Company registration in Ecuador

Ecuador's economy is the eighth largest in Latin America. The South American country is also rich in oil, agriculture, and trade. A foreigner can open a business in Quito or any other city in Ecuador, choosing almost any industrial sector. The exception is the strategic industries, where special rules regulate investor participation. Buying a business in Ecuador can be profitable due to the ability to partner with other jurisdictions without restrictions.

Advantages of registering a company

• possibility to open a company in Ecuador with 100% foreign participation;
• a low minimum amount of share capital - from $400;
• developed trade infrastructure;
• absence of currency control;
• the ability to conduct meetings of shareholders online;
• stable exchange rate and free circulation of the U.S. dollar.

Main forms of legal presence and doing business

• collective company ;
• limited liability partnership;
• limited liability company ;
• corporations;
• mixed capital company.

Company registration procedure in Ecuador

• Reserve a unique company name in the Superintendency of Companies (SUPERCIAS);
• Register the company in Ecuador in the Commercial Registry (Registro Mercantil);
• Apply for a tax identification number (RUC) with the Ecuadorian tax authorities;
• Register employees with the Ministry of Labor;
• Open a bank account;
• Submit the company data to the tax office and social security system;
• Obtain the necessary licenses and permits to start operations.

Legislation and regulatory environment

Ecuador has a civil law system inherited from continental Europe, particularly Spain, and France.

The Company Law establishes the organizational and legal forms of business. It defines the number of founders and administration of companies, the minimum size, and the share of capital payment terms. Strategic industries must be run by state or state-owned companies. However, each sector's laws permit private investment and operations, provided that the net benefits to the state are not less than those of the investor.

Entrepreneurs who plan to open a business in Ecuador should familiarize themselves with the Commercial Code, which defines the list of rights and obligations of merchants.

SUPERCIAS supervises companies, and there is also a market surveillance authority.

Tax system

Companies registered in Ecuador and permanent establishments of foreign companies are considered tax residents of the country. The introductory rates of payments to the budget, which are levied on companies:

• income tax - 22% - 28% (depending on corporate structure and compliance with disclosure requirements);
• PIT- 37%;
• VAT - 0% or 12% (depending on the taxable base);
• capital gains tax - 10%;
• capital outflow tax - 4%;
• dividend tax - 0% - 37% (depending on the investor's residency and fulfillment of other conditions).

Also, companies in Ecuador pay municipal taxes.

Opening a business in Ecuador: how Prifinance lawyers can assist

To get the most out of registering a company in Ecuador, it is necessary to study the local legislation, the requirements for various organizational-legal forms of enterprises, and the peculiarities of taxation. Then, the company's lawyers will tell you about the possibilities of doing business in this Latin American country. With our support, clients can quickly and profitably establish a business in Ecuador. Prifinance will help at the company's registration stage and throughout its existence. In addition, we will provide a legal address and assist with bookkeeping and business administration.