Ecuador company registration

DOING BUSINESS IN ECUADOR IN 2023

Since 2003, Healy Consultants Group PLC has assisted our Clients with starting their company in Ecuador. Our services include i) Ecuador business registration ii) assistance to license the company iii) Ecuador corporate bank account opening services iv) employee recruitment v) visa strategies and vi) office rental solutions.

Summary	Limited liability company	Corporation	Agribusiness company	Tourism company	Branch office
Also known as	Compañía de responsabilidad limitada	Sociedad Anonima	Empresa de agronegocios	Compañía de turismo	Sucursal
Best use of company?	All products and services	Capital raising from public	Agricuture and fishing activites	Nature tourism and related activities	Specific projects
How soon can you invoice Clients\sign sales contracts?	12 weeks	12 weeks	12 weeks	14 weeks	14 weeks
How soon can you hire staff?	12 weeks	12 weeks	12 weeks	14 weeks	14 weeks
How soon can you sign a lease agreement?	12 weeks	12 weeks	12 weeks	14 weeks	14 weeks
How long to supply corporate bank account numbers?	4 weeks	4 weeks	4 weeks	4 weeks	4 weeks
How long to supply company registration \ tax numbers?	12 weeks	12 weeks	12 weeks	14 weeks	14 weeks
Corporate tax rate on annual net profits?	25%	25%	0% for 1^st 10 yrs for new investments		25%
Limited liability entity?	Yes	Yes	Yes	Yes	No
Government grants/incentives available?	Yes	Yes	Yes	Yes	Yes
Government approval required for foreign owners?	No	No	No	No	No
Resident director/partner/manager/ legal representative required?	Yes	Yes	Yes	Yes	Yes
Minimum paid up share capital?	US$400	US$800	US$400	US$400	US$2,000
Can bid for Government contracts?	Yes	Yes	Yes	Yes	Yes
Corporate bank account location?	Citibank	Banco del Pichincha	Banco del Pacífico	Banco de Guayaquil	Produbanco
Can secure trade finance?	Yes	Yes	Yes	Yes	Yes
VAT payable on sales to local customers?	12%	12%	0%	12%	12%
Average total business set up engagement costs?	US$13,950	US$15,200	Request a proposal	Request a proposal	US$16,200
Average total engagement period?	4 months	4 months	4 months	5 months	5 months

