Looking to set up a company in Ecuador? Sometimes it can be hard to find quality information. Most of the time, the information is incomplete or incomprehensible, and it most certainly will be in Spanish.
Company Formation Ecuador: Get to know the main cities in Ecuador while you decide to open a business in this country.
Whilst there are some challenges to company incorporation in Ecuador, these can easily be navigated by using local partners with experience doing business in Ecuador.
Corporate law in Ecuador is relatively simple compared to some other countries in the region, and so with due diligence and proper strategic thinking, it is possible for companies from many types of commercial sectors to succeed!
With that in mind, we have prepared a legal summary of
everything you need to know when incorporating a company in
Ecuador, and crucially, in English! Before detailing the key steps
of company formation though, let's give you a quick overview of
what's on the table. Ecuador, from an economic perspective. The
nation has performed admirably in recent years and is a strong
place to launch your business from!
Ecuador ranks as the eighth largest economy among Latin American
countries, boasting a gross domestic product (GDP) valued at $106
million in 2021 (all figures denominated in USD).
Notably, it is also a leading destination for foreign direct investment (FDI) in the region, having received inflows totaling over $630 million during the year. However, this amount marks a significant decline compared to 2020, which recorded FDI inflows of $1 billion!
How to Set Up a Company in Ecuador: Key Details
Below, you will find useful information about business formation in Ecuador.
- In Ecuador, 100% foreign ownership is allowed, so you do not need an Ecuadorian 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$800.
- All legal entities in Ecuador require a fiscal address.
- The currency in Ecuador is US$ Dollars.
6 Steps to Set Up / Form a Company in Ecuador. Incorporate a company in Ecuador
Company Formation Process
When you form a company in Ecuador, you should know that you can establish both limited liability and unlimited liability companies either online or by following the normal "manual" process. We recommend using the online process because it is a lot easier and faster, and it transfers the workload 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.
Learn about the types of legal structures to set up / form a company in Ecuador. Incorporate company in Ecuador
The legal representative, usually an attorney will start the setup process. During this online process, the legal representative will reserve the company name and will fill out documentation with all the required information about 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.
Afterward, the notary will send the deeds, documents, and all the information to the Mercantile Registry as a last step to set up a company in Ecuador, which 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).
The 4 steps to form a company in Ecuador?
At this point, the company is legally incorporated. However, you must meet some other obligations:
- Step 1: Open a corporate bank account and deposit the company's minimum capital.
- Step 2: Create an account with the 'Superintendencia de Compañías'.
- Step 3: Register the company with the Social Security Agency (IESS).
- Step 4: Pay the municipal patent and get the license of economic activities.
Do You Want to Form a Company in Ecuador?
If you have any questions or inquiries about how to set up 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 now. 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.
Originally published 13 June 2018 | Updated on: 31 July 2023
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
