Demystifying Ecuadorian Company Capital: Your Essential Guide to Requirements

The Core Concept: Authorized Capital in Ecuador

In Ecuador, the "capital" is the legally mandated value of money or assets that founders contribute to form a company. This isn't just a number on a form; it's the company's initial financial backbone, a measure of its solvency for creditors, banks, and the tax authority (Servicio de Rentas Internas - SRI). It is a foundational element for legal incorporation.

The primary legislation governing this area is the Ley de Compañías (Law of Companies). All procedures are overseen by the Superintendencia de Compañías, Valores y Seguros (SUPERCIAS), the government body that regulates corporate entities.

Key Company Types and Their Capital Requirements

Ecuador offers several structures, but three are overwhelmingly favored by new businesses.

1. Sociedad por Acciones Simplificada (S.A.S.) - Simplified Stock Company

Introduced by the Ley Orgánica de Emprendimiento e Innovación, the S.A.S. is now the most flexible and popular option for entrepreneurs due to its streamlined formation process.

Minimum Capital Requirement: None. The law does not set a minimum capital. However, this is a common point of confusion. While you can legally form an S.A.S. with a nominal capital of $1, it is highly inadvisable. A capital amount that is not commensurate with your stated business activities (objeto social) will raise red flags with banks when you try to open an account and with the SRI.
Hyper-Specific Detail: The capital for an S.A.S. is "subscribed" (suscrito) and "paid" (pagado). A key benefit is that founders have up to 24 months to pay in the full amount of the subscribed capital. This flexibility must be explicitly stated in the company's bylaws (estatutos).
Legal Basis: Art. 42.10, Ley de Compañías.

2. Compañía de Responsabilidad Limitada (Cía. Ltda.) - Limited Liability Company

The traditional choice for small to medium-sized businesses, the Cía. Ltda. offers liability protection for its partners (socios).

Minimum Capital Requirement: USD $400.00. The capital is divided into "participations" (participaciones) which are not freely transferable and require unanimous consent from all partners to be sold to an outsider. The entire capital must be fully subscribed and paid at the moment of incorporation.
Legal Basis: Art. 100, Ley de Compañías.

3. Compañía Anónima (S.A.) - Anonymous Company (Corporation)

The S.A. is designed for larger ventures or businesses that may eventually seek public investment.

Minimum Capital Requirement: USD $800.00. The capital is represented by shares (acciones) which are freely transferable.
Hyper-Specific Detail: A critical distinction is that while the entire $800 minimum must be subscribed at incorporation, only 25% of each shareholder's subscribed amount must be paid up at that time. The remainder must be paid according to the terms set in the bylaws.
Legal Basis: Art. 147, Ley de Compañías.

Meeting the Capital Requirement: A Practical Walkthrough

Fulfilling the capital contribution is a precise, multi-step process.

Declaration of Capital: Your attorney will draft the company bylaws (minuta de constitución), which will state the total authorized capital and how it is divided among the founders.
Capital Contribution:
- Cash Contribution: This is the most common method. Founders must deposit the required paid-up capital into a special, temporary bank account called a "cuenta de integración de capital" (capital integration account).
  - Hyper-Specific Detail: Upon making the deposit, the bank issues a crucial document: the "Certificado de Depósito de Integración de Capital." This certificate is a mandatory part of the incorporation package submitted to SUPERCIAS. Once the company receives its tax ID (RUC), these funds are transferred to the company's permanent current account.
  - Local Tip for Cuenca: Bank branches located near the regional SUPERCIAS office on Av. Remigio Crespo Toral are often more familiar and efficient with issuing these specific certificates compared to smaller, less central branches.
- In-Kind Contribution (Aportes en Especie): Assets like machinery, vehicles, or real estate can be contributed. This is more complex and requires a detailed inventory and valuation included in the bylaws.
  - Hyper-Specific Detail: For registered assets like real estate or vehicles, the contribution is not legally complete until ownership is formally transferred to the new company's name in the corresponding public registry—the Registro de la Propiedad for real estate or the Agencia Nacional de Tránsito (ANT) for vehicles. This is a critical post-incorporation compliance step.
Notarization and Registration: Once SUPERCIAS approves the company's formation online, the incorporation documents must be formalized into a public deed (escritura pública) before a notary.
- Hyper-Specific Detail: Notary fees are not standardized and can vary significantly. Budget approximately $300 - $550 for notary and registration costs in a city like Cuenca. The official SUPERCIAS registration fee itself is minimal, often around $8.00.

Common Expat Pitfalls to Avoid

The SAS "No Minimum" Fallacy: Declaring a $10 capital for a company that plans to import goods or buy property is a critical error. It signals a lack of seriousness and will create immediate problems with banks and suppliers.
The "Escritura Pública" Bottleneck: Many entrepreneurs celebrate the SUPERCIAS approval but then get delayed at the notary. Notaries have strict requirements for identification (passports, visas, apostilled powers of attorney) that can stall the process for weeks if not prepared in advance.
Misunderstanding Capital vs. Operating Funds: The initial capital is legally registered. It is separate from the money you'll need for rent, salaries, and inventory. Confusing the two leads to poor financial planning and potential accounting issues.

⚠️ Legal Alert: When to Stop and Consult an Attorney

Hiring an expert is not a luxury; it's a necessity to avoid costly mistakes. Immediately consult a qualified Ecuadorian attorney if:

You are considering in-kind contributions of any significant value, especially real estate or intellectual property.
Your business will operate in a regulated industry (e.g., tourism, mining, food processing, financial services), which may have unstated capital or asset requirements beyond the Ley de Compañías.
You require a shareholder agreement to define relationships, exit strategies, or special voting rights between partners.
SUPERCIAS issues a "razón de suspensión" (notice of suspension) on your application, which is a formal request for clarification or correction of documents.

The process of establishing a company in Ecuador is straightforward when you understand the rules. Meeting capital requirements is the first and most fundamental step toward building a compliant and successful business.

Ready to Build Your Ecuadorian Business Foundation?

Navigating legal and administrative procedures in a new country requires local expertise. Don't let capital requirements or regulatory hurdles obstruct your entrepreneurial journey.

Schedule your initial consultation today. Let's discuss your business vision and ensure you build it on a solid, legally compliant foundation for lasting success in Ecuador.