How to incorporate a company in Ecuador

Incorporating a company in Ecuador stopped being a weeks-long filing with a notary in the middle. Two reforms changed it: the one that created the S.A.S., the simplified stock company, in 2020, and the corporate reform of 2023. What follows is the path in the order it happens, and what to have ready before starting each step.

1. Choose the figure

It is the only decision that is hard to undo later, because it determines the minimum capital, how many owners fit and how ownership transfers. The full comparison lives in S.A., Cía. Ltda. or S.A.S.; the summary is that the S.A.S. took the vast majority of new incorporations because it removed the minimum capital and the public deed, while the limited company still makes sense when the owners want a legal veto over third parties entering, and the stock corporation when capital is going to rotate.

2. Reserve the company name

The name is reserved before the Superintendencia de Compañías, Valores y Seguros, which checks it is not taken or confusable with another. Two tips that save round trips: bring prepared alternatives, and think how the name will sound day to day. Many companies end up operating under a trade name different from their legal name, and that trade name is what people search for.

You can get an idea of which names already exist by searching this directory, though the formal reservation is only settled by the Superintendencia.

3. Hold an electronic signature

The filing is electronic end to end, so every partner or shareholder who must sign needs their electronic signature certificate, issued by an accredited authority. It is the step that delays incorporations the most, because it is discovered late: solve it before anything else. What it is, who can issue it and what to check before buying one lives in the electronic signature guide.

4. The articles of incorporation

Here is where everything that later costs to change gets decided: corporate purpose, capital and its division, domicile, management and legal representation, and the internal governance rules. The form depends on the figure:

• S.A.S. Incorporated by private document, that is, without a notary, in the Superintendencia's online filing. So ordered the Ley Orgánica de Emprendimiento e Innovación, and the filing has been enabled since May 2020.
• Stock corporation and limited company. Incorporated through the traditional corporate route, though since the 2023 reform more of their filings can also skip the notary.

Ley Orgánica de Emprendimiento e Innovación (Registro Oficial supplement 151, February 28, 2020) · Reform to the Ley de Compañías (Registro Oficial supplement 269, March 15, 2023) · Ley de Compañías, codification published in Registro Oficial 312, November 5, 1999.

A note on the corporate purpose: it should describe what the company will actually do, because from it comes the economic activity it will later be classified under (see the ISIC code, how activity is classified).

5. Registration and legal existence

The company does not exist for having signed the articles: it exists once it is registered. That is the moment it appears with its legal status, its type, its incorporation date and its domicile: exactly the fields this directory publishes on each profile. Along with the registration come the appointments of managers and the legal representative, which are what prove who can sign on the company's behalf and bind it before third parties.

6. The RUC, within 24 hours

With the company registered, the Registro Único de Contribuyentes is issued. The March 2023 reform ordered the SRI (the tax authority) to issue it within 24 hours for freshly incorporated companies: the change that turned incorporation into a matter of days. How to read that number, and why the final 001 does not mean what people think, lives in what the RUC is.

What starts on day one

Incorporating is the beginning. From the first day run obligations that give no warning, and the most expensive to discover late are these:

• Invoicing electronically. The obligation has been general since November 2022 for taxpayers who issue invoices. You need a signature certificate and a system that issues them (see electronic invoicing).
• Keeping accounts and filing the financial statements within the first four months of each year (Ley de Compañías, art. 20).
• Filing VAT, withholdings and income tax on the calendar set by the RUC's ninth digit: each digit has its due day of the month.
• Local permits. The municipal license, the operating permit and whichever sector permits the activity requires.

The full calendar, with what gets filed and when, lives in a company's year.

The figures that do stand in the law

Many closed budgets of "what it costs to open a business" circulate. Here we publish only the figures with normative backing, because they are the only verifiable ones: the minimum capital is 800 dollars for the stock corporation and 400 for the limited liability company, amounts set by the Superintendencia de Compañías through a general resolution, under the law's own delegation (Ley de Compañías, arts. 160 and 102); none for the S.A.S.; and the branch of a foreign company must assign at least 2,000 dollars (Ley de Compañías, arts. 415 and following).

The fees, professional charges and duties paid along the way vary by filing and by who handles it, and we do not publish them because no official source backs them. For a real decision (figure, bylaws, capital structure) the conversation is with a lawyer: this guide is informational and is not legal advice.