Oil Crisis in Ecuador

My attorney at Ecuador Visas, Sara Chaca,, has advised me that the low price of oil now affects the fees for Residency Visa stamps for adults and minor children. Her message to me follows:

"As is present in many other countries at this time (including the US and Canada), there is currently in Ecuador a shortfall of funds for the Government budget (i.e. Ecuador is currently selling its oil at a LOSS at this time), and so the Government of Ecuador has effective for 2016 RAISED the Government Fee for the Residency Visa stamp to $550 per Adult person and to $250 per Minor Child (from the previously indicated 2015 level of $350 per Adult person and $0 per Minor Child), and so naturally as that additional Government Fee cost requirement is of course not in my control or knowledge until the Government decides to raise it (which they did in fact just raise the Government fee for this new year of 2016 for all new Residency Visa stamps to be issued to all such persons), please note that the TOTAL All-Inclusive Fee for each Residency Visa will naturally need to be $200 additional per Adult person and $250 additional per Minor Child receiving a Residency Visa stamp (there is however NO ADDITIONAL Government Fee being charged by Ecuador for your Cedula National ID Card itself)."

And the sludge they want to ship from Canada in the not yet constructed Keystone pipeline is selling at about $9/barrel.  As usual, the price of oil will be blamed for all kinds of increases, but those who use the cheaper products will not be lowering prices.  Gonna get bad.

Thank you, Dorothy, for sharing the information about the increases in residency-visa fees.

In order to share this significant piece of news beyond this obscure "oil" thread, I have created a new thread on the Ecuador forum titled Ecuador Raises Residency-Visa Fee By $200.  The link is below....

https://www.expat.com/forum/viewtopic.p … 08#3073996

  -- cccmedia in Quito

Can someone tell me how the cost of oil would increase the prices for visas.  This makes no sense to me.  Is this like a tax because you are moving there? To make up for the price of oil?

It's very simple, Ecuadors biggest revenue is oil. So they are trying to balance the budget. Sacrafices are being made across the board. As the original article mentions, they aren't the first to initiate an increase in visa fees.

Puerto Rico is struggling due its debt problems . Would be find an inexpensive and low crime country that it's experiencing financial issues

And it just gets worse.  With the US crude going under $27, MSNBC Money is running a post saying Venezuela is about bankrupt, and if the trend continues or even levels off, Ecuador is not far behind.  World credit gonna take a big hit, as oil producers in West Asia be looking for loans as their reserves vanish.

sandrarduncan wrote:

Can someone tell me how the cost of oil would increase the prices for visas.  This makes no sense to me.  Is this like a tax because you are moving there? To make up for the price of oil?

Makes perfect sense to the governments of all South American countries. More taxes are their immediate answer to any problem. Visas and fees surrounding immigrations are, after all, just taxes. Take for example Brazil, where all visa fees have increased significantly, and the minimum investment required to obtain a VIPER Permanent Visa for Investors has more than tripled; going from R$150 thousand to R$500 thousand. Massive tax increases and new taxes since the beginning of the oil crisis have become a way of life. I wouldn't expect that to be much different in Ecuador and Venezuela.

There is one big cultural difference between South Americans and the rest of us, traditionally they are far less reluctant to complain about more taxes or oppressive taxes than we are. Once you understand their history, and the results (historical) of doing so you will understand why.

Cheers,
James
expat.com Experts Team

You have to remember it is a very passive aggressive society in Ecuador. They may not complain but they will find a way to get around it if possible........ that is why a number of years ago.. so many Ecuadorians set their homes up in trusts in Panama to evade any taxes for inheritance purposes....... Ecuador is now trying to stop it all together.

James wrote:

There is one big cultural difference between South Americans and the rest of us, traditionally they are far less reluctant to complain about more taxes or oppressive taxes than we are. Once you understand their history, and the results (historical) of doing so you will understand why.

Cheers,
James
expat.com Experts Team

should that be 'more' reluctant?

I found a pretty good article yesterday about the collapse of Ecuador's oil industry,

Ecuador’s Oil Industry Catastrophe… To Spread Around The World

....The Collapse Of Ecuador’s Drilling Rig Industry

While the drilling rig count in the U.S. and world has fallen considerably over the past 18 months, nothing can compare to the collapse that has taken place in Ecuador.  When oil was trading over $100 in August 2014, Ecuador had 27 drilling rigs working in the country.   Today… they have one.

Thus, the low price of oil has totally gutted Ecuador’s drilling rig industry…. a 96% collapse in just 18 months.  Again, the reason for the huge decline in Ecuador’s drilling rig industry has to do with simple economics–you can’t continue producing something as a loss, especially at a huge loss.

https://srsroccoreport.com/ecuadors-oil … the-world/