For foreign investors interested in entering the Ecuadorian market, a popular option in recent years has been to form an SAS corporation in Ecuador.
A simplified stock corporation (SAS) — which is sometimes also referred to as a simplified shares company — is an entirely private entity that involves limited liabilities for shareholders, among a number of benefits described in more detail below.
It has only been possible to establish an SAS corporation in Ecuador since the country passed its Law of Entrepreneurship and Innovation in February 2020. That law saw the country establish a National Council for Entrepreneurship and Innovation, as well as commit to further promote entrepreneurship education and culture.
Ecuador has witnessed significant growth since the turn of the century, with gross domestic product increasing more than five-fold between 2000 and 2020, when it was registered at $98.8 billion, making it Latin America’s seventh-largest economy.
Ecuador is bordered by two of the biggest investment destinations in the region, in Colombia and Peru, and along with those two and Bolivia is a member of the Andean Community of Nations — an economic integration initiative that in August established a free movement statute, and more recently launched a centralized trademark database as part of its integration efforts.
Ecuador elected business-friendly President Guillermo Lasso earlier this year, who has gone about implementing a range of policies intended to promote the private sector and commerce.
That promises to bolster the already notable opportunities on offer to foreign investors, who may find that an SAS corporation in Ecuador is the most attractive type of entity to establish.
Ecuador’s key exports include agricultural goods, such as bananas, fruits, plants, and timber. The country also produces significant quantities of petroleum oil, with production growing steadily in recent years to at least 500,000 barrels per day since 2014. Ecuador’s most significant trade partners include Chile, China, Panama, Peru, and the United States.
On top of that, capital city Quito has been recognized for being a software development hub, while principal port Guayaquil handled saw the seventh-highest throughput of containers in Latin America and the Caribbean in 2018.
If you are interested in launching in this fast-growing market, read on to learn more about an SAS corporation in Ecuador. Or contact us now to find out more about how we can support your business.
What is an SAS corporation in Ecuador?
An SAS corporation in Ecuador is a legal entity whose shareholders can only be held liable for their own capital contributions to the entity — unless that limitation is waived. An SAS corporation by its nature is a private entity that cannot be floated on the stock exchange.
Another key benefit of this type of entity, beyond limited liability, is the fact that an SAS corporation in Ecuador can be established with no minimum capital. It also only needs a single shareholder.
It is important to note that an SAS in Ecuador cannot engage in commercial activities that fall outside of its stated line of business, and cannot be involved in certain activities — such as insurance or financial services — that are handled with special conditions set out by Ecuadorian corporate law.
Establishing an SAS corporation in Ecuador entails minimal administrative costs because it is formed through private acts and documents, meaning that notarial services are not needed.
Note that if you already have another kind of entity established in the country, it may be possible to transform your current structure into an SAS — something a corporate lawyer in Ecuador will be able to advise you on.
Choose the right corporate lawyer in Ecuador
If you are planning to form an SAS corporation in Ecuador — or do any kind of business in the country — you will need to make sure that you secure the services of a reliable local corporate lawyer.
Your lawyer will not only be able to guide you through every step of the process for setting up an SAS corporation in Ecuador, but will also be able to provide ongoing advice on various aspects of local legislation, guaranteeing your compliance in the process.
You will also want to make sure that your lawyer in Ecuador has a track record of assisting investors in the country, and will be able to anticipate obstacles and pitfalls that you might encounter, and effectively represent you in front of local authorities.
That will include the protection of your intellectual property, in order to guarantee your competitiveness in the market and prevent imitation from competitors.
Biz Latin Hub can help you to establish an SAS corporation in Ecuador
At Biz Latin Hub, we have the personnel and expertise to help you establish an SAS corporation in Ecuador, as well as to support you in ongoing operations. We offer a comprehensive portfolio of back-office services, including company formation, accounting & taxation, legal services, and visa processing, meaning that we can provide tailored packages of integrated services to suit every need.
We also operate in 16 other markets around Latin America and the Caribbean and specialize in multi-jurisdiction market entry.
Contact us today to find out more about how we can support you doing business in Ecuador.
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The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.