How to Setup Company in Ecuador: A Step By Step Process With a Guide You Need to Follow
Starting up a business is a complicated process, especially when in a country not your own. Barriers of different kinds arise and these normally include challenges in terms of geography, policy, or language. The Republic of Ecuador, as an example, is a rising country with a great potential in entrepreneurial ventures. It is, however, quite challenging to setup company in Ecuador because procedures and policies are usually in their official language of Spanish.
To give you a brief background, we have prepared a quick guide for you to utilize should you find yourself in the venture of founding a corporation in the country of Ecuador.
The country doesn’t fully require a business to be incorporated with a national Ecuadorian. To setup company in Ecuador, it is completely legal to be a full foreigner, as long as you have a fiscal address, and the minimum number of shareholders is 2.
You have to remember, though, that should you be a foreigner, you need to have a valid visa in order to represent your company. Your company can be categorized into two types: a Limited Liability Company or LLC, and an Unlimited Liability Company, ULC. The LLC structure involves the shareholders only to a certain extent of liability – debts and losses will be considered as the corporation’s, and not theirs. ULC, on the other hand, gives all responsibilities for liability to the owner, demanded by its sole proprietorship. All debts and losses, in cases of misfortune, are of the owner’s.
A Limited Liability Company is required to have a USD$400 capital, while those which are under Unlimited Liability are required to present USD$800. As a legal entity, you are mandated to have an internal system which has the administrative positions of the President, the Chairman, or the CEO, together with a General Manager.
Usually with a corporate lawyer, the shareholders of the business will have a legal representative in the whole process to setup company in Ecuador. With options to choose between online and offline (or manual) processing, the representative, or the lawyer shall make arrangements for the reservation of the company name. All documentations will have to be gathered by the representative as well.
In documentations, defining the company’s address, the actual shareholders, and the members of the organization (such as the President, the Manager, and the like), is mandatory. A company constitution, together with its established bylaws, must also be given upon documentation, because these are considered as the founding grounds and the vision of the corporation.
Upon submission, the public notary reviews and approves of the application. To fully complete the procedures to setup company in Ecuador, the members of the internal system such as the President and the shareholders must sign the processed documents. These processed documents will then be forwarded by the notary to the Mercantile Registry who gives the final approval towards the incorporation of a business. The business will be then given its Tax Identification Number afterwards.
Receiving your corporation’s tax identification number is the final step to setup company in Ecuador. Other further requirements include depositing the company’s minimum capital to a local corporate bank, obliging with the patent payment for legalization of economic activities, and having registration under the Ecuadorian social security agency.
Setup Company in Ecuador
For a smooth flowing process in the establishment of an Ecuadorian corporation, the guide above provides helpful insights. Taking note of the steps and strictly following the rules and the laws of another nation when starting a business is a must for a company to thrive and succeed better.