Category: Ecuador for Investors

Today, I´m checking in from the border of Ecuador and Colombia, where I´ve never seen anything like this!

There is currently a 3 hour line up of cars on the Ecuadorian side waiting to get into Colombia!

Why the incredible mass exodus from Ecuador?

When I lived in Colombia 7 years ago, the peso-USD echange rate hoovered around $2200 Pesos to 1 USD.

Last year, when I visited Colombia in October of 2014 the peso was at around $1800 to 1 USD or around where it´s been for the last decade.

Now, as of the last few weeks, the peso is at a record low against the dollar, $3125 pesos to 1 USD.

In other words, the dollar has almost doubled in value, or another way to think about it is that you can buy twice as many pesos as a year ago!

No sense sugar-coating it. Overall, for the last decade Ecuador was cheaper than Colombia, but now, on most things Colombia has Ecuador beat!

And Ecuadorians know it, as the border is only 4 hrs from one of Ecuadors largest cities, Quito, many are making weekend trips to go shopping.

Which is a great idea right now for anyone living in Ecuador.

Heck, I´m here.

So, specifically what is best to bring back from Colombia or the USA?

Why not have your trip pay for itself, and more?

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Living abroad my philosophy is simple… ‘if I see all the locals jumping off a bridge, I’m jumping too!’

There must be a good reason.

So, working in an airport hotel in Quito, I can’t help but notice that literally ALL of my Ecuadorian clients are coming back to Ecuador from abroad with one big rectangular box…

A TV box.

So I noticed, and researched it.

Now I see why.

A 50 inch Samsung LED Smart TV like this one at Walmart in the USA for sale at $597 costs roughly $1500 USD here in Ecuador both at the stores (I checked) and online on the Ecuador version of eBay Mercadolibre.

Or a generic 50 inch LED Smart TV like this one can be had for $348 at Walmart. A generic one in Ecuador goes for around $900.

Big difference!

But nothing is ever that simple. The reason for the difference is the import restrictions/ taxes.

You can only bring ONE TV down per year per person.

And after speaking to a client of mine at the hotel that just brought a 55 inch TV down 3 days ago, he said for TVs over 50 inches you pay $250 cash in taxes upon arrival to the airport in Ecuador. For smaller Tvs you may pay even more, he said. he continued, the deal now is bringing a TV over 50 inches.

And if you are moving here you are allowed one in your previously approved by the Ecuador consulate shipment of household goods tax-free.

If you do bring one down I’d bring a brand Ecuadorians know like LG, Samsung or Sony as I think it’d be easier to sell.

Also, I’d bring a big screen Tv over 50 inches large as I think the margins are better.

Even paying the tax, there’s still a margin there of $500-600 dollars of you sell it locally!

Enough to cover a plane ticket!

Hey Grant (a friend of mine coming down tomorrow) you get this?

Why not take advantage of Ecuadors STRICT import regulations raising many prices locally?

Let me show you how.

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Hiring employees scares even the best of us.

And it will probably be your biggest expense when it comes to your producing farm in Ecuador.

But it doesn’t have to be.

In fact, I’ve met quite a few entrepreneurs in Ecuador that get free volunteer help from the websites workaway.info and helpx.net .

Workaway is a new way travelers are opting to see the world, instead of your typical tourist route, you can really dig into the local culture by working in exchange for free room and board.

And Ecuador is exotic enough to have a nice draw, good luck trying to get people to work for free in Wisconsin!

All you, as the farm owner or host, have to do is provide cheap lodging and food for these travelers and they will work a specified number of hours per day.

So once you have your farm, build a lodge or even easier, rent a cheap one nearby where these people can stay. Then post your “project” to these sites.

Then sort through the applicants and select. What do employees have to say? I guess no words are needed, they should only demonstrate their skills and experience.

No employments contracts or messy social security payments, liquidations since its not a standard salaried job.

Also, this is great if you prefer to work with people that speak your language, and Spanish isn’t one of them yet.

You’ll be surprised at the quality, you can also opt for a minimum stay requirement of at least one month or whatever you decide.

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You don’t realize it until you drive from the highlands of Ecuador down to the coast, like I did this week, but Ecuador has a lot of good cattle land.

Ecuador has miles and miles of lush, green foothills leading up from the coast that get tons of rain. And anyone who has had to maintain a lawn knows with a lot of water grass grows fast! Just what you need if raising cattle.

And down here it’s year round, no winters!

So at a routine stop buying cheese I met the owner of the cattle farm I was at, and struck up a conversation.

And as usual, I’ve found agro-business people to be very open with information, unlike most secretive business-folks.

There’s just so much to go around I guess.

Afterall, in 3-plus years living in Ecuador and serving food to Ecuadorians and foreigners alike, I have yet to meet an Ecuadorian vegetarian.

Maybe one exists, but I doubt it, Ecuadorians love meat!

The good thing was this guy wasn’t trying to sell me something, so you have a feeling his numbers would be more accurate.

He started, “you buy the baby calfs for $150, and after about a year you can sell them weighing 1000 pounds at the going-Ecuador-rate of $2 per pound, but some cuts fetch $5-7 per pound.”

I continued, “Wow, thats a great return, $2000+ dollars for each after one year, how many can you fit per hectare (2.2 acres)?”

“In this rainy climate with fast growing grass, we can fit 2 or 3 per hectare.”

I followed, “How big is your farm?”

He said, “it’s a small farm, of about 25 hectares.”

“So, what are your biggest costs?” I asked.

“Well, the help of course, the water comes from an on-site stream, the grass grows on its own. But we have just 2 full-time farm hands, the rest of the workers are just temp help we hire for special tasks and pay by the day ($15 a day).”

“So, what does good cattle land around here go for?” I continued.

“My friend just bought a small 4 hectare lot for $20,000 USD.” He stated.

Not wanting to get too nosy, I concluded, “so is this your primary source of income or day job?”

“No,” he said, “I’m a lawyer in Quito, But I come here on the weekends.”

There you have it, a brief but intriging look at the cattle biz in Ecuador.

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Next up after tractoring the land came digging out the on-site resevoir which had been overgrown by weeds.

The resevoir is fed by a “seikia” or a shared irrigation system common in Ecuador where rivers are split off into canal-like things to farm certain areas.

My lot has rights to part of the “seikia”.

I had to hire an excavator truck to come and dig the resevoir out.

This guy charged $30 an hour. And he was finished in 4 hrs.

Total cost $120.

After that, next came the organic fertilizer of hen droppings and rice shells.

Two truck loads for my hectare (2.2 acres), each truck load had 9 cubic meters of material. Total heavy equipment rental prices for both loads to about $480. When you buy fertilizer in Ecuador, be sure it doesnt have too much wood mulch in it, and that it is HEN droppings (gallina) as chicken (pollo) droppings are not as good a quality.

After getting the fertilizer I had to pay 3 guys a total of $100 to spread it around, it took them about a day and a half.

See pic below.

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