Ecuador company registration summary

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Advantages and disadvantages
Advantages of Ecuador company registration
1. Registering in Ecuador can be relatively easy because:
  - Ecuador companies can be registered with 1 director and 3 shareholders, who can be of any nationality. As a result, companies can be 100% foreign owned;
  - A low minimum share capital of US$400 is required under the law. Furthermore, our Client will not be required to travel to Ecuador to complete the company registration process;
  - In 2000, US dollar was adopted as the national currency of Ecuador. This move has helped stabilize the country’s economy. As a result, businesses will benefit from stable exchange rates and low inflation rates.
2. Record oil revenues in Ecuador are sparking new infrastructure projects in the country. Registering a company allows our Clients to take advantage of related new business opportunities in Ecuador;
3. 100% foreign ownership is permitted when setting up a company in Ecuador;
4. Healy Consultants can open a corporate bank account to support the Ecuador business. Our Ecuador business registration agents are indeed used at working with internationally-recognized banks such as HSBC, Standard Chartered, and Citibank;
5. To incorporate a LLC in Ecuador, two directors and two shareholders are needed. The minimum share capital is US$800 and there is no need to travel to Ecuador;
6. Ecuador has four Special Economic Development Zones (ZEDEs) that provide a range of benefits to companies incorporating in any of these zones. The benefits include:
  - an exemption from corporate taxes for first 20 years;
  - provision of good infrastructural facilities;
  - an exemption from tariffs on imported goods entering in these zones.
Disadvantages of Ecuador company registration
1. An Ecuadorean company is subject to a corporate tax rate of 25%. Capital gains are taxed at 10%;
2. Ecuador subsidiary company registration is time-consuming due to bureaucracy and unclear incorporation procedures. According to the World Bank’s Doing Business 2015 Survey, Ecuador ranks poorly at 114^th in the world for its ease in which to do business in. The survey measures factors including business startup procedures, time, cost, and minimum capital required for company setup;
3. Ecuador suffers from a poor international perception. As evidence of this, Ecuador is negatively ranked as the world’s 110^th least corrupt country in the 2014 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians. Ecuador is ranked very poorly as the world’s 156^th freest economy, and scores at 30% in terms of investment freedom and capital flows in the Heritage Foundation’s 2015 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment, and labor markets;
4. An annual tax return and financial statement must be submitted to the Superintendency of Companies following business registration in Ecuador;
5. Ecuador has been poorly ranked at the 97^th position ( out of 137 countries) in the Global Competitiveness Index 2017-2018 edition. This is largely due to the nation’s i) political instability, ii) high tax rates and tax regulation and iii) an underdeveloped financial market.
Best uses for an Ecuador company
1. Our Clients may choose to setup manufacturing operations in Ecuador because:
  - Companies investing in industries in the mining, forestry and oil & gas sector will be eligible for 100% corporate tax exemption for up to 12 years;
  - Companies incorporated in certain prioritized sectors will benefit from corporate tax exemption for 5 years. To receive these benefits, the investment projects must be undertaken outside the areas of Quito and Guayaquil;
  - Companies incorporated in the free zones will benefit from 100% exemption from taxes including VAT, import duties, and provincial & municipal taxes. Further, such companies are allowed to sell their products to local exporters in Ecuador;
  - SMEs investing in programs for improving business productivity including i) technical training for workers ii) technological innovation iii) market analysis and iv) packing design are allowed to deduct an additional 100% on these expenses for 5 years;
  - MERCOSUR membership (union of Latin American countries) will allow Ecuadorian companies i) tariff free exports into other Latin America countries ii) access to a regional market of 300 million people and iii) absence of withholding taxes on foreign payments.

Tell us what you need - we’ll send you a customised proposal in 5 hours!

To help us engineer the optimum Ecuador corporate structure, please complete the 3-minute questionnaire below; then press the submit button below.

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Within 5 hours, one of our senior staff will ring or email you:

Company purpose?
Will the LLC be a trading company or a holding company?
Will the entity be a subsidiary of a foreign company?
The LLC will be tax resident? Having local customers and local staff and local suppliers?
The entity will receive investment income or professional services fees or sales from trading with multi-national customers?
Is double taxation treaty access important?
Do you need our help to legally minimize your international tax obligations?
Do you need our help to increase e-commerce sales (click link)?
Company structure?
Will the shareholders be individuals or corporate?

In what country do you require a corporate bank account? Refer to this web page (click link) for ideas

Do you need multi-currency corporate visa debit cards?

Do you need a resident director?

Nationality of shareholders and directors?
Expected annual sales and net profits?
Does the entity need a special regulatory license or import or export license?
Additional comments?
Tell us about your existing business?
Name of your existing company?
Your business web site address?
What products and services does your company supply?
How many years are you operating this business?
Is your Firm regulated by a Government agency?
In what country are the majority of your customers?

In what country are the majority of your suppliers?
Tell us about you?
Your name?
Your email address?
What country are you based in?

Specifically, what deliverables (click link) do you need?
What is your US$ budget for the services you need?
What does quality customer service mean to you?
How do we contact you?
For now, do you prefer Healy Consultants PLC staff to phone you, or just email reply you with some corporate solutions?
If a phone call, on what number can our senior Consultant call you?
If an email, what email address can our Consultant email you at?
What alternative email address can our Consultant email you at?
What is your preferred date and time for a phone call?
In what language do you prefer we communicate with you?
What matters would you like to discuss during the call; the agenda?

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