ECUADOR Law and Practice Contributed by: Sebastian Corral Guevara, Miguel Pizarro Páez, María Fernanda Mencías Pérez, José Cisneros Pazmiño, Roque Bustamante Espinosa and Jorge Pizarro Páez, Flor Bustamante Pizarro & Hurtado
purposes. These are reporting and disclosure obliga - tions and should not be construed as an investment approval requirement. A different regime applies where a foreign compa - ny intends to conduct business directly in Ecuador through a branch. Under Article 6 of the Companies Act, a foreign company carrying on business in Ecua - dor must appoint a permanent attorney-in-fact author - ised to represent it before Ecuadorian authorities and courts. Where the company intends to execute public works, provide public services or engage in the exploi - tation of natural resources, it must also establish a legal domicile in Ecuador through the registration of a branch. Assuming that all foreign corporate documents have been duly legalised or apostilled and submitted, the branch registration process generally takes between six and nine weeks. Investments in strategic or regulated sectors – includ - ing hydrocarbons, mining, financial services, tele - communications, transportation and other regulated activities – remain subject to the licences, permits, concessions or contractual arrangements established by the applicable sector-specific legislation. Such requirements apply irrespective of the nationality of the investor and should not be regarded as a foreign investment approval regime. 2.3 Commitments Required From Foreign Investors Ecuador does not generally require foreign investors to undertake specific commitments as a condition for investing. However, investments in regulated sectors remain subject to the obligations established under the applicable legislation, licences, concessions or investment agreements. Depending on the sector, these may include minimum investment commit - ments, environmental and social obligations, health and safety standards, technical requirements, report - ing obligations and, where applicable, local employ - ment or local content requirements. In practice, environmental permitting and regulatory compliance are among the principal conditions appli -
cable to large-scale projects in sectors such as min - ing, hydrocarbons, infrastructure and energy. 2.4 Right to Appeal Ecuador does not maintain a foreign investment approval regime. Accordingly, foreign investors gen - erally do not challenge investment approvals as such. Where an administrative licence, permit, concession or other sector-specific authorisation is denied, the applicant may file the administrative appeals provid - ed under the Organic Administrative Code and, once the administrative stage has concluded, seek judicial review before the administrative litigation courts. Where applicable, investors may also rely on the dis - pute resolution mechanisms available under invest - ment treaties or investment contracts entered into with the Ecuadorian state. 3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity Corporate entities in Ecuador are primarily governed by the Companies Act, the Commercial Code and, where applicable, the Organic Law on the Popular and Solidarity Economy. Following the reforms introduced in 2020 and 2023, most corporate forms may be incor - porated by a single shareholder or partner. In practice, foreign investors most commonly operate through a simplified stock corporation ( sociedad por acciones simplificada – S AS ), a joint-stock company ( socie- dad anónima – SA) or a branch of a foreign company, depending on the nature and scale of the investment. SAS The SAS is currently the most flexible and widely used corporate vehicle in Ecuador. It may be incorporated by one or more individuals or legal entities, has no minimum share capital requirement and may be incor - porated through a private document, including elec - tronically through the SCVS. Shareholders’ liability is limited to the amount of their capital contributions. Unless otherwise provided in the by-laws, the compa - ny is not required to have a board of directors, allow - ing considerable flexibility in its governance structure. Owing to its simplified incorporation process and con -
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