NESsT Legal Series Nonprofit Enterprise and Self-sustainability Team (NESsT)
Ecuador
English June 2009
The Legal and Regulatory Framework for CSO Self-financing in Ecuador Written by Paola Estupiñán and Nicole Etchart This guide examines the legal and regulatory framework governing the selffinancing activities of civil society organizations (CSOs) in Peru and provides an assessment of the relevant laws and their practical effects in order to identify areas where the law might be created, overruled or reformed. Chapter 1 explains the concepts used and defines CSO self-financing, explains the regulatory environment as it relates to self-financing, and details the methodology NESsT used in researching and assessing the current legal framework in Ecuador. Chapter 2 describes the typology first developed by the International Center for Not-for-Profit Law (ICNL) to examine the legal treatment of CSO economic and commercial activities in different countries around the world. Chapter 3 describes the current regulatory framework in detail and its application in Ecuador. It also shows that, although the use of CSO self-financing is not expressly prohibited in Ecuador, the tax structure can vary; that is to say, that CSOs can have or lose exemption from income tax depending on whether or not they are fulfilling the social mission of the institution. This chapter also explains the procedures for CSOs to follow. Finally, Chapter 4 discusses the Ecuadorian legal framework for CSOs carrying out commercial activities, including an analysis of two case studies and makes recommendations for its updating and/or improvement. NESsT promotes the social, political, economic and religious rights of all people and does not discriminate on the basis of gender, race, age, national origin, mental or physical disability, sexual orientation and political or religious opinion or affiliation. Copyright © 2009 NESsT. All rights reserved. Do not cite, copy, distribute or duplicate without prior written permission from NESsT.
NESsT works to solve critical social problems in emerging market countries by developing and supporting social enterprises that strengthen civil society organizations' financial sustainability and maximize their social impact. This publication contains information prepared by sources outside NESsT and opinions based on that information. NESsT strives to provide accurate information and well-founded opinions, but does not represent that the information and opinions in this publication are error-free. The laws and regulations cited herein may change. This publication is for informational purposes, and NESsT is not engaged in providing legal advice. As legal advice must be tailored to the specific circumstances of each situation, the information and opinions provided herein should not be used as a substitute for the advice of competent counsel. For more information on NESsT, its publications and services, please contact: NESsT, José Arrieta 89, Providencia Santiago, Chile Tel: +(56 2) 222-5190. nesst@nesst.org www.nesst.org