Starting a Business in Ecuador as a Foreigner — What It Actually Takes

Here's something that surprises a lot of newcomers: foreigners can own businesses in Ecuador with the same rights as Ecuadorian citizens. No local partner required. No foreign ownership cap. No special permits beyond what any Ecuadorian would need. The constitution guarantees equal economic rights to all residents.

That said, "can" and "should" are different conversations. Starting a business here involves navigating Ecuadorian bureaucracy, tax obligations, and labor laws that work very differently from what you're used to. This guide walks you through all of it — the legal structures, the real costs, the steps, and the gray areas.

Choosing Your Business Structure

Ecuador offers four main business structures. The right one depends on your size, risk tolerance, and how much paperwork you want to deal with.

Persona Natural (Sole Proprietor)

This is the simplest option. You register as an individual with the SRI (Servicio de Rentas Internas — Ecuador's tax authority) and get a RUC (Registro Unico de Contribuyentes — your tax ID number). No separate legal entity is created. You ARE the business.

Best for: Freelancers, consultants, solo service providers, anyone testing the waters.

Pros: Cheapest to set up ($0–$50), fastest (same day at SRI), minimal paperwork.

Cons: You're personally liable for everything. No separation between your personal and business assets. If the business gets sued, your personal savings are on the line.

Setup: Walk into any SRI office with your cedula, passport, and proof of address. Fill out the form. You'll have your RUC within an hour.

SAS (Sociedad por Acciones Simplificada — Simplified Stock Company)

This is the one you probably want. Created by Ecuador's Ley de Emprendimiento in 2020, the SAS was specifically designed to make it easier for small businesses and startups to incorporate. It has rapidly become the most popular structure for new businesses.

Best for: Small to medium businesses, partnerships, any venture where you want liability protection without corporate-level complexity.

Key features:

• One shareholder minimum (can be just you)
• $400 minimum capital (doesn't need to be deposited upfront — you declare it)
• Limited liability — your personal assets are protected
• Flexible governance — you set the rules in your operating agreement
• Can be registered at a notary in 1–2 weeks without going through the Superintendencia de Compañías

Costs: Notary fees $300–$500, lawyer $500–$1,200 to draft the documents, Registro Mercantil (commercial registry) $50–$100.

Compañia Limitada (LLC)

The traditional limited liability company. Still widely used, but the SAS has eaten into its market share because the process is simpler and faster.

Key features:

• Requires 2–15 shareholders
• $400 minimum capital
• Must register with the Superintendencia de Compañias (more oversight, more paperwork)
• More rigid governance structure than SAS

Best for: Businesses with multiple partners who want a traditional corporate structure, or specific industries where clients/partners expect a Cia. Ltda.

Costs: $1,500–$3,000 all-in (notary, lawyer, Superintendencia registration, Registro Mercantil).

Sociedad Anónima (Corporation)

The big one. This is for larger operations — think import/export companies, manufacturing, anything with significant capital requirements.

Key features:

• Minimum 2 shareholders
• $800 minimum capital
• 25% of capital must be paid in at formation
• Shares are freely transferable
• Heaviest regulatory burden — annual reports to Superintendencia de Compañías

Best for: Larger businesses, companies seeking outside investment, operations that need to issue shares.

Costs: $2,000–$5,000+ all-in.

The Registration Process Step by Step

Regardless of which structure you choose (assuming you're going beyond persona natural), here's the general process:

Step 1: Get Your RUC

Every business needs a RUC — it's your tax identification number. You'll get this from the SRI. For a persona natural, you can do this on day one. For a company, you'll get a temporary RUC during formation and a permanent one after registration.

What you need: Cedula, passport, proof of address (utility bill), and the company formation documents once they're ready.

Step 2: Register at the Notary and Registro Mercantil

For an SAS, your lawyer drafts the constitución (formation document) and you sign it at a notary. The notary then sends it to the Registro Mercantil (commercial registry) for inscription. For an SAS, this takes 1–2 weeks. For a Cia. Ltda. or S.A., add the Superintendencia de Compañías step, which can add 2–4 weeks.

