Steps and Requirements to Create a Company in Ecuador

18 minutos de lectura

Do you have money and you don’t know what to spend it on? Do you want to undertake? Creating your own business will become a great investment in the future, who knows? Maybe you can become the next industry mogul and own a multi-million dollar hotel chain or own a very famous transnational.

Above all, in a country like Ecuador that has to offer you a diversity of business fields, whether you want to dedicate yourself to the tourist area, (with its beautiful beaches and the great Amazon, as well as being a cultural heritage of humanity).

To the scientific area (since it has a wide variety of fauna and flora that is still under study) or to the financial area (it has the most stable economy in Latin America).

Ecuador always a good option to establish your company!

But perhaps at this moment you are thinking «it is very complicated», «I don’t have time» or perhaps you do not know how to create a company or what are the requirements that you must meet, so here we will teach you how to carry out the Procedures to create a Company in Ecuador in a very simple, fast and efficient way.

Before starting, we strongly recommend that you seek the proper legal advice, since for this process the two essential figures when establishing a legal company are a lawyer and an accountant.

The first will help you with the due procedures that, although they are personalized, it never hurts to have someone to support you and help you with any irregularity that may arise in the process.

At this point, several people would have turned to a manager, but you must believe us, a manager will never be the same as a lawyer, the advice of a lawyer is worth every penny.

On the other hand, the accountant will help you with the cumbersome statistics, in addition to the fact that some of the documents that you will need must be certified by him. With that said, we can continue.

Requirements To Create A Company

First of all, you must consider your status in Ecuador.

If you are an Ecuadorian citizen, you are ready to undertake and you can skip this part.

On the other hand, if you are a foreigner, you should not worry, however, it involves an additional step, since, you must have a visa to settle in Ecuador and thus obtain a branch with offices, a brand, hire employees, obtain Partners, etc. .

But it is something very simple to solve, since the very opening of your business may be the reason to request an investor visa.

In this sense, you will have the following options, which will allow you to apply for this type of visa:

  1. Investment in Real Estate: You must be listed as the Owner of the Property and it must be registered in the Property Registry of the respective canton. Its amount must be equal to or greater than 80 unified basic salaries.
  2. The Sale of Shares or Participations in an Ecuadorian Company, whose amount must be equal to or greater than 70 unified basic salaries. These shares or participations must be duly registered with the Superintendency of Companies, Securities and Insurance.
  3. A Title, Policy or Certificate of Deposit with a minimum term of 730 days, issued by a credit institution that is recognized by the Superintendency of Banks or Superintendency of Popular and Solidarity Economy. Said amount must be equal to or greater than 70 unified basic salaries.
  4. Invest in your own business. Here you must have the Act, Certificate or Deed, duly legalized and where the Invested Capital is reflected, which must not be less than 70 unified basic salaries.

The investment may be carried out, by direct reimbursement or in parts. Having a maximum term to make the total investment effective. In this case, a deposit of three thousand dollars ($ 3,000) may be made, in the first instance, which constitutes the guarantee that the investment will be carried out.

This deposit will be made in the central bank of Ecuador and with it the investor visa can be granted, but under the condition that the entire investment is executed.

The term set for this will be 180 days, after the granting of the visa. Now, if you do not have this level of capital, to obtain the aforementioned visas, but you got in some way or another, a different visa to be in the country, you still have many opportunities to start your business in Ecuador.

In the first instance, you could establish or buy a limited company or a limited company, where the capital is a little lower, you should choose the one that best suits your wishes and needs.

  • To create an anonymous company, At least you must have a capital of $ 800, this type of company adapts to you, if you are looking for a company, whose number of partners is unlimited and with an «open capital» and also an unlimited number of shares that are they can be listed on the stock exchange.
  • To create a limited company, the minimum amount for the principal will be $ 400. This company model works if you are looking to create a family business or with close people. This can be made up of a minimum of 2 people up to a maximum of 15 people. It has “closed capital” and a limited number of shares that cannot be listed on the stock market.

Steps to create a company in Ecuador

Next, we will see the step by step to create a legal company in Ecuador, with one of the institutions that we have mentioned above:

  • 1st Step: Reserve your company name

This procedure is carried out in the superintendency of companies. You must check that the name you want to use is not being used and reserve it.

