Take The First Step As You Form a Company in Ecuador
Ecuador is more than just a developing country. Its GDP is consistently progressing, from $26.1 billion in 1980 to $192.6 billion in 2017. This nation remains to be the leading exporter of bananas, but it’s also abundant in other goods like cacao, coffee, oil, and seafood. These reasons certainly appeal to anyone who wants to form a company in Ecuador.
However, this process is easier said than done. It’s such a grueling and often convoluted process which requires preparation, guidance, and knowledge. In this article. we are going to discuss different types of visa needs and the types of companies you can create in Ecuador.
To form a company in Ecuador, you basically need to have a capital of at least US $400 and have an Ecuadorian visa. These two ingredients will enable you to do business freely in this Andean nation. Read further as we differentiate corporate structures and visas to let you determine which one’s right for your business.
Different Types of Visas in Ecuador
There are many kinds of visa in this Andean nation. We will cover the most relevant ones for you to decide more easily.
- Long Duration visa (Larga Duración)
This visa is for non-immigrants who are seeking employment in Ecuador.
- Indefinite Visa (Tiempo Indeterminado)
This is for settlers and long-term Ecuadorian investors.
- Visa 9 III (Visa Inversionista)
This is a special kind of visa suitable for foreign investors in Ecuador. It may also apply in business or individually owned companies. Generally, you are required to invest no less than US $25,000 with an increment of US $500 for every additional dependent. If you’re investing in agriculture and livestock, or you’re exporting merchandise, the minimum investment amounts to US $30,000.
- Temporary Residency Visa (Residencia Temporal)
Foreigners who wish to take part in the MERCOSUR organization may avail for this visa. MERCOSUR members include Argentina, Brazil, Paraguay, Uruguay, and Bolivia. Venezuela used to be a part of this organization, but their membership has been temporarily suspended recently.
- Permanent Residency Visa (Residencia Permanente)
If you decide to settle down permanently in Ecuador, then you can apply for this visa.
Form a Company in Ecuador – Corporate Structures
Once you have distinguished the appropriate visa, you must decide the right company structure for your business. We will go over these 5 company types for you to decide which one’s the most applicable to you.
Collective Company (Compañía en Nombre Colectivo)
You’ll encounter this corporate structure often when you form a company in Ecuador. It’s a basic company type which involves two or more members. Due to having a simple form, collective companies don’t require any subscription capital. This is because they are not under the control of an agency known as Superintendence of Companies.
Limited Partnership and Shareholder Company (Compañía en Comandita Simple y Dividida por Acciones)
This type of company structure is formed by various partners and investors. Similar to collective companies, this type does not require a minimum amount of capital because it’s not under the Superintendence of Companies’ administration.
Limited Liability Company (Compañía de Responsabilidad Limitada)
The limited liability company has a minimum of two and a maximum of 15 members.
Anonymous Company (Compañía Anónima)
Anonymous companies vary in size, with a minimum of two members. Similar to the collective structure, you’ll find many anonymous legal entities when you form a company in Ecuador. When partnering with these businesses, make sure that they are duly registered with Ecuadorian authorities. Check their legal and financial background as soon as possible.
Mixed Company (Compañía de Economía Mixta)
This type of company structure arises from public or private partnerships. In essence, they have elements from both worlds. As a result, mixed companies have varying tax regulations.
How Do I Start a Business in Ecuador?
When you form a company in Ecuador, expect it to be challenging and even stressful. We suggest that you consult a proxy company offering back-office services in Ecuador. This takes away all your hassles and enables you fully focus on the tasks on hand.
Biz Latin Hub has an office in Ecuador with a team of legal and accounting experts. They can offer you comprehensive services such as work visas, office space, legal support, accounting services in Ecuador and more. Such menial paperwork takes too much time and energy but they will take care of these for you.