Business entities in Ecuador in 2022
The most commonly registered business entities in Ecuador are the limited liability company (LLC) and the Corporation. Additionally, our corporate Clients may choose to register a branch office in Ecuador. Bejarano ADF Consultants will assist our Clients with choosing the optimum corporate structure based on their business needs.
The Ecuador Limited Liability Company
- The Ecuador LLC can be setup with 1 director and 3 shareholders, who can be of any nationality. The shareholders must deposit at least US$400 prior to company registration;
- All LLCs holding assets worth US$1,000,000 must appoint an auditor and submit annual audited financial statements to the authorities.
The Ecuador Corporation
- Our Clients may choose this Ecuador business setup if they wish to raise capital from the public. To successfully setup this entity, at least 1 director and 2 shareholders will be required, who can be of any nationality;
- The minimum initial capital required to setup a corporation will be US$800. If our Client wishes to list their company on the local stock market, they must register with the Securities Market Registry (RVM).
Branch Office
- This Ecuador business setup can be used by foreign companies for operating in the country. To setup this entity, the foreign company must i) deposit minimum share capital of US$2,000 and ii) appoint a resident individual as the legal representative in Ecuador;
- A branch office can only pursue business activities within the scope defined by the parent company. However, it is allowed to invoice local customers, sign local sales contracts and receive income from customers.
Table of comparison between business entities
| LLC | Corporation | Branch Office | |
|---|---|---|---|
| How long to set the company up? | 12 weeks | 12 weeks | 14 weeks |
| How long to open company bank account? | 3 weeks | 3 weeks | 3 weeks |
| Issued share capital required | US$400 | US$800 | US$2,000 |
| Allowed to sign sales contracts with local Clients? | Yes | Yes | Yes |
| Allowed to invoice local Clients? | Yes | Yes | Yes |
| Ecuador corporate tax payable? | 0.22 | 0.22 | 0.22 |
| Corporate bank account | Citibank | Banco del Pichincha | Banco del Pacífico |
| Can rent office premises in Ecuador? | Yes | Yes | Yes |
| Allowed to import raw materials? | Yes | Yes | Yes |
| Allows to export goods? | Yes | Yes | Yes |
| Can the entity hire expatriate staff in Ecuador? | Yes | Yes | Yes |
| Tenancy agreement required before incorporation? | No | No | No |
| Do you visit Ecuador for company incorporation? | No | No | No |
| Individual shareholders allowed? | Yes | Yes | Yes |
| Corporate shareholders allowed? | No | Yes | N/A |
| Corporate director(s) allowed? | No | No | No |
| Resident director required? | No | No | N/A |
| Resident representative required? | No | No | Yes |
| Resident shareholder required? | No | No | NA |
| Minimum number of directors | 1 | 1 | NA |
| Minimum number of shareholders | 3 | 2 | NA |
| Statutory audit required? | No | No | No |
| Annual tax return to be submitted? | Yes | Yes | Yes |
| Access to US double taxation treaties? | Yes | Yes | Yes |
| Estimate of engagement costs | US $ | US $ | US $ |
| Total Ecuador business setup costs in Yr. 1 | 13,950 | 15,200 | 16,200 |
| Subsequent annual costs (incl. accounting and tax fee) | 4,400 | 5,400 | 5,400 |
| Bejarano ADF Consultants Invoice | View invoice PDF | View invoice PDF | View invoice PDF |
