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Investment & Legal Framework
and a merchandise coding structure of the Customs
Cooperation Council.
Most imports are subject to import duties (levied
at ad valorem rates varying from 0% to 35%,
depending on the importance of the imported
product to Ecuador’s economic development) and
to value added tax (levied at 12%, but some goods
are subject to 0%). Additional customs duties must
be paid for control service, storage service, and the
country’s modernization program.
Exports The Central Bank requires exporters to
obtain export licenses. Itemized listings must be
presented that clearly show the amount, quality, and
unit value of the goods to be exported.
TRADE AGENTS
Relations between trade agents and their principal
offices (which grant foreign trademarks) are subject
to the principles of free will and contractual liberty.
Trade agents can sign civil representation contracts,
trade commission contracts, or any other type of
contract permitted under the law. Such contracts
must establish conditions, causes for termination,
indemnities, and so forth.
MONOPOLIES
The Companies’ Law (Ley de Compañías) prohibits
the formation or functioning of companies that
monopolize any industry.
PROTECTION OF INTELLECTUAL PROPERTY
Patents and trademarks are registered with the IEPI
(Instituto Ecuatoriano de Propiedad Intelectual).
Patents are granted for twenty years from the date
of application. Trademarks are granted for five years
from the date of application.
Copyright protection can be obtained for literary,
scientific, technical, musical, and artistic works.
Copyrights grant the holder exclusive right to use,
exploit, and reproduce the work during the lifetime
of the author or creator and for fifty years after his
or her death.
Ecuador is a member of the Paris Convention for
the Protection of Industrial Properties, the Patent
Cooperation Treaty, and the Berne and universal
copyright conventions.
SAFETY AND CONSUMER REGULATIONS
The Consumer Protection Law (Ley de Defensa
del Consumidor) establishes procedures to protect
consumers and defines the rights and obligations of
the various parties that must be considered by the
authorities.
The principal forms of business organization in
Ecuador are corporations, the limited liability
companies and branch of a foreign company.
Partnerships and other types of entities may also be
formed. Registration of corporations, limited liability
companies, and branches with the Commercial
Registry is governed by the Companies’ Law. Each
business must have a legal representative domiciled
in Ecuador.
Corporations are the most flexible form of entity,
allowing a mixture of foreign and local capital.
Limited liability companies are useful as closed
companies, but they have disadvantages with
respect to the sale and transfer of capital and are
usually not advantageous for foreign investors. Most
foreigners choose to use corporations or branches to
set up business in Ecuador.
CORPORATIONS
The corporation offers the same major advantages
to investors as the corporate form does in
other countries. It provides limited liability for its
shareholders and the possibility of unrestricted
transfer of shares without affecting the corporation’s
existence.
Incorporation The Incorporation formalities are
usually entrusted to lawyers and public accounting
firms in Ecuador. For formation purposes, a
corporation needs at least two Founder shareholders
or incorporators, although the number of share-
holders can be reduced to one at any time following
incorporation. The founder shareholders may be
Ecuadorian nationals or foreigners, individuals, or
legal entities.
The entity that supervises and controls
corporations is the Superintendency of Companies
(Superintendencia de Compañías); banks and
financial entities, however, are supervised and
controlled by the Superintendency of Banks
(Superintendencia de Bancos). The proposed
name of the corporation must be approved by the
Superintendency of Companies. The Commercial
CREATIONOF COMPANIESAND
CHOICEOF BUSINESS ENTITY