Since 2003, Healy Consultants Group 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.

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.