  • 2nd Step: Prepare the statutes of the company

The statutes of the company, is nothing more than the contract by which the company will be governed and it will be validated by a draft that your lawyer must sign.

  • 3rd Step: The capital integration and certification account

You must open a capital integration account, in the national bank of your preference, the requirements to open the account depend on each bank, but generally they are made up of:

  1. Minimum Capital, which will change depending on the type of company, Four Hundred Dollars ($ 400) for Limited Companies and Eight Hundred Dollars ($ 800) for Public Limited Companies.
  2. Partner Letter detailing the Participation of each Partner
  3. Copies of the Certificate and Voting Ballot of each Member

Next, you should make sure to request the certification of the capital integration account.

  • 4th Step: Take it to the notary

You must go to the corresponding notary’s office and present yourself before the notary public with the documents described above: The reservation of the name, the certificate of capital integration account and the minute signed by the respective lawyer attached to the statutes of the company.

  • 5th Step: Approval of the statutes of the company

Take the notarized documents to the superintendency of companies, for their subsequent review and approval, through a resolution.

  • Step 6: Make it public

The superintendency of companies will give you 4 copies of the resolution of approval of the company statute and an extract that must be published in a newspaper with national circulation.

  • Step 7: Obtain relevant permits

In the municipality corresponding to the location where you want to establish your business, you must pay the municipal license and request the certificate of compliance with obligations.

  • Step 8: Register the company

In a manila folder, where all the previously detailed documents are collected, they must be taken to the commercial registry of the canton where your company was incorporated to register the company.

  • Step 9: The general meeting of shareholders

At this meeting, the representatives of the company will be appointed, as well as the positions that have been defined and agreed.

  • Step 10: Obtain the qualifying documents

After obtaining the registration of the commercial register, you must take it to the superintendency of companies, there they will give you the documents to open the RUC of the Association.

  • Step 11: Register the appointment of the representative

In the same commercial register, the appointment of the manager of the company in charge must be registered, who will act as the representative of the same designated in the general meeting of the shareholder. This process must be completed within 30 days of your appointment.

  • Step 12: Obtain the RUC

RUC is the acronym for the Single Registry of Taxpayers, which is obtained from the SRI or Internal Revenue Service, to obtain it the following requirements are raised:

  1. The corresponding and duly completed form
  2. Original and copy of the Articles of Incorporation
  3. Original and copy of appointments
  4. Copies of identity card and voting ballot of the partners
  5. If applicable, a letter of authorization from the legal representative in favor of the person who will carry out the procedure
  • 13th: The Letter to the Bank

Finally, with the RUC or Unique Registry of Taxpayers, the superintendency of companies will give you a letter addressed to the bank where you opened the account, so that you can dispose of the deposited value.

How much does it cost to Create a Company?

It has previously been established that, although it is possible to establish your own company, it is a bit tedious, and depending on your scope it could be a bit expensive.

Taking into account that the minimum amount for the creation of a company is between $ 400 and $ 3,000.

Not counting the procedural expenses and the advice of the lawyer who will evaluate their fees depending on the amount of the capital of the company, so you could end up needing between $ 600 and $ 1,000 additional.

We could make a total estimate of between $ 2,000 and $ 5,000

What is a company?

Recapping, we could define a company or company as:

«A productive unit grouped and dedicated to developing an economic activity for profit»

It could also be defined as:

«A unit formed by a group of people, material and financial goods, with the aim of producing something or providing a service that meets a need and for which benefits are obtained»

Types of Companies:

One of the first questions that the entrepreneur must solve is what is the type of company that he wishes to configure, according to his needs and desires, among the different types of companies, according to their classification we can find:

According to their economic activity:

  • Primary sector: It is that sector that deals mainly in terms of agricultural activity.
  • Secondary sector: It is that sector that deals mainly in terms of industrial activity
  • Third sector: It is the sector that deals mainly with the provision of services

According to its Creation:

Individual Companies (autonomous): One partner

It is a natural person who regularly, personally, directly, on his own account and outside the scope of management and organization of another person, carries out an economic or professional activity for profit. You may or may not have employees in your charge.

Initial capital: none are required.

