When do you need a Legal Representative in Ecuador?

Appointing a legal representative in Ecuador is required if you are planning to establish a company in the country. That representative will be responsible for acting on your behalf and undertaking all regulatory procedures. 

Your legal representative will be the face of your organization in the local business community, so it pays to choose wisely.

What will a Representative do?

Ecuador’s labor legislation recognizes legal representatives as agents appointed by legally established companies. That means they are not considered workers and, therefore, they do not have the right to receive the same labor benefits as most employees in Ecuador.

However, a legal representative will still have to contribute to the National Social Security Institute — Ecuador’s compulsory public insurance. This contribution equates to 17.6% of the payee’s income tax.

Your legal representative will represent your organization before local authorities. They will fulfill all legal requirements, attend all appointments and respond to any demands on your behalf — a particularly useful service for anyone who doesn’t speak the local language.

Some of the most essential duties of a legal representative in Ecuador include:

• Signing contracts
• Hiring new staff
• Acting as a representative in company trials and lawsuits.
• Agreeing or conclude commercial agreements
• Signing any obligation authorized by the shareholders
• Acting as a representative in banking arrangements

When do you need a legal representative in Ecuador?

You will need a legal representative:

• At the point of company formation in Ecuador. This legal representative will serve until a permanent one is appointed by shareholders
• At any time that the shareholders decide to remove the incumbent legal representative, or accept their resignation
• When the incumbent legal representative’s statutory period expires

Choosing a legal representative

Any person of legal age and sufficient capacity to fulfill statutory obligations can be appointed as a legal representative in Ecuador. A company can also act as a legal representative.

In either case they will ideally:

• Have technical knowledge related to the administration of a company
• Understand the markets where they are operating — both the country and the sector
• Have a proven track record fulfilling legal compliance requirements

Engage with a trusted Legal Representative in Ecuador

At Biz Latin Hub, our team of accounting and legal specialists have broad experience supporting foreign companies and multinationals expand into Ecuador and the rest of Latin America. With our full suite of market entry and back-office services, we are equipped to help you navigate your business entry into Ecuador.

Get in touch with us today to discuss the assistance that you need.

Learn more about our team and expert authors.