Ecuador

Starting a Business in

Ecuador

Listed below is a detailed summary of the bureaucratic and legal hurdles an entrepreneur must overcome in order to incorporate and register a new firm, along with their associated time and set-up costs.  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 (GNI).

The information appearing on this page was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 183 economies. The most recent round of data collection for the project was completed in June 2011.

  • Standardized Company

  • Legal Form: Compañía Limitada
  • City: Quito

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No. Procedure Time to Complete Associated Costs
1 Reservation of the company name at the Superintendent of Companies

The certificate is valid for 30 days according the Resolution No. 06-Q-IJ-002 dated on 24-07-2006 issued by the Superintendence of Companies.
1 day no charge
2 Hire a lawyer to prepare the minutes of incorporation

The minutes include the constituting contract, the articles of incorporation, the bylaws of the company, and the formation of capital. A lawyer must prepare and sign the minutes on the contract for the company incorporation. Moreover, a notary public must notarize these documents; the lawyer cannot do so. The cost includes all the operating expenses and legal fees.
1 day USD 780-1000
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

The minimum deposit for opening the completion-of-capital account is 50% of share capital. Proof of the approved company name is required.
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

The registration fee is paid annually to the Superintendent of Companies. The cost of contribution is 1% of total assets.

The Superintendent of Companies cut the time for processing company applications, by eliminating internal processes, increasing staff, and upgrading the computer system. The company founders can now verify the status of the registration procedure online.
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

The Mercantile Registry (“Registro Mercantil”) provides a registration number “Numero de codigo”, with the date the company starts its legal existence.
5 days USD 80
8 Apply for the Registro Unico de Contribuyentes (RUC)

The Registro Unico de Contribuyentes (RUC) must be obtained (a) once the constitution procedure is completed; and (b) after the company has appointed its legal representatives and registered those appointments in the Register of Commerce. The application procedure is done at the Servicio de Rentas Internas (SRI) and takes 48 hours after the submission of all required documents (the registered deed, the registered appointments, and the certification of publication). Because the VAT (Impuesto al Valor Agregado) goes by the same identification number, it does not require a separate registration. The RUC is obtained immediately, but a paper receipt is sent by mail in the following 3 days.
4 days USD 5 per form
9 Print invoices and VAT forms at an authorized printing shop

With the RUC, companies must buy invoices from SRI-authorized companies and state monthly VAT declarations on special forms. The cost to print a 100-page book of invoices (one original and two copies) is about USD 40.
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

The company must present a petition for an employer identification number (cédula patronal). Obligatory for employers, social security payments cover health, pension, and accident and work-related illness.

An employer can register with the Social Security online through the webpage of Ecuador’s Social Security Institute. After completing the registration online, the employer needs to obtain a password which will allow the employer to operate the system online. The system will allow the employer to register all employee’s movements (entries of new employees and termination of employees, contributions, etc.). The following day the employer can present the documents/information to the Social Security and obtain the password to operate the online system.

2 days no charge
11 Inscribe all employee contracts with the Ministry of Labor (Inspectoria de Trabajo)

The department responsible for registering labor contracts is the National Technical Secretariat of Human Resources Development and Public Sector Remuneration SENRES (Secretaría Nacional Técnica de Desarrollo de Recursos Humanos y de Remuneraciones del Sector Público) this office is part of the Ministry of Labor.
2 days no charge
12 Inspection from the municipality


29 days no charge
13 Obtain “tasa de habilitacion” and pay commercial patent at the competent municipality

The Law of Municipal Regime, which regulates the operation of Municipalities that run each city, contemplates the possibility of the Municipalities collecting certain fees or “tasas”, which are a form of a tax which is paid as a compensation for a service which is provided to whoever pays the fee. The Law of Municipal Regime provides for the Municipalities being able to collect a fee or “tasa” for the “habilitación y control de establecimientos comerciales e industriales” or the “approval of the ability to operate and the control of commercial and industrial establishments”. Although the tasa de habilitación was phased out on December 31, 2004 for all companies, the payment of the "tasa" is still required in practice for some companies. The fee varies depending on the type of company and on the type, location, and size of the facilities in which the company will operate

Before any commercial or industrial business starts operating, the Municipality will inspect the building/offices/shop where the business is going to operate to make sure that such place complies with all of the City’s requirements for the operation of such business, including that the specific location where the business is going to operate is in an area where such types of business are permited to operate. Once the inspection has been made, and the operation of the business has been approved, the Municipality declares such business as able to operate, and grants the “tasa de habilitacion” as evidence of such ability to operate. The average time to obtain the permit is a month.

The entrepreuner is also required to pay the Commercial Patent - a tax that every person or company engaged in commercial or industrial activities has to pay to the Municipality of the City where such activites are being executed. The Commercial Patent has to be paid each year. Companies should pay the Commercial Patent Tax within 30 days following the last day of the month when the company started operating.



 1 day USD 50
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