Responsibility: The Sole Partner is responsible for all of his assets. If the employer is married, the responsibility derived from his activity could reach his spouse, so to know the situation the economic regime that governs the union and the very nature of the assets must be taken into account

  • Limited Liability Entrepreneur: One Partner

It would be the natural person who, with limited liability under certain conditions, regularly, personally, directly, on his own account, carries out a lucrative economic or professional activity, with or without employed workers under his charge.

Initial capital: it is not required.

Responsibility: It allows self-employed professionals not to have to respond with their personal assets to the possible debts generated by their activity, for example, with their habitual residence. However, in practice this restriction is subject to several conditions that must be known.

  • Community of Assets: Minimum of Two Partners

It is the most appropriate formula when the ownership of an asset or right belongs jointly to several people and is part of a business activity carried out in common, for example, the rental of homes and premises.

The community of goods does not pay taxes on the income obtained, but rather these are attributed to the community members who pay them by personal income tax or corporation tax, mainly.

Initial capital: there is no legal minimum.

Responsibility: it is unlimited against third parties.

  • Civil Society: Minimum of two Partners

It is a contract by which two or more people pool capital in order to distribute the profits among themselves. Their taxation must be in Corporation Tax when they have a commercial objective, and when this is not the case, they are attributed to the regime to which each of their partners applies.

Initial capital: No legal minimum

Responsibility: Is unlimited

  • Collective Society: Minimum two Partners

Commercial company of a personal nature, in which all the partners, in their collective name and under a company name, undertake to participate in the proportion that they establish, of the same rights and obligations.

Initial capital: no legal minimum.

Responsibility: unlimited of all partners, who are jointly and severally liable to each other and subsidiary to the company for all their debts.

  • Simple Limited Partnership. Minimum two Partners

Commercial company of a personalist type. Its peculiarity is the existence of general partners who contribute capital and work and respond in a subsidiary, personal and several way to the corporate debts, and limited partners, who only contribute capital, limiting their liability to this contribution.

Initial capital: there is no legal minimum.

Responsibility: that of general partners is unlimited. Limited partners, limited.

  • Limited Liability Company: Minimum one Partner

Widely used by the small business owner. It is the most popular type of commercial company, because it avoids responding with personal assets. It divides its capital stock into shares, which are indivisible and accumulative. In this way, it is made up of the contributions of all the partners.

Initial capital: minimum $ 400

Responsibility: limited to contributed capital.

  • Limited Company of Successive Formation: Minimum one Partner

Also again, its objective is to lower the price of the initial formation of the company by not requiring any prior disbursement.

For the rest, this commercial company has an identical regime to the Limited Liability Company, except for certain obligations to guarantee the protection of third parties, which includes limits on the remuneration of partners and administrators or joint liability in the event of liquidation.

Initial capital: no legal minimum.

Responsibility: limited to contributed capital.

  • New Company Limited Company: Minimum of five Partners

Another variant of the Limited Company, designed for an agile start-up of small projects and totally telematics. However, since its creation in 2003 it has not attracted the entrepreneur as previously thought.

Initial capital: from $ 400 to $ 1,200.

Responsibility: limited to the capital contributed in the company.

  • Public Limited Company: Minimum one Partner

It is the commercial company of the most ambitious projects and is not very present in the territory of small companies. Its capital stock, divided into shares, is made up of the contributions of the partners. Its taxation is governed by Corporation Tax.

Initial capital: minimum $ 2,000.

Responsibility: limited to contributed capital.

  • Limited Partnership by Shares: Minimum of two Partners

Its capital stock is divided into shares formed by the contributions of the partners. One of the partners must assume the administration of the company, personally liable for the social debts as a general partner.

Initial capital: minimum $ 2,000.

Responsibility: of the general partner, unlimited. Of the limited partner, limited to his contribution.

  • Limited Labor Liability Company

A little-used formula, despite adjusting to cooperative projects. Its main characteristic is that at least 51% of the capital stock is owned by the workers who provide paid services in it personally and directly, and with an indefinite employment relationship.

Capital initial: minimum € 3,000.

Responsibility: limited to contributed capital.

  • Labor Stock Company: Minimum two partners

As in the SLL, the majority of the capital stock is owned by the workers who provide paid and personal service there indefinitely, although in this case its formula is more appropriate for projects with greater growth prospects.

