3 Steps to Start a Business “Legally” in Ecuador

Yes, you can find a job in Ecuador, but the best way to work in Ecuador is to “create your own job” by working independently or starting your own business with the help of the right tax accountant backing you through the entire process.

Entrepreneurs run wild in Ecuador… really, they do! There’s a lot to do.

But gone are the days of being able to work years under the table. The current regime has really clamped down and for the first time, businesses have to keep good financial records and pay their taxes. SMSF Specialist advises on such issues.

So if you’re looking to work independently or start a business, here’s how you get started:

First, in one of the major cities of Ecuador go to the government office called the “SRI”. Here, anyone in Ecuador legally, even on a tourist visa, can apply for and get a “RUC” or the Ecuadorian version of a tax ID number. With this number you can print official receipts “facturas” you can use to charge your clients.

Second, to register a trademark or brand in Ecuador you will need to go to the office of the IEPI in Quito, where you pay $16 to do a domain search, then $116 more to register your brand or business name in Ecuador if it is available. This step is optional.

Third, if you’d like to start a corporation in Ecuador, you can with as little as $200 which turns into the shares of your new business which you can distribute or sell as you please. To find out more try the office of the SRI or the office called the “Superintencia de Companias” in Quito on Calle Roca 660 y Amazonas. Also, the SRI should be able to inform you of any other licenses your specific business may need in Ecuador. But don’t sweat it, Ecuador is not nearly as demanding on licenses as the States is.

But the key is the RUC, without it, you can’t legally charge anyone for anything in Ecuador. 95% of your business clients will demand a “factura” with your RUC because without it they can’t write the expense off their taxes.

You can do all the above rather easily without a lawyer, maybe with just a friend translating, but to hire employees “legally” it gets a bit more complicated. To learn more about that try the “Ministerio de Trabajo” (Ministry of Work)… or to get a good, quick overview of labor law in Ecuador and to see exactly how much you will have to pay in taxes as a business owner or retiree in Ecuador , try my full Ecuador Tax Guide here.

Related: Issuing Equity Compensation.

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