Eternity Law International — News — Company registration in Ecuador

Company registration in Ecuador

Published:
December 22, 2020

Ecuador is often used by foreign investors to optimize the tax system. In this country, the rates for tax duties are quite low: VAT is 12%, and income tax is maximum 30% – which is the lower threshold in Sweden.

However, Ecuador is not offshore. The fiscal field of this jurisdiction is maximally favorable for foreign investors, although it is not in great demand among businessmen. Entrepreneurs rarely choose Ecuador, since the income of the population there is relatively small, which reduces the prestige and respectability of the jurisdiction. Regardless of the legal form and industry in which the company operates, all enterprises pay an income tax of 25%.

Business forms in Ecuador

You can register a company in Ecuadorian jurisdiction in one of the following legal options:

  • LTD. The company must contribute 50% of the capital at the time of registration of the company with the relevant authorities. The minimum amount for starting capital is $ 400. Since the authorities of Ecuador have abolished the local currency, the US dollar is now in circulation.
  • Joint venture. Such a commercial structure is established as a partnership between non-residents and residents. The advantage of this option is that such a firm has many tax privileges, and investors do not risk anything when investing their capital in starting a business. Among the shortcomings, one can name the lack of competent businessmen in a particular industry, since only about 10 million people from the entire population of Ecuador are involved in economic activities.
  • Collective organization. Two founders can create such a company. This one differs from the previous version in that there may be no resident among the founders.
  • Individual entrepreneurship. This form allows the founder of the company to be at the same time its employee. The advantage of this option is that the Ecuadorian jurisdiction provides for a tax deduction if about 15 percent of the profit is distributed among the company’s employees. Thus, for the entrepreneur, the fiscal costs are significantly reduced.
  • Branch of a foreign company. The disadvantage of this form is the mandatory requirement for the minimum amount of capital – $ 2,000. Opening an LLC is cheaper.
  • Simple limited partnership. Founders can have different statuses. Some of them impose personal liability for the debts of the enterprise, while others – limited.
  • Holding institutions and corporations. These are groups of enterprises and individual companies whose securities are put up for free sale.

Establishing a company in Ecuador is quite promising. This is one of the shortest routes to the global market.

If you need to register a company in Ecuador, our specialists will help you register a company quickly and efficiently. Also, you can buy a ready-made company in Ecuador. Write to us in the CRM form and we will help you register a company.

Eternity Law International specialists will provide you with qualified advice on the acquisition of an offshore company, opening a bank account in any jurisdiction, as well as further support of your company’s activities at any stage.

We offer ready-made European and offshore companies. It takes 2 days to reissue documents for new owners.

If you have any questions or need advice on registering or buying a company, call us at the phone numbers listed on the website, or write to us in the CRM form located at the bottom of the page. Our specialists will answer you online.

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