Notary fees: $300–$500 depending on complexity and city. Cuenca notaries tend to be on the lower end; Quito and Guayaquil are slightly higher.

Step 3: Open a Business Bank Account

Once your company is registered, you need a corporate bank account. Banco Pichincha and Banco del Pacífico are the most common choices for business accounts. Produbanco is another solid option, especially in Quito.

What you need: Company formation documents, RUC, representative's cedula and passport, corporate resolution authorizing the account opening.

Reality check: This step can take 1–3 weeks. Banks are slow with corporate accounts. Start the process early.

Step 4: Register with SRI for Tax Obligations

Your accountant (more on this below) will register your company's tax obligations with SRI. This includes monthly IVA (value-added tax) declarations, income tax withholdings, and annual income tax returns.

Step 5: Get Your Municipal Operating Permit (Patente)

Every business operating in Ecuador needs a patente municipal — a municipal operating license — from the local GAD (gobierno autónomo descentralizado — your city government). In Cuenca, you get this at the Municipalidad offices on Calle Sucre. In Quito, at the Administración Zonal for your sector.

Cost: $50–$200 annually, depending on your declared revenue and business type.

Additional permits: Depending on your industry, you may need a permiso de funcionamiento from the Ministerio de Salud (restaurants, food businesses), ARCSA permits (anything food/beverage/cosmetics), or fire department inspections.

What It Actually Costs — Total Budget

Here's a realistic budget for forming an SAS (the most common choice for expat small businesses):

Item	Cost
Lawyer (formation documents)	$500–$1,500
Notary fees	$300–$500
Registro Mercantil	$50–$100
Municipal patente (annual)	$50–$200
Accountant setup	$200–$400
Bank account opening	$50–$200
Total startup	$1,150–$2,900

Ongoing monthly costs:

Item	Cost
Accountant (contador)	$80–$200/month
Municipal taxes	Varies
IESS (if you have employees)	11.15% of payroll
SRI declarations	Handled by accountant

You Need a Contador — This Is Non-Negotiable

A contador (accountant) is not optional in Ecuador. They handle your monthly SRI declarations, IVA filings, employee payroll calculations, IESS contributions, and annual income tax returns. Missing a filing or paying late results in fines and interest that stack up fast.

A good contador costs $80–$200/month depending on transaction volume and complexity. In Cuenca, $100–$150/month is typical for a small business with a few employees. In Quito or Guayaquil, expect $150–$200.

How to find one: Ask other business owners in your city. In Cuenca, the Gringo Post Facebook group regularly has recommendations. Avoid the cheapest option — a bad accountant will cost you far more in SRI penalties than you'll save on their fee.

What to verify: Make sure they're registered with the SRI as an authorized contador. Ask for their license number.

Hiring Employees

Ecuador's labor laws are employee-friendly. That's great if you're an employee. As an employer, you need to understand what you're getting into.

The Real Cost of an Employee

Minimum wage in 2026 is approximately $470/month. But the actual cost to you is much higher:

Item	Cost
Base salary (minimum)	$470/month
IESS employer contribution (11.15%)	$52/month
Décimo tercer sueldo (13th month salary)	$39/month (prorated)
Décimo cuarto sueldo (14th month salary)	$39/month (prorated)
Fondos de reserva (after 1 year)	$39/month
Vacations (15 days/year)	Prorated
True monthly cost	~$640+/month

The décimo tercero is an extra month's salary paid in December. The décimo cuarto is another extra payment equal to one minimum wage, paid in March (Sierra/Oriente) or April (Costa). These are mandatory. You cannot negotiate them away.

Firing Is Expensive

There is no at-will employment in Ecuador. Terminating an employee requires severance pay calculated as one month's salary per year of service (desahucio), plus three months' salary penalty for unjustified termination (intempestivo). A five-year employee earning $600/month could cost you $4,800+ in termination costs.

