Tourism in Ecuador is rapidly becoming a major component of the country’s economy. Due to its physical and cultural variety, the nation attracts tourists from both Northern and Southern America. Since 2007, the number of tourists has increased significantly, hitting a record high of 2.427 million visitors in 2018. Ecuador’s thriving tourist sector offers opportunities for eco-sustainable nature tourism, adventure tourism, and urban tourism service providers. Transportation, food, lodging, and hotel services are all in high demand in this dynamic nation.
Legal requirements for Ecuadorian tourism businesses
Keep in mind that the Ministry of Tourism is the agency that oversees governmental policy in this sector if you’re considering investing in Ecuador’s tourism and hotel industries. Several important conditions must be satisfied before you may do business as a tourist firm.
Establish a company
You must first establish a company in Ecuador. This procedure includes the following steps:
Selecting a corporate structure
The many business and legal entities in Ecuador include:
- Limited Partnership (Compaa en comandita simple y dividida por acciones)
- Limited (LLC) (Compaa de responsabilidad limitada C.a. Ltda)
- Unlimited Liability Company/Corporation (Sociedad anónima S.A.)
- Mixed-capital Company (Compañía de economía mixta)
All of these legal entities are required to have an Ecuadorian legal representation and a local mailing address. The local tax authorities must also receive monthly and yearly tax declarations from them. You must weigh the advantages and disadvantages of these organizations to choose which is best for your travel business.
Reserve company name
You must first secure the company name if you wish to start a business in Ecuador. The reservation certificate is valid for 30 days.
Notarise registration documents
A notary is necessary for the registration documents and the bylaws.
Register with the companies superintendence
To receive a company number and pay the yearly registration fee, the next stage in the registration of a business in Ecuador is to register with the Superintendence of Companies. You will be required to supply certain paperwork, such as the company’s address or the name of the designated legal representative.
Release in a newspaper
When forming a business in Ecuador, you must additionally announce its incorporation in a regional newspaper with a large readership.
Enrol in social security
To establish a corporation in Ecuador, you must also register for Social Security at the Ecuadorian Institute of Social Security and get a password to access the system. Our experts in business formation issues can assist you with this phase as well.
Register the contract of employees with the Ministry of Labor.
Employees’ contracts for the firm must be registered with the Ministry of Labour. The municipality must then permit you to conduct operations.
Additionally, you need to create a corporate bank account, register your firm’s location, and receive the “municipal patent.” You also need to obtain the company and tax identification numbers.
Any tourism-related or hotel-related operation additionally requires a “Single Annual Operating License,” or LUAF. The LUAF is the authorization given by the relevant local governments where commercial tourist activity is conducted. Only when your business has registered with the ministry of tourism can you apply for this license, which will allow you to conduct regular commercial tourist activities. The municipalities where commercial tourist activity is conducted issue this license.
Ecuadorian government incentives for travel and tourism
Finally, it’s essential to be aware that Ecuador’s Ministry of Tourism has launched two iconic projects that enable getting sizeable advantages for tourism industry investors. The first is the initiative called “Emprende Turismo Ecuador.” This program aids in the growth of tourist businesses that exhibit innovation, uniqueness, and added value. The Emprende Turismo Ecuador initiative gives out prizes to recognize the distinctive actions carried out or significant accomplishments made by service providers in this industry. The second initiative is called “Invest Ecuador Tourism.” With cooperation from both the public and commercial sectors, this effort aims to increase foreign investment in Ecuador while attracting new, creative enterprises with huge potential for the nation.