Sometimes it can be hard to find quality information when one is interested in setting up a company/corporation in Ecuador. Most of the time, the information is incomplete or incomprehensible, and it most certainly will be in Spanish. With that in mind, we have prepared a legal summary of everything you need to know when incorporating a company in Ecuador, and in English!
Concerns When Setting Up a Company/Corporation in Ecuador?
- In Ecuador, 100% foreign ownership is allowed, so you do not need aEcuadorianan partner.
- The minimum number of shareholders is two (2) and they can be natural persons, legal entities or both.
- All legal entities in Ecuador need a President or Chairman and a General Manager or CEO. They have to be Ecuadorian or a foreigner with a valid visa.
- The President and the CEO can be the legal representatives, individually or combined.
- Limited liability and unlimited liability companies are the most common types of entities in Ecuador.
- Minimum capital: Limited liability USD$400, unlimited liability USD$800.
- All legal entites in Ecuador require a fiscal address.
- The currency in Ecuador is US$ Dollars.
What is the Process to Form a Company in Ecuador?
When forming a company in Ecuador, both limited liability and unlimited liability companies can be done either online or following the normal “manual” process. We recommend the online process because it is a lot easier, faster and the workload is transferred to the authorities.
Steps to Set-Up a Company in Ecuador
The shareholders will have to grant a power of attorney to their legal representative, granting him/her permission to set up a company in Ecuador on their behalf.
The legal representative, usually an attorney will start the setting up process. During this online process, the legal representative will reserve the company name and will fill out documentation with all the required information of the company; fiscal/legal address, president, general manager, and the shareholders, including their share in the company. This application will include the bylaws of the company, the corporate purpose and additional activities that the company will perform.
Once the application is submitted, the public notary will review and approve it. Then, the President, General Manager and the shareholders will have to sign the deed and the corresponding documents. Afterwards, the notary will send the deeds, documents and all the information to the Mercantile Registry, who will review, and if approved, will inscribe the company. At this stage of the process, the tax authority will grant the company its tax identification number (RUC).
At this point, the company is legally incorporated. Nevertheless, there are some other obligations that need to be met:
- Open a corporate bank account and deposit the company’s minimum capital.
- Create an account with the ‘Superintendencia de Compañías’.
- Register the company in the Social Security agency (IESS).
- Pay the municipal patent and get the licence of economic activities.
Do You Want to Form a Company in Ecuador?
If you have any questions or enquiries about how to form a company in Ecuador, our local Ecuadorian business experts have created a company formation presentation. We hope it helps! If you have any more questions about how to incorporate your company in Ecuador, please do not hesitate to contact us here. Our Biz Latin Hub team in Ecuador includes local and expat professionals who have the knowledge and expertise to support you throughout the process.
View our slideshow and learn how to form a company in ecuador.