Initial capital: minimum € 60,000.

Responsibility: limited to contributed capital.

  • Cooperative Society: Minimum three partners

With less presence than in other neighboring countries, despite offering lower business mortality than other formulas and having greater tax benefits.

It is made up of people who join, under a free membership and voluntary withdrawal regime, to carry out business activities aimed at satisfying their economic and social needs and aspirations, with a democratic structure and functioning.

Taxed in the special regime of Corporation Tax.

Initial capital: minimum set in the statutes.

Responsibility: limited to the capital contributed in the company.

  • Cooperative Society of Associated Work: Minimum three members

Another of the models that integrates the economic and social objectives of the project. In this case, the CTA is constituted by people whose objective is to provide their partners with part-time or full-time jobs, through the joint organization of the production of goods or services to third parties.

Initial capital: minimum set in the statutes.

Responsibility: limited to the capital contributed in the company.

  • Professional Societies: Minimum one Partner

Active since 2007, they were created for the joint exercise of a professional activity.

They try to offer legal certainty and a specific regime that serves as a guarantee for customers and users. They are capital companies that can be constituted as limited or anonymous, and are subject to special requirements such as that 75% of the capital, the right to vote and the social assets is in the possession of the professional partners.

Initial capital: according to the social form adopted, limited or anonymous.

Responsibility: limited to the capital contributed in the company.

  • Agrarian Transformation Society: Minimum three partners

Designed for projects that promote improvements in rural areas. These are civil companies with economic and social purposes in order to produce, transform and commercialize agricultural, livestock or forestry products.

Initial capital: according to the social form it adopts, limited or anonymous.

Responsibility: The social assets will respond, firstly, to the social debts, and subsidiarily, the partners in a joint and unlimited manner (unless liability has been limited by statute).

According to its size:

  • Big enterprises:

They are those companies whose business volume has exceeded during the previous accounting year, and exceeds more than 100 minimum wages.

In addition, they are obliged to submit monthly statements-settlements regarding withholdings, value added tax (VAT), special taxes and insurance premiums.

  • SMEs:

It is any organization that does not belong to the group of large companies with the obligation to declare monthly their withholdings on income from work and economic activities.

The Legal Structure of a Company

Now that we have oriented you a bit about what a company means and its respective classification, you should already have more or less an idea about what you want for your company and the type you want to establish.

But in addition to what we have already described, there is also another type of categorization for companies according to their legal structure, they contain the previous categories. In most of the world, three types of legal forms are most commonly used to operate small businesses. These ways are as follows:

  1. Sole Proprietor (Sole Proprietor) Business:

Where only one person founds commercial activities. This form usually does not have many formalities; however, you have to pay income tax.

The biggest disadvantage of being a sole trader is that you become fully responsible for any debt your business incurs. If you go bankrupt, your creditors have the right to evaluate and sell your personal property as well as your business. Attack their assets directly if they wish.

  1. Societies:

Where two or more people come together to finance or operate a joint initiative. In practice, companies are groupings of sole proprietors, who subsequently seek partners.

There are very few restrictions to establishing a business in partnership with another person (or persons), and several concrete advantages. By pooling resources, you can have more capital.

You will be bringing different skill sets to the business. There is a Support from the other Partners to build the Company.

The biggest disadvantage is that if a Partner makes a business mistake. Perhaps by signing a disastrous contract, without your knowledge or consent. Still, each member of society must take responsibility, even if it is not their fault.

  1. Corporations / Limited Companies

As the name suggests, in this form of business your obligation is limited to the amount that you through share capital.

It is a separate legal entity. The liability of the shareholders is limited to the amount contributed or the issued share capital. However, there are many restrictions in the company.

The biggest downside is that they are more expensive to establish and there are more rules to be followed.


Is it profitable to start a business?

After establishing the concepts for the creation, formation and processing of a Company, every entrepreneur must adjust to reality and come to a conclusion about whether they have the capacity to carry out a Company and whether it is profitable.

But well everything will depend as we have already said, on the circumstances of the person, because even if all the opportunities are presented to you, you must do a study of your possibilities, a list of the benefits and the disadvantages to be able to analyze your situation.

We hope this information has been useful for you to create and set up your business. Gather and follow the steps and requirements to create a company in Ecuador!

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