Starting a Business in Ecuador : Guide
Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Ecuador. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
This information was collected from World Bank: Doing Business
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Reservation of the company name at the Superintendent of Companies | 1 day | no charge |
| 2 | Hire a lawyer to prepare the minutes of incorporation | 1 day | USD 800-1000 |
| 3 | Deposit 50% of paid-in capital in a special account of “completion of capital” (Integración de Capital ) in the name of the company being formed | 1 day | no charge |
| 4 | Notarize the charter of incorporation and bylaws | 2 days | USD 245 for the first USD 25,000 of the start up capital + 0.2% of capital for notary fees for the rest of the start up capital |
| 5 | The lawyer presents the documents (attached with three certified copies of charter and bylaws) to the Superintendent of Companies for the approval of the constitution of the company | 5 days | no charge |
| 6 | Publish an abstract of the charter in a daily newspaper that circulates in the area in which the company operates | 2 days | USD 75 |
| 7 | The general stockholder's meeting inscribes the charter and resolutions in the Mercantile Registry; register the names of the legal representatives in the Mercantile Registry | 5 days | USD 80 |
| 8 | Apply for the Registro Unico de Contribuyentes (RUC) | 4 days | USD 5 per form |
| 9 | Print invoices and VAT forms at an authorized printing shop | 1 day | USD 40 |
| 10 | Sign up online for Instituto Ecuatoriano de Seguridad Social (IESS, social security institute) and obtain password to operate the online system | 2 days | no charge |
| 11 | Inscribe all employee contracts with the Ministry of Labor (Inspectoria de Trabajo) | 2 days | no charge |
| 12 | Receive inspection and operations permit from the municipality | 29 days | no charge |
| 13 | Obtain “tasa de habilitacion” and pay commercial patent at the competent municipality | 1 day | USD 50 |
