Reservation of the company name at the Superintendence of Companies
Agency: Superintendence of Companies (National Ecuadorian Office of Companies)
The reservation of the company name is done online at: http://www.supercias.gob.ec/portalConstitucionElectronica/
The certificate of reservation is valid for 30 days.
Time and cost: Less than 1 day (online procedure), no charge
Hire a lawyer to prepare the minutes of incorporation
Agency: Lawyer
The minutes include the constituting contract, the articles of incorporation, the company’s bylaws, and the formation of capital. A lawyer must prepare and sign the minutes for the company’s incorporation. Moreover, a notary public must notarize these documents; the lawyer cannot do so. The cost includes all the operating expenses and legal fees.
Time and cost: 1 day, USD 800 – 1,000
Notarize the charter of incorporation and bylaws
Agency: Notary
The entrepreneurs need to notarize the charter of incorporation and the bylaws with a notary public.
The notarization cost of the charter of incorporation and bylaws is based on the submitted capital of the company. Under our company assumptions, the cost is 1.75 points of the minimum wage (SBU) in Ecuador.
Time and cost: 2 days, USD 689.5
Register at the Superintendence of Companies for the annual contribution
Agency: Superintendence of Companies
The article 449.3 of the Law of Corporations determines the obligation for the company to get its number and pay the annual registration fee (0.71 % of total assets) at the Superintendence of Companies.
In order to do so, the following documents are required:
- A form with the address of the new company, the name of the appointed legal representative and the identifications of both the legal representative and the founding partners
- A certified copy of the public deed of the constitution of the company
Once this information is presented, within 24 hours the information of the company will be uploaded online and the company would be registered, the number given to the company will appear in the general information of the company on the website. The company can pay the 50% of the contribution until September 30th, and the remaining 50% until December 31st of each year.
Time and cost: 1 day, no charge
Register the company’s charter and resolutions, as well as the name of the company’s legal representatives in the Mercantile Registry Office
Agency: Mercantile Registry
After inscribing the charter, resolution, and the name of the legal representatives, the Mercantile Registry office (“Registro Mercantil”) will provide a registration number (“Numero de codigo”) with the date that the company began its legal existence.
Time and cost: 5 days, USD 25 + 0.5% of start-up capital + USD 25 for each owner
Apply for the Tax identification number (Registro Unico de Contribuyentes, RUC)
Agency: Tax Authorities (Servicio de Rentas Internas, SRI)
The Tax ID (Registro Unico de Contribuyentes, RUC) must be obtained:
- Once the constitution procedure is completed; and
- After the company has appointed its legal representatives and registered those appointments in the Register of Commerce. The application procedure is done at the Tax Authorities (Servicio de Rentas Internas, SRI) and takes 48 hours after the submission of all required documents (the registered deed, and the registered appointments).
Because the VAT (Impuesto al Valor Agregado, IVA) 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.
Time and cost: 4 days, no charge
Print invoices and VAT forms at an authorized printing shop
Agency: Any authorized print 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.
Time and cost: 1 day, USD 40
Sign up online for Social Security (Instituto Ecuatoriano de Seguridad Social, IESS) and obtain a password to operate the online system
Agency: Ecuadorian Institute of Social Security (Instituto Ecuatoriano de Seguridad Social, IESS)
The company must present a petition for an employer identification number (cédula patronal). This identification number is obligatory for employers for purposes of social security, payments covering health, pension, 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 day after registering online, the employer can present the documents/information to the Social Security and obtain the password to operate the online system. The online system will allow the employer to register all employees’ movements (entries of new employees and termination of the employment contract, contributions, etc.).
Time and cost: 2 days, no charge
Register all employee contracts with the Ministry of Labor (SENRES)
Agency: National Technical Secretariat of Human Resources Development and Public Sector (Secretaría Nacional Técnica de Desarrollo de Recursos Humanos y de Remuneraciones del Sector Público, SENRES)
The department responsible for registering labor contracts is the National Technical Secretariat of Human Resources Development and Public Sector Remuneration (Secretaría Nacional Técnica de Desarrollo de Recursos Humanos y de Remuneraciones del Sector Público, SENRES). SENRES is part of the Ministry of Labor.
Time and cost: 2 days, no charge
Obtain an Operations Permit (Licencia Metropolitana Única para el Ejercicio de las Actividades Económicas, LUAE) from the Municipality
Agency: Municipality of Quito (Administración Zonal del Municipio de Quito)
New companies must apply for an Operations Permit (Licencia Metropolitana Única para el Ejercicio de las Actividades Económicas, LUAE) in the Municipality of Quito. The LUAE is an authorization provided by the Municipal government, that is required for any companies to conduct business activities in the city.
In approximately 15 days after filing the application, the company will receive the inspection of Fire Department and the Secretary of Environment (Secretaría del Ambiente). Then, in approximately 5 days, these two institutions will give the final report to the Municipality of Quito. If these reports are favorable, the Municipality will issue the operations permit in approximately 10 days.
Time and cost: 29 days, no charge
Register for the Municipal Economic Activities Registry (Registro de Actividades Económicas Tributarias, RAET) and pay the Municipal License tax (Patente Municipal)
Agency: Municipality of Quito (Administración Zonal del Municipio de Quito)
The entrepreneur must register for the Municipal Economic Activities Registry (Registro de Actividades Económicas Tributarias, RAET) to operate any business activity in the city.
At the same time, the entrepreneur must pay a yearly Municipal License tax (Patente Municipal), charged as a certification that that every person or company engaged in commercial or industrial activities is verified by the Municipality. Companies should pay this fee within 30 days following the last day of the month when the company started operating.
This fee is foreseen in the Law of Municipal Regime, which regulates the operation of Municipalities in each city. It contemplates the possibility of the Municipalities collecting certain fees or “tasas”, as a compensation for a service provided by the Municipality.
Time and cost: 1 day, USD 50
