always subject to the abovementioned requirements if it is to be registered within the Ecuadorian Registry. It has to be noted also that according to the General Law of Registration, if the mortgage is granted abroad, prior to its registration, a judicial order must be issued declaring the validity of the document as to formalities and its authenticity. Since a vessel can be subject of various mortgages, the principal effect of mortgage's registration is reflected in regards to the position of preference in contrast to other creditors of the debtor. Sometimes, foreign creditors, especially foreign financial institutions, believe that the registration of a mortgage at the Ecuadorian Registry implies a prohibition to transfer the property of the vessel mortgaged. Under the Ecuadorian Law, there is no such implication and even though if by agreement such particular prohibition is convened, this clause is in no way binding to the Harbor Master's Office (Ship Registry Office). Any prohibition to transfer the vessel's property can only be imposed by means of a judicial decision as consequence of a particular proceeding. There is an expressly provision contained within our Civil Code that permits the debtor - owner of the good mortgaged to sell its property is despite of such clause intended to forbid so. Such agreement prohibiting the mortgagee to sells its property produces no effect as to registration purposes, since the Registry Officer will always permits the transference of property notwithstanding such clause.

Fees

Information unavailable at this time.

Contact

DIRECCIÓN NACIONAL DE LOS ESPACIOS ACUÁTICOS
LCDR Freddy Espinoza
Deputy Director of Environmental Management
Elizalde 101 y Malecón
Guayaquil
Guayas
090307
Ecuador

Phone
593 42320400 ext. 37206
0990984055

Email
fespinozah@armada.mil.ec
fespinozah001@gmail.com

CDR Jaime Lasso
Technical Officer

Phone
+593 960998209

Email
jlasso@armada.mil.ec
jlassonaj@gmail.com

Web
https://www.dirnea.org

Stockholm Agreement 96
IMO Convention 48
* IMO amendments 91 
* IMO amendments 93
SOLAS Convention 74
SOLAS Protocol 78
SOLAS Protocol 88
LOAD LINES Convention 66
LOAD LINES Protocol 88
TONNAGE Convention 69
COLREG  Convention 72
CSC Convention 72
CSC amendments 93
SFV Protocol 93
STCW  Convention 78
STCW-F Convention 95
SAR  Convention 79
STP Agreement 71
STP Protocol 73
IMSO Convention 76
INMARSAT OA 76
INMARSAT amendments 94
INMARSAT amendments 98
IMSO amendments 2006
IMSO amendments 2008
FACILITATION Convention 65
MARPOL 73/78 (Annex I/II)
MARPOL 73/78 (Annex IV)
MARPOL 73/78 (Annex V)
MARPOL Protocol 97 (Annex VI)
London Convention 72
London Convention Protocol 96
INTERVENTION Convention 69
INTERVENTION Protocol 73
CLC Convention 69
CLC Protocol 76
CLC Protocol 92
FUND Convention 71
FUND Protocol 92
FUND Protocol 2003
NUCLEAR Convention 71
MARPOL 73/78 (Annex III)
PAL Protocol 76
PAL Protocol 90
PAL Protocol 02
LLMC Convention 76
LLMC Protocol 96
SUA Convention 2005
SUA Protocol 2005
SALVAGE Convention 89
OPRC  Convention 90
HNS Convention 96
OPRC/HNS 2000
BUNKERS CONVENTION 01
ANTI FOULING 01
BALLASTWATER 2004
NAIROBI WRC 2007
HONG KONG CONVENTION
HNS PROT 2010
Cape Town Agreement 2012
SUA Convention 88
SUA Protocol 88

IMO Conventions

Status of Conventions Ecuador

IMO Convention 48 x
SOLAS Convention 74 x
SOLAS Protocol 78 x
SOLAS Protocol 88 x
SOLAS Agreement 96
LOAD LINES Convention 66 x
LOAD LINES Protocol 88 x
TONNAGE Convention 69 x
COLREG Convention 72 x
CSC Convention 72
CSC amendments 93
SFV Protocol 93
Cape Town Agreement 2012
STCW Convention 78 x
STCW-F Convention 95
SAR Convention 79 x
STP Agreement 71
Space STP Protocol 73
IMSO Convention 76 x
INMARSAT OA 76
IMSO amendments 2006
IMSO amendments 2008 x
FACILITATION Convention 65 x
MARPOL 73/78 (Annex I/II) x
MARPOL 73/78 (Annex III) x
MARPOL 73/78 (Annex IV) x
MARPOL 73/78 (Annex V) x
MARPOL Protocol 97 (Annex VI)
London Convention 72
London Convention Protocol 96
INTERVENTION Convention 69 x
INTERVENTION Protocol 73
CLC Convention 69 x
CLC Protocol 76
CLC Protocol 92 x
FUND Protocol 76
FUND Protocol 92 x
FUND Protocol 2003
NUCLEAR Convention 71
PAL Convention 74
PAL Protocol 76
PAL Protocol 90
PAL Protocol 02
LLMC Convention 76
LLMC Protocol 96
SUA Convention 88 x
SUA Protocol 88 x
SUA Convention 2005
SUA Protocol 2005
SALVAGE Convention 89 x
OPRC Convention 90 x
HNS Convention 96
HNS PROT 2010
OPRC/HNS 2000 x
BUNKERS CONVENTION 01
ANTI FOULING 2001
BALLASTWATER 2004
NAIROBI WRC 2007
HONG KONG CONVENTION

x: Accession/ratification
d: Denunciation

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