The workaround: Many small businesses use fixed-term contracts (contrato a plazo fijo) for the first 1–2 years. After two years, the contract automatically becomes indefinite — and firing costs go up significantly.

IESS Is Mandatory

You must register every employee with IESS from day one. The employer pays 11.15% of the employee's salary; the employee contributes 9.45% (deducted from their paycheck). Failure to register employees with IESS is one of the most common violations inspectors look for, and the penalties are severe.

Popular Expat Businesses in Ecuador

The businesses that tend to work well for expats:

• Restaurants and cafes — High failure rate worldwide, but lower startup costs here. A small cafe in Cuenca can open for $10,000–$30,000. The challenge is competing on both quality and price.
• Real estate services — Buying/selling assistance, property management, vacation rentals. The expat influx creates steady demand.
• Tour companies — Day trips, adventure tourism, Galapagos booking services. Requires MINTUR (Ministry of Tourism) registration.
• Language schools — Teaching English to Ecuadorians or Spanish to expats. Can start small from a home office.
• Consulting and professional services — Legal, financial, relocation assistance. Low overhead, high margins if you have the expertise.
• Online businesses — E-commerce, remote services, digital products. Ecuador's low cost of living makes this attractive, but see the note below about the gray area.

The Gray Area: Working Without a Formal Business

Let's be honest about this. A significant number of expats in Ecuador work remotely for foreign companies, freelance for international clients, or run online businesses without any formal Ecuadorian business structure. Technically, if you're performing work while physically in Ecuador and earning income, you should be declaring it and paying taxes here.

In practice, enforcement of this is minimal. Ecuador's SRI focuses on domestic transactions and businesses with a local presence. That said, you're operating without legal protections, you can't write off business expenses against Ecuadorian taxes, and if your situation changes (you want to hire local help, you get audited, you need a business visa), having no paper trail creates problems.

The smart move: if you're earning more than a few thousand dollars a month from Ecuador-based activities, formalize it. The cost is minimal, and you gain legal protections, tax deductions, and visa eligibility.

Import/Export: A Quick Overview

If your business involves importing or exporting goods, you'll need to register with SENAE (Servicio Nacional de Aduana del Ecuador — the customs authority). This adds a layer of complexity:

• You need a registered customs broker (agente de aduana)
• Import duties vary by product category (0%–30%+)
• Many products require INEN (quality standards) certification
• Food and agricultural products require AGROCALIDAD permits
• The process takes 2–4 weeks per shipment initially, faster once you're established

Import/export is absolutely doable — many expats run successful businesses this way — but budget for the learning curve and a good customs broker ($200–$500 per shipment in fees).

The Visa Question

To legally own and operate a business in Ecuador, you need a visa that permits commercial activity. The most relevant options:

• Professional visa (Visa Profesional) — For those practicing a profession in Ecuador
• Investor visa (Visa de Inversionista) — Requires a minimum investment (currently $46,000+ in a business or property)
• Work visa — If your own company is hiring you as an employee

A tourist visa does NOT authorize you to conduct business. If you're serious about starting a business, get the right visa first. EcuaPass handles the complete visa application process for all major visa types and can advise on which visa fits your business plans.

Final Advice

Starting a business in Ecuador is genuinely straightforward compared to most countries. The costs are low, the bureaucracy is manageable (with a good lawyer and accountant), and the market opportunities for English-speaking entrepreneurs are real.

The three things that will make or break your experience:

1. A good lawyer for formation — get referrals from other business owners, not from Google.
2. A reliable contador for ongoing compliance — this is your most important ongoing relationship.
3. Patience with the bureaucracy — nothing happens fast. Budget 4–8 weeks from decision to fully operational, even for the simplest SAS.

Don't skip the formalization because it seems like hassle. The upfront cost of doing it right is small. The cost of doing it wrong — or not doing it at all — only surfaces when something goes sideways.