Understand the Jurisdictions Setup Requirement Before Proceed Your Ecuador Company Incorporation Services
Ecuador, a country situated on the Northwestern coast of South America, is very well-known as one of the ideal locations for exportation in the region due to its strategic location – a location that gives access to nearby regional markets like Latin America, East Asia, as well as the west coast of the U.S. Ranked 118 among 190 economies in the ease of doing business by World Bank, Ecuador is indeed one of the preferred investment hotspots in the region. In fact, the advantages translate into business opportunities and attract many foreign investments into the country.
Business Types Available in Ecuador
There are a few different types of business entities available in Ecuador. Foreign investors can decide which type of business vehicle suits their business needs according to their business plan and investment goal.
a. Corporations (stock companies)
The “corporation” is so far the most flexible business structure in Ecuador under the law of Ecuador. Like many other jurisdictions, the Ecuadorian corporation speaks volumes of advantages if compared with other business structures. In summary, an Ecuadorian corporate
Can limit shareholders’ liability to the investment amount,
Do not restrict its shareholders to negotiate their stock holdings (they own negotiable shares).
b. Limited liability companies
As the name implies, this type of company is a kind of limited partnership that consists of partners with liabilities (they have limited liabilities up to their respective contribution amount). A minimum of two members is needed in the incorporation where the total number of members cannot exceed 15.
In Ecuador, a Branch is not a separated incorporated company but an extension of its parent company. Therefore, its parent company is liable to the Branch’s obligations. That said, the Ecuadorian law has stipulated that the Branch is liable to Ecuador Corporation Tax.
The Basic Requirements in Company Incorporation
While foreign investors can decide which type of company they want to incorporate according to their business goal, a majority of foreign investors favour the limited liability company. Here is a quick list of the basic requirements:
- Must have at least two directors,
- A minimum of two shareholders is needed (note: shareholders need not to be Ecuadorian residents),
- Share capital: minimum 400$
- 100% foreign ownership is allowed
- Must have a registered office in Ecuador
Steps for Company Incorporation in Ecuador
1. Decide on a business type, and start drafting a business plan.
2. Draft a document to grant power to an attorney to help you to set up a company in Ecuador.
3. Name your business and run a name check with the Superintendence of Companies. Proceed to reserve the proposed name after the name check – the validity of certificate of reservation is 30 days.
4. Find a notary public for document notarisation and a lawyer that can constitute and sign documents.
5. Make sure the minutes of incorporation is ready:
- the contract,
- the articles of incorporations,
- the company’s bylaws, and
- the formation of capital
6. In order to obtain the company’s number and to pay the annual registration levy, you must register with the Superintendence of Companies.
- Company’s address
- The name of the legal representative
- A copy of the company’s public deed of the constitution (must be certified)
7. Open a bank account.
8. The final step is to pay for the commercial certificate at the Municipality of Quito.
The company incorporation process can be completed in a four-week window.
Despite its country size, Ecuador is becoming one of the preferred investment hotspots due to its strategic location, trade routes, as well as the excellent trade agreements. If you are among the foreign investors looking forward to expanding your portfolio, Ecuador is a not-to-be-missed investment choice.