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GLOBAL INFO

Ecuador

COUNTRY:

Ecuador

QUESTION:

ANSWER:

1.      What are the main types of companies in your country?

Branch: Is considered as a foreign company established in the Country.

Subsidiary: Are considered national companies. Most common are Limited (CIA. LTD.) and Anonym (S.A.) depending on the nature of business and relationship of shareholders.

2.      Which is the most preferred type of company by foreign investors?

For foreign investments it is recommended to stablish a Branch, since the foreign company maintains its administration, structure and operation activities.

3.      What are the basic capital requirements of this company? (minimum amounts, types of capital, deadline of capital contribution)

Branch: If the CEO is a national at least USD 2.000,00 if the CEO is a Foreigner at least USD 25.000,00.

Subsidiary: USD 400 for CIA. LTDA.; USD 800 for S.A.

4.      What are the basic rules of shareholders liability for company debts in this company?

Branch: the shareholders are the same from the head office, so the branch is responsible depending on the public contract that has signed in Ecuador.

Subsidiary: for both of them the liability goes up to their personal capital investment. It could increase for public debts.

5.      What are the basic management requirements for this company? (only natural persons, or nationals can be managers etc.)

Any natural person could be a CEO or legal representative for both branches and subsidiaries, even national companies could act as CEO or legal representatives.

6.      How long does the registration procedure of this company take?

Branch: 1 to 3 months.

Subsidiary: 2 to 4 weeks.

7.      What are the main costs of formation of this company in local currency?

Branch.- Official rates: USD 2500, for notary and registration procedures.

Subsidiary.- Official rates: USD 800, for notary and registration procedures.

8.      What is the average attorney’s fee of the formation of this company in local currency?

Branch.- USD 6500

Subsidiary.- USD 1600

9.      What are the basic publicity requirements of this company (filing of company changes, financial reports, etc.)

Annual financial reports need to be sent to the Superintendence of Companies, together with the CEO report, and related documents according to the IFRS.

10.   What are the main auditor requirements?

-        All kinds of companies need permanent accounting to send monthly tax and transactions reports to the IRS office. There could be some extra requirements depending on the activities of the Company. External auditor is needed if the capital or assets level of the companies are high.