If you’re looking to expand your business abroad, Ecuador is often overlooked however it’s an interesting market full of opportunity for you and your company. It has business-friendly policies which make the process of starting a business easy such as the possibility to incorporate your company online and without the need for a lawyer. The legal framework in Ecuador is indeed evolving to make doing business in the country easier however it is still recommended to employ consult a local corporate law firm to ensure success during the process of establishing a company and doing business in Ecuador.
Despite the simplicity of some processes in Ecuador, having a corporate lawyer by your side can drastically reduce the risks involved when doing business in the country and will give you peace of mind while you focus on building your business. Here are some examples of how the support of a local corporate lawyer can give you the advantage you need.
Reducing Business Risk With a Corporate Lawyer in Ecuador
There are various regulations and obligations that a company must meet when operating in Ecuador that are designed to ensure good practice. These require a fairly specialized knowledge and, if breached, the company may face fines, or even the impediment to continue exercising economic activity. Therefore, it is recommended to continuously monitoring of the management of the company.
The guidance of a corporate lawyer from the set up of the company is key to ensuring a successful beginning to your economic activities. In Ecuador, companies can only have one corporate purpose (unique) and are allowed up to 5 additional activities in the online constitution process. This limitation requires you to be very careful when choosing the corporate purpose, because an error in the assignment of this can have consequences as serious as the company not being able to perform the activities you really want. The advice of a corporate lawyer will ensure the selection of an appropriate purpose for your company and economic activity and will allow you to do business in Ecuador without limitations.
Also, Ecuador has very protective labor legislation for workers’ rights and, consequently, there exists many regulations that must be followed. Again, the advice of a corporate lawyer will reduce the likelihood of encountering problems with your company. The affiliation of workers to social security from the first day of work, the registration of labor contracts at the Ministry of Labor, the content of the contracts, or the obligation to keep records of physical contracts in the offices, are only a few of the obligations to fulfil and your corporate lawyer will facilitate your management taking care of the legal necessities.
The termination of employment relationships in Ecuador is expensive and complicated so to avoid future labor problems, it is better to have the advice of your corporate lawyer in the drafting of employment contracts to reduce possible contingencies with workers.
Moreover, in every country, compliance with tax obligations is of vital importance and Ecuador is no the exception. Tax planning and accounting advice will be invaluable in reducing the risk of tax contingencies and the high costs they entail, and in turn, will allow rapid growth.
Legal Advice When Conducting Business in Ecuador
In Ecuador, many of the problems and commercial litigation are due to signing contracts without the necessary advice. The courts and arbitration centres are full of cases between suppliers and customers for contractual breaches arising exclusively from contracts lacking clarity, impossible or illegal conditions, and in short, problems caused by signing contracts without proper advice. The guidance of a corporate lawyer in all your contracts and business relationships will help you reduce future business problems and maintain excellent relationships with your suppliers and your customers.
Corporate Lawyers: Key to Success When Doing Business in Ecuador
To start doing business in Ecuador, companies must either open a new company or domicile a branch in Ecuador. In either scenario, you need a natural or legal person who has residency in the country to be your legal representative. In this sense, a corporate lawyer is key, first because they are the ones who will do the incorporation or domiciliation process and secondly because commonly, they represent their company legally, they provide the fiscal domicile required by law and they fulfil all the obligations of your company, at least until the growth of your company allows you to open your own offices in the country and take your business to the next level.
For More Information on Corporate Lawyers in Ecuador
If you want more information on how to set up a company in Ecuador or any other matters relating to doing business in the country, the Biz Latin Hub group has a team of experienced and bilingual lawyers who can assist you with your queries. Send an email to our director Mr. Craig Dempsey at [email protected] to find out how we can help ensure your Latin American business venture is a success.
Watch our video below to find out more about the legal services we offer in Latin America!