Great resources, an educated workforce, multiple opportunities and a quite frankly beautiful country; Ecuador has the potential to become one of the most important Latin American economies to invest in. Qualities like these are motivating a lot of small, medium and large companies to turn their attention to Ecuador in order to establish commercial operations, often in the form of a foreign branch office. From worldwide corporations to new software startups; all of them have experienced the amazing benefits that doing business in Ecuador provides.
The Ecuadorian government understands the importance of opening up to the world and attracting foreign investment (FDI), and as such, has made extensive efforts to change the landscape of the Ecuadorian business world. Ecuador’s trade agreement with the European Union (EU), the re-adoption of bilateral investment treaties with several countries and the expedition of the production promotion law that includes vast benefits to new investments in Ecuador are clear examples of Ecuadorian intentions to bring investment and economic growth to its market; now is the best time to make investments into Ecuadorian business. Registering a Branch Office in Ecuador is one of the best ways to take advantage of the benefits that this great country offers.
Continue reading to learn about the requirements and process in opening a foreign branch office in Ecuador.
Requirements to Open a Foreign Branch Office in Ecuador
The process of registering a branch office in Ecuador can be slightly complex and long due to a great number of requirements. Therefore, having a local business service provider helping you to navigate the difficult waters of Ecuadorian bureaucracy will be vital to complete the task, as well as assisting to save vital time and money.
The following are the required documentation/information needed to establish a foreign branch office in Ecuador:
- Verification of the parent company’s incorporation deeds/bylaws and current bylaws (which should include permission to establish branch offices in foreign countries).
- Verification of the ‘Legal Existence Certificate’ granted by the corresponding government authority.
- Verification of the ‘Board of Directors Resolution’ authorizing the establishment of a branch office in Ecuador, assigning a minimum initial capital of at least USD$2,000 and appointing a company legal representative in Ecuador. Legal representation can be executed by a legal entity or a natural person. In the case of it being a legal entity, it must be an Ecuadorian company whose bylaws allow it to represent other companies. In the second case, the legal representative must be an Ecuadorian national or a foreigner with a resident visa in Ecuador.
- Verification of the Power of Attorney (POA) granted to whoever is appointed as the company legal representative of the Branch Office in Ecuador. This POA might contain limitations but needs to allow the representative to fulfil the branch obligations and answer to local authorities. The Law establishes that the branch must have a legal representative permanently established in Ecuador.
- Ecuadorian Consulate Certification that the foreign branch office is incorporated and authorized by the parent company’s domicile country and that the company is allowed to do business in Ecuador.
- Open a corporate bank account in Ecuador in the name of the parent company’s name and deposit at least USD$2,000.
All the documents described above must be legalized, translated into Spanish and apostilled.
Steps to Create/Register a Foreign Branch Office in Ecuador
Once all the documents are ready and the bank account is opened, the process is rather simple.
- Present an application to the Superintendency of Companies signed by a local lawyer and include verifications of the documents listed above.
- The Superintendency will approve the registration (Domiciliación) and collocate the Power of Attorney into a resolution.
- The resolution and the Power of Attorney must be registered in the Mercantile Registry.
- The Branch Office must then obtain a local tax ID number (‘RUC’) and the ‘patente’ in the corresponding municipality.
Want to Open a Foreign Branch Office in Ecuador?
This is one of the best moments to invest in Ecuador and the corporations of all sizes know it. Foreign investment is growing rapidly in Ecuador and the benefits and overall business conditions in Ecuador are getting better every day. If you are interested in opening a foreign branch office in Ecuador, please contact our bilingual Country Manager, Ernesto, at [email protected]. He and his team will support with the establishment of commercial operations in the region.
Once established, looking for a local partner that can provide corporate secretarial services in Ecuador will give you and your company an advantage, allowing you to focus on your business and its growth.
Interested in forming a company in Ecuador? Watch the video below to learn how we can support you.